AMENDMENT NO. 10 TO CREDIT AGREEMENT AND WAIVER
THIS AMENDMENT NO. 10 TO CREDIT AGREEMENT (the "Amendment") dated as of
July 1, 1996 by and among Mariner Health Group, Inc., a Delaware corporation
(the "Borrower"), PNC Bank, National Association, Chemical Bank, CoreStates
Bank, N.A., Creditanstalt-Bankverein, First Union National Bank of North
Carolina, Mellon Bank, N.A., Toronto Dominion (New York), Inc. and NationsBank
of Tennessee, N.A., (collectively, the "Banks"), and PNC Bank, National
Association, in its capacity as agent for the Banks (the "Agent").
WITNESSETH:
WHEREAS, the parties hereto are parties to that certain Credit
Agreement dated as of May 18, 1994, as amended (the "Credit Agreement"),
pursuant to which the Banks provided a $200,000,000 revolving credit facility to
the Borrower; and
WHEREAS, the Borrower, the Banks and the Agent desire to amend and
restate the Credit Agreement as hereinafter provided, including without
limitation to increase the revolving credit facility to $250,000,000 and to add
Toronto Dominion (New York), Inc. and Chemical Bank as Banks.
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:
1. Definitions.
Defined terms used herein unless otherwise defined herein shall have
the meanings ascribed to them in the Credit Agreement as amended by this
Amendment.
2. Amendment of Credit Agreement.
A. Articles I through XI. The parties hereto do hereby amend
and restate the recitals and Articles I through XI to the Credit Agreement as
set forth on Exhibit 1 hereto.
B. Schedules. Schedule 1.01(R)(2) Commitments of Banks, to the
Credit Agreement is hereby amended and restated to read as set forth on the
schedule attached hereto bearing the same numerical reference as the original
schedule. Schedule 6.01 (a) and (c) Qualifications to do Business and
Subsidiaries is hereby amended and restated to read as set forth on the schedule
attached hereto bearing the same numerical references as the original schedule,
but the new title, Qualifications to do Business, Subsidiaries and Excluded
Entities.
C. Exhibits. Each of the following exhibits to the Credit
Agreement is hereby amended and restated to read as set forth on the exhibit
attached hereto bearing the same numerical reference as the original exhibit:
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Exhibit 8.01(m)(i) -- Acquisition Approval Certificate
Exhibit 8.01(m)(ii) -- -
Exhibit 8.03(d)(2) -- Compliance Certificate for Quarter Ending
3/31/96 and Thereafter
D. Additional Banks. Toronto Dominion (New York), Inc. and
Chemical Bank upon execution of this Amendment, hereby each became a Bank party
to the Credit Agreement.
3. Conditions of Effectiveness of this Agreement. The effectiveness of
this Amendment is expressly conditioned upon satisfaction of each of the
following conditions precedent:
(a) Representations and Warranties: No Defaults. The
representations and warranties of the Borrower contained in Article VI of the
Credit Agreement shall be true and accurate on the date hereof with the same
effect as though such representations and warranties had been made on and as of
such date (except representations and warranties which relate solely -to an
earlier date or time, which representations and warranties shall be true and
correct on and as of the specific dates or times referred to therein), and the
Borrower shall have performed and complied with all covenants and conditions
hereof; no Event of Default or Potential Default under the Credit Agreement
shall have occurred and be continuing or shall exist.
(b) Organization, Authorization and Incumbency. There shall be
delivered to the Agent for the benefit of each Bank a certificate dated as of
the date hereof and signed by the Secretary or an Assistant Secretary of each
Loan Party, certifying as appropriate as to:
(i) all action taken by such Loan Party in
connection with this Amendment and the other
Loan Documents;
(ii) the names of the officer or officers
authorized to sign this Amendment and the
other documents executed and delivered in
connection herewith and described in this
Section 3 and the true signatures of such
officer or officers and, in the case of the
Borrower, specifying the Authorized Officers
permitted to act on behalf of the Borrower
for purposes of the Loan Documents and the
true signatures of such officers, on which
the Agent and each Bank may conclusively
rely; and
(iii) copies of its organizational documents,
including its certificate of incorporation
and bylaws if it is a corporation and its
certificate of partnership and partnership
agreement if it is a partnership, in each
case as in effect on the date hereof,
certified by the appropriate state official
where such documents are filed in a state
office together with certificates from the
appropriate state officials as to the
continued existence and good standing of
each of the Loan Parties in each state where
organized; provided that each of the
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Loan Parties other than Borrower may, in
lieu of delivering copies of the foregoing
organizational documents and good standing
certificates, certify that the
organizational documents and good standing
certificates previously delivered remain in
effect and have not been amended.
(c) Opinions of Counsel. There shall be delivered to the Agent
for the benefit of each Bank a written opinion dated the date hereof of Xxxxx,
Xxxxxxx & Xxxxxxxxx, L.L.P., counsel for the Loan Parties, in form and substance
satisfactory to the Agent.
(d) Fees and Expenses. The Borrower shall pay or cause to be
paid to the Agent for itself and for the account of the Banks to the extent not
previously paid the fees set forth in that certain letter agreement between the
Borrower and the Agent regarding fees of the Agent and certain Banks with
respect to the increase in the Revolving Credit Commitments from $200 million to
$250 million and all other fees accrued through the date hereof and the costs
and expenses of the Agent and the Banks including, without limitation, fees of
the Agent's counsel in correction with this Amendment.
(e) Acknowledgment. Each of the Loan Parties, other than the
Borrower, shall have executed the Confirmation of Guaranty in the form attached
hereto as Exhibit 2 hereto.
(f) Legal Details: Counterparts. All legal details and
proceedings in connection with the transactions contemplated by this Amendment
shall be in form and substance satisfactory to the Agent, and the Agent shall
have received all such other counterpart originals or certified or other copies
of such documents and proceedings in connection with such transactions, in form
and substance satisfactory to the Agent.
(g) Notes. The Borrower shall have delivered to the Agent on
behalf of each Bank a Note in the amount of each Bank's Commitment.
(h) Mariner Health Properties IV, Ltd. Mariner Health
Properties IV, Ltd. (formerly known as Regency Health Properties IV, Ltd.) shall
have executed a joinder to the -Guaranty Agreement in form and substance
satisfactory to the Agent.
4. Outstanding Items. The Borrower covenants and agrees to undertake in
good faith to complete as promptly as possible, but no later than July 31, 1996,
all outstanding items required to be completed in connection with Amendments 1
through 9 of the Credit Agreement, the satisfaction of which it is expressly
agreed has not been waived by the Banks.
5. Mortgages. On or before July 31, 1996, the borrower shall cause the
Loan Parties to enter into appropriate amendments to the Mortgages, such
amendments to be in form and substance satisfactory to the Agent to set forth,
among other matters, an acknowledgment of the increase in the amount of the
Revolving Credit Commitments to $250 million.
6. Amendment to Certain Other Loan Documents.
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(a) Schedule 1 to that certain Guaranty Agreement made by each
Subsidiary of the Borrower party thereto, for the benefit of the Banks, dated as
of May 18, 1994, as amended is hereby amended and restated to read as set forth
on the Schedule attached hereto bearing the same numerical reference and name.
(b) Schedule A to the following Pledge Agreements is hereby
amended and restated to read as set forth on the schedule attached hereto
bearing the same numerical reference and name:
(i) SCHEDULE A TO THE PLEDGE AGREEMENT
(Borrower) dated as of May 18, 1994, as
amended, by the Borrower, as pledgor in
favor of the Agent
(ii) SCHEDULE A TO THE PLEDGE AGREEMENT
(Subsidiaries Pledging Stock) dated as of
May 18, 1994, as amended, by certain
Subsidiaries of the Borrower, as pledgor in
favor of the Agent
(iii) SCHEDULE A TO AMENDED AND RESTATED PLEDGE
AGREEMENT (Subsidiaries' Pledging
Partnership Interests) dated June 1, 1996,
as amended, by certain Subsidiaries of the
Borrower, as pledgor in favor of the Agent
7. Force and Effect. Except as expressly modified by this Amendment,
the Credit Agreement and the other Loan Documents are hereby ratified and
confirmed and shall remain in full force and effect after the date hereof.
8. Governing Law. This Amendment shall be deemed to be a contract under
the laws of the Commonwealth of Pennsylvania and for all purposes shall be
governed by and construed and enforced in accordance with the internal laws of
the Commonwealth of Pennsylvania without regard to its conflict of laws
principles.
[INTENTIONALLY BLANK]
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[SIGNATURE PAGE l OF 2 TO AMENDMENT NO. 10]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
MARINER HEALTH GROUP, INC.
By: _________________________________
Name: _______________________________
Title: ______________________________
PNC BANK, NATIONAL ASSOCIATION,
individually and as Agent
By: _________________________________
Name: _______________________________
Title: ______________________________
CORESTATES BANK, N.A.
By: _________________________________
Name: _______________________________
Title: ______________________________
CREDITANSTALT - BANKVEREFN
By: _________________________________
Name: _______________________________
Title: ______________________________
By: _________________________________
Name: _______________________________
Title: ______________________________
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By: _________________________________
Name: _______________________________
Title: ______________________________
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[SIGNATURE PAGE 2 OF -TO AMENDMENT NO. 10]
MELLON BANK, N.A.
By: _________________________________
Name: _______________________________
Title: ______________________________
NATIONSBANK OF TENNESSEE, N.A.
By: _________________________________
Name: _______________________________
Title: ______________________________
EXHIBIT 1
--------------
AMENDED AND RESTATED RECITALS AND ARTICLES I THROUGH XI
OF THE REVOLVING CREDIT AGREEMENT
(Cover page, table of contents and
first paragraph
are also attached for convenience)
$250,000,000 REVOLVING CREDIT FACILITY
CREDIT AGREEMENT
by and among
MARINER HEALTH GROUP, INC.
and
THE BANKS PARTY HERETO
and
PNC BANK, NATIONAL ASSOCIATION, as Agent
Dated as of May 18, 1994, as amended
TABLE OF CONTENTS
ARTICLE I - CERTAIN DEFINITIONS...................................................................................1
1.01 Certain Definitions.......................................................................................1
1.02 Construction.............................................................................................28
1.03 Accounting Principles....................................................................................28
ARTICLE II - REVOLVING CREDIT FACILITY...........................................................................29
2.01 Revolving Credit Commitments; Limitation on Borrowings...................................................29
(a) Revolving Credit Commitments...........................................................................29
(b) Extension by Banks of the Expiration Date..............................................................29
(c) Limitation on Borrowings...............................................................................29
2.02 Nature of Banks' Obligations with Respect to Revolving Credit Loans......................................30
2.03 Commitment Fees..........................................................................................30
2.04 [Intentionally Omitted]..................................................................................31
2.05 Revolving Credit Loan Requests...........................................................................31
2.06 Making Revolving Credit Loans............................................................................32
2.07 Revolving Credit Note....................................................................................32
2.08 Use of Proceeds..........................................................................................33
2.09 Letter of Credit Subfacility.............................................................................33
2.10 Voluntary Reduction of Revolving Credit Commitments......................................................34
ARTICLE III - COLLATERAL.........................................................................................34
3.01 Collateral...............................................................................................34
ARTICLE IV - INTEREST RATES......................................................................................34
4.01 Interest Rate Options....................................................................................34
(a) Revolving Credit Interest Rate Options.................................................................35
(b) Rate Quotations........................................................................................36
4.02 Interest Periods.........................................................................................36
4.03 Interest After Default...................................................................................37
4.04 Euro-Rate Unascertainable................................................................................37
(i)
4.05 Selection of Interest Rate Options.......................................................................38
ARTICLE V - PAYMENTS.............................................................................................38
5.01 Payments.................................................................................................38
5.02 Pro Rata Treatment of Banks..............................................................................39
5.03 Interest Payment Dates...................................................................................39
5.04 Voluntary Prepayments....................................................................................39
5.05 Mandatory Prepayments....................................................................................40
(a) Sale of Assets.........................................................................................41
(b) Application Among Interest Rate Options................................................................41
5.06 Additional Compensation in Certain Circumstances.........................................................41
(a) Increased Costs or Reduced Return Resulting From Taxes, Reserves, Capital Adequacy
Requirements, Expenses, Etc................................................................................41
(b) Indemnity..............................................................................................42
ARTICLE VI - REPRESENTATIONS AND WARRANTIES......................................................................43
6.01 Representations and Warranties - Effective On And After Date of This Agreement...........................43
(a) Organization and Qualification.........................................................................43
(b) [Intentionally Omitted.]...............................................................................43
(c) Excluded Entities; Subsidiaries........................................................................43
(d) Power and Authority....................................................................................44
(e) Validity and Binding Effect............................................................................44
(f) No Conflict............................................................................................44
(g) Litigation.............................................................................................44
(h) Title to Properties....................................................................................44
(i) Financial Statements...................................................................................45
(j) Margin Stock...........................................................................................46
(k) Full Disclosure........................................................................................46
(l) Taxes..................................................................................................47
(m) Consents and Approvals.................................................................................47
(n) No Event of Default; Compliance with Instruments.......................................................47
(o) Patents, Trademarks, Copyrights, Etc...................................................................48
(p) Security Interests in the Collateral...................................................................48
(q) [Intentionally Omitted.]...............................................................................48
(r) Status of the Pledged Collateral.......................................................................48
(s) Insurance..............................................................................................49
(t) Compliance with Laws...................................................................................49
(u) Material Contracts, Licenses, Permits and Approvals....................................................49
(v) Investment Companies...................................................................................50
(w) Plans and Benefit Arrangements.........................................................................50
(x) Employment Matters.....................................................................................51
(y) Environmental Matters..................................................................................52
(z) Senior Debt Status.....................................................................................53
(aa) Convalescent Merger...................................................................................53
(bb) Regency Merger........................................................................................54
(ii)
(cc) Mortgage and Leasehold Mortgage Liens.................................................................56
6.02 Updates to Schedules.....................................................................................56
ARTICLE VII - CONDITIONS OF LENDING..............................................................................56
7.01 [Intentionally Omitted.].................................................................................57
7.02 Each Additional Loan.....................................................................................57
7.03 Conditions to Consummation of Regency Merger and Making of Additional Loan in connection with Regency
Merger........................................................................................................57
ARTICLE VIII - COVENANTS.........................................................................................58
8.01 Affirmative Covenants....................................................................................58
(a) Preservation of Existence, Etc.........................................................................58
(b) Payment of Liabilities, Including Taxes, Etc...........................................................58
(c) Maintenance of Insurance...............................................................................59
(d) Maintenance of Properties and Leases...................................................................59
(e) Maintenance of Patents, Trademarks, Etc................................................................59
(f) Visitation Rights......................................................................................59
(g) Keeping of Records and Books of Account................................................................59
(h) Plans and Benefit Arrangements.........................................................................60
(i) Compliance with Laws...................................................................................60
(j) Use of Proceeds........................................................................................60
(k) [Intentionally Omitted.]...............................................................................60
(l) Subordination of Intercompany Loans, Other Loans and Advances to the Borrower..........................60
(m) Approval of Financial Statements in Permitted Acquisitions; Notice of Permitted Acquisition............60
(n) Dissolution of Certain Subsidiaries....................................................................62
(o) Westbury Associates, Ltd...............................................................................62
(p) Further Assurances.....................................................................................62
(q) Convalescent Facilities................................................................................62
(r) Regency Facilities.....................................................................................64
8.02 Negative Covenants.......................................................................................65
(a) Indebtedness...........................................................................................66
(b) Liens..................................................................................................67
(c) Guaranties.............................................................................................67
(d) Loans and Investments..................................................................................67
(e) Dividends and Related Distributions....................................................................68
(f) Liquidations, Mergers, Consolidations, Acquisitions....................................................68
(g) Dispositions of Assets or Subsidiaries.................................................................69
(h) Affiliate Transactions.................................................................................70
(i) Subsidiary, Partnerships and Joint Ventures............................................................70
(j) Continuation of or Change in Business..................................................................71
(k) Plans and Benefit Arrangements.........................................................................71
(l) Fiscal Year............................................................................................72
(m) Issuance of Stock......................................................................................72
(n) [Intentionally Omitted.]...............................................................................72
(o) [Intentionally Omitted.]...............................................................................72
(p) Capital Expenditures and Leases........................................................................72
(iii)
(q) Minimum Fixed Charge Coverage Ratio....................................................................73
(r) Maximum Leverage Ratio.................................................................................73
(s) [Intentionally Omitted.]...............................................................................73
(t) Minimum Net Worth......................................................................................74
(u) Senior Indebtedness to Cash Flow From Operations Ratio.................................................74
(v) Incurrence of Indebtedness Permitted By the Indenture..................................................74
(w) [Intentionally Omitted.]...............................................................................74
(x) Negative Pledges.......................................................................................74
(y) Prohibition of Defeasance of Subordinated Notes........................................................75
8.03 Reporting Requirements...................................................................................75
(a) [Intentionally Omitted.]...............................................................................75
(b) Quarterly Financial Statements; Additional Convalescent Statements.....................................75
(c) Annual Financial Statements............................................................................75
(d) Certificate of the Borrower............................................................................76
(e) Notice of Default......................................................................................76
(f) Notice of Litigation...................................................................................76
(g) Certain Events.........................................................................................76
(h) Budgets, Forecasts, Other Reports and Information......................................................77
(i) Notices Regarding Plans and Benefit Arrangements.......................................................77
(j) Notices with Respect to Indenture......................................................................79
ARTICLE IX - DEFAULT.............................................................................................79
9.01 Events of Default........................................................................................79
9.02 Consequences of Event of Default.........................................................................82
9.03 Notice of Sale...........................................................................................85
ARTICLE X - THE AGENT............................................................................................85
10.01 Appointment.............................................................................................85
10.02 Delegation of Duties....................................................................................85
10.03 Nature of Duties; Independent Credit Investigation......................................................85
10.04 Actions in Discretion of Agent; Instructions from the Banks.............................................86
10.05 Reimbursement and Indemnification of Agent by the Borrower..............................................86
10.06 Exculpatory Provisions..................................................................................87
10.07 Reimbursement and Indemnification of Agent by Banks.....................................................87
10.08 Reliance by Agent.......................................................................................88
10.09 Notice of Default.......................................................................................88
10.10 Notices.................................................................................................88
(iv)
10.11 Banks in Their Individual Capacities....................................................................88
10.12 Holders of Notes........................................................................................88
10.13 Equalization of Banks...................................................................................88
10.14 Successor Agent.........................................................................................89
10.15 Agent's Fee.............................................................................................89
10.16 Availability of Funds...................................................................................89
10.17 Calculations............................................................................................90
10.18 Beneficiaries...........................................................................................90
10.19 Holding of Loan Documents...............................................................................90
ARTICLE XI - MISCELLANEOUS.......................................................................................90
11.01 Modifications, Amendments or Waivers....................................................................90
11.02 No Implied Waivers; Cumulative Remedies; Writing Required...............................................91
11.03 Reimbursement and Indemnification of Banks by the Borrower; Taxes.......................................91
11.04 Holidays................................................................................................92
11.06 Funding by Branch, Subsidiary or Affiliate..............................................................92
(a) Notional Funding.......................................................................................92
(b) Actual Funding.........................................................................................93
11.06 Notices.................................................................................................93
11.07 Severability............................................................................................93
11.08 Governing Law...........................................................................................93
11.09 Prior Understanding.....................................................................................93
11.10 Duration; Survival......................................................................................94
11.11 Successors and Assigns..................................................................................94
11.12 Confidentiality.........................................................................................95
11.13 Counterparts............................................................................................95
11.14 Agent's or Bank's Consent...............................................................................95
11.15 Exceptions..............................................................................................95
11.16 Consent to Forum; Waiver of Jury Trial..................................................................95
(v)
11.17 Tax Withholding Clause..................................................................................96
11.18 Effect on Prior Credit Agreement; Amendments on Fourth Amendment Effective Date.........................96
(a) Amendment and Restatement..............................................................................96
(iv)
SCHEDULES
SCHEDULE 1.01(P) PERMITTED LIENS
SCHEDULE 1.01(R)(2) COMMITMENTS OF BANKS
SCHEDULE 2.09(a) EXISTING LETTERS OF CREDIT; LOANS, INTEREST AND OTHER
OBLIGATIONS UNDER PRIOR CREDIT AGREEMENT
SCHEDULES 6.01(a) QUALIFICATIONS TO DO BUSINESS, SUBSIDIARIES AND
and 6.01(c) EXCLUDED ENTITIES
SCHEDULE 6.01(u) MATERIAL CONTRACTS
SCHEDULE 6.01(y) ENVIRONMENTAL DISCLOSURES
SCHEDULE 6.01(z) CERTAIN DISCLOSURES REGARDING OTHER DEBT OF THE
BORROWER
SCHEDULE 6.01(aa) CONVALESCENT FACILITIES INDEBTEDNESS, LIEN RELEASES;
INTERCREDITOR AGREEMENTS; NON-DISTURBANCE AGREEMENTS;
CONSENTS TO LEASEHOLD MORTGAGES AND SECOND LIENS
SCHEDULE 6.01(bb) REGENCY FACILITIES INDEBTEDNESS; LIEN RELEASES;
INTERCREDITOR AGREEMENTS; NON-DISTURBANCE AGREEMENTS;
CONSENTS TO LEASEHOLD MORTGAGES AND SECOND LIENS
SCHEDULE 8.01(l) CERTAIN DISCLOSURES REGARDING SUBORDINATION OF
INDEBTEDNESS
SCHEDULE 8.02(a) PERMITTED INDEBTEDNESS
SCHEDULE 8.02(c) CERTAIN GUARANTIES
SCHEDULE 8.02(x) EXISTING NEGATIVE PLEDGE COVENANTS
EXHIBITS
EXHIBIT 1.01(A) ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.01(G) GUARANTY AND SURETYSHIP AGREEMENT
EXHIBIT 1.01(I)(1) INTERCREDITOR AGREEMENT - LEASED FACILITY
(A) and (B)
EXHIBITS 1.01(I)(2) INTERCREDITOR AGREEMENT - OWNED FACILITY
(A) and (B)
EXHIBIT 1.01(L) LEASEHOLD MORTGAGE
EXHIBIT 1.01(M) MORTGAGE
EXHIBIT 1.01(P)(1) PLEDGE AGREEMENT (Borrower)
EXHIBIT 1.01(P)(2) PLEDGE AGREEMENT (Subsidiaries Pledging Stock)
EXHIBIT 1.01(P)(3) PLEDGE AGREEMENT (Subsidiaries Pledging Partnership
Interests)
EXHIBIT 1.01(R) REVOLVING CREDIT NOTE
EXHIBIT 1.01(S) SUBORDINATION AGREEMENT (Intercompany)
EXHIBIT 1.01(T) TRUSTEE AGREEMENT
EXHIBIT 2.05 REVOLVING CREDIT LOAN REQUEST
EXHIBIT 8.01(l) TERMS OF CERTAIN SUBORDINATED INDEBTEDNESS
EXHIBIT 8.01(m)(i) ACQUISITION APPROVAL CERTIFICATE
EXHIBIT 8.01(m)(ii) ACQUISITION NOTICE CERTIFICATE
EXHIBIT 8.03(d)(2) COMPLIANCE CERTIFICATE FOR QUARTERS ENDING 3/31/96
AND THEREAFTER
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of May 18, 1994 and is made
by and among MARINER HEALTH GROUP, INC., a Delaware corporation (the
"Borrower"), the BANKS (as hereinafter defined), and PNC BANK, NATIONAL
ASSOCIATION, in its capacity as agent for the Banks under this Agreement
(hereinafter referred to in such capacity as the "Agent").
WITNESSETH:
WHEREAS, the Borrower has requested the Banks to provide a
revolving credit facility to the Borrower in an aggregate principal amount not
to exceed $250,000,000; and
WHEREAS, the Banks are willing to provide such credit upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, in consideration of their
mutual covenants and agreements hereinafter set forth and intending to be
legally bound hereby, covenant and agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
-------------------
1.01 Certain Definitions. In addition to words and terms
defined elsewhere in this Agreement, the following words and terms shall have
the following meanings, respectively, unless the context hereof clearly requires
otherwise:
Acquisition Approval Certificate shall have the meaning
set forth in Section 8.01(m)(i).
Acquisition Income Reporting Period shall mean the
period during which Borrower shall measure Consolidated Cash Flow from
Operations pursuant to Section 8.01(m) for purposes of computing Borrower's
leverage ratio and its other financial covenants on the date on which Borrower
makes any Permitted Acquisition, which period shall be either:
(1) the four fiscal quarters ending
immediately before the date of such Permitted Acquisition (the "Immediately
Preceding Four Quarters") if such Permitted Acquisition occurs after the
Delivery Date for the financial statements of Borrower for such Immediately
Preceding Four Quarters, or
(2) the four fiscal quarters ending one
quarter period prior to the end of the Immediately Preceding Four Quarters (the
"Second Preceding Four Quarters") if such Permitted Acquisition occurs before
the Delivery Date for the financial statements of Borrower for the Immediately
Preceding Four Fiscal Quarters.
Acquisition Notice Certificate shall have the meaning
given to such term in Section 8.01(m)(ii).
Acquisition Reporting Certification shall mean any
Permitted Acquisition with respect to which Borrower delivers or is required to
deliver either an Acquisition Notice Certificate or an Acquisition Approval
Certificate pursuant to Section 8.01(m).
Adjusted Consolidated Net Income shall mean for any
period of determination an amount equal to the net income of the Borrower and
its Subsidiaries for such period determined and consolidated in accordance with
GAAP, plus the following expenses to the extent such expenses are deducted in
computing such net income: (i) up to $9,230,000 of extraordinary, nonrecurring
charges incurred by the Loan Parties in connection with the Convalescent Merger
incurred in the following amounts during the following fiscal quarters: $757,000
during the fiscal quarter beginning January 1, 1995 and ending March 31, 1995;
$8,410,000 during the fiscal quarter beginning April 1, 1995 and ending June 30,
1995; $54,000 during the fiscal quarter beginning July 1, 1995 and ending
September 30, 1995; and $9,000 during the fiscal quarter beginning October 1,
1995 and ending December 31, 1995; (ii) up to $1,138,000 of extraordinary,
nonrecurring deferred financing charges incurred by the Loan Parties in
connection with the Fourth Amendment during the fiscal quarter beginning April
1, 1995 and ending June 30, 1995; (iii) up to $6,543,000 of extraordinary,
nonrecurring charges incurred by the Loan Parties during the fiscal quarters
beginning January 1, 1996 and ending June 30, 1996, in connection with one or
more Permitted Acquisitions consummated during such period, including without
limitation, in connection with the Convalescent Merger; and (iv) such other
extraordinary nonrecurring charges as approved by the Required Banks pursuant to
Section 8.01(m).
Affiliate as to any person shall mean any other
person (i) which directly or indirectly controls, is controlled by, or is under
common control with such person, (ii) which beneficially owns or holds 50% or
more of any class of the voting stock of the Borrower, or (iii) 50% or more of
the voting stock (or in the case of a person which is not an individual or a
corporation, 50% or more of the equity interest) of which is beneficially owned
or held, directly or indirectly, by the Borrower. Control, as used herein, shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a person, whether through the
ownership of voting securities, by contract or otherwise, including the power to
elect a majority of the directors or trustees of a corporation or trust, as the
case may be.
Agent shall mean PNC Bank, National Association and
its successors.
Agent's Fee shall have the meaning assigned to that
term in Section 10.15 hereof.
Agreement shall mean this Credit Agreement as the
same may be supplemented, amended, modified or restated from time to time
including all schedules and exhibits hereto.
Ansonia shall mean Mariner Health Care of Southern
Connecticut, a corporation organized and existing under the laws of the State of
Connecticut.
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Assignment and Assumption Agreement shall mean an
Assignment and Assumption Agreement by and among a Purchasing Bank, the
Transferor Bank and the Agent, as Agent and on behalf of the remaining Banks,
substantially in the form of Exhibit 1.01(A) hereto.
Authorized Officer shall mean those persons
designated by written notice to the Agent from the Borrower, authorized to
execute notices, reports and other documents required hereunder. The Borrower
may amend such list of persons from time to time by giving written notice of
such amendment to the Agent.
Banks shall mean the financial institutions named on
Schedule 1.01(R)(2) hereto and their respective successors and assigns as
permitted hereunder, each of which is referred to herein as a Bank.
Base Rate shall mean the greater of (i) the interest
rate per annum announced from time to time by the Agent at its Principal Office
as its then prime rate, which rate may not necessarily be the lowest rate then
being charged commercial borrowers by the Agent, or (ii) the Federal Funds
Effective Rate plus one-half percent (0.5%) per annum.
Base Rate Option shall mean Loans subject to the
Revolving Credit Base Rate Option.
Benefit Arrangement shall mean at any time an
"employee benefit plan," within the meaning of Section 3(3) of ERISA, which is
neither a Plan or a Multiemployer Plan and which is maintained, sponsored or
otherwise contributed to, by any member of the ERISA Group.
Blue Corporation shall mean Blue Corporation, a
Georgia corporation and wholly owned subsidiary of the Borrower which merged
into Convalescent on the Convalescent Merger Effective Date pursuant to the
terms of the Convalescent Merger Agreement.
Borrower shall mean Mariner Health Group, Inc., a
corporation organized and existing under the laws of the State of Delaware.
Borrowing Date shall mean, with respect to any Loan,
the date for the making thereof or the renewal thereof or conversion thereof to
the same or a different Interest Rate Option, which shall be a Business Day.
Borrowing Tranche shall mean (i) with respect to the
Revolving Credit Euro-Rate Portion of the Loans, Loans to which a Euro-Rate
Option applies by reason of the selection of, conversion to or renewal of such
Interest Rate Option on the same day and having the same Euro-Rate Interest
Period, and (ii) with respect to the Revolving Credit Base Rate Portion of the
Loans, Loans to which the Base Rate Option applies by reason of the selection of
or conversion of such Interest Rate Option.
Business Day shall mean (i) with respect to matters
relating to the Euro-Rate Option, a day on which banks in the London interbank
market are dealing in U.S. Dollar
-3-
deposits and on which commercial banks are open for domestic and international
business in Pittsburgh, Pennsylvania and New York, New York, and (ii) with
respect to any other matter, a day on which commercial banks are open for
business in Pittsburgh, Pennsylvania and New York, New York.
Change in Ownership shall mean if, from and after the
Closing Date, any person or group within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "1934 Act") and the rules and
regulations promulgated thereunder (other than a person or group owning stock of
the Borrower prior to the initial public offering of the Borrower's stock
consummated on June 15, 1993) shall have acquired beneficial ownership (within
the meaning of Rule 13d-3 of the 1934 Act), directly or indirectly, of
securities of the Borrower (or other securities convertible into such
securities) representing 50% or more of combined voting power of all securities
of the Borrower entitled to a vote in the election of directors (hereinafter
called a "Controlling Person"). Any change in ownership which has resulted from
the Convalescent Merger shall be excluded from the determination in the
preceding sentence. For purposes of this definition, a person or group shall not
be a Controlling Person if such person or group holds voting power in good faith
and not for the purpose of circumventing this definition as an agent, bank,
broker, nominee, trustee, or holder of irrevocable proxies given in response to
a solicitation pursuant to the 1934 Act, for one or more beneficial owners who
do not individually, or, if they are a group acting in concert, as a group, have
the voting power specified in this definition.
CLF Lender shall have the meaning given to such term
in Section 6.01(aa).
CLF Lessor shall have the meaning given to such term
in Section 6.01(aa).
CLF Lessor Indebtedness shall have the meaning given
to such term in Section 6.01(aa).
Class A Excluded Entities shall mean collectively
those Excluded Entities which have not incurred any Restricted Indebtedness nor
are subject to or bound by the terms of any agreement with respect to Restricted
Indebtedness, and Class A Excluded Entity shall mean separately any Class A
Excluded Entity.
Closing Date shall mean May 18, 1994, which is the
Business Day on which the first
Loan was made.
COF Lender shall have the meaning assigned to such
term in Section 6.01(aa).
COF Owner shall have the meaning given to such term
in Section 6.01(aa).
COF Owner Indebtedness shall have the meaning given
to such term in Section 6.01(aa).
-4-
Collateral shall mean the Pledged Collateral, all of
the collateral under the Mortgages and the Leasehold Mortgages and any other
collateral security in which any of the Loan Parties may hereafter grant a
security interest or other lien to the Agent for the benefit of the Banks as
security for their obligations under the Loan Documents.
Commitment shall mean as to any Bank its Revolving
Credit Commitment, and Commitments shall mean the aggregate of the Revolving
Credit Commitments of all of the Banks.
Commitment Fee shall have the meaning assigned to
that term in Section 2.03 hereof.
Consolidated Cash Flow from Operations for any period
of determination shall mean the difference between the amounts determined under
the following clauses (i) and (ii): (i) the sum of (X) the sum of Consolidated
Net Income, depreciation, amortization, other non-cash charges to Consolidated
Net Income, interest expense and income tax expense of the Borrower and its
Restricted Subsidiaries for such period determined in accordance with GAAP, plus
(Y) for periods beginning on and after April 1, 1996, the sum of the
Consolidated Cash Flow from Operations Adjustment Amount for all Class A
Excluded Entities, minus (ii) non-cash credits to net income of the Borrower and
its Restricted Subsidiaries for such period determined in accordance with GAAP,
subject to the adjustments described in this definition below.
If the Loan Parties make a Permitted Acquisition and
the Banks approve of the historical and pro-forma financial statements of the
business acquired in such Permitted Acquisition pursuant to Section 8.01(m)
hereof, Consolidated Cash Flow from Operations shall be adjusted as set forth in
paragraphs (A), (B) and (C) below. The adjustments in Paragraphs (A), (B) and
(C) below shall apply to computations of the ratios in Sections 2.01, 2.03,
4.01(a), 8.02(f), 8.02(r) and 8.02(u) on the date of such Permitted Acquisition
and at the end of each of the four fiscal quarters after such Permitted
Acquisition. (The adjustments described in Paragraphs (A) and (B) below shall
not apply to computations of such ratios made as of the end of the fiscal
quarter immediately preceding the date of such Permitted Acquisition.)
(A) Consolidated Cash Flow from Operations for
periods prior to such Permitted Acquisition shall include (i) the sum of net
income, depreciation, amortization, other non-cash charges to net income,
interest expense and income tax expense of the acquired business, plus the
adjustment, if any pursuant to clause (C) below, minus (ii) non-cash credits to
net income of such business, in each case as determined in accordance with GAAP,
(B) Extraordinary or nonrecurring expenses under GAAP incurred in connection
with such Permitted Acquisition shall be excluded from the net income of the
acquired business when computing Consolidated Cash Flow from Operations in the
preceding sentence if the Required Banks have agreed to such exclusion pursuant
to Section 8.01(m), and
(C) To the extent, in the determination of net income
of the acquired business utilized in clause (A) above, deductions were taken in
respect of rental expense
-5-
pursuant to operating leases in accordance with GAAP and following the
consummation of a Permitted Acquisition the Borrower appropriately amends such
leases so that, in accordance with GAAP, such rental expense pursuant to
operating leases may properly be treated as rental expense pursuant to capital
leases (and the Borrower treats such leases as capital leases for periods
following the consummation by the Borrower of such Permitted Acquisition) then,
such net income for purposes of clause (A) above shall be increased by the
deductions taken in respect of rental expense pursuant to such operating leases
during the period of determination.
Consolidated Cash Flow from Operations Adjustment
Amount shall mean, for each Class A Excluded Entity, for any period of
determination, the amount equal to the product of (A) a percentage, as
determined by the Agent in its reasonable discretion, multiplied by (B) the
difference between (i) the sum of net income, depreciation, amortization, other
non-cash charges to such net income, interest expense and income tax expense of
such Class A Excluded Entity for such period, as determined in accordance with
GAAP, minus (ii) non-cash credits to net income of such Class A Excluded Entity
for such period, as determined in accordance with GAAP. In determining the
applicable percentage under clause (A) above, the Agent shall review with the
Borrower the constituent documents of each Excluded Entity, including without
limitation, partnership agreements, shareholder agreements and other relevant
documents which the Borrower agrees to provide as the Agent may reasonably
request, and the Agent shall also review the equity ownership interests of the
Loan Parties in each Excluded Entity and the actual cash flow available to be
distributed to the Loan Parties from the operations of each Excluded Entity.
Consolidated Net Income shall mean for any period of
determination an amount equal to the net income of the Borrower and its
Restricted Subsidiaries for such period determined in accordance with GAAP, but
without regard to net income attributable to Excluded Entities, plus the
following expenses to the extent such expenses are deducted in computing such
net income: (i) up to $9,230,000 of extraordinary, nonrecurring charges incurred
by the Loan Parties in connection with the Convalescent Merger incurred in the
following amounts during the following fiscal quarters: $757,000 during the
fiscal quarter beginning January 1, 1995 and ending March 31, 1995; $8,410,000
during the fiscal quarter beginning April 1, 1995 and ending June 30, 1995;
$54,000 during the fiscal quarter beginning July 1, 1995 and ending September
30, 1995; and $9,000 during the fiscal quarter beginning October 1, 1995 and
ending December 31, 1995; (ii) up to $1,138,000 of extraordinary, nonrecurring
deferred financing charges incurred by the Loan Parties in connection with the
Fourth Amendment during the fiscal quarter beginning April 1, 1995 and ending
June 30, 1995; (iii) up to $6,543,000 of extraordinary, nonrecurring charges
incurred by the Loan Parties during the fiscal quarters beginning January 1,
1996 and ending June 30, 1996, in connection with one or more Permitted
Acquisitions consummated during such period, including without limitation, in
connection with the Convalescent Merger; and (iv) such other extraordinary
nonrecurring charges as approved by the Required Banks pursuant to Section
8.01(m).
Consolidated Net Worth shall mean as of any date of
determination total stockholders' equity of the Borrower and its Subsidiaries as
of such date determined and consolidated in accordance with GAAP.
-6-
Convalescent shall mean Convalescent Services, Inc.,
a corporation organized and existing under the laws of the State of Georgia.
Convalescent Amendment Agreement shall mean
collectively (i) that certain Amendment Agreement dated as of May 24, 1995,
together with each of the schedules and exhibits thereto; and (ii) that certain
Second Amendment Agreement dated as of December 29, 1995, together with each of
the schedules and exhibits thereto.
Convalescent Amendment Documents shall mean the
Convalescent Amendment, the Convalescent Management Agreement, the Master
Agreements and each of the other documents executed in connection with the
Convalescent Amendment.
Convalescent Annual Statements shall have the meaning
given to such term in Section 6.01(i)(i)(B).
Convalescent Certification shall have the meaning set
forth in the Fourth Amendment.
Convalescent Facilities shall mean collectively the
Convalescent Owned Facilities, Convalescent Leased Facilities and Convalescent
Managed Facilities.
Convalescent Facility Purchase Option shall mean an
option provided by a CLF Lender or COF Lender in an Intercreditor Agreement
giving the Agent or the Banks the right to purchase the CLF Lessor Indebtedness
or COF Owner Indebtedness from such CLF Lender or COF Lender upon certain events
of default relating to such Indebtedness.
Convalescent Historical Statements shall have the
meaning given to such term in Sections 6.01(i)(i)(B).
Convalescent Interim Statements shall have the
meaning given to such term in Sections 6.01(i)(i)(B).
Convalescent Leased Facilities shall mean the health
care facilities leased by Convalescent, as lessee. Borrower has listed the
Convalescent Leased Facilities on Schedule 6.01(aa).
Convalescent Managed Facilities shall mean the health
care facilities formerly managed by Convalescent (and managed by Mariner through
the Convalescent Merger Effective Date). Borrower has listed the Convalescent
Managed Facilities on Schedule 6.01(aa) under the heading "Convalescent Managed
Facilities."
Convalescent Management Agreement shall mean the
Management Agreement, dated as of May 24, 1995, pursuant to which Mariner and
Convalescent and affiliates of Convalescent agreed that Mariner managed each of
the Convalescent Facilities between May 24, 1995 and the Convalescent Merger
Effective Date.
-7-
Convalescent Merger shall mean the merger of Blue
Corporation into Convalescent and the other transactions referred to in the
Convalescent Merger Documents. The Convalescent Merger occurred on January 2,
1996.
Convalescent Merger Agreement shall mean the
Agreement and Plan of Merger dated as of January 9, 1995, pursuant to which the
Convalescent Merger was consummated.
Convalescent Merger Documents shall mean the
Convalescent Merger Agreement, the Convalescent Proxy, the Convalescent
Participation Agreement, the other Operating Agreements referred to in the
Convalescent Participation Agreement, the Management Agreement, the Amendment
Agreement and the other Amendment Documents and each of the other documents
executed in connection with or relating to the Convalescent Merger.
Convalescent Merger Effective Date shall mean January
2, 1996, which is the effective time of the merger of Blue Corporation into
Convalescent.
Convalescent Owned Facilities shall mean the health
care facilities owned by Convalescent or its Subsidiaries. The Convalescent
Owned Facilities are listed on Schedule 6.01(aa).
Convalescent Participation Agreement shall mean that
certain Participation Agreement dated as of January 9, 1995, as amended on May
24, 1995, and December 29, 1995, among Borrower, Blue Corporation, Convalescent
and the other parties referred to therein.
Convalescent Proxy shall mean the Proxy Statement of
the Borrower dated March 14, 1995 and any subsequent Proxy Statement issued by
Borrower in connection with the Convalescent Merger.
Corporate Shares shall have the meaning assigned to
that term in Section 6.01(c).
Corporate Subsidiaries shall mean each Subsidiary of
Borrower which is a corporation.
Delivery Date shall mean the date which is the
earlier of (i) the date on which the Borrower delivers its consolidated
financial statements to the Agent and the Banks pursuant to Sections 8.03(b) and
(c), or (ii) one Business Day following the date on which such financial
statements are due to be delivered pursuant to such Sections.
Dollar, Dollars, U.S. Dollars and the symbol $ shall
mean lawful money of the United States of America.
Environmental Complaint shall mean any written
complaint setting forth a cause of action for personal, property or natural
resource damage or equitable relief, order, notice of violation, citation,
request for information issued pursuant to any Environmental Laws by an
-8-
Official Body, subpoena or other written notice of any type relating to, arising
out of, or issued pursuant to any of the Environmental Laws or any Environmental
Conditions, as the case may be, in each case with respect to any violation or
alleged violation of Environmental Laws or release or threatened release of a
Regulated Substance.
Environmental Conditions shall mean any conditions of
the environment, including, without limitation, the work place, the ocean,
natural resources (including flora or fauna), soil, surface water, ground water,
any actual or potential drinking water supply sources, substrata or the ambient
air, relating to or arising out of, or caused by the use, handling, storage,
treatment, recycling, generation, transportation, release, spilling, leaking,
pumping, emptying, discharging, injecting, escaping, leaching, disposal,
dumping, threatened release or other management or mismanagement of Regulated
Substances resulting from the use of, or operations on, the Property.
Environmental Laws shall mean all federal, state,
local and foreign laws and regulations, including without limitation permits,
licenses, authorizations, bonds, orders, judgments, consent decrees issued, or
entered into, pursuant thereto, relating to pollution or protection of human
health or the environment or employee safety in the work place or the operation
of the activities of the Borrower and its Subsidiaries.
ERISA shall mean the Employee Retirement Income
Security Act of 1974, as the same may be amended or supplemented from time to
time, and any successor statute of similar import, and the rules and regulations
thereunder, as from time to time in effect.
ERISA Group shall mean, at any time, the Borrower and
all members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control and all other entities which,
together with the Borrower, are treated as a single employer under Section 414
of the Internal Revenue Code.
Euro-Rate shall mean with respect to the Loans
comprising any Borrowing Tranche to which the Euro-Rate Option applies for any
Euro-Rate Interest Period, the interest rate per annum determined by the Agent
by dividing (the resulting quotient rounded upward to the nearest 1/100 of 1%
per annum) (i) the rate of interest determined by the Agent in accordance with
its usual procedures (which determination shall be conclusive absent manifest
error) to be the Euro-Rate offered by Telerate page 4756 as quoted by Xxxxxx,
Astley & Xxxxxx (or appropriate successor) at approximately 11:00 A.M. London
time two (2) Business Days prior to the first day of such Euro-Rate Interest
Period for delivery on the first day of such Euro-Rate Interest Period in
amounts comparable to such Borrowing Tranche and having maturities comparable to
such Euro-Rate Interest Period by (ii) a number equal to 1.00 minus the
Euro-Rate Reserve Percentage. The Euro-Rate may also be expressed by the
following formula:
Telerate page 4756 as Quoted by Xxxxxx,
Euro-Rate = [Astley & Xxxxxx (or appropriate successor)]
1.00 - Euro-Rate Reserve Percentage
-9-
The Euro-Rate shall be adjusted with respect to any Euro-Rate Option outstanding
on the effective date of any change in the Euro-Rate Reserve Percentage as of
such effective date. The Agent shall give prompt notice to the Borrower of the
Euro-Rate as determined or adjusted in accordance herewith, which determination
shall be conclusive absent manifest error.
Euro-Rate Interest Period shall have the meaning
assigned to that term in Section 4.02 hereof.
Euro-Rate Option shall mean Loans subject to the
Revolving Credit Euro-Rate Option.
Euro-Rate Reserve Percentage shall mean the maximum
percentage (expressed as a decimal rounded upward to the nearest 1/100 of 1%) as
determined by the Agent (which determination shall be conclusive absent manifest
error) which is in effect during any relevant period, as prescribed by the Board
of Governors of the Federal Reserve System (or any successor) for determining
the reserve requirements (including, without limitation, supplemental, marginal
and emergency reserve requirements) with respect to eurocurrency funding
(currently referred to as "Eurocurrency Liabilities") of a member bank in such
System.
Event of Default shall mean any of the Events of
Default described in Section 9.01 of this Agreement.
Excluded Entities shall mean (i) any partnership,
corporation or limited liability company which is not a Subsidiary of any Loan
Party and with respect to which a Loan Party has made a Restricted Investment
permitted by Section 8.02(d)(iv), and (ii) any Unrestricted Subsidiary of the
Borrower which the Borrower has designated as one of the Excluded Entities and
with respect to which a Loan Party has made a Restricted Investment permitted by
Section 8.02(d)(iv), and Excluded Entity shall mean separately any Excluded
Entity.
Existing Letters of Credit shall have the meaning
given to such term in Section 2.09.
Expiration Date shall mean, with respect to the
Revolving Credit Commitment, April 30, 1999.
Federal Funds Effective Rate for any day shall mean
the rate per annum (based on a year of 360 days and actual days elapsed and
rounded upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank
of New York (or any successor) on such day as being the weighted average of the
rates on overnight Federal funds transactions arranged by Federal funds brokers
on the previous trading day, as computed and announced by such Federal Reserve
Bank (or any successor) in substantially the same manner as such Federal Reserve
Bank computes and announces the weighted average it refers to as the "Federal
Funds Effective Rate" as of the date of this Agreement; provided, if such
Federal Reserve Bank (or its successor) does not announce such rate on any day,
the "Federal Funds Effective Rate" for such day shall be the Federal Funds
Effective Rate for the last day of which such rate was announced.
-10-
First Trust Indenture shall mean that certain
Indenture of Trust dated as of October 1, 1993, between Xxxxxx County, West
Virginia and First Trust National Association, as Trustee.
Fourth Amendment shall mean that certain Amendment
No. 4 to Credit Agreement, Waiver and Consent dated July 18, 1995 among
Borrower, the Banks and Agent, together with the schedules and exhibits thereto.
Fourth Amendment Documents shall mean the Fourth
Amendment and the documents executed or delivered in connection therewith.
Fourth Amendment Effective Date shall mean July 18,
1995, the effective date of the Fourth Amendment.
Fourth Amendment Fee shall mean the non-refundable
fee paid to each Bank on the Fourth Amendment Effective Date in the amount set
forth on Schedule 1.01(R)(2) referenced in and attached to the Fourth Amendment
as set forth in the column titled "Fourth Amendment Fee."
GAAP shall mean generally accepted accounting
principles as are in effect on the Closing Date, subject to the provisions of
Section 1.03 hereof, and applied on a consistent basis (except for changes in
application in which the Borrower's independent certified public accountants
concur) both as to classification of items and amounts.
Guaranty of any person shall mean any obligation of
such person guaranteeing or in effect guaranteeing any liability or obligation
of any other person in any manner, whether directly or indirectly, including,
without limiting the generality of the foregoing, any agreement to indemnify or
hold harmless any other person, any performance bond or other suretyship
arrangement and any other form of assurance against loss, except endorsement of
negotiable or other instruments for deposit or collection in the ordinary course
of business.
Guaranty Agreements shall mean collectively the
Guaranty and Suretyship Agreements, in substantially the form attached hereto as
Exhibit 1.01(G) executed and delivered by the Subsidiaries of Borrower except
for Pinnacle Rehab of Gwinnette and Pinnacle's Kansas Joint Venture to the Agent
for the benefit of the Banks and Guaranty Agreement shall mean separately any
Guaranty Agreement.
Historical Statements shall have the meaning given to
such term in Section 6.01(i)(ii)(C).
Indebtedness shall mean as to any person at any time,
any and all indebtedness, obligations or liabilities (whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, or joint or several) of such person for or in respect of: (i)
borrowed money, including, without limitation the Subordinated Notes, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility,
-11-
(iii) reimbursement obligations under any letter of credit, currency swap
agreement, interest rate swap, cap, collar or floor agreement or other interest
rate protection agreement, (iv) any other transaction (including without
limitation forward sale or purchase agreements, capitalized (not operating)
leases required under GAAP to be disclosed as a liability on the Loan Party's
balance sheet and conditional sales agreements) having the commercial effect of
a borrowing of money entered into by such person to finance its operations or
capital requirements (but not including the deferred portion of any Restricted
Investment in an Excluded Entity if such amount is to be paid from available
cash flow from operations of the Borrower and its Subsidiaries and also not
including trade payables and accrued expenses incurred in the ordinary course of
business which are not represented by a promissory note, instrument or other
evidence of indebtedness and which are not more than ninety (90) days past due
(unless such past due indebtedness is being disputed in good faith and an
appropriate reserve has been established with respect to such indebtedness in
accordance with GAAP)), provided that, for purposes of this clause (iv) the
phrase "other evidence of indebtedness" shall not include any ordinary course
evidence of trade accounts payable of the Borrower or any Subsidiary such as
purchase orders or invoices, or (v) any Guaranty of Indebtedness for borrowed
money.
Indenture shall mean that certain Indenture dated
April 4, 1996, between the Borrower and State Street Bank and Trust Company, as
trustee, in respect of the Subordinated Notes, as the same may be amended,
modified, supplemented or restated from time to time in accordance with this
Agreement.
Intercreditor Agreements shall mean collectively the
Intercreditor Agreement - Leased Facility, the Intercreditor Agreement - Owned
Facility and the intercreditor agreements entered into as required pursuant to
Section 8.02(d)(iv), and Intercreditor Agreement shall mean separately any
Intercreditor Agreement.
Intercreditor Agreement - Leased Facility shall mean
collectively (i) the Intercreditor Agreements executed by certain of the CLF
Lenders, certain CLF Lessors and the Agent; and (ii) the Intercreditor
Agreements to be executed by certain of the RLF Lenders, certain RLF Lessors and
the Agent, each in form and substance satisfactory to the Agent. If MHF is
required to obtain an Intercreditor Agreement from a lender to a Regency Leased
Facility, whether upon a refinancing or otherwise, MHF shall use its best
efforts to obtain an agreement in the form of Exhibit 1.01(I)(1)(A) hereto, but
in no event shall it obtain an agreement less favorable to the Agent than the
form attached as Exhibit 1.01(I)(1)(B) hereto. Except as described on Schedules
6.01(aa) and 6.01(bb), each Intercreditor Agreement shall provide that the
lender (i) grants to the Agent a Convalescent Facility Purchase Option or
Regency Facility Purchase Option, as the case may be, and (ii) consents to the
grant by Convalescent or Regency, as the case may be, to the Agent of (a) the
Leasehold Mortgage relating to the Convalescent Leased Facility which secures
such CLF Lessor Indebtedness; (b) Liens on the assets of Convalescent relating
to such Convalescent Leased Facility; such Liens shall be second in priority to
the Liens granted by Convalescent to such CLF Lender in such assets if
Convalescent has granted Liens in such assets to such CLF Lender; (c) the
Leasehold Mortgage relating to the Regency Leased Facility which secures such
RLF Lessor Indebtedness; and (d) Liens on the assets of Regency or MHF, as the
case may be, relating to such Regency
-12-
Leased Facility; such Liens shall be second in priority to the Liens granted by
Regency or MHF, as the case may be, to such RLF Lender in such assets if Regency
or MHF, as the case may be, has granted Liens in such assets to such RLF Lender.
Intercreditor Agreement - Owned Facility shall mean
collectively (i) the Intercreditor Agreements executed by certain of the COF
Lenders and the Agent; and (ii) the Intercreditor Agreements to be executed by
certain of the ROF Lenders and the Agent, each in form and substance
satisfactory to the Agent. If MHF is required to obtain an Intercreditor
Agreement from a lender to a Regency Owned Facility, whether upon a refinancing
or otherwise, MHF shall use its best efforts to obtain an agreement in the form
of Exhibit 1.01(I)(2)(A) hereto, but in no event shall it obtain an agreement
less favorable to the Agent than the form attached as Exhibit 1.01(I)(2)(B)
hereto. Except as described on Schedules 6.01(aa) and 6.01(bb), each
Intercreditor Agreement shall provide that the lender (i) grants to the Agent a
Convalescent Facility Purchase Option or Regency Facility Purchase Option, as
the case may be, and (ii) consents to the execution and delivery of a Mortgage
in favor of the Agent for the benefit of the Banks on the Convalescent Owned
Facility which secures the COF Owner Indebtedness owed to such COF Lender or on
the Regency Owned Facility which secures the Regency Owner Indebtedness owed to
such Regency Lender, as the case may be.
Interest Payment Date shall mean each date specified
for the payment of interest in Section 5.03.
Interest Rate Option shall mean the Revolving Credit
Euro-Rate Option or Revolving Credit Base Rate Option.
Internal Revenue Code shall mean the Internal Revenue
Code of 1986, as the same may be amended or supplemented from time to time, and
any successor statute of similar import, and the rules and regulations
thereunder, as from time to time in effect.
Labor Contracts shall have the meaning assigned to
that term in Section 6.01(u).
Law shall mean any law (including common law),
constitution, statute, treaty, regulation, rule, ordinance, opinion, release,
ruling, order, injunction, writ, decree or award of any Official Body.
Leasehold Mortgages shall mean collectively, the
Leasehold Mortgages, each substantially in the form of Exhibit 1.01(L), granted
by Convalescent in favor of the Agent for the benefit of the Banks with respect
to each of the Convalescent Leased Facilities or granted by MHF in favor of the
Agent for the benefit of the Banks with respect to certain of the Regency Leased
Facilities.
Letter of Credit shall have the meaning assigned to
that term in Section 2.09.
-13-
Letter of Credit Fee shall have the meaning assigned
to that term in Section 2.09.
Lien shall mean any mortgage, deed of trust, pledge,
lien, security interest, charge or other encumbrance or security arrangement of
any nature whatsoever, whether voluntarily or involuntarily given, including but
not limited to any conditional sale or title retention arrangement, and any
assignment, deposit arrangement or capitalized lease intended as, or having the
effect of, security and any filed financing statement or other notice of any of
the foregoing (whether or not a lien or other encumbrance is created or exists
at the time of the filing).
Loan Documents shall mean this Agreement, the Notes,
the Guaranty Agreements, the Pledge Agreements, the Mortgages, the Leasehold
Mortgages, the Intercreditor Agreements, the Trustee Agreement, the
Subordination Agreement (Intercompany), the letter from PNC Bank to Borrower
dated June 30, 1994 and Amendment Nos. 2 and 3 dated as of September 28, 1994
and September 30, 1994, respectively, the Fourth Amendment Documents, Amendment
No. 5 dated November 3, 1995, Amendment No. 6 dated December 29, 1995, Amendment
No. 7 dated February 15, 1996, Amendment No. 8 dated March 28, 1996, Amendment
No. 9 dated April 30, 1996, Amendment No. 10 dated __________, and any other
instruments, certificates or documents delivered or contemplated to be delivered
hereunder or thereunder or in connection herewith or therewith, as the same may
have previously been or in the future be supplemented or amended from time to
time in accordance herewith or therewith, and Loan Document shall mean any of
the Loan Documents.
Loan Parties shall mean the Borrower and its
Subsidiaries, other than those Subsidiaries which are permitted Excluded
Entities.
Loan Request shall mean a request for Revolving
Credit Loans made in accordance with Section 2.05 hereof or a request to select,
convert to or renew a Euro-Rate Option in accordance with Section 4.02 hereof.
Loans shall mean collectively and Loan shall mean
separately all Revolving Credit Loans or any Revolving Credit Loan.
Mariner Historical Statements shall have the meaning
given to such term in Section 6.01(i)(i)(A).
Mariner Maryland shall mean Mariner Health Care of
Baltimore, Inc., a corporation organized and existing under the laws of the
Commonwealth of Massachusetts.
Mariner-NBT/NBG Guaranty shall have the meaning given
to such term in Section 8.01(o).
Material Adverse Change shall mean any set of
circumstances or events which (a) has or could reasonably be expected to have
any material adverse effect whatsoever upon the validity or enforceability of
this Agreement or any other Loan Document, (b) is or
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could reasonably be expected to be material and adverse to the business,
properties, assets, financial condition, results of operations or prospects of
the Borrower and its Subsidiaries taken as a whole, (c) impairs materially or
could reasonably be expected to impair materially the ability of the Borrower or
any of its Subsidiaries to duly and punctually pay or perform its Indebtedness,
or (d) impairs materially or could reasonably be expected to impair materially
the ability of the Agent or any of the Banks, to the extent permitted, to
enforce their legal remedies pursuant to this Agreement or any other Loan
Document.
Material Subsidiary shall mean any Subsidiary the
revenue or net income of which represented more than five percent (5%) of the
Borrower's consolidated revenues or consolidated net income during the preceding
four (4) fiscal quarters.
MedRehab Merger shall mean the merger of MRI
Acquisition Corp., a Delaware corporation and a wholly-owned Subsidiary of the
Borrower with and into MedRehab, Inc., a Delaware corporation and the other
transactions referred to in the MedRehab Merger Documents. The MedRehab Merger
occurred on March 1, 1996.
MedRehab Merger Agreement shall mean that certain
Agreement and Plan of Merger dated as of February 9, 1996, by and among the
Borrower, MRI Acquisition Corp., a Delaware corporation and MedRehab, Inc., a
Delaware corporation.
MedRehab Merger Documents shall mean the MedRehab
Merger Agreement and all other documents executed in connection with or relating
to the MedRehab Merger.
Member Interests shall have the meaning assigned to
that term in Section 6.01(c).
MHF shall mean Mariner Health of Florida, Inc., a
Delaware corporation and a wholly-owned subsidiary of the Borrower.
month, with respect to a Euro-Rate Interest Period,
shall mean the interval between the days in consecutive calendar months
numerically corresponding to the first day of such Euro-Rate Interest Period.
The last day of a calendar month shall be deemed to be such numerically
corresponding day for such calendar month (i) if there is no such numerically
corresponding day in such calendar month, or (ii) if the first day of such
Euro-Rate Interest Period is the last Business Day of a calendar month.
Mortgages shall mean collectively the second Lien
Mortgages, each substantially in the form of Exhibit 1.01(M): (i) granted by the
COF Owner in favor of the Agent for the benefit of the Banks on each of the
Convalescent Owned Facilities which is encumbered by Liens in favor of a COF
Lender; or (ii) granted by the ROF Owner in favor of the Agent for the benefit
of the Banks on each of the Regency Owned Facilities which is encumbered by
Liens in favor of a ROF Lender.
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Multiemployer Plan shall mean any employee benefit
plan which is a "multiemployer plan" within the meaning of Section 4001(a)(3) of
ERISA and to which the Borrower or any member of the ERISA Group is then making
or accruing an obligation to make contributions or, within the preceding five
Plan years, has made or had an obligation to make such contributions.
Multiple Employer Plan shall mean a Plan which has
two or more contributing sponsors (including the Borrower or any member of the
ERISA Group) at least two of whom are not under common control, as such a plan
is described in Sections 4063 and 4064 of ERISA.
NBG shall mean NationsBank of Georgia, N.A.
NBT shall mean NationsBank of Tennessee, N.A.
Ninth Amendment Effective Date shall mean April 30,
1996, which shall be the effective date of the Amendment No. 9 to this
Agreement.
Non-Disturbance Agreements shall mean collectively
(i) the non-disturbance agreements executed by each CLF Lender listed on
Schedule 6.01(aa) and Convalescent, each providing in part that the CLF Lender
shall recognize Convalescent's right as the lessee under its lease of its
Convalescent Leased Facility should the CLF Lender foreclose upon such facility,
and (ii) the non-disturbance agreements or other agreement containing
nondisturbance provisions executed by each RLF Lender listed on Schedule
6.01(bb) and MHF, each providing in part that the RLF Lender shall recognize
Regency's right as the lessee under its lease of its Regency Leased Facility
should the RLF Lender foreclose upon such facility, such non-disturbance
agreements or provisions to be reasonably satisfactory to the Agent in form and
substance.
Notes shall mean collectively the Revolving Credit
Notes.
Official Body shall mean any national, federal,
state, local or other government or political subdivision thereof or any agency,
authority, bureau, central bank, commission, department or instrumentality of
any government or political subdivision thereof, or any court, tribunal, grand
jury or arbitrator, in each case whether foreign or domestic.
Partnership Interest shall have the meaning given to
such term in Section 6.01(c).
Partnership Subsidiaries shall mean each Subsidiary
of Borrower which is a general or limited partnership.
PBGC shall mean the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV of ERISA or any
successor.
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Permitted Acquisition shall mean any merger,
consolidation or acquisition after the Closing Date described in and permitted
under clauses (iii) or (iv) of Section 8.02(f).
Permitted Convalescent Leased Facility Liens shall
mean Liens on certain of the Permitted General Intangibles of Convalescent
relating to certain of the Convalescent Leased Facilities more particularly
described on Schedule 6.01(aa). Each such Lien is granted by Convalescent in
favor of a CLF Lender and secures CLF Lessor Indebtedness described on Schedule
6.01(aa). Such Liens are permitted hereunder on and after the Convalescent
Merger Effective Date, subject to the following limitations:
(i) Each of such Liens must be terminated on or
before the earlier of: (i) the maturity of the CLF Lessor Indebtedness which
such Lien secures (without giving effect to any extension of such maturity after
the Fourth Amendment Effective Date) or (ii) any refinancing, replacement or
substitution of the CLF Lessor Indebtedness which such Lien secures;
(ii) Convalescent shall have granted to Agent
perfected security interests in each of the assets encumbered by such Liens and
Agent's security interests shall have priority over all other Liens on such
assets except that they shall be subordinate to the Liens in favor of the CLF
Lender, unless the CLF Lender is listed on Schedule 6.01(aa) hereto and such
Schedule states that such Lender has refused to consent to the grant to Agent of
such second Liens;
(iii) The amount of CLF Indebtedness secured by
such Liens may not be increased after the Fourth Amendment Effective Date and
any reductions in the amount of such Indebtedness after such date shall be
permanent; and
(iv) Any termination of such Liens by a CLF
Lender in an asset after the Fourth Amendment Effective Date shall be permanent
and Convalescent may not thereafter grant a new Lien on such asset.
Permitted Convalescent Owned Facility Liens shall
mean Liens on real and personal property of Convalescent or its Subsidiaries
relating to certain of the Convalescent Owned Facilities more particularly
described on Schedule 6.01(aa). Such Liens are granted in favor of the COF
Lender and secure COF Owner Indebtedness as described on Schedule 6.01(aa). Such
Liens are permitted hereunder, subject to the following limitations:
(i) Each of such Liens must be terminated on or
before the earlier of: (i) the maturity of the COF Owner Indebtedness which such
Lien secures (without giving effect to any extension of such maturity after the
Fourth Amendment Effective Date) or (ii) any refinancing, replacement or
substitution of the COF Owner Indebtedness which such Lien secures; and
(ii) The COF Owner shall have granted to Agent
second priority mortgage liens and security interests in each of the assets
which is encumbered by such Liens; and
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(iii) The amount of COF Owner Indebtedness
secured by such Liens may not be increased after the Fourth Amendment Effective
Date and any reductions in the amount of such Indebtedness after such date shall
be permanent; and
(iv) Any termination of a Lien by a COF Lender
in an asset after the Fourth Amendment Effective Date shall be permanent and
Convalescent or its Subsidiaries may not thereafter grant a new Lien on such
asset.
Permitted General Intangibles shall mean licenses,
permits, certificates or Medicare/Medicaid reimbursement contracts.
Permitted Investments shall mean:
(i) direct obligations of the United States of
America or any agency or instrumentality thereof or obligations backed by the
full faith and credit of the United States of America maturing in twelve months
or less from the date of acquisition;
(ii) commercial paper maturing in 180 days or
less rated not lower than A-1 by Standard & Poor's Corporation or P-1 by Xxxxx'x
Investors Service on the date of acquisition;
(iii) demand deposits, time deposits or
certificates of deposit maturing within one year in commercial banks whose
obligations are rated A-1, A or the equivalent or better by Standard & Poor's
Corporation or Xxxxx'x Investors Service on the date of acquisition;
(iv) publicly traded debt securities or
preferred stocks rated at least A or better by either Standard & Poor's
Corporation or by Xxxxx'x Investors Service which in the aggregate do not have,
at any time, a cost basis under GAAP in excess of $1,000,000;
(v) common stocks, or mutual funds which invest
in common stocks provided that (A) such stocks are of corporations organized and
existing under the laws of the United States of America, (B) such stocks are
traded publicly on a national securities exchange or the "over the counter
market", (C) the Borrower or its Subsidiaries do not have a cost basis in excess
of $15,000,000 in the aggregate in such stocks and mutual funds, (D) the
Borrower or its Subsidiaries invest in such stocks or mutual funds using funds
obtained from sources other than, directly or indirectly, proceeds of Loans
hereunder and (E) the cost basis of the Borrower or its Subsidiaries in such
stocks and mutual funds does not exceed at any time the amount of cash invested
in investments described in clauses (i) through (iv) and (vi) of this definition
of Permitted Investments; and
(vi) investments in money market funds rated AA
or AAm-G or higher by Standard & Poor's Corporation (or equivalent rating) whose
net asset value remains a constant $1.00 per share.
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Permitted Liens shall mean:
(i) Liens for taxes, assessments, or similar
charges, incurred in the ordinary course of business and which are not yet due
and payable;
(ii) Pledges or deposits made in the ordinary
course of business to secure payment of workers' compensation, or to participate
in any fund in connection with workers' compensation, unemployment insurance,
old-age pensions or other social security programs;
(iii) Liens of mechanics, materialmen,
warehousemen, carriers, or other like Liens, securing obligations incurred in
the ordinary course of business that are not yet due and payable and Liens of
landlords securing obligations to pay lease payments that are not yet due and
payable or in default;
(iv) Good faith pledges or deposits made in the
ordinary course of business to secure performance of bids, tenders, progress or
advance payments, contracts (other than for the repayment of borrowed money) or
leases, not in excess of the aggregate amount due thereunder, or to secure
statutory obligations, or surety, appeal, indemnity, performance or other
similar bonds required in the ordinary course of business;
(v) Encumbrances consisting of zoning
restrictions, easements, reservations, rights of way or other restrictions on
the use of real property, none of which materially impairs the use of such
property as currently used or the value thereof, and none of which is violated
in any material respect by existing or proposed structures or land use;
(vi) Liens, security interests and mortgages in
favor of the Agent for the benefit of the Banks;
(vii) Liens in respect of capital leases as and
to the extent permitted in Section 8.02(p) and Liens in respect of operating
leases;
(viii) Any Lien existing on the date of this
Agreement and described on Schedule 1.01(P) hereto (excluding Permitted
Convalescent Leased Facility Liens, Permitted Convalescent Owned Facility Liens,
Permitted Regency Leased Facility Liens and Permitted Regency Owned Facility
Liens, which are addressed in clauses (xi), (xii), (xiii) and (xiv) below and in
the definitions of such terms) provided that the principal amount secured
thereby is not hereafter increased and no additional assets become subject to
such Lien (other than through after-acquired property clauses in effect on the
date hereof);
(ix) Purchase Money Security Interests or other
liens, provided that the aggregate amount of loans and deferred payments secured
by such Purchase Money Security Interests or other liens shall not exceed
$500,000 (excluding for the purpose of this computation any loans or deferred
payments secured by Liens described on Schedule 1.01(P) hereto);
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(x) The following, (A) if the validity or amount
thereof is being contested in good faith by appropriate and lawful proceedings
diligently conducted so long as levy and execution thereon have been stayed and
continue to be stayed or (B) if a final judgment is entered and such judgment is
discharged within thirty (30) days of entry, and in either case they do not
materially affect the Collateral or, in the aggregate, materially impair the
ability of any Loan Party to perform its obligations hereunder or under the
other Loan Documents:
(1) Claims or Liens for taxes,
assessments or charges due and payable and subject to interest
or penalty, provided that such Loan Party maintains such
reserves or other appropriate provisions as shall be required
by GAAP and pays all such taxes, assessments or charges
forthwith upon the commencement of proceedings to foreclose
any such Lien;
(2) Claims, Liens or encumbrances
upon, and defects of title to, real or personal property other
than a material portion of the Collateral, including any
attachment of personal or real property or other legal process
prior to adjudication of a dispute on the merits; or
(3) Claims or Liens of mechanics,
materialmen, warehousemen, carriers, or other statutory
nonconsensual Liens;
(xi) Permitted Convalescent Leased Facility Liens;
(xii) Permitted Convalescent Owned Facility Liens;
(xiii) Permitted Regency Leased Facility Liens;
(xiv) Permitted Regency Owned Facility Liens; and
(xv) With respect to an Unrestricted Subsidiary
which is an Excluded Entity, Liens securing Indebtedness incurred by such
Unrestricted Subsidiary, provided that the sole assets subject to such Lien are
assets of such Unrestricted Subsidiary or assets of a person other than any Loan
Party or other Unrestricted Subsidiary.
Permitted Regency Leased Facility Liens shall mean
Liens on certain of the Permitted General Intangibles of Regency or MHF relating
to certain of the Regency Leased Facilities more particularly described on
Schedule 6.01(bb). Each such Lien is granted by Regency in favor of a RLF Lender
and secures RLF Lessor Indebtedness described on Schedule 6.01(bb). Such Liens
are permitted hereunder on and after the Regency Merger Effective Date, subject
to the following limitations:
(i) Each of such Liens must be terminated on or
before the earlier of: (i) the maturity of the RLF Lessor Indebtedness which
such Lien secures (without giving effect to any extension of such maturity after
the Ninth Amendment Effective Date) or (ii) any refinancing, replacement or
substitution of the RLF Lessor Indebtedness which such Lien secures;
-20-
(ii) Regency shall have granted to Agent
perfected security interests in each of the assets encumbered by such Liens and
Agent's security interests shall have priority over all other Liens on such
assets except that they shall be subordinate to the Liens in favor of the RLF
Lender, unless the RLF Lender is listed on Schedule 6.01(bb) hereto and such
Schedule states that such Lender has refused to consent to the grant to Agent of
such second Liens;
(iii) The amount of RLF Indebtedness secured by
such Liens may not be increased after the Ninth Amendment Effective Date and any
reductions in the amount of such Indebtedness after such date shall be
permanent; and
(iv) Any termination of such Liens by a RLF
Lender in an asset after the Ninth Amendment Effective Date shall be permanent
and Regency may not thereafter grant a new Lien on such asset.
Permitted Regency Owned Facility Liens shall mean
Liens on real and personal property of Regency or MHF or their Subsidiaries
relating to certain of the Regency Owned Facilities more particularly described
on Schedule 6.01(bb). Such Liens are granted in favor of the ROF Lender and
secure ROF Owner Indebtedness as described on Schedule 6.01(bb). Such Liens are
permitted hereunder, subject to the following limitations:
(i) Each of such Liens must be terminated on or
before the earlier of: (i) the maturity of the ROF Owner Indebtedness which such
Lien secures (without giving effect to any extension of such maturity after the
Ninth Amendment Effective Date) or (ii) any refinancing, replacement or
substitution of the ROF Owner Indebtedness which such Lien secures; and
(ii) The ROF Owner shall have granted to Agent
second priority mortgage liens and security interests in each of the assets
which is encumbered by such Liens; and
(iii) The amount of ROF Owner Indebtedness
secured by such Liens may not be increased after the Ninth Amendment Effective
Date and any reductions in the amount of such Indebtedness after such date shall
be permanent; and
(iv) Any termination of a Lien by a ROF Lender
in an asset after the Ninth Amendment Effective Date shall be permanent and
Regency or its Subsidiaries may not thereafter grant a new Lien on such asset.
Person shall mean any individual, corporation,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture, government or political subdivision or agency
thereof, or any other entity.
Pinnacle shall mean Pinnacle Care Corporation, a
corporation organized and existing under the laws of the State of Delaware.
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Pinnacle Rehab of Gwinnette shall mean Pinnacle Rehab
of Gwinnette, a general partnership formed and existing under the laws of the
State of Georgia, with Pinnacle Rehabilitation of Georgia, Inc., a Georgia
corporation, Xxxxxxx Xxxx and Xxxxxx Xxxxx as its general partners.
Pinnacle's Kansas Joint Venture shall mean Pinnacle's
Kansas Joint Venture, a general partnership formed and existing under the laws
of the State of Kansas, with Pinnacle Rehabilitation of Missouri, Inc., a
Missouri corporation and Jusker Corporation, a Kansas corporation as its general
partners.
Plan shall mean at any time an employee pension
benefit plan (including a Multiple Employer Plan but not a Multiemployer Plan)
which is covered by Title IV of ERISA or is subject to the minimum funding
standards under Section 412 of the Internal Revenue Code and either (i) is
maintained by any member of the ERISA Group for employees of any member of the
ERISA Group or (ii) has at any time within the preceding five years been
maintained by any entity which was at such time a member of the ERISA Group for
employees of any entity which was at such time a member of the ERISA Group.
Pledge Agreements shall mean collectively the Pledge
Agreements in substantially the form attached hereto as: (i) Exhibit 1.01(P)(1)
executed and delivered by the Borrower to the Agent for the benefit of the
Banks; (ii) Exhibit 1.01(P)(2) executed and delivered by any Subsidiary which
owns any equity ownership interest in another Corporate Subsidiary to the Agent
for the benefit of the Banks; (iii) Exhibit 1.01(P)(3) executed by any
Subsidiary which owns any interest in a Partnership Subsidiary; and (iv) any
other agreement pledging equity interests of a Subsidiary to the Agent for the
benefit of the Banks, in form and substance satisfactory to the Agent, as any
such Pledge Agreement may hereinafter be modified, amended, restated or replaced
from time to time in form and substance satisfactory to the Agent, and Pledge
Agreement shall mean separately any Pledge Agreement.
Pledged Collateral shall have the meaning assigned to
that term in the respective Pledge Agreements.
PNC Bank shall mean PNC Bank, National Association, a
national banking association, its successors and assigns.
Potential Default shall mean any event or condition
which with notice, passage of time or a determination by the Agent or the
Required Banks, or any combination of the foregoing, would constitute an Event
of Default.
Principal Office shall mean the main banking office
of the Agent, Xxxxx Xxxxxx xxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000.
Prior Credit Agreement shall mean that certain Credit
Agreement dated as of October 6, 1993 among Borrower, certain of the Banks and
PNC Bank, as Agent.
Prior Security Interest shall mean a valid and
enforceable perfected first priority security interest under the Uniform
Commercial Code in the UCC Collateral which is subject only to Permitted Liens.
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Prohibited Transaction shall mean any prohibited
transaction as defined in Section 4975 of the Internal Revenue Code or Section
406 of ERISA for which neither an individual nor a class exemption has been
issued by the United States Department of Labor.
Property shall mean all real property, both owned and
leased, of the Loan Parties.
Purchase Money Security Interest shall mean Liens
upon tangible personal property securing loans to a Loan Party or deferred
payments by a Loan Party for the purchase of such tangible personal property.
Purchase Price shall mean, with respect to any
Permitted Acquisition by the Loan Parties, the sum of (i) cash paid at closing,
(ii) the amount of any deferred payments, which are not contingent on the
financial performance of the business being acquired, (iii) the projected amount
of any deferred payments which are contingent on the financial performance of
the business being acquired following the acquisition, provided that it shall be
assumed for purposes of such projection that the cash flow and other financial
performance of the acquired business in each year after the acquisition date
shall be the same as the financial performance of such business during the
twelve (12) months preceding such date, (iv) the amount of any debt assumed or
guaranteed by any Loan Party, (v) if the Loan Parties are acquiring stock of
another person (whether by purchase, merger or otherwise) the amount of debt of
such person outstanding after the acquisition, plus (vi) the value of any stock,
securities or other consideration given by any of the Loan Parties in connection
therewith. If the consideration to be paid in connection with a Permitted
Acquisition includes deferred payments which are contingent on the financial
performance of the acquired business after the acquisition, the Loan Parties
shall compare the amount of deferred payments which the Loan Parties actually
pay (or which become ascertainable if the Loan Parties can ascertain the amount
of any deferred payments before paying them) with the amount which the Loan
Parties projected they would pay pursuant to clause (iii) in the preceding
sentence. The Purchase Price in connection with such acquisition shall be deemed
to increase by the amount of such excess for purposes of determining the
aggregate Purchase Price paid by the Loan Parties in connection with Permitted
Acquisitions pursuant to Sections 8.02(f)(iii)(v) and 8.02(f)(iv)(x).
Purchasing Bank shall mean a Bank which becomes a
party to this Agreement by executing an Assignment and Assumption Agreement.
Ratable Share shall mean the proportion that a Bank's
Revolving Credit Commitment bears to the Revolving Credit Commitments of all of
the Banks, respectively.
Regency shall mean Regency Health Care Centers, Inc.,
a corporation organized and existing under the laws of the State of Georgia
which shall merge with and into Mariner Health of Florida, Inc., a Delaware
corporation and a wholly-owned subsidiary of the Borrower which shall be the
survivor of such merger in accordance with the Regency Merger Documents.
Regency Facilities shall mean collectively the
Regency Owned Facilities and Regency Leased Facilities.
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Regency Facility Purchase Option shall mean an option
provided by a RLF Lender or ROF Lender in an Intercreditor Agreement giving the
Agent or the Banks the right to purchase the RLF Lessor Indebtedness or ROF
Owner Indebtedness from such RLF Lender or ROF Lender upon certain events of
default relating to such Indebtedness.
Regency Leased Facilities shall mean the health care
facilities leased by Regency, as lessee. Borrower has listed the Regency Leased
Facilities on Schedule 6.01(bb) under the heading "Regency Leased Facilities."
Regency Merger shall mean the merger of Regency into
Mariner Health of Florida, Inc., a Delaware corporation and a wholly-owned
subsidiary of the Borrower and the other transactions referred to in the Regency
Merger Documents. The Regency Merger is expected to occur on May 1, 1996.
Regency Merger Agreement shall mean that certain
Agreement and Plan of Merger dated as of February 27, 1996, among the Borrower,
Mariner Health of Florida, Inc., a Delaware corporation, Regency Health Care
Centers, Inc., a Florida corporation, MedTx Corporation, a Florida corporation,
Xxxxxx X. Xxxxxxxx, J. Xxxxxx Xxxxxx, Xxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxx and
Xxxxxx X. Xxxxx, as trustee of The Xxxxxx X. Xxxxx Revocable Trust of 1994, or
hereinafter amended or modified from time to time as permitted by this
Agreement.
Regency Merger Documents shall mean the Regency
Merger Agreement and all other documents executed in connection with or relating
to the Regency Merger.
Regency Merger Effective Date shall mean the
effective time of the merger of Regency into Mariner Health of Florida, Inc. The
Regency Merger Effective Date is expected to be on May 1, 1996.
Regency Owned Facilities shall mean the health care
facilities owned by Regency or its Subsidiaries. The Regency Owned Facilities
are listed on Schedule 6.01(bb) under the heading "Regency Owned Facilities."
Regulated Substances shall mean any substance,
including without limitation any solid, liquid, gaseous, thermal or thoriated
material, refuse, garbage, wastes, chemicals, petroleum products or by-products,
dust, scrap, PCB's, heavy metals, any substances defined as "hazardous
substances," "pollutants," "pollution," "contaminant," "hazardous or toxic
substances," "toxic wastes," "regulated substances," "industrial waste,"
"residual waste," "solid wastes," "municipal wastes," "infectious waste,"
"chemotherapeutic waste," "medical waste" or any related materials or substances
as now or hereafter defined pursuant to any Environmental Laws, ordinances,
rules or directives of any Official Body, the generation, manufacture,
processing, distribution, treatment, storage, disposal, transport, recycling,
reclamation, use, reuse or other management or mismanagement of which is
regulated by the Environmental Laws.
Regulation U shall mean Regulation U, T, G or X as
promulgated by the Board of Governors of the Federal Reserve System, as amended
from time to time.
Reimbursement Agreement shall mean that certain
Reimbursement Agreement dated as of October 1, 1993, as amended, among
Xxxxxxxxxxx Xxxxxx Xxxxxxxxxxx, XXX and NBG which provides in part that
Seventeenth Street Partnership shall reimburse NBT and NBG in respect of draws
under the Seventeenth Street Letter of Credit.
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Reportable Event means a reportable event described
in Section 4043 of ERISA and regulations thereunder with respect to a Plan or
Multiemployer Plan.
Required Banks shall mean (i) if there are no Loans
outstanding, Banks whose Commitments aggregate at least 51% of the Commitments
of all of the Banks, or (ii) if there are Loans outstanding, Banks whose Loans
outstanding aggregate at least 51% of the total principal amount of the Loans
outstanding hereunder.
Restricted Indebtedness shall mean with respect to
the Excluded Entities, Indebtedness secured by any Liens, other than
Indebtedness not to exceed $250,000 in the aggregate for all Excluded Entities
secured by Purchase Money Security Interests.
Restricted Investments shall mean collectively the
following with respect to the Excluded Entities: (i) investments or
contributions by any of the Loan Parties directly or indirectly in or to the
capital of or other payments to (except in connection with transactions for fair
value in the ordinary course of business) an Excluded Entity, (ii) loans by any
of the Loan Parties directly or indirectly to an Excluded Entity, (iii)
guaranties by any of the Loan Parties directly or indirectly of the obligations
of an Excluded Entity, or (iv) other obligations, contingent or otherwise, of
any of the Loan Parties to or for the benefit of an Excluded Entity. If the
nature of a Restricted Investment is tangible property then the amount of such
Restricted Investment shall be determined by valuing such property at fair value
in accordance with the past practice of the Loan Parties and such fair values
shall be satisfactory to the Agent, in its sole discretion.
Restricted Subsidiaries shall mean all Subsidiaries
of the Borrower other than the Unrestricted Subsidiaries of the Borrower which
as of the date of determination are Excluded Entities.
Revolving Credit Base Rate Option shall have the
meaning assigned to that term in Section 4.01(a)(i).
Revolving Credit Base Rate Portion shall mean the
portion of the Revolving Credit Loans bearing interest at any time under the
Revolving Credit Base Rate Option.
Revolving Credit Commitment shall mean as to any Bank
at any time, the amount initially set forth opposite its name on Schedule
1.01(R)(2) hereto in the column labeled "Amount of Commitment for Revolving
Credit Loans," and thereafter on Schedule I to the most recent Assignment and
Assumption Agreement, as such amount shall be reduced from time to time pursuant
to Sections 2.01 and 2.10 hereof, and Revolving Credit Commitments shall mean
the aggregate Revolving Credit Commitments of all of the Banks.
Revolving Credit Euro-Rate Option shall have the
meaning assigned to that term in Section 4.01(a)(ii).
Revolving Credit Euro-Rate Portion shall mean the
portion of the Revolving Credit Loans bearing interest at any time under the
Revolving Credit Euro-Rate Option.
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Revolving Credit Loan Request shall have the meaning
set forth in Section 2.05.
Revolving Credit Loans shall mean collectively and
Revolving Credit Loan shall mean separately all Revolving Credit Loans or any
Revolving Credit Loan made by the Banks or one of the Banks to the Borrower
pursuant to Section 2.01 hereof.
Revolving Credit Notes shall mean collectively all
the Revolving Credit Notes of the Borrower in the form of Exhibit 1.01(R) hereto
evidencing the Revolving Credit Loans together with all amendments, extensions,
renewals, replacements, refinancings or refundings thereof in whole or in part
and Revolving Credit Note shall mean separately any Revolving Credit Note.
RLF Lender shall have the meaning given to such term
in Section 6.01(bb).
RLF Lessor shall have the meaning given to such term
in Section 6.01(bb).
RLF Lessor Indebtedness shall have the meaning given
to such term in Section 6.01(bb).
ROF Lender shall have the meaning given to such term
in Section 6.01(bb).
ROF Owner shall have the meaning given to such term
in Section 6.01(bb).
ROF Owner Indebtedness shall have the meaning given
to such term in Section 6.01(bb).
Solvent shall mean, with respect to any person on a
particular date, that on such date (i) the fair value of the property of such
person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such person, (ii) the present fair
saleable value of the assets of such person is not less than the amount that
will be required to pay the probable liability of such person on its debts as
they become absolute and matured, (iii) such person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (iv) such person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such person's ability to pay as such debts and liabilities
mature, and (v) such person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such person's
property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such person is
engaged. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
Subordinated Indebtedness Incurrence Date shall mean
March 28, 1996, the date of issuance by the Borrower of the Subordinated Notes
pursuant to and in accordance with the Indenture.
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Subordinated Notes shall mean the $150 million in
original principal amount of Subordinated Notes due 2006 issued by the Borrower
pursuant to the Indenture. It is acknowledged that prior to the Exchange Offer,
the Subordinated Notes shall consist of the Series A Securities, and following
the Exchange Offer, the Subordinated Notes shall consist of the Series B
Securities and any Series A Securities which are not exchanged in the Exchange
Offer, as such terms are defined in the Indenture.
Subordination Agreement (Intercompany) shall mean
that certain Subordination Agreement (Intercompany) in the form of Exhibit
1.01(S) hereto executed and delivered by each Loan Party to the Agent for the
benefit of the Banks.
Subsidiary of any person at any time shall mean (i)
any corporation, limited liability company or trust of which more than 50% (by
number of shares or number of votes) of the outstanding capital stock, member
interests or shares of beneficial interest normally entitled to vote for the
election of one or more directors or trustees (regardless of any contingency
which does or may suspend or dilute the voting rights) is at such time owned
directly or indirectly by such Person or one or more of such Person's
Subsidiaries, or any partnership of which such Person is a general partner or of
which more than 50% of the general or voting partnership interests is at the
time directly or indirectly owned by such Person or one or more of such Person's
Subsidiaries, and (ii) any corporation, trust, limited liability company,
partnership or other entity which is controlled or capable of being controlled
by such Person or one or more of such Person's Subsidiaries.
Total Indebtedness shall mean as of any date of
determination, without duplication, the total Indebtedness of the Borrower and
its Subsidiaries.
Transferor Bank shall mean the selling Bank pursuant
to an Assignment and Assumption Agreement.
Tri-State shall mean Tri-State Health Care, Inc., a
West Virginia corporation, which is a Subsidiary of Pinnacle and the sole
general partner of Seventeenth Street Partnership.
Trustee Agreement shall mean that certain Paying
Agency Agreement executed by Convalescent, PNC Bank and certain of the CLF
Lessors listed on Schedule 6.01(aa) in the form of Exhibit 1.01(T) providing for
the payment by Convalescent to PNC Bank, as trustee for Convalescent and such
CLF Lessors, of monies due to the CLF Lessors under the leases between such CLF
Lessors and Convalescent, and the subsequent payment of such monies by PNC Bank
to the CLF Lenders.
UCC Collateral shall mean the Pledged Collateral and
that portion of the Collateral under the Mortgage or the Leasehold Mortgage
which consists of personal property in which a security interest may be granted
under the Uniform Commercial Code.
Uniform Commercial Code shall have the meaning
assigned to that term in Section 6.01(p).
Unrestricted Subsidiary of any person at any time
shall mean any corporation or limited liability company of which more than 50%
but less than 80% (by number of shares or number of votes) of the outstanding
capital stock or member interests normally
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entitled to vote for the election of one or more directors (regardless of any
contingency which does or may suspend or dilute the voting rights) is at such
time owned directly or indirectly by such Person or one or more of such Person's
Subsidiaries, or any partnership of which such Person is a general partner or of
which more than 50% but less than 80% of the general or voting partnership
interests is at the time directly or indirectly owned by such Person or one or
more of such Person's Subsidiaries.
1.02 Construction. Unless the context of this Agreement
otherwise clearly requires, references to the plural include the singular, the
singular the plural and the part the whole, "or" has the inclusive meaning
represented by the phrase "and/or," and "including" has the meaning represented
by the phrase "including without limitation." References in this Agreement to
"determination" of or by the Agent or the Banks shall be deemed to include good
faith calculations by the Agent or the Banks (in the case of quantitative
determinations) and good faith beliefs by the Agent or the Banks (in the case of
qualitative determinations). Whenever the Agent or the Banks are granted the
right herein to act in its or their sole discretion or to grant or withhold
consent such right shall be exercised in good faith. The words "hereof,"
"herein," "hereunder" and similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
section and other headings contained in this Agreement and the Table of Contents
preceding this Agreement are for reference purposes only and shall not control
or affect the construction of this Agreement or the interpretation thereof in
any respect. Section, subsection, schedule and exhibit references are to this
Agreement unless otherwise specified.
1.03 Accounting Principles. Except as otherwise provided in
this Agreement, all computations and determinations as to accounting or
financial matters and all financial statements to be delivered pursuant to this
Agreement shall be made and prepared in accordance with GAAP (including
principles of consolidation where appropriate), and all accounting or financial
terms shall have the meanings ascribed to such terms by GAAP. In the event of:
(i) any dissolution or liquidation of any Subsidiary pursuant to Section 8.02(f)
of this Agreement, (ii) any consolidation or merger of any Subsidiary with or
into any person (other than the Borrower or another Subsidiary) pursuant to
Section 8.02(f) of this Agreement, or (iii) the sale, transfer, lease or
disposition of assets of the Borrower or any Subsidiary permitted pursuant to
Section 8.02(g)(v) of this Agreement, then, in the case of any of the foregoing
clauses (i), (ii) or (iii), any financial covenant to be calculated hereunder
(including, without limitation, those set forth in Sections 2.01(c), 4.01, and
8.02(q) through 8.02(u), inclusive) shall be calculated for the period during
which such sale, transfer, lease or other disposition occurs, excluding all
financial items (for example and without limitation, all cash flow, revenues,
expenses, and income) attributable to the assets sold, transferred, leased or
otherwise disposed of.
ARTICLE II
REVOLVING CREDIT FACILITY
-------------------------
2.01 Revolving Credit Commitments; Limitation on Borrowings.
(a) Revolving Credit Commitments. Subject to the
terms and conditions hereof and relying upon the representations and warranties
herein set forth, each Bank
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severally agrees to make revolving credit loans (the "Revolving Credit Loans")
to the Borrower at any time and from time to time on or after the date hereof
to, but not including, the Expiration Date in an aggregate principal amount not
to exceed at any one time such Bank's Revolving Credit Commitment minus such
Bank's Ratable Share of the aggregate undrawn face amount of outstanding Letters
of Credit issued pursuant to Section 2.09. Within such limits of time and amount
and subject to the other provisions of this Agreement, the Borrower may borrow,
repay and reborrow pursuant to this Section 2.01. In no event shall outstanding
Revolving Credit Loans as of any date exceed the Revolving Credit Commitments as
of such date, and the entire outstanding principal amount of the Revolving
Credit Loans shall be due and payable on the Expiration Date.
(b) Extension by Banks of the Expiration Date. Upon
or promptly after delivery by the Borrower of the annual financial statements to
be provided under Section 8.03(c) for the fiscal year ending December 31, 1996
or any subsequent fiscal year, the Borrower may request a one-year extension of
the Expiration Date by written notice to the Banks, and the Banks agree to
respond to the Borrower's request for an extension by the later of sixty (60)
days following receipt of the request or May 31 of such year; provided, however,
that all the Banks must consent to any extension of the Expiration Date and the
failure of the Banks to respond within such time period shall not in any manner
constitute an extension of the Expiration Date.
(c) Limitation on Borrowings. Notwithstanding the
provisions of Sections 2.01(a) and 2.01(b) of this Agreement, the outstanding
principal amount of Revolving Credit Loans to the Borrower shall not exceed at
any time an amount such that after giving effect to such borrowings, the ratio
of (i) Total Indebtedness to (ii) Consolidated Cash Flow from Operations
exceeds: (A) 3.75 to 1.0 from and including the Convalescent Merger Effective
Date through but not including the Subordinated Indebtedness Incurrence Date;
and (B) 4.5 to 1.0 from and after the Subordinated Indebtedness Incurrence Date.
For purposes of such ratio, the amount
determined under clause (i) shall be as of the date of determination and the
amount determined under clause (ii) shall be for the twelve-month period ending
on the last day of the month which precedes such date of determination.
Notwithstanding the provisions of this
subsection (c), at no time shall the outstanding principal amount of proceeds of
Revolving Credit Loans made to the Borrower which are used by the Borrower or
any Subsidiary of the Borrower to, directly or indirectly, make an investment in
or loan to Ansonia, exceed Two Million Dollars ($2,000,000). Notwithstanding the
provisions of this subsection (c), at no time shall proceeds of Revolving Credit
Loans be used by the Borrower or any Subsidiary of the Borrower to, directly or
indirectly, make an investment in or loan to Pinnacle Rehab of Gwinnette or
Pinancle's Kansas Joint Venture. Notwithstanding the provisions of this
subsection (c), until all required governmental licenses and approvals have been
obtained from governmental regulatory authorities for the operation of Regency
Nursing and Rehabilitation Center located in Olathe, Kansas, by Regency Health
Properties VI, Ltd., no proceeds of Revolving Credit Loans shall be
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used by the Borrower or any Subsidiary of the Borrower to, directly or
indirectly, make an investment in or loan to Regency Health Properties VI, Ltd.
2.02 Nature of Banks' Obligations with Respect to
Revolving Credit Loans. Each Bank shall be obligated to participate in each
request for Revolving Credit Loans pursuant to Section 2.05 hereof in accordance
with its Ratable Share. The aggregate of each Bank's Revolving Credit Loans
outstanding hereunder to the Borrower at any time shall never exceed its
Revolving Credit Commitment minus its Ratable Share of the aggregate undrawn
face amount of outstanding Letters of Credit. The obligations of each Bank
hereunder are several. The failure of any Bank to perform its obligations
hereunder shall not affect the obligations of the Borrower to any other party
nor shall any other party be liable for the failure of such Bank to perform its
obligations hereunder. The Banks shall have no obligation to make Revolving
Credit Loans hereunder on or after the Expiration Date.
2.03 Commitment Fees. Accruing from the Ninth
Amendment Effective Date until the Expiration Date, the Borrower agrees to pay
to the Agent for the account of each Bank, as consideration for such Bank's
Revolving Credit Commitment hereunder, a commitment fee (the "Commitment Fee")
equal to the applicable percentage set forth below based on the ratio of Total
Indebtedness to Consolidated Cash Flow from Operations.
Ratio of Total Indebtedness
to Consolidated Commitment Fee
Cash Flow From Operations (per annum)
------------------------- -----------
Greater than 4.0 to 1.0 .375%
Greater than 3.5 to 1.0
but less than or equal to
4.0 to 1.0 .250%
Greater than 3.0 to 1.0
but less than or equal
to 3.5 to 1.0 .225%
Greater than 2.5 to 1.0
but less than or equal
to 3.0 to 1.0 .200%
Less than or equal to
2.5 to 1.0 .150%
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Such ratio shall be computed on the date of each Acquisition Requiring
Certification as more fully set forth in the third sentence of Section
8.01(m)(i) or the second sentence of Section 8.01(m)(ii), as applicable, and any
interest rate adjustment attributable to such computation shall be effective on
the date of such Acquisition Requiring Certification. If Borrower does not make
any Acquisition Requiring Certification during any fiscal quarter, (1) such
ratio shall also be computed as of the end of such fiscal quarter, with
Consolidated Cash Flow from Operations computed for the four fiscal quarters
then ended and (2) any increase in the Commitment Fee attributable to a change
in such ratio shall be effective as of the Delivery Date for the Borrower's
consolidated financial statements for such quarter and (3) any decrease of the
Commitment Fees attributable to a change in such ratio shall be effective as of
the later of the Delivery Date for such financial statements and the date on
which such financial statements are actually delivered to the Agent and the
Banks. The Commitment Fees shall be computed on the Fourth Amendment Effective
Date based on the Historical Statements and such computation shall remain in
effect after such date until it is changed pursuant to the preceding sentence.
Commitment Fees shall be computed on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed on the average daily unborrowed amount
of such Bank's Revolving Credit Commitment (less its Ratable Share of the
aggregate undrawn face amount of outstanding Letters of Credit) as the same may
be constituted from time to time. All Commitment Fees shall be payable in
arrears on the first Business Day of each April, July, October and January after
the date hereof commencing on January 1, 1994 and on the Expiration Date or upon
acceleration of maturity of the Notes.
2.04 [Intentionally Omitted].
2.05 Revolving Credit Loan Requests. Except as otherwise
provided herein, the Borrower may from time to time prior to the Expiration Date
request the Banks to make Revolving Credit Loans, or renew or convert the
Interest Rate Option applicable to existing Revolving Credit Loans, by the
delivery to the Agent, not later than 10:00 A.M. Pittsburgh time (i) three (3)
Business Days prior to the proposed Borrowing Date with respect to the making of
Revolving Credit Loans to which the Revolving Euro-Rate Option applies or the
conversion to or the renewal of the Euro-Rate Option for any Revolving Credit
Loans; and (ii) one (1) Business Day prior to either the proposed Borrowing Date
with respect to the making of a Revolving Credit Loan to which the Revolving
Credit Base Rate Option applies or the last day of the preceding Euro-Rate
Interest Period with respect to the conversion to the Revolving Credit Base Rate
Option for any Revolving Credit Loan, of a duly completed request therefor
substantially in the form of Exhibit 2.05 hereto or a request by telephone
immediately confirmed in writing by letter, facsimile or telex in such form
(each, a "Revolving Credit Loan Request"), it being understood that the Agent
may rely in good faith on the authority of any person making such a telephonic
request and purporting to be an Authorized Officer. Each Revolving Credit Loan
Request shall be irrevocable and shall (i) specify the proposed Borrowing Date;
(ii) specify the aggregate amount of the proposed Revolving Credit Loans
comprising the Borrowing Tranche, which shall be in integral multiples of
$500,000 and not less than $5,000,000 for Revolving Credit Loans to which the
Revolving Credit Euro-Rate Option applies and not less than the lesser of
$500,000 or the maximum amount available for Revolving Credit Loans to which the
Revolving Credit Base Rate Option applies; (iii) specify whether the Revolving
Euro-Rate
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Option or Base Rate Option shall apply to the proposed Revolving Credit Loans
comprising the Borrowing Tranche; (iv) specify in the case of Revolving Credit
Loans to which the Revolving Euro-Rate Option applies, an appropriate Euro-Rate
Interest Period for the proposed Revolving Credit Loans comprising the Borrowing
Tranche; (v) specify the use by the Borrower of the Loan proceeds; (vi) certify
that no Event of Default or Potential Default has occurred and is continuing
after giving effect to the proposed Revolving Credit Loan and without limiting
the generality of this clause (vi), certify compliance with Section 2.01(c) of
this Agreement; and (vii) in the event that the proceeds of the proposed
Revolving Credit Loan will be used to acquire a new health care facility or
other business, permitted to be acquired pursuant to this Agreement, certify, in
detail satisfactory to the Agent, a calculation of the ratio specified in
Section 2.01(c).
2.06 Making Revolving Credit Loans. The Agent shall, promptly
after receipt by it of a Loan Request pursuant to Section 2.05, notify the Banks
of its receipt of such Loan Request specifying: (i) the proposed Borrowing Date
and the time and method of disbursement of such Revolving Credit Loan; (ii) the
amount and type of such Revolving Credit Loan and the applicable Euro-Rate
Interest Period (if any); and (iii) the apportionment among the Banks of the
Revolving Credit Loans as determined by the Agent in accordance with Section
2.02 hereof. Each Bank shall remit the principal amount of each Revolving Credit
Loan to the Agent such that the Agent is able to, and the Agent shall, to the
extent the Banks have made funds available to it for such purpose, fund such
Revolving Credit Loan to the Borrower in U.S. Dollars and immediately available
funds at the Principal Office prior to 2:00 P.M. Pittsburgh time on the
Borrowing Date, provided that if any Bank fails to remit such funds to the Agent
in a timely manner the Agent may elect in its sole discretion to fund with its
own funds the Revolving Credit Loan of such Bank on the Borrowing Date.
2.07 Revolving Credit Note. The obligation of the Borrower to
repay the aggregate unpaid principal amount of the Revolving Credit Loans made
to it by each Bank, together with interest thereon, shall be evidenced by a
promissory note of the Borrower dated the Closing Date in substantially the form
attached hereto as Exhibit 1.01(R) payable to the order of each Bank in a face
amount equal to the Revolving Credit Commitment of such Bank.
2.08 Use of Proceeds. The proceeds of the Revolving Credit
Loans shall be used for (a) the payment of obligations under the Prior Credit
Agreement, (b) the acquisition and development of health care related businesses
and facilities and (c) general corporate purposes, which, among other things,
may include working capital or intercompany loans to a Subsidiary of the
Borrower provided the Borrower and such Subsidiary comply with Section 8.01(1)
hereof.
2.09 Letter of Credit Subfacility.
(a) At the request of the Borrower, the Agent will
issue, on the terms and conditions hereinafter set forth, standby letters of
credit (collectively, "Letters of Credit"); provided, however, that each Letter
of Credit shall have a maximum maturity of twelve (12) months from the date of
issuance and shall in no event expire later than one (1) Business Day prior to
the Expiration Date; provided, further, however, that in no event shall (i) the
aggregate undrawn face amount of the Letters of Credit issued pursuant to this
Section 2.09 exceed, at any
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one time, $10,000,000; or (ii) the aggregate outstanding principal balance of
the Revolving Credit Loans made to the Borrower pursuant to Section 2.01 and the
aggregate undrawn face amount of the Letters of Credit issued by the Agent under
this Section 2.09 exceed, at any one time, the Revolving Credit Commitments.
Schedule 2.09(a) hereto lists letters of credit which PNC Bank issued for the
accounts of certain of the Loan Parties prior to the date hereof pursuant to the
Prior Credit Agreement and which shall remain outstanding after the Closing Date
(the "Existing Letters of Credit"). Each Existing Letter of Credit shall be a
Letter of Credit hereunder on and after the Closing Date and the provisions of
this Section 2.09 shall apply to such Existing Letter of Credit. (Schedule
2.09(a) also lists all amounts of Loans, interest and expenses outstanding under
the Prior Credit Agreement.)
(b) The Borrower shall pay to the Agent for the
ratable account of the Banks a fee (the "Letter of Credit Fee") equal to the
applicable interest rate per annum then in effect for Revolving Credit Loans
which are subject to the Euro-Rate Option less the Euro-Rate, which fee shall be
computed on the face amount of each Letter of Credit and shall be payable
quarterly in arrears commencing with the first Business Day of each April, July,
October and January following issuance of each Letter of Credit and on the
expiration date for each Letter of Credit. The Borrower shall also pay to the
Agent the Agent's then in effect customary documentation fee payable with
respect to the Letters of Credit as the Agent may generally charge from time to
time.
(c) Any and all amounts which the Agent is required
to advance pursuant to the Letters of Credit shall become, at the time the
amounts are advanced, Revolving Credit Loans from the Banks and shall thereafter
bear interest at the rate set forth in, and in accordance with the provisions
contained in, Section 4.01. The Agent will notify the Banks of the amount
required to be advanced pursuant to the Letters of Credit. Before 10:00 A.M.
(Pittsburgh time) on the date of any advance the Agent is required to make
pursuant to the Letters of Credit, each Bank shall make available such Bank's
Ratable Share of such advance in immediately available funds to the Agent.
(d) The Borrower agrees to be bound by the terms of
the Agent's application and/or agreement for Letters of Credit and the Agent's
written regulations and customary practices relating to Letters of Credit,
though such interpretation may be different from the Borrower's own, and it is
understood and agreed that, except in the case of gross negligence or willful
misconduct, the Agent shall not be liable for any error, negligence and/or
mistakes, whether of omission or commission, in following the Borrower's
instructions or those contained in the Letters of Credit or any modifications,
amendments or supplements thereto.
2.10 Voluntary Reduction of Revolving Credit Commitments. The
Borrower shall have the right at any time and from time to time upon not less
than three (3) Business Days' prior written notice (which notice shall be
irrevocable) to the Agent to terminate or to permanently and ratably reduce, in
an aggregate amount of not less than $1,000,000 or an integral multiple thereof,
the respective Revolving Credit Commitments without penalty or premium, except
as hereinafter set forth. The Agent shall promptly advise each Bank of the date
and amount of each such reduction. After each such reduction, the Commitment Fee
shall be
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calculated upon the unused portion of the Revolving Credit Commitments as so
reduced and the amount of reduction may not be reinstated.
ARTICLE III
COLLATERAL
----------
3.01 Collateral. The Borrower shall execute and deliver the
Pledge Agreement in the form of Exhibit 1.01(P)(1) pledging all of the stock,
partnership interests or other ownership interests owned by the Borrower in each
existing or hereafter formed or acquired Subsidiary and in each existing or
hereafter formed or acquired Excluded Entity. Each of the Borrower's Restricted
Subsidiaries (whether now existing or hereafter formed or acquired, including
without limitation any Excluded Entity which becomes a Restricted Subsidiary,
upon so becoming a Restricted Subsidiary) shall execute and deliver a Guaranty
Agreement in the form of Exhibit 1.01(G). Each of the Borrower's Subsidiaries
(whether now owned or hereafter acquired) owning stock, partnership interests or
other ownership interests of each existing or hereafter formed or acquired
Subsidiary or each existing or hereafter formed or acquired Excluded Entity
shall execute a Pledge Agreement in the form of Exhibit 1.01(P)(2) or (3), as
the case may be or other Pledge Agreement in form and substance satisfactory to
the Agent.
ARTICLE IV
INTEREST RATES
--------------
4.01 Interest Rate Options. The Borrower shall pay interest in
respect of the outstanding unpaid principal amount of the Loans as selected by
it from the Base Rate Option or Euro-Rate Option set forth below applicable to
the Loans (it being understood that, subject to the provisions of this
Agreement, the Borrower may select different Interest Rate Options and different
Euro-Rate Interest Periods to apply simultaneously to the Loans comprising
different Borrowing Tranches and may convert to or renew one or more Interest
Rate Options with respect to all or any portion of the Loans comprising any
Borrowing Tranche; provided that there shall not be at any one time outstanding
more than ten (10) Borrowing Tranches in the aggregate among all the Loans
accruing interest at a Euro-Rate Option). The Agent's determination of a rate of
interest and any change therein shall in the absence of manifest error be
conclusive and binding upon all parties hereto. If at any time the designated
rate applicable to any Loan made by any Bank exceeds such Bank's highest lawful
rate, the rate of interest on such Bank's Loan shall be limited to such Bank's
highest lawful rate.
(a) Revolving Credit Interest Rate Options. The
Borrower shall have the right to select from the following Interest Rate Options
applicable to the Loans:
(i) Revolving Credit Base Rate Option: For
periods commencing on and after the Ninth Amendment Effective Date, a
fluctuating rate per annum (computed on the basis of a year of 365 or 366 days,
as the case may be, and actual days elapsed) equal to the Base Rate, such
interest rate to change automatically from time to time effective as of the
effective date of each change in the Base Rate.
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(ii) Revolving Credit Euro-Rate Option: For
periods commencing on and after the Ninth Amendment Effective Date, a rate per
annum (computed on the basis of a year of 360 days and actual days elapsed)
equal to the Euro-Rate plus the applicable percentage set forth below, based
upon the ratio of (a) Total Indebtedness, to (b) Consolidated Cash Flow from
Operations. Such ratio shall be computed on the date of each Acquisition
Requiring Certification as more fully set forth in the third sentence of Section
8.01(m)(i) or the second sentence of Section 8.01(m)(ii), as applicable, and any
interest rate adjustment attributable to such computation shall be effective on
the date of such Acquisition Requiring Certification. If Borrower does not make
any Acquisition Requiring Certification during any fiscal quarter, such ratio
shall also be computed as of the end of such quarter, but any interest
adjustments attributable to a change in such ratio shall be effective (a) with
respect to an increase of the applicable interest rate, as of the Delivery Date
for the Borrower's consolidated financial statements for such quarter and (b)
with respect to a decrease of the applicable interest rate, as of the later of
the Delivery Date for such financial statements and the date on which such
financial statements are actually delivered to the Agent and the Banks.
Ratio of Total Indebtedness
to Consolidated
Cash Flow from Operations Applicable Interest Rate
------------------------- ------------------------
Greater than 4.0 to 1.0 Euro-Rate plus 1-1/2%
Greater than 3.5 to 1.0 but less than or
equal to 4.0 to 1.0 Euro-Rate plus 1-1/4%
Greater than 3.0 to 1.0 but less than or
equal to 3.5 to 1.0 Euro-Rate plus 1%
Greater than 2.5 to 1.0 but less than or
equal to 3.0 to 1.0 Euro-Rate plus 3/4%
Less than or equal to 2.5 to 1.0 Euro-Rate plus 1/2%
(iii) The ratio of Total Indebtedness to
Consolidated Cash Flow from Operations on the Fourth Amendment Effective Date
for purposes of this Section 4.01 shall be based on the Historical Statements.
(b) Rate Quotations. The Borrower may call the Agent
on or before the date on which a Loan Request is to be delivered to receive an
indication of the rates then in effect, but it is acknowledged that such
indication shall not be binding on the Agent or the Banks nor affect the rate of
interest which thereafter is actually in effect when the election is made.
4.02 Interest Periods. At any time when the Borrower shall
select, convert to or renew a Euro-Rate Option, the Borrower shall notify the
Agent thereof at least three (3) Business Days prior to the effective date of
such Euro-Rate Option by delivering a Loan Request. The notice shall specify an
interest period during which such Interest Rate Option shall apply, such
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periods to be one, two, three or six months in the event of a Euro-Rate Option
("Euro-Rate Interest Period"), provided, that:
(a) any Euro-Rate Interest Period which would
otherwise end on a date which is not a Business Day shall be extended to the
next succeeding Business Day unless such Business Day falls in the next calendar
month, in which case such Euro-Rate Interest Period shall end on the next
preceding Business Day;
(b) any Euro-Rate Interest Period which begins on the
last day of a calendar month for which there is no numerically corresponding day
in the subsequent calendar month during which such Euro-Rate Interest Period is
to end shall end on the last Business Day of such subsequent month;
(c) the Revolving Credit Euro-Rate Portion for each
Euro-Rate Interest Period shall be in integral multiples of $500,000 and not
less than $5,000,000;
(d) the Borrower shall not select, convert to or
renew a Euro-Rate Interest Period for any portion of the Loans that would end
after the Expiration Date; and
(e) in the case of the renewal of a Euro-Rate Option
at the end of a Euro-Rate Interest Period, the first day of the new Euro-Rate
Interest Period shall be the last day of the preceding Euro-Rate Interest
Period, without duplication in payment of interest for such day.
4.03 Interest After Default. To the extent permitted by Law,
upon the occurrence and during the continuation of an Event of Default, any
principal, interest, fee or other amount payable hereunder shall bear interest
for each day thereafter until paid in full (before and after judgment) at a rate
per annum which shall be equal to two hundred (200) basis points (2% per annum)
above the rate of interest otherwise applicable with respect to such amount or
the Base Rate if no rate of interest is otherwise applicable, but in no event in
excess of the highest rate permitted under applicable law. The Borrower
acknowledges that such increased interest rate reflects, among other things, the
fact that such Loans or other amounts have become a substantially greater risk
given their default status and that the Banks are entitled to additional
compensation for such risk. If an Event of Default shall occur and be
continuing, the Agent may in its discretion limit the Borrower to the Base Rate
Option.
4.04 Euro-Rate Unascertainable.
(a) If on any date on which a Euro-Rate would
otherwise be determined, the Agent shall have determined (which determination
shall be conclusive absent manifest error) that:
(i) adequate and reasonable means do not exist
for ascertaining such Euro-Rate, or
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(ii) a contingency has occurred which materially
and adversely affects the London interbank market relating to the Euro-Rate, or
(b) if at any time any Bank shall have determined (which
determination shall be conclusive absent manifest error) that:
(i) the making, maintenance or funding of any
Loan to which a Euro-Rate Option applies has been made impracticable or unlawful
by compliance by such Bank in good faith with any Law or any interpretation or
application thereof by any Official Body or with any request or directive of any
such Official Body (whether or not having the force of Law), or
(ii) such Euro-Rate Option will not adequately
and fairly reflect the cost to such Bank of the establishment or maintenance of
any such Loan, or
(iii) after making all reasonable efforts that
deposits of the relevant amount in Dollars for the relevant Euro-Rate Interest
Period for a Loan to which a Euro-Rate Option applies, respectively, are not
available to such Bank with respect to a proposed Euro-Rate Loan in the London
interbank market, in the case of any event specified in subsection (a) above,
then the Agent shall promptly so notify the Banks and the Borrower thereof and
in the case of an event specified in subsection (b) above, such Bank shall
promptly so notify the Agent and endorse a certificate to such notice as to the
specific circumstances of such notice and the Agent shall promptly send copies
of such notice and certificate to the other Banks and the Borrower. Upon such
date as shall be specified in such notice (which shall not be earlier than the
date such notice is given) the obligation of (A) the Banks in the case of such
notice given by the Agent or (B) such Bank in the case of such notice given by
such Bank to allow the Borrower to select, convert to or renew a Euro-Rate
Option shall be suspended until the Agent shall have later notified the Borrower
or such Bank shall have later notified the Agent, of the Agent's or such Bank's,
as the case may be, determination (which determination shall be conclusive
absent manifest error) that the circumstances giving rise to such previous
determination no longer exist. If at any time the Agent makes a determination
under subsection (a) or (b) of this Section 4.04 and the Borrower has previously
notified the Agent of its selection of, conversion to or renewal of a Euro-Rate
Option and such Interest Rate Option has not yet gone into effect, such
notification shall be deemed to provide for selection of, conversion to or
renewal of the Base Rate Option otherwise available with respect to such Loans.
If any Bank notifies the Agent of a determination under subsection (b) of this
Section 4.04, the Borrower shall, subject to the Borrower's indemnification
obligations under Section 5.06(b), as to any Loan of the Bank to which a
Euro-Rate Option applies, on the date specified in such notice either convert
such Loan to the Base Rate Option otherwise available with respect to such Loan
or prepay such Loan in accordance with Section 5.04 hereof. Absent due notice
from the Borrower of conversion or prepayment such Loan shall automatically be
converted to the Base Rate Option otherwise available with respect to such Loan
upon such specified date.
4.05 Selection of Interest Rate Options. If the Borrower fails
to select a Euro-Rate Interest Period in accordance with the provisions of
Section 4.02 in the case of renewal of the Revolving Credit Euro-Rate Portion,
the Borrower shall be deemed to have converted such
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Loan or portion thereof to the Base Rate Option otherwise available with respect
to such Loans, commencing upon the last day of that Euro-Rate Interest Period.
If an Event of Default shall occur and be continuing, the Agent may in its
discretion limit the Borrower to the Base Rate Option hereunder.
ARTICLE V
PAYMENTS
--------
5.01 Payments. All payments and prepayments to be made in
respect of principal, interest, Commitment Fees, Closing Fee, Letter of Credit
Fees, Agent's Fee or other fees or amounts due from the Borrower hereunder shall
be payable prior to 11:00 A.M. (Pittsburgh time) on the date when due without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by the Borrower, and without setoff, counterclaim or other
deduction of any nature, and an action therefor shall immediately accrue. Such
payments shall be made to the Agent at the Principal Office for the ratable
accounts of the Banks with respect to the Loans in U.S. Dollars and in
immediately available funds, and the Agent shall promptly distribute such
amounts to the Banks in immediately available funds, provided that in the event
payments are received by 11:00 A.M. (Pittsburgh time) by the Agent with respect
to the Loans and such payments are not distributed to the Banks on the same day
received by the Agent, the Agent shall pay the Banks the Federal Funds Effective
Rate with respect to the amount of such payments for each day held by the Agent
and not distributed to the Banks. The Agent's and each Bank's statement of
account, ledger or other relevant record shall, in the absence of manifest
error, be conclusive as the statement of the amount of principal of and interest
on the Loans and other amounts owing under this Agreement and shall be deemed an
"account stated."
5.02 Pro Rata Treatment of Banks. Each borrowing, and each
selection of, conversion to or renewal of any Interest Rate Option and each
payment or prepayment by the Borrower with respect to principal, interest,
Commitment Fees, Closing Fee, Letter of Credit Fees, or other fees or amounts
due from the Borrower hereunder to the Banks with respect to the Loans, shall
(except as provided in Section 4.04(b) [Euro-Rate Unascertainable], 5.04(b)
[Voluntary Prepayments] or 5.06(a) [Additional Compensation in Certain
Circumstances] hereof) be made in proportion to the Loans outstanding from each
Bank and if no such Loans are then outstanding, in proportion to the Ratable
Share of each Bank.
5.03 Interest Payment Dates. Interest on Loans to which the
Base Rate Option applies shall be due and payable in arrears on the first
Business Day of each April, July, October and January after the date hereof and
on the Expiration Date or upon acceleration of the Notes. Interest on Loans to
which a Euro-Rate Option applies shall be due and payable on the last day of
each Euro-Rate Interest Period for those Loans, and if any such Euro-Rate
Interest Period is longer than three months, also on the last day of every third
month during such period.
5.04 Voluntary Prepayments.
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(a) The Borrower shall have the right at its option
from time to time to prepay the Loans in whole or part without premium or
penalty (except as provided in subsection (b) below or in Section 5.06 hereof):
(i) at any time with respect to any Loan to
which the Base Rate Option applies,
(ii) on the last day of the applicable Euro-Rate
Interest Period with respect to Loans to which a Euro-Rate Option applies,
(iii) on the date specified in a notice by any
Bank pursuant to Section 4.04(b) [Euro-Rate Unascertainable] hereof with respect
to any Loan to which a Euro-Rate Option applies.
Whenever the Borrower desires to prepay any part of the Loans,
it shall provide a prepayment notice to the Agent at least one (1) Business Day
prior to the date of prepayment of Loans setting forth the following
information:
(x) the date, which shall be a Business
Day, on which the proposed prepayment is to be made; and
(y) the total principal amount of such
prepayment, which shall not be less than (i) $1,000,000 with
respect to any Loan to which the Base Rate Option applies and
(ii) $1,000,000 with respect to any Loan to which the
Euro-Rate Option applies.
All prepayment notices shall be irrevocable. The principal
amount of the Loans for which a prepayment notice is given, together with
interest on such principal amount except with respect to Loans to which the Base
Rate Option applies, shall be due and payable on the date specified in such
prepayment notice as the date on which the proposed prepayment is to be made.
Unless otherwise specified by the Borrower with respect to prepayments of the
Revolving Credit Euro-Rate Portion of the Loans permitted under (ii) or (iii)
above, all prepayments shall be applied first to the Revolving Credit Base Rate
Portion of such Loans, and then to the Revolving Credit Euro-Rate Portion of
such Loans, subject to Section 5.06(b) hereof.
(b) In the event any Bank (i) gives notice under
Section 4.04(b) [Euro-Rate Unascertainable] or Section 5.06(a) [Additional
Compensation in Certain Circumstances] hereof, or (ii) does not approve any
action as to which consent of the Banks or Required Banks is requested by the
Borrower and obtained hereunder, the Borrower shall have the right, with the
consent of the Agent, which shall not be unreasonably withheld, to: (y) prepay
the Loans of such Bank, in whole together with all interest accrued thereon and
thereby permanently and irrevocably terminate the Revolving Credit Commitment of
such Bank, or (z) replace such Bank, so long as, in the case of (y) or (z), such
replacement or prepayment occurs within ninety (90) days after (i) receipt of
such Bank's notice under Section 4.04(b) or 5.06(a), or (ii) the date of
obtaining the consent which such Bank has not approved, as applicable, provided
the Borrower shall also pay to such Bank in the case of either the foregoing (y)
or (z) at the time of such
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prepayment or replacement any amounts required under Section 5.06 and accrued
Commitment Fees due on such amount and all other costs, fees and any amounts due
to such Bank being prepaid or replaced. Notwithstanding the foregoing sentence,
it is expressly agreed that if the consent of the Banks or Required Banks is
required and more than one Bank does not approve the action as to which consent
is requested, the Borrower's right to replace or repay such non-consenting Bank,
if exercised by the Borrower, must be exercised to simultaneously replace or
prepay all such non-consenting Banks.
5.05 Mandatory Prepayments.
(a) Sale of Assets. Within five (5) Business Days of any
sale of assets authorized by Section 8.02(g)(v) hereof, the Borrower shall make
a mandatory prepayment of principal on the Revolving Credit Loans in the amount,
if any, necessary to bring the Borrower into compliance with the Leverage Ratio
set forth in Section 8.02(r) after giving effect to such disposition. In
addition to the foregoing mandatory prepayment provisions, in the event that any
sale of assets will result in the Borrower or any Subsidiary receiving "Net Cash
Proceeds" which would otherwise become "Excess Proceeds" (as each of those terms
are defined in the Indenture), then at least sixty (60) days prior to the date
any Net Cash Proceeds would become Excess Proceeds under the Indenture, the
Borrower shall give written notice to the Agent thereof setting forth the amount
of Net Cash Proceeds at issue. Upon the direction of the Agent with the consent
of the Required Banks, the Borrower shall make a permanent payment of principal
on the Revolving Credit Loans in the amount of said Net Cash Proceeds, and the
Revolving Credit Commitment of each Bank shall be reduced by its Ratable Share
of the principal payment made to such Bank from the Net Cash Proceeds.
(b) Application Among Interest Rate Options. All prepayments
required pursuant to this Section 5.05 shall first be applied among the Interest
Rate Options to the principal amount of the Loans subject to a Base Rate Option,
then to Loans subject to Euro-Rate Option. In accordance with Section 5.06(b),
the Borrower shall indemnify the Banks for any loss or expense including loss of
margin incurred with respect to any such prepayments applied against Loans
subject to a Euro-Rate Option on any day other than the last day of the
applicable Euro-Rate Interest Period.
5.06 Additional Compensation in Certain Circumstances.
(a) Increased Costs or Reduced Return Resulting From Taxes,
Reserves, Capital Adequacy Requirement(a)ExpeIncreased Costs or Reduced Return
Resulting From Taxes, Reserves, Capital Adequacy Requirements, Expenses, Etc..
If any Law, guideline or interpretation or any change in any Law, guideline or
interpretation or application thereof by any Official Body charged with the
interpretation or administration thereof or compliance with any request or
directive (whether or not having the force of Law) of any central bank or other
Official Body:
(i) subjects any Bank to any tax or changes the basis
of taxation with respect to this Agreement, the Notes, the Loans or payments by
the Borrower of principal, interest, Commitment Fees, or other amounts due from
the Borrower hereunder or under the Notes (except for taxes on the overall net
income of such Bank),
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(ii) imposes, modifies or deems applicable any
reserve, special deposit or similar requirement against credits or commitments
to extend credit extended by, or assets (funded or contingent) of, deposits with
or for the account of, or other acquisitions of funds by, any Bank, or
(iii) imposes, modifies or deems applicable any
capital adequacy or similar requirement (A) against assets (funded or
contingent) of, or letters of credit, other credits or commitments to extend
credit extended by, any Bank, or (B) otherwise applicable to the obligations of
any Bank under this Agreement, and the result of any of the foregoing is to
increase the cost to, reduce the income receivable by, or impose any expense
(including loss of margin) upon any Bank with respect to this Agreement, the
Notes or the making, maintenance or funding of any part of the Loans (or, in the
case of any capital adequacy or similar requirement, to have the effect of
reducing the rate of return on any Bank's capital, taking into consideration
such Bank's customary policies with respect to capital adequacy) by an amount
which such Bank in its sole discretion deems to be material, such Bank shall
from time to time notify the Borrower and the Agent of the amount determined in
good faith (using any averaging and attribution methods employed in good faith)
by such Bank (which determination shall be conclusive absent manifest error) to
be necessary to compensate such Bank for such increase in cost, reduction of
income or additional expense. Such notice shall set forth in reasonable detail
the basis for such determination. Such amount shall be due and payable by the
Borrower to such Bank ten (10) Business Days after such notice is given.
(b) Indemnity. In addition to the compensation required by
subsection (a) of this Section 5.06, the Borrower shall indemnify each Bank
against all liabilities, losses or expenses (including loss of margin, any loss
or expense incurred in liquidating or employing deposits from third parties and
any loss or expense incurred in connection with funds acquired by a Bank to fund
or maintain Loans subject to the Euro-Rate Option) which such Bank sustains or
incurs as a consequence of any:
(i) payment, prepayment, conversion or renewal of any
Loan to which the Euro-Rate Option applies on a day other than the last day of
the corresponding Euro-Rate Interest Period (whether or not such payment or
prepayment is mandatory, voluntary or automatic and whether or not such payment
or prepayment is then due),
(ii) attempt by the Borrower to revoke (expressly, by
later inconsistent notices or otherwise) in whole or part any notice relating to
Loan Requests under Section 2.05 or Section 4.02 or prepayments under Section
5.04, or reductions of Revolving Credit Commitments under Section 2.10(a), or
(iii) default by the Borrower in the performance or
observance of any covenant or condition contained in this Agreement or any other
Loan Document, including without limitation any failure of the Borrower to pay
when due (by acceleration or otherwise) any principal, interest, Commitment Fee
or any other amount due hereunder.
If any Bank sustains or incurs any such loss or expense it
shall from time to time notify the Borrower of the amount determined in good
faith by such Bank (which determination
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shall be conclusive absent manifest error and may include such assumptions,
allocations of costs and expenses and averaging or attribution methods as such
Bank shall deem reasonable) to be necessary to indemnify such Bank for such loss
or expense. Such notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by the Borrower to such Bank
ten (10) Business Days after such notice is given.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
------------------------------
6.01 Representations and Warranties - Effective On And After
Date of This Agreement. The Borrower represents and warrants to the Agent and
each of the Banks as follows:
(a) Organization and Qualification. The Borrower, each
Restricted Subsidiary of the Borrower and each Excluded Entity in which a
Restricted Investment has been made are duly organized, validly existing and in
good standing under the laws of their respective jurisdiction of organization;
the Borrower, each Restricted Subsidiary of the Borrower and each Excluded
Entity in which a Restricted Investment has been made have the power to own or
lease their properties and to engage in the business they presently conduct or
propose to conduct; and the Borrower and each Subsidiary of the Borrower are
duly qualified as a foreign corporation, limited liability company or
partnership and in good standing in each jurisdiction listed on Schedule 6.01(a)
hereto and in all other jurisdictions where the property owned or leased by them
or the nature of the business transacted by them or both makes such
qualification necessary, except where the failure to so qualify would not have a
material adverse effect on the Borrower or any Subsidiary.
(b) [Intentionally Omitted.]
(c) Excluded Entities; Subsidiaries. Schedule 6.01(c) attached
hereto states (i) the name of each of the Borrower's Restricted Subsidiaries and
each Excluded Entity in which a Restricted Investment has been made, (ii) in the
case of each Corporate Subsidiary or Excluded Entity which is a corporation, its
jurisdiction of incorporation, its authorized capital stock, the issued and
outstanding shares (referred to herein as the "Corporate Shares") and the owners
thereof, (iii) in the case of each Partnership Subsidiary or Excluded Entity
which is a partnership, the jurisdiction in which it is organized, the type of
organization (limited or general partnership) and the owners of its partnership
interests (the "Partnership Interests"), and (iv) in the case of each Subsidiary
or Excluded Entity which is a limited liability company, the jurisdiction in
which it is organized, its authorized member interests, the issued and
outstanding member interests (the "Member Interests") and the owners thereof.
The Borrower and each Subsidiary have good and valid title to all of the
Corporate Shares, Partnership Interests or Member Interests they purport to own,
free and clear in each case of any Lien other than under the Loan Documents. All
Corporate Shares, Partnership Interests and Member Interests have been validly
issued and are fully paid and nonassessable. There are no options, warrants or
other rights outstanding to purchase any Member Interests, Corporate Shares or
Partnership Interests except as indicated on Schedule 6.01(c).
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(d) Power and Authority. Each Loan Party has full power to
enter into, execute, delivery and carry out this Agreement, the other Loan
Documents to which it is a party, to incur the Indebtedness contemplated by the
Loan Documents and to perform its obligations under the Loan Documents to which
it is a party and all such actions have been duly authorized by all necessary
proceedings on its part.
(e) Validity and Binding Effect. This Agreement has been duly
executed and delivered by each Loan Party that is a party hereto, and each other
Loan Document, when duly executed and delivered by each Loan Party which is a
party thereto, will have been duly executed and delivered by such Loan Party.
This Agreement and each other Loan Document delivered by the Loan Parties
pursuant to the provisions hereof will constitute legal, valid and binding
obligations of the Loan Parties thereto, enforceable against such Loan Party in
accordance with their respective terms, except to the extent that (i)
enforceability of any of the foregoing Loan Documents may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforceability of creditors' rights generally or limiting the
right of specific performance or by general equitable principles and (ii) the
exercise by the Banks of their rights with respect to the Collateral would be
subject to the prior approval of health care regulatory authorities.
(f) No Conflict. Neither the execution and delivery of this
Agreement or the other Loan Documents by the Loan Parties nor the consummation
of the transactions herein or therein contemplated or compliance with the terms
and provisions hereof or thereof by them will conflict with, constitute a
default under or result in any breach of (i) the terms and conditions of the
certificate of incorporation, by-laws or other organizational documents of any
Loan Party or (ii) of any Law or of any material agreement or instrument or
order, writ, judgment, injunction or decree to which any Loan Party is a party
or by which it is bound or to which it is subject, or result in the creation or
enforcement of any Lien, charge or encumbrance whatsoever upon any property (now
or hereafter acquired) of any Loan Party (other than Liens granted under the
Loan Documents).
(g) Litigation. There are no actions, suits, proceedings or
investigations pending or, to the knowledge of the Borrower, threatened against
the Borrower or any Subsidiary of the Borrower at law or equity before any
Official Body which individually or in the aggregate would constitute a Material
Adverse Change. Neither the Borrower nor any Subsidiary of the Borrower is in
violation of any order, writ, injunction or any decree of any Official Body
which would constitute a Material Adverse Change.
(h) Title to Properties. The Borrower and each Subsidiary of
the Borrower have good and marketable title to or valid leasehold interest in
all material properties, assets and other rights which they purport to own or
lease or which are reflected as owned or leased on their respective books and
records, free and clear of all Liens and encumbrances except Permitted Liens,
and subject to the terms and conditions of the applicable leases. All material
leases of real property are in full force and effect without the necessity for
any consent which has not previously been obtained for the consummation of the
transactions contemplated hereby.
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(i) Financial Statements.
(i) Historical Statements.
(A) Loan Parties Other Than Convalescent and
Convalescent's Subsidiaries. The Borrower has delivered to the Agent copies of
its audited consolidated year-end financial statements for and as of the end of
the fiscal years ended December 31, 1992, 1993 and 1994 and the unaudited
consolidated statements for 1995 for the three quarters ending on September 30,
1995 (collectively the "Mariner Historical Statements"). The Borrower has also
delivered to the Agent copies of its audited consolidated year-end financial
statements for and as of the end of the fiscal year ended December 31, 1995 (the
"Updated Mariner Statements" and together with the Mariner Historical Statements
the "Updated Mariner Historical Statements"). The Updated Mariner Historical
Statements were compiled from the books and records maintained by the Borrower's
management, fairly present the consolidated financial condition of the Loan
Parties (excluding Convalescent and Convalescent's Subsidiaries) as of their
dates and the results of operations for the fiscal periods then ended and have
been prepared in accordance with GAAP consistently applied, subject (in the case
of the interim statements) to normal year-end audit adjustments.
(B) Convalescent Statements. The Borrower has
delivered to the Agent copies of the audited consolidated year-end financial
statements of Convalescent and Convalescent's Subsidiaries for and as of the end
of the four fiscal years ended December 31, 1994 (the "Convalescent Annual
Statements"). In addition, the Borrower has delivered to the Agent copies of the
unaudited consolidated interim financial statements of Convalescent and
Convalescent's Subsidiaries for and as of the end of the nine (9) months ended
September 30, 1995 (the "Convalescent Interim Statements") (the Convalescent
Annual Statements and Convalescent Interim Statements being collectively
referred to as the "Convalescent Historical Statements"). The Borrower has
delivered to the Agent copies of the unaudited consolidated year-end financial
statements of Convalescent and Convalescent's Subsidiaries for and as of the end
of the fiscal year ended December 31, 1995 (the "1995 Convalescent Statements"
and together with the Convalescent Historical Statements, the "Updated
Convalescent Historical Statements"). The Updated Convalescent Historical
Statements fairly present the consolidated financial condition of Convalescent
and Convalescent's Subsidiaries as of their dates and the results of operations
for the fiscal periods then ended and have been prepared in accordance with GAAP
consistently applied, subject (in the case of the Convalescent Interim
Statements) to normal year-end audit adjustments.
(C) Regency Statements. The Borrower has
delivered to the Agent copies of the audited consolidated year-end financial
statements of Regency and Regency's Subsidiaries for and as of the end of each
of the three fiscal years ended December 31, 1995 (the "Regency Historical
Statements"). The Regency Historical Statements fairly present the consolidated
financial condition of Regency and Regency's Subsidiaries as of their dates and
the results of operations for the fiscal periods then ended and have been
prepared in accordance with GAAP consistently applied.
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(D) MedRehab Statements. The Borrower has
delivered to the Agent copies of the audited consolidated year-end financial
statements of MedRehab, Inc. and MedRehab, Inc.'s Subsidiaries for and as of the
end of each of the three fiscal years ended June 30, 1995 (the "MedRehab
Historical Statements") and the unaudited financial statements for MedRehab,
Inc. and MedRehab, Inc.'s Subsidiaries for and as of the six months ended
December 31, 1995 (the "MedRehab Interim Statements" and together with the
MedRehab Annual Statements being collectively referred to as the "MedRehab
Historical Statements"). The MedRehab Historical Statements fairly present the
consolidated financial condition of MedRehab and MedRehab's Subsidiaries as of
their dates and the results of operations for the fiscal periods then ended and
have been prepared in accordance with GAAP consistently applied, subject (in the
case of the MedRehab Interim Statements) to normal year-end audit adjustments.
(ii) Accuracy of Financial Statements. Neither the
Borrower nor any Subsidiary of Borrower has any liabilities, contingent or
otherwise, or material forward or long-term commitments that are not disclosed
in the Updated Mariner Historical Statements, Pinnacle Annual Statements,
Updated Convalescent Historical Statements, MedRehab Historical Statements and
Regency Historical Statements (collectively, the "Historical Statements") or in
the notes thereto or that are required to be disclosed under GAAP, and except as
disclosed therein there are no unrealized or anticipated losses from any
commitments of the Borrower or any Subsidiary which may cause a Material Adverse
Change. Since December 31, 1995, no Material Adverse Change has occurred;
provided, however, that with the written approval of the Required Banks, express
disclosures to the Banks by the Borrower in the reports provided by the Borrower
to the Banks, pursuant to Section 8.03 hereof, shall be deemed to be an update
and an exception to the representation made in the foregoing portion of this
sentence.
(j) Margin Stock. Neither the Borrower nor any Subsidiary
engages or intends to engage principally, or as one of its important activities,
in the business of extending credit for the purpose, immediately, incidentally
or ultimately, of purchasing or carrying margin stock (within the meaning of
Regulation U). No part of the proceeds of any Loan has been or will be used,
immediately, incidentally or ultimately, to purchase or carry any margin stock
or to extend credit to others for the purpose of purchasing or carrying any
margin stock or to refund Indebtedness originally incurred for such purpose, or
for any purpose which entails a violation of or which is inconsistent with the
provisions of the regulations of the Board of Governors of the Federal Reserve
System.
(k) Full Disclosure. Neither this Agreement nor any other Loan
Document contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein and
therein, in light of the circumstances under which they were made, not
misleading considered as a whole; provided that any information provided after
the date hereof shall be deemed to supersede any prior inconsistent information.
There is no fact known to the Borrower or any Subsidiary which materially
adversely affects the business, property, assets, financial condition, results
of operations or prospects of the Borrower or any Material Subsidiary, which:
(i) prior to or at the date hereof, has not been set forth in the Agreement or
in the certificates, statements, agreements or other documents furnished in
writing to the Agent and the Banks in connection with the
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transactions contemplated hereby or in the Borrower's public filings with the
Securities and Exchange Commission, or (ii) following the date hereof and with
the written approval of the Required Banks, has not been set forth in other
documents furnished in writing to the Agent and the Banks.
(l) Taxes. All material federal, state, local and other tax
returns required to have been filed with respect to the Borrower or any
Subsidiary have been filed and payment or adequate provision has been made for
the payment of all taxes, fees, assessments and other governmental charges which
have or may become due pursuant to said returns or to assessments received
except to the extent that such taxes, fees, assessments and other charges are
being contested in good faith by appropriate proceedings diligently conducted
and for which such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made. As of the date hereof, there are no
agreements or waivers extending the statutory period of limitations applicable
to any federal income tax return of the Borrower or any Subsidiary for any
period.
(m) Consents and Approvals. No consent, approval, exemption,
order or authorization of, or a registration or filing with any Official Body or
any other person is required by any Law or any agreement in connection with the
execution, delivery and carrying out of this Agreement, or the other Loan
Documents or the Merger Documents by any Loan Party, all of which have been
obtained or made; provided, however, that it is acknowledged that consent of
health care regulatory authorities issuing any licenses or regulating any health
care facilities may be required if the Agent on behalf of the Banks exercises
the rights and remedies in respect of the Pledged Collateral and such exercise
of remedies results in or constitutes an assignment of any health care license
issued by a health care regulatory authority or constitutes a change of control
with respect to the ownership of a health care facility.
(n) No Event of Default; Compliance with Instruments. No event
has occurred and is continuing and no condition exists or will exist after
giving effect to the borrowings to be made on the Ninth Amendment Effective
Date, or the Regency Merger Effective Date under the Loan Documents which
constitutes an Event of Default or Potential Default. Neither the Borrower nor
any Subsidiary is in violation of (i) any term of its certificate of
incorporation, by-laws, or other organizational documents or (ii) any material
agreement or instrument to which it is a party or by which it or any of its
properties may be subject or bound where such violation would constitute a
Material Adverse Change.
(o) Patents, Trademarks, Copyrights, Etc. The Borrower and
each Subsidiary owns or possesses all the material patents, trademarks, service
marks, trade names, copyrights and other intellectual property rights necessary
to own and operate its properties and to carry on its business as presently
conducted and planned to be conducted by the Borrower and each Subsidiary,
without known conflict with the rights of others.
(p) Security Interests in the Collateral. The Liens and
security interests granted to the Agent for the benefit of the Banks pursuant to
the Pledge Agreements, Mortgages and Leasehold Mortgages in the UCC Collateral
constitute, and will continue to
-46-
constitute, Prior Security Interests under the Uniform Commercial Code as in
effect in each applicable jurisdiction (the "Uniform Commercial Code") or other
applicable Law entitled to all the rights, benefits and priorities provided by
the Uniform Commercial Code or such Law to the fullest extent permitted by
applicable law, except that the security interests in the Collateral under the
Mortgages and Leasehold Mortgages may be subordinated to the security interests
Regency granted to the COF Lender, CLF Lender, ROF Lender or RLF Lender, as the
case may be. Upon the filing of financing statements relating to said security
interests in each office and in each jurisdiction where required in order to
perfect the security interests described above and taking possession of the
stock certificates or certificates of ownership of member interests in a limited
liability company, as the case may be, evidencing the Pledged Collateral which
constitutes stock of a corporation or member interests of a limited liability
company, as the case may be, all such action as is necessary or advisable to
establish such rights of the Agent will have been taken, and there will be upon
execution and delivery of the Pledge Agreements, Mortgages and Leasehold
Mortgages, such filings, and such taking of possession no necessity for any
further action in order to preserve, protect and continue such rights, except
for maintaining possession of such certificates and filing continuation
statements with respect to such financing statements within six (6) months prior
to each five-year anniversary of the filing of such financing statements. Any
expenses in connection with each such action have been or will be paid by the
Borrower. It is acknowledged that the exercise by the Banks of their rights and
remedies in respect of the Pledged Collateral which would result in or
constitute any assignment of any license issued by a health care regulatory
authority or any change of control with respect to a health care facility may be
subject to the prior approval of such health care regulatory authorities.
(q) [Intentionally Omitted.]
(r) Status of the Pledged Collateral. All the shares of
capital stock, partnership interests, or member interests in a limited liability
company, as the case may be, included in the Pledged Collateral to be pledged
pursuant to the Pledge Agreements are or will be upon issuance duly authorized,
validly issued, fully paid, nonassessable and all of the Pledged Collateral is
owned beneficially and of record by the pledgor free and clear of any Lien or
restriction on transfer, except as otherwise provided in the Pledge Agreements
and except as the right of the Banks to dispose of the Pledged Collateral may be
limited by the Securities Act of 1933, as amended, and the regulations
promulgated by the Securities and Exchange Commission thereunder and by
applicable state securities laws. Except as otherwise disclosed to the Banks, in
writing, there are no shareholder or other agreements or understandings with
respect to the Pledged Collateral.
(s) Insurance. The insurance policies and bonds to which the
Borrower or any Subsidiary is a party provide adequate coverage from reputable
and financially sound insurers in amounts sufficient to insure the assets and
risks of the Borrower and its Subsidiaries in accordance with prudent business
practice in the industry of the Borrower and its Subsidiaries, including
self-insurance to the extent customary, and such policies and bonds are valid
and in full force and effect.
-47-
(t) Compliance with Laws. The Borrower and its Subsidiaries
are in compliance in all material respects with all applicable Laws (other than
Environmental Laws which are specifically addressed in subsection (y)) in all
jurisdictions in which the Borrower or any Subsidiary is presently or will be
doing business except where the failure to do so would not constitute a Material
Adverse Change.
(u) Material Contracts, Licenses, Permits and Approvals.
(A) As of the date hereof, Schedule 6.01(u) hereto lists
the following contracts relating to the business operations of the Borrower and
its Subsidiaries: (i) all employee benefit plans, employment agreements where
the compensation paid by the Borrower or any Subsidiary exceeds $250,000 in any
fiscal year, collective bargaining agreements and labor contracts (the "Labor
Contracts"), (ii) all written provider or similar agreements (the "Provider
Agreements") pursuant to which the Borrower and its Subsidiaries have received
or may claim any entitlement to receive reimbursement from or as a result of (1)
Medicaid, Medicare or Blue Cross programs, or (2) any other public or private
reimbursement programs where the payments received by the Borrower or any
Subsidiary exceeded or are expected to exceed $6,000,000 in the current fiscal
year, (iii) all leases of real property where the payments made by the Borrower
or any Subsidiary in the current fiscal year exceed or are expected to exceed
$250,000, (iv) any contract or series of contracts with the same person for the
furnishing or purchase of machinery, equipment, goods or services, where the
payments made by the Borrower or any Subsidiary exceeded or are expected to
exceed $1,000,000 in the aggregate in the current fiscal year; (v) all
management contracts pursuant to which the Borrower or a Subsidiary provides
management services to any other person where the payments received or expected
to be received by the Borrower or any Subsidiary exceed $500,000 in the current
fiscal year; and (vi) all other material contracts filed as exhibits to any
report filed by the Borrower with the SEC during the past twelve months. All
contracts listed on Schedule 6.01(u) and any Provider Agreements which provide
for annual payments in excess of $6,000,000 which are not listed on Schedule
6.01(u) are valid, binding and enforceable upon the Borrower or its
Subsidiaries, as the case may be, and, to the best knowledge of the Borrower,
each of the other parties thereto in accordance with their respective terms and
there is no default thereunder, to the knowledge of the Borrower and of its
Subsidiaries, with respect to parties other than the Borrower or any of its
Subsidiaries. There are no patient care agreements with patients or any other
person or organization which deviate in such a material respect from the
standard patient care forms used by the Borrower or any of its Subsidiaries as
to constitute a Material Adverse Change.
(B) Except as set forth on Schedule 6.01(u), the Borrower
and each of its Subsidiaries has all material accreditations, authorizations,
approvals, certificates of need, consents, licenses, permits and qualifications
(collectively, "Approvals") required (i) for them to construct, acquire, own,
manage, lease and/or operate their facilities and services, (ii) for them to
receive payment and reimbursement from any patient or third party payor, to the
extent in the case of (i) and (ii) such Approvals are presently required. The
Borrower and each of its Subsidiaries have all other material Approvals required
for the lawful operation of their businesses. All material Approvals of the
Borrower and each of its Subsidiaries are in full force
-48-
and effect and have not been amended or otherwise modified (except for
modifications which would not have a material adverse effect upon the Borrower
or any Subsidiary) rescinded, revoked or assigned, and no notice has been
received of any violation of applicable Laws or any refusal to renew any
Approval which could reasonably be expected to cause any of such Approvals to be
modified, rescinded or revoked (except for modifications, rescissions or
revocations which would not have a material adverse effect upon the Borrower and
its Subsidiaries taken as a whole). The continuation, validity and effectiveness
of all such Approvals will in no way be adversely affected by the transactions
contemplated by this Agreement. Neither the Borrower nor any of its Subsidiaries
knows of any reason why any of them will not be able to maintain all material
Approvals necessary or appropriate to construct, own, lease, manage and operate
all of their facilities and to otherwise conduct their businesses as now
conducted and presently proposed to be conducted. There are no deficiencies to
the conditions for participation by the Borrower or any Subsidiary in any
Medicare, Medicaid or other reimbursement programs which would preclude such
participation.
(v) Investment Companies. The Borrower is not an
"investment company" registered or required to be registered under the
Investment Company Act of 1940 or under the "control" of an "investment company"
as such terms are defined in the Investment Company Act of 1940 and shall not
become such an "investment company" or under such "control."
(w) Plans and Benefit Arrangements.
(i) The Borrower and each member of the ERISA
Group are in compliance in all material respects with any applicable provisions
of ERISA with respect to all Benefit Arrangements, Plans and Multiemployer
Plans. There has been no Prohibited Transaction with respect to any Benefit
Arrangement or any Plan or, to the best knowledge of the Borrower, with respect
to any Multiemployer Plan or Multiple Employer Plan, which could result in any
material liability of the Borrower or any other member of the ERISA Group. The
Borrower and all members of the ERISA Group have made when due any and all
payments required to be made under any agreement relating to a Multiemployer
Plan or a Multiple Employer Plan or any Law pertaining thereto. With respect to
each Plan and Multiemployer Plan, the Borrower and each member of the ERISA
Group (i) have fulfilled in all material respects their obligations under the
minimum funding standards of ERISA, (ii) have not incurred any liability to the
PBGC and (iii) have not had asserted against them any penalty for failure to
fulfill the minimum funding requirements of ERISA.
(ii) To the best of the Borrower's knowledge,
each Multiemployer Plan and Multiple Employer Plan is able to pay benefits
thereunder when due.
(iii) Neither the Borrower nor any other member
of the ERISA Group has instituted or intends to institute proceedings to
terminate any Plan.
(iv) No event requiring notice to the PBGC under
Section 302(f)(4)(A) of ERISA has occurred or is reasonably expected to occur
with respect to any Plan,
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and no amendment with respect to which security is required under Section 307 of
ERISA has been made or is reasonably expected to be made to any Plan.
(v) The aggregate actuarial present value of all
benefit liabilities (whether or not vested) under each Plan, determined on a
plan termination basis, as disclosed in, and as of the date of, the most recent
actuarial report for such Plan, does not exceed the aggregate fair market value
of the assets of such Plan by an amount in excess of $250,000.
(vi) Neither the Borrower nor any other member
of the ERISA Group has incurred or reasonably expects to incur any material
withdrawal liability under ERISA to any Multiemployer Plan or Multiple Employer
Plan. Neither the Borrower nor any other member of the ERISA Group has been
notified by any Multiemployer Plan or Multiple Employer Plan that such
Multiemployer Plan or Multiple Employer Plan has been terminated within the
meaning of Title IV of ERISA and, to the best knowledge of the Borrower, no
Multiemployer Plan or Multiple Employer Plan is reasonably expected to be
reorganized or terminated, within the meaning of Title IV of ERISA.
(vii) To the extent that any Benefit Arrangement
is insured, the Borrower and all members of the ERISA Group have paid when due
all premiums required to be paid for all periods. To the extent that any Benefit
Arrangement is funded other than with insurance, the Borrower and all members of
the ERISA Group have made when due all contributions required to be paid for all
periods.
(x) Employment Matters. The Borrower and each of its
Subsidiaries are in compliance with the Labor Contracts and all applicable
federal, state and local labor and employment Laws including, but not limited
to, those related to equal employment opportunity and affirmative action, labor
relations, minimum wage, overtime, child labor, medical insurance continuation,
worker adjustment and relocation notices, immigration controls and worker and
unemployment compensation, where the failure to comply would constitute a
Material Adverse Change. There are no outstanding grievances, arbitration awards
or appeals therefrom arising out of the Labor Contracts or current or threatened
strikes, picketing, handbilling or other work stoppages or slowdowns at
facilities of the Borrower or any of its Subsidiaries which in any case would
constitute a Material Adverse Change. The Borrower has delivered to the Agent
true and correct copies of each of the Labor Contracts in effect as of the date
hereof.
(y) Environmental Matters. Except as disclosed on
Schedule 6.01(y) hereto:
(i) Neither the Borrower nor any of its
Subsidiaries has received any Environmental Complaint from any Official Body or
private person alleging that the Borrower, any of its Subsidiaries or any prior
or subsequent owner of the Property is a potentially responsible party under the
Comprehensive Environmental Response, Cleanup and Liability Act ("CERCLA"), 42
U.S.C. ss. 9601, et seq., or is potentially liable under the Solid Waste
Disposal Act, as amended, ("SWDA") 42 U.S.C. ss. 6901, et seq., or any
comparable state or foreign law, statute or regulation of either CERCLA or SWDA
and the Borrower has no reason to believe that such an Environmental Complaint
might be received. There are no
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pending or, to the Borrower's knowledge, threatened Environmental Complaints
relating to the Borrower, any of its Subsidiaries or, to the Borrower's
knowledge, any prior or subsequent owner of the Property pertaining to, or
arising out of, any Environmental Conditions which, individually or in the
aggregate, if adversely determined could reasonably be expected to have a
material adverse effect on the Borrower or any Subsidiary of the Borrower taken
as a whole.
(ii) Except for conditions, violations or
failure which individually and in the aggregate are not reasonably likely to
result in a Material Adverse Change, there are no circumstances at, on or, to
the best of the Borrower's knowledge, under the Property that constitute a
breach of or non-compliance with any of the Environmental Laws, and there are,
to the best of the Borrower's knowledge, no past or present Environmental
Conditions at, on or under the Property or, to the Borrower's knowledge, at, on
or, to the best of the Borrower's knowledge, under adjacent property, that
prevent compliance with the Environmental Laws at the Property.
(iii) Neither the Property nor any structures,
improvements, equipment, fixtures, activities or facilities thereon or
thereunder contain or use Regulated Substances except in compliance in all
material respects with Environmental Laws. There are no processes, facilities,
operations, equipment or any other activities at, on or, to the best of the
Borrower's knowledge, under the Property, or, to the Borrower's knowledge, at,
on or under adjacent property, that currently result in the release or
threatened release of Regulated Substances onto the Property, except to the
extent that such releases or threatened releases are not a material breach of or
otherwise not a material violation of the Environmental Laws, or are not likely
to result in a Material Adverse Change.
(iv) There are no above ground storage tanks,
underground storage tanks, or underground piping associated with such tanks,
used for the management of Regulated Substances at, on or under the Property
that (a) do not have, to the extent required by applicable Environmental Laws, a
full operational secondary containment system in place, and (b) are not
otherwise in compliance in all material respects with all Environmental Laws. To
Borrower's best knowledge, there are no abandoned underground storage tanks or
underground piping associated with such tanks, previously used for the
management of Regulated Substances at, on or under the Property that have not
been either abandoned in place, or removed, in accordance with the Environmental
Laws.
(v) The Borrower and each of its Subsidiaries
have all material permits, licenses, authorizations, plans and approvals
necessary under the Environmental Laws for the conduct of the business of the
Borrower and each such Subsidiary as presently conducted. The Borrower and each
such Subsidiary have submitted all material notices, reports and other filings
required by the Environmental Laws to be submitted to an Official Body which
pertain to past and current operations on the Property.
(vi) Except for violations which individually
and in the aggregate are not likely to result in a Material Adverse Change, all
present and, to the best knowledge of the Borrower, past on-site generation,
storage, processing, treatment, recycling,
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reclamation or disposal of Regulated Substances at, on, or under the Property
and, to the best knowledge of the Borrower, all off-site transportation,
storage, processing, treatment, recycling, reclamation or disposal of Regulated
Substances has been done in accordance with the Environmental Laws.
(z) Senior Debt Status. Except as set forth on
Schedule 6.01(z), the obligations of the Borrower under this Agreement and the
Notes and the obligations of the Subsidiaries of Borrower under the Guaranties
do rank and will rank at least pari passu in priority of payment with all other
Indebtedness of the Borrower or such Subsidiaries, as the case may be, except
Indebtedness of the Borrower or its Subsidiaries to the extent secured by
Permitted Liens. The obligations of the Borrower under this Agreement and the
Notes constitute "Designated Senior Indebtedness" as such term is defined in the
Indenture. There is no Lien upon or with respect to any of the properties or
income of the Borrower or any of its Subsidiaries which secures Indebtedness or
other obligations of any person except for Permitted Liens.
(aa) Convalescent Merger.
(i) Indebtedness Related to Convalescent Leased
Facilities. Schedule 6.01(aa) describes (1) each Convalescent Leased Facility
(herein sometimes referred to in this paragraph as the "facility"); (2) the
person (the "CLF Lessor") which owns such facility and leases such facility to
Convalescent; (3) the amount of Indebtedness (the "CLF Lessor Indebtedness") of
the CLF Lessor, secured by any assets of such facility; (4) the obligee under
such Indebtedness (the "CLF Lender"); (5) any assets of Convalescent relating to
such facility in which Convalescent has granted Liens in favor of the CLF Lessor
(it is acknowledged that the CLF Lessor has assigned such Liens to the CLF
Lender) or CLF Lender; and (6) the maturity of such CLF Lessor Indebtedness as
of the Fourth Amendment Effective Date and without giving effect to subsequent
amendments.
(ii) Indebtedness Related to Convalescent Owned
Facilities. Schedule 6.01(aa) describes (1) each Convalescent Owned Facility
(herein sometimes referred to in this paragraph as the "facility"); (2) the
person which owns such facility (the "COF Owner"); (3) the amount of
Indebtedness (the "COF Owner Indebtedness") of the COF Owner, secured by any
assets of such facility; (4) the obligee under such Indebtedness (the "COF
Lender"); (5) the assets of the COF Owner relating to such facility in which the
COF Owner has granted Liens in favor of such COF Lender; and (6) the maturity of
such COF Owner Indebtedness as of the Fourth Amendment Effective Date and
without giving effect to subsequent amendments.
(iii) CLF Lender, CLF Lessor and COF Lender
Agreements.
(A) Leased Facilities. Schedule 6.01(aa)
states with respect to each Convalescent Leased Facility whether the CLF Lender
has:
(1) agreed to release its liens in the
assets of Convalescent related to such Facility;
(2) entered into a Non-Disturbance
Agreement;
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(3) entered into an Intercreditor
Agreement with the Agent;
(4) granted to the Agent and the Banks
a Convalescent Facility Purchase Option; and
(5) agreed to the grant by
Convalescent to the Agent of (i) a Leasehold Mortgage and (ii) second Liens in
the assets of Convalescent.
Schedule 6.01(aa) also states, with respect to each Convalescent Leased Facility
(i) whether the CLF Lessor has pursuant to its lease with Convalescent consented
to the grant by Convalescent to the Agent of a Leasehold Mortgage and (ii)
whether Convalescent has granted Liens to the CLF Lessor pursuant to such lease.
(B) Owned Facilities. Schedule 6.01(aa)
states with respect to each Convalescent Owned Facility whether the COF Lender
has:
(1) entered into an Intercreditor
Agreement with Agent;
(2) granted to the Agent and the Banks
a Convalescent Facility Purchase Option; and
(3) agreed to the grant by
Convalescent to the Agent of a Mortgage.
(bb) Regency Merger.
(i) Indebtedness Related to Regency Leased
Facilities. Schedule 6.01(bb) describes (1) each Regency Leased Facility (herein
sometimes referred to in this paragraph as the "facility"); (2) the person which
owns such facility (the "RLF Lessor") and leases such facility to Regency; (3)
the amount of Indebtedness (the "RLF Lessor Indebtedness") of the RLF Lessor,
secured by any assets of such facility; (4) the obligee under such Indebtedness
(the "RLF Lender"); (5) any assets of Regency relating to such facility in which
Regency has granted Liens in favor of the RLF Lessor (it is acknowledged that
the RLF Lessor may have assigned such Liens to the RLF Lender, as indicated on
Schedule 6.01(bb)) or RLF Lender; and (6) the maturity of such RLF Lessor
Indebtedness as of the Ninth Amendment Effective Date and without giving effect
to subsequent amendments.
(ii) Indebtedness Related to Regency Owned
Facilities. Schedule 6.01(bb) describes (1) each Regency Owned Facility (herein
sometimes referred to in this paragraph as the "facility"); (2) the person which
owns such facility effective upon the consummation of the Regency Merger (the
"ROF Owner"); (3) the amount of Indebtedness (the "ROF Owner Indebtedness") of
the ROF Owner, secured by any assets of such facility; (4) the
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obligee under such Indebtedness (the "ROF Lender"); (5) the assets of the ROF
Owner relating to such facility in which the ROF Owner has granted Liens in
favor of such ROF Lender; and (6) the maturity of such ROF Owner Indebtedness as
of the Ninth Amendment Effective Date and without giving effect to subsequent
amendments.
(iii) RLF Lender, RLF Lessor and ROF Lender
Agreements.
(A) Leased Facilities. Schedule 6.01(bb)
states with respect to each Regency Leased Facility whether the RLF Lender has:
(1) agreed to release its liens in the
assets of Regency related to such facility;
(2) entered into a Non-Disturbance
Agreement;
(3) entered into an Intercreditor
Agreement with the Agent;
(4) granted to the Agent and the Banks
a Regency Facility Purchase Option; and
(5) agreed to the grant by Regency to
the Agent of (i) a Leasehold Mortgage and (ii) second Liens in the assets of
Regency.
Schedule 6.01(bb) also states, with
respect to each Regency Leased Facility (i) whether the RLF Lessor has consented
to the grant by Regency or MHF to the Agent of a Leasehold Mortgage and (ii)
whether Regency or MHF shall grant Liens to the RLF Lessor pursuant to such
lease.
(B) Owned Facilities. Schedule 6.01(bb)
states with respect to each Regency Owned Facility whether the ROF Lender has:
(1) entered into an Intercreditor
Agreement with Agent;
(2) granted to the Agent and the Banks
a Regency Facility Purchase Option; and
(3) agreed to the grant by Regency to
the Agent of a Mortgage.
(cc) Mortgage and Leasehold Mortgage Liens. The Liens
granted to the Agent for the benefit of the Banks pursuant to the Mortgages and
the Leasehold Mortgages constitute valid Liens under applicable law having
priority over all other Liens except that they may be subordinate to Liens in
favor of the COF Owners and CLF Lenders, or in favor of the ROF Owners and RLF
Lenders, as the case may be. All such action as will be necessary or advisable
to establish such Liens of the Agent and its priority as described in the
preceding
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sentence will be taken at or prior to the time required for such purpose, and
there will be as of the date of execution and delivery of the Mortgages and
Leasehold Mortgages no necessity for any further action in order to protect,
preserve and continue such Liens and such priority.
6.02 Updates to Schedules. Should any of the information or
disclosures provided on any of the Schedules attached hereto (other than
Schedules relating solely to representations and warranties made solely as of
the Closing Date, solely as of the Fourth Amendment Effective Date or solely as
of the Ninth Amendment Effective Date) become outdated or incorrect in any
material respect, the Borrower shall promptly provide the Agent in writing with
such revisions or updates to such Schedule as may be necessary or appropriate to
update or correct the same; provided, however that no Schedule shall be deemed
to have been amended, modified or superseded by any such correction or update
that would disclose the occurrence of an event or condition which constitutes a
Potential Default or Event of Default, nor shall any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any such
Schedule be deemed to have been cured thereby, unless and until the Required
Banks, in their sole and absolute discretion, shall have accepted in writing
such revisions or updates to such Schedule.
ARTICLE VII
CONDITIONS OF LENDING
---------------------
The obligation of each Bank to make Loans and of the Agent to
issue Letters of Credit hereunder is subject to the performance by the Borrower
of its obligations to be performed hereunder at or prior to the making of any
such Loans or issuance of such Letters of Credit and to the satisfaction of the
following further conditions:
7.01 [Intentionally Omitted.]
7.02 Each Additional Loan. At the time of making any Loans or
issuing any Letters of Credit other than the Loan made on the Closing Date
hereunder and after giving effect to the proposed borrowings: the
representations and warranties of the Borrower contained in Article VI hereof
shall be true on and as of the date of such additional Loan with the same effect
as though such representations and warranties had been made on and as of such
date (except representations and warranties which expressly relate solely to an
earlier date or time, which representations and warranties shall be true and
correct on and as of the specific dates or times referred to therein) and the
Borrower shall have performed and complied with all covenants and conditions
hereof; no Event of Default or Potential Default shall have occurred and be
continuing or shall exist; the making of the Loans or issuing of such Letters of
Credit shall not contravene any Law applicable to the Borrower or any of the
Banks; and the Borrower shall have delivered to the Agent a duly executed and
completed Loan Request.
7.03 Conditions to Consummation of Regency Merger and Making
of Additional Loan in Connection with Re7.03y MerConditions to Consummation of
Regency Merger and Making of Additional Loan in connection with Regency Merger.
(a) Regency Merger Closing. Each of the Regency
Merger Documents and the documents in connection with the closing of the Regency
Merger, including
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without limitation the Intercreditor Agreements, Leasehold Mortgages and
Mortgages, is a binding obligation of each party thereto. All conditions to
closing under the Regency Merger Agreement, or other Regency Merger Documents
have been satisfied. The Regency Merger has been or simultaneous with permitted
borrowings hereunder in connection therewith shall be consummated in accordance
with the Laws of the State of Florida and the Regency Merger Documents. Borrower
has delivered to the Agent for the benefit of the Banks true and correct copies
of each document executed or delivered in connection with the closing of the
Regency Merger. There has been no amendment to the Regency Merger Agreement,
other than such amendment as approved by the Agent prior to the execution
thereof;
(b) There exists no Event of Default or Potential
Default;
(c) The ratio of Total Indebtedness of the Borrower
and its Subsidiaries and Regency and its Subsidiaries as of the Regency Merger
Effective Date to Consolidated Cash Flow from Operations of Borrower and its
Subsidiaries and Regency and its Subsidiaries, computed on a pro forma combined
basis for the fourth fiscal quarters ending on December 31, 1995 does not exceed
4.5 to 1.0;
(d) An authorized Officer shall have delivered a duly
executed certificate, certifying as to items 7.03(a), (b) and (c) above;
(e) The Agent shall have received opinions from
Xxxxx, Xxxxxxx & Xxxxxxxxx, the Borrower's counsel and from the Borrower's local
counsel in Florida, Kansas and Tennessee, all such opinions to be in form and
substance satisfactory to the Agent; and
(f) Mariner Health of Florida, Inc. and each other
new Subsidiary of the Borrower shall have executed and delivered to the Agent on
behalf of the Banks (i) a joinder to Guaranty Agreement and a joinder to the
Subordination Agreement (Intercompany) and all of the stock and partnership
interests of each such entity shall be pledged to the Agent for the benefit of
the Banks pursuant to a Pledge Agreement, on a first priority perfected basis;
(ii) organization documents certified by such Loan Party and certified by the
Secretary of the State of formation of each such entity, together with good
standing certificates from each jurisdiction where such entity is required to be
qualified to conduct business and from the jurisdiction of its formation; (iii)
an incumbency certificate of each officer authorized to execute and deliver Loan
Documents; and (iv) resolutions of such entity certified by the Secretary or
Assistant Secretary thereof authorizing the execution, delivery and performance
of the Loan Documents.
ARTICLE VIII
COVENANTS
---------
8.01 Affirmative Covenants. The Borrower covenants and agrees
that until payment in full of the Loans and interest thereon, satisfaction of
all of the Borrower's other obligations hereunder and termination of the
Revolving Credit Commitments, the Borrower shall comply at all times with the
following affirmative covenants:
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(a) Preservation of Existence, Etc.. The Borrower shall, and
shall cause each of its Subsidiaries to, maintain its corporate existence and
its qualification to do business as a foreign corporation and good standing in
each jurisdiction in which its ownership or lease of property or the nature of
its business makes such qualification necessary, except where the failure to be
so qualified or in such good standing would not constitute a Material Adverse
Change.
(b) Payment of Liabilities, Including Taxes, Etc.. The
Borrower shall, and shall cause each of its Subsidiaries to, duly pay and
discharge all liabilities to which it is subject or which are asserted against
it, promptly as and when the same shall become due and payable, including all
taxes, assessments and governmental charges upon it or any of its properties,
assets, income or profits, prior to the date on which penalties attach thereto,
except to the extent that such liabilities, including taxes, assessments or
charges, are being contested in good faith and by appropriate and lawful
proceedings diligently conducted and for which such reserve or other appropriate
provisions, if any, as shall be required by GAAP shall have been made, but only
to the extent that failure to discharge any such liabilities would not result in
any additional liability which would adversely affect to a material extent the
financial condition of the Borrower and its Subsidiaries taken as a whole and
which would affect the Collateral.
(c) Maintenance of Insurance.nsurance
(i) The Borrower shall, and shall cause each of its
Subsidiaries to, insure its properties and assets against loss or damage by fire
and such other insurable hazards as such assets are commonly insured (including
fire, extended coverage, property damage, worker's compensation, public
liability and business interruption insurance) and against other risks
(including errors and omissions) in such amounts as similar properties and
assets are insured by prudent companies in similar circumstances carrying on
similar businesses, and with reputable and financially sound insurers, including
self-insurance to the extent customary. At the request of the Agent, the
Borrower shall deliver (x) on the Closing Date and annually thereafter an
original certificate of insurance signed by the Borrower's independent insurance
broker describing and certifying as to the existence of the insurance on the
Collateral required to be maintained by this Agreement and the other Loan
Documents and (y) from time to time a summary schedule indicating all insurance
then in force with respect to the Borrower.
(d) Maintenance of Properties and Leases. The Borrower shall,
and shall cause each of its Subsidiaries to, maintain in good repair, working
order and condition (ordinary wear and tear excepted) in accordance with the
general practice of other businesses of similar character and size, all of those
properties useful or necessary to its business, and from time to time, the
Borrower will make or cause to be made all appropriate repairs, renewals or
replacements thereof.
(e) Maintenance of Patents, Trademarks, Etc.. The Borrower
shall, and shall cause each of its Subsidiaries to, maintain in full force and
effect all patents, trademarks, trade names, copyrights, licenses, franchises,
permits and other authorizations
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necessary for the ownership and operation of its properties and business if the
failure so to maintain the same would constitute a Material Adverse Change.
(f) Visitation Rights. The Borrower shall, and shall cause
each of its Subsidiaries to, permit any of the officers or authorized employees
or representatives of the Agent or any of the Banks to visit and inspect any of
its properties and to examine and make excerpts from its books and records and
discuss its business affairs, finances and accounts with its officers, all in
such detail and at such times during normal business hours and as often as any
of the Banks may reasonably request, provided that each Bank shall provide the
Borrower and the Agent with reasonable notice prior to any visit or inspection.
In the event any Bank desires to conduct an audit of the Borrower, such Bank
shall make a reasonable effort to conduct such audit contemporaneously with any
audit to be performed by the Agent.
(g) Keeping of Records and Books of Account. The Borrower
shall, and shall cause each of its Subsidiaries to, maintain and keep proper
books of record and account which enable the Borrower and its Subsidiaries to
issue financial statements in accordance with GAAP and as otherwise required by
applicable Laws of any Official Body having jurisdiction over the Borrower or
any of its Subsidiaries, and which accurately and fairly reflect the
transactions and dispositions of assets of the Borrower or such Subsidiary.
(h) Plans and Benefit Arrangements. The Borrower shall, and
shall cause each member of the ERISA Group to, comply with ERISA, the Internal
Revenue Code and other applicable Laws applicable to Plans and Benefit
Arrangements except where such failure, alone or in conjunction with any other
failure, would not result in a Material Adverse Change. Without limiting the
generality of the foregoing, the Borrower shall cause all of its Plans and all
Plans maintained by any member of the ERISA Group to be funded in accordance
with the minimum funding requirements of ERISA and shall make, and cause each
member of the ERISA Group to make, in a timely manner, all contributions due to
Plans, Benefit Arrangements and Multiemployer Plans.
(i) Compliance with Laws. The Borrower shall, and shall cause
each of its Subsidiaries to, comply with all applicable Laws, including all
Environmental Laws, in all respects provided that it shall not be deemed to be a
violation of this Section 8.01(i) if any failure to comply with any Law would
not result in fines, penalties, other similar liabilities or injunctive relief
which in the aggregate would constitute a Material Adverse Change.
(j) Use of Proceeds. The Borrower will use the proceeds of the
Loans only for lawful purposes in accordance with Section 2.08 hereof as
applicable and such uses shall not contravene any applicable Law or any other
provision hereof.
(k) [Intentionally Omitted.]Omitted.]
(l) Subordination of Intercompany Loans, Other Loans and
Advances to the Borrower. Except for Indebtedness described on Schedule 8.01(l),
the Borrower shall cause any intercompany Indebtedness, and shall cause any
other Indebtedness, loans or advances owed by any Loan Party to any other person
(other than a Loan Party) to be subordinated to the
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Loan Parties' obligations under the Loan Documents on the terms set forth in
Exhibit 8.01(l), with such revisions thereto as are reasonably satisfactory to
the Agent.
(m) Approval of Financial Statements in Permitted
Acquisitions; Notice of Permitted Acquisit(m) Approval of Financial Statements
in Permitted Acquisitions; Notice of Permitted Acquisition.
(i) Approval of Financial Statements. The
Borrower shall deliver to the Banks a certificate in the form of Exhibit
8.01(m)(i) hereof (the "Acquisition Approval Certificate") before making a
Permitted Acquisition if they desire that the cash flow of the business to be
acquired during periods prior to the acquisition shall be included when they
compute Cash Flow from Operations under this Agreement. The Borrower shall
attach to such Acquisition Approval Certificate copies of the historical
financial statements of the business to be acquired including the annual and
interim balance sheets and income statements for at least three (3) fiscal years
prior to the Permitted Acquisition and pro forma statements which shall include
a combined balance sheet as of the acquisition date and cash flow statements for
the preceding year. The pro forma statements shall set forth: (1) Consolidated
Cash Flow from Operations of the Loan Parties and the acquired business,
adjusted in accordance with clause (A) of the definition of Consolidated Cash
Flow from Operations, for the Acquisition Income Reporting Period in connection
with such Permitted Acquisition, and (2) Total Indebtedness on the date of the
Permitted Acquisition after giving effect to the acquisition and the Loans to be
made on such date, and (3) the ratio of the amount in clause (2) to the amount
in clause (1), which ratio shall not exceed (A) 3.75 to 1.0 from and including
the Convalescent Merger Effective Date through but not including the
Subordinated Indebtedness Incurrence Date; and (B) 4.5 to 1.0 from and after the
Subordinated Indebtedness Incurrence Date. The Acquisition Approval Certificate
shall confirm the accuracy of the foregoing computations and that, after giving
effect to the Permitted Acquisition and the Loans made on the date thereof, no
Event of Default shall exist and the Loan Parties shall be in compliance with
all of their covenants hereunder, assuming, for purposes of Borrower's financial
covenants, that all items of income, expense and cash flow are reported for the
Acquisition Income Reporting Period and that all balance sheet items (such as
Indebtedness) are measured on the date of such Permitted Acquisition. The Loan
Parties may make the Permitted Acquisition prior to receiving the Required
Banks' approval of Borrower's Acquisition Approval Certificate with respect
thereto; provided that the Loan Parties may not, until they have received such
approval, include the cash flow of the business to be acquired for periods prior
to the acquisition in their net income when they compute Consolidated Cash Flow
from Operations. The Banks shall use their best efforts to respond to the
Borrower's request for approval of each Acquisition Approval Certificate within
two (2) Business Days following the Banks' receipt of such certificate and shall
not unreasonably withhold or delay such approval. The Borrower may request that
extraordinary, nonrecurring expenses under GAAP incurred in connection with such
Permitted Acquisition be excluded from the Consolidated Net Income of the Loan
Parties and from the net income of the business to be acquired when they compute
Consolidated Cash Flow from Operations pursuant to clause (1) above. Examples of
such expenses include, without limitation, transaction costs, debt prepayments
and similar charges, brokers' fees, attorneys' fees and accountants' fees. The
foregoing expenses shall be excluded from net income in such computations of
Consolidated Cash Flow from Operations if the Required Banks agree in writing to
such request.
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(ii) Notice. The Borrower shall deliver to the
Banks a notice in the form of Exhibit 8.01(m)(ii) (the "Acquisition Notice
Certificate") at least two (2) Business Days before making any Permitted
Acquisition except for: (1) a Permitted Acquisition described in Section
8.01(m)(i) with respect to which the Borrower is delivering an Acquisition
Approval Certificate, or (2) a Permitted Acquisition if the Purchase Price in
connection therewith is less than $2,500,000. The Acquisition Notice Certificate
shall set forth the ratio of (1) Consolidated Cash Flow From Operations
(excluding the cash flow of the acquired business) for the Acquisition Income
Reporting Period in connection with such Permitted Acquisition, and (2) Total
Indebtedness on the date of the Permitted Acquisition after giving effect to the
acquisition and the Loans to be made on such date, which ratio shall not exceed
(A) 3.75 to 1.0 from and including the Convalescent Merger Effective Date
through but not including the Subordinated Indebtedness Incurrence Date; and (B)
4.5 to 1.0 from and after the Subordinated Indebtedness Incurrence Date. The
Acquisition Notice Certificate also shall confirm that, after giving effect to
the Permitted Acquisition and the Loans made on the date thereof, no Event of
Default shall exist and the Loan Parties shall be in compliance with all of
their covenants hereunder, assuming, for purposes of Borrower's financial
covenants, that all items of income, expense and cash flow are reported for the
Acquisition Income Reporting Period and that all balance sheet items (such as
Indebtedness) are measured on the date of such Permitted Acquisition.
(iii) Additional Information. With respect to
any Acquisition Approval Certificate or Acquisition Notice Certificate, the
Borrower shall provide to the Banks, as the Banks may reasonably request
detailed calculations and information supporting the financial calculations
therein and the financial statements attached thereto.
(n) Dissolution of Certain Subsidiaries. Borrower shall cause
Pinnacle Rehab of Gwinnette and Pinnacle's Kansas Joint Venture to be dissolved
on or before December 31, 1996. Borrower shall not, directly or indirectly, make
any capital contributions or other investments in, loans to, guarantees or other
obligations on behalf of, or other payments, distributions or contributions to
or for the benefit of, Pinnacle Rehab of Gwinnette or Pinnacle's Kansas Joint
Venture on or after the Closing Date, except for payment of immaterial expenses
on behalf of such entities relating to their dissolution.
(o) Westbury Associates, Ltd.. Borrower shall, on or before
December 31, 1996, cause Westbury Associates, Ltd. to become a wholly-owned
Subsidiary of Borrower.
(p) Further Assurances. Each Loan Party shall, from time to
time, at its expense, faithfully preserve and protect the Agent's Lien on or
perfected security interest in the Collateral as a continuing perfected Lien,
subject only to Permitted Liens, and shall do such other acts and things as the
Agent in its sole discretion may deem necessary or advisable from time to time
in order to preserve, perfect and protect the Liens granted under the Loan
Documents and to exercise and enforce its rights and remedies thereunder with
respect to the Collateral.
(q) Convalescent Facilities.cilities
(i) Convalescent Owned Facilities.
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(A) Termination of Liens. Borrower shall:
(1) Cause any Lien securing any COF Owner
Indebtedness to be terminated on or before the earlier of: (i) the maturity of
such COF Owner Indebtedness (without giving effect to any extension of such
maturity after the Fourth Amendment Effective Date) or (ii) any refinancing,
replacement or substitution of such COF Owner Indebtedness;
(2) Not permit the amount of COF Owner
Indebtedness secured by Liens in favor of the COF Lenders to exceed the amount
of such Indebtedness existing on the Fourth Amendment Effective Date, less any
repayments of such Indebtedness after such date; and
(3) Cause each COF Owner not to xxxxx x Xxxx on
any asset of such COF Owner if the COF Lender has previously terminated its
Liens or has never obtained a Lien on such asset.
(B) Intercreditor Agreements. Cause each COF Lender
on the Convalescent Merger Effective Date and thereafter any other person which
loans money to any COF Owner, or otherwise obtains a Lien in any of the assets
of any COF Owner relating to any of the COF Owned Facilities (whether by
assignment of the COF Owner Indebtedness or otherwise), on the date of such loan
or lien to execute and deliver to Agent an Intercreditor Agreement in the form
described in the definition of "Intercreditor Agreement." Borrower shall deliver
or cause to be delivered to Agent a true and correct copy of the original of
each Intercreditor Agreement within one (1) Business Day after such agreement
has been executed pursuant to the preceding sentence.
(ii) Convalescent Leased Facilities.
(A) Termination of Liens. Borrower shall:
(1) Cause any Lien securing any CLF Lessor
Indebtedness to be terminated on or before the earlier of: (i) the maturity of
such CLF Lessor Indebtedness (without giving effect to any extension of such
maturity after the Fourth Amendment Effective Date) or (ii) any refinancing,
replacement or substitution of such CLF Lessor Indebtedness;
(2) Not permit the amount of CLF Lessor
Indebtedness secured by Liens in favor of the CLF Lenders to exceed the amount
of such Indebtedness existing on the Fourth Amendment Effective Date, less any
repayments of such Indebtedness after such date; and
(3) Cause Convalescent not to xxxxx x Xxxx on
any of its asset if the CLF Lessor or CLF Lender has previously terminated its
Liens or has never obtained a Lien on such asset.
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(B) Non-Disturbance and Intercreditor Agreements.
Convalescent shall cause each CLF Lender on the Convalescent Merger Effective
Date and any other person which loans money to, or obtains a Lien in any of the
assets of, the CLF Lessor (whether by assignment of the CLF Lessor Indebtedness
or otherwise) to execute a Non-Disturbance Agreement and an Intercreditor
Agreement (in the form described in the definition of such term), as the case
may be, except for any CLF Lender listed on Schedule 6.01(aa) if Schedule
6.01(aa) states that Mariner shall not be required to cause Convalescent to
obtain such a Non-Disturbance Agreement or an Intercreditor Agreement from such
CLF Lender. Borrower shall deliver or cause to be delivered to Agent a true and
correct copy of each Non-Disturbance Agreement and the original of each
Intercreditor Agreement within one (1) Business Day after such agreement has
been executed pursuant to the preceding sentence.
(C) Trustee Agreements. Convalescent shall cause each
CLF Lessor listed on Schedule 6.01(aa) to execute and deliver to PNC Bank the
Trustee Agreement if Schedule 6.01(aa) states that such CLF Lessor shall be
required to enter into such Trustee Agreement.
(r) Regency Facilities.
(i) Regency Owned Facilities.
(A) Termination of Liens. Borrower shall:
(1) Cause any Lien securing any ROF Owner
Indebtedness to be terminated on or before the earlier of: (i) the maturity of
such ROF Owner Indebtedness (without giving effect to any extension of such
maturity after the Ninth Amendment Effective Date) or (ii) any refinancing,
replacement or substitution of such ROF Owner Indebtedness;
(2) Cause Regency to grant to Agent on the
Regency Merger Date second priority mortgage liens or perfected security
interests, pursuant to the Mortgages in the form attached as Exhibit 1.01(M), in
each of the assets which is encumbered by Liens in favor of the ROF Lender;
(3) Not permit the amount of ROF Owner
Indebtedness secured by Liens in favor of the ROF Lenders to exceed the amount
of such Indebtedness existing on the Ninth Amendment Effective Date, less any
repayments of such Indebtedness after such date;
(4) Cause each ROF Owner not to xxxxx x Xxxx on
any asset of such ROF Owner if the ROF Lender has previously terminated its
Liens or has never obtained a Lien on such asset; and
(5) Not permit the amendment of any documents
evidencing Indebtedness due to an ROF Lender without the prior consent of the
Agent.
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(B) Intercreditor Agreements. Cause each ROF Lender
on the Regency Merger Effective Date and thereafter any other person which loans
money to any ROF Owner, or otherwise obtains a Lien in any of the assets of any
ROF Owner relating to any of the ROF Owned Facilities (whether by assignment of
the ROF Owner Indebtedness or otherwise), on the date of such loan or lien to
execute and deliver to Agent an Intercreditor Agreement in the form described in
the definition of "Intercreditor Agreement." Borrower shall deliver or cause to
be delivered to Agent a true and correct copy of the original of each
Intercreditor Agreement within one (1) Business Day after such agreement has
been executed pursuant to the preceding sentence.
(ii) Regency Leased Facilities.
(A) Termination of Liens. Borrower shall:
(1) Cause any Lien securing any RLF Lessor
Indebtedness to be terminated on or before the earlier of: (i) the maturity of
such RLF Lessor Indebtedness (without giving effect to any extension of such
maturity after the Ninth Amendment Effective Date) or (ii) any refinancing,
replacement or substitution of such RLF Lessor Indebtedness;
(2) Cause Regency to grant to Agent second
priority perfected security interests, pursuant to Leasehold Mortgages in the
form attached as Exhibit 1.01(L), in each of the assets which is encumbered by
Liens in favor of any RLF Lender, except if the RLF Lender to the Regency Leased
Facility relating to such assets is listed on Schedule 6.01(bb) and Schedule
6.01(bb) states that such RLF Lender has not consented to the grant by Regency
of such second priority security interests;
(3) Not permit the amount of RLF Lessor
Indebtedness secured by Liens in favor of the RLF Lenders to exceed the amount
of such Indebtedness existing on the Ninth Amendment Effective Date, less any
repayments of such Indebtedness after such date; and
(4) Cause Regency not to xxxxx x Xxxx on any of
its assets if the RLF Lessor or RLF Lender has previously terminated its Liens
or has never obtained a Lien on such asset.
(B) Non-Disturbance and Intercreditor Agreements.
Regency shall cause each RLF Lender on the Regency Merger Effective Date and any
other person which loans money to, or obtains a Lien in any of the assets of,
the RLF Lessor (whether by assignment of the RLF Lessor Indebtedness or
otherwise) to execute a Non-Disturbance Agreement and an Intercreditor Agreement
(in the form described in the definition of such term), as the case may be,
except for any RLF Lender listed on Schedule 6.01(bb) if Schedule 6.01(bb)
states that Borrower shall not be required to cause Regency to obtain such a
Non-Disturbance Agreement or an Intercreditor Agreement from such CLF Lender.
Borrower shall deliver or cause to be delivered to Agent a true and correct copy
of each Non-Disturbance Agreement and
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the original of each Intercreditor Agreement within one (1) Business Day after
such agreement has been executed pursuant to the preceding sentence.
8.02 Negative Covenants. The Borrower covenants and agrees
that until payment in full of the Loans and interest thereon, satisfaction of
all of the Borrower's other obligations hereunder and termination of the
Revolving Credit Commitments, the Borrower shall comply with the following
negative covenants:
(a) Indebtedness. Subject to Section 8.02(v), the Borrower
shall not, and shall not permit any of its Restricted Subsidiaries to, at any
time create, incur, assume or suffer to exist any Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) Existing Indebtedness as set forth on Schedule
8.02(a) hereto (including any extensions or renewals thereof provided there is
no increase in the amount thereof or other significant change in the terms
thereof adverse to any Loan Party or to any Bank unless otherwise specified on
Schedule 8.02(a)); the COF Owner Indebtedness and CLF Lessor Indebtedness are
also subject to the covenants and limitations described in Section 8.01(q); the
ROF Owner Indebtedness and RLF Lessor Indebtedness are also subject to the
covenants and limitations described in Section 8.01(r);
(iii) Capitalized leases as and to the extent
permitted under Section 8.02(p) and operating leases;
(iv) Indebtedness which is subordinated in accordance
with the provisions of Section 8.01(1);
(v) Indebtedness secured by Purchase Money Security
Interests in an aggregate amount for the Borrower and its Subsidiaries on a
consolidated basis at any time not exceeding $500,000;
(vi) Indebtedness of a Loan Party to the Borrower or
to a wholly owned Subsidiary of the Borrower;
(vii) the Subordinated Notes, provided that neither
the subordination provisions contained in the Indenture nor Section 1008
[Limitation on Indebtedness] of the Indenture shall be amended after the
Subordinated Indebtedness Incurrence Date and provided further that the
Indenture is not otherwise amended after the Subordinated Indebtedness
Incurrence Date if the effect thereof would (i) accelerate the due date or
increase the amount of any payment due from the Borrower thereunder, (ii) change
the rate at which interest is charged thereunder, or (iii) impose material
restrictions or obligations on the Borrower or the other Loan Parties which are
not imposed thereunder on the Closing Date or add any term thereto which is less
favorable in any material respect to the Loan Parties than the terms of the
Indenture on the Subordinated Indebtedness Incurrence Date or which is more
restrictive to any of the Loan Parties than the terms of the Credit Agreement;
and
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(viii) Guaranties which constitute Indebtedness as
permitted pursuant to Section 8.02(c).
(b) Liens. The Borrower shall not, and shall not permit any of
the other Loan Parties or Unrestricted Subsidiary which is an Excluded Entity
with respect to which Restricted Investments have been made as permitted
pursuant to Section 8.02(d)(iv) to, at any time create, incur, assume or suffer
to exist any Lien on any of its or their property or assets, tangible or
intangible, now owned or hereafter acquired, or agree or become liable to do so,
except Permitted Liens.
(c) Guaranties. Except as described in Schedule 8.02(c), the
Borrower shall not, and shall not permit any of the other Loan Parties to, at
any time, directly or indirectly, become or be liable in respect of any Guaranty
except: (i) Guaranties of any obligation or liability of another Loan Party that
is permitted under the other provisions of this Agreement, (ii) Guaranties which
are not required by GAAP to be disclosed in the Borrower's audited consolidated
financial statements (including the footnotes thereto), (iii) Guaranties of
Indebtedness incurred as part of a permitted Restricted Investment pursuant to
Section 8.02(d)(iv) and (iv) Guaranties which are subordinated on terms
reasonably acceptable to the Agent.
(d) Loans and Investments. The Borrower shall not, and shall
not permit any of the other Loan Parties, to, at any time make or suffer to
remain outstanding any loan or advance to, or purchase, acquire or own any
stock, bonds, notes or securities of, or any partnership interest (whether
general or limited) in, or any other investment or interest in, or make any
capital contribution to, any other person, or agree, become or remain liable to
do any of the foregoing, except:
(i) trade credit extended on usual and customary
terms in the ordinary course of business;
(ii) advances to employees to meet expenses incurred
by such employees in the ordinary course of business;
(iii) Permitted Investments;
(iv) Restricted Investments not to exceed in the
aggregate for the Borrower and the other Loan Parties Twenty Five Million
Dollars ($25,000,000) outstanding at any time; provided that (i) the Excluded
Entity in which the Restricted Investment is made is engaged in a business which
is ancillary and related to the business of the Loan Parties; (ii) the Loan
Party making a Restricted Investment is either a shareholder, member or partner
of the Excluded Entity in which a Restricted Investment is made; (iii) the
stock, equity interests in a limited liability company or partnership interests
owned by a Loan Party in the Excluded Entity in which a Restricted Investment is
made are pledged to the Agent on a first priority basis for the benefit of the
Banks; and (iv) to the extent that any Excluded Entity incurs Indebtedness
payable to any person other than a Loan Party (the "Third Party Lender") in
excess of $2,500,000, prior to incurring such Indebtedness, the Borrower shall
cause the Third Party Lender to enter into an
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intercreditor agreement with the Agent on behalf of the Banks, in form and
substance satisfactory to the Agent in its sole discretion with respect to the
Indebtedness of such Excluded Entity payable to the Third Party Lender and any
Indebtedness of such Excluded Entity payable to either the Banks or any Loan
Party; and
(v) loans, advances and investments in Restricted
Subsidiaries.
(e) Dividends and Related Distributions. The Borrower shall
not, and shall not permit any of its Subsidiaries to, make or pay, or agree to
become or remain liable to make or pay, any dividend or other distribution of
any nature (whether in cash, property, securities or otherwise) on account of or
in respect of their respective shares of capital stock or partnership interests,
as the case may be, or on account of the purchase, redemption, retirement or
acquisition of their respective shares of capital stock (or warrants, options or
rights therefor) or partnership interests, as the case may be, except (i)
dividends or distributions in respect of a partnership interest payable by any
Subsidiary to the Borrower, (ii) dividends payable by the Borrower solely in
shares of capital stock of the Borrower, and (iii) up to $500,000 of
distributions per year payable in the aggregate by the Subsidiaries of the
Borrower which are limited liability companies or partnerships to non Affiliate
members of such limited liability companies or non Affiliate limited partners of
such partnerships, so long as after giving effect thereto no Event of Default or
Potential Default has occurred and is continuing. Notwithstanding the foregoing,
the Borrower may purchase or redeem its stock (from funds other than Loan
proceeds), from the date hereof through the Expiration Date, up to an aggregate
of $5 million of such stock, provided that, after giving effect to such purchase
or redemption, so long as after giving effect thereto no Potential Default or
Event of Default has occurred and is continuing and, without limiting the
generality of the foregoing, that the Borrower is in compliance (and the
Borrower demonstrates such compliance to the Agent in detail satisfactory to the
Agent) with the Leverage Ratio set forth in Section 8.02(r) and with the Minimum
Net Worth covenant set forth in Section 8.02(t).
(f) Liquidations, Mergers, Consolidations, Acquisitions. The
Borrower shall not, and shall not permit any of the other Loan Parties to,
dissolve, liquidate or wind-up its affairs, or become a party to any merger or
consolidation, or acquire by purchase, lease or otherwise all or substantially
all of the assets or capital stock of any other person, provided that (i) any
wholly owned Subsidiary may consolidate or merge into the Borrower or any other
wholly owned Subsidiary; (ii) a Subsidiary that is not a Material Subsidiary may
be dissolved, liquidated or wound up provided that from the date of this
Agreement through the Expiration Date, the total assets of the non-Material
Subsidiaries which so dissolve, liquidate or wind up shall not exceed
$10,000,000 in the aggregate; (iii) the Borrower or a Restricted Subsidiary of
the Borrower may acquire all of the capital stock of another corporation so long
as (u) the Purchase Price for such acquisition shall not exceed $75,000,000, (v)
the aggregate Purchase Price for such acquisition together with all previous
acquisitions permitted under clauses (iii) and (iv) of this Section 8.02(f)
shall not exceed $70,000,000 during the fiscal year ending December 31, 1995 or
$150,00,000 in any fiscal year of Borrower commencing after December 31, 1995,
(w) such acquired corporation, simultaneous with the acquisition thereof by a
Loan Party, executes and delivers to the Agent for the benefit of the Banks a
Guaranty
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Agreement and a Pledge Agreement substantially in the form of Exhibits 1.01(G)
and 1.01(P), respectively, and also delivers to the Agent such opinions of
counsel and other documents in connection therewith as the Agent may reasonably
request, (x) all of the issued and outstanding capital stock of such acquired
corporation owned by a Loan Party is pledged to the Agent for the benefit of the
Banks pursuant to a Pledge Agreement substantially in the form of Exhibit
1.01(P) hereto, (y) after giving effect to such proposed acquisition, no Event
of Default shall have occurred and be continuing, and (z) after giving effect to
such proposed acquisition (and without limiting the generality of the preceding
clause (iii)(y)), the Borrower is in compliance with the Leverage Ratio set
forth in Section 8.02(r) and the Borrower demonstrates such compliance pursuant
to Section 8.01(m) (if Section 8.01(m) requires such demonstration of
compliance); and (iv) the Borrower or any Restricted Subsidiary may merge or
consolidate with, or acquire all or substantially all of the assets of another
person so long as (w) the Purchase Price for such acquisition, merger or
consolidation shall not exceed $75,000,000, (x) the aggregate Purchase Price for
such acquisition together with all previous acquisitions permitted under clauses
(iii) and (iv) of this Section 8.02(f) shall not exceed $70,000,000 during the
fiscal year ending December 31, 1995 or $150,000,000 in any fiscal year of
Borrower commencing after December 31, 1995, (y) after giving effect to such
proposed acquisition, merger or consolidation, no Event of Default shall have
occurred and be continuing, and (z) after giving effect to such proposed
acquisition, merger or consolidation, the Borrower is in compliance with the
Leverage Ratio set forth in Section 8.02(r) and the Borrower demonstrates such
compliance pursuant to Section 8.01(m) (if Section 8.01(m) requires such
demonstration of compliance). The Purchase Price paid in connection with the
Convalescent Merger shall be excluded from the computation of the dollar
limitations on the Purchase Price permitted to be paid in connection with the
mergers or other acquisitions contained in clauses (iii)(u) and (v) and (iv)(w)
and (x) above. The Purchase Price paid in connection with the MedRehab Merger
shall be excluded from the computation of the dollar limitations on the Purchase
Price permitted to be paid in connection with the mergers or other acquisitions
contained in clauses (iii)(u) and (v) and (iv)(w) and (x) above. The Purchase
Price paid in connection with the Regency Merger shall be included in the
computation of the dollar limitations on the Purchase Price permitted to be paid
in connection with mergers or other acquisitions contained in clauses (iii)(u)
and (v) and (iv)(w) and (x) above. For purposes of the preceding clauses
(iii)(z) and (iv)(z), the Leverage Ratio set forth in Section 8.02(r) shall be
calculated as follows: (i) Total Indebtedness shall be determined as of the date
of the proposed acquisition, after giving effect thereto, and (ii) Consolidated
Cash Flow from Operations shall be calculated for the twelve-month period ending
on the last day of the fiscal quarter of the Borrower which precedes such date
of acquisition.
(g) Dispositions of Assets or Subsidiaries. The Borrower shall
not, and shall not permit any of the other Loan Parties to, sell, convey,
assign, lease, abandon or otherwise transfer or dispose of, voluntarily or
involuntarily, any of its properties or assets, tangible or intangible
(including but not limited to sale, assignment, discount or other disposition of
accounts, contract rights, chattel paper, equipment or general intangibles with
or without recourse or of capital stock, shares of beneficial interest or
partnership interests of a Subsidiary), except:
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(i) any sale, transfer or lease of assets in the
ordinary course of business which are no longer necessary or required in, or
which are not material to, the conduct of the Borrower's or such Subsidiary's
business;
(ii) any sale, transfer or lease of assets by any
wholly owned Loan Party to the Borrower or any other wholly owned Loan Party (or
by the Borrower to a wholly owned Loan Party);
(iii) any sale, transfer or lease of assets in the
ordinary course of business which are replaced by substitute assets acquired or
leased within the parameters of Section 8.02(p) provided such substitute assets
are subject to the Banks' Prior Security Interest;
(iv) any sale or transfer of assets which are
obsolete or no longer used or useful in the business of the Borrower or its
Subsidiaries; provided that such sales, transfers or dispositions shall not
exceed, in any fiscal year, $1 million in the aggregate for the Borrower and its
Subsidiaries; or
(v) any sale, transfer or lease of assets, other than
those specifically excepted pursuant to clauses (i) through (iv) above, which is
approved by the Required Banks so long as (x) the proceeds of such sale,
transfer or lease are applied as a mandatory prepayment of the Loans to the
extent required by the provisions of Section 5.05 of this Agreement, (y) after
giving effect to such proposed disposition, no Event of Default shall have
occurred and be continuing, and (z) after giving effect to such proposed
disposition (and without limiting the generality of the foregoing clause (y)),
the Borrower is in compliance (and, with respect to sales, transfers or leases
of assets of Subsidiaries which are not Material Subsidiaries, which sales,
transfers or leases individually or in the aggregate exceed $10 million for the
period from the date hereof through and including the Expiration Date, the
Borrower demonstrates such compliance to the Agent in detail reasonably
satisfactory to the Agent) with the leverage ratio set forth in Section 8.02(r).
For purposes of this Section 8.02(g)(v), the leverage ratio set forth in Section
8.02(r) shall be calculated as follows: (i) Indebtedness of the Borrower and its
Subsidiaries shall be determined as of the date of the proposed disposition,
after giving effect thereto, and (ii) Consolidated Cash Flow from Operations
shall be calculated for the twelve-month period ending on the last day of the
fiscal quarter of the Borrower which precedes such date of disposition but shall
exclude therefrom all amounts attributable to the assets which are sold,
transferred or leased.
(h) Affiliate Transactions. The Borrower shall not, and shall
not permit any of its Subsidiaries to, enter into or carry out any transaction
with any Affiliate (including, without limitation, purchasing property or
services from or selling property or services) unless such transaction is
entered into in the ordinary course of business upon fair and reasonable
arm's-length terms and conditions and is in accordance with all applicable Law
or unless such transaction is not otherwise prohibited by this Agreement.
(i) Subsidiary, Partnerships and Joint Ventures. The Borrower
shall not, and shall not permit any Subsidiary to, own or create directly or
indirectly any Subsidiaries other than those listed in Schedule 6.01(c);
provided, however, that the Borrower or a Restricted
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Subsidiary may acquire a Subsidiary pursuant to Section 8.02(f) or form a new
Subsidiary so long as (A) if such Subsidiary is a Restricted Subsidiary it
executes and delivers to the Agent for the benefit of the Banks a Guaranty
Agreement substantially in the form of Exhibit 1.01(G), , and also delivers to
the Agent such opinions of counsel and other documents as the Agent may
reasonably request; and (B) all of the issued and outstanding capital stock of
such Subsidiary owned by a Loan Party is pledged to the Agent for the benefit of
the Banks, such pledge to be a first priority perfected pledge pursuant to a
Pledge Agreement. If Borrower is forming a new Subsidiary (as opposed to
acquiring a Subsidiary) the obligations set forth in clauses (A) and (B) of the
preceding sentence shall arise only at such time as such new Subsidiary either
commences construction of a health care facility or related health care
business, acquires a health care facility or makes another acquisition permitted
under this Agreement or has a net book value, as determined under GAAP, of at
least $250,000. Except for investments permitted under Section 8.02(d)(iv),
neither the Borrower nor any Subsidiary shall become or agree to become a
general or limited partner in any general or limited partnership or a joint
venturer in any joint venture.
(j) Continuation of or Change in Business. The Borrower shall
not, and shall not permit any Subsidiary to, engage in any business other than
(i) its existing business, substantially as conducted and operated as of the
Closing Date and (ii) related health care businesses.
(k) Plans and Benefit Arrangements. The Borrower shall not,
and shall not permit any of its Subsidiaries to:
(i) fail to satisfy the minimum funding requirements
of ERISA and the Internal Revenue Code with respect to any Plan;
(ii) request a minimum funding waiver from the
Internal Revenue Service with respect to any Plan;
(iii) engage in a Prohibited Transaction with any
Plan, Benefit Arrangement or Multiemployer Plan which, alone or in conjunction
with any other circumstances or set of circumstances resulting in liability
under ERISA, would constitute a Material Adverse Change;
(iv) permit the aggregate actuarial present value of
all benefit liabilities (whether or not vested) under each Plan, determined on a
plan termination basis, as disclosed in the most recent actuarial report
completed with respect to such Plan, to exceed, as of any actuarial valuation
date, the fair market value of the assets of such Plan by an amount in excess of
$250,000;
(v) fail to make when due any contribution to any
Multiemployer Plan that the Borrower or any member of the ERISA Group may be
required to make under any agreement relating to such Multiemployer Plan, or any
Law pertaining thereto;
(vi) withdraw (completely or partially) from any
Multiemployer Plan or withdraw (or be deemed under Section 4062(e) of ERISA to
withdraw) from any
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Multiple Employer Plan, where any such withdrawal is likely to result in a
material liability of Borrower or any member of the ERISA Group;
(vii) terminate, or institute proceedings to
terminate, any Plan, where such termination is likely to result in a material
liability to the Borrower or any member of the ERISA Group;
(viii) make any amendment to any Plan with respect to
which security is required under Section 307 of ERISA; or
(ix) fail to give any and all notices and make all
disclosures and governmental filings required under ERISA or the Internal
Revenue Code, where such failure is likely to result in a Material Adverse
Change.
(l) Fiscal Year. The Borrower shall not permit any of its
Subsidiaries to, change its fiscal year from the twelve-month period beginning
January 1 and ending December 31.
(m) Issuance of Stock. The Borrower shall not permit any of
its Subsidiaries to issue any additional shares of capital stock, partnership
interests or member interests in a limited liability company or any options,
warrants or other rights in respect thereof; provided, however, that an
Unrestricted Subsidiary which is an Excluded Entity may issue additional capital
stock, partnership interests or member interests in a limited liability company
so long as all such capital stock, partnership interests or member interests in
a limited liability company which are owned, beneficially, of record, or
otherwise, by any Loan Party are pledged to the Banks as a first priority
perfected pledge pursuant to a Pledge Agreement, and provided further that any
Restricted Subsidiary may issue additional capital stock, partnership interests
or member interests in a limited liability company so long as such capital
stock, partnership interests or member interests in a limited liability company
are pledged to the Banks as a first priority perfected pledge pursuant to a
Pledge Agreement.
(n) [Intentionally Omitted.]Omitted.]
(o) [Intentionally Omitted.]Omitted.]
(p) Capital Expenditures and Leases. The Borrower shall not,
and shall not permit any of its Subsidiaries to make any payments on account of
the purchase of any assets which if purchased would constitute fixed assets or
on account of the lease of any assets which if leased would constitute a capital
lease, in the aggregate exceeding: (i) $11,100,000 during the fiscal year of
January 1, 1995 through December 31, 1995; (ii) $30,000,000 during the fiscal
year of January 1, 1996 through December 31, 1996; and (iii) $15,000,000 in each
fiscal year thereafter, and all such purchases of fixed assets or payments
pursuant to such capital leases shall be made under usual and customary terms
and in the ordinary course of business.
(q) Minimum Fixed Charge Coverage Ratio. The Borrower shall
not at any time permit: (i) for periods prior to but not including the
Subordinated Indebtedness
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Incurrence Date, the ratio of (x) the sum of Adjusted Consolidated Net Income,
interest expense, income tax expense and operating lease expense to (y) the sum
of its interest expense and operating lease expense, in each case determined and
consolidated in accordance with GAAP to be less than 2.5 to 1.0; and (ii) for
periods from and after the Subordinated Indebtedness Incurrence Date, the ratio
of (x) the sum of Adjusted Consolidated Net Income, interest expense,
depreciation, amortization, income tax expense and operating lease expense to
(y) the sum of its interest expense, operating lease expense and current
maturities of long-term Indebtedness in each case determined and consolidated in
accordance with GAAP to be less than 2.25 to 1.0. Such ratio shall be calculated
as of the end of each fiscal quarter. Calculations as of the end of each fiscal
quarter shall be for the four fiscal quarters then ended. Calculations made as
of the end of the fiscal quarter ending after the Convalescent Merger Effective
Date and each of the three fiscal quarters thereafter shall be based on pro
forma combined financial statements of the Borrower and its Subsidiaries and
Convalescent and its Subsidiaries to the extent the calculation includes periods
prior to the Convalescent Merger Effective Date. Calculations made as of the end
of the fiscal quarter ending after the Regency Merger Effective Date and each of
the three fiscal quarters thereafter shall be based on pro forma combined
financial statements of the Borrower and its Subsidiaries and Regency and its
Subsidiaries to the extent the calculation includes periods prior to the Regency
Merger Effective Date, with such pro forma combined financial statements to be
utilized to be in the form attached to the Acquisition Approval Certificate
delivered in connection with the Regency Merger. It is expressly agreed that for
purposes of calculating the foregoing ratio, for each period of determination at
the end of a fiscal quarter for the four fiscal quarters then ended, Adjusted
Consolidated Net Income, which is part of the numerator of such ratio, shall be
reduced by an amount, if any, equal to the excess of (x) the extraordinary,
nonrecurring charges included in Adjusted Consolidated Net Income for such four
fiscal quarters, over (y) $16,911,000.
(r) Maximum Leverage Ratio. The Borrower shall not at any time
permit the ratio of Total Indebtedness to Consolidated Cash Flow from Operations
to exceed (A) 3.0 to 1.0 from the Fourth Amendment Effective Date through but
not including the Convalescent Merger Effective Date; (B) 3.75 to 1.0 from and
including the Convalescent Merger Effective Date through but not including the
Subordinated Indebtedness Incurrence Date; and (C) 4.5 to 1.0 from and after the
Subordinated Indebtedness Incurrence Date. For purposes of this Section 8.02(r),
Total Indebtedness shall be calculated as of each date of determination and
Consolidated Cash Flow from Operations shall be calculated as of each date of
determination for the four fiscal quarters then ended.
(s) [Intentionally Omitted.]Omitted.]
(t) Minimum Net Worth. The Borrower shall not at any time
after the Fourth Amendment Effective Date permit Consolidated Net Worth to be
less than the sum of (i) Two Hundred Two Million Five Hundred Thousand Dollars
($202,500,000), (ii) seventy-five percent (75%) of Adjusted Consolidated Net
Income of the Borrower and its Subsidiaries for each fiscal quarter in which net
income was earned (as opposed to a net loss) during the period from March 31,
1995 through (and including) the date of determination, (iii) one hundred
percent (100%) of all increases in capital stock and additional paid-in capital
from issuances for cash of
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equity securities and other equity capital investments after March 31, 1995, and
(iv) one hundred percent (100%) of all increases in capital stock and additional
paid-in capital from issuances of equity securities in connection with the
acquisition of a Subsidiary after March 31, 1995 (so long as the fair market
value at the time of acquisition of the Subsidiary so acquired is at least equal
to the value of the capital stock or other equity securities so issued);
provided, however, that for purposes of determining the amount of this clause
(iv), the Borrower shall exclude therefrom any amounts attributable to capital
stock issued as consideration for the purchase of an intangible asset (so long
as the fair market value of the intangible asset purchased does not exceed the
fair market value of the capital stock issued therefor).
(u) Senior Indebtedness to Cash Flow From Operations Ratio.
The Borrower shall not at any time permit the ratio of (i) Total Indebtedness,
other than the outstanding principal amount of the Subordinated Notes and other
than the outstanding principal amount of Indebtedness permitted pursuant to
Section 8.02(a)(iv), to (ii) Consolidated Cash Flow from Operations to exceed
3.25 to 1.0. For purposes of this Section 8.02(u), Total Indebtedness, the
outstanding principal amount of the Subordinated Notes and the outstanding
principal amount of Indebtedness permitted pursuant to Section 8.02(a)(iv) shall
be calculated as of each date of determination and Consolidated Cash Flow from
Operations shall be calculated as of each date of determination for the four
fiscal quarters then ended.
(v) Incurrence of Indebtedness Permitted By the Indenture. So
long as any Indebtedness or other obligations (monetary or otherwise) are
outstanding under the Indenture the Borrower shall not, and shall not permit any
of its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness unless the incurrence thereof complies with the provisions of
Section 1008. [Limitation on Indebtedness] of the Indenture as in effect on the
Ninth Amendment Effective Date without giving any effect to any grace period
under the Indenture or waiver under the Indenture of any default of such
covenant.
(w) [Intentionally Omitted.]Omitted.]
(x) Negative Pledges. Except as set forth on Schedule 8.02(x),
Borrower shall not and shall not permit any of its Subsidiaries to enter into
any agreement with any person which prohibits the Loan Parties from granting
Liens to the Agent or the Banks.
(y) Prohibition of Defeasance of Subordinated Notes. The
Borrower shall not and shall not permit any of its Subsidiaries to make any
payments to the trustee under the Indenture or to any holders of Subordinated
Notes in payment of the defeasance or covenant defeasance of the Subordinated
Notes pursuant to Section 402 or 403 of the Indenture or any similar provision
in any supplement to the Indenture.
8.03 Reporting Requirements. The Borrower covenants and agrees
that until payment in full of the Loans and interest thereon, satisfaction of
all of the Borrower's other obligations hereunder and termination of the
Revolving Credit Commitments, the Borrower will furnish or cause to be furnished
to the Agent and each of the Banks:
(a) [Intentionally Omitted.]Omitted.]
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(b) Quarterly Financial Statements; Additional Convalescent
Statements. As soon as available and in any event within forty-five (45)
calendar days after the end of each fiscal quarter in each fiscal year,
financial statements of the Borrower, consisting of a consolidated balance sheet
as of the end of such fiscal quarter and related consolidated statements of
income, retained earnings and cash flows for the fiscal quarter then ended and
the fiscal year through that date, all in reasonable detail and certified by the
Chief Executive Officer, President or Chief Financial Official of the Borrower
as having been prepared in accordance with GAAP, consistently applied (subject
to normal year-end audit adjustments), and setting forth in comparative form the
respective financial statements for the corresponding date and period in the
previous fiscal year. The financial statements which Borrower prepares and
delivers as of each of the four fiscal quarters ending after the Convalescent
Merger Effective Date shall include statements of income, retained earnings and
cash flows showing the combined results of Borrower and its Subsidiaries and
Convalescent and its Subsidiaries on a pro forma basis for applicable periods
prior to the Convalescent Merger Effective Date. Borrower also shall deliver to
the Agent and each of the Banks any financial statements which Borrower receives
from Convalescent (or prepares on behalf of Convalescent) for Convalescent and
Convalescent's Subsidiaries relating to the period between December 31, 1994 and
the Convalescent Merger Effective Xxxx or any portion of such period. Borrower
shall deliver such statements promptly after Borrower receives or prepares such
statements, as the case may be.
(c) Annual Financial Statements. As soon as available and in
any event within ninety (90) days after the end of each fiscal year of the
Borrower, financial statements of the Borrower consisting of a consolidated
balance sheet as of the end of such fiscal year, and related consolidated
statements of income, retained earnings and cash flows for the fiscal year then
ended, all in reasonable detail and setting forth in comparative form the
financial statements as of the end of and for the preceding fiscal year, and
certified by independent certified public accountants of nationally recognized
standing satisfactory to the Agent. The certificate or report of accountants
shall be free of qualifications (other than any consistency qualification that
may result from a change in the method used to prepare the financial statements
as to which such accountants concur) and shall not include a statement which
indicates the occurrence or existence of any event, condition or contingency
which would materially impair the prospect of payment or performance of any
covenant, agreement or duty of the Borrower or any of its Subsidiaries under any
of the Loan Documents, together with a letter of such accountants substantially
to the effect that, based upon their ordinary and customary examination of the
affairs of the Borrower and its Subsidiaries, performed in connection with the
preparation of such consolidated financial statements, and in accordance with
generally accepted auditing standards, they are not aware of the existence of
any condition or event which constitutes an Event of Default or Potential
Default or, if they are aware of such condition or event, stating the nature
thereof.
(d) Certificate of the Borrower. Concurrent with the financial
statements of the Borrower furnished to the Agent and to the Banks pursuant to
Sections 8.03(b) and 8.03(c) hereof, a certificate of the Borrower signed by the
Chief Executive Officer, President or Chief Financial Officer of the Borrower or
by Xxxxx Xxxx, Vice President and Corporate Controller of the Borrower, in the
form of Exhibit 8.03(d) hereto, to the effect that, except as
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described pursuant to Section 8.03(e) below, (i) the representations and
warranties of the Borrower contained in Article VI hereof are true on and as of
the date of such certificate with the same effect as though such representations
and warranties had been made on and as of such date (except representations and
warranties which expressly relate solely to an earlier date or time) and the
Borrower has performed and complied with all covenants and conditions hereof,
(ii) no Event of Default or Potential Default exists and is continuing on the
date of such certificate, and (iii) containing calculations in sufficient detail
to demonstrate compliance as of the date of the financial statements with all
financial covenants contained in Section 8.02 hereof and with the covenant
contained in Section 1008 [Limitation on Indebtedness] of the Indenture.
Certifications on and after March 31, 1996 shall be in the form of Exhibit
8.03(d)(2).
(e) Notice of Default. Promptly after any officer of the
Borrower has learned of the occurrence of an Event of Default or Potential
Default, a certificate signed by the Chief Executive Officer, President or Chief
Financial Officer of the Borrower or by Xxxxx Xxxx, Vice President and Corporate
Controller of the Borrower, setting forth the details of such Event of Default
or Potential Default and the action which the Borrower proposes to take with
respect thereto.
(f) Notice of Litigation. Promptly after the commencement
thereof, notice of all actions, suits, proceedings or investigations before or
by any Official Body or any other person against the Borrower which relate to
the Collateral, involve a claim or series of related claims in excess of
$1,000,000 or which if adversely determined would constitute a Material Adverse
Change.
(g) Certain Events. Written notice to the Agent at least
thirty (30) calendar days prior thereto, with respect to any proposed sale or
transfer of assets pursuant to Section 8.02(g)(iii) or (iv).
(h) Budgets, Forecasts, Other Reports and Information.
Promptly upon their becoming available to the Borrower:
(i) the annual budget of the Borrower, to be supplied not
later than sixty (60) days prior to commencement of the fiscal year to which
such budget relates,
(ii) any reports including management letters submitted
to the Borrower by independent accountants in connection with any annual,
interim or special audit,
(iii) any reports, notices or proxy statements generally
distributed by the Borrower to its stockholders on a date no later than the date
supplied to the stockholders,
(iv) regular or periodic reports, including Forms 10-K,
10-Q and 8-K, registration statements and prospectuses, filed by the Borrower
with the Securities and Exchange Commission,
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(v) a copy of any material order in any proceeding to
which the Borrower or any of its Subsidiaries is a party issued by any Official
Body,
(vi) regular, periodic utilization reports including in
detail reasonably satisfactory to the Agent for the period of such reports the
patient census, the number of occupied beds, the payment source (Medicare,
Medicaid, private pay or otherwise) for each patient,
(vii) such other reports and information as the Banks may
from time to time reasonably request. The Borrower shall also notify the Banks
promptly of the enactment or adoption of any Law which may result in a Material
Adverse Change with respect to the Borrower after the Borrower becomes aware or
should reasonably have become aware thereof, and
(viii) annual reports in detail satisfactory to the Agent
setting forth the real property owned, leased or managed by the Borrower or any
Subsidiary, to be supplied not later than sixty (60) days prior to commencement
of the fiscal year to which any of the foregoing may be applicable.
(i) Notices Regarding Plans and Benefit Arrangements. (i)
Promptly upon becoming aware of the occurrence thereof, notice (including the
nature of the event and, when known, any action taken or threatened by the
Internal Revenue Service or the PBGC with respect thereto) of:
(A) any Reportable Event with respect to the
Borrower or any member of the ERISA Group (regardless of whether the obligation
to report said Reportable Event to the PBGC has been waived),
(B) any Prohibited Transaction which could be
subject the Borrower or any member of the ERISA Group to a civil penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of
the Internal Revenue Code in connection with any Plan, Benefit Arrangement or
any trust created thereunder,
(C) any assertion of material withdrawal
liability with respect to any Multiemployer Plan,
(D) any partial or complete withdrawal from a
Multiemployer Plan by the Borrower or any member of the ERISA Group under Title
IV of ERISA (or assertion thereof), where such withdrawal is likely to result in
material withdrawal liability,
(E) any cessation of operations (by the Borrower
or any member of the ERISA Group) at a facility in the circumstances described
in Section 4063(e) of ERISA,
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(F) withdrawal by the Borrower or any member of
the ERISA Group from a Multiple Employer Plan,
(G) a failure by the Borrower or any member of
the ERISA Group to make a payment to a Plan required to avoid imposition of a
lien under Section 302(f) of ERISA,
(H) the adoption of an amendment to a Plan
requiring the provision of security to such Plan pursuant to Section 307 of
ERISA, or
(I) any change in the actuarial assumptions or
funding methods used for any Plan, where the effect of such change is to
materially increase or materially reduce the unfunded benefit liability or
obligation to make periodic contributions.
(ii) Promptly after receipt thereof, copies of (a)
all notices received by the Borrower or any member of the ERISA Group of the
PBGC's intent to terminate any Plan administered or maintained by the Borrower
or any member of the ERISA Group, or to have a trustee appointed to administer
any such Plan; and (b) at the request of the Agent or any Bank each annual
report (IRS Form 5500 series) and all accompanying schedules, the most recent
actuarial reports, the most recent financial information concerning the
financial status of each Plan administered or maintained by the Borrower or any
member of the ERISA Group, and schedules showing the amounts contributed to each
such Plan by or on behalf of the Borrower or any member of the ERISA Group in
which any of their personnel participate or from which such personnel may derive
a benefit, and each Schedule B (Actuarial Information) to the annual report
filed by the Borrower or any member of the ERISA Group with the Internal Revenue
Service with respect to each such Plan.
(iii) Promptly upon the filing thereof, copies of
Form 5310, or any successor or equivalent form to Form 5310, filed with the PBGC
in connection with the termination of any Plan.
(j) Notices with Respect to Indenture. Written notice to the
Agent:
(i) immediately upon the occurrence of a "Default" or
an "Event of Default," as such terms are defined in the Indenture;
(ii) immediately upon a "Change of Control," as such
term is defined in the Indenture;
(iii) immediately upon receipt of a "notice of
acceleration" from either the trustee for the Subordinated Notes or the holders
of the Subordinated Notes pursuant to Section 502 of the Indenture or any
similar provision in any supplement to the Indenture;
(iv) simultaneous with the sending thereof, all
notices required to be sent to the trustee or the holders of the Subordinated
Notes under the Indenture; and
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(v) immediately upon the receipt thereof, all notices
received from the trustee under the Indenture.
ARTICLE IX
DEFAULT
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9.01 Events of Default. An Event of Default shall mean the
occurrence or existence of any one or more of the following events or conditions
(whatever the reason therefor and whether voluntary, involuntary or effected by
operation of Law):
(a) The Borrower shall fail to pay any principal of
any Loan (including scheduled or mandatory prepayments or the payment due at
maturity) or shall fail to pay any interest on any Loan or any other amount
owing hereunder or under the other Loan Documents after such principal or within
three (3) Business Days after such interest or other amount becomes due in
accordance with the terms hereof or thereof;
(b) Any representation or warranty made at any time
by the Borrower herein or by the Borrower or any of its Subsidiaries in any
other Loan Document, or in any certificate, other instrument or statement
furnished pursuant to the provisions hereof or thereof, shall prove to have been
false or misleading in any material respect as of the time it was made or
furnished regardless of whether such representation or warranty was qualified as
to Borrower's knowledge or best knowledge;
(c) The Borrower shall default in the observance or
performance of any covenant contained in Section 8.01(f) or Section 8.02 hereof;
(d) The Borrower or any of its Subsidiaries shall
default in the observance or performance of any other covenant, condition or
provision hereof or of any other Loan Document and such default shall continue
unremedied for a period of thirty (30) Business Days after any officer of the
Borrower or any Subsidiary becomes aware of the occurrence thereof (such grace
period to be applicable only in the event such default can be remedied by
corrective action of the Borrower or such Subsidiary as determined by the Agent
in its sole discretion);
(e) A default or event of default shall occur at any
time under the terms of any other agreement involving borrowed money or the
extension of credit or any other Indebtedness under which the Borrower or any of
its Subsidiaries may be obligated as borrower or guarantor in excess of $250,000
in aggregate principal amount, and such breach, default or event of default
consists of the failure to pay (beyond any period of grace permitted with
respect thereto, whether waived or not) any indebtedness when due (whether at
stated maturity, by acceleration or otherwise) or if such breach or default
permits or causes the acceleration of any indebtedness (whether or not such
right shall have been waived) or the termination of any commitment to lend;
(f) Any final judgments or orders for the payment of
money in excess of $1,000,000 in the aggregate (not paid or fully covered by
insurance) shall be entered against
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the Borrower or any of its Subsidiaries by a court having jurisdiction in the
premises which judgment is not discharged, vacated, bonded or stayed pending
appeal within a period of thirty (30) days from the date of entry;
(g) Any of the Loan Documents shall cease to be
legal, valid and binding agreements enforceable against the party executing the
same or such party's successors and assigns (as permitted under the Loan
Documents) in accordance with the respective terms thereof or shall in any way
be terminated (except in accordance with its terms) or shall in any way be
challenged or contested or cease to give or provide the respective Liens,
security interests, rights, titles, interests, remedies, powers or privileges
intended to be created thereby;
(h) The Collateral or any other of the Borrower's or
any of its Subsidiaries' assets are attached, seized, levied upon or subject to
a writ or distress warrant; or such come within the possession of any receiver,
trustee, custodian or assignee for the benefit of creditors and the same is not
cured within thirty (30) days thereafter;
(i) A notice of lien or assessment in excess of
$1,000,000 is filed of record with respect to all or any part of the Borrower's
or any of its Subsidiaries' assets by the United States, or any department,
agency or instrumentality thereof, or by any state, county, municipal or other
governmental agency, including, without limitation, the Pension Benefit Guaranty
Corporation, or if any taxes or debts owing at any time or times hereafter to
any one of these becomes payable and the same is not paid within thirty (30)
days after the same becomes payable unless the same is being contested in good
faith in accordance with Section 8.01(b);
(j) The Borrower or any of its Material Subsidiaries
ceases to be solvent or admits in writing its inability to pay its debts as they
mature;
(k) Any of the following occurs: The Agent determines
in good faith that the amount of Borrower's liability is likely to exceed 10% of
its Consolidated Net Worth upon the occurrence of (i), (ii), (iii) or (iv)
below: (i) any Reportable Event constitutes grounds for the termination of any
Plan by the PBGC or the appointment of a trustee to administer or liquidate any
Plan, shall have occurred and be continuing; (ii) proceedings shall have been
instituted or other action taken to terminate any Plan or a termination notice
shall have been filed with respect to any Plan; (iii) a trustee shall be
appointed to administer or liquidate any Plan; or (iv) the PBGC shall give
notice of its intent to institute proceedings to terminate any Plan or Plans or
to appoint a trustee to administer or liquidate any Plan; or, with respect to
any of the events specified in (v), (vi), (vii), (viii) or (ix) below, the Agent
determines in good faith that any such occurrence could be reasonably likely to
materially and adversely affect the total enterprise represented by the Borrower
and the other members of the ERISA Group; (v) the Borrower or any member of the
ERISA Group shall fail to make any contributions when due to a Plan or a
Multiemployer Plan; (vi) the Borrower or any member of the ERISA Group shall
make any amendment to a Plan with respect to which security is required under
Section 307 of ERISA; (vii) the Borrower or any member of the ERISA Group shall
withdraw completely or partially from a Multiemployer Plan; (viii) the Borrower
or any member of the ERISA Group shall withdraw (or shall be deemed under
Section 4062(e) of ERISA to withdraw) from a Multiple
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Employer Plan; or (ix) any applicable Law is adopted, changed or interpreted by
any Official Body with respect to or otherwise affecting one or more Plans,
Multiemployer Plans or Benefit Arrangements;
(l) The Borrower ceases to conduct its business as
contemplated or the Borrower or any of its Material Subsidiaries is enjoined,
restrained or in any way prevented by court order from conducting all or any
material part of its business and such injunction, restraint or other
preventative order is not dismissed within thirty (30) days after the entry
thereof;
(m) A Change of Ownership occurs;
(n) A proceeding shall have been instituted in a
court having jurisdiction in the premises seeking a decree or order for relief
in respect of the Borrower or any of its Subsidiaries in an involuntary case
under any applicable bankruptcy, insolvency, reorganization or other similar law
now or hereafter in effect, or a receiver, liquidator, assignee, custodian,
trustee, sequestrator, conservator (or similar official) of the Borrower or any
of its Subsidiaries for any substantial part of its property, or for the
winding-up or liquidation of its affairs, and such proceeding shall remain
undismissed or unstayed and in effect for a period of sixty (60) consecutive
days or such court shall enter a decree or order granting any of the relief
sought in such proceeding; or
(o) The Borrower or any of its Subsidiaries shall
commence a voluntary case under any applicable bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect, shall consent to
the entry of an order for relief in an involuntary case under any such law, or
shall consent to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator, conservator (or other similar
official) of itself or for any substantial part of its property or shall make a
general assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any action in furtherance of any of
the foregoing.
9.02 Consequences of Event of Default
(a) If an Event of Default specified under
subsections (a) through (m) of Section 9.01 hereof shall occur and be
continuing, the Banks shall be under no further obligation to make Loans
hereunder and the Agent upon the request of the Required Banks, shall (i) by
written notice to the Borrower, declare the unpaid principal amount of the Notes
then outstanding and all interest accrued thereon, any unpaid fees and all other
Indebtedness of the Borrower to the Banks hereunder and thereunder to be
forthwith due and payable, and the same shall thereupon become and be
immediately due and payable to the Agent for the benefit of each Bank without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived, and (ii) require the Borrower to, and the Borrower
shall thereupon, deposit in a non-interest bearing account with the Agent, as
cash collateral for its obligations under the Loan Documents, an amount equal to
the maximum amount currently or at any time thereafter available to be drawn on
all outstanding Letters of Credit, and the Borrower hereby pledges to the Agent
and the Banks, and grants to the Agent and the Banks a security interest in, all
such cash as security for such obligations. Upon the curing of all existing
Events of Default
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to the satisfaction of the Required Banks, the Agent shall return such cash
collateral to the Borrower; and
(b) If an Event of Default specified under
subsections (n) or (o) of Section 9.01 hereof shall occur, the Banks shall be
under no further obligations to make Loans hereunder and the unpaid principal
amount of the Notes then outstanding and all interest accrued thereon, any
unpaid fees and all other Indebtedness of the Borrower to the Banks hereunder
and thereunder shall be immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived;
and
(c) If an Event of Default shall occur and be
continuing, any Bank to whom any obligation is owed by any Loan Party hereunder
or under any other Loan Document or any participant of such Bank which has
agreed in writing to be bound by the provisions of Section 10.13 hereof and any
branch, subsidiary or affiliate of such Bank or participant anywhere in the
world shall have the right, in addition to all other rights and remedies
available to it, without notice to such Loan party, to set-off against and apply
to the then unpaid balance of all the Loans and all other obligations of such
Loan party hereunder or under any other Loan Document any debt owing to, and any
other funds held in any manner for the account of, such Loan Party by such Bank
or participant or by such branch, subsidiary or affiliate, including, without
limitation, all funds in all deposit accounts (whether time or demand, general
or special, provisionally credited or finally credited, or otherwise) now or
hereafter maintained by such Loan Party for its own account (but not including
funds held in custodian or trust accounts) with such Bank or participant or such
branch, subsidiary or affiliate. Such right shall exist whether or not any Bank
or the Agent shall have made any demand under this Agreement or any other Loan
Document, whether or not such debt owing to or funds held for the account of
such Loan Party is or are matured or unmatured and regardless of the existence
or adequacy of any Collateral, Guaranty or any other security, right or remedy
available to any Bank or the Agent; and
(d) If an Event of Default shall occur and be
continuing, and whether or not the Agent shall have accelerated the maturity of
Loans of the Borrower pursuant to any of the foregoing provisions of this
Section 9.02, the Agent or any Bank, if owed any amount with respect to the
Notes, may proceed to protect and enforce its rights by suit in equity, action
at law and/or other appropriate proceeding, whether for the specific performance
of any covenant or agreement contained in this Agreement or the Notes, including
as permitted by applicable Law the obtaining of the ex parte appointment of a
receiver, and, if such amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right of the agent or such Bank; and
(e) From and after the date on which the Agent has
taken any action pursuant to this Section 9.02 and until all obligations of the
Loan Parties have been paid in full, any and all proceeds received by the Agent
from any sale or other disposition of the Collateral, or any part thereof, or
the exercise of any other remedy by the Agent, shall be applied as follows:
(i) first, to reimburse the Agent and the
Banks for reasonable out-of-pocket costs, expenses and disbursements, including
without limitation reasonable
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attorneys' fees and legal expenses, incurred by the Agent or the Banks in
connection with realizing on the Collateral or collection of any obligations of
the Loan Parties under any of the Loan Documents, including advances made by the
Banks or any one of them or the Agent for the reasonable maintenance,
preservation, protection or enforcement of, or realization upon, the Collateral,
including without limitation, advances for taxes, insurance, repairs and the
like and reasonable expenses incurred to sell or otherwise realize on, or
prepare for sale or other realization on, any of the Collateral;
(ii) second, to the repayment of all
Indebtedness then due and unpaid of the Loan Parties to the Banks incurred under
this Agreement or any of the Loan Documents, whether of principal, interest,
fees, expenses or otherwise, in such manner as the Agent may reasonably
determine in its discretion and with respect to principal, interest, and fees,
shall be made in proportion to the Ratable Share of each Bank; and
(iii) the balance, if any, as required by
Law.
(f) In addition to all of the rights and remedies
contained in this Agreement or in any of the other Loan Documents, the Agent
shall have all of the rights and remedies with respect to the Collateral of a
secured party under the Uniform Commercial Code or other applicable Law, all of
which rights and remedies shall be cumulative and non-exclusive, to the extent
permitted by Law. The Agent may, and upon the request of the Required Banks
shall, exercise all post-default rights granted to the Agent and the Banks under
the Loan Documents or applicable Law.
(g) Following the occurrence and continuance of an
Event of Default, the Borrower, at its cost and expense (including the cost and
expense of obtaining any of the following referenced consents, approvals, etc.)
will promptly execute and deliver or cause the execution and delivery of all
applications, certificates, instruments, registration statements, and all other
documents and papers the Agent may request in connection with the obtaining of
any consent, approval, registration, qualification, permit, license,
accreditation, or authorization of any other Official Body or other person
necessary or appropriate for the effective exercise of any rights hereunder or
under the other Loan Documents. Without limiting the generality of the
foregoing, the Borrower agrees that in the event the Agent on behalf of the
Banks shall exercise its rights, hereunder or pursuant to the other Loan
Documents, to sell, transfer, or otherwise dispose of, or vote, consent,
operate, or take any other action in connection with any of the Collateral, the
Borrower shall execute and deliver (or cause to be executed and delivered) all
applications, certificates, assignments, and other documents that the Agent
requests to facilitate such actions and shall otherwise promptly, fully, and
diligently cooperate with the Agent and any other necessary persons in making
any application for the prior consent or approval of any Official Body or any
other person to the exercise by the Agent on behalf of the Banks of any of such
rights relating to all or any of the Collateral. Furthermore, because the
Borrower agrees that the remedies at law, of the Agent on behalf of the Banks,
for failure of the Borrower to comply with the provisions of Section 8.01(f) and
of this Section 9.02(g) would be inadequate and that any such failure would not
be adequately compensable in damages, the Borrower agrees that the covenants of
Sections 8.01(f) and 9.02(g) may be specifically enforced.
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(h) Upon the occurrence and continuance of an Event
of Default, the Agent may request, without limiting the rights and remedies of
the Agent on behalf of the Banks otherwise provided hereunder and under the
other Loan Documents, that the Borrower do any of the following: (i) give the
Agent on behalf of the Banks specific assignments of the accounts receivable of
the Borrower and each Subsidiary after such accounts receivable come into
existence, and schedules of such accounts receivable, the form and content of
such assignment and schedules to be satisfactory to the Agent, (ii) immediately
notify the Agent if any of such accounts receivable arise out of contracts with
the U.S. Government or any department, agency or instrumentality thereof, and
execute any instruments and take any steps required by the Agent in order that
all moneys due and to become due under such contract shall be assigned (to the
extent permitted by law) to the Agent on behalf of the Banks and notice thereof
given to the government under the Federal Assignment of Claims Act, if
applicable, or any other applicable law or regulation; and in order to better
secure the Agent on behalf of the Banks, in relation to such accounts
receivable, and (iii) to the extent permitted by Law, enter into such lockbox
agreements and establish such lockbox accounts as the Agent may require, with
the local banks in areas in which the Borrower and its Subsidiaries may be
operating (in such cases, all local lockbox accounts shall be depository
transfer accounts entitled "In trust for PNC Bank, National Association, as
Agent") which shall have agreed in writing to the Agent's requirements for the
handling of such accounts and the transfer of account funds to the Agent on
behalf of the Banks, all at the Borrower's sole expense, and shall direct all
payments from Medicare, Medicaid, Blue Cross and Blue Shield, private payors,
health maintenance organizations, all commercial payors and all other payors due
to the Borrower or any Subsidiary, to such lockbox accounts.
9.03 Notice of Sale. Any notice required to be given by the
Agent of a sale, lease, or other disposition of the Collateral or any other
intended action by the Agent, if given ten (10) days prior to such proposed
action, shall constitute commercially reasonable and fair notice thereof to the
relevant Loan Party.
ARTICLE X
THE AGENT
---------
10.01 Appointment. Each Bank hereby irrevocably designates,
appoints and authorizes PNC Bank to act as Agent for such Bank under this
Agreement to execute and deliver or accept on behalf of each of the Banks the
other Loan Documents. Each Bank hereby irrevocably authorizes, and each holder
of any Note by the acceptance of a Note shall be deemed irrevocably to
authorize, the Agent to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and any other instruments and
agreements referred to herein, and to exercise such powers and to perform such
duties hereunder as are specifically delegated to or required of the Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto. PNC Bank agrees to act as the Agent on behalf of the Banks to the
extent provided in this Agreement.
10.02 Delegation of Duties. The Agent may perform any of its
duties hereunder by or through agents or employees (provided such delegation
does not constitute a relinquishment of its duties as Agent) and, subject to
Sections 10.05 and 10.06 hereof, shall be
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entitled to engage and pay for the advice or services of any attorneys,
accountants or other experts concerning all matters pertaining to its duties
hereunder and to rely upon any advice so obtained.
10.03 Nature of Duties; Independent Credit Investigation. The
Agent shall have no duties or responsibilities except those expressly set forth
in this Agreement and no implied covenants, functions, responsibilities, duties,
obligations, or liabilities shall be read into this Agreement or otherwise
exist. The duties of the Agent shall be mechanical and administrative in nature;
the Agent shall not have by reason of this Agreement a fiduciary or trust
relationship in respect of any Bank; and nothing in this Agreement, expressed or
implied, is intended to or shall be so construed as to impose upon the Agent any
obligation in respect of this Agreement except as expressly set forth herein.
Each Bank expressly acknowledges (i) that the Agent has not made any
representations or warranties to it and that no act by the Agent hereafter
taken, including any review of the affairs of the Loan Parties, shall be deemed
to constitute any representation or warranty by the Agent to any Bank; (ii) that
it has made and will continue to make, without reliance upon the Agent, its own
independent investigation of the financial condition and affairs and its own
appraisal of the creditworthiness of the Loan Parties is connection with this
Agreement and the making and continuance of the Loans hereunder; and (iii)
except as expressly provided herein, that the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Bank
with any credit or other information with respect thereto, whether coming into
its possession before the making of any Loan or at any time or times thereafter.
10.04 Actions in Discretion of Agent; Instructions from the
Banks. The Agent agrees, upon the written request of the Required Banks, to take
or refrain from taking any action of the type specified as being within the
Agent's rights, powers or discretion herein, provided that the Agent shall not
be required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement or any other Loan Document or applicable
Law. In the absence of a request by the Required Banks, the Agent shall have
authority, in its sole discretion, to take or not to take any such action,
unless this Agreement specifically requires the consent of the Required Banks or
all of the Banks. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Banks, subject to Section
10.06 hereof. Subject to the provisions of Section 10.06, no Bank shall have any
right of action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Banks, or in the absence of such instructions, in the absolute
discretion of the Agent so long as the Agent is otherwise authorized to act
within its rights and powers as provided in this Agreement.
10.05 Reimbursement and Indemnification of Agent by the
Borrower. The Borrower unconditionally agrees to pay or reimburse the Agent and
save the Agent harmless against (a) liability for the payment of all reasonable
out-of-pocket costs, expenses and disbursements, including but not limited to
reasonable fees and expenses of counsel, appraisers and environmental
consultants, incurred by the Agent (i) in connection with the development,
negotiation, preparation, execution, performance by a Loan Party or an Excluded
Entity and interpretation of this Agreement and the other Loan Documents, (ii)
relating to any requested
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amendments, waivers or consents pursuant to the provisions hereof, (iii) in
connection with the enforcement of this Agreement or any other Loan Document or
collection of amounts due hereunder or thereunder or the proof and allowability
of any claim arising under this Agreement or any other Loan Document, whether in
bankruptcy or receivership proceedings or otherwise, and (iv) in any workout,
restructuring or in connection with the protection, preservation, exercise or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Loan Document or in connection with any foreclosure, collection or
bankruptcy proceedings, and (b) all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Agent, in its capacity as such, in any way relating to or arising
out of this Agreement or any other Loan Documents or any action taken or omitted
by the Agent hereunder or thereunder, provided that the Borrower shall not be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements if the
same results from the Agent's gross negligence or willful misconduct, or if the
Borrower was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense, or if the same results from
a compromise or settlement agreement entered into without the consent of the
Borrower. In addition, upon the occurrence of an Event of Default, the Borrower
agrees to reimburse and pay all reasonable out-of-pocket expenses of the Agent's
regular employees and agents engaged periodically to perform audits of the
Borrower's books, records and business properties.
10.06 Exculpatory Provisions. Neither the Agent nor any of its
directors, officers, employees, agents, attorneys or affiliates shall (a) be
liable to any Bank for any action taken or omitted to be taken by it or them
hereunder, or in connection herewith including without limitation pursuant to
any Loan Document, unless caused by its or their own gross negligence or willful
misconduct, (b) be responsible in any manner to any of the Banks for the
effectiveness, enforceability, genuineness, validity or the due execution of
this Agreement or any other Loan Documents or for any recital, representation,
warranty, document, certificate, report or statement herein or made or furnished
under or in connection with this Agreement or any other Loan Documents, unless
caused by its or their own gross negligence or willful misconduct, or (c) be
under any obligation to any of the Banks to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions hereof or
thereof on the part of the Loan Parties or any Excluded Entity, or the financial
condition of the Loan Parties or any Excluded Entity, or the existence or
possible existence of any Event of Default or Potential Default, unless caused
by its or their own gross negligence or willful misconduct. Neither the Agent
nor any Bank nor any of their respective directors, officers, employees, agents,
attorneys or affiliates shall be liable to the Loan Parties or any Excluded
Entity for consequential damages resulting from any breach of contract, tort or
other wrong in connection with the negotiation, documentation, administration or
collection of the Loans or any of the Loan Documents.
10.07 Reimbursement and Indemnification of Agent by Banks.
Each Bank agrees to reimburse and indemnify the Agent (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so) in proportion to its Ratable Share from and against all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred
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by or asserted against the Agent, in its capacity as such, in any way relating
to or arising out of this Agreement or any other Loan Documents or any action
taken or omitted by the Agent hereunder or thereunder, provided that no Bank
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
(a) if the same results from the Agent's gross negligence or willful misconduct,
or (b) if such Bank was not given notice of the subject claim and the
opportunity to participate in the defense thereof, at its expense, or (c) if the
same results from a compromise and settlement agreement entered into without the
consent of such Bank. In addition, each Bank agrees promptly to reimburse the
Agent (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so) in proportion to its Ratable Share for all
amounts due and payable by the Borrower to the Agent in connection with the
Agent's periodic audit of the Borrower's books, records and business properties.
In the event the Banks reimburse or indemnify the Agent pursuant to this Section
10.07 and subsequent thereto the Agent is reimbursed or indemnified by the
Borrower with respect to the same matter for which indemnification or
reimbursement was previously made by the Banks, the Agent will promptly refund
to the Banks, in accordance with each Bank's Ratable Share, the duplicative
amount.
10.08 Reliance by Agent. The Agent shall be entitled to rely
upon any writing, telegram, telex or teletype message, resolution, notice,
consent, certificate, letter, cablegram, statement, order or other document or
conversation by telephone or otherwise believed by it to be genuine and correct
and to have been signed, sent or made by the proper person or persons, and upon
the advice and opinions of counsel and other professional advisers selected by
the Agent. The Agent shall be fully justified in failing or refusing to take any
action hereunder unless it shall first be indemnified to its satisfaction by the
Banks against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action.
10.09 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Potential Default or Event of
Default unless the Agent has received written notice from a Bank or the Borrower
referring to this Agreement, describing such Potential Default or Event of
Default and stating that such notice is a "notice of default."
10.10 Notices. The Agent shall promptly send to each Bank a
copy of all notices received from any Loan Party pursuant to the provisions of
this Agreement or the other Loan Documents promptly upon receipt thereof. The
Agent shall promptly notify the Borrower and the other Banks of each change in
the Base Rate and the effective date thereof.
10.11 Banks in Their Individual Capacities. With respect to
its Revolving Credit Commitments and the Revolving Credit Loans made by it, the
Agent shall have the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not the Agent, and the term "Banks" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. PNC Bank and its affiliates and each of the Banks and their respective
affiliates may, without liability to account, except as prohibited herein, make
Loans to, accept deposits from, discount drafts for, act as trustee under
indentures of, and generally engage in any kind of banking or trust business
with, the Borrower and its affiliates, in the case of the Agent, as
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though it were not acting as Agent hereunder and in the case of each Bank, as
though such Bank were not a Bank hereunder.
10.12 Holders of Notes. The Agent may deem and treat any payee
of any Note as the owner thereof for all purposes hereof unless and until
written notice of the assignment or transfer thereof shall have been filed with
the Agent. Any request, authority or consent of any person who at the time of
making such request or giving such authority or consent is the holder of any
Note shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
10.13 Equalization of Banks. The Banks and the holders of any
participations in any Notes agree among themselves that, with respect to all
amounts received by any Bank or any such holder for application on any
obligation hereunder or under any Note or under any such participation, whether
received by voluntary payment, by realization upon security, by the exercise of
the right of set-off or banker's lien, by counterclaim or by any other non-pro
rata source, equitable adjustment will be made in the manner stated in the
following sentence so that, in effect, all such excess amounts will be shared
ratably among the Banks and such holders in proportion to their interests in
payments under the Notes, except as otherwise provided in Sections [4.04(b),
5.04(b) or 5.06(a)] hereof. The Banks or any such holder receiving any such
amount shall purchase for cash from each of the other Banks an interest in such
Bank's Loans in such amount as shall result in a ratable participation by the
Banks and each such holder in the aggregate unpaid amount under the Notes,
provided that if all or any portion of such excess amount is thereafter
recovered from the Bank or the holder making such purchase, such purchase shall
be rescinded and the purchase price restored to the extent of such recovery,
together with interest or other amounts, if any, required by law (including
court order) to be paid by the Bank or the holder making such purchase.
10.14 Successor Agent. The Agent (i) may resign as Agent, or
(ii) shall resign if such resignation is requested by the Required Banks, in the
case of either (i) or (ii) upon not less than thirty (30) days' prior written
notice to the Borrower and the Banks. If the Agent shall resign under this
Agreement, then either (a) the Required Banks shall appoint from among the Banks
a successor Agent for the Banks, or (b) if a successor agent shall not be so
appointed and approved within the thirty (30) day period following the Agent's
notice to the Banks of its resignation, then the Agent shall appoint, with the
consent of the Borrower, such consent not to be unreasonably withheld, a
successor agent who shall serve as Agent until such time as the Required Banks
appoint a successor agent. Upon its appointment pursuant to either clause (a) or
(b) above, such successor agent shall succeed to the rights, powers and duties
of the agent and the term "Agent" shall mean such successor agent, effective
upon its appointment, and the former Agent's rights, powers and duties as Agent
shall be terminated without any other or further act or deed on the part of such
former Agent or any of the parties to this Agreement. After the resignation of
any Agent hereunder, the provisions of this Article X shall inure to the benefit
of such former Agent and such former Agent shall not by reason of such
resignation be deemed to be released from liability for any actions taken or not
taken by it while it was an Agent under this Agreement.
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10.15 Agent's Fee. For periods prior to the Ninth Amendment
Effective Date, the Borrower shall pay to the Agent a nonrefundable fee (the
"Agent's Fee") as set forth in the letter agreement dated July 30, 1993 between
the Borrower and the Agent, such fee to be payable in the manner and on the
dates set forth in such letter agreement. For periods on and after the Ninth
Amendment Effective Date, the Borrower shall pay to the Agent a non-refundable,
annual fee (also the "Agent's Fee") as set forth in the letter agreement dated
April 9, 1996 between the Borrower and the Agent, such fee to be payable in the
manner and on the dates set forth in such letter agreement.
10.16 Availability of Funds. Unless the Agent shall have been
notified by a Bank prior to the date upon which a Loan is to be made that such
Bank does not intend to make available to the Agent such Bank's portion of such
Loan, the Agent may assume that such Bank has made or will make such proceeds
available to the Agent on such date and the Agent may, in reliance upon such
assumption (but shall not be required to), make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Agent by such Bank, the Agent shall be entitled to recover such amount on
demand from such Bank (or, if such Bank fails to pay such amount forthwith upon
such demand from the Borrower) together with interest thereon, in respect of
each day during the period commencing on the date such amount was made available
to the Borrower and ending on the date the Agent recovers such amount, at a rate
per annum equal to the Federal Funds Effective Rate in respect of the Loan.
10.17 Calculations. In the absence of gross negligence or
willful misconduct, the Agent shall not be liable for any error in computing the
amount payable to any Bank whether in respect of the Loans, fees or any other
amounts due to the Banks under this Agreement. In the event an error in
computing any amount payable to any Bank is made, the Agent, the Borrower and
each affected Bank shall, forthwith upon discovery of such error, make such
adjustments as shall be required to correct such error, and any compensation
therefor will be calculated at the Federal Funds Effective Rate.
10.18 Beneficiaries. Except as expressly provided herein, the
provisions of this Article X are solely for the benefit of the Agent and the
Banks, and the Borrower shall not have any rights to rely on or enforce any of
the provisions hereof. In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Banks and does not assume
and shall not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for the Borrower.
10.19 Holding of Loan Documents. Agent agrees that all
original Loan Documents retained by it shall be retained for the benefit of the
Banks, and Agent shall make available copies of such documents retained by it
upon the reasonable request of any of the Banks.
ARTICLE XI
MISCELLANEOUS
-------------
11.01 Modifications, Amendments or Waivers. With the written
consent of the Required Banks, the Agent, acting on behalf of all the Banks, and
the Borrower or the other
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applicable Loan Party may from time to time enter into written agreements
amending or changing any provision of this Agreement or any other Loan Document
or the rights of the Banks or the Borrower or such Loan Party hereunder or
thereunder, or may grant written waivers or consents to a departure from the due
performance of the obligations of the Borrower or such Loan Party hereunder or
thereunder. Any such agreement, waiver or consent made with such written consent
shall be effective to bind all the Banks; provided that, without the written
consent of all the Banks, no such agreement, waiver or consent may be made which
will:
(a) Reduce the amount of the Commitment Fee or any
other fees payable to any Bank hereunder, or amend Sections 5.02 [Pro Rata
Treatment of Banks], 10.06 [Exculpatory Provisions] and 10.13 [Equalization of
Banks] hereof;
(b) Whether or not any Loans are outstanding, extend
the time for payment of principal or interest of any Loan, or reduce the
principal amount of or the rate of interest borne by any Loan, or otherwise
affect the terms of payment of the principal of or interest of any Loan;
(c) Except for sales of assets permitted by Section
8.02(g), release any Collateral or other security, if any, for the Borrower's
obligations hereunder;
(d) Release or terminate any Guaranty Agreement of
any Loan party; or
(e) Amend Sections 2.01(c), 4.01(a), 8.02(r), or
11.01, change the definitions or the method of computing the ratios contained
within such foregoing sections, change the definition of Required Banks, or
change any requirement providing for the Banks or the Required Banks to
authorize the taking of any action hereunder.
11.02 No Implied Waivers; Cumulative Remedies; Writing
Required. No course of dealing and no delay or failure of the Agent or any Bank
in exercising any right, power, remedy or privilege under this Agreement or any
other Loan Document shall affect any other or future exercise thereof or operate
as a waiver thereof; nor shall any single or partial exercise thereof or any
abandonment or discontinuance of steps to enforce such a right, power, remedy or
privilege preclude any further exercise thereof or of any other right, power,
remedy or privilege. The rights and remedies of the Agent and the Banks under
this Agreement and any other Loan Documents are cumulative and not exclusive of
any rights or remedies which they would otherwise have. Any waiver, permit,
consent or approval of any kind or character on the part of any Bank of any
breach or default under this Agreement or any such waiver of any provision or
condition of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing.
11.03 Reimbursement and Indemnification of Banks by the
Borrower; Taxes. The Borrower agrees unconditionally upon demand to pay or
reimburse to each Bank (other than the Agent, as to which the Borrower's
obligations are set forth in Section 9.05) and to save such Bank harmless
against (i) liability for the payment of all reasonable out-of-pocket costs,
expenses and disbursements (including reasonable fees and expenses of counsel
for each Bank except with
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respect to (a) and (b) below), incurred by such Bank (a) in connection with the
interpretation of this Agreement, and other instruments and documents to be
delivered hereunder, (b) relating to any requested amendments, waivers or
consents pursuant to the provisions hereof, (c) in connection with the
enforcement of this Agreement or any other Loan Document, or collection of
amounts due hereunder or thereunder or the proof and allowability of any claim
arising under this Agreement or any other Loan Document, whether in bankruptcy
or receivership proceedings or otherwise, and (d) in any workout, restructuring
or in connection with the protection, preservation, exercise or enforcement of
any of the terms hereof or of any rights hereunder or under any other Loan
Document or in connection with any foreclosure, collection or bankruptcy
proceedings, or (ii) all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against such
Bank, in its capacity as such, in any way relating to or arising out of this
Agreement or any other Loan Documents or any action taken or omitted by such
Bank hereunder or thereunder, provided that the Borrower shall not be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements (A) if the same
results from such Bank's gross negligence or willful misconduct, or (B) if the
Borrower was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense, or (C) if the same results
from a compromise or settlement agreement entered into without the consent of
the Borrower. The Banks will attempt to minimize the fees and expenses of legal
counsel for the Banks which are subject to reimbursement by the Borrower
hereunder by considering the usage of one law firm to represent the Banks and
the Agent if appropriate under the circumstances. The Borrower agrees
unconditionally to pay all stamp, document, transfer, recording or filing taxes
or fees and similar impositions now or hereafter determined by the Agent or any
Bank to be payable in connection with this Agreement or any other Loan Document,
and the Borrower agrees unconditionally to save the Agent and the Banks harmless
from and against any and all present or future claims, liabilities or losses
with respect to or resulting from any omission to pay or delay in paying any
such taxes, fees or impositions.
11.04 Holidays. Whenever any payment or action to be made or
taken hereunder shall be stated to be due on a day which is not a Business Day,
such payment or action shall be made or taken on the next following Business Day
(except as provided in Section 4.02(a) with respect to Euro-Rate Interest
Periods), and such extension of time shall be included in computing interest or
fees, if any, in connection with such payment or action.
11.06 Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. Each Bank shall have the right from time
to time, without notice to the Borrower, to deem any branch, subsidiary or
affiliate (which for the purposes of this Section 11.05 shall mean any
corporation or association which is directly or indirectly controlled by or is
under direct or indirect common control with any corporation or association
which directly or indirectly controls such Bank) of such Bank to have made,
maintained or funded any Loan to which the Euro-Rate Option applies at any time,
provided that immediately following (on the assumption that a payment were then
due from the Borrower to such other office) and as a result of such change the
Borrower would not be under any greater
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financial obligation pursuant to Section 5.06 hereof than it would have been in
the absence of such change. Notional funding offices may be selected by each
Bank without regard to the Bank's actual methods of making, maintaining or
funding the Loans or any sources of funding actually used by or available to
such Bank.
(b) Actual Funding. Each Bank shall have the right from time
to time to make or maintain any Loan by arranging for a branch, subsidiary or
affiliate of such Bank to make or maintain such Loan subject to the last
sentence of this Section 11.05(b). If any Bank causes a branch, subsidiary or
affiliate to make or maintain any part of the Loans hereunder, all terms and
conditions of this Agreement shall, except where the context clearly requires
otherwise, be applicable to such part of the Loans to the same extent as if such
Loans were made or maintained by such Banks but in no event shall any Bank's use
of such a branch, subsidiary or affiliate to make or maintain any part of the
Loans hereunder cause such Bank or such branch, subsidiary or affiliate to incur
any cost or expenses payable by the Borrower hereunder or require the Borrower
to pay any other compensation to any Bank (including, without limitation, any
expenses incurred or payable pursuant to Section 5.06 hereof) which would
otherwise not be incurred.
11.06 Notices. All notices, requests, demands, directions and
other communications (collectively "notices") given to or made upon any party
hereto under the provisions of this Agreement shall be by telephone or in
writing (including telex or facsimile communication) unless otherwise expressly
permitted hereunder and shall be delivered or sent by telex or facsimile to the
respective parties at the addresses and numbers set forth under their respective
names on the signature pages hereof or in accordance with any subsequent
unrevoked written direction from any party to the others. All notices shall,
except as otherwise expressly herein provided, be effective (a) in the case of
telex or facsimile, when received, (b) in the case of hand-delivered notice,
when hand delivered, (c) in the case of telephone, when telephoned, provided,
however, that in order to be effective, telephonic notices must be confirmed in
writing no later than the next day by letter, facsimile or telex, (d) if given
by mail, four (4) days after such communication is deposited in the mails with
first class postage prepaid, return receipt requested, and (e) if given by any
other means (including by air courier), when delivered; provided, that notices
to the Agent shall not be effective until received. Any Bank giving any notice
to the Borrower shall simultaneously send a copy thereof to the Agent, and the
Agent shall promptly notify the other Banks of the receipt by it of any such
notice.
11.07 Severability. The provisions of this Agreement are
intended to be severable. If any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
11.08 Governing Law. This Agreement shall be deemed to be a
contract under the laws of the Commonwealth of Pennsylvania and for all purposes
shall be governed by and
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construed and enforced in accordance with the laws of the Commonwealth of
Pennsylvania without regard to its conflict of laws principles.
11.09 Prior Understanding. This Agreement supersedes all prior
understandings and agreements, whether written or oral, between the parties
hereto and thereto relating to the transactions provided for herein and therein,
including any prior confidentiality agreements and commitments.
11.10 Duration; Survival. All representations and warranties
of the Borrower contained herein or made in connection herewith shall survive
the making of Loans and shall not be waived by the execution and delivery of
this Agreement, any investigation by the Agent or the Banks, the making of
Loans, or payment in full of the Loans. All covenants and agreements of the
Borrower contained in Sections 8.01, 8.02 and 8.03 herein shall continue in full
force and effect from and after the date hereof so long as the Borrower may
borrow hereunder and until termination of the Revolving Credit Commitments and
payment in full of the Loans. All covenants and agreements of the Borrower
contained herein relating to the payment of principal, interest, premiums,
additional compensation or expenses and indemnification, including those set
forth in the Notes, Article V and Sections 10.05, 10.07 and 11.03 hereof, shall
survive payment in full of the Loans and termination of the Revolving Credit
Commitments.
11.11 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the Banks, the Agent, the Borrower and
their respective successors and assigns, except that the Borrower may not assign
or transfer any of its rights and obligations hereunder or any interest herein.
Each Bank may, at its own cost, make assignments of or sell participations in
all or any part of its Revolving Credit Commitment and the Loans made by it to
one or more banks or other entities, subject to the consent of the Borrower and
the Agent with respect to any assignee, such consent not to be unreasonably
withheld, and provided that assignments may not be made in amounts less than
$5,000,000. In the case of an assignment, upon receipt by the Agent of the
Assignment and Assumption Agreement and payment to the Agent of a fee in the
amount of $2,000, the assignee shall have, to the extent of such assignment
(unless otherwise provided therein), the same rights, benefits and obligations
as it would have if it had been a signatory Bank hereunder, the Commitments in
Section 2.01 shall be adjusted accordingly, and upon surrender of any Note
subject to such assignment, the Borrower shall execute and deliver a new Note to
the assignee in an amount equal to the amount of the Revolving Credit Commitment
or Loan assumed by it and a new Revolving Credit Note to the assigning Bank in
an amount equal to the Revolving Credit Commitment or Loan retained by it
hereunder. In the case of a participation, the participant shall only have the
rights specified in Section 9.02(c) (the participant's rights against such Bank
in respect of such participation to be those set forth in the agreement executed
by such Bank in favor of the participant relating thereto and not to include any
voting rights except with respect to changes of the type referenced in clauses
(a), (b), or (c) under Section 11.01 hereof), all of such Bank's obligations
under this Agreement or any other Loan Document shall remain unchanged and all
amounts payable by any Loan party hereunder or thereunder shall be determined as
if such Bank had not sold such participation. Each Bank may furnish any publicly
available information concerning any Loan Party and any other information
concerning any Loan Party in the possession of such Bank from
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time to time to assignees and participants (including prospective assignees or
participants) provided such assignees and participants agree to be bound by the
provisions of Section 11.12 hereof.
11.12 Confidentiality. The Agent and the Banks each agree to
keep confidential all information obtained from any Loan party which is
nonpublic and confidential or proprietary in nature (including any information
any Loan Party specifically designates as confidential), except as provided
below, and to use such information only in connection with their respective
capacities under this Agreement and for the purposes contemplated hereby. The
Agent and the Banks shall be permitted to disclose such information (i) to
outside legal counsel, accountants and other professional advisors who need to
know such information in connection with the administration and enforcement of
this Agreement, subject to agreement of such persons to maintain the
confidentiality, (ii) assignees and participants as contemplated by Section
11.11, (iii) to the extent requested by any bank regulatory authority or, with
notice to the Borrower, as otherwise required by applicable Law or by any
subpoena or similar legal process, or in connection with any investigation or
proceeding arising out of the transactions contemplated by this Agreement, (iv)
if it becomes publicly available other than as a result of a breach of this
Agreement or becomes available from a source not subject to confidentiality
restrictions, or (v) the Borrower shall have consented to such disclosure.
11.13 Counterparts. This Agreement may be executed by
different parties hereto on any number of separate counterparts, each of which,
when so executed and delivered, shall be an original, and all such counterparts
shall together constitute one and the same instrument.
11.14 Agent's or Bank's Consent. Whenever the Agent's or any
Bank's consent is required to be obtained under this Agreement or any of the
other Loan Documents as a condition to any action, inaction, condition or event,
the Agent and each Bank shall be authorized to give or withhold such consent in
its sole and absolute discretion and to condition its consent upon the giving of
additional collateral, the payment of money or any other matter.
11.15 Exceptions. The representations, warranties and
covenants contained herein shall be independent of each other and no exception
to any representation, warranty or covenant shall be deemed to be an exception
to any other representation, warranty or covenant contained herein unless
expressly provided, nor shall any such exceptions be deemed to permit any action
or omission that would be in contravention of applicable Law.
11.16 Consent to Forum; Waiver of Jury Trial. The Borrower
hereby irrevocably consents to the nonexclusive jurisdiction of the Court of
Common Pleas of Allegheny County and the United States District Court for the
Western District of Pennsylvania, and waives personal service of any and all
process upon it and consents that all such service of process be made by
certified or registered mail directed to the Borrower at the addresses provided
for in Section 11.06 hereof and service so made shall be deemed to be completed
upon actual receipt thereof. The Borrower waives any objection to jurisdiction
and venue of any action instituted against it as provided herein and agrees not
to assert any defense based on lack of jurisdiction or venue. The Borrower, the
Agent and the Banks hereby waive trial by jury in
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any action, suit, proceeding or counterclaim of any kind arising out of or
related to this Agreement, any other Loan Document or the Collateral to the full
extent permitted by Law.
11.17 Tax Withholding Clause. At least five (5) Business Days
prior to the first date on which interest or fees are payable hereunder for the
account of any Bank, each Bank that is not incorporated under the laws of the
United States of America or a state thereof agrees that it will deliver to each
of the Borrower and the Agent two (2) duly completed copies of (i) Internal
Revenue Service Form W-9, 4224 or 1001, or other applicable form prescribed by
the Internal Revenue Service, certifying in either case that such Bank is
entitled to receive payments under this Agreement and the other Loan Documents
without deduction or withholding of any United States federal income taxes, or
is subject to such tax at a reduced rate under an applicable tax treaty, or (ii)
Form W-8 or other applicable form or a certificate of the Bank indicating that
no such exemption or reduced rate is allowable with respect to such payments.
Each Bank which so delivers a Form W-8, W-9, 4224 or 1001 further undertakes to
deliver to each of the Borrower and the Agent two (2) additional copies of such
form (or a successor form) on or before the date that such form expires or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent form so delivered by it, and such amendments thereto or extensions
or renewals thereof as may be reasonably requested by the Borrower or the Agent,
either certifying that such Bank is entitled to receive payments under this
Agreement and the other Loan Documents without deduction or withholding of any
United States federal income taxes or is subject to such tax at a reduced rate
under an applicable tax treaty or stating that no such exemption or reduced rate
is allowable. The Agent shall be entitled to withhold United States federal
income taxes at the full withholding rate unless the Bank establishes an
exemption or at the applicable reduced rate as established pursuant to the above
provisions.
11.18 Effect on Prior Credit Agreement; Amendments on Fourth
Amendment Effective Date.
(a) Amendment and Restatement. This Agreement amends and
restates the Prior Credit Agreement effective on the Closing Date except that
the Loan Parties shall comply with the representations, warranties and covenants
contained in the Prior Credit Agreement applicable to periods prior to the
Closing Date, and further except that the interest rate, Commitment Fees, Letter
of Credit Fees and other fees applicable to the Loans or otherwise applicable
for periods prior to the Ninth Amendment Effective Date shall be determined as
provided in this Agreement without regard to Amendment No. 9 to this Agreement
unless this Agreement after giving effect to Amendment No. 9 otherwise provides
in which case, the provisions of this Agreement after giving effect to Amendment
Xx. 0 xxxxx xxxxxxx.
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XXXXXXX 0
________________, 1996
To: Mariner Health Group, Inc.
and each of its subsidiaries
Reference is made to that certain Credit Agreement, dated as of May 18, 1994, as
amended (the "Credit Agreement"), by and among Mariner Health Group, Inc., a
Delaware corporation, the Banks party thereto and PNC Bank, National Association
("Agent"). All terms used herein unless otherwise defined herein shall have the
meanings as set forth in the Credit Agreement.
The Borrower, the Banks and the Agent have entered into that certain Amendment
No. 10 to the Credit Agreement, dated as of the date hereof (the "Amendment No.
10") a copy of which has been delivered to each Loan Party.
This letter agreement will confirm that each Loan Party has read and
understands Amendment No. 10. Each Loan Party agrees and acknowledges that,
among other things, on and after the effective date of Amendment No. 10, the
Revolving Credit Commitments will be increased from $200,000,000 to
$250,000,000. Each Loan Party hereby ratifies and confirms each of the Loan
Documents to which it is a party by signing below as indicated, including
without limitation each Guaranty Agreement and each Pledge Agreement to which it
is a party, including all schedules thereto.
Very truly yours,
PNC BANK, NATIONAL ASSOCIATION,
as Agent
By:______________________________
[SIGNATURE PAGE TO
CONFIRMATION OF GUARANTY
DATED _______________, 1996]
Intending to be legally bound hereby,
the undersigned have accepted and agreed
to the foregoing as of the date and year
first above written.
MARINER HEALTH GROUP, INC. and each
Subsidiary thereof which is a
corporation and which is listed as a
"Company" on Schedule 6.01(c) of the
Credit Agreement both for itself and, if
applicable, as general partner of each
Subsidiary of Mariner Health Group, Inc.
which is a partnership and which is
listed as a "Company" on Schedule
6.01(c).
By:__________________________________
Title:_______________________________
of each of the foregoing corporations
SCHEDULE 1.01(R)(2)
COMMITMENTS OF BANKS
BANK AMOUNT OF COMMITMENT
---- --------------------
FOR REVOLVING CREDIT LOANS
--------------------------
PNC BANK, NATIONAL ASSOCIATION $45,000,000
CHEMICAL BANK $20,000,000
CORESTATES BANK, N.A. $35,000,000
CREDITANSTALT-BANKVEREIN $20,000,000
FIRST UNION NATIONAL BANK OF NORTH CAROLINA $35,000,000
MELLON BANK, N.A. $35,000,000
NATIONSBANK OF TENNESSEE, N.A. $40,000,000
TORONTO DOMINION (NEW YORK), INC. $20,000,000
-----------
$250,000,000
