Exhibit 10(h)
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of June 16, 1997
among
MAGELLAN HEALTH SERVICES, INC.,
CHARTER BEHAVIORAL HEALTH SYSTEM OF NEW MEXICO, INC.,
THE LENDERS NAMED HEREIN,
THE CHASE MANHATTAN BANK,
as Administrative Agent,
Collateral Agent and an Issuing Bank,
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as Syndication Agent and an Issuing Bank
TABLE OF CONTENTS
Page
ARTICLE I Definitions
SECTION 1.01. Defined Terms . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 1.02. Terms Generally . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE II The Credits
SECTION 2.01. Commitments . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.02. Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.03. Borrowing Procedure . . . . . . . . . . . . . . . . . . . 31
SECTION 2.04. Evidence of Debt; Repayment of Loans. . . . . . . . . . . 32
SECTION 2.05. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.06. Interest on Loans . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.07. Default Interest. . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.08. Alternate Rate of Interest. . . . . . . . . . . . . . . . 34
SECTION 2.09. Termination and Reduction of Commitments. . . . . . . . . 34
SECTION 2.10. Conversion and Continuation of Borrowings . . . . . . . . 35
SECTION 2.11. Prepayment. . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.12. Repayment of Note Repurchase Borrowings . . . . . . . . . 37
SECTION 2.13. Mandatory Prepayments and Commitment
Reductions. . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 2.14. Reserve Requirements; Change in Circumstances . . . . . . 40
SECTION 2.15. Change in Legality. . . . . . . . . . . . . . . . . . . . 41
SECTION 2.16. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 2.17. Pro Rata Treatment. . . . . . . . . . . . . . . . . . . . 43
SECTION 2.18. Sharing of Setoffs. . . . . . . . . . . . . . . . . . . . 43
SECTION 2.19. Payments. . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 2.20. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 2.21. Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate. . . . . . . . . . . . . . . . . . . . . 46
SECTION 2.22. Letters of Credit . . . . . . . . . . . . . . . . . . . . 47
SECTION 2.23. Additional Borrowers. . . . . . . . . . . . . . . . . . . 50
ARTICLE III Representations and Warranties
SECTION 3.01. Organization; Powers. . . . . . . . . . . . . . . . . . . 51
SECTION 3.02. Authorization . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 3.03. Enforceability. . . . . . . . . . . . . . . . . . . . . . 52
SECTION 3.04. Governmental Approvals. . . . . . . . . . . . . . . . . . 52
SECTION 3.05. Financial Statements. . . . . . . . . . . . . . . . . . . 52
SECTION 3.06. No Material Adverse Change. . . . . . . . . . . . . . . . 53
SECTION 3.07. Title to Properties; Possession Under Leases. . . . . . . 53
SECTION 3.08. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 3.09. Litigation; Compliance with Laws. . . . . . . . . . . . . 53
SECTION 3.10. Agreements. . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 3.11. Federal Reserve Regulations . . . . . . . . . . . . . . . 54
SECTION 3.12. Investment Company Act;
Public Utility Holding Company Act. . . . . . . . . . . . 54
SECTION 3.13. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 54
SECTION 3.14. Tax Returns . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 3.15. No Material Misstatements . . . . . . . . . . . . . . . . 54
SECTION 3.16. Employee Benefit Plans. . . . . . . . . . . . . . . . . . 54
SECTION 3.17. Environmental Matters . . . . . . . . . . . . . . . . . . 55
SECTION 3.18. Insurance . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 3.19. Security Documents. . . . . . . . . . . . . . . . . . . . 56
SECTION 3.20. Labor Matters . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 3.21. Solvency. . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE IV Conditions
SECTION 4.01. Effectiveness . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 4.02. All Credit Events . . . . . . . . . . . . . . . . . . . . 62
SECTION 4.03. Note Repurchase Loans Credit Event. . . . . . . . . . . . 63
SECTION 4.04. New Subsidiary Borrower Credit Event. . . . . . . . . . . 63
ARTICLE V Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties. . . . . . . . . . . 64
SECTION 5.02. Insurance . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 5.03. Obligations and Taxes . . . . . . . . . . . . . . . . . . 65
SECTION 5.04. Financial Statements, Reports, etc. . . . . . . . . . . . 65
SECTION 5.05. Litigation and Other Notices. . . . . . . . . . . . . . . 67
SECTION 5.06. Employee Benefits . . . . . . . . . . . . . . . . . . . . 67
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 5.08. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 68
SECTION 5.09. Compliance with Environmental Laws. . . . . . . . . . . . 68
SECTION 5.10. Preparation of Environmental Reports. . . . . . . . . . . 68
SECTION 5.11. Further Assurances. . . . . . . . . . . . . . . . . . . . 68
SECTION 5.12. Concentration and Disbursement Accounts . . . . . . . . . 68
SECTION 5.13. Remedies Under Franchise Agreement. . . . . . . . . . . . 69
SECTION 5.14. Series A Notes Repurchase . . . . . . . . . . . . . . . . 69
ARTICLE VI Negative Covenants
SECTION 6.01. Indebtedness. . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 6.02. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 6.03. Sale and Leaseback Transactions . . . . . . . . . . . . . 73
SECTION 6.04. Investments, Loans, Advances and Certain Other
Transactions. . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 6.05. Mergers, Consolidations, Sales of Assets and
Acquisitions. . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends . . . . . . . . . . . . . . 76
SECTION 6.07. Transactions with Affiliates. . . . . . . . . . . . . . . 78
SECTION 6.08. Other Indebtedness and Agreements . . . . . . . . . . . . 78
SECTION 6.09. Business of the Borrowers and Subsidiaries. . . . . . . . 78
SECTION 6.10. Interest Expense Coverage Ratio . . . . . . . . . . . . . 79
SECTION 6.11. Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . 79
SECTION 6.12. Senior Debt Ratio . . . . . . . . . . . . . . . . . . . . 79
SECTION 6.13. Maintenance of Consolidated EBITDA. . . . . . . . . . . . 79
SECTION 6.14. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . 79
ARTICLE VII Events of Default. . . . . . . . . . . . . . . . . . . . . . . 79
ARTICLE VIII The Administrative Agent, the Syndication Agent and the
Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . 82
ARTICLE IX Miscellaneous
SECTION 9.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 9.02. Survival of Agreement . . . . . . . . . . . . . . . . . . 85
SECTION 9.03. Binding Effect. . . . . . . . . . . . . . . . . . . . . . 85
SECTION 9.04. Successors and Assigns. . . . . . . . . . . . . . . . . . 85
SECTION 9.05. Expenses; Indemnity . . . . . . . . . . . . . . . . . . . 88
SECTION 9.06. Right of Setoff . . . . . . . . . . . . . . . . . . . . . 89
SECTION 9.07. APPLICABLE LAW. . . . . . . . . . . . . . . . . . . . . . 89
SECTION 9.08. Waivers; Amendment. . . . . . . . . . . . . . . . . . . . 89
SECTION 9.09. Interest Rate Limitation. . . . . . . . . . . . . . . . . 90
SECTION 9.10. Entire Agreement. . . . . . . . . . . . . . . . . . . . . 91
SECTION 9.11. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . 91
SECTION 9.12. Severability. . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 9.13. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 9.14. Headings. . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 9.15. Jurisdiction; Consent to Service of Process . . . . . . . 91
SECTION 9.16. Confidentiality . . . . . . . . . . . . . . . . . . . . . 92
SECTION 9.17. Obligations Joint and Several . . . . . . . . . . . . . . 93
Exhibits, Annex and Schedules
Exhibit A Form of Administrative Questionnaire
Exhibit B-1 Form of Advance Collateral Assignment
Exhibit B-2 Form of Advance Security Agreement
Exhibit C Form of Assignment and Acceptance
Exhibit D-1 Form of Borrowing Request
Exhibit D-2 Form of New Borrower Agreement
Exhibit D-3 Form of Subsidiary Borrower Termination
Exhibit E Form of Collateral Assignment
Exhibit F Form of Guarantee Agreement
Exhibit G Form of Indemnity, Subrogation and Contribution Agreement
Exhibit H Form of Pledge Agreement
Exhibit I Form of Security Agreement
Exhibit J-1 Form of Opinion of King & Spalding
Exhibit J-2 Form of Opinion of Foreign Counsel
Schedule 1.01(a) Charter IRBs
Schedule 1.01(b) Existing Letters of Credit
Schedule 1.01(c) Guarantors
Schedule 1.01(d) Real Estate for Sale
Schedule 2.01 Commitments
Schedule 3.04 Government Approvals
Schedule 3.08 Subsidiaries
Schedule 3.09 Litigation
Schedule 3.17 Environmental Matters
Schedule 3.18 Insurance
Schedule 4.02(a) Foreign Counsel
Schedule 6.01(a) Indebtedness
Schedule 6.02(a) Liens
Schedule 6.04(m) Investments, Loans and Advances
Schedule 6.06(b) Intercompany Dividend Restrictions and Encumbrances
Schedule 6.06(c) Green Spring Intercompany Dividend Restrictions and
Encumbrances
AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 16,
1997, among MAGELLAN HEALTH SERVICES, INC., a Delaware
corporation (the "Parent Borrower"), CHARTER BEHAVIORAL HEALTH
SYSTEM OF NEW MEXICO, INC., a New Mexico corporation, and each
other subsidiary of the Parent Borrower that becomes a
"Subsidiary Borrower" hereunder as provided in Section 2.23
hereof (each, a "Subsidiary Borrower" and collectively, the
"Subsidiary Borrowers" (such term is used herein as modified in
Article I); the Parent Borrower and the Subsidiary Borrowers are
collectively referred to herein as the "Borrowers"); the Lenders
(as defined in Article I), THE CHASE MANHATTAN BANK, a New York
banking corporation, as administrative agent (in such capacity,
the "Administrative Agent") for the Lenders, as collateral agent
(in such capacity, the "Collateral Agent") for the Lenders and as
an issuing bank (in such capacity, an "Issuing Bank"), and FIRST
UNION NATIONAL BANK OF NORTH CAROLINA, a North Carolina banking
corporation, as syndication agent (in such capacity, the
"Syndication Agent") for the Lenders and as an issuing bank (in
such capacity, an "Issuing Bank", and together with The Chase
Manhattan Bank in its capacity as an Issuing Bank, the "Issuing
Banks").
Pursuant to (a) the REIT Purchase Agreement (such term and each other
capitalized term used but not defined herein having the meaning given to it in
Article I), the Parent Borrower will cause Charter Behavioral and its
subsidiaries to sell to Crescent or Crescent Funding (the "Crescent
Transaction") substantially all the real property and related improvements, and
certain fixtures, furniture and equipment and certain other tangible and
intangible personal property, owned by Charter Behavioral and its subsidiaries
and used in the operation of their behavioral health care facilities (the
"Purchased Facilities"); (b) the Contribution Agreement, the Parent Borrower and
certain Subsidiaries will contribute or sell to CBHS and its subsidiaries (the
"Contribution Transaction") certain tangible and intangible personal property
used in connection with the operation of the Purchased Facilities, certain
leasehold interests and certain other tangible and intangible property used in
connection with facilities leased by the Parent Borrower and its subsidiaries
(the "Leased Facilities"); and (c) the Warrant Agreements, the Parent Borrower
will issue to Crescent and the Crescent Affiliate warrants to purchase up to an
aggregate of 2,567,000 shares of the Parent Borrower's common stock. Upon
consummation of the Crescent Transaction, the Contribution Transaction and the
issuance of the Warrants, the Parent Borrower will receive the aggregate
consideration of $400,000,000 in cash (subject to other adjustments in
accordance with the Transaction Documents) (the "Transaction Consideration").
In connection with the foregoing, the Parent Borrower will apply, or
caused to be applied, the Transaction Consideration (a) to refinance the
principal of, and pay all interest, fees and other amounts payable in respect
of, the outstanding loans under the Existing Credit Agreement, (b) to repay or
defease the Charter IRBs, (c) to pay all transaction costs and expenses of the
Parent Borrower and its Subsidiaries in respect of the Transactions,
(d) together with the proceeds of Note Repurchase Loans, to repurchase on the
Series A Notes Repurchase Date all the Series A Notes that are tendered to the
Parent Borrower and not withdrawn in accordance with the Series A Notes Tender
Offer and (e) for general corporate purposes.
2
The parties hereto are party to the Existing Credit Agreement or have
purchased assignments in outstanding "Loans" and "Commitments" pursuant to
Section 9.04 of the Existing Credit Agreement. The Borrowers have requested
that the Existing Credit Agreement be amended in certain respects and restated
so as to provide, among other things, that the "Refinancing Revolving Credit
Facility" in the Existing Credit Agreement be amended to make available to the
Borrowers the Revolving Loans and Note Repurchase Loans described below and
contemplated hereby. In connection with the foregoing, the Borrowers have
requested the Lenders to extend credit (pursuant to this Amended and Restated
Agreement) in the form of Revolving Loans at any time and from time to time in
an aggregate principal amount at any time outstanding not in excess of
$200,000,000 (less the Note Repurchase Loan Amount and the L/C Exposure). In
addition, if the Note Repurchase Loan Amount is greater than zero, the Parent
Borrower has requested the Lenders to extend credit in the form of Note
Repurchase Loans on the Series A Notes Repurchase Date, in an aggregate
principal amount not to exceed the Note Repurchase Loan Amount. The Borrowers
have requested the Issuing Banks to issue letters of credit, in an aggregate
face amount at any time outstanding not in excess of $50,000,000, to support
payment obligations incurred in the ordinary course of business by the Borrowers
and the Subsidiaries, including to support payment obligations for industrial
revenue bonds that are permitted hereunder. The proceeds of the Revolving Loans
are to be used solely (a) for general corporate purposes, (b) to finance
acquisitions, investments, transactions, stock repurchases and debt repayments
and repurchases, in each case only to the extent permitted hereunder, and (c) to
make advances to CBHS, subject to the restrictions and other conditions set
forth hereunder. The proceeds of the Note Repurchase Loans are to be used solely
to finance the repurchase of the Series A Notes on the Series A Notes Repurchase
Date in accordance with the Series A Notes Tender Offer.
The Lenders are willing (a) to amend and restate the Existing Credit
Agreement and (b) to extend such credit to the Borrowers and each Issuing Bank
is willing to issue such letters of credit for the account of the Borrowers on
the terms and subject to the conditions set forth herein. Accordingly, the
parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any ABR Revolving Loan or ABR Note Repurchase
Loan.
"ABR Note Repurchase Loan" shall mean any Note Repurchase Loan bearing
interest at a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
3
"ABR Note Repurchase Borrowing" shall mean a Borrowing comprised of
ABR Note Repurchase Loans.
"ABR Revolving Loan" shall mean any Revolving Loan bearing interest at
a rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ABR Revolving Borrowing" shall mean a Borrowing comprised of ABR
Revolving Loans.
"Acquired Entity" shall mean the assets, in the case of an acquisition
of assets, or the capital stock or other equity interests (or, if the context
requires, the person that is the issuer of such capital stock or other equity
interests), in the case of an acquisition of capital stock or other equity
interests, acquired by any Borrower or any Guarantor pursuant to a Permitted
Acquisition.
"Acquired Entity EBITDA" shall mean, for purposes of clause (c) of the
definition of Consolidated EBITDA, the net income of any Acquired Entity for any
period plus to the extent deducted in the determination of such Acquired
Entity's net income, the sum of such Acquired Entity's (a) aggregate amount of
income tax expense for such period, (b) aggregate amount of interest expense for
such period and (c) aggregate amount of amortization, depreciation and other
non-cash charges (including employee stock ownership plan expense, stock option
expense, and amortization of goodwill, transaction expenses, excess
reorganization expense, covenants not to compete and other intangible assets)
for such period, all as determined in accordance with GAAP, provided that
(i) all extraordinary gains or losses of such Acquired Entity for such period
and (ii) the gain (or loss) for such period attributable to the sale of any
assets of such Acquired Entity outside the ordinary course of business shall not
be included in such Acquired Entity's net income.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the product of (a) the LIBO Rate
in effect for such Interest Period and (b) Statutory Reserves.
"Administrative Agent" shall have the meaning assigned to such term in
the preamble to this Agreement or any successor appointed pursuant to
Article VIII.
"Administrative Agent Fees" shall have the meaning assigned to such
term in Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit A.
"Advance Collateral Assignment" shall mean the Collateral Assignment,
substantially in the form of Exhibit B-1, made by the Parent Borrower in favor
of the Collateral Agent for the benefit of the Secured Parties.
"Advance Security Agreement" shall mean the Security Agreement,
substantially in the form of Exhibit B-2, among the Parent Borrower, CBHS and
the subsidiaries of CBHS.
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified.
4
"Aggregate Credit Exposure" shall mean the aggregate amount of the
Lenders' Revolving Credit Exposures.
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. If for any reason the Administrative
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Effective Rate
for any reason, including the inability of the Administrative Agent to obtain
sufficient quotations in accordance with the terms of the definition thereof,
the Alternate Base Rate shall be determined without regard to clause (b) of the
preceding sentence until the circumstances giving rise to such inability no
longer exist. Any change in the Alternate Base Rate due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively. The term "Prime Rate" shall mean the rate of interest per
annum publicly announced from time to time by the Administrative Agent as its
prime rate in effect at its principal office in New York City; each change in
the Prime Rate shall be effective on the date such change is publicly announced
as being effective. The term "Federal Funds Effective Rate" shall mean, for any
day, the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for the day for such transactions received by
the Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Applicable Percentage" shall mean, for any day, with respect to any
Eurodollar Loan or any ABR Loan, or with respect to the Commitment Fees, as the
case may be, the applicable percentage set forth below under the caption
"Eurodollar Spread", "ABR Spread" or "Fee Percentage", as the case may be, based
upon the Leverage Ratio as of the relevant determination date:
Leverage Ratio Eurodollar ABR Fee
Spread Spread Percentage
Category 1 1.25% .25% .375%
Greater than 2.50 to 1.00
Category 2 1.00% .00% .250%
Less than or equal to 2.50 to 1.00 but
greater than 2.00 to 1.00
Category 3 .75% .00% .250%
Less than or equal to 2.00 to 1.00
Each change in the Applicable Percentage resulting from a change in
the Leverage Ratio shall be effective with respect to all Loans, Commitments
and Letters of Credit outstanding on and after the date of delivery to the
Administrative Agent of the financial statements and certificates
5
required by Section 5.04(a) or (b) indicating such change until the date
immediately preceding the next date of delivery of such financial statements
and certificates indicating another such change. Notwithstanding the
foregoing, (i) until the Parent Borrower has delivered the financial
statements for the first full fiscal quarter ending after the Closing Date,
in accordance with Section 5.04(a) or (b), (ii) at any time during which the
Parent Borrower has failed to deliver the financial statements and
certificates required by Section 5.04(a) or (b), or (iii) at any time after
the occurrence and during the continuance of an Event of Default, the
Leverage Ratio shall be deemed to be in Category 1 for purposes of
determining the Applicable Percentage.
"Asset Sale" shall mean the sale (including any transaction that has
the economic effect of a sale), transfer or other disposition (by way of
merger or otherwise, including sales in connection with a sale and leaseback
transaction permitted pursuant to Section 6.03, or as a result of a
Condemnation Event or a Casualty Event) by the Borrowers or any Guarantor to
any person, other than the Borrowers or any Guarantor, of (a) any capital
stock of the Subsidiary Borrowers or any Guarantor or (b) any other assets of
the Borrowers or any Guarantor (other than inventory, obsolete or worn out
assets, scrap and Permitted Investments, in each case disposed of in the
ordinary course of business), except, (i) sales, transfers or other
dispositions of the Real Estate for Sale; (ii) sales, transfers or other
dispositions of assets on the Closing Date pursuant to the Transaction
Documents, including sales, transfers or other dispositions conducted in
accordance with Section 14.1 of the REIT Purchase Agreement, (iii) sales,
transfers or other dispositions that are Permitted Non-Control Investments or
Permitted Non-Guarantor Transactions, (iv) sales, transfers or other
dispositions of Green Spring capital stock pursuant to the Green Spring
Stockholders' Agreement, (v) any Permitted Post-Closing Crescent Transaction,
(vi) sales, transfers or other dispositions of any assets in one transaction
or a series of related transactions having a value not in excess of $200,000
and (vii) sales of the capital stock of Charter Medical of England Limited
and Societe Anonyme de Metairie, or all or a substantial portion of the
assets of such Foreign Subsidiaries, in each case for consideration not less
than the fair market value thereof (as determined in good faith by the Board
of Directors or a Financial Officer of the Parent Borrower), of which amount
not less than 60% is paid in cash.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit C or such other form as shall be approved by the
Administrative Agent.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrowers" shall have the meaning assigned to such term in the pre-
amble to this Agreement.
"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders on a single date and as to which a single Interest Period is in effect.
"Borrowing Request" shall mean a request by a Borrower in accordance
with the terms of Section 2.03 and substantially in the form of Exhibit D-1.
"Business Day" shall mean any day other than a Saturday, Sunday or day
on which banks in New York City are authorized or required by law to close;
provided, however, that when
6
used in connection with a Eurodollar Loan, the term "Business Day" shall also
exclude any day on which banks are not open for dealings in dollar deposits
in the London interbank market.
"Capital Lease Obligations" of any person shall mean the obligations
of such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person in accordance
with GAAP, and the amount of such obligations shall be the capitalized amount
thereof determined in accordance with GAAP.
"Casualty Event" shall mean an event pursuant to which any Borrower or
any Guarantor has the right to collect and receive insurance proceeds (other
than business interruption proceeds) under any insurance policies with respect
to any insured casualty to any property of any Borrower or any Guarantor.
"CBHS" shall mean Charter Behavioral Health Systems, LLC, a Delaware
limited liability company, 50% of which is initially owned by the Parent
Borrower and 50% of which is initially owned by the Crescent Affiliate.
"CBHS Borrowing Base" shall have the meaning assigned to the term
"Borrowing Base" in the CBHS Credit Agreement.
"CBHS Commitments" shall have the meaning assigned to the term
"Commitments" in the CBHS Credit Agreement.
"CBHS Credit Agreement" shall mean the Credit Agreement dated as of
June 16, 1997, among CBHS, the subsidiaries of CBHS named therein, the financial
institutions named therein as lenders, The Chase Manhattan Bank, as
administrative agent, collateral agent and an issuing bank thereunder, and First
Union National Bank of North Carolina, as syndication agent and an issuing bank
thereunder.
"CBHS L/C Exposure" shall have the meaning assigned to the term
"L/C Exposure" in the CBHS Credit Agreement.
"CBHS Loan Documents" shall have the meaning assigned to the term
"Loan Documents" in the CBHS Credit Agreement.
"CBHS Loans" shall have the meaning assigned to the term "Loans" in
the CBHS Credit Agreement.
A "Change in Control" shall be deemed to have occurred if (a) any
person or group (within the meaning of Rule 13d-5 of the Securities Exchange Act
of 1934 as in effect on the date hereof) shall own directly or indirectly,
beneficially or of record, shares representing more than 35% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock of
the Parent Borrower, other than any person or group that owns at least 5% of the
capital stock of the Parent Borrower on the Closing Date; (b) a majority of the
seats (other than vacant seats) on the board of directors of the Parent Borrower
shall at any time be occupied by persons who were neither
7
(i) nominated by the board of directors of the Parent Borrower nor (ii)
appointed by directors so nominated; or (c) any change in control (or similar
event, however denominated) with respect to the Parent Borrower shall occur
under and as defined in any indenture or agreement (other than the Series A
Notes Indenture and Series A Notes as may be applicable as a result of the
Transactions) in respect of Indebtedness for borrowed money in excess of the
aggregate principal amount of $10,000,000 to which the Parent Borrower or any
Guarantor is a party.
"Charter Behavioral" shall mean Charter Behavioral Health Systems,
Inc., a Delaware corporation and a wholly owned subsidiary of the Parent
Borrower.
"Charter IRBs" shall mean the industrial revenue bonds set forth on
Schedule 1.01(a).
"Closing Date" shall mean the date of the first Credit Event.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean all the "Collateral" as defined in any
Security Document.
"Collateral Agent" shall have the meaning assigned to such term in the
preamble to this Agreement or any successor appointed pursuant to Article VIII.
"Collateral Assignment" shall mean the Collateral Assignment,
substantially in the form of Exhibit E, made by the Parent Borrower in favor of
the Collateral Agent for the benefit of the Secured Parties.
"Commitment" shall mean, with respect to each Lender, such Lender's
Revolving Credit Commitment and Note Repurchase Loan Commitment.
"Commitment Fee" shall have the meaning assigned to such term in
Section 2.05(a).
"Condemnation Event" shall mean an event pursuant to which any
Borrower or any Guarantor has the right to collect and receive proceeds as a
result of any action or proceeding for the taking of any property of any
Borrower or any Guarantor, or any part thereof or interest therein, for public
or quasi-public use under the power of eminent domain, by reason of any public
improvement or condemnation proceeding or in any other manner.
"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum of the Parent Borrower and CBHS dated May , 1997.
"Consolidated Current Assets" shall mean, at any date of
determination, all assets (other than cash and cash-equivalents) that would, in
accordance with GAAP, be classified on a consolidated balance sheet of the
Parent Borrower and the Guarantors as current assets at such date of
determination.
"Consolidated Current Liabilities" shall mean, at any date of
determination, all liabilities (other than, without duplication, (x) the current
portion of long-term Indebtedness and
8
(y) Revolving Loans) that would, inaccordance with GAAP, be classified on a
consolidated balance sheet of the Parent Borrower and the Guarantors as
current liabilities at such date of determination.
"Consolidated EBITDA" shall mean, for any period, (a) Consolidated Net
Income for such period plus (b) to the extent deducted in the determination of
Consolidated Net Income, the sum of (i) the aggregate amount of income tax
expense for such period, (ii) the aggregate amount of Consolidated Interest
Expense for such period and (iii) the aggregate amount of amortization,
depreciation and other non-cash charges (including employee stock ownership plan
expense, stock option expense and amortization of goodwill, expenses related to
the consummation of the Transactions and other transaction expenses, excess
reorganization expense, covenants not to compete and other intangible assets)
for such period, as determined in accordance with GAAP, and plus, without
duplication, (c) any Acquired Entity EBITDA during such period, calculated on a
pro forma basis as of the first day of such period, and minus, without
duplication, (d) the sum of extraordinary cash charges paid during such period
by the Parent Borrower and the Subsidiaries, excluding any such extraordinary
cash charges paid in respect of (x) the Transactions up to an amount that is not
materially inconsistent with amounts previously disclosed to the Administrative
Agent and the Syndication Agent or (y) any refinancing of Indebtedness permitted
by Section 6.01(n) and Section 6.04(d).
"Consolidated Interest Expense" shall mean, with respect to the Parent
Borrower and the Subsidiaries for any period, the gross interest expense
(including interest expense attributable to Capital Lease Obligations and
Interest Rate Protection Agreements but excluding any non-cash interest expense,
including amortization of deferred loan costs) accrued or paid by the Parent
Borrower and the Subsidiaries for such period, as determined on a consolidated
basis in accordance with GAAP, plus (without duplication) gross interest expense
(including interest expense attributable to Capital Lease Obligations and
interest rate protection agreements but excluding any non-cash interest expense
such as amortization of deferred loan costs) relating to Indebtedness incurred
or assumed by the Parent Borrower or any Subsidiary with respect to the
acquisition of any Acquired Entity during such period, calculated on a pro forma
basis as of the first day of such period.
"Consolidated Net Income" shall mean, for any period, the net income
(or loss) of the Parent Borrower and the Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP, provided that (a)
there shall be included in the determination of Consolidated Net Income the net
income (or loss) attributable to each Controlled Venture (it being understood
that such net income (or loss) will be proportionate to the Parent Borrower's
equity interest, direct or indirect, in such Controlled Venture) and (b) there
shall be excluded from the determination of Consolidated Net Income (i) the net
income (or loss) attributable to all Non-Controlled Ventures to the extent that
cash has not been distributed to the Parent Borrower or any of the Subsidiaries,
(ii) all extraordinary gains or losses and (iii) the gain (or loss) attributable
to the sale of any assets of the Parent Borrower or the Subsidiaries permitted
under Section 6.05 or pursuant to the Transactions.
"Consolidated Working Capital" shall mean, at any date of
determination, Consolidated Current Assets at such date of determination minus
Consolidated Current Liabilities at such date of determination.
"Contribution Agreement" shall mean the Contribution Agreement dated
as of June 16, 1997, among the Parent Borrower, Crescent Affiliate and CBHS.
9
"Contribution Transaction" shall have the meaning given such term in
the preamble to this Agreement.
"Control" 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, and the terms "Controlling" and "Controlled" shall have meanings
correlative thereto. For purposes of this Agreement, "Control" shall be deemed
to exist if, for financial reporting purposes, the Controlled person's financial
statements are consolidated with the financial statements of the Controlling
person.
"Controlled Non-Guarantor Entities" shall mean partnerships, joint
ventures or Subsidiary Non-Guarantors in which the Parent Borrower or any of the
Subsidiaries have an ownership interest of 50% or greater of the equity
interests therein and that are Controlled by the Parent Borrower.
"Controlled Ventures" shall mean the healthcare partnerships and joint
ventures (i) that are Controlled by the Parent Borrower or any of the
Subsidiaries, (ii) of which the Parent Borrower or any of the Subsidiaries has
an ownership interest of 50% or greater of the equity interests therein and
(iii) of which the partnership documents and any other applicable governing
documents contain no restriction or prohibition of any kind on cash
distributions, other than Permitted Restrictions.
"Credit Event" shall have the meaning assigned to such term in
Section 4.01.
"Crescent" shall mean Crescent Real Estate Equities Limited
Partnership, a Delaware limited partnership.
"Crescent Affiliate" shall mean Crescent Operating Inc., a Delaware
corporation, its successors and assigns.
"Crescent Funding" shall mean Crescent Real Estate Funding VII, L.P.,
a Delaware limited partnership, its successors and assigns.
"Crescent Transaction" shall have the meaning assigned to such term in
the preamble to this Agreement.
"Deemed Borrowing Base Cut-Off Date" shall have the meaning assigned
to such term in the CBHS Credit Agreement.
"Default" shall mean any event or condition which upon notice, lapse
of time or both would constitute an Event of Default.
"dollars" or "$" shall mean lawful money of the United States of
America.
"Domestic Subsidiaries" shall mean all Subsidiaries incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.
10
"environment" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.
"Environmental Claim" shall mean any written accusation, allegation,
notice of violation, claim, demand, order, directive, cost recovery action or
other cause of action by, or on behalf of, any Governmental Authority or any
person for damages, injunctive or equitable relief, personal injury
(including sickness, disease or death), Remedial Action costs, tangible or
intangible property damage, natural resource damages, nuisance, pollution,
any adverse effect on the environment caused by any Hazardous Material, or
for fines, penalties or restrictions, resulting from or based upon (a) the
existence, or the continuation of the existence, of a Release (including
sudden or non-sudden, accidental or non-accidental Releases), (b) exposure to
any Hazardous Material, (c) the presence, use, handling, transportation,
storage, treatment or disposal of any Hazardous Material or (d) the violation
or alleged violation of any Environmental Law or Environmental Permit.
"Environmental Law" shall mean any and all applicable present and
future treaties, laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any
way to the environment, preservation or reclamation of natural resources, the
management, Release or threatened Release of any Hazardous Material or to
health and safety matters, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. Sections 9601 et seq.
(collectively "CERCLA"), the Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C. Sections 6901 et seq., the Federal Water
Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C.
Sections 1251 et seq., the Clean Air Act of 1970, as amended 42 U.S.C.
Sections 7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C.
Sections 2601 et seq., the Occupational Safety and Health Act of 1970, as
amended, 29 U.S.C. Sections 651 et seq., the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001 et seq., the
Safe Drinking Water Act of 1974, as amended, 42 U.S.C. Sections 300(f) et
seq., the Hazardous Materials Transportation Act, 49 U.S.C. Sections 5101 et
seq., and any similar or implementing state or local law, and all amendments
or regulations promulgated under any of the foregoing.
"Environmental Permit" shall mean any permit, approval,
authorization, certificate, license, variance, filing or permission required
by or from any Governmental Authority pursuant to any Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with any Loan Party, is treated as a single
employer under Section 414(b) or (c) of the Code, or solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan; (b) the adoption of any
11
amendment to a Plan that would require the provision of security pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA; (c) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined
in Section 412 of the Code or Section 302 of ERISA), whether or not waived;
(d) the filing pursuant to Section 412(d) of the Code or Section 303(d) of
ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (e) the incurrence of any liability under Title IV of
ERISA with respect to the termination of any Plan or the withdrawal or
partial withdrawal of any Loan Party or any of its ERISA Affiliates from any
Plan or Multiemployer Plan; (f) the receipt by any Loan Party or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to the
intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan; (g) the receipt by any Loan Party or any ERISA Affiliate
of any notice concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA; (h) the
occurrence of a "prohibited transaction" with respect to which any Loan Party
or any of its Subsidiaries is a "disqualified person" (within the meaning of
Section 4975 of the Code) or with respect to which any Loan Party or any such
Subsidiary could otherwise be liable; and (i) any other event or condition
with respect to a Plan or Multiemployer Plan that could reasonably be
expected to result in liability of any Loan Party.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Loan" shall mean any Eurodollar Revolving Loan or
Eurodollar Note Repurchase Loan.
"Eurodollar Note Repurchase Borrowing" shall mean a Borrowing
comprised of Eurodollar Note Repurchase Loans.
"Eurodollar Note Repurchase Loan" shall mean any Note Repurchase
Loan bearing interest at a rate determined by reference to the Adjusted LIBO
Rate in accordance with the provisions of Article II.
"Eurodollar Revolving Borrowing" shall mean a Borrowing comprised of
Eurodollar Revolving Loans.
"Eurodollar Revolving Loan" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Adjusted LIBO Rate in
accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in
Article VII.
"Excess Cash Flow" shall mean, for any fiscal year, the excess of
(a) the sum, without duplication, of (i) Consolidated EBITDA, (ii)
extraordinary cash income, if any, not included in Consolidated EBITDA and
(iii) an amount equal to any decrease in Consolidated Working Capital during
such fiscal year minus (b) the sum, without duplication, of (i) taxes paid or
payable in cash by the Parent Borrower and the Subsidiaries on a consolidated
basis during such fiscal year, (ii) Consolidated Interest Expense paid in
cash during such fiscal year, (iii) cash payments made during such fiscal
year in respect of Permitted Acquisitions, Permitted Non-Control Investments,
Permitted Non-Guarantor Transactions, Permitted Stock Repurchases and
maintenance capital
12
expenditures in the ordinary course of business, (iv) scheduled and mandatory
principal repayments of Indebtedness (other than the Loans) made by the
Borrowers and the Subsidiaries during such fiscal year (excluding (A)
payments of intercompany Indebtedness between or among the Parent Borrower
and the Subsidiaries, (B) principal repayments made in connection with the
refinancing of the Existing Credit Agreement or the Charter IRBs and (C) any
principal repayments to the extent financed by incurring other Indebtedness,
other than Revolving Loans), (v) scheduled principal repayments of Note
Repurchase Loans made during such fiscal year pursuant to Section 2.12, (vi)
optional prepayments of principal of Note Repurchase Loans made during such
fiscal year pursuant to Section 2.11, (vii) an amount equal to any increase
in Consolidated Working Capital during such fiscal year and (viii)
extraordinary cash expenses, if any, paid by the Parent Borrower and the
Subsidiaries and not reflected in the calculation of Consolidated EBITDA;
provided that Excess Cash Flow shall be adjusted to exclude the effect of any
gains, losses, income or expenses attributable to any Prepayment Event.
"Existing Credit Agreement" shall mean the Credit Agreement, dated
as of October 16, 1996, as amended by Amendment No. 1 dated as of March 14,
1997, among the Parent Borrower, the Subsidiaries party thereto, the lenders
party thereto, The Chase Manhattan Bank, as administrative agent, collateral
agent and an issuing bank, and First Union National Bank of North Carolina,
as syndication agent and an issuing bank.
"Existing Letter of Credit" shall mean each letter of credit that
(a) was issued under the Existing Credit Agreement, (b) is outstanding on the
Closing Date and (c) is listed on Schedule 1.01(b).
"Fee Letter" shall mean the letter agreement dated January 30, 1997,
between the Parent Borrower and the Administrative Agent.
"Fees" shall mean the Commitment Fees, the Administrative Agent's
Fees, the L/C Participation Fees and the Issuing Bank Fees.
"Financial Officer" of any corporation shall mean any of the chief
financial officer, principal accounting officer, Treasurer and Controller of
such corporation.
"Foreign Subsidiary" shall mean any Subsidiary that is not a
Domestic Subsidiary.
"Franchise Agreement" shall mean the Master Franchise Agreement
dated as of June 16, 1997, among the Parent Borrower, Charter Franchise
Services, LLC and CBHS, each Franchise Agreement dated as of June 16, 1997,
among the Parent Borrower, Charter Franchise Services, LLC and each
subsidiary of CBHS party thereto and any Franchise Agreement entered into
among Parent Borrower, Charter Franchise Services, LLC and any subsidiary of
CBHS that is acquired or organized after the date of this Agreement.
"Franchise Payment Default" shall mean the failure by CBHS or any
subsidiary of CBHS to pay any fee or other amount that it is obligated to pay
under the Franchise Agreement to the Parent Borrower at the time payment of
such fee or other amount is due in accordance with the terms of the Franchise
Agreement, whether due to the subordination of such payments or other causes.
13
"GAAP" shall mean generally accepted accounting principles applied
on a consistent basis.
"Governance Remedies" shall mean remedies that are specifically
enumerated in Section 5.9 of the Franchise Agreement.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Green Spring" shall mean Green Spring Health Services, Inc., a
Delaware corporation.
"Green Spring Exchange Agreement" shall mean the agreement dated as
of December 13, 1995, as amended, among Blue Cross and Blue Shield of New
Jersey, Inc., Health Care Service Corporation, Independence Blue Cross,
Xxxxxx County Medical Bureau, Inc. and the Parent Borrower.
"Green Spring Stockholders' Agreement" shall mean the stockholders'
agreement dated as of December 13, 1995, among Green Spring, Blue Cross and
Blue Shield of New Jersey, Inc., Health Care Service Corporation,
Independence Blue Cross, Xxxxxx County Medical Bureau, Inc. and the Parent
Borrower.
"Guarantee" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
to purchase (or to advance or supply funds for the purchase of) any security
for the payment of such Indebtedness, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness of the payment of such Indebtedness or (c) to maintain working
capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay
such Indebtedness; provided, however, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business.
"Guarantee Agreement" shall mean the Amended and Restated Guarantee
Agreement, substantially in the form of Exhibit F, made by the Guarantors in
favor of the Collateral Agent for the benefit of the Secured Parties.
"Guarantors" shall mean each person listed on Schedule 1.01(c) and
each other person that becomes party to a Guarantee Agreement as a Guarantor,
and the permitted successors and assigns of each such person.
"Hazardous Materials" shall mean all explosive or radioactive
substances or wastes, hazardous or toxic substances or wastes, pollutants,
solid, liquid or gaseous wastes, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls ("PCBs") or PCB-containing materials or equipment, radon gas,
infectious or medical wastes and all other substances or wastes of any nature
regulated pursuant to any Environmental Law.
14
"Health Care Law" shall mean any and all applicable current and
future laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions or binding agreements issued, promulgated or entered
into by the Food and Drug Administration, the Health Care Financing
Administration, the Department of Health and Human Services ("HHS"), the
Office of Inspector General of HHS, the Drug Enforcement Administration or
any other Governmental Authority, including any state and/or local
professional licensing laws, certificate of need laws and state reimbursement
laws, relating in any way to the conduct of the business of the Parent
Borrower or any Subsidiary and the provision of health care services
generally.
"Inactive Subsidiary" shall have the meaning assigned to such term
in Section 5.11.
"Indebtedness" of any person shall mean, without duplication, (a)
all obligations of such person for borrowed money, (b) all obligations of
such person evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such person upon which interest charges are customarily
paid, (d) all obligations of such person under conditional sale or other
title retention agreements relating to property or assets purchased by such
person, (e) all obligations of such person issued or assumed as the deferred
purchase price of property or services (excluding trade accounts payable and
accrued obligations incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed, (g) all Guarantees by such
person of Indebtedness of others, (h) all Capital Lease Obligations of such
person, (i) all obligations (determined on the basis of actual, not notional,
obligations) of such person in respect of interest rate protection
agreements, foreign currency exchange agreements or other interest or
exchange rate hedging arrangements and (j) all obligations of such person as
an account party in respect of letters of credit and bankers' acceptances
issued in support of obligations that constitute Indebtedness under any other
clause of this definition (unless such obligations are fully cash
collateralized), provided that all obligations in respect of letters of
credit shall be deemed Indebtedness to the extent drawings thereunder are
unreimbursed (after any applicable grace period) regardless of the purpose
for which such letter of credit was issued. The Indebtedness of any person
shall include the recourse Indebtedness of any partnership in which such
person is a general partner.
"Indemnity, Subrogation and Contribution Agreement" shall mean the
Amended and Restated Indemnity, Subrogation and Contribution Agreement,
substantially in the form of Exhibit G, among the Borrowers, the Guarantors
and the Collateral Agent.
"Insurance Subsidiaries" shall mean (a) Golden Isle Assurance
Company and (b) Plymouth Insurance Company, Ltd., each a corporation
organized under the laws of Bermuda, and their respective successors and
assigns.
"Interest Expense Coverage Ratio" shall mean, as of the last day of
any fiscal quarter, the ratio of (a) Consolidated EBITDA for the period of
four consecutive fiscal quarters ended on such day to (b) Consolidated
Interest Expense for such period (provided that, for purposes of calculating
Consolidated EBITDA and Consolidated Interest Expense for each of the
four-fiscal quarter periods ending September 30, 1997, December 31, 1997, and
March 31, 1998, Consolidated EBITDA and Consolidated Interest Expense, as the
case may be, for such four-fiscal quarter periods shall equal Consolidated
EBITDA and Consolidated Interest Expense, as the case may be, for the period
15
commencing on July 1, 1997, and ending on (A) September 30, 1997, multiplied
by 4, (B) December 31, 1997, multiplied by 2 and (C) March 31, 1998,
multiplied by 4/3, respectively).
"Interest Payment Date" shall mean, with respect to any Loan, the
last day of the Interest Period applicable to the Borrowing of which such
Loan is a part (and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months' duration, each day that would have been an
Interest Payment Date had successive Interest Periods of three months'
duration been applicable to such Borrowing), and the date of any prepayment
of such Borrowing or conversion of such Borrowing to a Borrowing of a
different Type.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the
last day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as
the applicable Borrower may elect, and (b) as to any ABR Borrowing, the
period commencing on the date of such Borrowing and ending on the earliest of
(i) the last Business Day of March, June, September or December, (ii) the
Maturity Date and (iii) the date such Borrowing is converted to a Borrowing
of a different Type in accordance with Section 2.10 or repaid or prepaid in
accordance with Section 2.11 or 2.12; provided, however, that, in the case of
a Eurodollar Borrowing, if any Interest Period would end on a day other than
a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day. Interest shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest
Period.
"Interest Rate Protection Agreement" shall mean any interest rate
swap, cap or other agreement or arrangement entered into by any Borrower
designed to protect such Borrower against fluctuations in interest rates and
not for speculation, provided that any such swap, cap agreement or other
arrangement entered into after the Closing Date shall be satisfactory to the
Administrative Agent.
"Issuing Banks" shall have the meaning assigned to such term in the
preamble to this Agreement, except as amended in Section 2.22(i).
"Issuing Bank Fees" shall have the meaning assigned to such term in
Section 2.05(c).
"L/C Commitment" shall mean, with respect to each Issuing Bank, the
commitment of such Issuing Bank to issue Letters of Credit pursuant to
Section 2.22.
"L/C Disbursement" shall mean a payment or disbursement made by an
Issuing Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate principal amount of all L/C Disbursements that have not yet been
reimbursed at such time. The L/C Exposure of any Revolving Credit Lender at
any time shall mean its Pro Rata Percentage of the L/C Exposure at such time.
16
"L/C Participation Fee" shall have the meaning assigned to such term
in Section 2.05(c).
"Lease" shall mean the Master Lease Agreement dated as of June 16,
1997, and all supplements thereto, among Crescent Funding (as landlord), CBHS
and each facility subsidiary listed therein (as tenant).
"Leased Facilities" shall have the meaning assigned to such term in
the preamble to this Agreement.
"Lenders" shall mean (a) the financial institutions listed on
Schedule 2.01 (other than any such financial institution that has ceased to
be a party hereto pursuant to an Assignment and Acceptance) and (b) any
financial institution that has become a party hereto pursuant to an
Assignment and Acceptance.
"Letter of Credit" shall mean (a) any letter of credit issued
pursuant to Section 2.22 and (b) any Existing Letter of Credit.
"Leverage Ratio" shall mean, as of the last day of any fiscal
quarter, the ratio of (a) Total Debt as of such date to (b) Consolidated
EBITDA for the period of four consecutive fiscal quarters ended on such date;
(provided that, for purposes of determining Consolidated EBITDA for each of
the four-fiscal-quarter periods ending September 30, 1997, December 31, 1997,
and March 31, 1998, Consolidated EBITDA for such four-fiscal-quarter periods
shall equal Consolidated EBITDA for the period commencing on July 1, 1997,
and ending on (A) September 30, 1997, multiplied by 4, (B) December 31, 1997,
multiplied by 2 and (C) March 31, 1998, multiplied by 4/3, respectively).
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to
or substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations
of interest rates applicable to dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period, as the rate for dollar deposits
with a maturity comparable to such Interest Period. In the event that such
rate is not available at such time for any reason, then the "LIBO Rate" with
respect to such Eurodollar Borrowing for such Interest Period shall be the
rate at which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, charge or security interest in or on
such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase
option, call or similar right of a third party with respect to such
securities.
17
"Loan Documents" shall mean this Agreement, the Letters of Credit,
the Guarantee Agreement, the Security Documents and the Indemnity,
Subrogation and Contribution Agreement.
"Loan Parties" shall mean the Borrowers and the Guarantors.
"Loans" shall mean the Revolving Loans and the Note Repurchase Loans.
"Magellan Guarantee Agreement" shall have the meaning assigned to
such term in the CBHS Credit Agreement.
"Margin Stock" shall have the meaning assigned to such term in
Regulation U.
"Material Franchise Payment Default" shall mean any Franchise
Payment Default that could reasonably be expected to have a Material Adverse
Effect. Without limiting the generality of the foregoing sentence, the
failure by CBHS or any of its subsidiaries to pay franchise fees and other
amounts due under the Franchise Agreement to the Parent Borrower in an
aggregate amount greater than $30,000,000 for more than 30 days after such
payment is due in accordance with the terms of the Franchise Agreement
(whether due to subordination of such payments or other causes) shall be
deemed a "Material Franchise Payment Default".
"Material Adverse Effect" shall mean (a) a materially adverse effect
on the business, assets, operations, prospects or condition, financial or
otherwise, of the Parent Borrower and the Subsidiaries taken as a whole, (b)
material impairment of the ability of the Parent Borrower and the other Loan
Parties taken as a whole to perform any of their respective obligations under
any Loan Document to which it is or will be a party or (c) material
impairment of the rights of or benefits available to the Lenders under any
Loan Document (including as a result of any material impairment of the Parent
Borrower's rights or benefits under the Franchise Agreement).
"Maturity Date" shall mean the fifth anniversary of the date of this
Agreement.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean (a) with respect to any Asset Sale or
any transaction described in Section 6.05(g), the cash proceeds thereof
(including cash and cash equivalents and cash payments received by way of
deferred payment or principal pursuant to a note or installment receivable or
otherwise, but only as and when received), net of (i) costs of sale
(including fees, expenses and payment of the outstanding principal amount of,
premium or penalty, if any, interest and other amounts on any Indebtedness
(other than Loans) repaid under the terms thereof as a result of such Asset
Sale or such transaction), (ii) taxes paid or payable as a result thereof and
(iii) amounts provided as a reserve, in accordance with GAAP, against any
liabilities under any indemnification obligations associated with such Asset
Sale or such transaction (except that, to the extent and at the time any such
amounts are released from such reserve, such amounts shall constitute Net
Cash Proceeds); provided, however, that if the Asset Sale is a result of a
Casualty Event or Condemnation Event, the cash proceeds thereof for purposes
of this definition shall not include proceeds used to replace or repair the
damaged or condemned property, as applicable, within 180 days of receipt of
such proceeds or, if replacement or repair cannot reasonably be completed
within such period, within
18
360 days of receipt of such proceeds and (b) with respect to any issuance of
Indebtedness for borrowed money, the cash proceeds thereof net of
underwriting commissions, placement fees and other costs and expenses
directly incurred in connection therewith.
"New Borrower Agreement" shall mean any agreement entered into by a
new Subsidiary Borrower, the Administrative Agent and the Collateral Agent
in accordance with Section 2.23 and substantially in the form of Exhibit D-2.
"Non-Controlled Ventures" shall mean all partnerships and joint
ventures (a) in which the Parent Borrower and/or any of the Subsidiaries have
an ownership interest and (b) that are not Controlled Ventures.
"Note Repurchase Borrowing" shall mean a Borrowing comprised of Note
Repurchase Loans.
"Note Repurchase Loan Amount" shall mean the aggregate principal
amount of Note Repurchase Loans that shall be made on the Series A Notes
Repurchase Date, which amount shall be determined by the Parent Borrower on
the Series A Notes Repurchase Date.
"Note Repurchase Loan Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make Note Repurchase Loans hereunder
as set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant
to which such Lender assumed its Note Repurchase Loan Commitment, as
applicable, as the same may be (a) reduced from time to time pursuant to
Section 2.09 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04.
"Note Repurchase Loan Payment Date" shall have the meaning assigned
to such term in Section 2.12(a).
"Note Repurchase Loans" shall mean the term loans made by the
Lenders to the Parent Borrower pursuant to clause (b) of Section 2.01 on the
Series A Notes Repurchase Date. Each Note Repurchase Loan shall be a
Eurodollar Note Repurchase Loan or an ABR Note Repurchase Loan.
"Obligations" shall mean all obligations defined as "Obligations" in
the Guarantee Agreement and the Security Documents.
"Operating Agreement" shall mean the Operating Agreement for CBHS
dated as of June 16, 1997, among the Parent Borrower, Charter Behavioral
Health Systems, Inc. and the Crescent Affiliate.
"Parent Borrower" shall have the meaning assigned to such term in
the preamble to this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred
to and defined in ERISA.
19
"Perfection Certificate" shall mean the Perfection Certificate
substantially in the form of Annex 1 to the Security Agreement.
"Permitted Acquisition" shall mean any acquisition of an Acquired
Entity that was not preceded by an unsolicited tender offer for such Acquired
Entity by the Parent Borrower or any Guarantor in which the Parent Borrower
or any Guarantor is (x) in the case of an asset or stock purchase, the
purchaser of assets or stock, or (y) in the case of a merger or
consolidation, the surviving entity or the owner of all the capital stock of
the surviving or resulting entity, so long as (a) after giving effect to such
acquisition, (i) the Parent Borrower shall be in compliance, on a pro forma
basis, with all covenants set forth in this Agreement, including then
effective covenants contained in Sections 6.10, 6.11, 6.12 and 6.13, which
shall be recomputed as at the last day of the most recently ended fiscal
quarter (for which financial information has been delivered pursuant to
Section 5.04) of the Parent Borrower as if such acquisition had occurred on
the first day of each relevant period for testing such compliance, and the
Parent Borrower shall have delivered to the Administrative Agent an
officers' certificate to such effect for any acquisition in excess of
$7,500,000, (ii) any Indebtedness of the Acquired Entity that is acquired or
assumed in connection with such acquisition shall be in compliance with
Section 6.01 and (iii) on the date of such acquisition and immediately after
giving effect thereto (including the effect of any Indebtedness incurred or
assumed thereby), no Default or Event of Default shall have occurred and be
continuing, (b) in the case of an asset acquisition, such assets are to be
used, and in the case of an acquisition of capital stock or other equity
interests, the person so acquired is engaged in, a healthcare business or
healthcare businesses or in a reasonably related (ancillary or complementary)
line of business or lines of business and (c) in the case of an acquisition
of capital stock or other equity interests, (i) the Parent Borrower or the
acquiring Guarantor shall acquire at least 50% of the outstanding equity
securities of the Acquired Entity and otherwise Control such Acquired Entity,
(ii) in the case of an Acquired Entity in which no person other than the
Parent Borrower, any Affiliate of the Parent Borrower or any member of
management of the Parent Borrower owns any equity interest, such Acquired
Entity shall become a Guarantor in accordance with Section 5.11 and (iii) all
the capital stock of or other equity interests in such Acquired Entity and
any of the subsidiaries of the Acquired Entity owned by the Parent Borrower
or any Guarantor shall be pledged to the Collateral Agent in accordance with
Section 5.11.
"Permitted CBHS Advances" shall mean any loan or advance by the
Parent Borrower to CBHS, other than any loans and advances made and
outstanding as a "Permitted Non-Control Investment" hereunder, provided that
(a) the aggregate principal amount of such loans or advances outstanding at
any time shall not exceed $65,000,000, (b) no such loans or advances shall be
made or remain outstanding at any time if at such time any CBHS Loans or any
CBHS L/C Exposure shall be outstanding, (c) no such loans or advances may be
made or remain outstanding after the Deemed Borrowing Base Cut-Off Date, (d)
all such loans or advances shall be evidenced by a note from CBHS to the
Parent Borrower, which note shall be pledged by the Parent Borrower to the
Collateral Agent for the benefit of the Secured Parties in accordance with
the Pledge Agreement, (e) all such advances shall be secured by a security
interest in the accounts receivable of CBHS and its wholly owned
subsidiaries, pursuant to the Advance Security Agreement, which security
interest and Agreement shall be assigned to the Collateral Agent for the
benefit of the Secured Parties pursuant to the Advance Collateral Assignment
and (f)(i) no Event of Default and (ii) no event of default under the CBHS
Credit Agreement shall have occurred and be continuing.
20
"Permitted CBHS Guarantee" shall mean the Guarantee by the Parent
Borrower of CBHS Loans not to exceed an aggregate principal sum of
$65,000,000 at any time up to but excluding the later of (a) the Deemed
Borrowing Base Cut-Off Date and (b) the first date on which the CBHS
Borrowing Base is equal to or greater than the amount of CBHS Loans then
outstanding, provided that on the date such Guarantee is made and immediately
after giving effect thereto, no Event of Default shall have occurred and be
continuing.
"Permitted Debt Repurchase" shall mean any repurchase of Permitted
Subordinated Indebtedness by the Parent Borrower so long as (a) after giving
effect to such repurchase, (i) the Parent Borrower shall be in compliance, on
a pro forma basis, with all covenants set forth in this Agreement, including
then effective covenants contained in Sections 6.10, 6.11, 6.12 and 6.13,
which shall be recomputed as at the last day of the most recently ended
fiscal quarter (for which financial information has been delivered pursuant
to Section 5.04) of the Parent Borrower as if such repurchase had occurred on
the first day of each relevant period for testing such compliance, and the
Parent Borrower shall have delivered to the Administrative Agent an
officers' certificate to such effect for any repurchase in excess of
$10,000,000 and (ii) on the date of such repurchase and immediately after
giving effect thereto, no Default or Event of Default shall have occurred and
be continuing and (b) after giving effect to such repurchase, the aggregate
amount of cash and cash equivalents on the Parent Borrower's consolidated
balance sheet plus the remaining available balance of the Total Revolving
Credit Commitment shall be at least equal to $50,000,000. The term "Permitted
Debt Repurchase" shall also include, without giving effect to and
notwithstanding the restrictions set forth above, the repurchases of the
Series A Notes on the Series A Notes Repurchase Date, pursuant to the Series
A Notes Tender Offer.
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America or by any agency, instrumentality or sponsored corporation
thereof to the extent such obligations are rated at least A or the
equivalent thereof by Standard & Poor's Ratings Group or at least A-2 or
the equivalent thereof by Xxxxx'x Investors Service, Inc., in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 360 days from
the date of acquisition thereof and having, at such date of acquisition,
a rating from Standard & Poor's Ratings Service of A-1 or from Xxxxx'x
Investors Service, Inc. of P-1;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within one year from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any commercial bank
organized under the laws of the United States of America or any State
thereof that has a combined capital and surplus and undivided profits of
not less than $250,000,000;
(d) repurchase obligations with a term of not more than 90 days for,
and secured by, underlying securities of the types described in clauses
(a) through (c) above entered into with a bank meeting the qualifications
described in clause (c) above;
21
(e) other investment instruments offered by financial institutions
which have a combined capital and surplus and undivided profits of not
less than $250,000,000; and
(f) deposits made prior to 1992 and interest and income earned
thereon with respect to the Parent Borrower's obligations under its
Public Issue of 7.5% Dual Currency Swiss Franc Bonds dated 1986 and due
1998/2001.
"Permitted Non-Control Investment" shall mean any investment by the
Parent Borrower or any Guarantor in another corporation or other business
entity so long as (a) after giving effect to such Permitted Non-Control
Investment, (i) the Parent Borrower shall be in compliance, on a pro forma
basis, with all covenants set forth in this Agreement, including then
effective covenants contained in Sections 6.10, 6.11, 6.12 and 6.13, which
shall be recomputed as at the last day of the most recently ended fiscal
quarter (for which financial information has been delivered pursuant to
Section 5.04) of the Parent Borrower as if such investment had occurred on
the first day of each relevant period for testing such compliance, and the
Parent Borrower shall have delivered to the Administrative Agent an officers'
certificate to such effect for any investment in excess of $7,500,000 and
(ii) on the date of such investment and immediately after giving effect
thereto, no Default or Event of Default shall have occurred and be
continuing, (b) such investment shall constitute either (i) an investment in
less than 50% of the equity interests of such corporation or other business
entity or (ii) an investment in which, notwithstanding the ownership by the
Parent Borrower or any wholly owned Subsidiary of 50% or more of the equity
interests of such corporation or business entity, neither the Parent Borrower
nor any wholly owned Subsidiary Controls such corporation or other business
entity, (c) all the capital stock of such corporation or other business
entity owned by the Parent Borrower or any Guarantor shall be pledged to the
Collateral Agent in accordance with Section 5.11 and (d) the aggregate amount
of Permitted Non-Control Investments made after the Closing Date and
outstanding at any time shall not exceed $35,000,000 less the amount, if any,
by which the amount of Permitted Non-Guarantor Transactions made after the
Closing Date and outstanding at such time exceeds $35,000,000. Subject to
satisfaction of the foregoing criteria, the term "Permitted Non-Control
Investment" shall include (a) any investment arising as a result of sales or
other dispositions of common stock of a Guarantor permitted pursuant to this
Agreement, (b) transfers of assets to or other investments in entities that
are neither Controlled Non-Guarantor Entities nor Guarantors and (c) the
granting of any Guarantee of any Indebtedness of any such entity. In
addition, "Permitted Non-Control Investment" shall include, without giving
effect to and notwithstanding the restrictions set forth above, (x)
investments made as part of the Transactions or as otherwise existing on the
Closing Date, (y) Permitted CBHS Guarantee and (z) up to $10,000,000 in the
aggregate of additional contributions and/or loans to CBHS in accordance with
the Operating Agreement (as in effect on the date hereof). Notwithstanding
anything to the contrary, Permitted CBHS Advances shall not be deemed
investments in CBHS or its subsidiaries for purposes of this definition of
"Permitted Non-Control Investment".
"Permitted Non-Guarantor Transactions" shall mean any (a) transfer
of assets by the Parent Borrower or any Guarantor to a Controlled
Non-Guarantor Entity, (b) investments by the Parent Borrower or any Guarantor
in Controlled Non-Guarantor Entities, (c) Guarantees by the Parent Borrower
or any Guarantor of any Indebtedness of Controlled Non-Guarantor Entities or
(d) any transaction that causes any Guarantor to become a Controlled
Non-Guarantor Entity, in each case so long as, after giving effect to any
such transaction, the sum of (i) the fair market value of all assets
transferred to Controlled Non-Guarantor Entities (such value to be determined
with respect to each
22
asset as of the time such asset was transferred), (ii) the amount of
then-outstanding investments in Controlled Non-Guarantor Entities, (iii) the
then-outstanding principal amount of Indebtedness of the Controlled
Non-Guarantor Entities Guaranteed by the Parent Borrower or any Guarantor and
(iv) the value of the equity interests retained by the Parent Borrower or any
Guarantor in all Controlled Non-Guarantor Entities that became Controlled
Non-Guarantor Entities as the result of a Permitted Non-Guarantor Transaction
effected after the Closing Date (such value to be determined with respect to
each Controlled Non-Guarantor Entity as of the time the relevant Permitted
Non-Guarantor Transaction occurred), shall not exceed $35,000,000 plus the
amount, if any, by which $35,000,000 exceeds the amount of Permitted
Non-Control Investments made after the Closing Date and outstanding (without
giving effect to the transactions described in the last sentence of the
definition of "Permitted Non-Control Investment") at the time of such
transaction; provided, further, that after giving effect to any such
Permitted Non-Guarantor Transaction, (i) the Parent Borrower shall be in
compliance, on a pro forma basis, with all covenants set forth in this
Agreement, including then effective covenants contained in Sections 6.10,
6.11, 6.12 and 6.13, which shall be recomputed as at the last day of the most
recently ended fiscal quarter (for which financial information has been
delivered pursuant to Section 5.04) of the Parent Borrower as if such
transaction had occurred on the first day of each relevant period for testing
such compliance, and the Parent Borrower shall have delivered to the
Administrative Agent an officers' certificate to such effect for any
investment in excess of $7,500,000 and (ii) on the date of such transaction
and immediately after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing. The term "Permitted Non-Guarantor
Transactions" shall also include, without giving effect to and
notwithstanding the restrictions set forth above, exchanges under the Green
Spring Exchange Agreement and the purchases pursuant to the Green Spring
Stockholders' Agreement.
"Permitted Post-Closing Crescent Transaction" shall mean a sale,
transfer or other disposition of assets or property related to the behavioral
healthcare businesses that are acquired by the Parent Borrower or any
Subsidiary after the Closing Date to Crescent, CBHS or any of their
respective subsidiaries in accordance with the REIT Purchase Agreement,
provided that (a) each such sale, transfer or other disposition shall be
consummated within 90 days of the acquisition thereof by the Parent Borrower
or any Subsidiary, (b) such sale, transfer or other disposition is for
consideration not less than the fair market value of such assets or property
sold, transferred or disposed of (as determined in good faith by a Financial
Officer of the Parent Borrower) and the purchase price paid therefor by the
Parent Borrower or such Subsidiary; provided, however, that in the event that
the assets or property sold, transferred or otherwise disposed of to Crescent
are a part of a larger group of assets or property acquired by the Parent
Borrower or any Subsidiary, then the Parent Borrower shall deliver a
certificate of a Financial Officer that (i) sets forth in reasonable detail
the derivation of the value allocated to such assets or property sold,
transferred or otherwise disposed of to Crescent and (ii) certifies that such
allocated value and the consideration paid by Crescent for such assets or
property is not less than the fair market value of such assets or property
and not less than the purchase price paid therefor by the Parent or such
Subsidiary, (c) the Parent Borrower shall be in compliance, on a pro forma
basis, with all covenants set forth in this Agreement, including then
effective covenants contained in Sections 6.10, 6.11, 6.12 and 6.13, which
shall be recomputed as at the last day of the most recently ended fiscal
quarter (for which financial information has been delivered pursuant to
Section 5.04) of the Parent Borrower as if such sale, transfer or other
disposition had occurred on the first day of each relevant period for testing
such compliance, and the Parent Borrower shall have delivered to the
Administrative Agent an officers' certificate to such effect for any sale,
transfer or other disposition in excess of $10,000,000 and (d) on the date of
such sale, transfer or other
23
disposition and immediately after giving effect thereto, no Default or Event
of Default shall have occurred and be continuing.
"Permitted Restrictions" shall mean, with respect to any Controlled
Venture, provisions contained in the governing documents of such Controlled
Venture, that prohibit or otherwise restrict the making of distributions by
such Controlled Venture (a) at any time such Controlled Venture has
outstanding Indebtedness to any owner of equity interests thereof, (b) in the
case of Controlled Ventures that are subject to taxation as a partnership
under the Code, to the extent that such distributions would cause any owner
of equity interests thereof to have a negative balance in its capital
account, (c) without the approval of at least a majority of the (i)
directors, (ii) managers, managing members or members, (iii) general partners
or (iv) the persons or governing body performing a similar function as any of
the foregoing, (d) to the extent such distribution would be prohibited by any
applicable law, rule or regulation, (e) out of or through the use of funds of
such Controlled Venture that the directors, managers, managing members,
members, general partners (or persons or governing body performing similar
functions) have reasonably determined are necessary to pay such Controlled
Venture's current and anticipated cash obligations, including operating
expenses, debt service, acquisitions, capital expenditures and reasonable
reserves, or (f) under other circumstances that are consented to in writing
by the Administrative Agent with respect to such Controlled Venture.
"Permitted Stock Repurchase" shall mean any repurchase by the Parent
Borrower of shares of its common stock so long as (a) after giving effect to
such repurchase, (i) the Parent Borrower shall be in compliance, on a pro
forma basis, with all covenants set forth in this Agreement, including then
effective covenants contained in Sections 6.10, 6.11, 6.12 and 6.13, which
shall be recomputed as at the last day of the most recently ended fiscal
quarter (for which financial information has been delivered pursuant to
Section 5.04) of the Parent Borrower as if such repurchase had occurred on
the first day of each relevant period for testing such compliance, and the
Parent Borrower shall have delivered to the Administrative Agent an officers'
certificate to such effect for any repurchase that exceeds $10,000,000 and
(ii) on the date of such repurchase and immediately after giving effect
thereto, no Default or Event of Default shall exist, (b) the aggregate amount
expended by the Parent Borrower in connection with all Permitted Stock
Repurchases shall not exceed during the term of this Agreement $27,207,346
and (c) after giving effect to any such repurchase, the aggregate amount of
cash and cash equivalents on the Parent Borrower's consolidated balance sheet
plus the remaining available balance of the Total Revolving Credit Commitment
shall be at least equal to $50,000,000.
"Permitted Subordinated Indebtedness" shall mean (a)(i) prior to the
Series A Notes Repurchase Date, the Series A Notes (including the Guarantees
thereof) and (ii) after the Series A Notes Repurchase Date, the Series A
Notes (including the Guarantees thereof) not required to be repurchased
pursuant to the Series A Notes Indenture or the Series A Notes Tender Offer;
(b) any Indebtedness of the Parent Borrower (including any Guarantees
thereof) that refinances the Series A Notes, provided that (i) such
refinancing Indebtedness is in an aggregate principal amount not greater than
the aggregate principal amount of the Series A Notes as of the Closing Date
plus the amount of any premiums required to be paid thereon and fees and
expenses associated with such refinancing; (ii) such refinancing Indebtedness
has a final maturity later than or equal to and a weighted average life
longer than or equal to the remaining life of the Series A Notes determined
as of the date of the refinancing; (iii) such refinancing Indebtedness bears
interest at a fixed rate, which rate shall be, in the good faith judgment of
the Parent Borrower's board of directors, consistent with the market at the
24
time of issuance for similar Indebtedness; (iv) such refinancing Indebtedness
shall contain subordination and intercreditor provisions that are no more
favorable in any material respect to the holders thereof than the
subordination and intercreditor provisions contained in the indenture
governing the Series A Notes; (v) the negative and financial covenants (if
any) of such refinancing Indebtedness shall not require the Parent Borrower
to maintain any specified financial condition except as a condition to the
taking of certain actions; (vi) each of the covenants, events of default and
other provisions thereof (including any Guarantees thereof) shall be no less
favorable to the Lenders in any material respect than those contained in the
indenture governing the Series A Notes and (vii) on the date that such
refinancing Indebtedness is incurred and immediately after giving effect
thereto, no Default or Event of Default shall have occurred and be
continuing; (c) Indebtedness issued pursuant to the Green Spring Exchange
Agreement; and (d) any other Indebtedness of the Parent Borrower that is
subordinated to the Obligations, provided that (i) such Indebtedness has a
maturity that is after the Maturity Date, (ii) such Indebtedness bears
interest at a rate consistent with the market at the time of issuance for
similar Indebtedness; (iii) such Indebtedness shall contain subordination and
intercreditor provisions that are no more favorable in any material respect
to the holders thereof than the subordination and intercreditor provisions
contained in the indenture governing the Series A Notes; (iv) the negative
financial covenants (if any) of such Indebtedness shall not require the
Parent Borrower to maintain any specified financial condition except as a
condition to the taking of certain actions; and (v) each of the covenants,
events of default and other provisions thereof (including any Guarantees
thereof) shall be no less favorable to the Lenders in any material respect
than those contained in the indenture governing the Series A Notes.
"person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership or government, or any agency
or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which any Loan
Party or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Pledge Agreement" shall mean the Amended and Restated Pledge
Agreement, substantially in the form of Exhibit H, among the Parent Borrower,
the Subsidiaries party thereto and the Collateral Agent for the benefit of
the Secured Parties.
"Prepayment Event" shall mean any event requiring a mandatory
prepayment of Note Repurchase Loans described in Section 2.13(a) or 2.13(c)
or a prepayment of Revolving Loans required pursuant to Section 2.13(f) as a
result of a mandatory commitment reduction pursuant to Section 2.13(e).
"Properties" shall have the meaning assigned to such term in Section
3.17(a).
"Pro Rata Percentage" of any Revolving Credit Lender at any time
shall mean the percentage of the Total Revolving Credit Commitment
represented by such Revolving Credit Lender's Revolving Credit Commitment.
25
"Public Solutions" shall mean Magellan Public Solutions, Inc., a
Delaware corporation.
"Purchased Facilities" shall have the meaning assigned to such term
in the preamble to this Agreement.
"Real Estate for Sale" shall mean the real property and improvements
having a book value of $[26,195,547] set aside by the Parent Borrower for
sale as set forth in the Parent Borrower's consolidated balance sheet as of
March 31, 1997, and described on Schedule 1.01(d).
"Refinancing Indebtedness" shall have the meaning assigned to such
term in Section 6.01(n).
"Register" shall have the meaning given such term in Section 9.04(d).
"Regulation G" shall mean Regulation G of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation T" shall mean Regulation T of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REIT Purchase Agreement" shall mean the Real Estate Purchase and
Sale Agreement dated as of January 29, 1997, as amended, between the Parent
Borrower and Crescent.
"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing, depositing, dispersing, emanating or migrating of any Hazardous
Material in, into, onto or through the environment.
"Remedial Action" shall mean (a) "remedial action" as such term is
defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions
required by any Governmental Authority or voluntarily undertaken to: (i)
cleanup, remove, treat, xxxxx or in any other way address any Hazardous
Material in the environment; (ii) prevent the Release or threat of Release,
or minimize the further Release, of any Hazardous Material so it does not
migrate or endanger or threaten to endanger public health, welfare or the
environment; or (iii) perform studies and investigations in connection with,
or as a precondition to, (i) or (ii) above.
"Required Lenders" shall mean, at any time, Lenders having Revolving
Loans, Note Repurchase Loans, L/C Exposure and unused Revolving Credit and
Note Repurchase Commitments representing at least a majority of the sum of
all Revolving Loans, Note Repurchase Loans outstanding, L/C Exposure and
unused Revolving Credit and Note Repurchase Commitments at such time.
26
"Responsible Officer" of any corporation shall mean any executive
officer or Financial Officer of such corporation and any other officer or
similar official thereof responsible for the administration of the
obligations of such corporation in respect of this Agreement.
"Revolving Credit Borrowing" shall mean a Borrowing comprised of
Revolving Loans.
"Revolving Credit Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make Revolving Loans hereunder as
set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to
which such Lender assumed its Revolving Credit Commitment, as applicable, as
the same may be (a) reduced from time to time pursuant to Sections 2.09, 2.13
or 2.21 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04.
"Revolving Credit Exposure" shall mean, with respect to any Lender
at any time, the aggregate principal amount at such time of all outstanding
Revolving Loans of such Lender, plus the aggregate amount at such time of
such Lender's L/C Exposure.
"Revolving Credit Lender" shall mean a Lender with a Revolving
Credit Commitment.
"Revolving Loans" shall mean the revolving loans made by the Lenders
to the Borrowers pursuant to clause (a) of Section 2.01. Each Revolving Loan
shall be a Eurodollar Revolving Loan or an ABR Revolving Loan.
"Rights Plan" shall mean the Rights Agreement dated as of July 21,
1992, between the Parent Borrower and First Union Bank of North Carolina, as
Rights Agent (as defined therein).
"Secured Parties" shall have the meaning assigned to such term in
the Security Agreement.
"Security Agreement" shall mean the Amended and Restated Security
Agreement, substantially in the form of Exhibit I, among the Parent Borrower,
the Subsidiaries party thereto and the Collateral Agent for the benefit of
the Secured Parties.
"Security Documents" shall mean the Security Agreement, the Pledge
Agreement, the Collateral Assignment, the Advance Collateral Assignment and
each of the security agreements and other instruments and documents executed
and delivered pursuant to any of the foregoing or pursuant to Section 5.11.
"Senior Debt" shall mean Total Debt but excluding all Permitted
Subordinated Indebtedness.
"Senior Debt Ratio" shall mean, as of the last day of any fiscal
quarter, the ratio of (a) Senior Debt as of such date to (b) Consolidated
EBITDA for the period of four consecutive fiscal quarters ended on such date
(provided that, for purposes of calculating Consolidated EBITDA for each of
the four-fiscal-quarter periods ending September 30, 1997, December 31, 1997,
and March 31,
27
1998, Consolidated EBITDA for such four-fiscal-quarter periods shall equal
Consolidated EBITDA for the period commencing on July 1, 1997, and ending on
(A) September 30, 1997, multiplied by 4, (B) December 31, 1997, multiplied by
2 and (C) March 31, 1998, multiplied by 4/3, respectively).
"Series A Notes" shall mean the 11-1/4% Series A Senior Subordinated
Notes due 2004 of the Parent Borrower.
"Series A Notes Indenture" shall mean the Indenture governing the
Series A Notes as in effect on the date hereof and as amended from time to
time in accordance with the provisions hereof.
"Series A Notes Repurchase Date" shall mean the date on which the
Parent Borrower is required to repurchase any Series A Notes tendered to it,
in accordance with the Series A Notes Indenture and the Series A Notes Tender
Offer, which date shall be no later than 70 days after the closing and sale
of the Purchased Facilities under the REIT Purchase Agreement.
"Series A Notes Tender Offer" shall mean the tender offer made by
the Parent Borrower, in accordance with the Series A Notes Indenture, for the
purchase of all issued and outstanding Series A Notes at a purchase price
equal to 101% of the principal amount thereof (plus accrued interest) on the
Series A Notes Repurchase Date.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including
any marginal, special, emergency or supplemental reserves) expressed as a
decimal established by the Board and any other banking authority, domestic or
foreign, to which the Administrative Agent or any Lender (including any
branch, Affiliate or other fronting office making or holding a Loan) is
subject with respect to the Adjusted LIBO Rate, for Eurocurrency Liabilities
(as defined in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall
be deemed to constitute Eurocurrency Liabilities and to be subject to such
reserve requirements without benefit of or credit for proration, exemptions
or offsets that may be available from time to time to any Lender under such
Regulation D. Statutory Reserves shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"Subordination Agreement" shall mean the Subordination Agreement
dated as of June 16, 1997, among CBHS, Crescent Funding, Charter Franchise
Services, LLC and the Parent Borrower.
"subsidiary" shall mean, with respect to any person (herein referred
to as the "parent"), any corporation, partnership, association or other
business entity of which securities or other ownership interests representing
more than 50% of the equity or more than 50% of the ordinary voting power or
more than 50% of the general partnership interests are, at the time any
determination is being made, owned, controlled or held by the parent or one
or more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent.
"Subsidiary" shall mean any subsidiary of the Parent Borrower.
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"Subsidiary Borrower" shall mean Charter Behavioral Health System
of New Mexico, Inc. and each wholly owned Subsidiary that executes a New
Borrower Agreement in accordance with Section 2.23 and that has not ceased to
be a Subsidiary Borrower in accordance with such Section.
"Subsidiary Borrower Termination" shall mean any termination
executed by the Parent Borrower in accordance with Section 2.23 and
substantially in the form of Exhibit D-3.
"Subsidiary Non-Guarantors" shall mean any Subsidiary that is not a
Guarantor.
"Syndication Agent" shall have the meaning assigned to such term in
the preamble to this Agreement.
"Total Debt" shall mean, with respect to the Parent Borrower and the
Subsidiaries on a consolidated basis at any time, all Indebtedness of the
Parent Borrower and the Subsidiaries which at such time would be required to
be reflected as a liability for borrowed money on a consolidated balance
sheet of the Parent Borrower and its consolidated Subsidiaries prepared in
accordance with GAAP, plus (without duplication) the maximum undrawn amount
of any outstanding letters of credit issued pursuant to this Agreement (it
being understood that such letters of credit shall not be included in "Total
Debt" to the extent such letters of credit are issued to support Indebtedness
and the amount of such Indebtedness has been included in "Total Debt").
"Total Revolving Credit Commitment" shall mean, at any time, the
aggregate amount of the Revolving Credit Commitments, as in effect at such
time.
"Transaction Consideration" shall have the meaning assigned to such
term in the preamble to this Agreement.
"Transaction Documents" shall mean the REIT Purchase Agreement, the
Contribution Agreement, the Operating Agreement, the Franchise Agreement, the
Lease, the Subordination Agreement and the Warrant Agreements and all other
agreements to be entered into by the Parent Borrower or any Subsidiary
pursuant thereto or in connection therewith.
"Transactions" shall mean all transactions contemplated by the
Transaction Documents, the Loan Documents and the CBHS Loan Documents.
"Type", when used in respect of any Loan or Borrowing, shall refer
to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, the term
"Rate" shall include the Adjusted LIBO Rate and the Alternate Base Rate.
"Warrant Agreements" shall mean (i) the Warrant Purchase Agreement
dated as of January 29, 1997, between the Parent Borrower and Crescent, and
(ii) the Warrant Purchase Agreement to be executed on the closing of the
Contribution Transaction between the Parent Borrower and the Crescent
Affiliate.
29
"wholly owned subsidiary" of any person shall mean a subsidiary of
such person of which securities (except for directors' qualifying shares) or
other ownership interests representing 100% of the equity or 100% of the
ordinary voting power or 100% of the general partnership interests are, at
the time any determination is being made, owned, controlled or held by such
person or one or more wholly owned subsidiaries of such person or by such
person and one or more wholly owned subsidiaries of such person.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan,
as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms
defined. Whenever the context shall require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation". All references herein to Articles, Sections, Exhibits
and Schedules shall be deemed references to Articles and Sections of, and
Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. Except as otherwise expressly provided herein, (a) any reference in
this Agreement to any Loan Document shall mean such document as amended,
restated, supplemented or otherwise modified from time to time and (b) all
terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time; provided, however, that for
purposes of determining compliance with the covenants contained in Article
VI, all accounting terms herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP as in effect
on the date of this Agreement and applied on a basis consistent with the
application used in the financial statements referred to in Section 3.05(a).
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, (a) to make Revolving Loans to the
Borrowers, at any time and from time to time on or after the date hereof, and
until the earlier of the Maturity Date and the termination of the Revolving
Credit Commitment of such Lender in accordance with the terms hereof, in an
aggregate principal amount at any time outstanding that will not result in
(i) such Lender's Revolving Credit Exposure exceeding (ii) such Lender's
Revolving Credit Commitment at such time and (b) to make Note Repurchase
Loans to the Parent Borrower on the Series A Notes Repurchase Date in a
principal amount not to exceed such Lender's Note Repurchase Loan Commitment.
Within the limits set forth in clause (a) of the preceding sentence and
subject to the terms, conditions and limitations set forth herein, the
Borrowers may borrow, pay or prepay and reborrow Revolving Loans. Amounts
paid or prepaid in respect of Note Repurchase Loans may not be reborrowed.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective Revolving Credit Commitments or Note Repurchase Loan
Commitments, as applicable; provided, however, that the
30
failure of any Lender to make any Loan shall not in itself relieve any other
Lender of its obligation to lend hereunder (it being understood, however,
that no Lender shall be responsible for the failure of any other Lender to
make any Loan required to be made by such other Lender). Except for Loans
deemed made pursuant to Section 2.02(f), the Loans comprising any Borrowing
shall be in an aggregate principal amount that is (i) an integral multiple of
$1,000,000 and not less than $5,000,000 or (ii) equal to the remaining
available balance of the applicable Commitments.
(b) Subject to Sections 2.08 and 2.15, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the applicable
Borrower may request pursuant to Section 2.03. Each Lender may at its option
make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan; provided that any exercise of
such option shall not affect the obligation of the applicable Borrower to
repay such Loan in accord-ance with the terms of this Agreement. Borrowings
of more than one Type may be outstanding at the same time; provided, however,
that the Borrowers shall not be entitled to request any Borrowing that, if
made, would result in more than five Eurodollar Borrowings outstanding
hereunder at any time. For purposes of the foregoing, only Borrowings having
different Interest Periods, regardless of whether they commence on the same
date, shall be considered separate Borrowings.
(c) Except with respect to Loans deemed made pursuant to Section
2.02(f), each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds to such
account in New York City as the Administrative Agent may designate not later
than 11:00 a.m., New York City time, and the Administrative Agent shall by
12:00 (noon), New York City time, credit the amounts so received to a
domestic account designated in the applicable Borrowing Request (provided
that such designated account shall be an account of a Borrower or a
Guarantor) or, if a Borrowing shall not occur on such date because any
condition precedent herein specified shall not have been met, return the
amounts so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received notice from
a Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing
in accordance with paragraph (c) above, and the Administrative Agent may, in
reliance upon such assumption, make available to the applicable Borrower on
such date a corresponding amount. If the Administrative Agent shall have so
made funds available then, to the extent that such Lender shall not have made
such portion available to the Administrative Agent, such Lender and the
applicable Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to such Borrower
until the date such amount is repaid to the Administrative Agent at (i) in
the case of any Borrower, the interest rate applicable at the time to the
Loans comprising such Borrowing and (ii) in the case of such Lender, a rate
determined by the Administrative Agent to represent its cost of overnight or
short-term funds (which determination shall be conclusive absent manifest
error). If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such Lender's Loan as part
of such Borrowing for purposes of this Agreement.
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(e) Notwithstanding any other provision of this Agreement, the
Borrowers shall not be entitled to request any Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date.
(f) If an Issuing Bank shall not have received from the applicable
Borrower any payment required to be made to such Issuing Bank by Section
2.22(e) within the time specified in such Section, such Issuing Bank will
promptly notify the Administrative Agent of the L/C Disbursement and the
Administrative Agent will promptly notify each Revolving Credit Lender of
such L/C Disbursement and its Pro Rata Percentage thereof. Each Revolving
Credit Lender shall pay by wire transfer of immediately available funds to
the Administrative Agent not later than 2:00 p.m., New York City time, on
such date (or, if such Revolving Credit Lender shall have received such
notice later than 12:00 (noon), New York City time, on any day, not later
than 10:00 a.m., New York City time, on the immediately following Business
Day), an amount equal to such Revolving Credit Lender's Pro Rata Percentage
of such L/C Disbursement (it being understood that such amount shall be
deemed to constitute an ABR Revolving Loan of such Revolving Credit Lender
and such payment shall be deemed to have reduced the L/C Exposure), and the
Administrative Agent will promptly pay to such Issuing Bank amounts so
received by it from the Revolving Credit Lenders. The Administrative Agent
will promptly pay to such Issuing Bank any amounts received by it from the
applicable Borrower pursuant to Section 2.22(e) prior to the time that any
Revolving Credit Lender makes any payment pursuant to this paragraph (f); any
such amounts received by the Administrative Agent thereafter will be promptly
remitted by the Administrative Agent to the Revolving Credit Lenders that
shall have made such payments and to such Issuing Bank, as their interests
may appear. If any Revolving Credit Lender shall not have made its Pro Rata
Percentage of such L/C Disbursement available to the Administrative Agent as
provided above, such Revolving Credit Lender and the applicable Borrower
severally agree to pay interest on such amount, for each day from and
including the date such amount is required to be paid in accordance with this
paragraph to but excluding the date such amount is paid, to the
Administrative Agent for the account of such Issuing Bank at (i) in the case
of such Borrower, a rate per annum equal to the interest rate applicable to
Revolving Loans pursuant to Section 2.06(a), and (ii) in the case of such
Revolving Credit Lender, for the first such day, the Federal Funds Effective
Rate, and for each day thereafter, the Alternate Base Rate.
SECTION 2.03. Borrowing Procedure. In order to request a Borrowing
(other than a deemed Borrowing pursuant to Section 2.02(f), as to which this
Section 2.03 shall not apply), a Borrower shall hand deliver or telecopy to
the Administrative Agent a duly completed Borrowing Request (a) in the case
of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time,
three Business Days before a proposed Borrowing, (b) in the case of an ABR
Borrowing made as part of the Note Repurchase Loans on the Series A Notes
Repurchase Date, not later than 11:00 a.m., New York City time on such date,
and (c) in the case of any other ABR Borrowing, not later than 12:00 noon,
New York City time, one Business Day before a proposed Borrowing. Each
Borrowing Request shall be irrevocable, shall be signed by or on behalf of
the applicable Borrower and shall specify the following information: (i)
whether the Borrowing then being requested is to be a Revolving Credit
Borrowing or a Note Repurchase Borrowing and whether such Borrowing is to be
a Eurodollar Borrowing or an ABR Borrowing, provided that any Borrowing on
the Closing Date, and any Borrowing on the Series A Notes Repurchase Date
consisting of Note Repurchase Loans made pursuant to clause (b) above shall
be an ABR Borrowing; (ii) the date of such Borrowing (which shall be a
Business Day); (iii) the number and location of the account to which funds
are to be disbursed
32
(which shall be an account that complies with the requirements of Section
2.02(c)); (iv) the amount of such Borrowing; and (v) if such Borrowing is to
be a Eurodollar Borrowing, the Interest Period with respect thereto;
provided, however, that, notwithstanding any contrary specification in any
Borrowing Request, each requested Borrowing shall comply with the
requirements set forth in Section 2.02. If no election as to the Type of
Borrowing is specified in any such notice, then the requested Borrowing shall
be an ABR Borrowing. If no Interest Period with respect to any Eurodollar
Borrowing is specified in any such notice, then the applicable Borrower shall
be deemed to have selected an Interest Period of one month's duration. The
Administrative Agent shall promptly advise the Lenders of any notice given
pursuant to this Section 2.03 (and the contents thereof), and of each
Lender's portion of the requested Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The
Borrowers, jointly and severally, unconditionally promise to pay to the
Administrative Agent for the account of each Lender (i) the principal amount
of each Note Repurchase Loan of such Lender as provided in Section 2.12 and
(ii) the then unpaid principal amount of each Revolving Loan of such Lender
on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrowers
to such Lender resulting from each Loan made by such Lender from time to
time, including the amounts of principal and interest payable and paid to
such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it
will record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to
each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder from any Borrower or any Guarantor and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) above shall be prima facie evidence of the existence
and amounts of the obligations therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain such accounts
or any error therein shall not in any manner affect the obligations of the
Borrowers to repay the Loans in accordance with their terms.
(e) Notwithstanding any other provision of this Agreement, in the
event any Lender shall request and receive a promissory note payable to such
Lender and its registered assigns, the interests represented by such note
shall at all times (including after any assignment of all or part of such
interests pursuant to Section 9.04) be represented by one or more promissory
notes payable to the payee named therein or its registered assigns.
SECTION 2.05. Fees. (a) The Borrowers agree to pay to each
Lender, through the Administrative Agent, on the last Business Day of March,
June, September and December in each year (calculated to such last Business
Day, as applicable, of March, June, September and December) and on the date
on which the applicable Commitment of such Lender shall expire or be
terminated as provided herein, a commitment fee (a "Commitment Fee") equal to
the Applicable Percentage per annum in effect from time to time on the
average daily unused amount of the Commitment of such Lender during the
preceding quarter (or other period commencing with the date of acceptance by
33
the Borrowers of the Commitment of such Lender or ending with the Maturity
Date or the date on which the applicable Commitments of such Lender shall
expire or be terminated), provided that the aggregate fees payable on any
such day shall not exceed the amount that would have been payable if no
assignment of any Lender's interest had occurred during the applicable three
month period. All Commitment Fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days. The Commitment Fee due
to each Lender shall commence to accrue on the later of the date of this
Agreement and the date of acceptance by the Borrowers of the applicable
Commitment of such Lender and shall cease to accrue on the date on which the
applicable Commitment of such Lender shall expire or be terminated as
provided herein. Notwithstanding anything to the contrary in this Section
2.05(a), no fees shall be payable upon the expiration or termination of any
Note Repurchase Loan Commitment if (i) such expiration or termination is the
result of the making of a Note Repurchase Loan on the Series A Notes
Repurchase Date or (ii) the applicable Lender's aggregate amount of
Commitments does not decrease as a result of such termination or expiration.
(b) The Borrowers agree to pay to the Administrative Agent, for its
own account, the administrative fees set forth in the Fee Letter at the times
and in the amounts specified therein (the "Administrative Agent Fees").
(c) The Borrowers agree to pay (i) to each Revolving Credit Lender,
through the Administrative Agent, on the last Business Day of March, June,
September and December of each year (calculated to such last Business Day, as
applicable, of March, June, September and December) and on the date on which
the Revolving Credit Commitment of such Revolving Credit Lender shall be
terminated as provided herein, a fee (an "L/C Participation Fee") calculated
on such Revolving Credit Lender's Pro Rata Percentage of the average daily
aggregate L/C Exposure (excluding the portion thereof attributable to
unreimbursed L/C Disbursements) during the preceding quarter (or shorter
period commencing with the date hereof or ending with the Maturity Date or
the date on which all Letters of Credit have been canceled or have expired
and the Revolving Credit Commitments of all Lenders shall have been
terminated) at a rate equal to the Applicable Percentage from time to time
used to determine the interest rate on Revolving Credit Borrowings comprised
of Eurodollar Loans pursuant to Section 2.06; provided that the aggregate
fees payable on any such day shall not exceed the amount that would have been
payable if no assignment of any Revolving Credit Lender's interest had
occurred during the applicable three month period, and (ii) to each Issuing
Bank with respect to each Letter of Credit issued by it, (x) a fee equal to
0.125% per annum of the face amount of such Letter of Credit, payable
quarterly in arrears on the last Business Day of each quarter (calculated to
such last Business Day, as applicable, of March, June, September and
December) and (y) the standard issuance and administration fees specified
from time to time by such Issuing Bank (the "Issuing Bank Fees"). All L/C
Participation Fees and Issuing Bank Fees shall be computed on the basis of
the actual number of days elapsed in a year of 360 days.
(d) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders, except that the Issuing Bank Fees shall be
paid directly to the respective Issuing Banks. Once paid, none of the Fees
shall be refundable under any circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of
Section 2.07, the Loans comprising each ABR Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of
365 or 366 days, as the case may be, when the Alternate Base
34
Rate is determined by reference to the Prime Rate and over a year of 360 days
at all other times) at a rate per annum equal to the Alternate Base Rate plus
the Applicable Percentage in effect from time to time.
(b) Subject to the provisions of Section 2.07, the Loans comprising
each Eurodollar Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum
equal to the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Percentage in effect from time to time.
(c) Interest on each Loan shall be payable on the Interest Payment
Dates applicable to such Loan except as otherwise provided in this Agreement.
The applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest
Period or day within an Interest Period, as the case may be, shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.07. Default Interest. If the Borrowers shall default in
the payment of the principal of or interest on any Loan or any other amount
becoming due hereunder, by acceleration or otherwise, or under any other Loan
Document, the Borrowers shall on demand from time to time pay interest, to
the extent permitted by law, on such defaulted amount to, but excluding, the
date of actual payment (after as well as before judgment) (a) in the case of
overdue principal, at the rate otherwise applicable to such Loan pursuant to
Section 2.06 plus 2.00% per annum and (b) in all other cases, at a rate per
annum (computed on the basis of the actual number of days elapsed over a year
of 365 or 366 days, as the case may be, when determined by reference to the
Prime Rate and over a year of 360 days at all other times) equal to the sum
of the Alternate Base Rate plus 2.00%.
SECTION 2.08. Alternate Rate of Interest. If, and on each occasion
that, on the day two Business Days prior to the commencement of any Interest
Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Loans
comprising such Borrowing are not generally available in the London interbank
market, or that the rates at which such dollar deposits are being offered
will not adequately and fairly reflect the cost to any Lender of making or
maintaining its Eurodollar Loan during such Interest Period, or that
reasonable means do not exist for ascertaining the Adjusted LIBO Rate, the
Administrative Agent shall, as soon as practicable thereafter, give written
or telecopy notice of such determination to the Borrowers and the Lenders.
In the event of any such determination, until the Administrative Agent shall
have advised the Borrowers and the Lenders that the circumstances giving rise
to such notice no longer exist, any request by the Borrowers for a Eurodollar
Borrowing pursuant to Section 2.03 shall be deemed to be a request for an ABR
Borrowing. Each determination by the Administrative Agent hereunder shall be
conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The
Note Repurchase Loan Commitments shall automatically terminate at 5:00 p.m.,
New York City time, on the Series A Notes Repurchase Date. The Revolving
Credit Commitments and the L/C Commitments shall automatically terminate on
the Maturity Date. Notwithstanding the foregoing, all the Commitments and
L/C Commitments shall automatically terminate at 5:00 p.m., New York City
time, on June 30, 1997, if the initial Credit Event shall not have occurred
by such time.
35
(b) Upon at least two Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Borrowers may at any time
after the Series A Notes Repurchase Date in whole permanently terminate, or
from time to time in part permanently reduce, the Revolving Credit
Commitments; provided, however, that (i) each partial reduction of the
Revolving Credit Commitments shall be in an integral multiple of $1,000,000
and in a minimum amount of $5,000,000 and (ii) the Total Revolving Credit
Commitment shall not be reduced to an amount that is less than the Aggregate
Credit Exposure at the time.
(c) Each reduction in the Revolving Credit Commitments or the Note
Repurchase Loan Commitments hereunder shall be made ratably among the Lenders
in accordance with their respective applicable Commitments. The Borrowers
shall pay to the Administrative Agent for the account of the Lenders, on the
date of each termination or reduction, the Commitment Fees on the amount of
the Commitments so terminated or reduced accrued to but excluding the date of
such termination or reduction.
(d) The Total Revolving Credit Commitment shall be automatically
reduced on the Series A Notes Repurchase Date by an amount equal to the Note
Repurchase Loan Amount; provided, however, that in the event the outstanding
Notes Repurchase Loans are repaid in full within 12 months after the Series A
Notes Repurchase Date from the net proceeds of the issuance of Permitted
Subordinated Indebtedness or equity capital of the Parent Borrower, then if
requested by the Parent Borrower in writing not less than 20 days prior to
such repayment, subject to the consent of each Lender affected thereby in
accordance with Section 9.08(b), the Total Revolving Credit Commitment shall
be increased by the amount that the Notes Repurchase Loans are so repaid. In
the event that no Note Repurchase Loans are made on the Series A Notes
Repurchase Date, the Note Repurchase Commitment shall automatically terminate
and the Total Revolving Credit Commitment shall not be reduced.
SECTION 2.10. Conversion and Continuation of Borrowings. The
applicable Borrower shall have the right at any time upon prior irrevocable
notice to the Administrative Agent (a) not later than 12:00 (noon), New York
City time, one Business Day prior to conversion, to convert any Eurodollar
Borrowing into an ABR Borrowing, (b) not later than 10:00 a.m., New York City
time, three Business Days prior to conversion or continuation, to convert any
ABR Borrowing into a Eurodollar Borrowing or to continue any Eurodollar
Borrowing as a Eurodollar Borrowing for an additional Interest Period, and
(c) not later than 10:00 a.m., New York City time, three Business Days prior
to conversion, to convert the Interest Period with respect to any Eurodollar
Borrowing to another permissible Interest Period, subject in each case to the
following:
(i) subject to Section 2.15, each conversion or continuation shall
be made pro rata among the Lenders in accordance with the respective
principal amounts of the Loans comprising the converted or continued
Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting Borrowing
shall satisfy the limitations specified in Sections 2.02(a) and 2.02(b)
regarding the principal amount and maximum number of Borrowings of the
relevant Type;
36
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new
Loan of such Lender resulting from such conversion and reducing the Loan
(or portion thereof) of such Lender being converted by an equivalent
principal amount; accrued interest on any Eurodollar Loan (or portion
thereof) being converted shall be paid by the Borrowers at the time of
conversion;
(iv) if any Eurodollar Borrowing is converted at a time other than
the end of the Interest Period applicable thereto, the Borrowers shall
pay, upon demand, any amounts due to the Lenders pursuant to Section 2.16;
(v) any portion of a Borrowing maturing or required to be repaid in
less than one month may not be converted into or continued as a
Eurodollar Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be converted
into or continued as a Eurodollar Borrowing by reason of the immediately
preceding clause shall be automatically converted at the end of the
Interest Period in effect for such Borrowing into an ABR Borrowing;
(vii) no Interest Period may be selected for any Eurodollar Note
Repurchase Borrowing that would end later than a repayment date occurring
on or after the first day of such Interest Period if, after giving effect
to such selection, the aggregate outstanding amount of (A) the Eurodollar
Note Repurchase Borrowings with Interest Periods ending on or prior to
such repayment date and (B) the ABR Note Repurchase Borrowings would not
be at least equal to the principal amount of Note Repurchase Borrowings
to be paid on such repayment date; and
(viii) upon notice to the Borrowers from the Administrative Agent
given at the request of the Required Lenders, after the occurrence and
during the continuance of a Default or Event of Default, no outstanding
Loan may be converted into, or continued as, a Eurodollar Loan.
Each notice pursuant to this Section 2.10 shall refer to this
Agreement and specify (i) the identity and amount of the Borrowing that the
applicable Borrower requests be converted or continued, (ii) whether such
Borrowing is to be converted to or continued as a Eurodollar Borrowing or an
ABR Borrowing, (iii) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day) and (iv) if such Borrowing is to
be converted to or continued as a Eurodollar Borrowing, the Interest Period
with respect thereto. If no Interest Period is specified in any such notice
with respect to any conversion to or continuation as a Eurodollar Borrowing,
the applicable Borrower shall be deemed to have selected an Interest Period
of one month's duration. The Administrative Agent shall advise the Lenders
of any notice given pursuant to this Section 2.10 and of each Lender's
portion of any converted or continued Borrowing. If the applicable Borrower
shall not have given notice in accordance with this Section 2.10 to continue
any Borrowing into a subsequent Interest Period (and shall not otherwise have
given notice in accordance with this Section 2.10 to convert such Borrowing),
such Borrowing shall, at the end of the Interest Period applicable thereto
(unless repaid pursuant to the terms hereof), automatically be continued into
a new Interest Period as an ABR Borrowing.
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SECTION 2.11. Prepayment. (a) The Borrowers shall have the right
at any time and from time to time to prepay any Borrowing, in whole or in
part, upon at least two Business Days' prior written or telecopy notice (or
telephone notice promptly confirmed by written or telecopy notice) to the
Administrative Agent before 11:00 a.m., New York City time; provided,
however, that each partial prepayment shall be in an amount that is an
integral multiple of $1,000,000 and not less than $5,000,000.
(b) Optional prepayments of Note Repurchase Loans shall be applied
as directed by the Parent Borrower against the remaining principal due in
respect of the Note Repurchase Loans.
(c) Each notice of prepayment shall specify the prepayment date and
the principal amount of each Borrowing (or portion thereof) to be prepaid,
shall be irrevocable and shall commit the Borrowers to prepay such Borrowing
by the amount stated therein on the date stated therein. All prepayments
under this Section 2.11 shall be subject to Section 2.16 but otherwise
without premium or penalty. All prepayments under this Section 2.11 shall be
accompanied by accrued interest on the principal amount being prepaid to the
date of payment.
SECTION 2.12. Repayment of Note Repurchase Borrowings. (a) The
Borrowers shall pay to the Administrative Agent, for the account of the
Lenders, on the dates set forth below or, if any such date is not a Business
Day, on the next preceding Business Day (each such date being a "Note
Repurchase Loan Repayment Date"), a principal amount of the Note Repurchase
Loans (such amount, as adjusted from time to time pursuant to this Section
2.12 and Sections 2.11 and 2.13, being called the "Note Repurchase Loan
Repayment Amount") equal to the percentage set forth below for
38
such date of the principal amount of the Note Repurchase Loans outstanding as
of the Series A Notes Repurchase Date, together in each case with accrued and
unpaid interest on the principal amount to be paid to but excluding the date
of such payment:
Date Amount
----------- ------
September 30, 1998 5%
December 31, 1998 5%
March 31, 1999 5%
June 30, 1999 5%
September 30, 1999 5%
December 31, 1999 5%
March 31, 2000 5%
June 30, 2000 5%
September 30, 2000 5%
December 31, 2000 5%
March 31, 2001 5%
June 30, 2001 5%
September 30, 2001 10%
December 31, 2001 10%
March 31, 2002 10%
Maturity Date 10%
(b) To the extent not previously paid, all Note Repurchase Loans
shall be due and payable on the Maturity Date.
(c) All repayments pursuant to this Section 2.12 shall be subject
to Section 2.16, but shall otherwise be without premium or penalty.
SECTION 2.13. Mandatory Prepayments and Commitment Reductions. (a)
Not later than the third Business Day following the completion of any Asset
Sale or any transaction described in Section 6.05(g), the Borrowers shall
apply 100% of the Net Cash Proceeds received with respect thereto to prepay
out-standing Note Repurchase Loans in accordance with Section 2.13(d);
provided, however, that no such prepayment shall be required until the
September 30 that is immediately after the completion of any such Asset Sale
if the applicable Net Cash Proceeds plus all other Net Cash Proceeds that
have yet to be applied in accordance with this Section 2.13(a) are less than
$5,000,000.
(b) No later than the earlier of (i) 120 days after the end of each
fiscal year of the Parent Borrower, commencing with the fiscal year ending on
September 30, 1998, and (ii) the date on which the financial statements with
respect to such period are delivered pursuant to Section 5.04(a), the Parent
Borrower shall prepay outstanding Note Repurchase Loans in accordance with
Sec-tion 2.13(d) in an aggregate principal
39
amount equal to 75% (or, if at such time the aggregate principal amount of
outstanding Note Repurchase Loans is less than $100,000,000, 50%) of Excess
Cash Flow for the fiscal year then ended.
(c) In the event that any Borrower or any Guarantor shall receive
Net Cash Proceeds from the issuance of Indebtedness for money borrowed of any
Borrower or any Subsidiary (other than Indebtedness for money borrowed
permitted pursuant to Section 6.01(i) or Section 6.01(n)), the Borrowers
shall, substantially simultaneously with (and in any event not later than the
third Business Day next following) the receipt of such Net Cash Proceeds,
apply an amount equal to 100% of such Net Cash Proceeds to prepay outstanding
Note Repurchase Loans in accordance with Section 2.13(d); provided, however,
that no such prepayment shall be required until the September 30 that is
immediately after such issuance if the applicable Net Cash Proceeds plus all
other Net Cash Proceeds that have yet to be applied in accordance with this
Section 2.13(c) are less than $5,000,000.
(d) Mandatory prepayments of outstanding Note Repurchase Loans
under this Agreement shall be applied pro rata against the remaining
scheduled installments of principal due in respect of the Note Repurchase
Loans under Sections 2.12(a).
(e) In the event that, upon the occurrence of any event described
in Section 2.13(a), no Note Repurchase Loans are outstanding (or the amount
required to be applied pursuant to such Section exceeds the aggregate
principal amount of outstanding Note Repurchase Loans), Revolving Credit
Commitments shall be reduced pro rata by the amount of the prepayment that
would have been required in respect of Note Repurchase Loans had there been
Note Repurchase Loans outstanding (after giving effect to any prepayment
thereof); provided, however, that no such reduction shall be required until
the September 30 that is immediately after such event if the applicable Net
Cash Proceeds plus all other Net Cash Proceeds that have yet to be applied in
accordance with this Section 2.13(e) are less than $5,000,000. The Borrowers
shall pay to the Administrative Agent for the account of the Revolving Credit
Lenders, on the date of each termination or reduction pursuant to this
Section 2.13(e), the Commitment Fees on the amount of the Revolving Credit
Commitments so terminated or reduced accrued to but excluding the date of
such termination or reduction.
(f) In the event of any termination of all the Revolving Credit
Commitments, the Borrowers shall repay or prepay all outstanding Revolving
Credit Borrowings on the date of such termination. In the event of any
partial reduction of the Revolving Credit Commitments, then (i) at or prior
to the effective date of such reduction, the Administrative Agent shall
notify the Borrowers and the Revolving Credit Lenders of the Aggregate Credit
Exposure after giving effect thereto and (ii) if the Aggregate Credit
Exposure would exceed the Total Revolving Credit Commitment after giving
effect to such reduction, then the Borrowers shall, on the date of such
reduction, repay or prepay Revolving Credit Borrowings in an amount
sufficient to eliminate such excess.
(g) If following any reduction of the Total Revolving Credit
Commitment pursuant to Section 2.13(e) and any payments required pursuant to
Section 2.13(f), the Total Revolving Credit Commitment is less than the L/C
Exposure, the Borrowers shall, on the date of such reduction, replace
out-standing Letters of Credit or deposit an amount in cash in a collateral
account established with the Collateral Agent in accordance with Section
2.22(j), in an amount equal to the amount that the L/C Exposure exceeds the
Total Revolving Credit Commitment upon such date of reduction.
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(h) Amounts to be applied pursuant to this Section 2.13 to the
pre-payment of Loans shall be applied, as applicable, first to reduce
outstanding ABR Loans. Any amounts remaining after each such application
shall, at the option of the Parent Borrower, be applied to prepay Eurodollar
Loans immediately and/or shall be deposited in the Prepayment Account (as
defined below). The Administrative Agent shall apply any cash deposited in
the Prepayment Account (i) allocable to Note Repurchase Loans to prepay
Eurodollar Note Repurchase Loans and (ii) allocable to Revolving Loans to
prepay Eurodollar Revolving Loans, in each case on the last day of their
respective Interest Periods (or, at the direction of the Parent Borrower, on
any earlier date) until all outstanding Note Repurchase Loans or Revolving
Loans, as the case may be, have been prepaid or until all the allocable cash
on deposit with respect to such Loans has been exhausted. For purposes of
this Agreement, the term "Prepayment Account" shall mean an account
established by the Parent Borrower with the Administrative Agent and over
which the Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal for application in accordance
with this paragraph (h). The Administrative Agent will, at the request of
the Parent Borrower, invest amounts on deposit in the Prepayment Account in
Permitted Investments that mature prior to the last day of the applicable
Interest Periods of the Eurodollar Note Repurchase Borrowings or Eurodollar
Revolving Borrowings to be prepaid, as the case may be; provided, however,
that (i) the Administrative Agent shall not be required to make any
investment that, in its sole judgment, would require or cause the
Administrative Agent to be in, or would result in any, violation of any law,
statute, rule or regulation and (ii) the Administrative Agent shall have no
obligation to invest amounts on deposit in the Prepayment Account if a
Default or Event of Default shall have occurred and be continuing. The
Parent Borrower shall indemnify the Administrative Agent for any losses
relating to the investments so that the amount available to prepay Eurodollar
Borrowings on the last day of the applicable Interest Period is not less than
the amount that would have been available had no investments been made
pursuant thereto. Any interest earned on such investments shall be deposited
in the Prepayment Account and reinvested and disbursed as specified above.
If the maturity of the Loans has been accelerated pursuant to Article VII,
the Administrative Agent may, in its sole discretion, apply all amounts on
deposit in the Prepayment Account to satisfy any of the Obligations. The
Parent Borrower hereby grants to the Administrative Agent, for its benefit
and the benefit of the Issuing Banks and the Lenders, a security interest in
the Prepayment Account to secure the Obligations.
SECTION 2.14. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision of this Agreement, if after the date of
this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof (whether or not
having the force of law) shall change the basis of taxation of payments to
any Lender or an Issuing Bank of the principal of or interest on any
Eurodollar Loan made by such Lender or any Fees or other amounts payable
hereunder (other than changes in respect of taxes imposed on the overall net
income of such Lender or Issuing Bank by the jurisdiction in which such
Lender or Issuing Bank has its principal office or by any political
subdivision or taxing authority therein), or shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of or credit extended by any Lender or
an Issuing Bank (except any such reserve requirement which is reflected in
the Adjusted LIBO Rate) or shall impose on such Lender or Issuing Bank or the
London interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or participation
therein, and the result of any of the foregoing shall be to increase the cost
to such Lender of making or maintaining any Eurodollar
41
Loan or increase the cost to any Lender or Issuing Bank of issuing or
maintaining any Letter of Credit or purchasing or maintaining a participation
therein or to reduce the amount of any sum received or receivable by such
Lender or Issuing Bank hereunder (whether of principal, interest or
otherwise) by an amount deemed by such Lender or Issuing Bank to be material,
then the Borrowers will pay to such Lender or Issuing Bank, as the case may
be, upon demand such additional amount or amounts as will compensate such
Lender or Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.
(b) If any Lender or an Issuing Bank shall have determined that the
adoption after the date hereof of any law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change after the date hereof in
any such law, rule, regulation, agreement or guideline (whether such law,
rule, regulation, agreement or guideline has been adopted) or in the
interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof, or compliance by
any Lender (or any lending office of such Lender) or an Issuing Bank or any
Lender's or Issuing Bank's holding company with any request or directive
regarding capital adequacy (whether or not having the force of law) of any
Governmental Authority has or would have the effect of reducing the rate of
return on such Lender's or Issuing Bank's capital or on the capital of such
Lender's or Issuing Bank's holding company, if any, as a consequence of this
Agreement or the Loans made or participations in Letters of Credit purchased
by such Lender pursuant hereto or the Letters of Credit issued by such
Issuing Bank pursuant hereto to a level below that which such Lender or
Issuing Bank or such Lender's or Issuing Bank's holding company could have
achieved but for such applicability, adoption, change or compliance (taking
into consideration such Lender's or Issuing Bank's policies and the policies
of such Lender's or Issuing Bank's holding company with respect to capital
adequacy) by an amount deemed by such Lender or Issuing Bank to be material,
then from time to time the Borrowers shall pay to such Lender or Issuing
Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or Issuing Bank or such Lender's or Issuing Bank's
holding company for any such reduction suffered.
(c) A certificate of a Lender or Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or an Issuing Bank or
its holding company, as applicable, as specified in paragraph (a) or (b)
above shall be delivered to the Borrowers and shall be conclusive absent
manifest error. Such certificate (i) shall set forth in reasonable detail the
conditions giving rise to a circumstance or situation under Section 2.14(a)
or (b), and (ii) shall set forth the calculations of the amounts to be paid
by the applicable Borrower (which calculations shall be made in the same
manner as for similar outstanding loans made by such Lender of a similar type
and amount as Loans by such Lender under this Agreement to persons of
creditworthiness similar to that of the Parent Borrower), and, if made in
accordance with this sentence, shall be conclusive absent manifest error.
The Borrowers shall pay such Lender or Issuing Bank the amount shown as due
on any such certificate delivered by it within 10 days after its receipt of
the same.
(d) Failure or delay on the part of any Lender or any Issuing Bank
to demand compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital shall not constitute
a waiver of such Lender's or Issuing Bank's right to demand such
compensation. The protection of this Section shall be available to each
Lender and Issuing Bank regardless of any possible contention of the
invalidity or inapplicability of the law, rule, regulation, agreement,
guideline or other change or condition that shall have occurred or been
imposed.
42
SECTION 2.15. Change in Legality. (a) Notwithstanding any other
provision of this Agreement, if, after the date hereof, any change in any law
or regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it
unlawful for any Lender to make or maintain any Eurodollar Loan or to give
effect to its obligations as contemplated hereby with respect to any
Eurodollar Loan, then, by written notice to the Borrowers and to the
Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by such Lender
hereunder (or be continued for additional Interest Periods and ABR Loans
will not thereafter (for such duration) be converted into Eurodollar
Loans), where-upon any request for a Eurodollar Borrowing (or to convert
an ABR Borrowing to a Eurodollar Borrowing or to continue a Eurodollar
Borrowing for an additional Interest Period) shall, as to such Lender
only, be deemed a request for an ABR Loan (or a request to continue an
ABR Loan as such for an additional Interest Period or to convert a
Eurodollar Loan into an ABR Loan, as the case may be), unless such
declaration shall be subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar Loans
made by it be converted to ABR Loans, in which event all such Eurodollar
Loans shall be automatically converted to ABR Loans as of the effective
date of such notice as provided in paragraph (b) below.
If any Lender shall exercise its rights under (i) or (ii) above, all payments
and prepayments of principal that would otherwise have been applied to repay
the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay
the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.15, a notice to the Borrowers by
any Lender shall be effective as to each Eurodollar Loan made by such Lender,
if lawful, on the last day of the Interest Period currently applicable to
such Eurodollar Loan; in all other cases such notice shall be effective on
the date of receipt by the Borrowers.
SECTION 2.16. Indemnity. The Borrowers, jointly and severally,
shall indemnify each Lender against any loss (but excluding lost profits) or
expense that such Lender may sustain or incur as a consequence of (a) any
event, other than a default by such Lender in the performance of its
obligations hereunder, which results in (i) such Lender receiving or being
deemed to receive any amount on account of the principal of any Eurodollar
Loan prior to the end of the Interest Period in effect therefor, (ii) the
conversion of any Eurodollar Loan to an ABR Loan, or the conversion of the
Interest Period with respect to any Eurodollar Loan, in each case other than
on the last day of the Interest Period in effect therefor, or (iii) any
Eurodollar Loan to be made by such Lender (including any Eurodollar Loan to
be made pursuant to a conversion or continuation under Section 2.10) not
being made after notice of such Loan shall have been given by the Borrowers
hereunder (any of the events referred to in this clause (a) being called a
"Breakage Event") or (b) any default in the making of any payment or
prepayment required to be made hereunder. In the case of any Breakage Event,
such loss shall include an amount equal to the excess, as reasonably
determined by such Lender, of (i) its cost of obtaining funds for the
Eurodollar Loan that is the subject of such Breakage Event for
43
the period from the date of such Breakage Event to the last day of the
Interest Period in effect (or that would have been in effect) for such Loan
over (ii) the amount of interest likely to be realized by such Lender in
redeploying the funds released or not utilized by reason of such Breakage
Event for such period. A certificate of any Lender setting forth any amount
or amounts which such Lender is entitled to receive pursuant to this Section
2.16 shall be delivered to the Borrowers and shall be conclusive absent
manifest error.
SECTION 2.17. Pro Rata Treatment. Except as required under Section
2.15, each Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Loans, each payment of the
Commitment Fees, each reduction of the Revolving Credit Commitments or the
Note Repurchase Loan Commitments and each conversion of any Borrowing to or
continuation of any Borrowing as a Borrowing of any Type shall be allocated
pro rata among the Lenders in accordance with their respective applicable
Commitments (or, if such applicable Commitments shall have expired or been
terminated, in accordance with the respective principal amounts of their
outstanding Loans). Each Lender agrees that in computing such Lender's
portion of any Borrowing to be made hereunder, the Administrative Agent may,
in its discretion, round each Lender's percentage of such Borrowing to the
next higher or lower whole dollar amount.
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, setoff or
counterclaim against the Borrowers or any other Loan Party, or pursuant to a
secured claim under Section 506 of Title 11 of the United States Code or
other security or interest arising from, or in lieu of, such secured claim,
received by such Lender under any applicable bankruptcy, insolvency or other
similar law or otherwise, or by any other means, obtain payment (voluntary or
involuntary) in respect of any Loan or Loans or L/C Disbursement as a result
of which the unpaid principal portion of its Revolving Loans and Note
Repurchase Loans and participations in L/C Disbursements shall be
proportionately less than the unpaid principal portion of the Revolving Loans
and Note Repurchase Loans and participations in L/C Disbursements of any
other Lender, it shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, a participation in the Revolving Loans and Note
Repurchase Loans and L/C Exposure, as the case may be, of such other Lender,
so that the aggregate unpaid principal amount of the Revolving Loans and Note
Repurchase Loans and L/C Exposure and participations in Revolving Loans and
Note Repurchase Loans and L/C Exposure held by each Lender shall be in the
same proportion to the aggregate unpaid principal amount of all Revolving
Loans and Note Repurchase Loans and L/C Exposure then outstanding as the
principal amount of its Revolving Loans and Note Repurchase Loans and L/C
Exposure prior to such exercise of banker's lien, setoff or counterclaim or
other event was to the principal amount of all Revolving Loans and Note
Repurchase Loans and L/C Exposure outstanding prior to such exercise of
banker's lien, setoff or counterclaim or other event; provided, however, that
if any such purchase or purchases or adjustments shall be made pursuant to
this Section 2.18 and the payment giving rise thereto shall thereafter be
recovered, such purchase or purchases or adjustments shall be rescinded to
the extent of such recovery and the purchase price or prices or adjustment
restored without interest. The Borrowers expressly consent to the foregoing
arrangements and agree that any Lender holding a participation in a Revolving
Loan and Note Repurchase Loan or L/C Disbursement deemed to have been so
purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrowers to
such Lender by reason thereof as fully as if such Lender had made a Loan
directly to the Borrowers in the amount of such participation.
44
SECTION 2.19. Payments. (a) The Borrowers shall make each payment
(including principal of or interest on any Borrowing or any L/C Disbursement
or any Fees or other amounts) hereunder and under any other Loan Document not
later than 12:00 (noon), New York City time, on the date when due in
immediately available dollars, without setoff, defense or counterclaim. Each
such payment (other than Issuing Bank Fees, which shall be paid directly to
the respective Issuing Banks, and other than payments pursuant to Sections
2.14, 2.16, 2.20 and 9.05, which shall be made to the persons entitled
thereto) shall be made to the Administrative Agent at its offices at One
Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation
of interest or Fees, if applicable.
SECTION 2.20. Taxes. (a) Any and all payments by or on behalf of
the Borrowers or any Loan Party hereunder and under any other Loan Document
shall be made, in accordance with Section 2.19, free and clear of and without
deduction for any and all current or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding (i) income taxes imposed on the net income of the
Administrative Agent, any Lender or either Issuing Bank (or any permitted
assignee thereof, (any such entity a "Transferee")) and (ii) franchise taxes
imposed on the net income of the Administrative Agent, any Lender or an
Issuing Bank (or Transferee), in each case by the jurisdiction under the laws
of which the Administrative Agent, such Lender or an Issuing Bank (or
Transferee) is organized or any political sub-division thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities, collectively or individually, being called "Taxes"). If the
Borrowers or any Loan Party shall be required to deduct any Taxes from or in
respect of any sum payable hereunder or under any other Loan Document to the
Administrative Agent, any Lender or an Issuing Bank (or any Transferee), (i)
the sum payable shall be increased by the amount (an "additional amount")
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.20) the
Administrative Agent, such Lender or an Issuing Bank (or Transferee), as the
case may be, shall receive an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrowers or such Loan Party shall
make such deductions and (iii) the Borrowers or such Loan Party shall pay the
full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
(b) In addition, the Borrowers agree to pay to the relevant
Governmental Authority in accordance with applicable law any current or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder or under
any other Loan Document or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any other Loan Document
("Other Taxes").
(c) The Borrowers shall indemnify the Administrative Agent, each
Lender and each Issuing Bank (or Transferee) for the full amount of Taxes and
Other Taxes paid by the Administrative Agent, such Lender or such Issuing
Bank (or Transferee), as the case may be, and any liability (including
penalties, interest and expenses (including reasonable attorney's fees and
expenses)) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally
45
asserted by the relevant Governmental Authority. A certificate as to the
amount of such payment or liability prepared by the Administrative Agent, a
Lender or an Issuing Bank (or Transferee), or the Administrative Agent on its
behalf and accompanied by a copy of any relevant notices received from a
Governmental Authority and any return or form prepared or filed by the
Administrative Agent, a Lender or an Issuing Bank (or Transferee) in
connection with such payment or liability, absent manifest error, shall be
conclusive for all purposes. Such indemnification shall be made within 30
days after the date the Administrative Agent, any Lender or any Issuing Bank
(or Transferee), as the case may be, makes written demand therefor.
(d) As soon as practicable after the date of any payment of Taxes
or Other Taxes by the Borrowers or any other Loan Party to the relevant
Governmental Authority, the Borrowers or such other Loan Party will deliver
to the Administrative Agent, at its address referred to in Section 9.01, the
original or a certified copy of a receipt issued by such Governmental
Authority evidencing payment thereof.
(e) Each Lender (or Transferee) that is organized under the laws of
a jurisdiction other than the United States, any State thereof or the
District of Columbia (a "Non-U.S. Lender") shall deliver to the Parent
Borrower and the Administrative Agent two copies of either United States
Internal Revenue Service Form 1001 or Form 4224, or, in the case of a
Non-U.S. Lender claiming exemption from U.S. Federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of "portfolio
interest", a Form W-8, or any subsequent versions thereof or successors
thereto (and, if such Non-U.S. Lender delivers a Form W-8, a certificate
representing that such Non-U.S. Lender is not a bank for purposes of Section
881(c) of the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrowers and is not a controlled
foreign corporation related to the Borrowers (within the meaning of Section
864(d)(4) of the Code)), properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or reduced rate of, U.S.
Federal withholding tax on payments by the Borrowers under this Agreement and
the other Loan Documents. Such forms shall be delivered by each Non-U.S.
Lender on or before the date it becomes a party to this Agreement and on or
before the date, if any, such Non-U.S. Lender changes its applicable lending
office by designating a different lending office (a "New Lending Office").
In addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Notwithstanding any other provision of this Section 2.20(e), a
Non-U.S. Lender shall not be required to deliver any form pursuant to this
Section 2.20(e) that such Non-U.S. Lender is not legally able to deliver.
(f) The Borrowers shall not be required to indemnify any Non-U.S.
Lender or to pay any additional amounts to any Non-U.S. Lender, in respect of
United States Federal withholding tax pursuant to paragraph (a) or (c) above
to the extent that (i) the obligation to withhold amounts with respect to
United States Federal withholding tax existed on the date such Non-U.S.
Lender became a party to this Agreement or, with respect to payments to a New
Lending Office, the date such Non-U.S. Lender designated such New Lending
Office with respect to a Loan or a Letter of Credit; provided, however, that
this paragraph (f) shall not apply (x) to any Transferee or New Lending
Office that becomes a Transferee or New Lending Office as a result of an
assignment, transfer or designation made at the request of the Borrowers and
(y) to the extent the indemnity payment or additional amounts any Transferee,
or any Lender (or Transferee), acting through a New Lending Office, would be
entitled to receive (without regard to this paragraph (f)) do not exceed the
indemnity
46
payment or additional amounts that the person making the assignment, or
transfer to such Transferee, or Lender (or Transferee) making the designation
of such New Lending Office, would have been entitled to receive in the
absence of such assignment, transfer or designation or (ii) the obligation to
pay such additional amounts would not have arisen but for a failure by such
Non-U.S. Lender to comply with the provisions of paragraph (e) above.
(g) Nothing contained in this Section 2.20 shall require any Lender
or Issuing Bank (or any Transferee) or the Administrative Agent to make
available any of its tax returns (or any other information that it deems to
be confidential or proprietary).
SECTION 2.21. Assignment of Commitments Under Certain
Circumstances; Duty to Mitigate. (a) If (i) any Lender delivers a
certificate requesting compensation pursuant to Section 2.14, (ii) any Lender
delivers a notice described in Section 2.15 or (iii) the Borrowers are
required to pay any additional amount to any Lender or any Governmental
Authority on account of any Lender pursuant to Section 2.20, the Borrowers
may, at their sole expense and effort (including with respect to the
processing and recordation fee referred to in Section 9.04(b)), upon notice
to such Lender and the Administrative Agent, require such Lender or Issuing
Bank to transfer and assign, without recourse (in accordance with and subject
to the restrictions contained in Section 9.04), all of its interests, rights
and obligations under this Agreement to an assignee that shall assume such
assigned obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (x) such assignment shall not
conflict with any law, rule or regulation or order of any court or other
Governmental Authority having jurisdiction, (y) the Borrowers shall have
received the prior written consent of the Administrative Agent (and, if a
Revolving Credit Commitment is being assigned, of each Issuing Bank), which
consent shall not unreasonably be withheld, and (z) the Borrowers or such
assignee shall have paid to the affected Lender in immediately available
funds an amount equal to the sum of the principal of and interest accrued to
the date of such payment on the outstanding Loans or L/C Disbursements of
such Lender, respectively, plus all Fees and other amounts accrued for the
account of such Lender hereunder (including any amounts under Section 2.14
and Section 2.16); provided further that, if prior to any such transfer and
assignment the circum-stances or event that resulted in such Lender's claim
for compensation under Section 2.14 or notice under Section 2.15 or the
amounts paid pursuant to Section 2.20, as the case may be, cease to cause
such Lender to suffer increased costs or reductions in amounts received or
receivable or reduction in return on capital, or cease to have the
consequences specified in Section 2.15, or cease to result in amounts being
payable under Section 2.20, as the case may be (including as a result of any
action taken by such Lender pursuant to paragraph (b) below), or if such
Lender shall waive its right to claim further compensation under Section 2.14
in respect of such circumstances or event or shall withdraw its notice under
Section 2.15 or shall waive its right to further payments under Section 2.20
in respect of such circumstances or event, as the case may be, then such
Lender shall not thereafter be required to make any such transfer and
assignment hereunder.
(b) If (i) any Lender shall request compensation under Section
2.14, (ii) any Lender delivers a notice described in Section 2.15 or (iii)
the Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority on account of any Lender, pursuant to Section 2.20,
then such Lender shall use reasonable efforts (which shall not require such
Lender to incur an unreimbursed loss or unreimbursed cost or expense or
otherwise take any action inconsistent with its internal policies or legal or
regulatory restrictions or suffer any disadvantage or burden deemed by it to
be significant) (x) to file any certificate or document (including any
document
47
contesting the imposition of any such amount or requesting a refund of such
amount by any relevant Governmental Authority) reasonably requested in
writing by the Borrowers or (y) to assign its rights and delegate and
transfer its obligations hereunder to another of its offices, branches or
affiliates, if such filing or assignment would reduce its claims for
compensation under Section 2.14 or enable it to withdraw its notice pursuant
to Section 2.15 or would reduce amounts payable pursuant to Section 2.20, as
the case may be, in the future. The Borrowers hereby agree to pay all
reasonable costs and expenses incurred by any Lender in connection with any
such filing or assignment, delegation and transfer. Any Lender receiving any
refund or rebate of any amounts paid by a Borrower pursuant to Section 2.20
shall promptly pay the same to the applicable Borrower.
SECTION 2.22. Letters of Credit. (a) General. Any Borrower may
request the issuance by either Issuing Bank of a Letter of Credit for such
Borrower's own account, in a form reasonably acceptable to the Administrative
Agent and such Issuing Bank, at any time and from time to time while the
Revolving Credit Commitments remain in effect. This Section shall not be
construed to impose an obligation upon either Issuing Bank to issue any
Letter of Credit that is inconsistent with the terms and conditions of this
Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of Credit (or to
amend, renew or extend an existing Letter of Credit), any Borrower or any
Guarantor shall hand deliver or telecopy to an Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, the date of issuance, amendment, renewal or extension,
the date on which such Letter of Credit is to expire (which shall comply with
paragraph (c) below), the face amount of such Letter of Credit, the name and
address of the beneficiary thereof and such other information as shall be
necessary to prepare such Letter of Credit. Following receipt of such notice
and prior to the issuance of the requested Letter of Credit or the applicable
amendment, renewal or extension, the Administrative Agent shall notify the
Borrowers and the applicable Issuing Bank of the amount of the Aggregate
Credit Exposure after giving effect to (i) the issuance, amendment, renewal
or extension of such Letter of Credit, (ii) the issuance or expiration of
each other Letter of Credit that is to be issued or will expire on or prior
to the requested date of issuance of such Letter of Credit and (iii) the
borrowing or repayment of any Revolving Loans that (based upon notices
delivered to the Administrative Agent by the Borrowers) are to be borrowed or
repaid on or prior to the requested date of issuance of such Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended
only if, and upon issuance, amendment, renewal or extension of each Letter of
Credit the Borrowers shall be deemed to represent and warrant that, after
giving effect to such issuance, amendment, renewal or extension (A) the L/C
Exposure shall not exceed $50,000,000 and (B) the Aggregate Credit Exposure
shall not exceed the Total Revolving Credit Commitment.
(c) Expiration Date. Each Letter of Credit shall expire at the
close of business on the earlier of (i) the date one year after the date of
the issuance of such Letter of Credit and (ii) the date that is five Business
Days prior to the Maturity Date, unless such Letter of Credit expires by its
terms on an earlier date.
(d) Participations. By the issuance of a Letter of Credit and
without any further action on the part of the applicable Issuing Bank or the
Revolving Credit Lenders, the Issuing Bank in respect of such Letter of
Credit hereby grants to each Revolving Credit Lender, and each such
48
Lender hereby acquires from such Issuing Bank, a participation in such Letter
of Credit equal to such Lender's Pro Rata Percentage of the aggregate amount
available to be drawn under such Letter of Credit, effective upon the
issuance of such Letter of Credit. In consideration and in furtherance of
the foregoing, each Revolving Credit Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
such Issuing Bank, such Lender's Pro Rata Percentage of each L/C Disbursement
made by such Issuing Bank and not reimbursed by the Borrowers (or, if
applicable, another party pursuant to its obligations under any other Loan
Document) forthwith on the date due as provided in Section 2.02(f). Each
Revolving Credit Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a
Default or an Event of Default, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If an Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, the Borrowers shall pay to the
Administrative Agent an amount equal to such L/C Disbursement not later than
2:00 p.m. on the day the Borrowers shall have received notice from such
Issuing Bank that payment of such draft will be made, or, if the Borrowers
shall have received such notice later than 10:00 a.m., New York City time, on
any Business Day, not later than 10:00 a.m., New York City time, on the
immediately following Business Day.
(f) Obligations Absolute. The Borrowers' obligations to reimburse
L/C Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit
or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or any Loan Document;
(iii) the existence of any claim, setoff, defense or other right
that the Borrowers, any other party guaranteeing, or otherwise obligated
with, the Borrowers, any Subsidiary or other Affiliate thereof or any
other person may at any time have against the beneficiary under any
Letter of Credit, either Issuing Bank, the Administrative Agent or any
Lender or any other person, whether in connection with this Agreement,
any other Loan Document or any other related or unrelated agreement or
transaction;
(iv) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;
(v) payment by an Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of either
Issuing Bank, the Lenders, the Administrative Agent or any other person
or any other event or circumstance
49
whatsoever, whether or not similar to any of the foregoing, that might,
but for the provisions of this Section, constitute a legal or equitable
discharge of the Borrowers' obligations hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrowers hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or willful misconduct of either Issuing Bank. However, the
foregoing shall not be construed to excuse an Issuing Bank from liability to
the Borrowers to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrowers to the extent permitted by applicable law) suffered by the
Borrowers that are caused by such Issuing Bank's gross negligence or willful
misconduct in determining whether drafts and other documents presented under
a Letter of Credit comply with the terms thereof; it is understood that an
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit (i) an Issuing Bank's exclusive reliance on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals
the amount of such draft and whether or not any document presented pursuant
to such Letter of Credit proves to be insufficient in any respect, if such
document on its face appears to be in order, and whether or not any other
statement or any other document presented pursuant to such Letter of Credit
proves to be forged or invalid or any statement therein proves to be
inaccurate or untrue in any respect whatsoever and (ii) any noncompliance in
any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute
willful misconduct or gross negligence of such Issuing Bank.
(g) Disbursement Procedures. An Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent
a demand for payment under a Letter of Credit. Such Issuing Bank shall as
promptly as possible give telephonic notification, confirmed by telecopy, to
the Administrative Agent and the Borrowers of such demand for payment and
whether such Issuing Bank has made or will make an L/C Disbursement
thereunder (it being understood that such notice shall not be required if
prior to any L/C Disbursement the Borrowers have made available to the
applicable Issuing Bank funds sufficient to reimburse such Issuing Bank for
such L/C Disbursement), provided that any failure to give or delay in giving
such notice shall not relieve the Borrowers of their obligation to reimburse
such Issuing Bank and the Revolving Credit Lenders with respect to any such
L/C Disbursement. The Administrative Agent shall promptly give each
Revolving Credit Lender notice thereof.
(h) Interim Interest. If on any date an Issuing Bank shall make
any L/C Disbursement in respect of a Letter of Credit, then, unless the
Borrowers shall reimburse such L/C Disbursement in full on such date, the
unpaid amount thereof shall bear interest for the account of such Issuing
Bank, for each day from and including the date of such L/C Disbursement, to
but excluding the earlier of the date of payment by the Borrowers or the date
on which interest shall commence to accrue thereon as provided in Section
2.02(f), at the rate per annum that would apply to such amount if such amount
were an ABR Loan.
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(i) Resignation or Removal of an Issuing Bank. An Issuing Bank may
resign at any time by giving 180 days' prior written notice to the
Administrative Agent, the Lenders and the Borrowers, and may be removed at
any time by the Borrowers by notice to such Issuing Bank, the Administrative
Agent and the Lenders. Subject to the last sentence of this paragraph (i),
upon the acceptance of any appointment as an Issuing Bank hereunder by a
Lender that shall agree to serve as a successor Issuing Bank, such successor
shall succeed to and become vested with all the interests, rights and
obligations of the retiring Issuing Bank and the retiring Issuing Bank shall
be discharged from its obligations to issue additional Letters of Credit
hereunder. At the time such removal or resignation shall become effective,
the Borrowers shall pay all accrued and unpaid fees due to the retiring
Issuing Bank pursuant to Section 2.05(c)(ii). The acceptance of any
appointment as an Issuing Bank here-under by a successor Lender shall be
subject to approval, unless an Event of Default has occurred and is
continuing, by the Parent Borrower (which approval shall not be unreasonably
withheld) and shall be evidenced by an agreement entered into by such
successor, in a form satisfactory to the Borrowers and the Administrative
Agent, and, from and after the effective date of such agreement, (i) such
successor Lender shall have all the rights and obligations of the previous
Issuing Bank under this Agreement and the other Loan Documents and (ii)
references herein and in the other Loan Documents to the term "Issuing Bank"
shall be deemed to include such successor or any previous Issuing Bank, or to
such successor and all previous Issuing Banks, as the context shall require.
After the resignation or removal of an Issuing Bank hereunder, the retiring
Issuing Bank shall remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Bank under this Agreement and the other
Loan Documents with respect to Letters of Credit issued by it prior to such
resignation or removal, but shall not be required to issue additional Letters
of Credit.
(j) Cash Collateralization. If (i) any Event of Default shall
occur and be continuing or (ii) the Total Revolving Credit Commitment is less
than the L/C Exposure, the Borrowers shall, on the Business Day they receive
notice from the Administrative Agent or the Required Lenders thereof and of
the amount to be deposited, deposit in an account with the Collateral Agent,
for the benefit of the Revolving Credit Lenders, an amount in cash equal to
the L/C Exposure as of such date. Such deposit shall be held by the
Collateral Agent as collateral for the payment and performance of the
Obligations. The Collateral Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than
any interest earned on the investment of such deposits in Permitted
Investments, which investments shall be made by the Collateral Agent and
selected in its sole discretion, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall (i) automatically be applied by the
Administrative Agent to reimburse the Issuing Banks for L/C Disbursements for
which they have not been reimbursed, (ii) be held for the satisfaction of the
reimbursement obligations of the Borrowers for the L/C Exposure at such time
and (iii) if the maturity of the Loans has been accelerated (but, if there
are Note Repurchase Loans outstanding, subject to the consent of Revolving
Credit Lenders holding participations in outstanding Letters of Credit
representing greater than 50% of the aggregate undrawn amount of all
outstanding Letters of Credit), be applied to satisfy the Obligations. If the
Borrowers are required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent
not applied as aforesaid) shall be returned to the Borrowers within three
Business Days after all Events of Default have been cured or waived. If the
Borrowers are required to provide an amount of cash collateral hereunder
pursuant to Section 2.13(g), such amount shall be returned to the Borrowers
from time to time to the extent that the amount of such cash collateral held
by the Collateral Agent exceeds the excess, if any,
51
of the aggregate L/C Exposure over the Total Revolving Credit Commitment;
provided, that such return shall not be required at any time that an Event of
Default has occurred and is continuing.
SECTION 2.23. Additional Borrowers. The parties hereto agree that
wholly owned Domestic Subsidiaries that are not Borrowers as of the Closing
Date may enter into and become a party to this Agreement by executing a New
Borrower Agreement. Upon execution and delivery after the date hereof by the
Administrative Agent, the Collateral Agent and such a wholly owned Subsidiary
of a New Borrower Agreement, such Subsidiary shall become a Borrower
hereunder with the same force and effect as if originally named as a Borrower
herein. The Parent Borrower may terminate any Subsidiary Borrower's
interests, rights and obligations under this Agreement by executing and
delivering to the Administrative Agent a Subsidiary Borrower Termination with
respect to such Subsidiary, whereupon such Subsidiary shall cease to be a
Subsidiary Borrower and a party to this Agreement. Notwithstanding the
preceding sentence, no Subsidiary Borrower Termination will become effective
as to any Subsidiary Borrower at a time when any principal of or interest on
any Revolving Loan to such Subsidiary Borrower shall be outstanding
hereunder, provided that such Subsidiary Borrower Termination shall be
effective to terminate such Subsidiary Borrower's right to make further
Borrowings under this Agreement unless and until such Subsidiary executes
subsequent to such termination a New Borrower Agreement. The execution and
delivery of a New Borrower Agreement or a Subsidiary Borrower Termination
shall not require the consent of any other Borrower hereunder. The rights
and obligations of each Borrower hereunder shall remain in full force and
effect notwithstanding the addition of any new Borrower or termination of any
Borrower as a party to this Agreement.
ARTICLE III
Representations and Warranties
Each of the Borrowers represents and warrants to the Administrative
Agent, the Syndication Agent, the Collateral Agent, the Issuing Banks and
each of the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrowers, the
Subsidiaries and CBHS (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority to own its property and assets and to carry on
its business as now conducted and as proposed to be conducted, including
after giving effect to the Transaction Documents, (c) is qualified to do
business in, and is in good standing in, every jurisdiction where such
qualification is required, except where the failure so to qualify could not
reasonably be expected to result in a Material Adverse Effect, and (d) has
the organizational power and authority to execute, deliver and perform its
obligations under each of the Loan Documents and Transaction Documents and
each other agreement or instrument contemplated hereby to which it is or will
be a party and, in the case of the Borrowers, to borrow hereunder.
SECTION 3.02. Authorization. The execution, delivery and
performance by each Loan Party and CBHS of each of the Loan Documents and
Transaction Documents to which it is a party, the borrowings hereunder and
the Transactions (a) have been duly authorized by all requisite
organizational and, if required, stockholder action and (b) will not (i)
violate (A) in any material respect any provision of law, statute, rule or
regulation (including any Health Care Law), or any
52
provision of the certificate or articles of incorporation or other
constitutive documents or by-laws of the Borrowers or any Subsidiary, (B) any
order of any Governmental Authority or (C) any provision of any indenture,
agreement or other instrument to which the Borrowers or any Subsidiary is a
party or by which any of them or any of their property is or may be bound,
(ii) be in conflict with, result in a breach of or constitute (alone or with
notice or lapse of time or both) a default under, or give rise to any right
to accelerate or to require the prepayment, repurchase or redemption of any
obligation under any such indenture, agreement or other instrument, other
than (x) the Series A Notes Indenture (but only with respect to the
requirement to make an offer to repurchase the Series A Notes as a result of
the Transactions) and (y) the Charter IRBs being paid or defeased in
connection with the Transactions, or (iii) result in the creation or
imposition of any Lien upon or with respect to any property or assets now
owned or hereafter acquired by the Borrowers or any Subsidiary (other than
any Lien created hereunder or under the Security Documents).
SECTION 3.03. Enforceability. This Agreement has been duly
executed and delivered by the Borrowers and constitutes, and each other Loan
Document when executed and delivered by each Loan Party thereto will
constitute, a legal, valid and binding obligation of such Loan Party
enforceable against such Loan Party in accordance with its terms.
SECTION 3.04. Governmental Approvals. No action, consent or
approval of, registration or filing with or any other action by any
Governmental Authority is or will be required in connection with the
Transactions, except for (a) the filing of Uniform Commercial Code financing
statements and filings with the United States Patent and Trademark Office and
the United States Copyright Office, (b) such as have been made or obtained
and are in full force and effect and (c) such other filings as are set forth
on Schedule 3.04 that the Borrowers reasonably expect to be made within six
months following the Closing Date.
SECTION 3.05. Financial Statements. (a) The Parent Borrower has
heretofore furnished to the Lenders its consolidated balance sheets and
statements of operations and cash flows and changes in stockholders' equity
(i) as of and for the fiscal year ended September 30, 1996, audited by and
accompanied by the opinion of Xxxxxx Xxxxxxxx LLP, independent public
accountants, and (ii) except for a statement of changes in stockholders'
equity, as of and for the fiscal quarter and the portion of the fiscal year
ended March 31, 1997, certified by its chief financial officer. Such
financial state-ments present fairly in all material respects the financial
condition and results of operations and cash flows of the Parent Borrower and
its consolidated Subsidiaries as of such dates and for such periods. Such
balance sheets and the notes thereto disclose all material liabilities,
direct or contingent, of the Parent Borrower and its consolidated
Subsidiaries as of the dates thereof. Such financial statements were
prepared in accordance with GAAP applied on a consistent basis, except that
the financial statements described in clause (ii) are condensed and comply as
to form and presentation with the requirements of Form 10-Q of the forms
promulgated under the Securities Exchange Act of 1934.
(b) The Parent Borrower has heretofore delivered to the Lenders its
unaudited pro forma consolidated balance sheet as of March 31, 1997, prepared
giving effect to the Transactions as if they had occurred on such date. Such
pro forma balance sheet has been prepared in good faith by the Parent
Borrower, based on the assumptions used to prepare the pro forma financial
information contained in the Confidential Information Memorandum (which
assumptions are believed by the Parent Borrower on the date hereof and on the
Closing Date to be reasonable), is based on the best information available to
the Parent Borrower as of the date of delivery thereof, accurately reflects
in
53
all material respects all adjustments required on a pro forma basis to be
made to give effect to the Transactions and presents fairly in all material
respects on a pro forma basis the estimated consolidated financial position
of the Parent Borrower and its consolidated Subsidiaries as of March 31,
1997, assuming that the Transactions had actually occurred at March 31, 1997.
SECTION 3.06. No Material Adverse Change. Except for the
Transaction Documents and the effect of the Transactions, there has been no
material adverse change in the business, assets, operations, prospects,
condition, financial or otherwise, or material agreements of (a) the Parent
Borrower and the Subsidiaries, taken as a whole, since September 30, 1996,
and (b) CBHS and its subsidiaries, taken as a whole, since March 31, 1997.
SECTION 3.07. Title to Properties; Possession Under Leases. (a)
Each of the Borrowers and the Subsidiaries has good and marketable title to,
or valid leasehold interests in, all its material properties and assets,
except for minor defects in title that do not interfere with its ability to
conduct its business as currently conducted or to utilize such properties and
assets for their intended purposes. All such material properties and assets
are free and clear of Liens, other than Liens expressly permitted by Section
6.02.
(b) Each of the Borrowers and the Subsidiaries has complied with
all material obligations under all leases to which it is a party and that are
material to the Borrowers and the Subsidiaries taken as a whole and all such
leases are in full force and effect. Each of the Borrowers and the
Subsidiaries enjoys peaceful and undisturbed possession under all such
material leases in which a Borrower or a Subsidiary is a lessee.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the
Closing Date a list of all Subsidiaries and the percentage ownership
interest, direct or indirect, of the Parent Borrower therein. The shares of
capital stock or other ownership interests so indicated on Schedule 3.08 are
fully paid and non-assessable and are owned by the Parent Borrower, directly
or indirectly, free and clear of all Liens, except Liens under the Loan
Documents.
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set
forth on Schedule 3.09, there are not any actions, suits or proceedings at
law or in equity or by or before any Governmental Authority now pending or,
to the knowledge of the Parent Borrower, threatened against or affecting any
Borrower or any Subsidiary or any business, property or rights of any such
person (i) that involve any Loan Document or the Transactions or (ii) as to
which there is a reasonable probability of an adverse determination and that,
if adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.
(b) None of the Borrowers or any of the Subsidiaries or any of
their respective material properties or assets is in violation of, nor will
the continued operation of their material properties and assets as currently
conducted (or as proposed to be conducted pursuant to the Transaction
Documents) violate, any law, rule or regulation (including any Health Care
Law or Environmental Law), or is in default with respect to any judgment,
writ, injunction, decree or order of any Governmental Authority, where such
violation or default could reasonably be expected to result in a Material
Adverse Effect.
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SECTION 3.10. Agreements. (a) Except for the effect of the
Transactions, none of the Borrowers or any of the Subsidiaries is a party to
any agreement or instrument or subject to any organizational restriction that
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(b) None of the Borrowers or any of the Subsidiaries is in default
in any manner under any provision of any indenture or other agreement or
instrument evidencing Indebtedness, or any other material agreement or
instrument (including any Transaction Document) to which it is a party or by
which it or any of its properties or assets are or may be bound, where such
default could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.11. Federal Reserve Regulations. (a) None of the
Borrowers or any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit
will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that entails a violation of, or
that is inconsis-tent with, the provisions of the Regulations of the Board,
including Regulation G, T, U or X.
SECTION 3.12. Investment Company Act; Public Utility Holding
Company Act. Neither any Borrower nor any Subsidiary is (a) an "investment
company" as defined in, or subject to regulation under, the Investment
Company Act of 1940 or (b) a "holding company" as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935.
SECTION 3.13. Use of Proceeds. The Borrowers will use the proceeds
of the Loans and will request the issuance of Letters of Credit only for the
purposes specified in the preamble to this Agreement.
SECTION 3.14. Tax Returns. Each of the Borrowers and the
Subsidiaries has filed or caused to be filed all Federal and state income tax
returns and all other material tax returns or materials required to have been
filed by it and has paid or caused to be paid all material taxes due and
payable by it and all assessments received by it, except taxes that are being
contested in good faith by appropriate proceedings and for which such
Borrower or such Subsidiary, as applicable, shall have set aside on its books
adequate reserves.
SECTION 3.15. No Material Misstatements. None of (a) the
Confidential Information Memorandum or (b) any other information, report,
financial statement, exhibit or schedule furnished by or on behalf of the
Parent Borrower to the Administrative Agent or any Lender in connection with
the negotiation of any Loan Document or included therein or delivered
pursuant thereto contained, contains or will contain any material
misstatement of fact or omitted, omits or will omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not misleading;
provided that to the extent any such information, report, financial
statement, exhibit or schedule was based upon or constitutes a forecast or
projection, the Parent Borrower represents only that it acted in good faith
and utilized reasonable assumptions and due care in the preparation of such
information, report, financial statement, exhibit or schedule.
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SECTION 3.16. Employee Benefit Plans. Each of the Borrowers and
its ERISA Affiliates is in compliance in all material respects with the
applicable provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in material liability of the Borrowers
or any of its ERISA Affiliates. The present value of all benefit liabilities
under each Plan (based on those assumptions used to fund such Plan) did not,
as of the last annual valuation date applicable thereto, exceed by more than
$2,000,000 the fair market value of the assets of such Plan, and the present
value of all benefit liabilities of all underfunded Plans (based on those
assumptions used to fund each such Plan) did not, as of the last annual
valuation dates applicable thereto, exceed by more than $7,500,000 the fair
market value of the assets of all such underfunded Plans.
SECTION 3.17. Environmental Matters. Except as set forth in
Schedule 3.17:
(a) The properties owned or operated by the Borrowers and the
Subsidiaries (the "Properties") do not contain any Hazardous Materials in
amounts or concentrations which (i) constitute, or constituted a violation
of, (ii) require Remedial Action under, or (iii) could give rise to liability
under, Environmental Laws, which violations, Remedial Actions and
liabilities, in the aggregate, could result in a Material Adverse Effect;
(b) The Properties and all operations of the Borrowers and the
Subsidiaries are in compliance, and in the last three years have been in
compliance, with all Environmental Laws and all necessary Environmental
Permits have been obtained and are in effect, except to the extent that such
non-compliance or failure to obtain any necessary permits, in the aggregate,
could not result in a Material Adverse Effect;
(c) There have been no Releases or threatened Releases at, from,
under or proximate to the Properties or otherwise in connection with the
operations of the Borrowers or the Subsidiaries, which Releases or threatened
Releases, in the aggregate, could result in a Material Adverse Effect;
(d) Neither the Borrowers nor any of the Subsidiaries has received
any notice of an Environmental Claim in connection with the Properties or the
operations of the Borrowers or the Subsidiaries or with regard to any person
whose liabilities for environmental matters any of the Borrowers or the
Subsidiaries has retained or assumed, in whole or in part, contractually, by
operation of law or otherwise, which, in the aggregate, could result in a
Material Adverse Effect, nor do the Borrowers or the Subsidiaries have reason
to believe that any such notice will be received or is being threatened; and
(e) Hazardous Materials have not been transported from the
Properties, nor have Hazardous Materials been generated, treated, stored or
disposed of at, on or under any of the Properties in a manner that could give
rise to liability under any Environmental Law, nor have the Borrowers or the
Subsidiaries retained or assumed any liability, contractually, by operation
of law or otherwise, with respect to the generation, treatment, storage or
disposal of Hazardous Materials, which transportation, generation, treatment,
storage or disposal, or retained or assumed liabilities, in the aggregate,
could result in a Material Adverse Effect.
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SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete
and correct description of all insurance maintained by the Borrowers or by
the Borrowers for their Subsidiaries as of the date hereof and the Closing
Date. As of each such date, such insurance is in full force and effect and
all premiums have been duly paid. The Parent Borrower and the Subsidiaries
have insurance in such amounts and covering such risks and liabilities as are
in accordance with normal industry practice.
SECTION 3.19. Security Documents. (a) The Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit
of the Secured Parties, a legal, valid and enforceable security interest in
the Collateral (as defined in the Pledge Agreement) and, when the Collateral
is delivered to the Collateral Agent, the Pledge Agreement shall constitute a
fully perfected first priority Lien on, and security interest in, all right,
title and interest of the pledgors thereunder in such Collateral, in each
case prior and superior in right to any other person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral (as defined in the
Security Agreement) and, when financing statements in appropriate form are
filed in the offices specified on Schedule 6 to the Perfection Certificate,
the Security Agreement shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the grantors
thereunder in such Collateral in which a security interest may be perfected
by filing such financing statements (other than the Intellectual Property, as
defined in the Security Agreement), in each case prior and superior in right
to any other person, other than with respect to Liens expressly permitted by
Section 6.02.
(c) When the Security Agreement is filed in the United States
Patent and Trademark Office and the United States Copyright Office, the
Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the grantors thereunder in the
Intellectual Property (as defined in the Security Agreement), in each case
prior and superior in right to any other person (it being understood that
subsequent recordings in the United States Patent and Trademark Office and
the United States Copyright Office may be necessary to perfect a lien on
registered trademarks, trademark applications and copyrights acquired by the
grantors after the date hereof).
(d) Each of the Collateral Assignment and Advance Collateral
Assignment (upon its execution) is effective to create in favor of the
Collateral Agent for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral (as defined in the
Collateral Assignment or the Advance Collateral Assignment, as applicable)
and, when financing statements in appropriate form are filed in appropriate
filing offices, each of the Collateral Assignment and the Advance Collateral
Assignment shall constitute a fully perfected Lien on, and security interest
in, all right, title and interest of the Parent Borrower in such Collateral
in which a security interest may be perfected by filing such financing
statements, in each case prior and superior in right to any other person,
other than with respect to Liens expressly permitted by Section 6.02.
SECTION 3.20. Labor Matters. As of the date hereof and the Closing
Date, there are no strikes, lockouts or slowdowns against any Borrower or any
Subsidiary pending or, to the knowledge of any Borrower, threatened. The
hours worked by and payments made to employees of the Borrowers and the
Subsidiaries have not been in violation in any material respect of the Fair
Labor
57
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters. All payments due from any Borrower or any
Subsidiary, or for which any claim may be made against any Borrower or any
Subsidiary, on account of wages and employee health and welfare insurance and
other benefits, have in all material respects been paid or accrued as a
liability on the books of such Borrower or such Subsidiary. The consummation
of the Transactions will not give rise to any right of termination or right
of renegotiation on the part of any union under any collective bargaining
agreement to which any Borrower or any Subsidiary is bound.
SECTION 3.21. Solvency. Immediately after the consummation of the
Transactions to occur on the Closing Date and the making of each Loan on the
Closing Date and after giving effect to the application of the proceeds of
such Loans and the rights of indemnity, contribution and subrogation of the
Loan Parties, (i) the fair value of the assets of each Loan Party will exceed
its debts and liabilities, subordinated, contingent or otherwise; (ii) the
present fair saleable value of the property of each Loan Party will be
greater than the amount that will be required to pay the probable liability
of its debts and other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured; (iii) each Loan
Party will be able to pay its debts and liabilities, subordinated, contingent
or otherwise, as such debts and liabilities become absolute and matured; and
(iv) each Loan Party will not have unreasonably small capital with which to
conduct the business in which it is engaged as such business is now conducted
and is proposed to be conducted following the Closing Date.
ARTICLE IV
Conditions
The obligations of the Lenders to make Loans and of the Issuing
Banks to issue Letters of Credit hereunder are subject to the satisfaction of
the following conditions:
SECTION 4.01. Effectiveness. The effectiveness of this Amended and
Restated Credit Agreement shall be subject to the satisfaction of each of the
following conditions:
(a) The Administrative Agent and the Syndication Agent shall have
received, on behalf of themselves, the Lenders and the Issuing Banks, a
favorable written opinion of (i) King & Spalding, counsel for the
Borrowers, substantially to the effect set forth in Exhibit J-1 and (ii)
each foreign counsel listed on Schedule 4.02(a), substantially to the
effect set forth in Exhibit J-2, in each case (A) dated the Closing Date,
(B) addressed to the Issuing Banks, the Administrative Agent, the
Syndication Agent and the Lenders, and (C) covering such other matters
relating to the Loan Documents, the Transaction Documents and the
Transactions as the Administrative Agent or the Syndication Agent shall
reasonably request, and the Borrowers hereby request such counsel to
deliver such opinions.
(b) All legal matters incident to this Agreement, the Borrowings
and extensions of credit hereunder and the other Loan Documents and the
Transaction Documents shall be satisfactory to the Lenders, to the
Issuing Banks and to Cravath, Swaine & Xxxxx, counsel for the
Administrative Agent and the Syndication Agent.
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(c) The Administrative Agent and the Syndication Agent shall have
received (i) a copy of the certificate or articles of incorporation,
including all amendments thereto, of each Loan Party, certified as of a
recent date by the Secretary of State of the state of its organization,
and a certificate as to the good standing of each Loan Party as of a
recent date, from such Secretary of State; (ii) a certificate of the
Secretary or Assistant Secretary of each Loan Party dated the Closing
Date and certifying (A) that attached thereto is a true and complete copy
of the by-laws of such Loan Party as in effect on the Closing Date and at
all times since a date prior to the date of the resolutions described in
clause (B) below, (B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors of such Loan Party
authorizing the execution, delivery and performance of the Loan Documents
and the Transaction Documents to which such person is a party and, in the
case of the Borrowers, the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are in full
force and effect, (C) that the certificate or articles of incorporation
of such Loan Party have not been amended since the date of the last
amendment thereto shown on the certificate of good standing furnished
pursuant to clause (i) above, and (D) as to the incumbency and specimen
signature of each officer executing any Loan Document or Transaction
Document or any other document delivered in connection herewith on behalf
of such Loan Party; (iii) a certificate of another officer as to the
incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to (ii) above; and (iv) such other
documents as the Lenders, the Issuing Banks or Cravath, Swaine & Xxxxx,
counsel for the Administrative Agent and the Syndication Agent, may
reasonably request.
(d) The Administrative Agent and the Syndication Agent shall have
received a certificate, dated the Closing Date and signed by a Financial
Officer of the Parent Borrower, confirming compliance with the conditions
precedent set forth in paragraphs (b), (c), (d) and (e) of Section 4.02.
(e) The Administrative Agent and the Syndication Agent shall have
received all Fees and other amounts due and payable on or prior to the
Closing Date, including, to the extent invoiced, reimbursement or payment
of all out-of-pocket expenses required to be reimbursed or paid by the
Borrowers hereunder or under any other Loan Document.
(f) The Pledge Agreement shall have been duly executed by the
parties thereto and delivered to the Collateral Agent and shall be in
full force and effect, and each of the Borrowers and the Guarantors shall
have duly and validly pledged thereunder all the Pledged Securities (as
defined in the Pledge Agreement) to the Collateral Agent for the ratable
benefit of the Secured Parties and certificates representing such Pledged
Securities, accompanied by instruments of transfer and stock powers
endorsed in blank, shall be in the actual possession of the Collateral
Agent; provided that (i) neither the Parent Borrower nor any Guarantor
that is a Domestic Subsidiary shall be required to pledge any capital
stock of Societe Anonyme De La Metairie or more than 65% of the capital
stock of any Foreign Subsidiary and (ii) no Foreign Subsidiary shall be
required to pledge the capital stock of any of its Foreign Subsidiaries.
(g) The Security Agreement shall have been duly executed by the
Loan Parties thereto and shall have been delivered to the Collateral
Agent and shall be in full force and
59
effect on such date and each document (including each Uniform Commercial
Code financing statement) required by law or reasonably requested by the
Administrative Agent or the Syndication Agent to be filed, registered or
recorded in order to create in favor of the Collateral Agent for the
benefit of the Secured Parties a valid, legal and perfected
first-priority security interest in and lien on the Collateral (subject
to any Lien expressly permitted by Section 6.02) described in such
agreement shall have been delivered to the Collateral Agent.
(h) The Collateral Assignment shall have been duly executed by the
Parent Borrower and shall have been delivered to the Collateral Agent and
shall be in full force and effect on such date and each document
(including each Uniform Commercial Code financing statement) required by
law or reasonably requested by the Administrative Agent or the
Syndication Agent to be filed, registered or recorded in order to create
in favor of the Collateral Agent for the benefit of the Secured Parties a
valid, legal and perfected first-priority security interest in and lien
on the Collateral (subject to any Lien expressly permitted by Section
6.02) described in such agreement shall have been delivered to the
Collateral Agent.
(i) The Collateral Agent shall have received the results of a
search of the Uniform Commercial Code filings (or equivalent filings)
made with respect to the Loan Parties in the states (or other
jurisdictions) in which the chief executive office of each such person is
located and the other jurisdictions in which Uniform Commercial Code
filings (or equivalent filings) are to be made pursuant to the preceding
paragraph, together with copies of the financing statements (or similar
documents) disclosed by such search, and accompanied by evidence
satisfactory to the Collateral Agent that the Liens indicated in any such
financing statement (or similar document) would be permitted under
Section 6.02 or have been released or documents providing for the release
of such financing statements (or similar documents) have been delivered
to the Collateral Agent.
(j) The Guarantee Agreement shall have been duly executed by each
Guarantor, shall have been delivered to the Collateral Agent and shall be
in full force and effect.
(k) The Indemnity, Subrogation and Contribution Agreement shall
have been duly executed by each Loan Party, shall have been delivered to
the Collateral Agent and shall be in full force and effect.
(l) The Collateral Agent shall have received a Perfection
Certificate with respect to the Loan Parties dated the Closing Date and
duly executed by a Responsible Officer of the Parent Borrower.
(m) Except for the Transaction Documents and the effect of the
Transactions, there has been no material adverse change in the business,
assets, operations, prospects, condition, financial or otherwise, or
material agreements of (i) the Parent Borrower and the Subsidiaries,
taken as a whole, since December 31, 1996, (ii) Crescent since December
31, 1996 or (iii) CBHS and its subsidiaries, taken as a whole, since
March 31, 1997, and there shall not have occurred any event, or none of
the Administrative Agent, the Syndication Agent or the Lenders shall have
discovered or other-wise become aware of information not previously known
by the Administrative Agent, the Syndication Agent or any such Lender
that, in each case, in the
60
reasonable judgment of the Administrative Agent, the Syndication Agent or
the Required Lenders, could reasonably be expected to have a Material
Adverse Effect.
(n) Prior to or substantially contemporaneously with the first
Credit Event, the Parent Borrower and the Subsidiaries shall have
received in cash an aggregate amount equal to the Transaction
Consideration, pursuant to the Transaction Documents.
(o) The Transactions shall have been consummated or shall be
consummated simultaneously with the first Credit Event in accordance with
applicable law, in accordance with the Transaction Documents (without
giving effect to any amendment or waiver of any condition set forth in
the Transaction Documents not approved by the Lenders).
(p) Substantially contemporaneously with the first Credit Event,
all the Charter IRBs shall have been repaid in full or defeased and all
obligations thereunder shall have been discharged or provided for, as the
case may be.
(q) The Borrowers shall have repaid in full the principal of all
loans outstanding, interest thereon and other amounts due and payable
under the Existing Credit Agreement, and the Aggregate Credit Exposure
under the Existing Credit Agreement shall be zero, except for the
Existing Letters of Credit.
(r) After giving effect to the Transactions, the Borrowers and the
Subsidiaries shall have outstanding no Indebtedness or preferred stock
other than (i) the Loans hereunder, (ii) the Series A Notes, (iii) the
Charter IRBs that have been fully defeased by the Parent Borrower and
(iv) the Indebtedness set forth on Schedule 6.01 or otherwise permitted
pursuant to Section 6.01.
(s) Each of the Transaction Documents shall have been executed and
delivered by the parties thereto and shall be in full force and effect,
in each case, in form and substance satisfactory to the Lenders.
(t) The Lenders shall be satisfied that (i) the consummation of the
Transactions will not (A) violate any applicable law (including any
Health Care Law), statute, rule or regulation or (B) conflict with, or
result in a default or event of default under, (x) any indenture relating
to any existing Indebtedness of any Loan Party or any subsidiary of any
Loan Party that is not being repaid, repurchased or redeemed in full on
or prior to the Closing Date in connection with the Transactions or any
other indenture of any Loan Party or any subsidiary of any Loan Party to
be in effect after the Closing Date or (y) any other material agreement
of any Loan Party or any subsidiary of any Loan Party and (ii) following
the consummation of the Transactions, the Parent Borrower, CBHS and their
respective subsidiaries, through the conduct of their business, will not
violate in any material respect any applicable law (including any Health
Care Law), statute, rule or regulation.
(u) The Lenders shall have received an unaudited pro forma
consolidated balance sheet of the Parent Borrower as of March 31, 1997,
after giving effect to the Transactions as if they had occurred on such
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date, which balance sheet shall be consistent in all material respects
with the forecasts previously provided to the Lenders.
(v) All governmental consents and approvals and all material third
party consents required to be obtained for the consummation of the
Transactions shall have been obtained and all applicable waiting and
appeal periods (including waiting periods under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976) shall have expired or been terminated.
(w) The Administrative Agent and the Syndication Agent shall have
had the opportunity to review existing environmental reports in form,
scope and substance reasonably satisfactory to them, as to any
environmental hazards, liabilities or Remedial Action to which any
Borrower or any of the Subsidiaries may be subject and shall be
reasonably satisfied with the nature and cost of any such hazards,
liabilities or Remedial Action and with the applicable Borrower's or
applicable Subsidiary's plans with respect thereto.
(x) The Administrative Agent and the Syndication Agent shall be
reasonably satisfied with the organizational structure and equity
ownership of (i) the Parent Borrower and the Subsidiaries and (ii) CBHS
and its subsidiaries, in each case after giving effect to the
Transactions.
(y) There shall be no litigation or administrative proceeding or
other legal or regulatory developments, actual or threatened, that in the
reasonable judgment of the Lenders (i) would be reasonably likely to
result in a Material Adverse Effect, (ii) would be reasonably likely to
result in any material restriction or limitation or impose any burdensome
conditions on the Transactions or (iii) would be materially inconsistent
with the assumptions underlying the projections previously furnished to
the Lenders.
(z) The Lenders shall be reasonably satisfied with the amount and
nature of any pension benefit plan exposure and liability to which the
Parent Borrower and the Subsidiaries may be subject, and their plans with
respect thereto.
(aa) The Lenders shall be reasonably satisfied in all respects with
the tax position and the contingent tax and other liabilities of the
Parent Borrower and the Subsidiaries, after giving effect to the
Transactions, and with the plans of the Parent Borrower with respect
thereto.
(ab) The Administrative Agent and the Syndication Agent shall be
reasonably satisfied with the sufficiency of the available Revolving
Loans to meet the ongoing working capital requirements of the Parent
Borrower and the Subsidiaries following the consummation of the
Transactions.
(ac) The Lenders shall have received financial projections for (i)
the Parent Borrower and the Subsidiaries and (ii) CBHS and its
subsidiaries, in each case for fiscal years 1997 through 2002, in form
and substance reasonably satisfactory to the Administrative Agent and the
Syndication Agent, which projections shall not be materially inconsistent
with the projections previously provided to the Lenders.
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(ad) The minority stockholders of Green Spring shall have executed
a waiver, or other written agreement or legally binding acknowledgement,
relinquishing all rights available to them as a result of the
consummation of the Transactions to require the Parent Borrower or any
Subsidiary to purchase shares of common stock of Green Spring held by
such stockholders.
(ae) The Lenders shall be reasonably satisfied with (i) the Parent
Borrower's and the Subsidiaries' arrangements for the retention of
management and other key employees and (ii) the amounts of cash payments
to be made to the executives of the Parent Borrower and the Subsidiaries
in connection with any "change of control" event that may be deemed to
have occurred as a result of the Transactions.
(af) The Lenders shall be reasonably satisfied with the management
and employees of CBHS (or, if applicable, with CBHS's plans for hiring
management and employees), after giving effect to the Transactions, and
with the arrangements for the retention of such management and employees.
(ag) The Administrative Agent and the Syndication Agent shall be
reasonably satisfied with the sufficiency of the available Revolving
Loans to meet the ongoing working capital requirements of the Parent
Borrower and its Subsidiaries.
(ah) The CBHS Credit Agreement shall have been duly executed and
delivered by the parties thereto and shall be in full force and effect,
and each of the conditions precedent set forth in Section 4.01 and
Section 4.02 of the CBHS Credit Agreement shall have been satisfied or
waived as provided therein.
SECTION 4.02. All Credit Events. On the date of each Borrowing,
including on the date of each issuance of a Letter of Credit (each such event
being called a "Credit Event"):
(a) The Administrative Agent shall have received a Borrowing
Request as required by Section 2.03 (or such notice shall have been
deemed given in accordance with Section 2.03) or, in the case of the
issuance of a Letter of Credit, the applicable Issuing Bank and the
Administrative Agent shall have received a notice requesting the issuance
of such Letter of Credit as required by Section 2.22(b).
(b) Except in the case of a Borrowing that does not increase the
aggregate principal amount of Loans outstanding of any Lender, the
representations and warranties set forth in Article III shall be true and
correct in all material respects on and as of the date of such Credit
Event with the same effect as though made on and as of such date, except
to the extent such representations and warranties expressly relate to an
earlier date.
(c) Each Borrower and each other Loan Party shall be in compliance
with all the terms and provisions set forth herein and in each other Loan
Document on its part to be observed or performed, and at the time of and
immediately after such Credit Event, no Event of Default or Default shall
have occurred and be continuing.
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(d) Each of the Franchise Agreement and the Lease shall be in full
force and effect in accordance with their respective terms.
(e) There shall not have occurred and be continuing any Material
Franchise Payment Default.
Each Credit Event shall be deemed to constitute a representation and warranty
by each Borrower on the date of such Credit Event as to the matters specified
in paragraphs (b) (except as aforesaid), (c), (d) and (e) of this Section
4.02.
SECTION 4.03. Note Repurchase Loans Credit Event. On or prior to
the Series A Notes Repurchase Date:
(a) The Parent Borrower shall have delivered a certificate signed
by a Financial Officer (i) setting forth the Note Repurchase Loan Amount
and (ii) acknowledging the reduction of the Total Revolving Credit
Commitment by the Note Repurchase Loan Amount.
(b) Substantially contemporaneously with the making of the Note
Repurchase Loans, each of the Series A Notes tendered (and not withdrawn)
pursuant to the Series A Notes Tender Offer shall have been purchased by
the Parent Borrower.
SECTION 4.04. New Subsidiary Borrower Credit Event. On the date of
the first Borrowing by any Subsidiary Borrower that was not a Subsidiary
Borrower on the Closing Date:
(a) The Administrative Agent (or its counsel) shall have received
(either at such time or in connection with the initial borrowing
hereunder) from each party thereto either (i) a counterpart of the
applicable New Borrower Agreement or (ii) written evidence satisfactory
to the Administrative Agent (which may include telecopy transmission of a
signed signature page thereof) that such party has signed a counterpart
of such New Borrower Agreement.
(b) The Administrative Agent shall have received such documents
(including legal opinions) and certificates as the Administrative Agent
or its counsel may reasonably request relating to the organization,
existence and good standing of such Subsidiary Borrower and the
authorization of the transactions relating to such Subsidiary Borrower
and any other legal matters relating to such Subsidiary Borrower and the
applicable New Borrower Agreement, all in form and substance satisfactory
to the Administrative Agent and its counsel.
ARTICLE V
Affirmative Covenants
Each Borrower covenants and agrees with each Lender that so long as
this Agreement shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts payable under any Loan Document shall have been
paid in full and all Letters of Credit have been canceled or have expired and
all
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amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing, the Borrowers will, and will
cause each of the Subsidiaries (unless otherwise set forth below) to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or
cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence, except as otherwise expressly permitted
under Section 6.05.
(b) Do or cause to be done all things necessary to obtain,
preserve, renew, extend and keep in full force and effect the rights,
licenses, permits, franchises, authorizations, patents, copyrights,
trademarks and trade names material to the conduct of its business; comply in
all material respects with all applicable laws, rules, regulations (including
any Health Care Law or Environmental Law) and decrees and orders of any
Governmental Authority, whether now in effect or hereafter enacted; and at
all times maintain and preserve all property material to the conduct of such
business and keep such property in good repair, working order and condition
and from time to time make, or cause to be made, all needful and proper
repairs, renewals, additions, improvements and replacements thereto necessary
in order that the business carried on in connection therewith may be properly
conducted at all times.
SECTION 5.02. Insurance. (a) Keep its insurable properties
adequately insured at all times by financially sound and reputable insurers;
maintain such other insurance, to such extent and against such risks,
including fire and other risks insured against by extended coverage, as is
customary with companies in the same or similar businesses operating in the
same or similar locations, including public liability insurance against
claims for personal injury or death or property damage occurring upon, in,
about or in connection with the use of any properties owned, occupied or
controlled by it; and maintain such other insurance as may be required by law.
(b) Cause all policies of casualty insurance to be endorsed or
otherwise amended to include a "standard" or "New York" lender's loss payable
endorsement, in form and substance satisfactory to the Administrative Agent
and the Collateral Agent, which endorsement shall provide that, from and
after the Closing Date, if the insurance carrier shall have received written
notice from the Administrative Agent or the Collateral Agent of the
occurrence of an Event of Default, the insurance carrier shall pay all
proceeds otherwise payable to the Borrowers or the Loan Parties under such
policies directly to the Collateral Agent; cause all such policies to provide
that none of the Borrowers, the Administrative Agent, the Syndication Agent,
the Collateral Agent or any other party shall be a coinsurer thereunder and
to contain a "Replacement Cost Endorsement" (for at least 85% of replacement
cost), without any deduction for depreciation, and such other provisions as
the Administrative Agent or the Collateral Agent may reasonably require from
time to time to protect their interests; deliver original or certified copies
of all such policies to the Collateral Agent; cause each such policy to
provide that it shall not be canceled, modified or not renewed (i) by reason
of nonpayment of premium upon less than 10 days' prior written notice thereof
by the insurer to the Administrative Agent and the Collateral Agent (giving
the Administrative Agent and the Collateral Agent the right to cure defaults
in the payment of premiums) or (ii) for any other reason upon less than 30
days' prior written notice thereof by the insurer to the Administrative Agent
and the Collateral Agent; deliver to the Administrative Agent and the
Collateral Agent, prior to the cancelation, modification or nonrenewal of any
such policy of insurance, a copy of a renewal or replacement policy (or other
evidence of renewal of a policy previously delivered to the Administrative
Agent and the Collateral Agent)
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together with evidence satisfactory to the Administrative Agent and the
Collateral Agent of payment of the premium therefor.
SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and
other obligations promptly and in accordance with their terms and pay and
discharge promptly when due all taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default, as well as
all lawful claims for labor, materials and supplies or otherwise that, if
unpaid, might give rise to a Lien upon such properties or any part thereof
(other than where failure to so do could not be reasonably expected to have a
Material Adverse Effect); provided, however, that such payment and discharge
shall not be required with respect to any such tax, assessment, charge, levy
or claim so long as the validity or amount thereof shall be contested in good
faith by appropri-ate proceedings and such Borrower or such Subsidiary shall
have set aside on its books adequate reserves with respect thereto in
accordance with GAAP and such contest operates to suspend collection of the
contested obligation, tax, assessment or charge and enforcement of a Lien.
SECTION 5.04. Financial Statements, Reports, etc. In the case of
the Parent Borrower, furnish to the Administrative Agent, the Syndication
Agent and each Lender:
(a) within five Business Days after any filing of its annual report
on Form 10-K with the Securities and Exchange Commission (but in no event
later than 120 days after the end of each fiscal year), (i) its
consolidated balance sheet and related statements of operations, changes
in stockholders' equity and cash flows, all audited by Xxxxxx Xxxxxxxx
LLP or any other "Big 6" accounting firm and accompanied by an opinion of
such accountants (which shall not be qualified in any material respect)
to the effect that such consolidated financial statements fairly present
in all material respects the financial condition, results of operations,
changes in stockholders' equity and cash flows of the Parent Borrower and
its consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied; and (ii) an unaudited consolidated balance
sheet and statement of operations for each of Green Spring and Public
Solutions.
(b) within five Business Days after any filing of its quarterly
report on Form 10-Q with the Securities and Exchange Commission (but in
no event later than 60 days after the end of each of the first three
fiscal quarters of each fiscal year), commencing with the report for the
fiscal quarter ending September 30, 1997, (i) its consolidated balance
sheet and related statements of operations and cash flows showing the
financial condition of the Parent Borrower and its consolidated
Subsidiaries, all certified by one of its Financial Officers as fairly
presenting in all material respects the financial condition and results
of operations of the Parent Borrower and its consolidated Subsidiaries on
a consolidated basis in accordance with GAAP, applied on a basis
consistent with the application of GAAP to the Parent Borrower's most
recent financial statements delivered pursuant to Section 5.04(a),
subject to normal year-end audit adjustments, the absence of notes that
are not required by GAAP and the condensed presentation permitted by Form
10-Q of the forms promulgated under the Securities Exchange Act of 1934
and (ii) consolidated balance sheets and statements of operations of each
of Green Spring and Public Solutions, showing the financial condition of
Green Spring and Public Solutions, in the cases of (i) and (ii) of this
paragraph as of the close of such fiscal
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quarter and the results of its operations and the operations of such
Subsidiaries during such fiscal quarter and the then elapsed portion of
the fiscal year.
(c) within 30 days after the end of each month (other than the last
month of any fiscal quarter), commencing with the month ending July 31,
1997, its unaudited consolidated balance sheet and related statements of
income and cash flows, showing the consolidated financial condition of
the Parent Borrower and its consolidated subsidiaries, in all cases as of
the close of such month and the consolidated results of its operations
and cash flows during such month and the then-elapsed portion of the
fiscal year;
(d) concurrently with any delivery of financial statements under
paragraph (a) or (b) above, a certificate of the accounting firm or
Financial Officer opining on or certifying such statements (which
certificate, when furnished by an accounting firm, may be limited to
accounting matters and disclaim responsibility for legal interpretations)
(i) certifying that no Event of Default or Default has occurred or, if
such an Event of Default or Default has occurred, specifying the nature
and extent thereof and any corrective action taken or proposed to be
taken with respect thereto and (ii) setting forth computations in
reasonable detail satisfactory to the Administrative Agent demonstrating
compliance with the covenants contained in Sections 6.10, 6.11, 6.12 and
6.13 (it being under-stood that nothing herein requires such computation
to be prepared by an accounting firm), provided that if the accounting
firm and other independent certified public accountants of recognized
national standing are prohibited by applicable industry guidelines from
delivering such certificates, the Parent Borrower shall no longer be
required to cause the delivery of such certificate;
(e) not later than the date financial statements are delivered
pursuant to Section 5.04(a) and (b), a report in form and substance
satisfactory to the Administrative Agent, of (i) all Permitted
Acquisitions consummated during such quarter, which shall include the
total consideration for each such Permitted Acquisition (including a
breakdown of any Indebtedness permitted under Section 6.01(d)) from the
Closing Date through the end of such quarter; (ii) the aggregate sales
price of assets sold or disposed of pursuant to each transaction that
constitutes an Asset Sale permitted hereunder from the Closing Date
through the end of such fiscal quarter and a schedule that identifies
each such sale or disposition; (iii) all Permitted Debt Repurchases and
all Permitted Stock Repurchases, which shall include the amount of
securities purchased pursuant thereto, from the Closing Date through the
end of such quarter, segregated by type of security; and (iv) all
Permitted Non-Guarantor Transactions and all Permitted Non-Control
Investments, which shall (A) include the value of such Transactions and
Investments completed during the period from the Closing Date through the
end of such quarter and (B) in the case of Permitted Non-Control
Investments, describe the management structure of the entity into which
such investment is made;
(f) promptly after the same become publicly available, copies of
all periodic and other reports (including the Parent Borrower's quarterly
report on Form 10-Q for the fiscal quarter ending June 30, 1997), proxy
statements and other materials (except for registration statements on
Form S-8) filed by any Borrower or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or
all of the functions of said Commission, or with any national securities
exchange, or distributed to its stockholders, as the case may be;
67
(g) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of any Borrower
or any Subsidiary, or compliance with the terms of any Loan Document, as
the Administrative Agent or any Lender may reasonably request; and
(h) within five Business Days after their availability (but in no
event later than the beginning of the third month of each fiscal year), a
copy of the budget for its consolidated statements of income and cash
flows for each fiscal year, with a certificate signed by a Financial
Officer certifying that such budget has been prepared in good faith.
SECTION 5.05. Litigation and Other Notices. Furnish to the
Administrative Agent prompt written notice of the following:
(a) any (i) Event of Default or Default or (ii) Franchise Payment
Default, that in the case of subclause (ii), continues uncured for a
period of three Business Days, in each case specifying the nature and
extent thereof and the corrective action (if any) taken or proposed to be
taken with respect thereto;
(b) the termination of the Lease or the Franchise Agreement;
(c) the failure of CBHS to pay any scheduled rent under the Lease
within three Business Days after the same has become due;
(d) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any Governmental
Authority, against any Borrower or any Affiliate thereof that could
reasonably be expected to result in a Material Adverse Effect; and
(e) any development (including any developments related to any
Health Care Law) that has resulted in, or could reasonably be expected to
result in, a Material Adverse Effect.
SECTION 5.06. Employee Benefits. (a) Comply in all material
respects with the applicable provisions of ERISA and the Code relating to
employee benefits and (b) furnish to the Administrative Agent (i) as soon as
possible after, and in any event within 10 days after any Responsible Officer
of any Borrower or any ERISA Affiliate knows or has reason to know that, any
ERISA Event has occurred that, alone or together with any other ERISA Event,
could reasonably be expected to have a Material Adverse Effect.
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections. Keep proper books of record and account in which in all
material respects full, true and correct entries in conformity with GAAP and
all requirements of law are made of all dealings and transactions in relation
to its business and activities. Each Loan Party will, and will cause each of
its Subsidiaries to, permit any representatives designated by the
Administrative Agent, the Syndication Agent or any Lender to visit and
inspect the financial records and the properties of any Borrower or any
Subsidiary at reasonable times and as often as reasonably requested of the
Parent Borrower and to make extracts from and copies of such financial
records, and permit any representatives designated by the Administrative
Agent or any Lender to discuss after reasonable
68
notice to the Parent Borrower the affairs, finances and condition of any
Borrower or any Subsidiary with the officers thereof and independent
accountants therefor; provided, that all such visits and inspections shall be
subject to health, safety and patient confidentiality procedures regularly
enforced by the Subsidiaries that provide patient care.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and
request the issuance of Letters of Credit only for the purposes set forth in
the preamble to this Agreement.
SECTION 5.09. Compliance with Environmental Laws. Comply, and
cause all lessees and other persons occupying its Properties to comply, in
all material respects with all Environmental Laws and Environmental Permits
applicable to its operations and Properties; obtain and renew all material
Environmental Permits necessary for its operations and Properties; and
conduct any Remedial Action in accordance with Environmental Laws.
SECTION 5.10. Preparation of Environmental Reports. If a Default
caused by reason of a breach of Section 3.17 or 5.09 shall have occurred and
be continuing, at the request of the Required Lenders through the
Administrative Agent, provide to the Lenders within 45 days after such
request, at the expense of the Borrowers, an environmental site assessment
report for the Properties which are the subject of such Default prepared by
an environmental consulting firm acceptable to the Administrative Agent and
indicating the presence or absence of Hazardous Materials and the estimated
cost of any compliance or Remedial Action in connection with such Properties.
SECTION 5.11. Further Assurances. Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements) that may be required under applicable law, or that the Required
Lenders, the Administrative Agent or the Collateral Agent may reasonably
request, in order to effectuate the transactions contemplated by the Loan
Documents and in order to grant, preserve, protect and perfect the validity
and first priority of the security interests created or intended to be
created by the Security Documents. The Borrowers will cause any subsequently
acquired or organized wholly owned Domestic Subsidiary (other than any wholly
owned Subsidiary that has total assets not in excess of $500,000 and has no
Indebtedness other than to any Borrower or any Guarantor (an "Inactive
Subsidiary")) or any wholly owned Domestic Subsidiary upon ceasing to be an
Inactive Subsidiary to become a party to the Guarantee Agreement, Indemnity
Subrogation and Contribution Agreement and each applicable Security Document
in the manner provided therein. In addition, from time to time, the
Borrowers and the Guarantors will, at their cost and expense, promptly secure
the Obligations by pledging or creating, or causing to be pledged or created,
perfected security interests with respect to assets acquired subsequent to
the Closing Date as required by any Security Document. Such security
interests and Liens will be created under the Security Documents and other
security agreements and other instruments and documents in form and substance
satisfactory to the Collateral Agent, and the Borrowers shall deliver or
cause to be delivered to the Lenders all such instruments and documents
(including legal opinions and lien searches) as the Collateral Agent shall
reasonably request to evidence compliance with this Section. Each Borrower
agrees to provide such evidence as the Collateral Agent shall reasonably
request as to the perfection and priority status of each such security
interest and Lien.
SECTION 5.12. Concentration and Disbursement Accounts. The Parent
Borrower shall maintain with a financial institution that is a Lender one or
more accounts to be used by the Parent Borrower as its principal concentration
69
and disbursement accounts in a manner and following procedures consistent
with past business practices.
SECTION 5.13. Remedies Under Franchise Agreement. In the event
that a Franchise Payment Default shall have occurred and be continuing, the
Parent Borrower shall, upon the request of the Administrative Agent, the
Syndication Agent and the Required Lenders, exercise all remedies under the
Franchise Agreement (including Governance Remedies) that are so requested and
are available to the Parent Borrower under the Franchise Agreement, provided,
that the Parent Borrower shall not be required to comply with this Section
5.13 if at the time of such request (a) no Event of Default (other than any
Event of Default described in paragraphs (a), (e) or (m) of Article VII
hereof or any Event of Default described in paragraph (d) of Article VII
relating to provisions other than those contained in Article VI hereof) shall
have occurred and be continuing or (b) no Loans are outstanding and there is
no Aggregate Credit Exposure outstanding.
SECTION 5.14. Series A Notes Repurchase. On the Series A Notes
Repurchase Date, the Parent Borrower shall repurchase all Series A Notes
tendered (and not withdrawn) in accordance with applicable law, the Series A
Notes Tender Offer and the Series A Notes Indenture.
ARTICLE VI
Negative Covenants
Each Borrower covenants and agrees with each Lender that, so long as
this Agreement shall remain in effect and until the Commitments have been
terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts payable under any Loan Document have been paid in
full and all Letters of Credit have been canceled or have expired and all
amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing, the Borrowers will not, and will
not cause or permit any of the Subsidiaries (other than the Subsidiary
Non-Guarantors, except with respect to Sections 6.01, 6.06(c) and 6.09) to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to
exist any Indebtedness, except for Indebtedness satisfying one of the
following paragraphs:
(a) Indebtedness existing on the date hereof and set forth on
Schedule 6.01(a);
(b) Indebtedness created hereunder and under the other Loan
Documents;
(c) unsecured Indebtedness of the Parent Borrower, provided that (i)
the aggregate amount of scheduled principal payments in respect of such
Indebtedness that can be due on a date that is on or prior to the
Maturity Date cannot exceed $25,000,000; (ii) such Indebtedness contains
covenants (including financial and negative covenants) and events of
default that are no more restrictive in any material respect than the
analogous covenants and events of default contained in this Agreement;
and (iii) on the date that any such Indebtedness is incurred and
immediately after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing;
70
(d) unsecured Indebtedness (i) assumed by the Parent Borrower or any
Subsidiary in connection with a Permitted Acquisition made after the date
hereof or (ii) of any Subsidiary acquired after the date hereof pursuant
to a Permitted Acquisition, which Indebtedness, in each case, exists at
the time of such Permitted Acquisition and is not created in
contemplation of such Permitted Acquisition, provided that the aggregate
principal amount of such Indebtedness (for all Subsidiaries) shall not
exceed $25,000,000 at any time outstanding;
(e) unsecured Indebtedness of any Subsidiary in an aggregate
principal amount (for all the Subsidiaries) not to exceed $10,000,000 at
any time outstanding, provided that (i) the aggregate amount of scheduled
principal payments in respect of such Indebtedness that can be due on a
date that is on or prior to the Maturity Date cannot exceed $5,000,000,
(ii) such Indebtedness contains covenants (including financial and
negative covenants) and events of default that are no more restrictive in
any material respect than the analogous covenants and events of default
contained in this Agreement; and (iii) on the date that any such
Indebtedness is incurred and immediately after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing;
provided, further, that the aggregate principal amount of such
Indebtedness plus the aggregate principal amount of Indebtedness of the
Subsidiaries permitted under clause (d)(ii) above shall not exceed
$25,000,000 at any time outstanding;
(f) secured Indebtedness of the Parent Borrower or any Subsidiary
(including purchase money Indebtedness) in an aggregate principal amount
(for the Parent Borrower and all the Subsidiaries) not to exceed
$10,000,000 at any time outstanding, provided that (i) such Indebtedness
contains covenants (including financial and negative covenants) and
events of default that are no more restrictive in any material respect
than the analogous covenants and events of default contained in this
Agreement; (ii) on the date that any such Indebtedness is incurred and
immediately after giving effect thereto, no Default or Event of Default
shall exist and be continuing; and (iii) the aggregate principal amount
of such Indebtedness shall not exceed 80% of the fair market value of the
assets and property securing such Indebtedness (as determined in good
faith by a Financial Officer of the Parent Borrower at the time of
incurrence);
(g) Guarantees in respect of Indebtedness permitted pursuant to this
Section 6.01 (except that Guarantees by the Parent Borrower and the
Guarantors of Indebtedness of Controlled Non-Guarantor Entities shall be
limited to Permitted Non-Guarantor Transactions);
(h) Indebtedness of the Parent Borrower, any wholly owned Subsidiary
or any Guarantor to any other wholly owned Subsidiary, any other
Guarantor or the Parent Borrower, so long as such Indebtedness is
subordinated to all Indebtedness incurred pursuant hereto and pursuant to
the Guarantee Agreement and evidenced by a note pledged to the Collateral
Agent for the benefit of the Lenders to the extent required by the Pledge
Agreement;
(i) Indebtedness incurred pursuant to any sale and leaseback
transaction permitted by Section 6.03;
(j) Indebtedness incurred under any Interest Rate Protection
Agreement;
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(k) Permitted Subordinated Indebtedness;
(l) the Permitted CBHS Guarantee;
(m) Indebtedness incurred in connection with any Permitted
Non-Guarantor Transaction; and
(n) extensions, renewals or refinancings of Indebtedness under
paragraphs (a), (c) and (d) so long as (i) such Indebtedness
("Refinancing Indebtedness") is in an aggregate principal amount not
greater than the aggregate principal amount of the Indebtedness being
extended, renewed or refinanced plus the amount of any premiums required
to be paid thereon and fees and expenses associated therewith, (ii) such
Refinancing Indebtedness has a later or equal final maturity and a longer
or equal weighted average life than the Indebtedness being extended,
renewed or refinanced, (iii) the interest rate applicable to such
Refinancing Indebtedness shall be a market interest rate (as determined
in good faith by a Financial Officer of the Parent Borrower) as of the
time of such extension, renewal or refinancing, (iv) if the Indebtedness
being extended, renewed or refinanced is subordinated to the Obligations,
such Refinancing Indebtedness is subordinated to the Obligations to the
same extent as the Indebtedness being extended, renewed or refinanced,
(v) each of the covenants, events of default or other provisions thereof
(including any Guarantees thereof) shall be substantially no less
favorable to the Lenders than those contained in the Indebtedness being
refinanced and (vi) at the time and after giving effect to such
extension, renewal or refinancing, no Default or Event of Default shall
have occurred and be continuing.
SECTION 6.02. Liens. Create, incur, assume or permit to exist any
Lien on any property or assets (including stock or other securities of any
person, including any Subsidiary) now owned or hereafter acquired by it or on
any income or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of the Parent Borrower and the
Subsidiaries existing on the date hereof and set forth in Schedule
6.02(a); provided that such Liens shall secure only those obligations
which they secure on the date hereof;
(b) any Lien created under the Loan Documents;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by any Borrower or any Subsidiary pursuant to a
Permitted Acquisition, provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition and (ii) such
Lien does not apply or extend to any other property or assets of any
Borrower or any Subsidiary;
(d) Liens for taxes not yet due or which are being contested in
compliance with Section 5.03 or Liens for unpaid local or state taxes
that are not in the aggregate material;
(e) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and securing obligations that are not in the aggregate material;
72
(f) pledges and deposits made in the ordinary course of business in
compliance with workmen's compensation, unemployment insurance and other
social security laws or regulations;
(g) deposits to secure the performance of bids, trade contracts
(other than for Indebtedness), leases (other than Capital Lease
Obligations), statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary
course of business;
(h) zoning restrictions, easements, rights-of-way, restrictions on
use of real property and other similar encumbrances incurred in the
ordinary course of business which, in the aggregate, are not substantial
in amount and do not materially detract from the value of the property
subject thereto or interfere with the ordinary conduct of the business of
the Borrowers and the Subsidiaries taken as a whole;
(i) purchase money security interests in real property, improvements
thereto or equipment hereafter acquired (or, in the case of improvements,
constructed) by any Borrower or any Subsidiary; provided that (i) such
security interests secure Indebtedness permitted by Section 6.01, (ii)
such security interests are incurred, and the Indebtedness secured
thereby is created, within 180 days after such acquisition (or
construction), (iii) the Indebtedness secured thereby does not exceed the
lesser of the cost and the fair market value of such real property,
improvements or equipment at the time of such acquisition (or
construction) and (iv) such security interests do not apply to any other
property or assets of any Borrower or any Subsidiary;
(j) any Lien securing Indebtedness permitted by Section 6.01(f),
provided that such Lien does not apply or extend to any other assets or
property of any Borrower or any Subsidiary;
(k) any Lien on an asset sold pursuant to a sale and leaseback
transaction permitted by Section 6.03, provided that such Lien does not
apply or extend to any other assets or property of any Borrower or any
Subsidiary;
(l) any Lien securing Indebtedness permitted by 6.01(h), provided
that such Indebtedness is subordinated and evidenced by a note pledged in
accordance with Section 6.01(h);
(m) Liens securing Refinancing Indebtedness, to the extent that the
Indebtedness being refinanced was originally permitted to be secured
pursuant to this Section 6.02, provided that any such Lien does not apply
or extend to any property or assets of any Borrower or any Subsidiary
other than property or assets subject to the Liens securing the
Indebtedness being refinanced;
(n) bankers' liens and Liens (other than any Lien imposed by ERISA)
incurred or deposits made in the ordinary course of business consistent
with past practices in connection with title insurance, purchase
agreements, judgment liens (if released, bonded or stayed within 60 days)
and leases and subleases;
73
(o) prejudgment liens in respect of property of a Foreign Subsidiary
that are incurred in connection with a claim or action against such
Foreign Subsidiary before a court or tribunal outside of the United
States, provided that such liens do not, individually or in the
aggregate, have a Material Adverse Effect;
(p) Liens on the assets of the Insurance Subsidiaries securing self
insurance and reinsurance obligations and letters of credit or bonds
issued in support of such self insurance and reinsurance obligations,
provided that the assets subject to such Liens shall only be assets of
the Insurance Subsidiaries; and
(q) deposits made prior to 1992 plus interest and income earned
thereon to secure the Parent Borrower's obligations in respect of its
Public Issue of 7.5% Dual Currency Swiss Franc Bonds dated 1986 and due
1998/2001.
SECTION 6.03. Sale and Leaseback Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property which it intends to use for substantially the same
purpose or purposes as the property being sold or transferred, provided that
the Parent Borrower and the Subsidiaries may enter into any such transaction
so long as (i) the aggregate fair market value of assets subject to all such
transactions (as determined in good faith by the board of directors of the
Parent Borrower at the time of the applicable transaction) shall not exceed
on a cumulative basis during the term of this Agreement $10,000,000 (less the
aggregate principal amount of Indebtedness permitted under Section 6.01(f)
outstanding at any time), (ii) all the proceeds of any such transaction shall
be in cash (except for obligations assumed by the purchaser thereof) and the
Net Cash Proceeds shall be applied to prepay Note Repurchase Loans or reduce
Revolving Credit Commitments as required by Section 2.13 and (iii) on the
date that any such transaction is consummated and immediately after giving
effect thereto, no Default or Event of Default shall have occurred and be
continuing.
SECTION 6.04. Investments, Loans, Advances and Certain Other
Transactions. Purchase, hold or acquire any capital stock, evidences of
indebtedness or other securities of, make or permit to exist any loans or
advances to, or make or permit to exist any investment or any other interest
in, any other person, or transfer any assets to any Controlled Non-Guarantor
Entity, or engage in any transaction that causes any Guarantor to become a
Controlled Non-Guarantor Entity, except:
(a) investments made by the Parent Borrower or any Subsidiary (i)
prior to the date hereof in the capital stock of the Subsidiaries that
are existing on the date hereof and (ii) after the date hereof in the
capital stock of the Borrowers, the Guarantors and the Inactive
Subsidiaries;
(b) Permitted Investments;
(c) Permitted Acquisitions;
(d) Permitted Debt Repurchases;
(e) Permitted Non-Guarantor Transactions;
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(f) Permitted Non-Control Investments;
(g) Permitted Stock Repurchases;
(h) Permitted CBHS Advances;
(i) loans and advances to (i) directors, officers and employees not
in excess of $5,000,000 at any time outstanding and (ii) physicians and
other health care professionals not in excess of $5,000,000, in each case
in the ordinary course of business and consistent with past practices;
(j) investments in real property in the ordinary course of business
and consistent with past practices not in excess of $5,000,000 at any
time outstanding so long as such property is being used or will be used
by an officer or employee of any Borrower or Guarantor primarily as a
residence;
(k) investments consisting of non-cash consideration from a sale of
assets that is permitted pursuant to Section 6.05;
(l) loans or advances by the Parent Borrower, any wholly owned
Subsidiary or any Guarantor to the Parent Borrower, any wholly owned
Subsidiary or any Guarantor that are permitted under Section 6.01(h),
provided that such loans or advances are subordinated and evidenced by a
note pledged in accordance with Section 6.01(h);
(m) investments, loans or advances existing on the date hereof and
set forth on Schedule 6.04(m);
(n) investments in the ordinary course of business and consistent
with past practices in property (including debt and equity securities)
issued by debtors as part of the reorganization of such debtors, provided
that such property is issued in exchange for property originally issued
when such debtors were solvent and was obtained in the ordinary course of
business;
(o) investments by any Foreign Subsidiary in instruments or
securities of the highest grade investment available in local currencies
or in certificates of deposit (or comparable instruments) of any bank
with which such Subsidiary regularly transacts business;
(p) any Interest Rate Protection Agreement permitted under Section
6.01(j); and
(q) acquisitions by the Parent Borrower of shares of the capital
stock of Green Spring pursuant to the Green Spring Exchange Agreement or
the Green Spring Stockholders' Agreement; provided, that no such
acquisition shall be permitted as a result of the consummation of the
Transactions.
SECTION 6.05. Mergers, Consolidations, Sales of Assets and
Acquisitions. Merge into or consolidate with any other person, or permit any
other person to merge into or consolidate with it, or conduct any Asset Sale
or
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sell any equity interests in Green Spring or CBHS or purchase, lease or
otherwise acquire (in one transaction or a series of transactions) all or any
substantial part of the assets of any other person, except:
(a) if at the time thereof and immediately after giving effect
thereto no Event of Default or Default shall have occurred and be
continuing (i) any wholly owned Subsidiary or any Guarantor may merge or
consolidate into any Borrower or Guarantor in a transaction in which such
Borrower or Guarantor is the surviving corporation and no person other
than the Borrower, the Parent Borrower, a Guarantor or any wholly owned
Domestic Subsidiary receives any consideration, (ii) any Borrower (other
than the Parent Borrower) may merge into or consolidate with any wholly
owned Subsidiary or Guarantor in a transaction in which no person other
than a Borrower, Guarantor or wholly owned Domestic Subsidiary receives
any consideration and the surviving or resulting corporation upon the
consummation of such merger or consolidation is or becomes a Borrower and
(iii) any wholly owned Subsidiary or any Guarantor may merge into or
consolidate with any other wholly owned Subsidiary in a transaction in
which the surviving entity is a wholly owned Domestic Subsidiary and no
person other than any Borrower or a wholly owned Domestic Subsidiary
receives any consideration and so long as the surviving entity is a
Guarantor or becomes a Guarantor to the extent required by Section 5.11;
(b) the Parent Borrower and the Subsidiaries may conduct any Asset
Sale, provided that the fair market value of all the assets sold,
transferred or otherwise disposed of pursuant to this Section 6.05(b)
(excluding any Casualty Event or Condemnation Event) shall not exceed
$10,000,000 on a cumulative basis during the term of this Agreement (as
determined in good faith by a Financial Officer of the Parent Borrower),
provided, that the Net Cash Proceeds from any such sale shall be applied
to the extent required by Section 2.13 and provided, further, that any
Asset Sale otherwise permitted by this Section 6.05(b) shall not be
permitted unless (A) such sale, transfer or other disposition is for
consideration at least (x) 85% of which is cash, if there are any Note
Repurchase Loans out-standing at the time of such sale, transfer or other
disposition, or (y) 70% of which is cash, if there are no outstanding
Note Repurchase Loans at the time of such sale, transfer or other
disposition, and (B) such consideration is at least equal to the fair
market value of the assets sold, transferred or disposed of (as
determined in good faith by a Financial Officer of the Parent Borrower);
(c) the Parent Borrower may sell equity interests in Green Spring,
provided that at no time shall the Parent Borrower cease to own a
majority of the equity interests in Green Spring;
(d) the Parent Borrower may sell equity interests in CBHS, provided
that at no time shall (i) the Parent Borrower cease to own at least 25%
of the equity interests in CBHS and (ii) the equity interests in CBHS
owned by the Parent Borrower be less than the equity interests in CBHS
owned by any other person or group, unless in the case of clause (ii),
the Parent Borrower has, at such time, the right or ability by contract
or otherwise to elect or designate for election more than 20% of the
governing board of CBHS;
(e) the Parent Borrower or any Subsidiary may make Permitted
Acquisitions;
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(f) any sale and leaseback transaction permitted by Section 6.03 may
be effected, provided that the Net Cash Proceeds from such sale shall be
applied as required by Section 2.13;
(g) any transfer of assets made in connection with any Permitted
Non-Control Investment or any Permitted Non-Guarantor Transaction may be
effected, provided that any Net Cash Proceeds from such transfer shall be
applied as required by Section 2.13;
(h) any Subsidiary may liquidate and distribute assets to any other
Subsidiary, a Guarantor or the Parent Borrower, provided that if the
Subsidiary that is being liquidated is a Guarantor or a Borrower, the
Subsidiary that receives the assets pursuant to following such
liquidation shall be a Guarantor or a Borrower; and
(i) any Loan Party or any Subsidiary may lease or sublease (whether
as lessor or lessee) properties in the ordinary course of business and
consistent with past practice;
SECTION 6.06. Dividends and Distributions; Restrictions on Ability
of Subsidiaries to Pay Dividends. (a) Declare or pay, directly or
indirectly, any dividend or make any other distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, with respect to any shares of its capital stock or directly or
indirectly redeem, purchase, retire or otherwise acquire for value (or permit
any Subsidiary to purchase or acquire) any shares of any class of its capital
stock or set aside any amount for any such purpose; provided, however, that:
(i) any Subsidiary may declare and pay dividends or make other
istributions to any Borrower or any wholly owned Subsidiary;
(ii) Permitted Stock Repurchases may be effected;
(iii) the Parent Borrower may repurchase common stock distributed in
the ordinary course of business consistent with past practices to trusts
pursuant to any employee-related benefit plan (including any employee
stock ownership plan);
(iv) the Parent Borrower may acquire warrants and options for the
purchase of capital stock acquired upon the exercise of such warrants or
options, including pursuant to the Warrant Agreements, provided that the
sole consideration for any such warrants or options shall be the Parent
Borrower's common stock;
(v) the Parent Borrower may purchase, redeem or otherwise acquire
for nominal consideration rights in connection with the Rights Plan;
(vi) any Guarantor may declare and pay dividends pro rata to its
shareholders, partners or other equity holders, as the case may be; and
(vii) so long as no Default or Event of Default shall have occurred
and be continuing, the Parent Borrower may declare and pay in each fiscal
year pro rata cash dividends on its capital stock in a cumulative amount
for such fiscal year not to exceed 6% of (x) the cash proceeds received by
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the Parent Borrower, net of underwriter's and broker's fees and
commissions and costs and expenses incurred in connection therewith, from
issuances of its common stock after the Closing Date pursuant to public
or private offerings less (y) all amounts spent by the Parent Borrower to
repurchase any shares of its common stock pursuant to a Permitted Stock
Repurchase.
(b) Permit any of its subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective, any
encumbrance or restriction on the ability of any such subsidiary to (i) pay
any dividends or make any other distributions on its capital stock or any
other interest or (ii) make or repay any loans or advances to the Parent
Borrower or the parent of such subsidiary (dividends, distributions and other
payments described in sub-clauses (i) and (ii) are collectively referred to
herein as "Upstream Payments"), other than encumbrances and restrictions:
(A) pursuant to the Loan Documents;
(B) existing under, or by reason of, applicable law;
(C) contained in any debt instrument governing (x) Indebtedness of a
Subsidiary that becomes a Borrower or (y) Indebtedness of a Guarantor
acquired or assumed pursuant to a Permitted Acquisition if such
Indebtedness was permitted by Section 6.01(d) or constitutes a
refinancing thereof permitted by Section 6.01(n), provided that (x) such
instrument was in existence at the time of such acquisition and was not
created in contemplation of or in connection with the applicable
Permitted Acquisition, (y) a Financial Officer of the Parent Borrower
reasonably believes at the time such Indebtedness is acquired that the
terms of such instrument will not encumber or restrict the ability of
such acquired Subsidiary to make an Upstream Payment, except upon a
default or an event of default under such Indebtedness and (z) such
instrument contains no express encumbrances, or restrictions on the
ability of such acquired Subsidiary to make an Upstream Payment, except
upon a default or an event of default under such Indebtedness;
(D) existing on the date hereof and set forth on Schedule 6.06(b);
(E) contained in sale and leaseback agreements permitted by Section
6.03 and any debt instrument governing any Indebtedness permitted by
Section 6.01(f); and
(F) that are Permitted Restrictions in the case of a Controlled
Venture.
(c) Permit Green Spring, directly or indirectly, to create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of Green Spring to pay or make any Upstream
Payments, other than encumbrances and restrictions:
(A) pursuant to the Loans Documents;
(B) existing under, or by reason of, applicable law;
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(C) contained in any debt instrument governing Indebtedness of Green
Spring acquired or assumed pursuant to an acquisition if such
Indebtedness or the refinancing thereof was permitted by Section 6.01,
provided that (x) such instrument was in existence at the time of such
acquisition and was not created in contemplation of or in connection with
the applicable acquisition, (y) a Financial Officer of the Parent
Borrower reasonably believes at the time such Indebtedness is acquired or
assumed that the terms of such instrument will not encumber or restrict
the ability of Green Spring to make an Upstream Payment, except upon a
default or an event of default under such Indebtedness and (z) such
instrument contains no express encumbrances or restrictions on the
ability of Green Spring to make an Upstream Payment, except upon a
default or an event of default under such Indebtedness.
(D) existing on the date hereof and set forth on Schedule 6.06(c);
(E) contained in any sale and leaseback agreement or any debt
instrument governing any Indebtedness permitted by Section 6.01(f); and
(F) that are Permitted Restrictions.
SECTION 6.07. Transactions with Affiliates. Sell or transfer any
property or assets to, or purchase or acquire any property or assets from, or
otherwise engage in any other transactions with, any of its Affiliates,
except that any Borrower or any Subsidiary may engage in any of the foregoing
transactions in the ordinary course of business at prices and on terms and
conditions substantially not less favorable to such Borrower or such
Subsidiary than could be obtained on an arm's-length basis from unrelated
third parties, provided that the foregoing restriction shall not apply to any
Permitted Non-Guarantor Transaction.
SECTION 6.08. Other Indebtedness and Agreements. (a) Permit any
waiver, supplement, modification, amendment, termination or release of any
indenture, instrument or agreement governing any Indebtedness or preferred
stock of any Borrower or any Subsidiary, or modify its charter or by-laws, in
each case to the extent that any such waiver, supplement, modification,
amendment, termination or release would be adverse to the Lenders in any
material respect.
(b) Permit any waiver, supplement, modification, amendment,
termination or release of any Transaction Document to which it is a party
after the Closing Date, to the extent that any such waiver, supplement,
modification, amendment, termination or release would be adverse to the
interest of the Lenders in any material respect, without the consent of the
Required Lenders.
(c) Make any distribution, whether in cash, property, securities or
a combination thereof, other than scheduled payments of principal and
interest as and when due (to the extent not prohibited by applicable
subordination provisions), in respect of, or pay, or offer or commit to pay,
or directly or indirectly redeem, repurchase, retire or otherwise acquire for
consideration, or set apart any sum for the aforesaid purposes, any
subordinated Indebtedness for borrowed money of any Loan Party or any
Subsidiary, except for (i) the refinancing of Indebtedness in connection with
the consummation of the Transactions, (ii) Permitted Debt Repurchases, (iii)
the refinancings of Indebtedness permitted by Section 6.01 and (iv)
Indebtedness permitted pursuant to Section 6.01(h).
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SECTION 6.09. Business of the Borrowers and Subsidiaries. Engage at
any time in any business or business activity that is not a health care business
or activity and business activities reasonably related (ancillary or
complementary) to such business or business activity.
SECTION 6.10. Interest Expense Coverage Ratio. Permit the Interest
Expense Coverage Ratio as of the end of any fiscal quarter, beginning with the
fiscal quarter ending on September 30, 1997, to be less than 2.00 to 1.00.
SECTION 6.11. Leverage Ratio. Permit the Leverage Ratio as of the
end of any fiscal quarter, beginning with the fiscal quarter ending on
September 30, 1997, to be in excess of 4.00 to 1.00.
SECTION 6.12. Senior Debt Ratio. Permit the Senior Debt Ratio as of
the end of any fiscal quarter, beginning with the fiscal quarter ending on
September 30, 1997, to be in excess of 2.00 to 1.00.
SECTION 6.13. Maintenance of Consolidated EBITDA. Permit for any
period of four consecutive fiscal quarters ending on the last day of any fiscal
quarter, commencing September 30, 1997, the Consolidated EBITDA for the Parent
Borrower to be less than $80,000,000; provided: that, for purposes of
determining Consolidated EBITDA for each of the four-fiscal-quarters ending
September 30, 1997, December 31, 1997, and March 31, 1998, Consolidated EBITDA
shall equal Consolidated EBITDA for the period commencing July 1, 1997, and
ending on (A) September 30, 1997, multiplied by 4, (B) December 31, 1997,
multiplied by 2 and (C) March 31, 1998, multiplied by 4/3, respectively.
SECTION 6.14. Fiscal Year. Change the end of its fiscal year from
September 30 to any other date.
ARTICLE VII
Events of Default
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made in or in
connection with any Loan Document or the borrowings or issuances of Letters
of Credit hereunder, or any representation, warranty, statement or
information contained in any report, certificate, financial statement or
other instrument furnished in connection with or pursuant to any Loan
Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of any Loan
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise;
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(c) default shall be made in the payment of any Fee, any L/C
Disbursement that is not satisfied by a deemed Loan pursuant to the second
sentence of Section 2.02(f) or interest on any Loan or L/C Disbursement or
any other amount (other than an amount referred to in (b) above) due under
any Loan Document, when and as the same shall become due and payable, and
such default shall continue unremedied for a period of three Business Days;
(d) default shall be made in the due observance or performance by any
Borrower or any Subsidiary of any covenant, condition or agreement
contained in Section 5.01(a), 5.05, 5.08, 5.12 or 5.14 or in Article VI;
(e) default shall be made in the due observance or performance by any
Borrower or any Subsidiary of any covenant, condition or agreement
contained in any Loan Document (other than those specified in (b), (c) or
(d) above) and such default shall continue unremedied for a period of
15 days after notice thereof from the Administrative Agent or any Lender to
the Borrowers;
(f) any Borrower or any Subsidiary shall (i) fail to pay any principal
or interest, regardless of amount, due in respect of any Indebtedness
(other than any Indebtedness evidenced by any Loan Document) in a principal
amount in excess of $10,000,000, when and as the same shall become due and
payable (subject to any grace period), or (ii) fail to observe or perform
any other term, covenant, condition or agreement contained in any agreement
or instrument evidencing or governing any such Indebtedness if the effect
of any failure referred to in this clause (ii) is to cause, or to permit
the holder or holders of such Indebtedness or a trustee on its or their
behalf to cause, such Indebtedness to become due prior to its stated
maturity;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking
(i) relief in respect of any Borrower or any Subsidiary, or of a
substantial part of the property or assets of any Borrower or a Subsidiary,
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any Borrower
or any Subsidiary or for a substantial part of the property or assets of
any Borrower or a Subsidiary or (iii) the winding-up or liquidation of any
Borrower or any Subsidiary; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of
the foregoing shall be entered;
(h) any Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described
in (g) above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for any
Borrower or any Subsidiary or for a substantial part of the property or
assets of any Borrower or any Subsidiary, (iv) file an answer admitting the
material allegations of a petition filed against it in any proceeding
relating to the above, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in
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writing its inability or fail generally to pay its debts as they become
due or (vii) take any action for the purpose of effecting any of the
foregoing;
(i) one or more judgments for the payment of money in an aggregate
amount in excess of $5,000,000 shall be rendered against any Borrower, any
Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 60 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to levy upon assets or properties of any Borrower or any
Subsidiary to enforce any such judgment;
(j) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other such ERISA Events,
could reasonably be expected to have a Material Adverse Effect;
(k) the Lease shall cease to be in full force and effect in accordance
with the respective terms thereof;
(l) there shall have occurred and be continuing a Material Franchise
Payment Default;
(m) any security interest purported to be created by any Security
Document shall cease to be, or shall be asserted by any Borrower or any
other Loan Party not to be, a valid, perfected, first priority (except as
otherwise expressly provided in this Agreement or such Security Document)
security interest in the securities, assets or properties covered thereby,
except to the extent that any such loss of perfection or priority results
from the failure of the Collateral Agent to maintain possession of
certificates representing securities pledged under the Pledge Agreement;
(n) any Loan Document or the Franchise Agreement shall not be for any
reason, or shall be asserted by any Loan Party not to be, in full force and
effect and enforceable in accordance with its terms; or
(o) there shall have occurred a Change in Control;
then, and in every such event (other than an event with respect to any Borrower
or any Subsidiary described in paragraph (g) or (h) above), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrowers,
take either or both of the following actions, at the same or different times:
(i) terminate forthwith the Commitments and (ii) declare the Loans then out-
standing to be forthwith due and payable in whole or in part, whereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrowers accrued hereunder and under any other Loan Document, shall become
forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the Borrowers,
anything contained herein or in any other Loan Document to the contrary
notwithstanding; and in any event with respect to any Borrower or any Subsidiary
described in paragraph (g) or (h) above, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued
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Fees and all other liabilities of the Borrowers accrued hereunder and under
any other Loan Document, shall automatically become due and payable, without
presentment, demand, protest or any other notice of any kind, all of which
are hereby expressly waived by the Borrowers, anything contained herein or in
any other Loan Document to the contrary notwithstanding. If any Event of
Default has occurred and is continuing, the Collateral Agent may exercise
rights and remedies as provided in the Collateral Assignment and the Advance
Collateral Assignment.
ARTICLE VIII
The Administrative Agent, the Syndication Agent and the Collateral Agent
In order to expedite the transactions contemplated by this Agreement,
The Chase Manhattan Bank is hereby appointed to act as Administrative Agent and
Collateral Agent and First Union National Bank of North Carolina is hereby
appointed to act as Syndication Agent, in each case on behalf of the Lenders and
the Issuing Banks (for purposes of this Article VIII, the Administrative Agent,
the Syndication Agent and the Collateral Agent are referred to collectively as
the "Agents"). Each of the Lenders and each assignee of any such Lender and
each Issuing Bank, hereby irrevocably authorizes the Agents to take such actions
on behalf of such Lender or assignee or Issuing Bank and to exercise such powers
as are specifically delegated to the Agents by the terms and provisions hereof
and of the other Loan Documents, together with such actions and powers as are
reasonably incidental thereto. The Administrative Agent is hereby expressly
authorized by the Lenders and the Issuing Banks, without hereby limiting any
implied authority, (a) to receive on behalf of the Lenders and the Issuing Banks
all payments of principal of and interest on the Loans, all payments in respect
of L/C Disbursements and all other amounts due to the Lenders hereunder, and
promptly to distribute to each Lender or the applicable Issuing Bank its proper
share of each payment so received; (b) to give notice on behalf of each of the
Lenders to the Borrowers of any Event of Default specified in this Agreement of
which the Administrative Agent has actual knowledge acquired in connection with
its agency hereunder; (c) pursuant to Section 5.13, request the Parent Borrower
to exercise all remedies under the Franchise Agreement (including Governance
Remedies); and (d) to distribute to each Lender copies of all notices, financial
statements and other materials delivered by the Borrowers or any other Loan
Party pursuant to this Agreement or the other Loan Documents as received by the
Administrative Agent. Without limiting the generality of the foregoing, the
Administrative Agent and the Collateral Agent are hereby expressly authorized to
execute any and all documents (including releases) with respect to the
Collateral and the rights of the Secured Parties with respect thereto, as
contemplated by and in accordance with the provisions of this Agreement and the
Security Documents. The Borrowers agree that the Administrative Agent may
designate prior to the Closing Date any other Lender with the title co-agent and
that any such co-agent shall not be obligated to perform any duties in such
capacity as a co-agent.
Neither the Agents nor any of their respective directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or willful misconduct, or
be responsible for any statement, warranty or representation herein or the
contents of any document delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance or observance by the
Borrowers or any other Loan Party of any of the terms, conditions, covenants or
agreements contained in any Loan Document. The Agents shall not be responsible
to the Lenders for the due execution, genuineness,
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validity, enforceability or effectiveness of this Agreement or any other Loan
Documents, instruments or agreements. The Agents shall in all cases be fully
protected in acting, or refraining from acting, in accordance with written
instructions signed by the Required Lenders and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders. Each Agent shall, in
the absence of knowledge to the contrary, be entitled to rely on any
instrument or document believed by it in good faith to be genuine and correct
and to have been signed or sent by the proper person or persons. Neither the
Agents nor any of their respective directors, officers, employees or agents
shall have any responsibility to the Borrowers or any other Loan Party on
account of the failure of or delay in performance or breach by any Lender or
any Issuing Bank of any of its obligations hereunder or to any Lender or any
Issuing Bank on account of the failure of or delay in performance or breach
by any other Lender or Issuing Bank or the Borrowers or any other Loan Party
of any of their respective obligations hereunder or under any other Loan
Document or in connection herewith or therewith. Each of the Agents may
execute any and all duties hereunder by or through agents or employees and
shall be entitled to rely upon the advice of legal counsel selected by it
with respect to all matters arising hereunder and shall not be liable for any
action taken or suffered in good faith by it in accordance with the advice of
such counsel.
The Lenders hereby acknowledge that none of the Agents shall be under
any duty to take any discretionary action permitted to be taken by it pursuant
to the provisions of this Agreement unless it shall be requested in writing to
do so by the Required Lenders.
Subject to the appointment and acceptance of a successor Agent as
provided below, any of the Agents may resign at any time by notifying the
Lenders and the Borrowers. Upon any such resignation, the Required Lenders,
with the consent of the Parent Borrower (which consent shall not be unreasonably
withheld), shall have the right to appoint a successor, provided the consent of
the Parent Borrower shall not be required if an Event of Default has occurred
and is continuing. If no successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent, with the consent of the Parent
Borrower (which consent shall not be unreasonably withheld), which shall be a
bank that is a Lender and has a combined capital and surplus of at least
$500,000,000 or an Affiliate of any such bank, provided the consent of the
Parent Borrower shall not be required if an Event of Default has occurred and is
continuing. Upon the acceptance of any appointment as Agent hereunder by a
successor bank, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations hereunder. After the
Agent's resignation hereunder, the provisions of this Article and Section 9.05
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
With respect to the Loans made by it hereunder, each Agent in its
individual capacity and not as Agent shall have the same rights and powers as
any other Lender and may exercise the same as though it were not an Agent, and
the Agents and their Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrowers or any Subsidiary or
other Affiliate thereof as if it were not an Agent.
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Each Lender agrees (a) to reimburse the Agents, on demand, in the
amount of its pro rata share (based on its Commitments hereunder) of any
expenses incurred for the benefit of the Lenders by the Agents, including
counsel fees and compensation of agents and employees paid for services rendered
on behalf of the Lenders, that shall not have been reimbursed by the Borrowers
or any other Loan Party and (b) to indemnify and hold harmless each Agent and
any of its directors, officers, employees or agents, on demand, in the amount of
such pro rata share, from and against any and all liabilities, taxes,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by or asserted against it in its capacity as Agent or any of them
in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by it or any of them under this
Agreement or any other Loan Document, to the extent the same shall not have been
reimbursed by the Borrowers or any other Loan Party, provided that no Lender
shall be liable to an Agent or any such other indemnified person for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Agent or any of
its directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and without
reliance upon the Agents or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agents or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to any Borrower, to it in care of the Parent Borrower at
0000 Xxxxxxxxx Xxxx, XX, Xxxxx 0000, Xxxxxxx, XX 00000, Attention of
Treasurer (Telecopy No. (000) 000-0000);
(b) if to the Administrative Agent or the Collateral Agent, to Chase
Manhattan Bank Agency Services Corporation, One Chase Xxxxxxxxx Xxxxx,
0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxxx Xxxxxxx (Telecopy
No. (000) 000-0000), with a copy to The Chase Manhattan Bank, at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxx Xxx Xxx (Telecopy
No. (000) 000-0000);
(c) if to the Syndication Agent, to First Union National Bank of North
Carolina, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attention of Xxx Xxxxxxxxx (Telecopy No. 704-383-9144); and
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(d) if to a Lender, to it at its address (or telecopy number) set
forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to
which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Loan Parties herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Banks and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Banks, regardless of any investigation made by the Lenders or the
Issuing Banks or on their behalf, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any Fee or any
other amount payable under this Agreement or any other Loan Document is
outstanding and unpaid or any Letter of Credit is outstanding and so long as the
Commitments have not been terminated. The provisions of Sections 2.14, 2.16,
2.20 and 9.05 shall remain operative and in full force and effect regardless of
the expiration of the term of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Loans, the
expiration of the Commitments, the expiration of any Letter of Credit, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the
Administrative Agent, the Syndication Agent, the Collateral Agent, any Lender or
any Issuing Bank.
SECTION 9.03. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrowers, the Administrative Agent and
the Syndication Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns.
SECTION 9.04. Successors and Assigns. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the permitted successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of the Borrowers, the
Administrative Agent and the Syndication Agent, the Issuing Banks or the Lenders
that are contained in this Agreement shall bind and inure to the benefit of
their respective permitted successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion
of its interests, rights and obligations under this Agreement (including all or
a portion of its Commitment and the Loans at the time owing to it); provided,
however, that (i) except in the case of an assignment to a Lender or an
Affiliate of such Lender, (x) the Parent Borrower (unless an Event of Default
shall have occurred and is continuing), the Administrative Agent and the
Syndication Agent (and, in the case of any assignment of a Revolving Credit
Commitment, the Issuing Banks) must give their prior written
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consent to such assignment (which consent shall not be unreasonably withheld)
and (y) the amount of the Commitment of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall
not be less than $5,000,000 (or, if less, the entire remaining amount of such
Lender's Commitment), (ii) the parties to each such assignment shall execute
and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500, (iii) the assignee,
if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire and (iv) the assignment by any Lender of any
portion of its Commitments or any portion of the Loans owing to such Lender
must include (A) a ratable portion of its Commitments and its CBHS
Commitments and a ratable portion of Loans and CBHS Loans owing to such
Lender and (B) a ratable portion of its Revolving Credit Commitments and Note
Repurchase Loan Commitments and Revolving Loans and Note Repurchase Loans
owing to such Lender. Upon acceptance and recording pursuant to paragraph
(e) of this Section 9.04, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five
Business Days after the execution thereof, (A) the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender under
this Agreement and (B) the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections
2.14, 2.16, 2.20 and 9.05, as well as to any Fees accrued for its account and
not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Revolving Credit Commitment and its Note Repurchase Loan Commitment, and the
outstanding balance of its Revolving Loans and Note Repurchase Loans, in each
case without giving effect to assignments thereof which have not become
effective, are as set forth in such Assignment and Acceptance, (ii) except as
set forth in (i) above, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement, or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto, or the financial condition of any Borrower
or any Subsidiary or the performance or observance by any Borrower or any
Subsidiary of any of its obligations under this Agreement, any other Loan
Document or any other instrument or document furnished pursuant hereto;
(iii) such assignee represents and warrants that it is legally authorized to
enter into such Assignment and Acceptance; (iv) such assignee confirms that it
has received a copy of this Agreement, together with copies of the most recent
financial statements referred to in Section 3.05(a) or delivered pursuant to
Section 5.04 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, the Syndication Agent, the Collateral
Agent, such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (vi) such
assignee appoints and authorizes the Administrative Agent and the Collateral
Agent to take such action as agent
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on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent and the Collateral Agent, respectively,
by the terms hereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance
with their terms all the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices a copy of each Assignment
and Acceptance delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitment of, and principal amount of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive and the Borrowers,
the Administrative Agent, the Issuing Banks, the Collateral Agent and the
Lenders may treat each person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrowers, the Issuing Banks, the Collateral Agent and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in
paragraph (b) above and, if required, the written consent of the Parent
Borrower, the Issuing Banks, the Administrative Agent and the Syndication Agent
to such assignment, the Administrative Agent shall (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Lenders and the Issuing Banks. No
assignment shall be effective unless it has been recorded in the Register as
provided in this paragraph (e).
(f) Each Lender may without the consent of the Borrowers, the Issuing
Banks or the Administrative Agent sell participations to one or more banks or
other entities in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to
it); provided, however, that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) the
participating banks or other entities shall be entitled to the benefit of the
cost protection provisions contained in Sections 2.14, 2.16 and 2.20 to the same
extent as if they were Lenders and (iv) the Borrowers, the Administrative Agent,
the Syndication Agent, the Issuing Banks and the Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrowers relating to the Loans or
L/C Disbursements and to approve any amendment, modification or waiver of any
provision of this Agreement and the other Loan Documents (other than amendments,
modifications or waivers decreasing any fees payable hereunder or the amount of
principal of or the rate at which interest is payable on the Loans, extending
any scheduled principal payment date or date fixed for the payment of interest
on the Loans or increasing or extending the Commitments or releasing from any
Lien granted under any Security Document all or any substantial part of the
Collateral (except with respect to sales or transfers of, and other transactions
relating to, Collateral permitted pursuant to any Loan Document)).
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(g) Any Lender or participant may, in connection with any assignment
or participation or proposed assignment or participation pursuant to this
Section 9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrowers furnished to such Lender
by or on behalf of the Borrowers; provided that, prior to any such disclosure of
information designated by the Borrowers as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information on
terms no less restrictive than those applicable to the Lenders pursuant to
Section 9.16.
(h) Any Lender may at any time assign all or any portion of its
rights under this Agreement to a Federal Reserve Bank to secure extensions of
credit by such Federal Reserve Bank to such Lender; provided that no such
assignment shall release a Lender from any of its obligations hereunder or
substitute any such Bank for such Lender as a party hereto. In order to
facilitate such an assignment to a Federal Reserve Bank, the Borrowers shall, at
the request of the assigning Lender, duly execute and deliver to the assigning
Lender a promissory note or notes evidencing the Loans made to the Borrowers by
the assigning Lender hereunder.
(i) The Borrowers shall not assign or delegate any of their
respective rights or duties hereunder without the prior written consent of the
Administrative Agent, the Syndication Agent, the Issuing Banks and each Lender,
and any attempted assignment without such consent shall be null and void.
SECTION 9.05. Expenses; Indemnity. (a) The Borrowers agree to pay
all reasonable out-of-pocket expenses incurred by the Administrative Agent, the
Syndication Agent, the Collateral Agent and the Issuing Banks in connection with
the syndication of the credit facilities provided for herein and the preparation
and administration of this Agreement and the other Loan Documents or in
connection with any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions hereby or thereby
contemplated shall be consummated) or incurred by the Administrative Agent, the
Syndication Agent, the Collateral Agent, an Issuing Bank or any Lender in
connection with the enforcement or protection of its rights in connection with
this Agreement and the other Loan Documents or in connection with the Loans made
or Letters of Credit issued hereunder, including the reasonable fees, charges
and disbursements of Cravath, Swaine & Xxxxx, counsel for the Administrative
Agent, the Syndication Agent and the Collateral Agent, and, in connection with
any such enforcement or protection, the reasonable fees, charges and
disbursements of any other counsel for the Administrative Agent, the Syndication
Agent, the Collateral Agent, an Issuing Bank or any Lender.
(b) The Borrowers agree, jointly and severally, to indemnify the
Administrative Agent, the Syndication Agent, the Collateral Agent, each
co-agent, each Lender and each Issuing Bank, each Affiliate of any of the fore-
going persons and each of their respective directors, officers, employees and
agents (each such person being called an "Indemnitee") against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees, charges and disbursements,
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective obligations
thereunder or the consummation of the Transactions and the other transactions
contemplated thereby, (ii) the use of the proceeds of the
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Loans or issuance of Letters of Credit, (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not
any Indemnitee is a party thereto, or (iv) any actual or alleged presence or
Release of Hazardous Materials on any property owned or operated by the
Borrowers or any of the Subsidiaries, or any Environmental Claim related in
any way to the Borrowers or the Subsidiaries; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee.
(c) The provisions of this Section 9.05 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the expiration
of any Letter of Credit, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent, the Syndication Agent, the
Collateral Agent, any Lender or either Issuing Bank. All amounts due under this
Section 9.05 shall be payable on written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and Issuing Bank is hereby authorized at
any time and from time to time, except to the extent prohibited by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender or Issuing Bank to or for the credit or the account of any
Borrower against any of and all the obligations of any Borrower now or hereafter
existing under this Agreement and other Loan Documents held by such Lender or
Issuing Bank, irrespective of whether or not such Lender or Issuing Bank shall
have made any demand under this Agreement or such other Loan Document and
although such obligations may be unmatured. The rights of each Lender and
Issuing Bank under this Section 9.06 are in addition to other rights and
remedies (including other rights of setoff) which such Lender or Issuing Bank
may have.
SECTION 9.07. APPLICABLE LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF
COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT
GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent, the Syndication Agent, the Collateral Agent, any Lender or
either Issuing Bank in exercising any power or right hereunder or under any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Administrative
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Agent, the Syndication Agent, the Collateral Agent, the Issuing Banks and the
Lenders hereunder and under the other Loan Documents are cumulative and are
not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or any other Loan Document or
consent to any departure by the Borrowers or any other Loan Party therefrom
shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No notice or
demand on the Borrowers in any case shall entitle the Borrowers to any other
or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any other Loan Document (excluding
Letters of Credit) nor any provision hereof or thereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Borrowers and the Required Lenders (or, in the case of any other such
Loan Document, the parties thereto with the prior written consent of the
Required Lenders); provided, however, that no such agreement shall (i) decrease
the principal amount of, or extend the maturity of or any scheduled principal
payment date or date for the payment of any interest on any Loan or any date for
reimbursement of an L/C Disbursement, or waive or excuse any such payment or any
part thereof, or decrease the rate of interest on any Loan or L/C Disbursement,
without the prior written consent of each Lender affected thereby, (ii) change
or extend the Commitment or decrease or extend the date for payment of the
Commitment Fees of any Lender without the prior written consent of such Lender,
(iii) amend or modify the provisions of Section 2.17 or 9.04(i), the provisions
of this Section, the definition of the term "Required Lenders" or release any
Guarantor from its obligations under the Guarantee Agreement (other than in
accordance with the Guarantee Agreement) or release from any Lien granted under
any Security Document all or any substantial part of the Collateral (except with
respect to sales or transfers of, and other transactions relating to,
Collateral permitted pursuant to the Security Documents), without the prior
consent of each Lender or (iv) change (A) the allocation of any prepayment, to
be allocated between the Note Repurchase Loans and Revolving Loans pursuant to
Section 2.13 or (B) the application of any prepayment or repayment of Note
Repurchase Loans pursuant to Sections 2.11(b), 2.12(b) or 2.13(d), in each case
without the prior written consent of Lenders holding a majority of the aggregate
outstanding principal amount of the Note Repurchase Loans; provided, further
that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent, the Syndication Agent, the Collateral Agent
or either Issuing Bank hereunder or under any other Loan Document without the
prior written consent of the Administrative Agent, the Syndication Agent, the
Collateral Agent or such Issuing Bank, as the case may be.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan
or participation in any L/C Disbursement, together with all fees, charges and
other amounts which are treated as interest on such Loan or participation in
such L/C Disbursement under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan or
participation in accordance with applicable law, the rate of interest payable in
respect of such Loan or participation hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Loan or participation but were not payable as a result of the operation
of this Section 9.09 shall be cumulated and the interest and Charges payable to
such Lender in respect of other Loans or participations or periods shall be
increased (but not above the Maximum Rate therefor) until such
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cumulated amount, together with interest thereon at the Federal Funds
Effective Rate to the date of repayment, shall have been received by such
Lender.
SECTION 9.10. Entire Agreement. This Agreement, the Fee Letter and
the other Loan Documents constitute the entire contract between the parties
relative to the subject matter hereof. Any other previous agreement among the
parties with respect to the subject matter hereof is superseded by this
Agreement and the other Loan Documents. Nothing in this Agreement or in the
other Loan Documents, expressed or implied, is intended to confer upon any party
other than the parties hereto and thereto any rights, remedies, obligations or
liabilities under or by reason of this Agreement or the other Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED TO SUCH PARTY, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
SECTION 9.12. Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together shall
constitute a single contract, and shall become effective as provided in
Section 9.03. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.
SECTION 9.14. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) Each
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting
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in New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in
such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative
Agent, the Syndication Agent, the Collateral Agent, either Issuing Bank or
any Lender may otherwise have to bring any action or proceeding relating to
this Agreement or the other Loan Documents against the Borrowers or its
properties in the courts of any jurisdiction.
(b) Each Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any New York State or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.16. Confidentiality. The Administrative Agent, the
Syndication Agent, the Collateral Agent, each Issuing Bank and each of the
Lenders agrees to keep confidential (and to use its best efforts to cause its
respective agents and representatives to keep confidential) the Information (as
defined below) and all copies thereof, extracts therefrom and analyses or other
materials based thereon, except that the Administrative Agent, the Syndication
Agent, the Collateral Agent, either Issuing Bank or any Lender shall be
permitted to disclose Information (a) to such of its respective officers,
directors, employees, agents, auditors, affiliates and representatives as need
to know such Information, (b) to the extent requested by any regulatory
authority, (c) to the extent otherwise required by applicable laws and
regulations or by any subpoena or similar legal process, (d) in connection with
any suit, action or proceeding relating to the enforcement of its rights
hereunder or under the other Loan Documents or (e) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 9.16 or (ii) becomes available to the Administrative Agent, the
Syndication Agent, either Issuing Bank, any Lender or the Collateral Agent on a
nonconfidential basis from a source other than the Borrowers. For the purposes
of this Section, "Information" shall mean all financial statements,
certificates, reports, agreements and information (including all analyses,
compilations and studies prepared by the Administrative Agent, the Syndication
Agent, the Collateral Agent, either Issuing Bank or any Lender based on any of
the foregoing) that (i) are received from the Borrowers and related to the
Borrowers, any shareholder of any of the Borrowers or any employee, customer or
supplier of the Borrowers, other than any of the foregoing that were available
to the Administrative Agent, the Syndication Agent, the Collateral Agent, either
Issuing Bank or any Lender on a nonconfidential basis prior to its disclosure
thereto by the Borrowers, and (ii) are in the case of Information provided after
the date hereof, clearly identified at the time of delivery as confidential.
The provisions of this Section 9.16 shall remain operative and in full force and
effect regardless of the expiration and term of this Agreement.
93
SECTION 9.17. Obligations Joint and Several. (a) Each Borrower
agrees that it shall, jointly with the other Borrowers and severally, be liable
for all the Obligations. Each Borrower further agrees that the Obligations of
the other Borrowers may be extended and renewed, in whole or in part, without
notice to or further assent from it, and that it will remain bound upon its
agreement hereunder notwithstanding any extension or renewal of any Obligation
of the other Borrowers.
(b) Each Borrower waives presentment to, demand of payment from and
protest to the other Borrowers of any of the Obligations, and also waives notice
of acceptance of its obligations and notice of protest for nonpayment. The
Obligations of a Borrower hereunder shall not be affected by (i) the failure of
any Lender or Issuing Bank or the Administrative Agent or Collateral Agent to
assert any claim or demand or to enforce any right or remedy against the other
Borrowers under the provisions of this Agreement or any of the other Loan
Documents or otherwise; (ii) any rescission, waiver, amendment or modification
of any of the terms or provisions of this Agreement, any of the other Loan
Documents or any other agreement; or (iii) the failure of any Lender or Issuing
Bank to exercise any right or remedy against any other Borrower.
(c) Each Borrower further agrees that its agreement hereunder
constitutes a promise of payment when due and not of collection, and waives any
right to require that any resort be had by any Lender or Issuing Bank to any
balance of any deposit account or credit on the books of any Lender or Issuing
Bank in favor of any other Borrower or any other person.
(d) The Obligations of each Borrower hereunder shall not be subject
to any reduction, limitation, impairment or termination for any reason,
including compromise, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Obligations of the other Borrowers or
otherwise. Without limiting the generality of the foregoing, the Obligations of
each Borrower hereunder shall not be discharged or impaired or otherwise
affected by the failure of the Administrative Agent, the Collateral Agent or any
Lender or Issuing Bank to assert any claim or demand or to enforce any remedy
under this Agreement or under any other Loan Document or any other agreement, by
any waiver or modification in respect of any thereof, by any default, failure or
delay, willful or otherwise, in the performance of the Obligations of the other
Borrowers, or by any other act or omission which may or might in any manner or
to any extent vary the risk of such Borrower or otherwise operate as a discharge
of such Borrower as a matter of law or equity.
(e) Each Borrower further agrees that its obligations hereunder shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Obligation of
the other Borrowers is rescinded or must otherwise be restored by the
Administrative Agent, the Collateral Agent or any Lender or Issuing Bank upon
the bankruptcy or reorganization of any of the other Borrowers or otherwise.
(f) In furtherance of the foregoing and not in limitation of any
other right which the Administrative Agent, the Collateral Agent or any Lender
or Issuing Bank may have at law or in equity against any Borrower by virtue
hereof, upon the failure of a Borrower to pay any Obligation when and as the
same shall become due, whether at maturity, by acceleration, after notice of
prepayment or otherwise, each other Borrower hereby promises to and will, upon
receipt of written demand by the Administrative Agent, forthwith pay, or cause
to be paid, in cash the amount of such unpaid Obligations, and thereupon each
Lender shall, in a reasonable manner, assign the amount of
94
the Obligations of the other Borrowers owed to it and paid by such Borrower
pursuant to this guarantee to such Borrower, such assignment to be pro tanto
to the extent to which the Obligations in question were discharged by such
Borrower, or make such disposition thereof as such Borrower shall direct (all
without recourse to any Lender and without any representation or warranty by
any Lender).
(g) Upon payment by a Borrower of any sums as provided above, all
rights of such Borrower against another Borrower, as the case may be, arising as
a result thereof by way of right of subrogation or otherwise shall in all
respects be subordinated and junior in right of payment to the prior
indefeasible payment in full of all the Obligations to the Lenders and Issuing
Banks.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
MAGELLAN HEALTH SERVICES, INC.,
by /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Vice President and
Treasurer
CHARTER BEHAVIORAL HEALTH SYSTEM OF
NEW MEXICO, INC. as a Subsidiary
Borrower,
by /s/ Xxxxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Treasurer
THE CHASE MANHATTAN BANK,
individually and as Administrative
Agent, Collateral Agent and an
Issuing Bank,
by /s/ Xxxxxx X. Korlark
-----------------------------
Name: Xxxxxx X. Korlark
Title: Vice President
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, individually and as
Syndication Agent and an Issuing
Bank,
by /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Sr V.P.
Signature page to the
Amended and Restated Credit Agreement
BANK POLSKA KASA OPIEKI S.A.
PEKAD S.A. GROUP
NEW YORK BRANCH
by /s/ Xxxxxxx X. Xxxx
-------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
Senior Lending Officer
CREDIT LYONNAIS NEW YORK BRANCH,
as Co-Agent,
by /s/ Farboud Tavangar
-------------------------
Name: Farboud Tavangar
Title: First Vice President
FIRST AMERICAN NATIONAL BANK,
by /s/ Xxxxx Xxxxxxx
-------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION
as Co-Agent,
by /s/ Xxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Duly Authorized Co Agent
THE BANK OF NEW YORK,
as Co-Agent,
by /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
THE BANK OF NOVA SCOTIA,
as Co-Agent,
by /s/ X.X. Xxxxx
-------------------------
Name: X.X. Xxxxx
Title: Vice President
XXX XXXXXX AMERICAN CAPITAL PRIME
RATE INCOME TRUST,
by /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Sr. Vice Pres.-Portfolio Mgr.
