-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
CREDIT AGREEMENT
dated as of October 16, 1996
among
MAGELLAN HEALTH SERVICES, INC.,
THE SUBSIDIARY BORROWERS NAMED HEREIN,
THE LENDERS NAMED HEREIN,
and
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
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
[CS&M Reference No. 6700-439]
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. TERMS GENERALLY . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.02. LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.03. BORROWING PROCEDURE . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.04. EVIDENCE OF DEBT; REPAYMENT OF LOANS. . . . . . . . . . . . . 26
SECTION 2.05. FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.06. INTEREST ON LOANS . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.07. DEFAULT INTEREST. . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.08. ALTERNATE RATE OF INTEREST. . . . . . . . . . . . . . . . . . 28
SECTION 2.09. TERMINATION AND REDUCTION OF COMMITMENTS. . . . . . . . . . . 29
SECTION 2.10. CONVERSION AND CONTINUATION OF BORROWINGS. . . . . . . . . . 29
SECTION 2.11. PREPAYMENT. . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.12. MANDATORY COMMITMENT REDUCTIONS . . . . . . . . . . . . . . . 31
SECTION 2.13. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES . . . . . . . . 32
SECTION 2.14. CHANGE IN LEGALITY. . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.15. INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.16. PRO RATA TREATMENT. . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.17. SHARING OF SETOFFS. . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.18. PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.19. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.20. ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES;
DUTY TO MITIGATE . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.21. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 2.22. ADDITIONAL BORROWERS. . . . . . . . . . . . . . . . . . . . . 42
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. ORGANIZATION; POWERS. . . . . . . . . . . . . . . . . . . . . 43
SECTION 3.02. AUTHORIZATION . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 3.03. ENFORCEABILITY. . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 3.04. GOVERNMENTAL APPROVALS. . . . . . . . . . . . . . . . . . . . 43
Contents, p. 2
PAGE
----
SECTION 3.05. FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . 44
SECTION 3.06. NO MATERIAL ADVERSE CHANGE. . . . . . . . . . . . . . . . . . 44
SECTION 3.07. TITLE TO PROPERTIES; POSSESSION UNDER LEASES. . . . . . . . . 44
SECTION 3.08. SUBSIDIARIES. . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 3.09. LITIGATION; COMPLIANCE WITH LAWS. . . . . . . . . . . . . . . 44
SECTION 3.10. AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 3.11. FEDERAL RESERVE REGULATIONS . . . . . . . . . . . . . . . . . 45
SECTION 3.12. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT. . 45
SECTION 3.13. USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 3.14. TAX RETURNS . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 3.15. NO MATERIAL MISSTATEMENTS . . . . . . . . . . . . . . . . . . 45
SECTION 3.16. EMPLOYEE BENEFIT PLANS. . . . . . . . . . . . . . . . . . . . 46
SECTION 3.17. ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . . 46
SECTION 3.18. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 3.19. SECURITY DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . 47
SECTION 3.20. LABOR MATTERS . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 3.21. SOLVENCY. . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. ALL CREDIT EVENTS . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 4.02. FIRST CREDIT EVENT. . . . . . . . . . . . . . . . . . . . . . 49
SECTION 4.03. CREDIT EVENTS IN RESPECT OF ADDITIONAL REVOLVING
FACILITY BORROWINGS. . . . . . . . . . . . . . . . . . . 52
SECTION 4.04. NEW SUBSIDIARY BORROWER CREDIT EVENT. . . . . . . . . . . . . 53
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01. EXISTENCE; BUSINESSES AND PROPERTIES. . . . . . . . . . . . . 53
SECTION 5.02. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 5.03. OBLIGATIONS AND TAXES . . . . . . . . . . . . . . . . . . . . 54
SECTION 5.04. FINANCIAL STATEMENTS, REPORTS, ETC. . . . . . . . . . . . . . 55
SECTION 5.05. LITIGATION AND OTHER NOTICES. . . . . . . . . . . . . . . . . 57
SECTION 5.06. EMPLOYEE BENEFITS . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 5.07. MAINTAINING RECORDS; ACCESS TO PROPERTIES AND INSPECTIONS . . 57
SECTION 5.08. USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 5.09. COMPLIANCE WITH ENVIRONMENTAL LAWS. . . . . . . . . . . . . . 58
SECTION 5.10. PREPARATION OF ENVIRONMENTAL REPORTS. . . . . . . . . . . . . 58
SECTION 5.11. FURTHER ASSURANCES. . . . . . . . . . . . . . . . . . . . . . 58
Contents, p. 3
PAGE
----
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01. INDEBTEDNESS. . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 6.02. LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 6.03. SALE AND LEASEBACK TRANSACTIONS . . . . . . . . . . . . . . . 63
SECTION 6.04. INVESTMENTS, LOANS, ADVANCES AND CERTAIN
OTHER TRANSACTIONS . . . . . . . . . . . . . . . . . . . 63
SECTION 6.05. MERGERS, CONSOLIDATIONS, SALES OF ASSETS AND ACQUISITIONS . . 65
SECTION 6.06. DIVIDENDS AND DISTRIBUTIONS; RESTRICTIONS ON ABILITY
OF SUBSIDIARIES TO PAY DIVIDENDS . . . . . . . . . . . . 66
SECTION 6.07. TRANSACTIONS WITH AFFILIATES. . . . . . . . . . . . . . . . . 67
SECTION 6.08. OTHER INDEBTEDNESS AND AGREEMENTS . . . . . . . . . . . . . . 67
SECTION 6.09. BUSINESS OF THE BORROWERS AND SUBSIDIARIES. . . . . . . . . . 68
SECTION 6.10. INTEREST EXPENSE COVERAGE RATIO . . . . . . . . . . . . . . . 68
SECTION 6.11. LEVERAGE RATIO. . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 6.12. SENIOR DEBT RATIO . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 6.13. FISCAL YEAR . . . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE VII
EVENTS OF DEFAULT
ARTICLE VIII
THE ADMINISTRATIVE AGENT, THE SYNDICATION AGENT AND THE COLLATERAL AGENT
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 9.02. SURVIVAL OF AGREEMENT . . . . . . . . . . . . . . . . . . . . 74
SECTION 9.03. BINDING EFFECT. . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 9.04. SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . . 75
SECTION 9.05. EXPENSES; INDEMNITY . . . . . . . . . . . . . . . . . . . . . 78
SECTION 9.06. RIGHT OF SETOFF . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 9.07. APPLICABLE LAW. . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 9.08. WAIVERS; AMENDMENT. . . . . . . . . . . . . . . . . . . . . . 79
SECTION 9.09. INTEREST RATE LIMITATION. . . . . . . . . . . . . . . . . . . 80
SECTION 9.10. ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 9.11. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . 81
SECTION 9.12. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 9.13. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 9.14. HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 9.15. JURISDICTION; CONSENT TO SERVICE OF PROCESS . . . . . . . . . 81
Contents, p. 4
PAGE
----
SECTION 9.16. CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 9.17. OBLIGATIONS JOINT AND SEVERAL . . . . . . . . . . . . . . . . 83
EXHIBITS, ANNEX AND SCHEDULES
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C-1 Form of Borrowing Request
Exhibit C-2 Form of New Borrower Agreement
Exhibit C-3 Form of Subsidiary Borrower Termination
Exhibit D Form of Guarantee Agreement
Exhibit E Form of Indemnity, Subrogation and Contribution Agreement
Exhibit F Form of Pledge Agreement
Exhibit G Form of Security Agreement
Exhibit H-1 Opinion of King & Spalding
Exhibit H-2 Opinion of Foreign Counsel
Schedule 1 Subsidiary Borrowers
Schedule 1.01(a) Existing Letters of Credit
Schedule 1.01(b) Guarantors
Schedule 1.01(c) Real Estate for Sale
Schedule 2.01 Commitments
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
CREDIT AGREEMENT dated as of October 16, 1996, among
MAGELLAN HEALTH SERVICES, INC., a Delaware corporation (the
"PARENT BORROWER"), each subsidiary of the Parent Borrower listed
on Schedule 1 hereto or as otherwise defined herein (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").
The Borrowers have requested the Lenders to extend credit to the
Borrowers (a) pursuant to the Refinancing Revolving Credit Facility (such term
and each other capitalized term used but not defined herein having the meaning
given it in Article I), in the form of Refinancing Revolving Loans at any time
and from time to time prior to the Refinancing Revolving Facility Maturity Date,
in an aggregate principal amount at any time outstanding not in excess of
$300,000,000 and (b) pursuant to the Additional Revolving Credit Facility, in
the form of Additional Revolving Loans at any time and from time to time prior
to the Additional Revolving Facility Maturity Date, in an aggregate principal
amount at any time outstanding not in excess of $100,000,000. The Borrowers
have requested the Issuing Banks to issue letters of credit under the
Refinancing Revolving Credit Facility, in an aggregate face amount at any time
outstanding not in excess of $100,000,000, to support payment obligations
incurred in the Borrowers' and the Subsidiaries' business.
The proceeds of the Refinancing Revolving Loans are to be used solely
(a) on the Closing Date, (i) to refinance the principal of, and to pay all
interest, fees and other amounts payable in respect of, the outstanding loans
under the Existing Credit Agreement and (ii) to pay fees and expenses incurred
in connection with the execution of this Agreement and the other Loan Documents
(clauses (i) and (ii) are collectively referred to herein as the
"TRANSACTIONS"), and (b) on or after the Closing Date, (i) for general corporate
purposes and (ii) to finance acquisitions, investments, stock repurchases and
debt repurchases, in each case as permitted hereunder. The proceeds of the
Additional Revolving Loans are to be used solely on or after the date specified
herein for (i) general corporate purposes and (ii) to finance acquisitions,
investments, stock repurchases and debt repurchases, in each case as permitted
hereunder.
The Lenders are willing to extend such credit to the Borrowers and
each Issuing Bank is willing to issue 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:
2
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 Loan bearing interest at the Alternate Base
Rate in accordance with the provisions of Article II.
"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 PLUS
(ii) 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 amortization of goodwill, transaction expenses, employee
stock ownership plan expense, excess reorganization expense, stock option
expense, covenants not to compete and other intangible assets) for such period,
all as determined in accordance with GAAP, PROVIDED that for purposes of
determining Acquired Entity EBITDA, (i) all extraordinary gains or losses of
such Acquired Entity and (ii) the gain (or loss) 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.
"ADDITIONAL FACILITY LENDER" shall mean a Lender that has an
Additional Loan Commitment or, if such Commitment has expired or terminated,
that has made Additional Revolving Loans that have not been repaid.
"ADDITIONAL LOAN COMMITMENT" shall mean, with respect to each
Additional Facility Lender, the commitment of such Lender to make Additional
Revolving Loans hereunder as set forth on Schedule 2.01, or in the Assignment
and Acceptance pursuant to which such Lender assumed its Additional Loan
Commitment, as applicable, as the same may be (a) reduced from time to time
pursuant to Sections 2.09, 2.11, 2.12 or 2.20 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04.
"ADDITIONAL REVOLVING CREDIT FACILITY" shall mean the revolving credit
facility pursuant to which Additional Revolving Loans shall be made.
"ADDITIONAL REVOLVING FACILITY BORROWING" shall mean a Borrowing
comprised of Additional Revolving Loans.
3
"ADDITIONAL REVOLVING FACILITY MATURITY DATE" shall mean the fourth
anniversary of the Credit Agreement.
"ADDITIONAL REVOLVING LOANS" shall mean the loans made by the
Additional Facility Lenders to the Borrowers pursuant to Section 2.01(b) under
the Additional Revolving Credit Facility. Each Additional Revolving Loan shall
be a Eurodollar Loan or an ABR Loan.
"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.
"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.
"AGGREGATE CREDIT EXPOSURE" shall mean the aggregate amount of the
Refinancing Facility Lenders' 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
4
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 with respect to the Commitment Fees, as the case may be, the
applicable percentage set forth below under the caption "Eurodollar Spread" or
"Fee Percentage", as the case may be, based upon the Leverage Ratio as of the
relevant determination date:
Leverage Ratio Eurodollar Fee
-------------- Spread Percentage
------ ----------
CATEGORY 1 1.50% .375%
Greater than 3.50 to 1.00
CATEGORY 2 1.25% 0.25%
Less than or equal to 3.50 to 1.00
but greater than 2.00 to 1.00
CATEGORY 3 1.00% 0.25%
Less than or equal to 2.00 to 1.00
but greater than 1.00 to 1.00
CATEGORY 4 0.75% 0.25%
Less than or equal to 1.00 to 1.00
Notwithstanding the foregoing, until the Parent Borrower has delivered
the financial statements for the fiscal quarter ending immediately following the
Closing Date, in accordance with Section 5.04(a) or (b), the Leverage Ratio
shall be deemed to be in Category 2 for purposes of determining the Applicable
Percentage. 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 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) 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
(ii) 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 of the Guarantors to any
person, other than the Borrowers or any Guarantor, of (a) any capital stock of
the Subsidiary Borrowers or any of the Guarantors or (b) any other assets of the
Borrowers or any of the
5
Guarantors (other than inventory, obsolete or worn out assets, scrap and
Permitted Investments, in each case disposed of in the ordinary course of
business) of the Borrowers or any of the Guarantors, except, (i) sales,
transfers or other dispositions of accounts receivables and related assets of
the Borrowers or any Guarantor in connection with a Permitted Receivables
Financing, (ii) sales, transfers or other dispositions of the Real Estate for
Sale; (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, and (v) 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.
"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 B or such other form as shall be approved by the
Administrative Agent.
"BACK-UP LETTER OF CREDIT" shall mean any Letter of Credit issued in
order to support any letter of credit that (a) exists on the Closing Date and
(b) is set forth on Schedule 1.01(a).
"BOARD" shall mean the Board of Governors of the Federal Reserve
System of the United States of America.
"BORROWERS" shall mean the Parent Borrower and the Subsidiary
Borrowers.
"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 the Borrowers in
accordance with the terms of Section 2.03 and substantially in the form of
Exhibit C-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 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 the Borrowers
or any of the Guarantors 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 the Borrowers or any of the
Guarantors.
6
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), other than any person or group that
owns at least 5% of the capital stock of the Parent Borrower on the Closing
Date, 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; (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 (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 in respect of Indebtedness for borrowed
money in excess of the aggregate principal amount of $12,500,000 to which the
Parent Borrower or any Guarantor is a party.
"CHARTER BEHAVIORAL" shall mean Charter Behavioral Health Systems,
Inc., a Delaware corporation.
"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.
"COMMITMENT" shall mean, with respect to any Lender, such Lender's
Refinancing Loan Commitment and Additional 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 the
Borrowers or any of the Guarantors has the right to collect and receive proceeds
as a result of any action or proceeding for the taking of any property of the
Borrowers 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 dated September, 1996.
"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 amortization of goodwill,
transaction expenses,
7
employee stock ownership plan expense, excess reorganization expense, stock
option expense, covenants not to compete and other intangible assets) for such
period 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.
"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) (a) interest-
equivalent costs associated with any Permitted Receivables Financing, whether
accounted for as interest expense or loss on the sale of receivables and (b)
interest expense 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 all Controlled Ventures (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.
"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 statement 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.
8
"CREDIT EXPOSURE" shall mean, with respect to any Refinancing Facility
Lender at any time, the aggregate principal amount at such time of all
outstanding Refinancing Revolving Loans of such Lender, PLUS the aggregate
amount at such time of such Lender's L/C Exposure.
"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.
"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.
9
"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 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 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.
"EXISTING CREDIT AGREEMENT" shall mean the Second Amended and Restated
Credit Agreement, dated as of May 2, 1994, and as amended by Amendments 1
through 11 thereto, among the Parent Borrower, Bankers Trust Company, as Agent,
the Syndication Agent, as Co-Agent, and the financial institutions listed on
Annex I thereto.
"FEE LETTER" shall mean the Fee Letter dated August 21, 1996, between
the Parent Borrower, the Administrative Agent and the Syndication Agent.
10
"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.
"GAAP" shall mean generally accepted accounting principles applied on
a consistent basis.
"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 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 Guarantee Agreement,
substantially in the form of Exhibit D, 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(b) and
each other person that becomes party to a Guarantee Agreement as a Guarantor,
and the permitted successors and assigns of each such person.
11
"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.
"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
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit E, 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.
"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
12
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 Refinancing
Revolving Facility Maturity Date or the Additional Revolving Facility Maturity
Date, as applicable, 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; 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 the Parent Borrower
designed to protect the Parent Borrower against fluctuations in interest rates
and not for speculation, PROVIDED that any such agreement or arrangement
designed to protect against fluctuations in interest rates for borrowed money
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 2.21(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
2.21.
"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 Refinancing Facility Lender at
any time shall mean its Pro Rata Percentage of the aggregate L/C Exposure at
such time.
"L/C PARTICIPATION FEE" shall have the meaning assigned to such term
in Section 2.05(c).
13
"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 any letter of credit issued pursuant to
Section 2.21.
"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, all determined on
a consolidated basis in accordance with GAAP.
"LIBO RATE" shall mean, with respect to any Eurodollar Borrowing, the
rate (rounded upwards, if necessary, to the next 1/16 of 1%) at which dollar
deposits approximately equal in principal amount of such Eurodollar Borrowing
and for a maturity comparable to such Interest Period are offered to 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, as
determined by the Administrative Agent.
"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.
"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 Refinancing Revolving Loans and the Additional
Revolving Loans.
"MARGIN STOCK" shall have the meaning assigned to such term in
Regulation U.
"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.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
14
"NET CASH PROCEEDS" shall mean the cash proceeds of any Asset Sale or
any transaction described in Section 6.05(e) (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), (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 (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 360 days of
receipt of such proceeds.
"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 2.22 and substantially in the form of Exhibit C-2.
"NON-CONTROLLED VENTURES" shall mean all partnerships and joint
ventures in which the Parent Borrower or any of the Subsidiaries have an
ownership interest but are not a Controlled Venture.
"OBLIGATIONS" shall mean all obligations defined as "Obligations" in
the Guarantee Agreement and the Security Documents.
"PARENT BORROWER" shall mean Magellan Health Services, Inc., a
Delaware corporation.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA.
"PERFECTION CERTIFICATE" shall mean the Perfection Certificate
substantially in the form of Annex 1 to the Security Agreement.
"PERMITTED ACQUISITION" shall mean any non-hostile acquisition of an
Acquired Entity by the Parent Borrower or any Guarantor in which the Parent
Borrower, any wholly owned Subsidiary 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 the
covenants contained in Section 6.10, 6.11 and 6.12, 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 $10,000,000, (ii) any Indebtedness of the Acquired
15
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, 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 businesses or 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 Parent Borrower or any Guarantor shall be pledged
to the Collateral Agent in accordance with Section 5.11.
"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 the
covenants contained in Section 6.10, 6.11 and 6.12, 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 on the Parent Borrower's consolidated balance sheet PLUS the
remaining available balance of the Total Commitment shall be at least equal to
$50,000,000.
"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 Group 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;
16
(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;
(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 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 the covenants contained in
Sections 6.10, 6.11 and 6.12, 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
$10,000,000 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
thereafter shall not exceed $100,000,000 LESS the amount, if any, by which the
outstanding amount of Permitted Non-Guarantor Transactions at such time exceeds
$100,000,000. 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.
"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 (other than exchanges under the Green Spring Exchange
Agreement and purchases pursuant to the Green Spring Stockholders' Agreement),
(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, (i) the fair market value of all
assets transferred to Controlled Non-Guarantor Entities (such value to be
determined with respect to each 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
17
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 made 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)
and outstanding at any time thereafter, shall not exceed $100,000,000 in the
aggregate PLUS the amount, if any, by which $100,000,000 exceeds the outstanding
amount of Permitted Non-Control Investments at the time of such transaction.
"PERMITTED RECEIVABLES FINANCING" shall mean any financing secured
substantially by receivables (and related assets) originated by the Parent
Borrower or any Subsidiary, PROVIDED that (i) any such receivables financing
involves the sales of receivables to secure not more than $75,000,000 of
Indebtedness outstanding at any time, (ii) sales of receivables are made at fair
market value for sales of receivables in comparable receivables financings,
(iii) the interest rate applicable to such receivables financing shall be a
market interest rate (as determined in good faith by a Financial Officer of the
Parent Borrower) as of the time such financing is entered into, (iv) such
financing is non-recourse to the Parent Borrower and the Subsidiaries except to
a limited extent customary for such financings and (v) the covenants, events of
default and other provisions thereof, collectively, shall be market terms (as
determined in good faith by a Financial Officer of the Parent Borrower).
"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 distribution 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 the covenants
contained in Section 6.10, 6.11 and 6.12, 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
18
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 on the Parent
Borrower's consolidated balance sheet PLUS the remaining available balance of
the Total Commitment shall be at least equal to $50,000,000.
"PERMITTED SUBORDINATED INDEBTEDNESS" shall mean (a) the Series A
Notes (including the Guarantees thereof), (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
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 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 all Senior Indebtedness, PROVIDED that
(i) such Indebtedness has a maturity that is after the Refinancing Revolving
Facility 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, limited liability
company, 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.
19
"PLEDGE AGREEMENT" shall mean the Pledge Agreement, substantially in
the form of Exhibit F, between the Parent Borrower, the Subsidiaries party
thereto and the Collateral Agent for the benefit of the Secured Parties.
"PRO RATA PERCENTAGE" of any Refinancing Facility Lender at any time
shall mean the percentage of the Total Refinancing Loan Commitment represented
by such Lender's Refinancing Loan Commitment.
"PUBLIC SOLUTIONS" shall mean Magellan Public Solutions, Inc., a
Delaware corporation.
"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 June 30,
1996 and described on Schedule 1.01(c).
"REFINANCING INDEBTEDNESS" shall have the meaning assigned to such
term in Section 6.01(o).
"REFINANCING FACILITY LENDER" shall mean a Lender that has a
Refinancing Loan Commitment or, if such Commitment has expired or been
terminated, that has made Refinancing Revolving Loans that have not been repaid.
"REFINANCING LOAN COMMITMENT" shall mean, with respect to each
Refinancing Facility Lender, the commitment of such Lender to make Refinancing
Revolving Loans hereunder as set forth on Schedule 2.01, or in the Assignment
and Acceptance pursuant to which such Lender assumed its Refinancing Loan
Commitment, as applicable, as the same may be (a) reduced from time to time
pursuant to Sections 2.09, 2.11, 2.12 or 2.20 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section
9.04.
"REFINANCING REVOLVING CREDIT FACILITY" shall mean the revolving
credit facility pursuant to which Refinancing Revolving Loans shall be made and
Letters of Credit shall be issued.
"REFINANCING REVOLVING FACILITY BORROWING" shall mean a Borrowing
comprised of Refinancing Revolving Loans.
"REFINANCING REVOLVING FACILITY MATURITY DATE" shall mean the fifth
anniversary of the Credit Agreement.
"REFINANCING REVOLVING LOANS" shall mean the loans made by the
Refinancing Facility Lenders to the Borrowers pursuant to Section 2.01(a) under
the Refinancing Revolving Credit Facility. Each Refinancing Revolving Loan
shall be a Eurodollar Loan or an ABR Loan.
"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 U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
20
"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 X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"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 Loans, L/C
Exposure and unused Commitments representing at least a majority of the sum of
all Loans outstanding, L/C Exposure and unused Commitments at such time.
"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.
"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 Security Agreement, substantially
in the form of Exhibit G, between 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 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, all
determined on a consolidated basis in accordance with GAAP.
21
"SENIOR INDEBTEDNESS" shall mean all Indebtedness of the Parent
Borrower and the Subsidiaries, including any Indebtedness incurred pursuant to
this Agreement, unless in the instrument creating or evidencing the same or
pursuant to which the same is outstanding it is provided that such obligations
are not superior in right of payment to any subordinated indebtedness; PROVIDED,
HOWEVER, that Senior Indebtedness shall not include (i) any obligation of the
Parent Borrower to any Subsidiary that is not a Borrower, (ii) any Indebtedness
or obligation of the Parent Borrower and the Subsidiaries which is subordinate
or junior in any respect (other than as a result of such Indebtedness being
unsecured) to any other Indebtedness or obligation of the Parent Borrower and
the Subsidiaries or (iii) any Indebtedness incurred in violation of this
Agreement.
"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.
"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.
"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.
"SUBSIDIARY" shall mean any subsidiary of the Parent Borrower.
"SUBSIDIARY BORROWER" shall mean each wholly owned Subsidiary listed
on Schedule 1 hereto and each wholly owned Subsidiary that executes a New
Borrower Agreement in accordance with Section 2.22 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 2.22 and substantially in the
form of Exhibit C-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.
22
"TOTAL ADDITIONAL LOAN COMMITMENT" shall mean, at any time, the
aggregate amount of Additional Loan Commitments as in effect at such time.
"TOTAL COMMITMENT" shall mean, at any time, the aggregate amount of
the Refinancing Loan Commitments and the Additional Loan Commitments, as in
effect at such time.
"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) (a) any liabilities or obligations
(including any portion of any purchase price received for receivables which
receivables have not been collected) associated with or in respect of any
Permitted Receivables Financing and (b) the 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 REFINANCING LOAN COMMITMENT" shall mean, at any time, the
aggregate amount of Refinancing Loan Commitments, as in effect at such time.
"TRANSACTIONS" shall have the meaning assigned to such term in the
preamble to this Agreement.
"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.
"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
23
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, (a) each
Refinancing Facility Lender agrees, severally and not jointly, to make
Refinancing 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 Refinancing Revolving
Facility Maturity Date and the termination of the Refinancing Loan 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 Credit
Exposure exceeding (ii) such Lender's Refinancing Loan Commitment and (b) each
Additional Facility Lender agrees, severally and not jointly, to make Additional
Revolving Loans to the Borrowers, at any time and from time to time on or after
the date specified in Section 4.03(a), and until the earlier of the Additional
Revolving Facility Maturity Date and the termination of the Additional Loan
Commitment of such Lender in accordance with the terms hereof, in an aggregate
principal amount at any time outstanding not to exceed such Lender's Additional
Loan Commitment. Within the limits set forth in the preceding sentence and
subject to the terms, conditions and limitations set forth herein, the Borrowers
may borrow, pay or prepay and reborrow Refinancing Revolving Loans and
Additional Revolving Loans.
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 Refinancing Loan Commitments or Additional Loan Commitments, as
applicable; PROVIDED, HOWEVER, that the 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 Commitments.
(b) Subject to Sections 2.08 and 2.14, 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
accordance 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.
24
(c) Except with respect to Loans made pursuant to Section 2.02(f) and
subject to Section 4.03(d) in the case of certain Additional Revolving Facility
Borrowings, 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) Subject to Section 4.03(d) in the case of certain Additional
Revolving Facility Borrowings, 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.
(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 Refinancing Revolving
Facility Maturity Date or the Additional Revolving Facility Maturity Date, as
applicable.
(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
2.21(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 Refinancing Facility Lender of
such L/C Disbursement and its Pro Rata Percentage thereof. Each Refinancing
Facility 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 Refinancing Facility 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 Lender's Pro Rata Percentage of such L/C Disbursement (it being
understood that such amount shall be deemed to constitute an ABR Loan that is a
Refinancing Revolving Loan of such 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 Refinancing Facility
Lenders. The Administrative Agent will promptly pay to such Issuing Bank
25
any amounts received by it from the applicable Borrower pursuant to
Section 2.21(e) prior to the time that any Refinancing Facility 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 Refinancing Facility Lenders that shall have made such payments and
to such Issuing Bank, as their interests may appear. If any Refinancing
Facility Lender shall not have made its Pro Rata Percentage of such L/C
Disbursement available to the Administrative Agent as provided above, such
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 Loans pursuant to Section 2.06(a), and (ii) in the case of such
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, and (b) in the case of an 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 Refinancing Revolving Facility Borrowing or an Additional Revolving Facility
Borrowing and whether such Borrowing is to be a Eurodollar Borrowing or an ABR
Borrowing, PROVIDED that any Borrowing on the Closing Date shall be an ABR
Borrowing comprised solely of Refinancing Revolving Loans; (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 (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. In the case of an
Additional Revolving Facility Borrowing, the Parent Borrower shall also deliver
each applicable document specified in Section 4.03. 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 the then unpaid principal
amount of (i) each Refinancing Revolving Loan on the Refinancing Revolving
Facility Maturity Date and (ii) each Additional Revolving Loan on the Additional
Revolving Facility 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
26
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 Closing Date and on the last day
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 Refinancing Loan Commitment or the Additional Loan
Commitment, as applicable, 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 Refinancing Loan Commitment or the Additional Loan Commitment, as
applicable, of such Lender during the preceding quarter (or other period
commencing with the date of acceptance by the Borrowers of the Refinancing Loan
Commitment or Additional Loan Commitment, as applicable, of such Lender or
ending with the Refinancing Revolving Facility Maturity Date or the Additional
Revolving Facility Maturity Date, as applicable, or the date on which the
Refinancing Loan Commitment or Additional Loan Commitment, as applicable, of
such Lender shall expire or be terminated) (it being understood that for
purposes of this paragraph (a), an assignment of interest shall not be
considered a termination of the Refinancing Loan Commitment or the Additional
Loan Commitment, as applicable, of such Lender), 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 date of
acceptance by the Borrowers of the Refinancing Loan Commitment or the Additional
Loan Commitment, as applicable, of such Lender and shall cease to accrue on the
date on which the Refinancing Loan Commitment or the Additional Loan Commitment,
as applicable, of such Lender shall expire or be terminated as provided herein.
27
(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 Refinancing Facility
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 Refinancing Loan Commitment of such Lender shall be terminated as provided
herein, a fee (an "L/C PARTICIPATION FEE") calculated on such 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
Refinancing Revolving Facility Maturity Date or the date on which all Letters of
Credit have been canceled or have expired and the Refinancing Loan 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 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 Lender's interest had occurred during
the applicable three month period, and (ii) to each Issuing Bank with respect to
each Letter of Credit (x) a fee equal to 0.125% per annum of the face amount of
such Letter of Credit issued by it, 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 each 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 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; PROVIDED that in the event that
the Leverage Ratio is greater than 3.50 to 1.00, each ABR Borrowing shall bear
interest (computed on the basis described above) at a rate per annum equal to
the Alternate Base Rate plus 0.25%.
(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.
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.
28
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
Refinancing Loan Commitments and the L/C Commitments shall automatically
terminate on the Refinancing Revolving Facility Maturity Date. The Additional
Loan Commitments shall automatically terminate on the Additional Revolving
Facility 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 October 31, 1996, if the initial Credit Event shall not have occurred by such
time.
(b) Upon at least two Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Borrowers may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Total Refinancing Loan Commitment and/or the Total Additional Loan
Commitment; PROVIDED, HOWEVER, that (i) each partial reduction of the Total
Refinancing Loan Commitment and the Total Additional Loan Commitment shall be in
an integral multiple of $1,000,000 and in a minimum amount of $5,000,000,
(ii) the Total Refinancing Loan Commitment shall not be reduced to an amount
that is less than the Aggregate Credit Exposure at the time and (iii) the Total
Additional Loan Commitment shall not be reduced to an amount that is less than
the aggregate principal amount of Additional Revolving Loans outstanding at the
time.
(c) Each reduction in the Total Refinancing Loan Commitment or the
Total Additional Loan Commitment, as applicable, hereunder shall be made ratably
among the Lenders in accordance with their respective Refinancing Loan
Commitments or Additional Loan Commitments, as applicable. 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 Total
29
Refinancing Loan Commitment or the Total Additional Loan Commitment, as
applicable, so terminated or reduced accrued to (but excluding the date of) such
termination or reduction.
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) 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;
(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 2.15;
(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; and
(vii) 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
30
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.
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) In the event of any termination of all the Refinancing Loan or
Additional Loan Commitments, the Borrowers shall repay or prepay all applicable
outstanding Borrowings on the date of such termination. In the event of any
partial reduction of the Total Refinancing Loan Commitment, then (i) at or prior
to the effective date of such reduction, the Administrative Agent shall notify
the Borrowers and the Refinancing Facility Lenders of the Aggregate Credit
Exposure after giving effect thereto and (ii) if the Aggregate Credit Exposure
would exceed the Total Refinancing Loan Commitment after giving effect to such
reduction, then the Borrowers shall, on the date of such reduction, repay or
prepay Refinancing Revolving Facility Borrowings in an amount sufficient to
eliminate such excess. In the event of any partial reduction of the Total
Additional Loan Commitment, then (x) at or prior to the effective date of such
reduction, the Administrative Agent shall notify the Borrowers and the
Additional Facility Lenders of the outstanding principal amount of Additional
Revolving Loans after giving effect thereto and (y) if the outstanding principal
amount of Additional Revolving Loans after giving effect to such reduction would
exceed the Total Additional Loan Commitment, then the Borrowers shall, on the
date of such reduction, repay or prepay Additional Revolving Facility Borrowings
in an amount sufficient to eliminate such excess.
(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 2.15 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. MANDATORY COMMITMENT REDUCTIONS. (a) The Total
Refinancing Loan Commitment and the Total Additional Loan Commitment shall be
subject to reduction (i) on September 30 of each year and (ii) on the second
Business Day following each date on which 50% of the aggregate Net Cash Proceeds
received in respect of Asset Sales and in respect of transactions described in
Section 6.05(e), and not previously taken into account in a prior reduction of
the Total Refinancing Loan Commitment or the Total Additional Loan Commitment
pursuant to this Section 2.12(a), equals or exceeds $5,000,000. The amount of
the reduction on each such
31
applicable date shall equal 50% of the Net Cash Proceeds received on or prior to
such date (or, in the case of clause (ii) in the preceding sentence on or prior
to the second Business Day immediately preceding such date) and not previously
taken into account in a prior reduction of the Total Refinancing Loan Commitment
or the Total Additional Loan Commitment pursuant to this Section 2.12(a). If
during the one-year period following any Asset Sale or transaction described in
Section 6.05(e), the Borrowers and the Guarantors have not reinvested in their
businesses an amount equal to 50% of the Net Cash Proceeds from such Asset Sale
or transaction, the Total Refinancing Loan Commitment and the Total Additional
Loan Commitment shall be further reduced on the first anniversary of such Asset
Sale or transaction by the portion of such amount not so reinvested.
Notwithstanding anything to the contrary in this Section 2.12(a), the Borrowers
may elect, with respect to the initial $50,000,000 of reductions in Commitments
required by this Section 2.12(a), by giving notice by telephone (promptly
confirmed by writing or telecopy notice) prior to any reduction pursuant to this
Section 2.12(a), to cause all or any portion of the applicable Net Cash Proceeds
to reduce the Total Additional Loan Commitment or the Total Refinancing Loan
Commitment or both. All other reductions in Commitments under this
Section 2.12(a) shall be applied pro rata between the Total Refinancing Loan
Commitment and the Total Additional Loan Commitment. Each reduction under this
Section 2.12(a) shall be effected in accordance with Section 2.11(b).
(b) Each reduction in the Total Refinancing Loan Commitment or the
Total Additional Loan Commitment, as applicable, hereunder shall be made ratably
among the Lenders in accordance with their respective Refinancing Loan
Commitments or Additional Loan Commitments, as applicable. The Borrowers shall
pay to the Administrative Agent for the account of the Lenders, on the date of
each reduction, the Commitment Fee on the amount of the Total Refinancing Loan
Commitment or the Total Additional Loan Commitment, as applicable, so reduced
accrued to (but excluding) the date of such reduction.
(c) If following any reduction of the Total Refinancing Loan
Commitment pursuant to Section 2.12 and any payments required pursuant to
Section 2.11(b)(ii), the Total Refinancing Loan Commitment is less than the
aggregate L/C Exposure, the Borrowers shall, on the date of such reduction,
provide cash collateral, in accordance with Section 2.21(j), in an amount equal
to the amount that the aggregate L/C Exposure exceeds the Total Refinancing Loan
Commitment upon such date of reduction.
(d) The Borrowers shall deliver to the Administrative Agent, at the
time of each reduction required under Section 2.12(a), a certificate signed by a
Financial Officer of the Parent Borrower setting forth in reasonable detail the
calculation of the amount of such reduction.
SECTION 2.13. 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
32
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 Loan or increase the cost to any Lender 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 2.13(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
33
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.
SECTION 2.14. 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),
whereupon 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 2.14, 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 2.15. 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
34
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 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 2.15 shall be delivered to the Borrowers and
shall be conclusive absent manifest error.
SECTION 2.16. PRO RATA TREATMENT. Except as required under
Section 2.14, 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 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 Revolving Facility Lenders or the Additional Facility
Lenders, as the case may be, 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 2.17. 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 Loans and participations in L/C Disbursements shall be
proportionately less than the unpaid principal portion of the 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
Loans and L/C Exposure of such other Lender, so that the aggregate unpaid
principal amount of the Loans and L/C Exposure and participations in Loans and
L/C Exposure held by each Lender shall be in the same proportion to the
aggregate unpaid principal amount of all Loans and L/C Exposure then outstanding
as the principal amount of its 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 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 2.17
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 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.
SECTION 2.18. 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
35
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,) shall be made to the Administrative Agent at its offices at Grand
Central Tower, 000 Xxxx 00xx Xxxxxx, 00xx 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 2.19. 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 2.18, 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
subdivision 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 2.19) 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 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
36
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 2.19(e), a Non-U.S. Lender
shall not be required to deliver any form pursuant to this Section 2.19(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 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.
37
(g) Nothing contained in this Section 2.19 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 2.20. ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES;
DUTY TO MITIGATE. (a) If (i) any Lender delivers a certificate requesting
compensation pursuant to Section 2.13, (ii) any Lender delivers a notice
described in Section 2.14 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 2.19, 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
Refinancing Loan 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 2.13 and Section 2.15);
PROVIDED FURTHER that, if prior to any such transfer and assignment the
circumstances or event that resulted in such Lender's claim for compensation
under Section 2.13 or notice under Section 2.14 or the amounts paid pursuant to
Section 2.19, 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 2.14, or cease
to result in amounts being payable under Section 2.19, 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 2.13 in respect of such circumstances or event or
shall withdraw its notice under Section 2.14 or shall waive its right to further
payments under Section 2.19 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 2.13,
(ii) any Lender delivers a notice described in Section 2.14 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 2.19, 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
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 2.13
or enable it to withdraw its notice pursuant to Section 2.14 or would reduce
amounts payable pursuant to Section 2.19, as the case may be, in the future.
The Borrowers hereby agree to pay all reasonable costs and expenses incurred by
any Lender in
38
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 2.19 shall promptly pay the same to the applicable Borrower.
SECTION 2.21. LETTERS OF CREDIT. (a) GENERAL. Any Borrower may
request the issuance by an 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
Refinancing Loan Commitments remain in effect. This Section shall not be
construed to impose an obligation upon an 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), the Parent Borrower or a
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
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 any 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 Refinancing 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 $100,000,000 and (B) the Aggregate Credit Exposure
shall not exceed the Total Refinancing Loan Commitment.
(c) EXPIRATION DATE. Each Letter of Credit (other than any Back-up
Letter of Credit, which shall expire not less than 30 days after the expiry date
set forth on Schedule 1.01(a) of the letter of credit that such Back-up Letter
of Credit supports) shall expire at the close of business on the earlier of the
date one year after the date of the issuance of such Letter of Credit and the
date that is five Business Days prior to the Refinancing Revolving Facility
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
Lenders, the Issuing Bank in respect of such Letter of Credit hereby grants to
each Refinancing Facility Lender, and each such 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 Refinancing Facility
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
39
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 Refinancing Facility 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 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
40
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
Refinancing Facility Lenders with respect to any such L/C Disbursement. The
Administrative Agent shall promptly give each Refinancing Facility Lender notice
thereof.
(h) INTERIM INTEREST. If 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.
(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 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
41
Issuing Bank hereunder 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 any Event of Default shall occur and
be continuing or if the Total Refinancing Loan Commitment is less than the
aggregate 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 Refinancing Facility 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, 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 2.12(d),
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, of the aggregate L/C Exposure over the Total Refinancing Loan
Commitment; PROVIDED, that such return shall not be required at any time that an
Event of Default has occurred and is continuing.
SECTION 2.22. 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
42
when any principal of or interest on any 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 and the
Subsidiaries (a) is a corporation 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, (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
corporate power and authority to execute, deliver and perform its obligations
under each of the Loan 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 of each of the Loan Documents to which it is a party and the
borrowings hereunder (a) have been duly authorized by all requisite corporate
and, if required, stockholder action and (b) will not (i) violate (A) any
provision of law, statute, rule or regulation, or 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 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 (subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
43
transfer and other similar laws affecting creditors' rights generally from time
to time in effect and to general principles of equity, regardless of whether in
a proceeding in equity or at law).
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) filings and recordings necessary to release security interests and
mortgages under the Existing Credit Agreement and (c) such as have been made or
obtained and are in full force and effect.
SECTION 3.05. FINANCIAL STATEMENTS. 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 (a)
as of and for the fiscal year ended September 30, 1995, audited by and
accompanied by the opinion of Xxxxxx Xxxxxxxx LLP, independent public
accountants, and (b) except for a statement of changes in stockholders' equity,
as of and for the fiscal quarter and the portion of the fiscal year ended June
30, 1996, certified by its chief financial officer. Such financial statements
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 (b)
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.
SECTION 3.06. NO MATERIAL ADVERSE CHANGE. There has been no material
adverse change in the business, assets, operations, prospects, condition,
financial or otherwise, or material agreements of the Parent Borrower and the
Subsidiaries, taken as a whole, since June 30, 1996.
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
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.
44
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 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 violate, any law, rule or regulation, 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.
SECTION 3.10. AGREEMENTS. (a) None of the Borrowers or any of the
Subsidiaries is a party to any agreement or instrument or subject to any
corporate 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 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
inconsistent 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 the Borrowers 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.
45
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.
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,
46
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.
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 its 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
(other than the Intellectual Property, as defined in the Security Agreement), in
each case (assuming release of security interests under the Existing Credit
Agreement) 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).
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
47
of the Fair Labor 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 immediately following the making
of each Loan made on the Closing Date and after giving effect to the application
of the proceeds of such Loans, (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 OF LENDING
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. 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 notice of such
Borrowing 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 2.21(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 hereof 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
48
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.
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) and (c) of this Section 4.01.
SECTION 4.02. FIRST CREDIT EVENT. On the Closing Date:
(a) The Administrative Agent and the Syndication Agent shall have
received, on behalf of itself, 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 H-1 and (ii)
each foreign counsel listed on Schedule 4.02(a), substantially to the
effect set forth in Exhibit H-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 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 shall be
satisfactory to the Lenders, to the Issuing Banks and to Cravath, Swaine &
Xxxxx, counsel for the Administrative Agent and the Syndication Agent.
(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
sincea 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 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 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.
49
(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) and (c) of Section 4.01.
(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 shares of capital stock or other
equity interests held by them in their direct Subsidiaries to the
Collateral Agent for the ratable benefit of the Secured Parties and
certificates representing such shares, 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 the capital stock of Societe Anonyme De La Metairie or more than
65% of the capital stock of any other 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 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 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.
(i) 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.
50
(j) 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.
(k) 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.
(l) Substantially contemporaneously with the first Credit Event, 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 under each other agreement related thereto, and the
Administrative Agent and Syndication Agent shall have received duly
executed documentation either evidencing or necessary for (i) the
termination of the Existing Credit Agreement and each other agreement
related thereto, (ii) the cancellation of all commitments thereunder (other
than the existing letters of credit that the Back-up Letters of Credit
support) and (iii) the termination of all related agreements and guarantees
and security interests granted by any Loan Party or any Subsidiary or any
other person in connection therewith and the discharge of all obligations
or interests thereunder.
(m) After giving effect to the Transactions, the Borrowers and the
Subsidiaries shall have outstanding no Indebtedness or preferred stock
other than (a) the Loans hereunder and (b) the Indebtedness set forth on
Schedule 6.01(a) or otherwise permitted pursuant to Section 6.01.
(n) The Lenders shall be satisfied that the consummation of the
Transactions will not (i) violate any applicable law, statute, rule or
regulation or (ii) conflict with, or result in a default or event of
default under, (A) 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 (B) any other material agreement of any Loan Party or any subsidiary of
any Loan Party.
(o) 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.
(p) The Administrative Agent and the Syndication Agent shall be
reasonably satisfied with the corporate structure of the Parent Borrower
and the Subsidiaries.
(q) There shall not have occurred any event, or none of the
Administrative Agent, the Syndication Agent or the Lenders shall have
discovered or otherwise become aware of
51
information not previously known by the Administrative Agent, the
Syndication Agent or any such Lender that, in each case, in the reasonable
judgment of the Administrative Agent, the Syndication Agent or the Required
Lenders, could reasonably be expected to have a Material Adverse Effect.
SECTION 4.03. CREDIT EVENTS IN RESPECT OF ADDITIONAL REVOLVING
FACILITY BORROWINGS. (a) Prior to the first Additional Revolving Facility
Borrowing, the Administrative Agent shall have received the financial statements
and certificates required to be delivered pursuant to Section 5.04(a) with
respect to the fiscal year ending September 30, 1996.
(b) Simultaneously with the delivery of a Borrowing Request (but not in
connection with the delivery of any notice of conversion or continuation of
outstanding Borrowings pursuant to Section 2.10) that requests the Additional
Facility Lenders to make Additional Revolving Loans, the Parent Borrower shall
deliver to the Administrative Agent a certificate of a Financial Officer
certifying that such Borrowing will be permitted by, and will constitute "Senior
Indebtedness" (as defined in the Series A Notes Indenture) under, the Series A
Notes Indenture, and such certificate shall also set forth the specific
provision of the Series A Notes Indenture upon which such Financial Officer is
relying in making such certification (it being understood that such provision
shall not be Section 5.08(i) of the Series A Notes Indenture).
(c) If the provision upon which such Financial Officer is relying in
making the certification described in clause (b) above is Section 5.08(xiii) of
the Series A Notes Indenture, (i) such certification shall also set forth a list
specifying all other outstanding "Indebtedness" (as defined in the Series A
Notes Indenture), if any, that has been incurred by the Parent Borrower and the
"Restricted Subsidiaries" (as defined in the Series A Notes Indenture) in
reliance upon Section 5.08(xiii) of the Series A Notes Indenture and (ii) the
Parent Borrower shall also cause to be delivered to the Administrative Agent any
documents that the Administrative Agent may reasonably request with respect to
the compliance of the applicable Additional Revolving Facility Borrowing with
Section 5.08(xiii) of the Series A Notes Indenture, including a written
statement of the type described in clause (d) below from Xxxxxx Xxxxxxxx LLP or
other independent public accountants of recognized national standing or the
opinion of King & Spalding or other counsel to the Parent Borrower reasonably
satisfactory to the Administrative Agent as to the legal requirement applicable
to such "Indebtedness" under the Series A Notes Indenture, in either case as so
requested.
(d) If the provision upon which such Financial Officer is relying in
making the certification described above in clause (b) is the first paragraph of
Section 5.08 of the Series A Notes Indenture, the applicable certificate
described above in clause (b) shall also set forth the Consolidated Interest
Coverage Ratio (as defined in the Series A Indenture), which shall be computed
in accordance with, and as of the date specified in, the Series A Notes
Indenture. Such certification shall be accompanied by the written statement of
Xxxxxx Xxxxxxxx LLP or other independent public accountants of recognized
national standing confirming that such accountants have read such certification,
including the computation of the Consolidated Interest Coverage Ratio, and have
analyzed the supporting documents relied upon by the Parent Borrower in making
such certification and computation, and indicating that such accountants are not
aware of any information that would cause such certification or computation to
be inaccurate. If the applicable Additional Revolving Facility Borrowing will
occur prior to the date that the financial statements for the fiscal quarter
52
ending immediately prior to such Borrowing have been delivered pursuant to
Section 5.04(a) or (b) hereof, the Parent Borrower shall deliver to the
Administrative Agent, simultaneously with such certificate, financial statements
and information, as are available, for the twelve-month period ending on the
last day of such fiscal quarter. Notwithstanding anything to the contrary in
this Section 4.03(d), if the Consolidated Interest Coverage Ratio specified in
such certificate is less than 2.25 to 1.00, the Lenders shall not be obligated
to make any Additional Revolving Loans requested in such Borrowing Request.
SECTION 4.04. NEW SUBSIDIARY BORROWER CREDIT EVENT. On or prior to
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
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 (either at such time
or in connection with the initial borrowing hereunder) 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
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
53
material respects with all applicable laws, rules, regulations 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
not 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 not 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
cancellation, 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)
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
54
long as the validity or amount thereof shall be contested in good faith by
appropriate 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 5 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
other independent public accountants of recognized national standing
reasonably acceptable to the Required Lenders 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 Charter Behavioral, Green Spring
and Public Solutions.
(b) within 5 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), (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 Charter Behavioral, Green Spring and Public
Solutions, showing the financial condition of Charter Behavioral, Green
Spring and Public Solutions, in the cases of (i) and (ii) of this paragraph
as of the close of such fiscal 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), 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;
55
(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 and 6.12 (it being understood
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) as soon as available but in any event not later than 45 days
after the end of each of the first three fiscal quarters, and, in the case
of the fourth fiscal quarter, not later than the date financial statements
for such fiscal year are delivered pursuant to Section 5.04(a), a report in
form and substance satisfactory to the Administrative Agent, of (i) (A) all
Permitted Acquisitions consummated during such quarter of $1,000,000 or
more, which shall include the total consideration for each such Permitted
Acquisition (including a breakdown of any Indebtedness permitted under
Section 6.01(d)); and (B) the amount expended for Permitted Acquisitions
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 amount of securities purchased
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, 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;
(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
56
(h) within 5 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 Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) taken or proposed to be taken
with respect thereto;
(b) 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
(c) any development (including any development relating to Medicare
or Medicaid) 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
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
57
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 the Parent 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.
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 cancelled or have expired and
58
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 Section 6.01 and Section 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 in Schedule
6.01(a);
(b) Indebtedness created hereunder and the other Loan Documents;
(c) unsecured Indebtedness of the Parent Borrower, PROVIDED that (i)
such Indebtedness shall not have any principal payments due on a date that
is on or prior to the Refinancing Revolving Facility Maturity Date; (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;
(d) unsecured Indebtedness assumed by the Parent Borrower in
connection with a Permitted Acquisition made after the date hereof or of
any Subsidiary acquired after the date hereof pursuant to a Permitted
Acquisition, which Indebtedness exists at the time of such Permitted
Acquisition and is not created in contemplation of such Permitted
Acquisition, PROVIDED that on the date any such Indebtedness is incurred
and immediately after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing;
(e) unsecured Indebtedness of the Parent Borrower in an aggregate
principal amount not to exceed $25,000,000 at any time outstanding,
PROVIDED that on the date any such Indebtedness is incurred and immediately
after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing;
(f) unsecured Indebtedness of any Subsidiary in an aggregate principal
amount (for all the Subsidiaries) not to exceed $50,000,000 at any time
outstanding, PROVIDED that (i) no more than an aggregate principal amount
of $25,000,000 of such Indebtedness may have any principal payments due on
a date that is on or prior to the Refinancing Revolving Facility Maturity
Date, (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;
(g) secured Indebtedness of the Parent Borrower or any Subsidiary
(including purchase money Indebtedness) in an aggregate principal amount
(for the Parent Borrower
59
and all the Subsidiaries) not to exceed $50,000,000 at any time
outstanding, PROVIDED that (i) no more than an aggregate principal amount
of $25,000,000 of such Indebtedness may have any principal payments due on
a date that is on or prior to the Refinancing Revolving Facility Maturity
Date; (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; (iii) 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 (iv) 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);
(h) 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);
(i) 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;
(j) Indebtedness incurred pursuant to any sale and leaseback
transaction permitted by Section 6.03;
(k) Indebtedness incurred under any Interest Rate Protection
Agreement;
(l) Indebtedness incurred in connection with any Permitted Receivables
Financing;
(m) Permitted Subordinated Indebtedness;
(n) Indebtedness incurred in connection with any Permitted Non-
Guarantor Transaction; and
(o) extensions, renewals or refinancings of Indebtedness under
paragraphs (a), (c) (d) and (g) 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
60
to the Obligations, such Refinancing Indebtedness is subordinated to the
Obligations to the extent of 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;
(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;
61
(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(g),
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(i), PROVIDED
that such Indebtedness is subordinated and evidenced by a note pledged in
accordance with Section 6.01(i);
(m) Liens on accounts receivables and related assets financed in
connection with any Permitted Receivables Financing;
(n) 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;
(o) 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;
(p) prejudgment liens in respect of property of a Foreign Subsidiary
that is 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;
(q) 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
62
(r) 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) shall
not exceed on a cumulative basis during the term of this Agreement $50,000,000,
(ii) all the proceeds of any such transaction shall be in cash (except for
obligations assumed by the buyer thereof) and the Net Cash Proceeds related to
such transaction shall be applied to reduce the Commitments to the extent
required by Section 2.12(a) 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 wholly owned Domestic
Subsidiaries not required to be Guarantors or Borrowers because of the
second sentence of Section 5.11;
(b) Permitted Investments;
(c) Permitted Acquisitions;
(d) Permitted Debt Repurchases;
(e) Permitted Non-Guarantor Transactions;
(f) Permitted Non-Control Investments;
(g) Permitted Stock Repurchases;
(h) 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
63
not in excess of $10,000,000, in each case in the ordinary course of
business and consistent with past practices;
(i) investments in real property in the ordinary course of business
and consistent with past practices not in excess of $10,000,000 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;
(j) investments consisting of non-cash consideration from a sale of
assets that is permitted pursuant to Section 6.05;
(k) investments by any Borrower to the extent necessary in connection
with a Permitted Receivables Financing;
(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(i),
PROVIDED that such loans or advances are subordinated and evidenced by a
note pledged in accordance with Section 6.01(i);
(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 were obtained in the ordinary course of
business;
(o) investments by Foreign Subsidiaries 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(k); and
(q) acquisition by Parent Borrower of shares of the capital stock of
Green Spring pursuant to the Green Spring Exchange Agreement or the Green
Spring Stockholders' Agreement.
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 of
(in one transaction or in a series of transactions)
63
all or any substantial part of its assets (whether now owned or hereafter
acquired) or any capital stock of any Subsidiary, 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
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 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 Subsidiary and no person other than any Borrower
or a wholly owned 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 so long as 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 $50,000,000 on a
cumulative basis during the term of this Agreement (as determined in good
faith by a Financial Officer of the Parent Borrower) and so long as the Net
Cash Proceeds from any such sale shall be applied to reduce the Commitments
to the extent required by Section 2.12(a); PROVIDED, HOWEVER, that any
Asset Sale otherwise permitted by Section 6.05(b) shall not be permitted
unless (A) such sale, transfer or other disposition is for consideration at
least 70% of which is cash, 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 or any Subsidiary may make Permitted
Acquisitions;
(d) 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 to reduce the Commitments to the extent required by Section
2.12(a);
(e) 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 to reduce the Commitments to the extent required by Section
2.12(a);
(f) 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
65
a Guarantor or a Borrower, the Subsidiary that receives the assets pursuant
to following such liquidation shall be a Guarantor or a Borrower;
(g) the Parent Borrower or any Subsidiary may sell accounts receivable
pursuant to any Permitted Receivables Financing; and
(h) any Loan Party or any Subsidiary may lease or sublease 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
distributions 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, 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
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.
66
(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 subclauses
(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 Indebtedness of a
Subsidiary that becomes a Borrower or a Guarantor acquired or assumed
pursuant to a Permitted Acquisition and permitted by Section 6.01(d) or (g)
or refinancings thereof permitted by Section 6.01(o), 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(g); and
(F) that are Permitted Restrictions in the case of a Controlled
Venture.
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
Receivables Financing or 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.
67
(b) 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 Permitted Debt
Repurchases and Indebtedness permitted by Section 6.01(i).
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 December 31, 1996, to be less than 2.50 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 December
31, 1996, 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
December 31, 1996, to be in excess of 2.00 to 1.00.
SECTION 6.13. 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;
68
(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 or 5.08 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 the Indebtedness evidenced by any Loan Document) in a principal
amount in excess of $12,500,000, 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
69
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 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 $10,000,000 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) 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;
(l) any Loan Document 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
(m) 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
outstanding 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 Fees and all other liabilities of the
Borrowers accrued hereunder and under any other Loan Document, shall
automatically become due and payable,
70
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.
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; and (c) 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, 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
71
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.
Each Lender agrees (a) to reimburse the Agents, on demand, in the
amount of its PRO RATA share (based on its Commitment 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
72
services rendered on behalf of the Lenders, that shall not have been reimbursed
by the Borrowers 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 agrees that such Lender will not challenge the seniority,
with respect to the Series A Notes or other subordinated Indebtedness of the
Parent Borrower or the Subsidiaries permitted to be incurred by Section 6.01, of
the Loans made by other Lenders.
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, to Chase Manhattan Bank Agency
Services Corporation, Grand Central Tower, 29th Floor, 000 Xxxx 00xx
Xxxxxx, 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);
73
(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
(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 2.13, 2.15,
2.19 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.
74
(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, the Administrative Agent and
the Syndication Agent (and, in the case of any assignment of a Commitment, the
Issuing Banks) must give their prior written 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 Commitment or any portion of the Loans owing to
such Lender must include, to the extent applicable, a ratable portion of both
its Refinancing Loan Commitment and its Additional Loan Commitment and, to the
extent applicable, a ratable portion of Refinancing Revolving Loans and
Additional Revolving 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 2.13, 2.15,
2.19 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 Commitment, and the outstanding balance of its 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
75
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 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 2.13, 2.15 and 2.19 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
76
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,
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 of, and other transactions relating to, Collateral permitted
pursuant to any Loan Document)).
(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.
77
(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 foregoing
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 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
78
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 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 (i) shall (A)
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,
(B) 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 or (C) amend or modify the provisions of Section 2.12(a), 2.16, 4.03(b)
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 of, and other transactions relating
to, Collateral permitted pursuant to the Security Documents), without the prior
written consent of each Lender, (ii) shall change the allocation between the
Total Refinancing Loan Commitment and the Total Additional Loan Commitment of
any prepayment or reduction pursuant to Section 2.09, 2.11 or 2.12 without the
prior written consent of (A) Refinancing Facility Lenders representing more than
50% of the sum of the Aggregate Credit Exposure and unused Refinancing Loan
Commitments and (B) Additional Facility Lenders representing more than 50% of
the sum of the aggregate outstanding principal amount of the Additional
Revolving Loans and unused Additional Loan Commitments or (iii) shall amend or
modify Section 4.03(a), (c) or (d) without the prior written consent of
Additional Facility Lenders representing more than 50% of the sum of the
aggregate outstanding principal amount of Additional
79
Revolving Loans and unused Additional Loan Commitments; 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.
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 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
80
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 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
81
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.
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
82
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 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).
83
(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 CENTRAL
GEORGIA, INC.
CHARTER BEHAVIORAL HEALTH SYSTEM
OF CHARLESTON, INC.
CHARTER BEHAVIORAL HEALTH SYSTEM
OF NEW MEXICO, INC.
CHARTER BEHAVIORAL HEALTH SYSTEM
OF NORTHERN
CALIFORNIA, INC.
CHARTER BEHAVIORAL HEALTH SYSTEM
OF NORTHWEST
ARKANSAS, INC.
CHARTER BEHAVIORAL HEALTH SYSTEMS
OF ATLANTA, INC.
CHARTER FAIRMONT BEHAVIORAL
HEALTH SYSTEM, INC.
CHARTER FOREST BEHAVIORAL HEALTH
SYSTEM, INC.
CHARTER HOSPITAL OF ST. LOUIS, INC.
CHARTER LAKESIDE BEHAVIORAL
HEALTH SYSTEM, INC.
CHARTER MISSION VIEJO BEHAVIORAL
HEALTH SYSTEM, INC.
CHARTER PALMS BEHAVIORAL HEALTH
SYSTEM, INC.
CHARTER PLAINS BEHAVIORAL HEALTH
SYSTEM, INC.
84
CHARTER RIDGE BEHAVIORAL HEALTH
SYSTEM, INC.
CHARTER RIVERS BEHAVIORAL HEALTH
SYSTEM, INC.
CHARTER SAN DIEGO BEHAVIORAL
HEALTH SYSTEM, INC.
CHARTER SPRINGS BEHAVIORAL HEALTH
SYSTEM,
INC.
CHARTER SPRINGWOOD BEHAVIORAL
HEALTH SYSTEM, INC.
CHARTER XXXXX BEHAVIORAL HEALTH
SYSTEM, INC.
CMSF, INC.
FLORIDA HEALTH FACILITIES, INC.
THE CHARTER BEHAVIORAL HEALTH SYSTEM
OF NORTHWEST INDIANA, LLC
THE CHARTER INDIANAPOLIS BEHAVIORAL
HEALTH SYSTEM,
LLC
THE CHARTER SOUTH BEND BEHAVIORAL
HEALTH SYSTEM,
LLC
THE CHARTER TERRE HAUTE BEHAVIORAL
HEALTH SYSTEM, LLC,
each as a Subsidiary Borrower,
by
/s/ Xxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Treasurer
THE CHASE MANHATTAN BANK, individually and
as Administrative Agent, Collateral Agent and
an Issuing Bank,
by
/s/ Xxxx Xxx Xxx
----------------
Name: Xxxx Xxx Xxx
Title: Vice President
00
XXXXX XXXXX XXXXXXXX XXXX XX XXXXX XXXXXXXX,
individually and as Syndication Agent and an
Issuing Bank,
by
/s/ Xxx X. Xxxx
-------------------------
Name: Xxx X. Xxxx
Title: Senior Vice President
BANK OF IRELAND GRAND CAYMAN BRANCH,
by
/s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: Assistant Vice President
by
/s/ Xxxxxxxx X. Xxxx
------------------------------
Name: Xxxxxxxx X. Xxxx
Title: Vice President
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
by
/s/ Xxxxxxxx Xxxxxxxx Xxxxxx
------------------------------
Name: Xxxxxxxx Xxxxxxxx Sunier
Title: Vice President and Manager
BANQUE FRANCAISE DU COMMERCE EXTERIEUR,
by
/s/ Xxxx X. Xxxxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President and Regional
Manager
by
/s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title Assistant Vice President
86
CREDIT LYONNAIS NEW YORK BRANCH,
individually and as Co-Agent,
by
/s/ Farboud Tavangar
------------------------------
Name: Farboud Tavangar
Title: Vice President
DRESDNER BANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES,
by
/s/ Xxxxxx X. Xxxx
------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
by
/s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
FIRST AMERICAN NATIONAL BANK,
by
/s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Agent and as Lender,
by
/s/ Xxxxxx X. Xxxx
------------------------------
Name: Xxxxxx X. Xxxx
Title: Duly Authorized Signatory
87
GIROCREDIT BANK AKTIENGESELLSCHAFT
DER SPARKASSEN, GRAND CAYMAN BRANCH,
by
/s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
Title: First Vice President
by
/s/ Xxxxxx Xxxxx
------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President
MITSUBISHI TRUST AND BANKING
CORPORATION,
by
/s/ Xxxxxxxx Xxxxx xx Xxxx
------------------------------
Name: Xxxxxxxx Xxxxx xx Xxxx
Title: Senior Vice President
THE BANK OF NEW YORK,
by
/s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
THE BANK OF NOVA SCOTIA,
by
/s/ Xxxx Xxxxxxx
------------------------------
Name: Xxxx Xxxxxxx
Title: Relationship Manager
THE NIPPON CREDIT BANK, LTD.,
by
/s/ Xxxxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Senior Manager
