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Exhibit 10.1
[EXECUTION COPY]
CREDIT AGREEMENT
Dated as of November 26, 1997
among
EXTENDICARE HEALTH SERVICES, INC.,
as Borrower,
EXTENDICARE HOLDINGS, INC.
and
CERTAIN SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTY HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
and
NATIONSBANK, N. A.,
as Agent
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TABLE OF CONTENTS
SECTION 1 DEFINITIONS............................................. 1
1.1 Definitions............................................... 1
1.2 Computation of Time Periods............................... 28
1.3 Accounting Terms.......................................... 29
SECTION 2 CREDIT FACILITIES....................................... 29
2.1 Revolving Loans........................................... 29
2.2 Letter of Credit Subfacility.............................. 31
2.3 Tranche A Term Loan....................................... 36
2.4 Tranche B Term Loan....................................... 39
2.5 Tranche C Term Loan....................................... 41
2.6 Regulation U and Regulation G............................. 43
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES.......... 44
3.1 Default Rate.............................................. 44
3.2 Extension and Conversion.................................. 45
3.3 Prepayments............................................... 45
3.4 Termination and Reduction of Revolving Committed Amount... 47
3.5 Fees...................................................... 48
3.6 Capital Adequacy.......................................... 49
3.7 Limitation on Eurodollar Loans............................ 50
3.8 Illegality................................................ 50
3.9 Requirements of Law....................................... 50
3.10 Treatment of Affected Loans.............................. 51
3.11 Taxes.................................................... 52
3.12 Compensation............................................. 54
3.13 Pro Rata Treatment....................................... 55
3.14 Sharing of Payments...................................... 56
3.15 Payments, Computations, Etc.............................. 56
3.16 Evidence of Debt......................................... 58
3.17 Mandatory Assignment..................................... 59
SECTION 4 GUARANTY................................................ 59
4.1 The Guaranty.............................................. 59
4.2 Obligations Unconditional................................. 60
4.3 Reinstatement............................................. 61
4.4 Certain Additional Waivers................................ 61
4.5 Remedies.................................................. 61
4.6 Rights of Contribution.................................... 62
4.7 Continuing Guarantee...................................... 63
4.8 Limitation of Liability of Parent......................... 63
SECTION 5 CONDITIONS.............................................. 63
5.1 Closing Conditions........................................ 63
5.2 Conditions to all Extensions of Credit.................... 67
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SECTION 6 REPRESENTATIONS AND WARRANTIES.......................... 68
6.1 Financial Condition....................................... 68
6.2 No Material Change........................................ 69
6.3 Organization and Good Standing............................ 69
6.4 Power; Authorization; Enforceable Obligations............. 70
6.5 No Conflicts.............................................. 70
6.6 No Default................................................ 71
6.7 Ownership................................................. 71
6.8 Indebtedness.............................................. 71
6.9 Litigation................................................ 71
6.10 Taxes.................................................... 71
6.11 Compliance with Law...................................... 71
6.12 ERISA.................................................... 72
6.13 Subsidiaries............................................. 73
6.14 Governmental Regulations, Etc............................ 74
6.15 Purpose of Loans and Letters of Credit................... 75
6.16 Reimbursement from Third Party Payors.................... 75
6.17 Fraud and Abuse.......................................... 75
6.18 Environmental Matters.................................... 76
6.19 Intellectual Property.................................... 77
6.20 Solvency................................................. 77
6.21 Investments.............................................. 77
6.22 Disclosure............................................... 77
6.23 No Burdensome Restrictions............................... 77
6.24 Brokers' Fees............................................ 78
6.25 Labor Matters............................................ 78
6.26 Nature of Business....................................... 78
6.27 Representations and Warranties from Merger Agreement..... 78
SECTION 7 AFFIRMATIVE COVENANTS................................... 78
7.1 Information Covenants..................................... 78
7.2 Preservation of Existence and Franchises.................. 81
7.3 Books and Records......................................... 82
7.4 Compliance with Law....................................... 82
7.5 Payment of Taxes and Other Indebtedness................... 82
7.6 Insurance................................................. 82
7.7 Maintenance of Property................................... 83
7.8 Performance of Obligations................................ 83
7.9 Use of Proceeds........................................... 83
7.10 Audits/Inspections....................................... 83
7.11 Financial Covenants...................................... 83
7.12 Additional Credit Parties................................ 85
7.13 Pledged Assets........................................... 86
7.14 Interest Rate Protection................................. 86
7.15 Consummation of Merger................................... 86
SECTION 8 NEGATIVE COVENANTS...................................... 87
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8.1 Indebtedness............................................. 87
8.2 Liens.................................................... 88
8.3 Nature of Business....................................... 88
8.4 Consolidation, Merger, Dissolution, etc.................. 88
8.5 Asset Dispositions....................................... 89
8.6 Investments.............................................. 89
8.7 Restricted Payments...................................... 89
8.8 Prepayments of Indebtedness, etc......................... 90
8.9 Transactions with Affiliates............................. 90
8.10 Fiscal Year; Organizational Documents................... 91
8.11 Limitation on Restricted Actions........................ 91
8.12 Ownership of Subsidiaries; Limitations on Parent........ 91
8.13 Sale Leasebacks......................................... 92
8.14 Growth Capital Expenditures............................. 92
8.15 No Further Negative Pledges............................. 92
8.16 No Foreign Subsidiaries................................. 93
SECTION 9 EVENTS OF DEFAULT...................................... 93
9.1 Events of Default........................................ 93
9.2 Acceleration; Remedies................................... 96
SECTION 10 AGENCY PROVISIONS..................................... 97
10.1 Appointment, Powers and Immunities...................... 97
10.2 Reliance by Agent....................................... 97
10.3 Defaults................................................ 98
10.4 Rights as a Lender...................................... 98
10.5 Indemnification......................................... 98
10.6 Non-Reliance on Agent and Other Lenders................. 99
10.7 Successor Agent......................................... 99
SECTION 11 MISCELLANEOUS......................................... 99
11.1 Notices................................................. 99
11.2 Right of Set-Off; Adjustments........................... 101
11.3 Benefit of Agreement.................................... 101
11.4 No Waiver; Remedies Cumulative.......................... 103
11.5 Expenses; Indemnification............................... 103
11.6 Amendments, Waivers and Consents........................ 104
11.7 Counterparts............................................ 106
11.8 Headings................................................ 106
11.9 Survival................................................ 106
11.10 Governing Law; Submission to Jurisdiction; Venue....... 106
11.11 Severability........................................... 107
11.12 Entirety............................................... 107
11.13 Binding Effect; Termination............................ 107
11.14 Confidentiality........................................ 108
11.15 Source of Funds........................................ 108
11.16 Conflict............................................... 109
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SCHEDULES
Schedule 1.1A Existing Letters of Credit
Schedule 1.1B Investments
Schedule 1.1C Liens
Schedule 2.1(a) Lenders
Schedule 5.1(d)(i) Form of Opinion of Xxxxxxx Xxxx Slate Xxxxxxx & Xxxx
Schedule 5.1(d)(ii) Form of Local Corporate Counsel Opinion
Schedule 5.1(g) Corporate Structure
Schedule 6.4 Required Consents, Authorizations, Notices and Filings
Schedule 6.5 Conflicts
Schedule 6.9 Litigation
Schedule 6.12 ERISA
Schedule 6.13 Subsidiaries
Schedule 6.14(d) Revocation, Suspension or Limitation of Licenses, Permits and Franchises
Schedule 6.15 Purpose of Loans and Letters of Credit
Schedule 6.18 Environmental Disclosures
Schedule 6.19 Intellectual Property
Schedule 6.24 Brokers' Fees
Schedule 6.25 Labor Matters
Schedule 7.6 Insurance
Schedule 8.1 Indebtedness
EXHIBITS
Exhibit 1.1A Form of Pledge Agreement
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.3(f) Form of Tranche A Term Note
Exhibit 2.4(f) Form of Tranche B Term Note
Exhibit 2.5(e) Form of Tranche C Term Note
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Acceptance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of November 26, 1997 (as amended,
modified, restated or supplemented from time to time, the "Credit Agreement"),
is by and among EXTENDICARE HEALTH SERVICES, INC., a Delaware corporation (the
"Borrower"), EXTENDICARE HOLDINGS, INC., a Delaware corporation (the "Parent"),
the Subsidiaries Guarantors (as defined herein), the Lenders (as defined
herein) and NATIONSBANK, N. A., as Agent for the Lenders (in such capacity, the
"Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide an $800
million credit facility for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
As used in this Credit Agreement, the following terms shall have the
meanings specified below:
"Acquisition", by any Person, means the acquisition by such Person
of the Capital Stock or all or substantially all of the Property of
another Person, whether or not involving a merger or consolidation with
such Person.
"Additional Credit Party" means each Person that becomes a
Subsidiary Guarantor after the Closing Date by execution of a Joinder
Agreement.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Consolidated Rental Expense" means, as of the date of
determination, Consolidated Rental Expense for the twelve month period
ending on such date multiplied by eight.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage. The Adjusted Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Requirement.
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"Adjusted Senior Funded Indebtedness" means, at any time, the sum of
(i) total Funded Indebtedness (other than Subordinated Indebtedness) of
the Consolidated Parties on a consolidated basis plus (ii) Adjusted
Consolidated Rental Expense.
"Adjusted Total Funded Indebtedness" means, at any time, the sum of
(i) total Funded Indebtedness (including without limitation Subordinated
Indebtedness) of the Consolidated Parties on a consolidated basis plus
(ii) Adjusted Consolidated Rental Expense.
"Affiliate" means, with respect to any Person, any other Person (i)
directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person or (ii) directly or indirectly
owning or holding ten percent (10%) or more of the Capital Stock in such
Person. For purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
"Agency Services Address" means NationsBank, N. A., 000 Xxxxx Xxxxx
Xxxxxx, XX0-000-00-00, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attn: Agency
Services, or such other address as may be identified by written notice
from the Agent to the Borrower.
"Agent" shall have the meaning assigned to such term in the heading
hereof, together with any successors or assigns.
"AHC" means AHC Acquisition Corp., a Delaware corporation and a
wholly-owned indirect subsidiary of the Borrower.
"Agent's Fee Letter" means that certain letter agreement, dated as
of September 29, 1997, between the Agent and the Borrower, as amended,
modified, restated or supplemented from time to time.
"Agent's Fees" shall have the meaning assigned to such term in
Section 3.5(d).
"Applicable Lending Office" means, for each Lender, the office of
such Lender (or of an Affiliate of such Lender) as such Lender may from
time to time specify to the Agent and the Borrower by written notice as
the office by which its Eurodollar Loans are made and maintained.
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Revolving Loan, any Tranche
A Term Loan, any Tranche B Term Loan or any Tranche C Term Loan, the
applicable rate of the Unused Fee for any day for purposes of Section
3.5(b), the applicable rate of the Standby Letter of Credit Fee for any
day for purposes of Section 3.5(c)(i) or the applicable rate of the Trade
Letter of Credit Fee for any day for purposes of Section 3.5(c)(ii), the
appropriate applicable percentage corresponding to the Total Leverage
Ratio in effect as of the most recent Calculation Date:
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TOTAL
PRICING LEVERAGE APPLICABLE PERCENTAGE APPLICABLE PERCENTAGE FOR
LEVEL RATIO FOR EURODOLLAR LOANS BASE RATE LOANS
REVOLVING LOANS, REVOLVING LOANS,
TRANCHE A TERM TRANCHE A TERM
LOANS AND LOANS AND
TRANCHE C TRANCHE B TRANCHE C TRANCHE B
TERM LOANS TERM LOANS TERM LOANS TERM LOANS
I < 3.0 to 1.0 0.75% 1.75% 0% 0.75%
II < 3.5 to 1.0 1.00% 1.75% 0% 0.75%
but
> 3.0 to 1.0
III < 4.0 to 1.0 1.25% 1.75% 0.25% 0.75%
but
> 3.5 to 1.0
IV < 4.5 to 1.0 1.50% 2.00% 0.50% 1.00%
but
> 4.0 to 1.0
V < 5.0 to 1.0 1.75% 2.00% 0.75% 1.00%
but
> 4.5 to 1.0
VI > 5.0 to 1.00 2.00% 2.00% 1.00% 1.00%
APPLICABLE APPLICABLE
PERCENTAGE FOR PERCENTAGE FOR APPLICABLE
STANDBY LETTER OF TRADE LETTER OF PERCENTAGE FOR
CREDIT FEE CREDIT FEE UNUSED FEES
I 0.75% 0.375% 0.25%
II 1.00% 0.50% 0.25%
III 1.25% 0.625% 0.3125%
IV 1.50% 0.75% 0.3125%
V 1.75% 0.875% 0.375%
VI 2.00% 1.00% 0.50%
The Applicable Percentages shall be determined and adjusted quarterly on
the date (each a "Calculation Date") five Business Days after the earlier
of (a) the date by which the Borrower is required to provide the officer's
certificate in accordance with the provisions of Section 7.1(c) for the
most recently ended fiscal quarter of the Consolidated Parties and (b) the
date the Borrower actually provides such officer's certificate; provided,
however, that (i) the initial Applicable Percentages shall be based on
Pricing Level V (as shown above) and shall remain at Pricing Level V until
the Calculation Date for the fiscal quarter of the Borrower and its
Subsidiaries occurring with respect to the June 30, 1998 financial
statements, and, thereafter, the Pricing Level shall be determined by the
Total Leverage Ratio as of the last day of the most recently ended fiscal
quarter of the Consolidated Parties preceding the applicable Calculation
Date, and (ii) if the Borrower fails to provide the officer's certificate
to the Agency Services Address as required by Section 7.1(c) for the last
day of the most recently ended fiscal quarter of the Consolidated Parties
preceding the applicable Calculation Date, the Applicable Percentage from
such Calculation Date shall be based on Pricing Level VI until such time
as an appropriate officer's certificate is provided, whereupon the Pricing
Level shall be determined by the Total Leverage Ratio as of the last day
of the most recently ended fiscal quarter of the Consolidated Parties
preceding such Calculation Date. Each Applicable Percentage shall be
effective from one Calculation Date until the next Calculation Date. Any
adjustment in the Applicable Percentages shall be applicable to all
existing Loans as well as any new Loans made or issued.
"Application Period", in respect of any Asset Disposition, shall
have the meaning assigned to such term in Section 8.5.
"Arbor" means Arbor Health Care Company, a Delaware corporation.
"Asset Disposition" means (i) the disposition of any or all of the
assets (including without limitation the Capital Stock of a Subsidiary)
of the Parent or any Consolidated Party
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whether by sale, lease, transfer or otherwise or (ii) any asset sale as
such term is defined in any agreement creating Subordinated Indebtedness.
The term "Asset Disposition" shall not include (a) the sale of inventory
in the ordinary course of business for fair consideration, (b) the sale
or disposition of machinery and equipment no longer used or useful in the
conduct of such Person's business or (c) any Equity Issuance.
"Asset Disposition Prepayment Event" means, with respect to any
Asset Disposition other than an Excluded Asset Disposition, the failure
of the Borrower to apply (or cause to be applied) the Net Cash Proceeds
of such Asset Disposition to the purchase, acquisition or construction of
Eligible Assets during the Application Period for such Asset Disposition.
"Banque Paribas" means Banque Paribas and its successors.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time
to time.
"Bankruptcy Event" means, with respect to any Person, the occurrence
of any of the following with respect to such Person: (i) a court or
governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of such Person (A) in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, (B) appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
(C) ordering the winding up or liquidation of its affairs; or (ii) there
shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or any case, proceeding or other action for the appointment of
a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded for a period of sixty (60)
consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or
taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its Property or make any general assignment for the
benefit of creditors; or (iv) such Person shall be unable to, or shall
admit in writing its inability to, pay its debts generally as they become
due.
"Base Rate" means, for any day, the rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (0.5%) or (b) the Prime Rate for such day. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Rate
shall be effective on the effective date of such change in the Prime Rate
or Federal Funds Rate.
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"Base Rate Loan" means any Loan bearing interest at a rate determined
by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading hereof,
together with any permitted successors and assigns.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or New York,
New York are authorized or required by law to close, except that, when
used in connection with a Eurodollar Loan, such day shall also be a day
on which dealings between banks are carried on in U.S. dollar deposits in
London, England.
"Calculation Date" has the meaning set forth in the definition of
"Applicable Percentage" set forth in this Section 1.1.
"Capital Lease" means, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership,
partnership interests (whether general or limited), (iv) in the case of a
limited liability company, membership interests and (v) any other
interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the
issuing Person.
"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having maturities
of not more than twelve months from the date of acquisition, (b) readily
marketable direct obligations of any state of the United States of
America or any political subdivision of any such state given on the date
of such investment a credit rating of at least Aa by Moody's or AA by
S&P, in each case due within twelve months of the date of acquisition;
(c) time deposits, certificates of deposit, Eurocurrency through or
bankers' acceptances of (i) any Lender, (ii) any domestic commercial bank
of recognized standing having capital and surplus in excess of
$250,000,000 or (iii) any bank whose short-term commercial paper rating
from S&P is at least A-1 or the equivalent thereof or from Xxxxx'x is at
least P-1 or the equivalent thereof (any such bank being an "Approved
Bank"), in each case with maturities of not more than twelve months from
the date of acquisition, (d) commercial paper and variable or fixed rate
notes issued by any Approved Bank (or by the parent company thereof) or
any variable rate notes issued by, or guaranteed by, any domestic
corporation rated A-1 (or the equivalent thereof) or better by S&P or P-1
(or the equivalent thereof) or better by Moody's and maturing within
twelve months of the date of acquisition, (e) repurchase agreements
entered into by any Person with a bank or trust company (including any of
the Lenders) or recognized securities
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dealer having capital and surplus in excess of $250,000,000 for direct
obligations issued by or fully guaranteed by the United States of America
in which such Person shall have a perfected first priority security
interest (subject to no other Liens) and having, on the date of purchase
thereof, a fair market value of at least 100% of the amount of the
repurchase obligations, (f) commercial paper of any corporation doing
business in and incorporated under the laws of the United States of any
state thereof given on the date of acquisition the highest credit rating
by Moody's and S&P, in each case due within 270 days or less after the
date of acquisition and (g) Investments, classified in accordance with
GAAP as current assets, in money market investment programs registered
under the Investment Company Act of 1940, as amended, which are
administered by reputable financial institutions having capital of at
least $500,000,000 and the portfolios of which are limited to Investments
of the character described in the foregoing subdivisions (a) through (f).
"Change of Control" means any of the following events: (a) the
failure of the Parent to own all of the Capital Stock of the Borrower,
(b) the failure of Extendicare to own, directly or indirectly, at least
66-2/3% of the Voting Stock of the Parent, (c) Scotia Investments Limited
and Kingfield Investments Limited shall, for any reason, beneficially
own, directly or indirectly, Voting Stock of Extendicare that represents
a lesser percentage of the aggregate voting power of all classes of
Voting Stock of Extendicare, voting together as a single class, than any
other Person or any other two or more Persons acting in concert, (d) any
Person (other than Scotia Investments Limited and Kingfield Investments
Limited) or any two or more Persons acting in concert (but without
including Scotia Investments Limited and Kingfield Investments Limited
whether or not acting alone, in concert with one another pursuant to a
shareholders agreement or in concert with any other Person(s)) shall have
acquired beneficial ownership, directly or indirectly, of, or shall have
acquired by contract or otherwise, or shall have entered into a contract
or arrangement that, upon consummation, will result in its or their
acquisition of, control over 35% or more of the votes attributable to the
Voting Stock of Extendicare, (e) during any period of up to 24
consecutive months, commencing after the Closing Date, individuals who at
the beginning of such 24 month period were directors of Extendicare
(together with any new director whose election by the Board of Directors
of Extendicare or whose nomination for election by the shareholders of
Extendicare was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning
of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of
the directors of Extendicare then in office or (f) the occurrence of a
"Change of Control" under and as defined in any indenture or other
agreement governing or evidencing any Subordinated Indebtedness. As used
herein, "beneficial ownership" shall have the meaning provided in Rule
13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time.
References to sections of the Code shall be construed also to refer to
any successor sections.
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"Collateral" means a collective reference to the collateral which is
identified in, and at any time will be covered by, the Collateral
Documents.
"Collateral Documents" means a collective reference to the Pledge
Agreement and such other documents executed and delivered in connection
with the attachment and perfection of the Agent's security interests and
liens arising thereunder.
"Commitment" means (i) with respect to each Lender, the Revolving
Commitment of such Lender, the Tranche A Term Loan Commitment, the
Tranche B Term Loan Commitment and the Tranche C Term Loan Commitment of
such Lender and (ii) with respect to the Issuing Lender, the LOC
Commitment.
"Consolidated Cash Taxes" means, for any period for the Consolidated
Parties on a consolidated basis, the aggregate of all taxes for such
period to the extent paid in cash, as determined in accordance with GAAP.
"Consolidated EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in
the determination of Consolidated Net Income for such period, has been
deducted for (A) Consolidated Interest Expense, (B) total federal, state,
local and foreign income, value added and similar taxes, (C) depreciation
and amortization expense and (D) all other non-cash charges, all as
determined in accordance with GAAP.
"Consolidated EBITDAR" means, for any period, the sum of (i)
Consolidated EBITDA for such period, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been
deducted for Consolidated Rental Expense, all as determined in accordance
with GAAP.
"Consolidated Growth Capital Expenditures" means, for any period for
the Consolidated Parties on a consolidated basis, all capital
expenditures for such period, as determined in accordance with GAAP,
representing the purchase price of equipment, or the costs of
construction or purchase price for, or other costs associated with the
acquisition construction or expansion of, a facility.
"Consolidated Interest Expense" means, for any period, interest
expense (including the amortization of debt discount and premium, the
interest component under Capital Leases and the implied interest
component under Synthetic Leases) of the Consolidated Parties on a
consolidated basis for such period, as determined in accordance with
GAAP.
"Consolidated Maintenance Capital Expenditures" means, for any
period for the Consolidated Parties on a consolidated basis, all capital
expenditures for such period, as determined in accordance with GAAP,
other than any capital expenditure representing the purchase price for,
or other costs associated with the acquisition, construction or expansion
of, a facility.
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"Consolidated Net Income" means, for any period, net income
(excluding extraordinary and unusual items) after taxes for such period
of the Consolidated Parties on a consolidated basis, as determined in
accordance with GAAP.
"Consolidated Net Worth" means, as of any date, shareholders' equity
or net worth of the Consolidated Parties on a consolidated basis, as
determined in accordance with GAAP.
"Consolidated Parties" means a collective reference to the Borrower
and its Subsidiaries, and "Consolidated Party" means any one of them.
"Consolidated Rental Expense" means, for any period, rental expense
under Operating Leases of the Consolidated Parties on a consolidated
basis for such period, as determined in accordance with GAAP.
"Consolidated Scheduled Funded Debt Payments" means, as of the end
of each fiscal quarter of the Consolidated Parties, for the Consolidated
Parties on a consolidated basis, the sum of all scheduled payments of
principal on Funded Indebtedness (other than Funded Indebtedness retired
in connection with the Refinancing) for the applicable period ending on
such date (including the principal component of payments due on Capital
Leases during the applicable period ending on such date); it being
understood that Scheduled Funded Debt Payments shall not include
voluntary prepayments or the mandatory prepayments required pursuant to
Section 3.3.
"Consolidated Total Assets" means, at any time, total assets of the
Consolidated Parties on a consolidated basis at such time, as determined
in accordance with GAAP.
"Consolidated Working Capital" means, at any time, the excess of (i)
current assets of the Consolidated Parties on a consolidated basis at
such time over (ii) current liabilities of the Consolidated Parties on a
consolidated basis at such time, all as determined in accordance with
GAAP.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 3.2 or Sections 3.7 through 3.12, inclusive, of a
Base Rate Loan into a Eurodollar Loan.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the LOC Documents, each Joinder Agreement, the
Agent's Fee Letter, the Collateral Documents and all other related
agreements and documents issued or delivered hereunder or thereunder or
pursuant hereto or thereto (in each case as the same may be amended,
modified, restated, supplemented, extended, renewed or replaced from time
to time), and "Credit Document" means any one of them.
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"Credit Parties" means a collective reference to the Borrower and
the Guarantors, and "Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (i) all of
the obligations of the Credit Parties to the Lenders (including the
Issuing Lender) and the Agent, whenever arising, under this Credit
Agreement, the Notes, the Collateral Documents or any of the other Credit
Documents (including, but not limited to, any interest accruing after the
occurrence of a Bankruptcy Event with respect to any Credit Party,
regardless of whether such interest is an allowed claim under the
Bankruptcy Code) and (ii) all liabilities and obligations, whenever
arising, owing from the Borrower to any Lender, or any Affiliate of a
Lender, arising under any Hedging Agreement.
"Debt Issuance" means the issuance of any Indebtedness for borrowed
money by the Parent or any Consolidated Party other than Indebtedness
permitted by Section 8.1; provided, however, that the first $200,000,000
in principal amount of Subordinated Indebtedness issued by the Borrower
as permitted by Section 8.1(f)(i) shall constitute a "Debt Issuance".
"Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a) has
failed to make a Loan or purchase a Participation Interest required
pursuant to the terms of this Credit Agreement within one Business Day of
when due, (b) other than as set forth in (a) above, has failed to pay to
the Agent or any Lender an amount owed by such Lender pursuant to the
terms of this Credit Agreement within one Business Day of when due,
unless such amount is subject to a good faith dispute or (c) has been
deemed insolvent or has become subject to a bankruptcy or insolvency
proceeding or with respect to which (or with respect to any of assets of
which) a receiver, trustee or similar official has been appointed.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Domestic Subsidiary" means, with respect to any Person, any
Subsidiary of such Person that is incorporated or organized under the
laws of any State of the United States or the District of Columbia.
"Eligible Assets" means another business or any substantial part of
another business or other long-term assets, in each case, in, or used or
useful in, the same or a similar line of business as the Consolidated
Parties were engaged in on the Closing Date or any reasonable extensions
or expansions thereof.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; a (iii) Related Fund; and (iv) any other Person approved by the
Agent (such approval not to be unreasonably withheld or delayed) and,
unless an Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 11.3, the
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Borrower (such approval not to be unreasonably withheld or delayed by the
Borrower and such approval to be deemed given by the Borrower if no
objection is received by the assigning Lender and the Agent from the
Borrower within two Business Days after notice of such proposed
assignment has been provided by the assigning Lender to the Borrower);
provided, however, that neither the Borrower nor an Affiliate of the
Borrower shall qualify as an Eligible Assignee.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of pollutants, contaminants, chemicals, or industrial, toxic
or hazardous substances or wastes.
"Equity Issuance" means any issuance by the Parent or any
Consolidated Party to any Person other than a Credit Party of (a) shares
of its Capital Stock, (b) any shares of its Capital Stock pursuant to the
exercise of options or warrants or (c) any shares of its Capital Stock
pursuant to the conversion of any debt securities to equity. The term
"Equity Issuance" shall not include any Asset Disposition or any capital
contribution in any Credit Party for which no Capital Stock of such
Credit Party is issued.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute thereto, as interpreted by the
rules and regulations thereunder, all as the same may be in effect from
time to time. References to sections of ERISA shall be construed also to
refer to any successor sections.
"ERISA Affiliate" means an entity which is under common control with
the Parent or any Consolidated Party within the meaning of Section
4001(a)(14) of ERISA, or is a member of a group which includes the Parent
or any Consolidated Party and which is treated as a single employer under
Sections 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence of
a Reportable Event or the substantial cessation of operations (within the
meaning of Section 4062(e) of ERISA); (ii) the withdrawal by the Parent,
any Consolidated Party or any ERISA Affiliate from a Multiple Employer
Plan during a plan year in which it was a substantial employer (as such
term is defined in Section 4001(a)(2) of ERISA), or the termination of a
Multiple Employer Plan; (iii) the distribution of a notice of intent to
terminate or the actual termination of a Plan pursuant to Section
4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under Section
4042 of ERISA; (v) any event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any Plan; (vi) the complete or partial
withdrawal of the Parent, any Consolidated Party or any ERISA Affiliate
from a
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Multiemployer Plan; (vii) the conditions for imposition of a lien under
Section 302(f) of ERISA exist with respect to any Plan; or (vii) the
adoption of an amendment to any Plan requiring the provision of security
to such Plan pursuant to Section 307 of ERISA.
"Eurodollar Loan" means any Loan that bears interest at a rate based
upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by the Agent to be equal to the
quotient obtained by dividing (a) the Interbank Offered Rate for such
Eurodollar Loan for such Interest Period by (b) 1 minus the Eurodollar
Reserve Requirement for such Eurodollar Loan for such Interest Period.
"Eurodollar Reserve Requirement" means, at any time, the maximum
rate at which reserves (including, without limitation, any marginal,
special, supplemental, or emergency reserves) are required to be
maintained under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) by member
banks of the Federal Reserve System against "Eurocurrency liabilities"
(as such term is used in Regulation D). Without limiting the effect of
the foregoing, the Eurodollar Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks with respect to
(i) any category of liabilities which includes deposits by reference to
which the Adjusted Eurodollar Rate is to be determined, or (ii) any
category of extensions of credit or other assets which include Eurodollar
Loans.
"Event of Default" means such term as defined in Section 9.1.
"Excluded Asset Disposition" means (a) any Asset Disposition by any
Consolidated Party provided that (i) the net book value of the assets
sold or otherwise disposed of in such transaction does not exceed
$1,000,000 and (ii) the aggregate net book value of all of the assets
sold or otherwise disposed of in all such transactions during any fiscal
year of the Consolidated Parties shall not exceed $15,000,000, (b) any
other Asset Disposition by any Consolidated Party to any Credit Party
other than the Parent if (i) the Credit Parties shall cause to be
executed and delivered such documents, instruments and certificates as
the Agent may request so as to cause the Credit Parties to be in
compliance with the terms of Section 7.13 after giving effect to such
Asset Disposition and (ii) after giving effect to such Asset Disposition,
no Default or Event of Default exists and (c) the sale by the Parent of
all or any portion of the Capital Stock or all or any portion of the
Property of any Unconsolidated Subsidiary; provided, however,
notwithstanding the foregoing, the term "Excluded Asset Disposition"
shall not include any Asset Disposition which, pursuant to the terms of
any indenture or other agreement governing or evidencing any Subordinated
Indebtedness of the Borrower, would be required to be applied to the
prepayment of any Indebtedness of the Borrower.
"Executive Officer" of any Person means any of the chief executive
officer, chief operating officer, president, vice president, chief
financial officer or treasurer of such Person.
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"Existing Letters of Credit" means the letters of credit issued by
Banque Paribas and described by date of issuance, letter of credit
number, undrawn amount, name of beneficiary and date of expiry on
Schedule 1.1A hereto.
"Extendicare" means Extendicare Inc., a corporation existing under
the laws of Canada.
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on
the next succeeding Business Day, and (b) if no such rate is so published
on such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate charged to the Agent (in its individual
capacity) on such day on such transactions as determined by the Agent.
"Fixed Charge Coverage Ratio" means, as of the end of each fiscal
quarter of the Consolidated Parties for the twelve month period ending on
such date, the ratio of (a) the sum of (i) Consolidated EBITDAR for the
applicable period minus (ii) Consolidated Maintenance Capital
Expenditures for the applicable period minus (iii) Consolidated Cash
Taxes for the applicable period to (b) the sum of (i) Consolidated
Interest Expense for the applicable period plus (ii) Consolidated
Scheduled Funded Debt Payments for the applicable period plus (iii)
Consolidated Rental Expense for the applicable period plus (iv)
Restricted Payments made by the Consolidated Parties on a consolidated
basis for the applicable period.
"Foreign Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is not a Domestic Subsidiary of such
Person.
"Funded Indebtedness" means, with respect to any Person, without
duplication, (a) all Indebtedness of such Person other than Indebtedness
of the types referred to in clause (e), (f), (g) and (m) of the
definition of "Indebtedness" set forth in this Section 1.1, (b) all
Indebtedness of another Person of the type referred to in clause (a)
above secured by (or for which the holder of such Funded Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien
on, or payable out of the proceeds of production from, Property owned or
acquired by such Person, whether or not the obligations secured thereby
have been assumed, (c) all Guaranty Obligations of such Person with
respect to Indebtedness of the type referred to in clause (a) above of
another Person and (d) Indebtedness of the type referred to in clause (a)
above of any partnership or unincorporated joint venture in which such
Person is legally obligated or has a reasonable expectation of being
liable with respect thereto.
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"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to the terms of Section
1.3.
"Governmental Authority" means any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantors" means a collective reference to the Parent, each of the
Subsidiary Guarantors and each other Subsidiary of the Borrower
guarantying any Subordinated Indebtedness, together with their successors
and permitted assigns, and "Guarantor " means any one of them.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in
the ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any
other Person in any manner, whether direct or indirect, and including
without limitation any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or any Property constituting security
therefor, (ii) to advance or provide funds or other support for the
payment or purchase of any such Indebtedness or to maintain working
capital, solvency or other balance sheet condition of such other Person
(including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for
the benefit of any holder of Indebtedness of such other Person, (iii) to
lease or purchase Property, securities or services primarily for the
purpose of assuring the holder of such Indebtedness, or (iv) to otherwise
assure or hold harmless the holder of such Indebtedness against loss in
respect thereof. The amount of any Guaranty Obligation hereunder shall
(subject to any limitations set forth therein) be deemed to be an amount
equal to the outstanding principal amount (or maximum principal amount,
if larger) of the Indebtedness in respect of which such Guaranty
Obligation is made.
"Hedging Agreements" means any interest rate protection agreement or
foreign currency exchange agreement between the Borrower and any Lender,
or any Affiliate of a Lender, and entered into in order to manage
existing or anticipated interest rate or exchange rate risks and not for
speculative purposes.
"Indebtedness" means, with respect to any Person, 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, or upon which interest payments are customarily
made, (c) all obligations of such Person under conditional sale or other
title retention agreements relating to Property purchased by such Person
(other than trade or other accounts payable in the ordinary course of
business and customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such Person
(other than trade debt incurred in the ordinary course of business and
due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of
such Person under take-or-pay or similar arrangements or under
commodities agreements, (f) all Indebtedness of others secured
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by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of
the proceeds of production from, Property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed,
(g) all Guaranty Obligations of such Person, (h) the principal portion of
all obligations of such Person under Capital Leases, (i) all net
obligations of such Person under Hedging Agreements, (j) the maximum
amount of all standby letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed),
(k) all preferred Capital Stock issued by such Person and required by the
terms thereof to be redeemed, or for which mandatory sinking fund
payments are due, by a fixed date, (l) the principal portion of all
obligations of such Person under Synthetic Leases and (m) the
Indebtedness of any partnership or unincorporated joint venture in which
such Person is a general partner or a joint venturer and with respect to
which Indebtedness such Person has a legal obligation.
"Interbank Offered Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750
(or any successor page) as the London interbank offered rate for deposits
in Dollars at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable to
such Interest Period. If for any reason such rate is not available, the
term "Interbank Offered Rate" shall mean, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest
Period; provided, however, if more than one such rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic
mean of all such rates (rounded upwards, if necessary, to the nearest
1/100 of 1%).
"Interest Payment Date" means (a) as to Base Rate Loans, the last
day of each fiscal quarter of the Borrower and the Maturity Date, and (b)
as to Eurodollar Loans, the last day of each applicable Interest Period
and the Maturity Date, and in addition where the applicable Interest
Period for a Eurodollar Loan is greater than three months, then also the
date three months from the beginning of the Interest Period and each
three months thereafter.
"Interest Period" means, as to Eurodollar Loans, a period of one,
two, three or six months' duration, as the Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day), (b)
no Interest Period shall extend beyond the Maturity Date, (c) with regard
to the Tranche A Term Loans, no Interest Period shall extend beyond any
Principal Amortization Payment Date unless the portion of Tranche A Term
Loans comprised of Base Rate Loans together with the portion of Tranche A
Term Loans comprised of Eurodollar Loans with Interest Periods expiring
prior to the date such Principal Amortization Payment is due, is at least
equal to the
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amount of such Principal Amortization Payment due on such date, (d) with
regard to the Tranche B Term Loans, no Interest Period shall extend
beyond any Principal Amortization Payment Date unless the portion of
Tranche B Term Loans comprised of Base Rate Loans together with the
portion of Tranche B Term Loans comprised of Eurodollar Loans with
Interest Periods expiring prior to the date such Principal Amortization
Payment is due, is at least equal to the amount of such Principal
Amortization Payment due on such date, (e) with regard to the Tranche C
Term Loans, no Interest Period shall extend beyond any Principal
Amortization Payment Date unless the portion of Tranche C Term Loans
comprised of Base Rate Loans together with the portion of Tranche C Term
Loans comprised of Eurodollar Loans with Interest Periods expiring prior
to the date such Principal Amortization Payment is due, is at least equal
to the amount of such Principal Amortization Payment due on such date and
(f) where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the Interest
Period is to end, such Interest Period shall end on the last Business Day
of such calendar month.
"Investment" in any Person means (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets, shares of Capital Stock, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other
securities of such other Person or (b) any deposit with, or advance, loan
or other extension of credit to, such Person (other than deposits made in
connection with the purchase of equipment or other assets in the ordinary
course of business) or (c) any other capital contribution to or
investment in such Person, including, without limitation, any Guaranty
Obligations (including any support for a letter of credit issued on
behalf of such Person) incurred for the benefit of such Person, but
excluding any Restricted Payment to such Person.
"Issuing Lender" means (i) with respect to each Existing Letter of
Credit, Banque Paribas and (ii) with respect to each other Letter of
Credit, NationsBank.
"Issuing Lender Fees" shall have the meaning assigned to such term
in Section 3.5(c)(iii).
"Joinder Agreement" means a Joinder Agreement substantially in the
form of Exhibit 7.12 hereto, executed and delivered by an Additional
Credit Party in accordance with the provisions of Section 7.12.
"Lender" means any of the Persons identified as a "Lender" on the
signature pages hereto, and any Person which may become a Lender by way
of assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
"Letter of Credit" means (i) any letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the
terms of Section 2.2 and (ii) any Existing Letter of Credit..
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of
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any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any financing or
similar statement or notice filed under the Uniform Commercial Code as
adopted and in effect in the relevant jurisdiction or other similar
recording or notice statute, and any lease in the nature thereof).
"Loan" or "Loans" means the Revolving Loans, the Tranche A Term
Loans, the Tranche B Term Loans and/or the Tranche C Term Loans (or a
portion of any Revolving Loan, any Tranche A Term Loan, Tranche B Term
Loan or any Tranche C Term Loan bearing interest based on the Base Rate
or the Eurodollar Rate), individually or collectively, as appropriate.
"LOC Commitment" means the commitment of the Issuing Lender to issue
Letters of Credit in an aggregate face amount at any time outstanding
(together with the amounts of any unreimbursed drawings thereon) of up to
the LOC Committed Amount.
"LOC Committed Amount" shall have the meaning assigned to such term
in Section 2.2.
"LOC Documents" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (i) the rights and obligations of the parties concerned or
at risk or (ii) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding, assuming compliance with
all requirements for drawings referred to in such Letters of Credit plus
(ii) the aggregate amount of all drawings under Letters of Credit honored
by the Issuing Lender but not theretofore reimbursed by the Borrower.
"Material Adverse Effect" means a material adverse effect on (i) the
condition (financial or otherwise), operations, business, assets,
liabilities or prospects of the Parent and the Consolidated Parties taken
as a whole, (ii) the ability of any Credit Party to perform any material
obligation under the Credit Documents to which it is a party or (iii) the
material rights and remedies of the Lenders under the Credit Documents.
"Material Domestic Subsidiary" means (i) each of the corporations
described as a "Material Domestic Subsidiary" on Schedule 6.13 and (ii)
any other direct or indirect Domestic Subsidiary of the Borrower which at
any time on or after the Closing Date has total assets (as determined in
accordance with GAAP) equal to or greater than $1,000,000, provided that
the aggregate total assets (as determined in accordance with GAAP) at any
time of all Subsidiaries of the Borrower excluded from this definition of
"Material Subsidiary" shall not exceed $5,000,000.
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"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or
regulated as such in or under any Environmental Laws, including, without
limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.
"Maturity Date" means (i) as to the Revolving Loans and Letters of
Credit (and the related LOC Obligations), the Tranche A Term Loan and the
Tranche C Term Loan, December 31, 2003 and (ii) as to the Tranche B Term
Loan, December 31, 2004.
"Medicaid Regulations" shall mean, collectively, (i) all federal
statues (whether set forth in Title XIX of the Social Security Act, 42
USC Section Section 1396 et seq., or elsewhere) affecting the medical
assistance program established by Title XIX of the Social Security Act,
and any statutes succeeding thereto; (ii) all applicable provisions of
all federal rules, regulations, manuals and orders of all Governmental
Authorities promulgated pursuant to or in connection with the statutes
described in clause (i) above and all federal administrative,
reimbursement and other guidelines of all Governmental Authorities having
the force of law promulgated pursuant to or in connection with the
statutes described in clause (i) above; (iii) all state statutes and
plans for medical assistance enacted in connection with the statutes and
provisions described in clauses (i) and (ii) above; and (iv) all
applicable provisions of all rules, regulations, manuals and orders of
all Governmental Authorities promulgated pursuant to or in connection
with the statutes described in clause (iii) above and all state
administrative, reimbursement and other guidelines of all Governmental
Authorities having the force of law promulgated pursuant to or in
connection with the statutes described in clause (iii) above, in each
case as may be amended, supplemented or otherwise modified from time to
time.
"Medicare Regulations" shall mean, collectively, all federal
statutes (whether set forth in Title XVIII of the Social Security Act, 42
USC Section Section 1396 et seq., or elsewhere) affecting the health
insurance program for the aged and disabled established by Title XVIII of
the Social Security Act and any statutes succeeding thereto; together
with all applicable provisions of all rules, regulations, manuals and
orders and administrative, reimbursement and other guidelines having the
force of law of all Governmental Authorities (including without
limitation, Health and Human Services ("HHS"), HCFA, and Office of the
Inspector General for HHS, or any Person succeeding to the functions of
any of the foregoing) promulgated pursuant to or in connection with any
of the foregoing having the force of law, in each case as may be amended,
supplemented or otherwise modified from time to time.
"Merger Agreement" means the Agreement and Plan of Merger by and
among Extendicare, AHC and Arbor, dated as of September 29, 1997, as it
may be amended on or prior to the Closing Date.
"Merger Date" means the effective date of the merger of AHC into
Arbor (with Arbor as the surviving corporation) pursuant to the terms of
the Merger Agreement.
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"Moody's" means Xxxxx'x Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating
securities.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which the Parent, any
Consolidated Party or any ERISA Affiliate and at least one employer other
than the Parent, the Consolidated Parties or any ERISA Affiliate are
contributing sponsors.
"NationsBank" means NationsBank, N. A. and its successors.
"Net Cash Proceeds" means the aggregate cash proceeds received by
the Parent or any Consolidated Parties in respect of any Asset
Disposition, Equity Issuance or Debt Issuance, net of (a) direct costs
(including, without limitation, legal, accounting and investment banking
fees, and sales commissions) and (b) taxes paid or payable as a result
thereof; it being understood that "Net Cash Proceeds" shall include,
without limitation, any cash received upon the sale or other disposition
of any non-cash consideration received by the Parent or any Consolidated
Parties in any Asset Disposition, Equity Issuance or Debt Issuance.
"Note" or "Notes" means the Revolving Notes, the Tranche A Term
Notes, the Tranche B Term Notes and/or the Tranche C Term Notes,
individually or collectively, as appropriate.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i), Section 2.3(b), Section 2.4(b) or Section 2.5(b).
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Exhibit 3.2, as
required by Section 3.2.
"OSHA" shall mean the Occupational Safety and Health Act, as amended
from time to time, and all rules and regulations from time to time
promulgated thereunder.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Other Taxes" means such term as is defined in Section 3.11.
"Parent" means the Person identified as such in the heading hereof,
together with any permitted successors and assigns.
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"Participation Interest" means a purchase by a Lender of a
participation in Letters of Credit or LOC Obligations as provided in
Section 2.2 or in any Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Acquisition" means an Acquisition by the Borrower or any
Subsidiary of the Borrower for the fair market value of the Capital Stock
or Property acquired, provided that (i) the Capital Stock or Property
acquired in such Acquisition relates to the health care industry, (ii)
the Agent shall have received all items in respect of the Capital Stock
acquired in such Acquisition required to be delivered by the terms of
Section 7.12 and/or Section 7.13, (iii) in the case of an Acquisition of
the Capital Stock of another Person, the board of directors (or other
comparable governing body) of such other Person shall have duly approved
such Acquisition, (iv) the Borrower shall have delivered to the Agent a
Pro Forma Compliance Certificate demonstrating that, upon giving effect
to such Acquisition on a Pro Forma Basis, the Credit Parties shall be in
compliance with all of the covenants set forth in Section 7.11, (v) the
representations and warranties made by the Credit Parties in any Credit
Document shall be true and correct in all material respects at and as if
made as of the date of such Acquisition (after giving effect thereto)
except to the extent such representations and warranties expressly relate
to an earlier date, (vi) if the aggregate consideration (including any
assumption of liabilities (other than current working capital liabilities
not constituting Indebtedness), but excluding consideration consisting of
any Capital Stock of the Borrower or capital contributed by Extendicare)
for any such transaction is greater than $75 million, then the Required
Lenders shall have approved such Acquisition in their sole reasonable
discretion and (vii) unless the Required Lenders shall otherwise agree in
writing in their sole reasonable discretion to a greater amount, the
aggregate consideration (including any assumption of liabilities (other
than current working capital liabilities not constituting Indebtedness),
but excluding consideration consisting of any Capital Stock of the
Borrower or capital contributed by Extendicare) paid by the Consolidated
Parties for all Acquisitions during any fiscal year, taken together with
Consolidated Growth Capital Expenditures for such fiscal year, shall not
exceed (A) for fiscal year 1998 (including the period from the Closing
Date through the last day of fiscal year 1997), $150 million (excluding
for purposes hereof the Acquisition of Arbor), (B) for each of fiscal
years 1999 and 2000, $175 million and (C) for each fiscal year
thereafter, $200 million.
"Permitted Investments" means Investments which are either (i) cash
and Cash Equivalents; (ii) accounts receivable created, acquired or made
by any Consolidated Party in the ordinary course of business and payable
or dischargeable in accordance with customary trade terms; (iii)
Investments consisting of Capital Stock, obligations, securities or other
property received by any Consolidated Party in settlement of accounts
receivable (created in the ordinary course of business) from bankrupt
obligors; (iv) Investments existing as of the Closing Date and set forth
in Schedule 1.1B; (v) Guaranty Obligations permitted by Section 8.1; (vi)
transactions permitted by Section 8.9; (vii) advances or loans made by
any Consolidated Party to directors, officers, employees, agents,
customers or suppliers that do not
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exceed $2,500,000 in the aggregate at any one time outstanding for all of
the Consolidated Parties; (viii) Investments of the Parent in any
Unconsolidated Subsidiary; (ix) Investments in any Credit Party other
than the Parent, (x) Permitted Acquisitions; (xi) other Investments made
pursuant to an employee benefit program having an aggregate fair market
value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with
all other Investments made pursuant to this clause (xi) that are at the
time outstanding, not to exceed $7,000,000; and (xii) the Acquisition of
Arbor by AHC pursuant to the Tender Offer and the Merger Agreement.
"Permitted Liens" means:
(i) Liens in favor of the Agent to secure the Credit Party
Obligations;
(ii) Liens (other than Liens created or imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due or Liens
for taxes being contested in good faith by appropriate proceedings for
which adequate reserves determined in accordance with GAAP have been
established (and as to which the Property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof);
(iii) to the extent arising in the ordinary course of business, (a)
statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and suppliers, (b) Liens incident to the
maintenance of real property and (c) other Liens imposed by law or
pursuant to customary reservations or retentions of title, provided that,
in the case of each of clauses (a), (b) and (c) above, such Liens secure
only amounts not yet due and payable or, if due and payable, are unfiled
and no other action has been taken to enforce the same or are being
contested in good faith by appropriate proceedings for which adequate
reserves determined in accordance with GAAP have been established (and as
to which the Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof);
(iv) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any Consolidated Party in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(v) Liens in connection with attachments or judgments (including
judgment or appeal bonds) provided that the judgments secured shall,
within 30 days after the entry thereof, have been discharged or execution
thereof stayed pending appeal, or shall have been discharged within 30
days after the expiration of any such stay;
(vi) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use
of the encumbered Property for its intended purposes;
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(vii) Liens on Property securing purchase money Indebtedness
(including Capital Leases) to the extent permitted under Section 8.1(c),
provided that any such Lien attaches to such Property concurrently with
or within 90 days after the acquisition thereof;
(viii) leases or subleases granted to others not interfering in any
material respect with the business of any Consolidated Party;
(ix) any interest of title of a lessor under, and Liens arising from
UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, leases permitted by
this Credit Agreement;
(x) Liens deemed to exist in connection with Investments in
repurchase agreements permitted under Section 8.6;
(xi) normal and customary rights of setoff upon deposits of cash in
favor of banks or other depository institutions;
(xii) Liens existing as of the Closing Date and set forth on
Schedule 1.1C; provided that no such Lien shall at any time be extended
to or cover any Property other than the Property subject thereto on the
Closing Date; and
(xiii) rights reserved to or vested in any Governmental Authority
with respect to the use of any real property or with respect to any
right, power, franchise, grant, license or permit.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3)
of ERISA) which is covered by ERISA and with respect to which the Parent,
any Consolidated Party or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to
be) an "employer" within the meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the pledge agreement dated as of the
Closing Date in the form of Exhibit 1.1A to be executed in favor of the
Agent by each of the Credit Parties, as amended, modified, restated or
supplemented from time to time.
"Prime Rate" means the per annum rate of interest established from
time to time by NationsBank as its prime rate, which rate may or may not
be the lowest rate of interest charged by NationsBank to its customers.
"Principal Amortization Payment" means a principal payment on the
Tranche A Term Loans as set forth in Section 2.3(d) or on the Tranche B
Term Loans as set forth in Section 2.4(d).
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"Principal Amortization Payment Date" means the date a Principal
Amortization Payment is due.
"Principal Office" means the principal office of NationsBank,
presently located at Charlotte, North Carolina.
"Pro Forma Basis" means, with respect to any transaction, that such
transaction shall be deemed to have occurred (for purposes of calculating
compliance in respect of such transaction with each of the financial
covenants set forth in Section 7.11 as of the most recent fiscal quarter
end preceding the date of such transaction with respect to which the
Agent has received the Required Financial Information) as of the first
day of the four fiscal-quarter period ending as of such fiscal quarter
end. As used herein, "transaction" shall mean (i) any merger or
consolidation as referred to in Section 8.4, (ii) any Asset Disposition
as referred to in Section 8.5, (iii) any Investment as referred to in
Section 8.6 or (iv) any Restricted Payment as referred to in Section 8.7.
With respect to any transaction of the type described in clause (i)
above regarding Indebtedness which has a floating or formula rate, the
implied rate of interest for such Indebtedness for the applicable period
for purposes of this definition shall be determined by utilizing the rate
which is or would be in effect with respect to such Indebtedness as at
the relevant date of determination. With respect to any transaction of
the type described in clause (ii) or (iv) above, any Indebtedness
incurred by the Borrower or any of its Subsidiaries in order to
consummate such transaction (A) shall be deemed to have been incurred on
the first day of the applicable period four fiscal-quarter period and (B)
if such Indebtedness has a floating or formula rate, then the implied
rate of interest for such Indebtedness for the applicable period for
purposes of this definition shall be determined by utilizing the rate
which is or would be in effect with respect to such Indebtedness as at
the relevant date of determination. In connection with any calculation
of the financial covenants set forth in Section 7.11 upon giving effect
to a transaction on a Pro Forma Basis for purposes of Section 8.4,
Section 8.5, Section 8.6 or Section 8.7, as applicable:
(A) for purposes of any such calculation in respect of any
Asset Disposition as referred to in Section 8.5, (1) income
statement items (whether positive or negative) attributable to the
Property disposed of in such Asset Disposition shall be excluded
and (2) any Indebtedness which is retired in connection with such
Asset Disposition shall be excluded and deemed to have been retired
as of the first day of the applicable period;
(B) for purposes of any such calculation in respect of any
merger or consolidation as referred to in Section 8.4 or any
Investment as referred to in Section 8.6, (1) any Indebtedness
incurred by the Borrower or any of its Subsidiaries in connection
with such transaction shall be deemed to have been incurred as of
the first day of the applicable period and (2) income statement
items (whether positive or negative) attributable to the Property
acquired in such transaction or to the Investment comprising such
transaction, as applicable, shall be included to the extent
relating to the relevant period; and
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(C) for purposes of any such calculation, the principles set
forth in the second paragraph of Section 1.3 shall be applicable.
"Pro Forma Compliance Certificate" means a certificate of the chief
financial officer of the Borrower delivered to the Agent in connection
with (i) any merger or consolidation as referred to in Section 8.4, (ii)
any Asset Disposition as referred to in Section 8.5, (iii) any Investment
as referred to in Section 8.6 or (iii) any Restricted Payment as referred
to in Section 8.7, as applicable, and containing reasonably detailed
calculations, upon giving effect to the applicable transaction on a Pro
Forma Basis, of the Fixed Charge Coverage Ratio, the Senior Leverage
Ratio, the Total Leverage Ratio and the Consolidated Net Worth
requirement as of the most recent fiscal quarter end preceding the date
of the applicable transaction with respect to which the Agent shall have
received the Required Financial Information.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Real Properties" shall have the meaning assigned to such term in
Section 6.18(a).
"Refinancing" shall have the meaning given such term in Section
6.15.
"Register" shall have the meaning given such term in Section
11.3(c).
"Regulation G, T, U, or X" means Regulation G, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion
thereof.
"Related Fund" means, with respect to any Lender that is a fund that
invests in loans, any other fund that invests in loans and is managed by
the same investment advisor as such Lender or by an Affiliate of such
investment advisor.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment (including the abandonment or discarding
of barrels, containers and other closed receptacles containing any
Materials of Environmental Concern).
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation.
"Required Financial Information" means, with respect to the
applicable Calculation Date, (i) the financial statements of the
Consolidated Parties required to be delivered pursuant to Section 7.1(a)
or (b) for the fiscal period or quarter ending as of such Calculation
Date, and (ii) the certificate of the chief financial officer of the
Borrower
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required by Section 7.1(c) to be delivered with the financial statements
described in clause (i) above.
"Required Lenders" means, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the Agent)
and holding in the aggregate at least 51% of (i)(A) if prior to the
Merger Date, the Revolving Commitments (and Participation Interests
therein), the outstanding Tranche A Term Loans (and Participation
Interests therein), the unfunded portion of the Tranche A Term Loan
Committed Amount, the outstanding Tranche B Term Loans (and Participation
Interests therein) and the outstanding Tranche C Term Loans (and
Participation Interests therein) and (B) if after the Merger Date, the
Revolving Commitments (and Participation Interests therein), the
outstanding Tranche A Term Loans (and Participation Interests therein),
the outstanding Tranche B Term Loans (and Participation Interests
therein) and the outstanding Tranche C Term Loans (and Participation
Interests therein) or (ii) if the Commitments have been terminated, the
outstanding Loans and Participation Interests (including the
Participation Interests of the Issuing Lender in any Letters of Credit).
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or determination
of an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or to which any of its material
property is subject.
"Restricted Payment" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital
Stock of the Parent or any Consolidated Party, now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of
any shares of any class of Capital Stock of the Parent or any
Consolidated Party, now or hereafter outstanding, (iii) any payment made
to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of Capital Stock
of the Parent or any Consolidated Party, now or hereafter outstanding,
and (iv) any payment or prepayment of principal of, premium, if any, or
interest on, redemption, purchase, retirement, defeasance, sinking fund
or similar payment with respect to, any Subordinated Indebtedness.
"Revolving Commitment" means, with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Revolving Commitment Percentage of the
Revolving Committed Amount, (i) to make Revolving Loans in accordance
with the provisions of Section 2.1(a) and (ii) to purchase Participation
Interests in Letters of Credit in accordance with the provisions of
Section 2.2(c).
"Revolving Commitment Percentage" means, for any Lender, the
percentage identified as its Revolving Commitment Percentage on Schedule
2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
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"Revolving Committed Amount" shall have the meaning assigned to such
term in Section 2.1(a).
"Revolving Loans" shall have the meaning assigned to such term in
Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory notes of
the Borrower in favor of each of the Lenders evidencing the Revolving
Loans provided pursuant to Section 2.1(e), individually or collectively,
as appropriate, as such promissory notes may be amended, modified,
restated, supplemented, extended, renewed or replaced from time to time.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such division
in the business of rating securities.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party,
providing for the leasing to the Parent or any Consolidated Party of any
Property, whether owned by the Parent or such Consolidated Party, as
applicable, as of the Closing Date or later acquired, which has been or
is to be sold or transferred by the Parent or such Consolidated Party, as
applicable, to such Person or to any other Person from whom funds have
been, or are to be, advanced by such Person on the security of such
Property.
"Senior Leverage Ratio" means, for the twelve month period ending on
the last day of any fiscal quarter of the Consolidated Parties, the ratio
of (a) Adjusted Senior Funded Indebtedness on the last day of such period
to (b) Consolidated EBITDAR for such period.
"Single Employer Plan" means any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan or a Multiple Employer
Plan.
"Solvent" or "Solvency" means, with respect to any Person as of a
particular date, that on such date (i) such Person is able to realize
upon its assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, (ii) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to pay
as such debts and liabilities mature in their ordinary course, (iii) such
Person is not engaged in a business or a transaction, and is not about to
engage in a business or a transaction, for which such Person's Property
would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such
Person is engaged or is to engage, (iv) the fair value of the Property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person and (v) the
present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured. In computing
the amount of contingent liabilities at any time, it is intended that
such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
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"Standby Letter of Credit Fee" shall have the meaning assigned to
such term in Section 3.5(c)(i).
"Subordinated Indebtedness" means any Indebtedness incurred by the
Borrower after the Closing Date and which by its terms is specifically
subordinated in right of payment to the prior payment of the obligations
of the Credit Parties under this Credit Agreement and the other Credit
Documents on terms and conditions satisfactory to the Required Lenders.
"Subsidiary" means, as to any Person at any time, (a) any
corporation more than 50% of whose Capital Stock of any class or classes
having by the terms thereof ordinary voting power to elect a majority of
the directors of such corporation (irrespective of whether or not at such
time, any class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at such
time owned by such Person directly or indirectly through Subsidiaries,
and (b) any partnership, association, joint venture or other entity of
which such Person directly or indirectly through Subsidiaries owns at
such time more than 50% of the Capital Stock.
"Subsidiary Guarantor" means each of the Persons identified as a
"Subsidiary Guarantor" on the signature pages hereto and each Additional
Credit Party which may hereafter execute a Joinder Agreement, together
with their successors and permitted assigns, and "Subsidiary Guarantor"
means any one of them
"Synthetic Lease" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing
product where such transaction is considered borrowed money indebtedness
for tax purposes but is classified as an Operating Lease.
"Taxes" means such term as is defined in Section 3.11.
"Tender Offer" means the tender offer by AHC to purchase all the
shares of Capital Stock of Arbor pursuant to the terms of the Offer to
Purchase filed with the Securities and Exchange Commission by Extendicare
and AHC as of October 3, 1997.
"Total Leverage Ratio" means, for the twelve month period ending on
the last day of any fiscal quarter of the Consolidated Parties, the ratio
of (a) Adjusted Total Funded Indebtedness on the last day of such period
to (b) Consolidated EBITDAR for such period.
"Trade Letter of Credit Fee" shall have the meaning assigned to such
term in Section 3.5(c)(ii).
"Tranche A Term Loan" shall have the meaning assigned to such term
in Section 2.3(a).
"Tranche A Term Loan Commitment" means, with respect to each Lender,
the commitment of such Lender to make its portion of the Tranche A Term
Loan in a principal
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amount equal to such Lender's Tranche A Term Loan Commitment Percentage
of the Tranche A Term Loan Committed Amount.
"Tranche A Term Loan Commitment Percentage" means, for any Lender,
the percentage identified as its Tranche A Term Loan Commitment
Percentage on Schedule 2.1(a), as such percentage may be modified in
connection with any assignment made in accordance with the provisions of
Section 11.3.
"Tranche A Term Loan Committed Amount" shall have the meaning
assigned to such term in Section 2.3(a).
"Tranche A Term Note" or "Tranche A Term Notes" means the promissory
notes of the Borrower in favor of each of the Lenders evidencing the
Tranche A Term Loans provided pursuant to Section 2.3(f), individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, restated, supplemented, extended, renewed or replaced from time
to time.
"Tranche B Term Loan" shall have the meaning assigned to such term
in Section 2.4(a).
"Tranche B Term Loan Commitment" means, with respect to each
Lender, the commitment of such Lender to make its portion of the Tranche B
Term Loan in a principal amount equal to such Lender's Tranche B Term Loan
Commitment Percentage of the Tranche B Term Loan Committed Amount.
"Tranche B Term Loan Commitment Percentage" means, for any Lender,
the percentage identified as its Tranche B Term Loan Commitment
Percentage on Schedule 2.1(a), as such percentage may be modified in
connection with any assignment made in accordance with the provisions of
Section 11.3.
"Tranche B Term Loan Committed Amount" shall have the meaning
assigned to such term in Section 2.4(a).
"Tranche B Term Note" or "Tranche B Term Notes" means the promissory
notes of the Borrower in favor of each of the Lenders evidencing the
Tranche B Term Loans provided pursuant to Section 2.4(f), individually
or collectively, as appropriate, as such promissory notes may be amended,
modified, restated, supplemented, extended, renewed or replaced from time
to time.
"Tranche C Term Loan" shall have the meaning assigned to such term
in Section 2.5(a).
"Tranche C Term Loan Commitment" means, with respect to NationsBank,
the commitment of such Lender to make its portion of the Tranche C Term
Loan in a principal amount equal to such Lender's Tranche C Term Loan
Commitment Percentage of the Tranche
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C Term Loan Committed Amount.
"Tranche C Term Loan Commitment Percentage"
means, for any Lender, the percentage identified as its Tranche C Term
Loan Commitment Percentage on Schedule 2.1(a), as such percentage may be
modified in connection with any assignment made in accordance with the
provisions of Section 11.3.
"Tranche C Term Loan Committed Amount" shall have the meaning
assigned to such term in Section 2.5(a).
"Tranche C Term Note" or "Tranche C Term Notes" means the promissory
notes of the Borrower in favor of each of the Lenders evidencing the
Tranche C Term Loans provided pursuant to Section 2.5(e), individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, restated, supplemented, extended, renewed or replaced from time
to time.
"Unconsolidated Subsidiary" means any Subsidiary of the Parent which
is not a Consolidated Party.
"Unused Fee" shall have the meaning assigned to such term in Section
3.5(b).
"Unused Fee Calculation Period" shall have the meaning assigned to
such term in Section 3.5(b).
"Unused Revolving Committed Amount" means, for any period, the
amount by which (a) the then applicable Revolving Committed Amount
exceeds (b) the daily average sum for such period of (i) the outstanding
aggregate principal amount of all Revolving Loans plus (ii) the
outstanding aggregate principal amount of all LOC Obligations.
"Untendered Arbor Shares" means shares of Capital Stock of Arbor not
purchased by AHC on the Closing Date pursuant to the Tender Offer.
"Upfront Fee" shall have the meaning assigned to such term in
Section 3.5(a).
"Voting Stock" means, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the absence
of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even though the
right so to vote has been suspended by the happening of such a
contingency.
"Wholly Owned Subsidiary" of any Person means any Subsidiary 100% of
whose Voting Stock is at the time owned by such Person directly or
indirectly through other Wholly Owned Subsidiaries.
1.2 COMPUTATION OF TIME PERIODS.
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For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding."
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section
7.1, consistent with the financial statements as at December 31, 1996);
provided, however, if (a) the Borrower shall object to determining such
compliance on such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect thereto or (b)
the Agent or the Required Lenders shall so object in writing within 60 days
after delivery of such financial statements, then such calculations shall be
made on a basis consistent with the most recent financial statements delivered
by the Borrower to the Lenders as to which no such objection shall have been
made.
Notwithstanding the above, the parties hereto acknowledge and agree that, for
purposes of all calculations made in determining compliance with the financial
covenants set forth in Section 7.11 (including without limitation for purposes
of the definitions of "Applicable Percentage" and "Pro Forma Basis" set forth
in Section 1.1), (i)(A) income statement items (whether positive or negative)
attributable to the Property disposed of in any Asset Disposition as
contemplated by Section 8.5, as applicable, shall be excluded to the extent
relating to any period occurring prior to the date of such transaction and (B)
Indebtedness which is retired in connection with any such Asset Disposition
shall be excluded and deemed to have been retired as of the first day of the
applicable period and (ii) income statement items (whether positive or
negative) attributable to any Property acquired in any Investment transaction
contemplated by Section 8.6 shall be included to the extent relating to any
period applicable in such calculations occurring after the date of such
transaction (and, notwithstanding the foregoing, during the first four fiscal
quarters following the date of such transaction, shall be included on an
annualized basis).
SECTION 2
CREDIT FACILITIES
2.1 REVOLVING LOANS.
(a) Revolving Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set forth
herein, each Lender severally agrees to make available to the Borrower
such Lender's Revolving Commitment Percentage of revolving credit loans
requested by the Borrower in Dollars ("Revolving Loans") from time to
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time from the Closing Date until the Maturity Date, or such earlier date
as the Revolving Commitments shall have been terminated as provided
herein for the purposes hereinafter set forth; provided, however, that
the sum of the aggregate principal amount of outstanding Revolving Loans
shall not exceed TWO HUNDRED MILLION DOLLARS ($200,000,000) (as such
aggregate maximum amount may be reduced from time to time as provided in
Section 3.4, the "Revolving Committed Amount"); provided, further, (A)
with regard to each Lender individually, such Lender's outstanding
Revolving Loans shall not exceed such Lender's Revolving Commitment
Percentage of the Revolving Committed Amount, and (B) the aggregate
principal amount of outstanding Revolving Loans plus LOC Obligations
outstanding shall not exceed the Revolving Committed Amount. Revolving
Loans may consist of Base Rate Loans or Eurodollar Loans, or a
combination thereof, as the Borrower may request; provided, however, that
no more than 15 Eurodollar Loans shall be outstanding under this Credit
Agreement at any time. For purposes hereof, Eurodollar Loans with
different Interest Periods shall be considered as separate Eurodollar
Loans, even if they begin on the same date, although borrowings,
extensions and conversions may, in accordance with the provisions hereof,
be combined at the end of existing Interest Periods to constitute a new
Eurodollar Loan with a single Interest Period. Revolving Loans hereunder
may be repaid and reborrowed in accordance with the provisions hereof.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephonic notice
promptly confirmed in writing) to the Agent not later than 11:00
A.M. (Charlotte, North Carolina time) on the Business Day of the
requested borrowing in the case of Base Rate Loans, and not later
than 12:00 Noon (Charlotte, North Carolina time) on the third
Business Day prior to the date of the requested borrowing in the
case of Eurodollar Loans. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Revolving Loan is
requested, (B) the date of the requested borrowing (which shall be
a Business Day), (C) the aggregate principal amount to be borrowed,
and (D) whether the borrowing shall be comprised of Base Rate
Loans, Eurodollar Loans or a combination thereof, and if Eurodollar
Loans are requested, the Interest Period(s) therefor. If the
Borrower shall fail to specify in any such Notice of Borrowing (I)
an applicable Interest Period in the case of a Eurodollar Loan,
then such notice shall be deemed to be a request for an Interest
Period of one month, or (II) the type of Revolving Loan requested,
then such notice shall be deemed to be a request for a Base Rate
Loan hereunder. The Agent shall give notice to each affected
Lender promptly upon receipt of each Notice of Borrowing pursuant
to this Section 2.1(b)(i), the contents thereof and each such
Lender's share of any borrowing to be made pursuant thereto.
(ii) Minimum Amounts. Each Eurodollar Loan or Base Rate Loan
that is a Revolving Loan shall be in a minimum aggregate principal
amount of $3,000,000 and integral multiples of $1,000,000 in excess
thereof (or the remaining amount of the Revolving Committed Amount,
if less).
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(iii) Advances. Each Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing available to
the Agent for the account of the Borrower as specified in Section
3.15(a), or in such other manner as the Agent may specify in
writing, by 2:00 P.M. (Charlotte, North Carolina time) on the date
specified in the applicable Notice of Borrowing in Dollars and in
funds immediately available to the Agent. Such borrowing will then
be made available to the Borrower by the Agent by crediting the
account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Agent by the Lenders
and in like funds as received by the Agent.
(c) Repayment. The principal amount of all Revolving Loans shall be
due and payable in full on the Maturity Date, unless accelerated sooner
pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as Revolving Loans
shall be comprised in whole or in part of Base Rate Loans, such
Base Rate Loans shall bear interest at a per annum rate equal to
the Adjusted Base Rate.
(ii) Eurodollar Loans. During such periods as Revolving Loans
shall be comprised in whole or in part of Eurodollar Loans, such
Eurodollar Loans shall bear interest at a per annum rate equal to
the Adjusted Eurodollar Rate.
Interest on Revolving Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(e) Revolving Notes. The Revolving Loans made by each Lender shall
be evidenced by a duly executed promissory note of the Borrower to such
Lender in an original principal amount equal to such Lender's Revolving
Commitment Percentage of the Revolving Committed Amount and in
substantially the form of Exhibit 2.1(e).
2.2 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof and of the
LOC Documents, if any, and any other terms and conditions which the
Issuing Lender may reasonably require and in reliance upon the
representations and warranties set forth herein, the Issuing Lender
agrees to issue, and each Lender severally agrees to participate in the
issuance by the Issuing Lender of, standby and trade Letters of Credit in
Dollars from time to time from the Closing Date until the Maturity Date
as the Borrower may request, in a form acceptable to the Issuing Lender;
provided, however, that (i) the LOC Obligations outstanding shall not at
any time exceed SEVENTY-FIVE MILLION DOLLARS ($75,000,000) (the "LOC
Committed Amount") and (ii) the sum of the aggregate principal amount of
outstanding Revolving Loans plus LOC Obligations outstanding shall not at
any time exceed the Revolving Committed Amount. No Letter of Credit
shall (x) have an original expiry date more than one year from the date
of issuance or (y) as originally issued or as extended, have an expiry
date
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extending beyond the Maturity Date. Each Letter of Credit shall comply
with the related LOC Documents. The issuance and expiry dates of each
Letter of Credit shall be a Business Day.
(b) Notice and Reports. The request for the issuance of a Letter of
Credit shall be submitted by the Borrower to the Issuing Lender at least
three (3) Business Days prior to the requested date of issuance. The
Issuing Lender will, at least quarterly and more frequently upon request,
disseminate to each of the Lenders a detailed report specifying the
Letters of Credit which are then issued and outstanding and any activity
with respect thereto which may have occurred since the date of the prior
report, and including therein, among other things, the beneficiary, the
face amount and the expiry date, as well as any payment or expirations
which may have occurred.
(c) Participation. Each Lender, upon issuance of a Letter of Credit
(or, in the case of each Existing Letter of Credit, on the Closing
Date),, shall be deemed to have purchased without recourse a
Participation Interest from the Issuing Lender in such Letter of Credit
and the obligations arising thereunder and any collateral relating
thereto, in each case in an amount equal to its pro rata share of the
obligations under such Letter of Credit (based on the respective
Revolving Commitment Percentages of the Lenders) and shall absolutely,
unconditionally and irrevocably assume and be obligated to pay to the
Issuing Lender and discharge when due, its pro rata share of the
obligations arising under such Letter of Credit. Without limiting the
scope and nature of each Lender's Participation Interest in any Letter of
Credit, to the extent that the Issuing Lender has not been reimbursed as
required hereunder or under any such Letter of Credit, each such Lender
shall pay to the Issuing Lender its pro rata share of such unreimbursed
drawing in same day funds on the day of notification by the Issuing
Lender of an unreimbursed drawing pursuant to the provisions of
subsection (d) below. The obligation of each Lender to so reimburse the
Issuing Lender shall be absolute and unconditional and shall not be
affected by the occurrence of a Default, an Event of Default or any other
occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of the Borrower to reimburse the Issuing
Lender under any Letter of Credit, together with interest as hereinafter
provided.
(d) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Issuing Lender that the Borrower
intends to otherwise reimburse the Issuing Lender for such drawing, the
Borrower shall be deemed to have requested that the Lenders make a
Revolving Loan in the amount of the drawing as provided in subsection (e)
below on the related Letter of Credit, the proceeds of which will be used
to satisfy the related reimbursement obligations. The Borrower promises
to reimburse the Issuing Lender on the day of drawing under any Letter of
Credit (either with the proceeds of a Revolving Loan obtained hereunder
or otherwise) in same day funds. If the Borrower shall fail to reimburse
the Issuing Lender as provided hereinabove, the unreimbursed amount of
such drawing shall bear interest at a per annum rate equal to the
Adjusted Base Rate for Revolving Loans plus 2%. The Borrower's
reimbursement obligations hereunder shall be absolute and unconditional
under all circumstances irrespective of any rights of setoff,
counterclaim or defense to payment the Borrower may claim or have against
the Issuing Lender, the Agent, the Lenders, the
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beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of the
Borrower or any other Credit Party to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of
Credit. The Issuing Lender will promptly notify the other Lenders of the
amount of any unreimbursed drawing and each Lender shall promptly pay to
the Agent for the account of the Issuing Lender in Dollars and in
immediately available funds, the amount of such Lender's pro rata share
of such unreimbursed drawing. Such payment shall be made on the day such
notice is received by such Lender from the Issuing Lender if such notice
is received at or before 2:00 P.M. (Charlotte, North Carolina time)
otherwise such payment shall be made at or before 11:00 A.M. (Charlotte,
North Carolina time) on the Business Day next succeeding the day such
notice is received. If such Lender does not pay such amount to the
Issuing Lender in full upon such request, such Lender shall, on demand,
pay to the Agent for the account of the Issuing Lender interest on the
unpaid amount during the period from the date of such drawing until such
Lender pays such amount to the Issuing Lender in full at a rate per annum
equal to, if paid within two (2) Business Days of the date that such
Lender is required to make payments of such amount pursuant to the
preceding sentence, the Federal Funds Rate and thereafter at a rate equal
to the Base Rate. Each Lender's obligation to make such payment to the
Issuing Lender, and the right of the Issuing Lender to receive the same,
shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this
Credit Agreement or the Commitments hereunder, the existence of a Default
or Event of Default or the acceleration of the obligations of the
Borrower hereunder and shall be made without any offset, abatement,
withholding or reduction whatsoever. Simultaneously with the making of
each such payment by a Lender to the Issuing Lender, such Lender shall,
automatically and without any further action on the part of the Issuing
Lender or such Lender, acquire a Participation Interest in an amount
equal to such payment (excluding the portion of such payment constituting
interest owing to the Issuing Lender) in the related unreimbursed drawing
portion of the LOC Obligation and in the interest thereon and in the
related LOC Documents, and shall have a claim against the Borrower with
respect thereto.
(e) Repayment with Revolving Loans. On any day on which the
Borrower shall have requested, or been deemed to have requested, a
Revolving Loan advance to reimburse a drawing under a Letter of Credit,
the Agent shall give notice to the Lenders that a Revolving Loan has been
requested or deemed requested by the Borrower to be made in connection
with a drawing under a Letter of Credit, in which case a Revolving Loan
advance comprised of Base Rate Loans (or Eurodollar Loans to the extent
the Borrower has complied with the procedures of Section 2.1(b)(i) with
respect thereto) shall be immediately made to the Borrower by all Lenders
(notwithstanding any termination of the Commitments pursuant to Section
9.2) pro rata based on the respective Revolving Commitment Percentages of
the Lenders (determined before giving effect to any termination of the
Commitments pursuant to Section 9.2) and the proceeds thereof shall be
paid directly to the Issuing Lender for application to the respective LOC
Obligations. Each such Lender hereby irrevocably agrees to make its pro
rata share of each such Revolving Loan immediately upon any such request
or deemed request in the amount, in the manner and on the date specified
in the preceding sentence notwithstanding (i) the amount of such
borrowing may not comply with the minimum amount for advances of
Revolving Loans otherwise required hereunder, (ii) whether any
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conditions specified in Section 5.2 are then satisfied, (iii) whether a
Default or an Event of Default then exists, (iv) failure for any such
request or deemed request for Revolving Loan to be made by the time
otherwise required hereunder, (v) whether the date of such borrowing is a
date on which Revolving Loans are otherwise permitted to be made
hereunder or (vi) any termination of the Commitments relating thereto
immediately prior to or contemporaneously with such borrowing. In the
event that any Revolving Loan cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of
the commencement of a proceeding under the Bankruptcy Code with respect
to the Borrower or any Credit Party), then each such Lender hereby agrees
that it shall forthwith purchase (as of the date such borrowing would
otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) from the
Issuing Lender such Participation Interests in the outstanding LOC
Obligations as shall be necessary to cause each such Lender to share in
such LOC Obligations ratably (based upon the respective Revolving
Commitment Percentages of the Lenders (determined before giving effect to
any termination of the Commitments pursuant to Section 9.2)), provided
that at the time any purchase of Participation Interests pursuant to this
sentence is actually made, the purchasing Lender shall be required to pay
to the Issuing Lender, to the extent not paid to the Issuer by the
Borrower in accordance with the terms of subsection (d) above, interest
on the principal amount of Participation Interests purchased for each day
from and including the day upon which such borrowing would otherwise have
occurred to but excluding the date of payment for such Participation
Interests, at the rate equal to, if paid within two (2) Business Days of
the date of the Revolving Loan advance, the Federal Funds Rate, and
thereafter at a rate equal to the Base Rate. Simultaneously with the
making of each such payment by a Lender to the Issuing Lender, such
Lender shall, automatically and without any further action on the part of
the Issuing Lender or such Lender, acquire a Participation Interest in an
amount equal to such payment (excluding the portion of such payment
constituting interest owing to the Issuing Lender) in the related
unreimbursed drawing portion of the LOC Obligation and in the interest
thereon and in the related LOC Documents, and shall have a claim against
the Borrower with respect thereto.
(f) Designation of Consolidated Parties as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, including without limitation Section 2.2(a), a Letter of
Credit issued hereunder may contain a statement to the effect that such
Letter of Credit is issued for the account of a Consolidated Party other
than the Borrower, provided that notwithstanding such statement, the
Borrower shall be the actual account party for all purposes of this
Credit Agreement for such Letter of Credit and such statement shall not
affect the Borrower's reimbursement obligations hereunder with respect to
such Letter of Credit.
(g) Renewal, Extension. The renewal or extension of any Letter of
Credit shall, for purposes hereof, be treated in all respects the same as
the issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published
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as of the date of issue by the International Chamber of Commerce (the
"UCP"), in which case the UCP may be incorporated therein and deemed in
all respects to be a part thereof.
(i) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this Section
2.2, the Borrower hereby agrees to pay, and protect, indemnify and
save each Lender harmless from and against, any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) that such Lender may incur
or be subject to as a consequence, direct or indirect, of (A) the
issuance of any Letter of Credit or (B) the failure of the Issuing
Lender or such Lender to honor a drawing under a Letter of Credit
as a result of any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto government or
Governmental Authority (all such acts or omissions, herein called
"Government Acts").
(ii) As between the Borrower and the Lenders (including the
Issuing Lender), the Borrower shall assume all risks of the acts,
omissions or misuse of any Letter of Credit by the beneficiary
thereof. No Lender (including the Issuing Lender) shall be
responsible: (A) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party
in connection with the application for and issuance of any Letter
of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged;
(B) for the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, that may prove to be invalid or ineffective for
any reason; (C) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher;
(D) for any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under a Letter of
Credit or of the proceeds thereof; and (E) for any consequences
arising from causes beyond the control of such Lender, including,
without limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of the Issuing Lender's
rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken or
omitted by any Lender (including the Issuing Lender), under or in
connection with any Letter of Credit or the related certificates,
if taken or omitted in good faith, shall not put such Lender under
any resulting liability to the Borrower or any other Credit Party.
It is the intention of the parties that this Credit Agreement shall
be construed and applied to protect and indemnify each Lender
(including the Issuing Lender) against any and all risks involved
in the issuance of the Letters of Credit, all of which risks are
hereby assumed by the Borrower (on behalf of itself and each of the
other Credit Parties), including, without limitation, any and all
Government Acts. No Lender (including the Issuing Lender) shall,
in any way, be liable for any failure by such Lender or anyone else
to pay any
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drawing under any Letter of Credit as a result of any Government
Acts or any other cause beyond the control of such Lender.
(iv) Nothing in this subsection (h) is intended to limit the
reimbursement obligations of the Borrower contained in subsection
(d) above. The obligations of the Borrower under this subsection
(h) shall survive the termination of this Credit Agreement. No act
or omission of any current or prior beneficiary of a Letter of
Credit shall in any way affect or impair the rights of the Lenders
(including the Issuing Lender) to enforce any right, power or
benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (h), the Borrower shall have no obligation to indemnify
any Lender (including the Issuing Lender) in respect of any
liability incurred by such Lender (A) to the extent arising out of
the gross negligence or willful misconduct of such Lender, as
determined by a court of competent jurisdiction, or (B) caused by
such Lender's failure to pay under any Letter of Credit after
presentation to it of a request strictly complying with the terms
and conditions of such Letter of Credit, as determined by a court
of competent jurisdiction, unless such payment is prohibited by any
law, regulation, court order or decree.
(j) Responsibility of Issuing Lender. It is expressly understood and
agreed that the obligations of the Issuing Lender hereunder to the
Lenders are only those expressly set forth in this Credit Agreement and
that the Issuing Lender shall be entitled to assume that the conditions
precedent set forth in Section 5.2 have been satisfied unless it shall
have acquired actual knowledge that any such condition precedent has not
been satisfied; provided, however, that nothing set forth in this Section
2.2 shall be deemed to prejudice the right of any Lender to recover from
the Issuing Lender any amounts made available by such Lender to the
Issuing Lender pursuant to this Section 2.2 in the event that it is
determined by a court of competent jurisdiction that the payment with
respect to a Letter of Credit constituted gross negligence or willful
misconduct on the part of the Issuing Lender.
(k) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document (including any letter
of credit application), this Credit Agreement shall control.
2.3 TRANCHE A TERM LOAN.
(a) Tranche A Term Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set forth
herein each Lender severally agrees to make available to the Borrower on
the Closing Date such Lender's Tranche A Term Loan Commitment Percentage
of a term loan in Dollars (the "Tranche A Term Loan") in an aggregate
principal amount of TWO HUNDRED MILLION DOLLARS ($200,000,000) (the
"Tranche A Term Loan Committed Amount"), for the purposes hereinafter set
forth. The Tranche A Term Loan may consist of Base Rate Loans or
Eurodollar Loans, or a combination thereof, as the Borrower may request;
provided, however, that no more than 15 Eurodollar
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Loans shall be outstanding under this Credit Agreement at any time. For
purposes hereof, Eurodollar Loans with different Interest Periods shall
be considered as separate Eurodollar Loans, even if they begin on the
same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new Eurodollar Loan with a single
Interest Period. Amounts repaid on the Tranche A Term Loan may not be
reborrowed.
(b) Borrowing Procedures. The Borrower shall submit an appropriate
Notice of Borrowing to the Agent not later than 12:00 Noon (Charlotte,
North Carolina time) on the Closing Date, with respect to the portion of
the Tranche A Term Loan initially consisting of a Base Rate Loan, or on
the third Business Day prior to the Closing Date, with respect to the
portion of the Tranche A Term Loan initially consisting of one or more
Eurodollar Loans, which Notice of Borrowing shall be irrevocable and
shall specify (i) that the funding of a Tranche A Term Loan is requested
and (ii) whether the funding of the Tranche A Term Loan shall be
comprised of Base Rate Loans, Eurodollar Loans or a combination thereof,
and if Eurodollar Loans are requested, the Interest Period(s) therefor.
If the Borrower shall fail to deliver such Notice of Borrowing to the
Agent by 12:00 Noon (Charlotte, North Carolina time) on the third
Business Day prior to the Closing Date, then the full amount of the
Tranche A Term Loan shall be disbursed on the Closing Date as a Base Rate
Loan. Each Lender shall make its Tranche A Term Loan Commitment
Percentage of the Tranche A Term Loan available to the Agent for the
account of the Borrower at the office of the Agent specified in Schedule
2.1(a), or at such other office as the Agent may designate in writing, by
1:00 P.M. (Charlotte, North Carolina time) on the Closing Date in Dollars
and in funds immediately available to the Agent.
(c) Minimum Amounts. Each Eurodollar Loan or Base Rate Loan that is
part of the Tranche A Term Loan shall be in an aggregate principal amount
that is not less than $5,000,000 and integral multiples of $1,000,000 (or
the then remaining principal balance of the Tranche A Term Loan, if
less).
(d) Repayment of Tranche A Term Loan. The principal amount of the
Tranche A Term Loan shall be repaid in twenty-four (24) consecutive
quarterly installments as follows, unless accelerated sooner pursuant to
Section 9.2:
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TRANCHE A TERM LOAN
PRINCIPAL AMORTIZATION PRINCIPAL
PAYMENT DATES AMORTIZATION
PAYMENT
March 31, 1998, June 30, $ 6,250,000
1998, September 30, 1998
and December 31, 1998
March 31, 1999, June 30, $ 7,500,000
1999, September 30, 1999,
December 31, 1999, March 31,
2000, June 30, 2000, September
30, 2000 and December 31, 2000
March 31, 2001, June 30, 2001, $ 8,750,000
September 30, 2001 and December 31,
2001
March 31, 2002, June 30, 2002 $10,000,000
September 30, 2002, December 31, 2002,
March 31, 2003, June 30, 2003,
September 30, 2003 and December 31,
2003
(e) Interest. Subject to the provisions of Section 3.1, the Tranche
A Term Loan shall bear interest at a per annum rate equal to:
(i) Base Rate Loans. During such periods as the Tranche A Term
Loan shall be comprised in whole or in part of Base Rate Loans,
such Base Rate Loans shall bear interest at a per annum rate equal
to the Adjusted Base Rate.
(ii) Eurodollar Loans. During such periods as the Tranche A
Term Loan shall be comprised in whole or in part of Eurodollar
Loans, such Eurodollar Loans shall bear interest at a per annum
rate equal to the Adjusted Eurodollar Rate.
Interest on the Tranche A Term Loan shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(f) Tranche A Term Notes. The portion of the Tranche A Term Loan
made by each Lender shall be evidenced by a duly executed promissory note
of the Borrower to such Lender in an original principal amount equal to
such Lender's Tranche A Term Loan Commitment Percentage of the Tranche A
Term Loan and substantially in the form of Exhibit 2.3(f).
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2.4 TRANCHE B TERM LOAN.
(a) Tranche B Term Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set forth
herein, each Lender severally agrees to make available to the Borrower on
the Closing Date such Lender's Tranche B Term Loan Commitment Percentage
of a term loan in Dollars (the "Tranche B Term Loan") in the aggregate
principal amount of TWO HUNDRED MILLION DOLLARS ($200,000,000) (the
"Tranche B Term Loan Committed Amount") for the purposes hereinafter set
forth. The Tranche B Term Loan may consist of Base Rate Loans or
Eurodollar Loans, or a combination thereof, as the Borrower may request;
provided, however, that no more than 15 Eurodollar Loans shall be
outstanding under this Credit Agreement at any time. For purposes
hereof, Eurodollar Loans with different Interest Periods shall be
considered as separate Eurodollar Loans, even if they begin on the same
date, although borrowings, extensions and conversions may, in accordance
with the provisions hereof, be combined at the end of existing Interest
Periods to constitute a new Eurodollar Loan with a single Interest
Period. Amounts repaid on the Tranche B Term Loan may not be reborrowed.
(b) Borrowing Procedures. The Borrower shall submit an appropriate
Notice of Borrowing to the Agent not later than 12:00 Noon (Charlotte,
North Carolina time) on the Closing Date, with respect to the portion of
the Tranche B Term Loan initially consisting of a Base Rate Loan, or on
the third Business Day prior to the Closing Date, with respect to the
portion of the Tranche B Term Loan initially consisting of one or more
Eurodollar Loans, which Notice of Borrowing shall be irrevocable and
shall specify (i) that the funding of a Tranche B Term Loan is requested
and (ii) whether the funding of the Tranche B Term Loan shall be
comprised of Base Rate Loans, Eurodollar Loans or a combination thereof,
and if Eurodollar Loans are requested, the Interest Period(s) therefor.
If the Borrower shall fail to deliver such Notice of Borrowing to the
Agent by 12:00 Noon (Charlotte, North Carolina time) on the third
Business Day prior to the Closing Date, then the full amount of the
Tranche B Term Loan shall be disbursed on the Closing Date as a Base Rate
Loan. Each Lender shall make its Tranche B Term Loan Commitment
Percentage of the Tranche B Term Loan available to the Agent for the
account of the Borrower at the office of the Agent specified in Schedule
2.1(a), or at such other office as the Agent may designate in writing, by
2:00 P.M. (Charlotte, North Carolina time) on the Closing Date in Dollars
and in funds immediately available to the Agent.
(c) Minimum Amounts. Each Eurodollar Loan or Base Rate Loan that is
part of the Tranche B Term Loan shall be in an aggregate principal amount
that is not less than $5,000,000 and integral multiples of $1,000,000 (or
the then remaining principal balance of the Tranche B Term Loan, if
less).
(d) Repayment of Tranche B Term Loan. The principal amount of the
Tranche B Term Loan shall be repaid in twenty-eight (28) consecutive
quarterly installments as follows, unless accelerated sooner pursuant to
Section 9.2:
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TRANCHE B TERM LOAN
PRINCIPAL AMORTIZATION PRINCIPAL
PAYMENT DATES AMORTIZATION
PAYMENT
March 31, 1998, June 30, 1998, $ 500,000
September 30, 1998, December 31, 1998,
March 31, 1999, June 30, 1999,
September 30, 1999, December 31, 1999,
March 31, 2000, June 30, 2000,
September 30, 2000, December 31, 2000,
March 31, 2001, June 30, 2001,
September 30, 2001, December 31, 2001,
March 31, 2002, June 30, 2002,
September 30, 2002, December 31, 2002,
March 31, 2003, June 30, 2003,
September 30, 2003 and December 31,
2003
March 31, 2004, June 30, 2004, $47,000,000
September 30, 2004 and December 31,
2004
(e) Interest. Subject to the provisions of Section 3.1, the Tranche
B Term Loan shall bear interest at a per annum rate equal to:
(i) Base Rate Loans. During such periods as the Tranche B Term
Loan shall be comprised in whole or in part of Base Rate Loans,
such Base Rate Loans shall bear interest at a per annum rate equal
to the Adjusted Base Rate.
(ii) Eurodollar Loans. During such periods as the Tranche B
Term Loan shall be comprised in whole or in part of Eurodollar
Loans, such Eurodollar Loans shall bear interest at a per annum
rate equal to the Adjusted Eurodollar Rate.
Interest on the Tranche B Term Loan shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(f) Tranche B Term Notes. The portion of the Tranche B Term Loan
made by each Lender shall be evidenced by a duly executed promissory note
of the Borrower to such Lender in an original principal amount equal to
such Lender's Tranche B Term Loan
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Commitment Percentage of the Tranche B Term Loan and substantially in the
form of Exhibit 2.4(f).
2.5 TRANCHE C TERM LOAN.
(a) Tranche C Term Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set forth
herein, each Lender severally agrees to make available to the Borrower on
the Closing Date such Lender's Tranche C Term Loan Commitment Percentage
of two (2) advances on a term loan in Dollars (the "Tranche C Term Loan")
in the aggregate principal amount for both such advances of up to TWO
HUNDRED MILLION DOLLARS ($200,000,000) (the "Tranche C Term Loan
Committed Amount") for the purposes hereinafter set forth. The first
advance on the Tranche C Term Loan shall be made on the Closing Date and
shall be in the amount of $187,000,000. Unless the Tranche C Term Loan
Commitments shall have been earlier terminated as provided herein, the
second and final advance on the Tranche C Term Loan shall (subject to and
upon the terms and conditions hereof (including without limitation the
terms and conditions set forth in Section 5)), be available on and after
the Closing Date through and including December 15, 1997 and shall be in
an amount of $13,000,000. The Tranche C Term Loan may consist of Base
Rate Loans or Eurodollar Loans, or a combination thereof, as the Borrower
may request; provided, however, that no more than 15 Eurodollar Loans
shall be outstanding under this Credit Agreement at any time. For
purposes hereof, Eurodollar Loans with different Interest Periods shall
be considered as separate Eurodollar Loans, even if they begin on the
same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new Eurodollar Loan with a single
Interest Period. Amounts repaid on the Tranche C Term Loan may not be
reborrowed.
(b) Tranche C Term Loan Advances.
(i) Notice of Borrowing. The Borrower shall request a Tranche C
Term Loan advance by written notice (or telephone notice promptly
confirmed in writing) to the Agent not later than 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day of the
requested borrowing in the case of Base Rate Loans, and not later
than 12:00 Noon (Charlotte, North Carolina time) on the third
Business Day prior to the date of the requested borrowing in the
case of Eurodollar Loans. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Tranche C Term Loan
advance is requested, (B) the date of the requested advance (which
shall be a Business Day and either the Closing Date or the Merger
Date), (C) the aggregate principal amount to be advanced and (D)
whether the advance shall be comprised of Base Rate Loans or
Eurodollar Loans or a combination thereof, and if Eurodollar Loans
are requested, the Interest Period(s) therefor. If the Borrower
shall fail to specify in any such Notice of Borrowing (I) an
applicable Interest Period in the case of a Eurodollar Loan, then
such notice shall be deemed to be a request for an Interest Period
of one month or (II) the type of Tranche C Term Loan advance
requested, then such notice shall be deemed to be a request for a
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Base Rate Loan hereunder. The Agent shall give notice to each
affected Lender promptly upon receipt of each Notice of Borrowing
pursuant to this Section 2.3(b)(i), the contents thereof and each
such Lender's share of any borrowing to be made pursuant thereto.
(ii) Minimum Amounts. Each Eurodollar Loan or Base Rate Loan that
is part of the Tranche C Term Loan shall be in an aggregate
principal amount that is not less than $5,000,000 and integral
multiples of $1,000,000 (or the then remaining principal balance of
the Tranche C Term Loan, if less).
(iii) Advances. Each Lender will make its Tranche C Term Loan
Commitment Percentage of each Tranche C Term Loan advance available
to the Agent for the account of the Borrower as specified in
Section 3.15(a), or in such other manner as the Agent may specify
in writing, by 2:00 P.M. (Charlotte, North Carolina time) on the
date specified in the applicable Notice of Borrowing in Dollars and
in funds immediately available to the Agent. Such advance will
then be made available to the Borrower by the Agent by crediting
the account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Agent by the Lenders
and in like funds as received by the Agent.
(c) Repayment of Tranche C Term Loan. The principal amount of the
Tranche C Term Loan shall be repaid in full on the Maturity Date, unless
accelerated sooner pursuant to Section 9.2.
(d) Interest. Subject to the provisions of Section 3.1, the Tranche
C Term Loan shall bear interest at a per annum rate equal to:
(i) Base Rate Loans. During such periods as the Tranche C Term
Loan shall be comprised in whole or in part of Base Rate Loans,
such Base Rate Loans shall bear interest at a per annum rate equal
to the Adjusted Base Rate.
(ii) Eurodollar Loans. During such periods as the Tranche C
Term Loan shall be comprised in whole or in part of Eurodollar
Loans, such Eurodollar Loans shall bear interest at a per annum
rate equal to the Adjusted Eurodollar Rate.
Interest on the Tranche C Term Loan shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(e) Tranche C Term Notes. The portion of the Tranche C Term Loan
made by each Lender shall be evidenced by a duly executed promissory note
of the Borrower to such Lender in an original principal amount equal to
such Lender's Tranche C Term Loan Commitment Percentage of the Tranche C
Term Loan and substantially in the form of Exhibit 2.5(e).
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2.6 REGULATION U AND REGULATION G.
(a) The Borrower and the Lenders agree that certain proceeds of the
Revolving Loans, the Tranche A Term Loans and the Tranche B Term Loans
shall be used to purchase shares of capital stock of Arbor (the "Acquired
Shares") which are margin stock within the meaning of Regulation U and
Regulation G (all such Revolving Loans, Tranche A Term Loans and Tranche
B Term Loans used to purchase the Acquired Shares being referred to in
this Section 2.6 as "Purpose Loans" and all other Loans being referred to
in this Section 2.6 as "Non-Purpose Loans"). Accordingly, the Loans made
under this Credit Agreement by each Lender shall at all times be treated
for purposes of Regulation U and Regulation G as three separate
extensions of credit (the "X Credit", the "Y Credit" and the "Z Credit"
of such Lender and, collectively, the "X Credits", the "Y Credits" and
the "Z Credits"), as follows:
(i) the principal amount of the X Credit and the principal amount of
the Y Credit of such Lender shall each be an amount equal to fifty
percent (50%) of the principal amount of the Purpose Loans advanced by
such Lender.
(ii) the principal amount of the Z Credit of such Lender shall be an
amount equal to the aggregate of the Tranche A Term Loans, Tranche B Term
Loans, Revolving Loans and LOC Obligations made or participated in by
such Lender which are Non-Purpose Loans.
(b) The benefits of the provisions of this Credit Agreement and the other
Credit Documents, to the extent that any such provisions relate to the Acquired
Shares held by any Consolidated Party or the proceeds thereof and to the extent
of the Lenders' interests in such margin stock within the meaning of Regulation
U or Regulation G, shall be allocated first to the benefit and security of the
payment of the principal of and interest on the X Credits of the Lenders and of
all other amounts payable by the Borrower under this Credit Agreement in
connection with the X Credits (collectively, the "X Credit Amounts"), and only
after the payment in full of such principal and interest and other amounts, to
the benefit and security of (i) the payment of the principal of and interest on
the Y Credits of the Lenders and of all other amounts payable by the Borrower
under this Credit Agreement in connection with the Y Credits (collectively, the
"Y Credit Amounts") and (ii) the payment of principal of and interest on the Z
Credits of the Lenders and of all other amounts payable by the Borrower under
this Credit Agreement in connection with the Z Credits (collectively, the "Z
Credit Amounts").
(c) The benefits of the provisions of this Credit Agreement and the other
Credit Documents, to the extent that any such provisions relate to assets other
than the Acquired Shares held by any Consolidated Party or the proceeds thereof
and to the extent of the Lenders' interests in such assets, shall be allocated
first to the equal and ratable benefit and security of the payment of the Y
Credit Amounts and the Z Credit Amounts and, only after the payment in full of
all Y Credit Amounts and Z Credit Amounts, to the benefit and security of the
payment of the X Credit Amounts.
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(d) Each Lender will xxxx its records irrevocably to identify the X Credit
of such Lender with the benefits and security described in paragraph (b) of
this Section 2.6 and the Y Credit and Z Credit of such Lender with the benefits
and security described in paragraph (c) of this Section 2.6 and, solely for the
purposes of complying with Regulation U and Regulation G, the X, Y and Z
Credits shall be treated as separate loans.
(e) Except as otherwise specifically provided in this Credit Agreement or
the other Credit Documents (but in any event subject to the requirements of
Regulation U and Regulation G), (i) all payments and prepayments by the
Borrower of the Loans with proceeds of Acquired Shares shall be applied (A)
first to the payment or prepayment of the Purpose Loans and (B) second to the
payment or prepayment of the Non-Purpose Loans, and (ii) all payments and
prepayments by the Borrower of the Loans with funds derived from assets other
than the Acquired Shares, which are subject to the provisions referred to in
paragraph (c) of this Section 2.6, shall be applied (A) first to the equal and
ratable payment or prepayment of the Y Credit Amounts and Z Credit Amounts and
(B) second to the payment or prepayment of the X Credit Amounts.
(f) The Borrower will furnish to each Lender, prior to the making of any
Loan, such information and documents as such Lender may require to distinguish
between Purpose Loans and Non-Purpose Loans and to determine the X, Y and Z
Portions thereof, and from time to time such other information and documents as
such Lender may require to comply with paragraphs (d) and (e) of this Section
2.6 and to further determine compliance with Regulation U and Regulation G and
such documents as such Lender may require to comply with Regulation U and
Regulation G.
(g) Each Lender shall be responsible for its own compliance with and
administration of the provisions of this Section 2.6 and the Agent (in its
capacity as such) shall have no responsibility for any determinations or
allocations (including, without limitation, any allocations of payments or
prepayments) made or to be made by any Lender as required by such provisions.
(h) Each Lender represents severally and for itself that it has required
as much direct and indirect security for its Y Credit and Z Credit as such
Lender typically would require in good faith and exercising sound banking
judgment in other similar transactions, and that it is not relying on the value
of the Acquired Shares in making its decision to extend the Y Credit and the Z
Credit.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE.
Upon the occurrence, and during the continuance, of an Event of Default,
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder or under
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the other Credit Documents shall bear interest, payable on demand, at a per
annum rate 2% greater than the rate which would otherwise be applicable (or if
no rate is applicable, whether in respect of interest, fees or other amounts,
then the Base Rate plus 2%).
3.2 EXTENSION AND CONVERSION.
Subject to the terms of Section 5.2, the Borrower shall have the option,
on any Business Day, to extend existing Loans into a subsequent permissible
Interest Period or to convert Loans into Loans of another interest rate type;
provided, however, that (i) except as provided in Section 3.8, Eurodollar Loans
may be converted into Base Rate Loans only on the last day of the Interest
Period applicable thereto, (ii) Eurodollar Loans may be extended, and Base Rate
Loans may be converted into Eurodollar Loans, only if no Default or Event of
Default is in existence on the date of extension or conversion, (iii) Loans
extended as, or converted into, Eurodollar Loans shall be subject to the terms
of the definition of "Interest Period" set forth in Section 1.1 and shall be in
such minimum amounts as provided in, with respect to Revolving Loans, Section
2.1(b)(ii), with respect to the Tranche A Term Loan, Section 2.3(c), with
respect to the Tranche B Term Loan, Section 2.4(c), or, with respect to the
Tranche C Term Loan, Section 2.5(b)(ii), (iv) no more than 15 Eurodollar Loans
shall be outstanding under this Credit Agreement at any time (it being
understood that, for purposes hereof, Eurodollar Loans with different Interest
Periods shall be considered as separate Eurodollar Loans, even if they begin on
the same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new Eurodollar Loan with a single Interest
Period) and (v) any request for extension or conversion of a Eurodollar Loan
which shall fail to specify an Interest Period shall be deemed to be a request
for an Interest Period of one month. Each such extension or conversion shall
be effected by the Borrower by giving a Notice of Extension/Conversion (or
telephonic notice promptly confirmed in writing) to the office of the Agent
specified in specified in Schedule 2.1(a), or at such other office as the Agent
may designate in writing, prior to 12:00 Noon (Charlotte, North Carolina time)
on the Business Day of, in the case of the conversion of a Eurodollar Loan into
a Base Rate Loan, and on the third Business Day prior to, in the case of the
extension of a Eurodollar Loan as, or conversion of a Base Rate Loan into, a
Eurodollar Loan, the date of the proposed extension or conversion, specifying
the date of the proposed extension or conversion, the Loans to be so extended
or converted, the types of Loans into which such Loans are to be converted and,
if appropriate, the applicable Interest Periods with respect thereto. Each
request for extension or conversion shall be irrevocable and shall constitute a
representation and warranty by the Borrower of the matters specified in
subsections (b), (c), (d), (e) and (f) of Section 5.2. In the event the
Borrower fails to request extension or conversion of any Eurodollar Loan in
accordance with this Section, or any such conversion or extension is not
permitted or required by this Section, then such Eurodollar Loan shall be
automatically converted into a Base Rate Loan at the end of the Interest Period
applicable thereto. The Agent shall give each Lender notice as promptly as
practicable of any such proposed extension or conversion affecting any Loan.
3.3 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrower shall have the right to
prepay Loans in whole or in part from time to time; provided, however,
that each partial prepayment of Loans shall be in a minimum principal
amount of $5,000,000 (or the then outstanding balance of such
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Loan, if less) and integral multiples of $1,000,000. Subject to the
foregoing terms, amounts prepaid under this Section 3.3(a) shall be
applied as the Borrower may elect; provided that if the Borrower fails to
specify a voluntary prepayment then such prepayment shall be applied
first to Revolving Loans and then ratably to the Tranche A Term Loan, the
Tranche B Term Loan and the Tranche C Term Loan (in each case ratably to
the remaining Principal Amortization Payments thereof), in each case
first to Base Rate Loans and then to Eurodollar Loans in direct order of
Interest Period maturities. One or more holders of the Tranche B Term
Loans may decline to accept a voluntary prepayment under this Sections
3.3(a) to the extent there are sufficient Tranche A Term Loans
outstanding to be paid with such prepayment, in which case such declined
prepayments shall be allocated pro rata among the Tranche A Term Loans
and the Tranche B Term Loans held by Lenders accepting such prepayment.
All prepayments under this Section 3.3(a) shall be subject to Section
3.12, but otherwise without premium or penalty, and be accompanied by
interest on the principal amount prepaid through the date of prepayment.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time, the sum of
the aggregate principal amount of outstanding Revolving Loans plus
LOC Obligations outstanding shall exceed the Revolving Committed
Amount, the Borrower immediately shall (A) prepay the Revolving
Loans in an amount sufficient to eliminate such excess and (B) if
any such excess remains after all Revolving Loans have been repaid,
shall cash collateralize the LOC Obligations, in an amount
sufficient to eliminate such excess.
(ii) Asset Dispositions. Immediately upon the occurrence of
any Asset Disposition Prepayment Event, the Borrower shall prepay
the Loans in an aggregate amount equal to 100% of the Net Cash
Proceeds of the related Asset Disposition not applied (or caused to
be applied) during the related Application Period to the purchase,
acquisition or construction by the Consolidated Parties of Eligible
Assets as contemplated by the terms of Section 8.5(e) (such
prepayment to be applied as set forth in clause (v) below).
(iii) Debt Issuances. Immediately upon receipt by the Parent
or any Consolidated Party of proceeds from any Debt Issuance, the
Borrower shall prepay the Loans in an aggregate amount equal to
100% of the Net Cash Proceeds of such Debt Issuance to the Lenders
(such prepayment to be applied as set forth in clause (v) below).
(iv) Issuances of Equity. Immediately upon receipt by the
Parent or any Consolidated Party of proceeds from any Equity
Issuance, the Borrower shall prepay the Loans in an aggregate
amount equal to 100% of the Net Cash Proceeds of such Equity
Issuance to the Lenders (such prepayment to be applied as set forth
in clause (v) below).
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(v) Application of Mandatory Prepayments. All amounts
required to be paid pursuant to this Section 3.3(b) shall be
applied as follows: (A) with respect to all amounts prepaid
pursuant to Section 3.3(b)(i), to Revolving Loans and (after all
Revolving Loans have been repaid) to a cash collateral account in
respect of LOC Obligations and (B) with respect to all amounts
prepaid pursuant to Section 3.3(b)(ii), (iii) or (iv), first pro
rata to the Tranche A Term Loan and the Tranche B Term Loan (in
each case ratably to the remaining Principal Amortization Payments
thereof) and (2) second to the Revolving Loans and (after all
Revolving Loans have been repaid) to a cash collateral account in
respect of LOC Obligations; provided, however, with respect to any
prepayment pursuant to Section 3.3(b)(iii) with proceeds from the
issuance of any Subordinated Indebtedness, such prepayment shall be
applied first to the Tranche C Term Loan until the Tranche C Term
Loan shall have been paid in full. One or more holders of the
Tranche B Term Loans may decline to accept a mandatory prepayment
under Sections 3.3(b)(ii), (iii) or (iv) to the extent there are
sufficient Tranche A Term Loans outstanding to be paid with such
prepayment, in which case such declined prepayments shall be
allocated pro rata among the Tranche A Term Loans and the Tranche B
Term Loans held by Lenders accepting such prepayments. Within the
parameters of the applications set forth above, prepayments shall
be applied first to Base Rate Loans and then to Eurodollar Loans in
direct order of Interest Period maturities. All prepayments under
this Section 3.3(b) shall be subject to Section 3.12 and be
accompanied by interest on the principal amount prepaid through the
date of prepayment.
3.4 TERMINATION AND REDUCTION OF REVOLVING COMMITTED AMOUNT.
(a) Voluntary Reductions. The Borrower may from time to time
permanently reduce or terminate the Revolving Committed Amount in whole
or in part (in minimum aggregate amounts of $5,000,000 or in integral
multiples of $1,000,000 in excess thereof (or the full remaining amount
of the then applicable Revolving Committed Amount, if less) upon five
Business Days' prior written notice to the Agent; provided, however, no
such termination or reduction shall be made which would cause the
aggregate principal amount of outstanding Revolving Loans plus LOC
Obligations outstanding to exceed the Revolving Committed Amount, unless,
concurrently with such termination or reduction, the Revolving Loans are
repaid to the extent necessary to eliminate such excess. The Agent shall
promptly notify each affected Lender of receipt by the Agent of any
notice from the Borrower pursuant to this Section 3.4(a).
(b) Mandatory Reductions.
(i) Unless and until the Revolving Committed Amount shall have
been reduced to $150,000,000, the Revolving Committed Amount
automatically shall be permanently reduced on the date, and by the
amount, of any application of prepayment proceeds to the Revolving
Loans in accordance with the terms of Section 3.3(b)(v).
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(ii) The Tranche C Term Loan Committed Amount automatically
shall be permanently reduced on December 15, 1997 by the amount by
which the Tranche C Term Loan Committed Amount exceeds the
aggregate outstanding principal balance on the Tranche C Term Loan
as of December 15, 1997 (after giving effect to the advance on the
Tranche C Term Loan, if any, to be made on such date).
(c) Maturity Date. The Revolving Commitments of the Lenders and the
LOC Commitment of the Issuing Lender shall automatically terminate on the
Maturity Date.
(d) General. The Borrower shall pay to the Agent for the account of
the Lenders in accordance with the terms of Section 3.5(b), on the date
of each termination or reduction of the Revolving Committed Amount, the
Unused Fee accrued through the date of such termination or reduction on
the amount of the Revolving Committed Amount so terminated or reduced.
3.5 FEES.
(a) Upfront Fees. The Borrower agrees to pay to the Agent for the
benefit of the Lenders in immediately available funds on or before the
Closing Date an upfront fee (the "Upfront Fee") in the amount provided in
the Agent's Fee Letter.
(b) Unused Fee. In consideration of the Revolving Commitments of
the Lenders hereunder, the Borrower agrees to pay to the Agent for the
account of each Lender a fee (the "Unused Fee") on the Unused Revolving
Committed Amount computed at a per annum rate for each day during the
applicable Unused Fee Calculation Period (hereinafter defined) at a rate
equal to the Applicable Percentage in effect from time to time. The
Unused Fee shall commence to accrue on the Closing Date and shall be due
and payable in arrears on the last business day of each March, June,
September and December (and any date that the Revolving Committed Amount
is reduced as provided in Section 3.4(a) and the Maturity Date) for the
immediately preceding quarter (or portion thereof) (each such quarter or
portion thereof for which the Unused Fee is payable hereunder being
herein referred to as an "Unused Fee Calculation Period"), beginning with
the first of such dates to occur after the Closing Date.
(c) Letter of Credit Fees.
(i) Standby Letter of Credit Issuance Fee. In consideration
of the issuance of standby Letters of Credit hereunder, the
Borrower promises to pay to the Agent for the account of each
Lender a fee (the "Standby Letter of Credit Fee") on such Lender's
Revolving Commitment Percentage of the average daily maximum amount
which is or may become available to be drawn under each such
standby Letter of Credit computed at a per annum rate for each day
from the date of issuance to the date of expiration equal to the
Applicable Percentage. The Standby Letter of Credit Fee will be
payable quarterly in arrears on the last
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Business Day of each March, June, September and December for the
immediately preceding quarter (or a portion thereof).
(ii) Trade Letter of Credit Drawing Fee. In consideration of
the issuance of trade Letters of Credit hereunder, the Borrower
promises to pay to the Agent for the account of each Lender a fee
(the "Trade Letter of Credit Fee") equal to the Applicable
Percentage on such Lender's Revolving Commitment Percentage of the
amount of each drawing under any such trade Letter of Credit. The
Trade Letter of Credit Fee will be payable on each date of drawing
under a trade Letter of Credit.
(iii) Issuing Lender Fees. In addition to the Standby Letter
of Credit Fee payable pursuant to clause (i) above and the Trade
Letter of Credit Fee payable pursuant to clause (ii) above, the
Borrower promises to pay to the Issuing Lender for its own account
without sharing by the other Lenders the Borrower promises to pay
to the Issuing Lender for its own account without sharing by the
other Lenders (A) a standby Letter of Credit fronting fee of 0.125%
on the average daily maximum amount available to be drawn under
each standby Letter of Credit computed at a per annum rate for each
day from the date of issuance to the date of expiration, such
fronting fee to be payable quarterly in arrears on the last day of
each March, June, September and December for the immediately
preceding quarter (or a portion thereof) and (B) the customary
charges from time to time of the Issuing Lender with respect to the
issuance, amendment, transfer, administration, cancellation and
conversion of, and drawings under, such Letters of Credit
(collectively, the "Issuing Lender Fees").
(d) Administrative Fees. The Borrower agrees to pay to the Agent,
for its own account and NationsBanc Xxxxxxxxxx Securities, Inc., as
applicable, the fees referred to in the Agent's Fee Letter (collectively,
the "Agent's Fees").
3.6 CAPITAL ADEQUACY.
If any Lender has determined, after the date hereof, that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Lender with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Lender's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking
into consideration such Lender's policies with respect to capital adequacy),
then, upon notice from such Lender to the Borrower, the Borrower shall be
obligated to pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction. Each
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determination by any such Lender of amounts owing under this Section shall,
absent manifest error, be conclusive and binding on the parties hereto.
3.7 LIMITATION ON EURODOLLAR LOANS.
If on or prior to the first day of any Interest Period for any Eurodollar
Loan:
(a) the Agent determines (which determination shall be conclusive)
that by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Agent that the Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of funding Eurodollar
Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans,
either prepay such Eurodollar Loans or Convert such Eurodollar Loans into Base
Rate Loans in accordance with the terms of this Credit Agreement.
3.8 ILLEGALITY.
Notwithstanding any other provision of this Credit Agreement, in the event
that it becomes unlawful for any Lender or its Applicable Lending Office to
make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).
3.9 REQUIREMENTS OF LAW.
If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation
or administration thereof, or compliance by any Lender (or its Applicable
Lending Office) with any request or directive (whether or not having the force
of law) of any such Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending Office) to
any tax, duty, or other charge with respect to any Eurodollar Loans, its
Notes, or its obligation to make Eurodollar Loans, or change the basis of
taxation of any amounts payable to such Lender (or its Applicable Lending
Office) under this Credit Agreement or its Notes in
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respect of any Eurodollar Loans (other than taxes imposed on the overall
net income of such Lender by the jurisdiction in which such Lender has
its principal office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve, special
deposit, assessment, or similar requirement (other than the Eurodollar
Reserve Requirement utilized in the determination of the Eurodollar Rate)
relating to any extensions of credit or other assets of, or any deposits
with or other liabilities or commitments of, such Lender (or its
Applicable Lending Office), including the Commitment of such Lender
hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending Office)
or on the United States market for certificates of deposit or the London
interbank market any other condition affecting this Credit Agreement or
its Notes or any of such extensions of credit or liabilities or
commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9(a), the Borrower may, by notice to such Lender
(with a copy to the Agent), suspend the obligation of such Lender to make or
Continue Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans,
until the event or condition giving rise to such request ceases to be in effect
(in which case the provisions of Section 3.10 shall be applicable); provided
that such suspension shall not affect the right of such Lender to receive the
compensation so requested. Each Lender shall promptly notify the Borrower and
the Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Lender to compensation pursuant to this Section
3.9 and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender, be otherwise disadvantageous to
it. Any Lender claiming compensation under this Section 3.9 shall furnish to
the Borrower and the Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive in the absence of
manifest error. In determining such amount, such Lender may use any reasonable
averaging and attribution methods.
3.10 TREATMENT OF AFFECTED LOANS.
If the obligation of any Lender to make any Eurodollar Loan or to
Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.7 or 3.8 hereof, such Lender's Eurodollar Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for such Eurodollar Loans (or, in the case of a
Conversion required by Section 3.7 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent) and, unless and until
such Lender gives notice
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as provided below that the circumstances specified in Section 3.7 or 3.8 hereof
that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Eurodollar Loans shall be applied instead to
its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such
Lender as Eurodollar Loans shall be made or Continued instead as Base
Rate Loans, and all Base Rate Loans of such Lender that would otherwise
be Converted into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.7, 3.8 or 3.9 hereof that gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.
3.11 TAXES.
(a) Any and all payments by the Borrower to or for the account of
any Lender or the Agent hereunder or under any other Credit Document
shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the
case of each Lender and the Agent, taxes imposed on its income, and
franchise taxes imposed on it in lieu of income taxes, by the
jurisdiction under the laws of which such Lender (or its Applicable
Lending Office) or the Agent (as the case may be) is organized or any
political subdivision thereof (all such non-excluded taxes, duties,
levies, imposts, deductions, charges, withholdings, and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required
by law to deduct any Taxes from or in respect of any sum payable under
this Credit Agreement or any other Credit Document to any Lender or the
Agent, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 3.11) such Lender or the Agent
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii)
the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law, and (iv)
the Borrower shall furnish to the Agent, at its address referred to in
Section 11.1, the original or a certified copy of a receipt evidencing
payment thereof.
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(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under this
Credit Agreement or any other Credit Document or from the execution or
delivery of, or otherwise with respect to, this Credit Agreement or any
other Credit Document (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent for
the full amount of Taxes and Other Taxes (including, without limitation,
any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 3.11) paid by such Lender or the Agent
(as the case may be) and any liability (including penalties, interest,
and expenses) arising therefrom or with respect thereto other than any
penalties, interest or expense to the extent arising from the failure of
such Lender or the Agent to pay such Taxes or Other Taxes on a timely
basis.
(d) Each Lender organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery
of this Credit Agreement in the case of each Lender listed on the
signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter
if requested in writing by the Borrower or the Agent (but only so long as
such Lender remains lawfully able to do so), shall provide the Borrower
and the Agent with (i) (a) if such Lender is a "bank" within the meaning
of Section 881(c)(3)(A) of the Code, Internal Revenue Service Form 1001
or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party which
reduces the rate of withholding tax on payments of interest or certifying
that the income receivable pursuant to this Credit Agreement is
effectively connected with the conduct of a trade or business in the
United States, or (b) if such Lender is not a "bank" within the meaning
of Section 881(c)(3)(A) of the Code and which intends to claim exemption
form U.S. Federal withholding taxes 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 Borrower and is not a controlled foreign corporation related
to the Borrower (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 a reduced rate of, U.S. Federal withholding
tax on payments of interest by the Borrower under this Credit Agreement
and the other Credit Documents, (ii) Internal Revenue Service Form W-8 or
W-9, as appropriate, or any successor form prescribed by the Internal
Revenue Service, and (iii) any other form or certificate required by any
taxing authority (including any certificate required by Sections 871(h)
and 881(c) of the Internal Revenue Code), certifying that such Lender is
entitled to an exemption from or a reduced rate of tax on payments
pursuant to this Credit Agreement or any of the other Credit Documents.
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(e) For any period with respect to which a Lender has failed to
provide the Borrower and the Agent with the appropriate form pursuant to
Section 3.11(d) (unless such failure is due to a change in treaty, law,
or regulation occurring subsequent to the date on which a form originally
was required to be provided), such Lender shall not be entitled to
indemnification under Section 3.11(a) or 3.11(b) with respect to Taxes
imposed by the United States; provided, however, that should a Lender,
which is otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as
such Lender shall reasonably request to assist such Lender to recover
such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Lender pursuant to this Section 3.11, then such Lender
will agree to use reasonable efforts to change the jurisdiction of its
Applicable Lending Office so as to eliminate or reduce any such
additional payment which may thereafter accrue if such change, in the
judgment of such Lender, is not otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes,
the Borrower shall furnish to the Agent the original or a certified copy
of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 3.11 shall survive the repayment of the Loans,
LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
3.12 COMPENSATION.
Upon the request of any Lender, the Borrower shall pay to such Lender such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense (including loss of
anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar Loan for
any reason (including, without limitation, the acceleration of the Loans
pursuant to Section 9.2) on a date other than the last day of the
Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Section 5
to be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar
Loan on the date for such borrowing, Conversion, Continuation, or
prepayment specified in the relevant notice of borrowing, prepayment,
Continuation, or Conversion under this Credit Agreement.
With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of the applicable Interest Period (or,
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in the case of a failure to borrow, convert or continue, the Interest Period
that would have commenced on the date of such failure) in each case at the
applicable rate of interest for such Eurodollar Loans provided for herein
(excluding, however, the Applicable Percentage included therein, if any) over
(b) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank Eurodollar
market. The covenants of the Borrower set forth in this Section 3.12 shall
survive the repayment of the Loans, LOC Obligations and other obligations under
the Credit Documents and the termination of the Commitments hereunder.
3.13 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or (subject to the terms of
Section 3.3) prepayment of principal of any Loan or reimbursement
obligations arising from drawings under Letters of Credit, each payment
of interest on the Loans or reimbursement obligations arising from
drawings under Letters of Credit, each payment of Unused Fees, each
payment of the Standby Letter of Credit Fee, each payment of the Trade
Letter of Credit Fee, each reduction of the Revolving Committed Amount
and each conversion or extension of any Loan, shall be allocated pro rata
among the Lenders in accordance with the respective principal amounts of
their outstanding Loans and Participation Interests.
(b) Advances. No Lender shall be responsible for the failure or
delay by any other Lender in its obligation to make its ratable share of
a borrowing hereunder; provided, however, that the failure of any Lender
to fulfill its obligations hereunder shall not relieve any other Lender
of its obligations hereunder. Unless the Agent shall have been notified
by any Lender prior to the date of any requested borrowing that such
Lender does not intend to make available to the Agent its ratable share
of such borrowing to be made on such date, the Agent may assume that such
Lender has made such amount available to the Agent on the date of such
borrowing, and the Agent in reliance upon such assumption, may (in its
sole discretion but without any obligation to do so) make available to
the Borrower a corresponding amount. If such corresponding amount is not
in fact made available to the Agent, the Agent shall be able to recover
such corresponding amount from such Lender. If such Lender does not pay
such corresponding amount forthwith upon the Agent's demand therefor, the
Agent will promptly notify the Borrower, and the Borrower shall
immediately pay such corresponding amount to the Agent. The Agent shall
also be entitled to recover from the Lender or the Borrower, as the case
may be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Agent to the
Borrower to the date such corresponding amount is recovered by the Agent
at a per annum rate equal to (i) from the Borrower at the applicable rate
for the applicable borrowing pursuant to the Notice of Borrowing and (ii)
from a Lender at the Federal Funds Rate.
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3.14 SHARING OF PAYMENTS.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan, LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the
exercise of a right of setoff, banker's lien or counterclaim, 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, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a Participation Interest in such Loans, LOC
Obligations and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all
Lenders share such payment in accordance with their respective ratable shares
as provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of a
Participation Interest theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a Participation Interest
may, to the fullest extent permitted by law, exercise all rights of payment,
including setoff, banker's lien or counterclaim, with respect to such
Participation Interest as fully as if such Lender were a holder of such Loan,
LOC Obligations or other obligation in the amount of such Participation
Interest. Except as otherwise expressly provided in this Credit Agreement, if
any Lender or the Agent shall fail to remit to the Agent or any other Lender an
amount payable by such Lender or the Agent to the Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.14 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.14 to share in the benefits of any recovery on such secured claim.
3.15 PAYMENTS, COMPUTATIONS, ETC.
(a) Except as otherwise specifically provided herein, all payments
hereunder shall be made to the Agent in Dollars in immediately available
funds, without offset, deduction, counterclaim or withholding of any
kind, at the Agent's office specified in Schedule 2.1(a) not later than
2:00 P.M. (Charlotte, North Carolina time) on the date when due.
Payments received after such time shall be deemed to have been received
on the next succeeding Business Day. The Agent may (but shall not be
obligated to) debit the amount of any such payment which is not made by
such time to any ordinary deposit account of the Borrower maintained with
the Agent (with notice to the Borrower). The Borrower shall, at the time
it makes any payment under this Credit Agreement, specify to
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the Agent the Loans, LOC Obligations, Fees, interest or other amounts
payable by the Borrower hereunder to which such payment is to be applied
(and in the event that it fails so to specify, or if such application
would be inconsistent with the terms hereof, the Agent shall distribute
such payment to the Lenders in such manner as the Agent may determine to
be appropriate in respect of obligations owing by the Borrower hereunder,
subject to the terms of Section 3.13(a)). The Agent will distribute such
payments to such Lenders, if any such payment is received prior to 2:00
P.M. (Charlotte, North Carolina time) on a Business Day in like funds as
received prior to the end of such Business Day and otherwise the Agent
will distribute such payment to such Lenders on the next succeeding
Business Day. Whenever any payment hereunder shall be stated to be due
on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day (subject to accrual of
interest and Fees for the period of such extension), except that in the
case of Eurodollar Loans, if the extension would cause the payment to be
made in the next following calendar month, then such payment shall
instead be made on the next preceding Business Day. Except as expressly
provided otherwise herein, all computations of interest and fees shall be
made on the basis of actual number of days elapsed over a year of 360
days, except with respect to computation of interest on Base Rate Loans
which (unless the Base Rate is determined by reference to the Federal
Funds Rate) shall be calculated based on a year of 365 or 366 days, as
appropriate. Interest shall accrue from and include the date of
borrowing, but exclude the date of payment.
(b) Allocation of Payments After Event of Default. Notwithstanding
any other provisions of this Credit Agreement to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of the Credit
Party Obligations or any other amounts outstanding under any of the
Credit Documents or in respect of the Collateral shall be paid over or
delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Agent in connection with enforcing the rights of the Lenders under the
Credit Documents and any protective advances made by the Agent with
respect to the Collateral under or pursuant to the terms of the
Collateral Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
each of the Lenders in connection with enforcing its rights under the
Credit Documents or otherwise with respect to the Credit Party
Obligations owing to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
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FIFTH, to the payment of the outstanding principal amount of the
Credit Party Obligations (including the payment or cash collateralization
of the outstanding LOC Obligations);
SIXTH, to all other Credit Party Obligations and other obligations
which shall have become due and payable under the Credit Documents and
not repaid pursuant to clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to the
next succeeding category; (ii) each of the Lenders shall receive an
amount equal to its pro rata share (based on the proportion that the then
outstanding Loans and LOC Obligations held by such Lender bears to the
aggregate then outstanding Loans and LOC Obligations) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
and "SIXTH" above; and (iii) to the extent that any amounts available for
distribution pursuant to clause "FIFTH" above are attributable to the
issued but undrawn amount of outstanding Letters of Credit, such amounts
shall be held by the Agent in a cash collateral account and applied (A)
first, to reimburse the Issuing Lender from time to time for any drawings
under such Letters of Credit and (B) then, following the expiration of
all Letters of Credit, to all other obligations of the types described in
clauses "FIFTH" and "SIXTH" above in the manner provided in this Section
3.15(b).
3.16 EVIDENCE OF DEBT.
(a) Each Lender shall maintain an account or accounts evidencing
each Loan made by such Lender to the Borrower from time to time,
including the amounts of principal and interest payable and paid to such
Lender from time to time under this Credit Agreement. Each Lender will
make reasonable efforts to maintain the accuracy of its account or
accounts and to promptly update its account or accounts from time to
time, as necessary.
(b) The Agent shall maintain the Register pursuant to Section
11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and
Interest Period of each such Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to
each Lender hereunder and (iii) the amount of any sum received by the
Agent hereunder from or for the account of the Borrower and each Lender's
share thereof. The Agent will make reasonable efforts to maintain the
accuracy of the subaccounts referred to in the preceding sentence and to
promptly update such subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if
consistent with the entries of the
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Agent, subsection (a)) shall be prima facie evidence of the existence and
amounts of the obligations of the Borrower therein recorded absent
manifest error; provided, however, that the failure of any Lender or the
Agent to maintain any such account, such Register or such subaccount, as
applicable, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay the Loans made by such Lender in
accordance with the terms hereof.
3.17 MANDATORY ASSIGNMENT.
In the event that any Lender delivers to the Borrower a demand for payment
in accordance with Section 3.6, 3.9 or 3.11 or a notification in accordance
with Section 3.8 that such Lender is suspending its obligation or obligations
to make or Continue Eurodollar Loans and to Convert Base Rate Loans into
Eurodollar Loans, then, provided that no Default or Event of Default has
occurred and is continuing at such time, the Borrower may, at its own expense
(such expense to include the administrative fee payable to the Agent under
Section 11.3(b)), require such Lender to transfer and assign in whole, without
recourse (in accordance with and subject to the terms and conditions of Section
11.3), all of its interests, rights and obligations under this Credit Agreement
to an Eligible Assignee which shall assume such assigned obligations; provided
that (i) such assignment shall not conflict with any law, rule or regulation or
order of any court or any Governmental Authority and (ii) the Borrower or such
assignee shall have paid to the assigning Lender in immediately available funds
the principal of and interest accrued to the date of such payment on the Loans
made by it hereunder and all other amounts owed to it hereunder (including
Section 3.12).
SECTION 4
GUARANTY
4.1 THE GUARANTY.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Hedging Agreement, and
the Agent as hereinafter provided the prompt payment of the Credit Party
Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) strictly in accordance with the terms thereof. The Guarantors
hereby further agree that if any of the Credit Party Obligations are not paid
in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise), the
Guarantors will, jointly and severally, promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Credit Party Obligations, the same will be
promptly paid in full when due (whether at extended maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) in accordance with the terms of such extension or renewal.
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Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents or Hedging Agreements, the obligations of each
Subsidiary Guarantor hereunder shall be limited to an aggregate amount equal to
the largest amount that would not render its obligations hereunder subject to
avoidance under Section 548 of the Bankruptcy Code or any comparable provisions
of any applicable state law.
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.1 are joint and several,
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Credit Party Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor
shall have no right of subrogation, indemnity, reimbursement or contribution
against the Borrower or any other Guarantor of the Credit Party Obligations for
amounts paid under this Section 4 until such time as the Lenders (and any
Affiliates of Lenders entering into Hedging Agreements) have been paid in full,
all Commitments under this Credit Agreement have been terminated and no Person
or Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received
under the Credit Documents or Hedging Agreements. Without limiting the
generality of the foregoing, it is agreed that, to the fullest extent permitted
by law, the occurrence of any one or more of the following shall not alter or
impair the liability of any Guarantor hereunder which shall remain absolute and
unconditional as described above:
(a) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of the
Credit Party Obligations shall be extended, or such performance or
compliance shall be waived;
(b) any of the acts required or permitted by any of the provisions
of any of the Credit Documents, any Hedging Agreement or any other
agreement or instrument referred to in the Credit Documents or Hedging
Agreements shall be done or omitted;
(c) the maturity of any of the Credit Party Obligations shall be
accelerated, or any of the Credit Party Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements
shall be waived or any other guarantee of any of the Credit Party
Obligations or any security therefor shall be released, impaired or
exchanged in whole or in part or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Agent or any Lender or
Lenders as security for any of the Credit Party Obligations shall fail to
attach or be perfected; or
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(e) any of the Credit Party Obligations shall be determined to be
void or voidable (including, without limitation, for the benefit of any
creditor of any Guarantor) or shall be subordinated to the claims of any
Person (including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit
Documents, any Hedging Agreement or any other agreement or instrument referred
to in the Credit Documents or Hedging Agreements, or against any other Person
under any other guarantee of, or security for, any of the Credit Party
Obligations.
4.3 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment
by or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit
Party Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.4 CERTAIN ADDITIONAL WAIVERS.
Without limiting the generality of the provisions of this Section 4, each
Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. Section
Section 26-7 through 26-9, inclusive, to the extent applicable. Each
Guarantor further agrees that such Guarantor shall have no right of recourse to
security for the Credit Party Obligations, except through the exercise of
rights of subrogation pursuant to Section 4.2 and through the exercise of
rights of contribution pursuant to Section 4.6.
4.5 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due
and payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section
9.2) for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and
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payable), the Credit Party Obligations (whether or not due and payable by any
other Person) shall forthwith become due and payable by the Guarantors for
purposes of Section 4.1.
4.6 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such
other Guarantor's Contribution Share (as defined below) of such Excess Payment.
The payment obligations of any Guarantor under this Section 4.6 shall be
subordinate and subject in right of payment to the prior payment in full to the
Agent and the Lenders of the Guaranteed Obligations, and none of the Guarantors
shall exercise any right or remedy under this Section 4.6 against any other
Guarantor until payment and satisfaction in full of all of such Guaranteed
Obligations. For purposes of this Section 4.6, (a) "Guaranteed Obligations"
shall mean any obligations arising under the other provisions of this Section
4; (b) "Excess Payment" shall mean the amount paid by any Guarantor in excess
of its Pro Rata Share of any Guaranteed Obligations; (c) "Pro Rata Share" shall
mean, for any Guarantor in respect of any payment of Guaranteed Obligations,
the ratio (expressed as a percentage) as of the date of such payment of
Guaranteed Obligations of (i) the amount by which the aggregate present fair
salable value of all of its assets and properties exceeds the amount of all
debts and liabilities of such Guarantor (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of such
Guarantor hereunder) to (ii) the amount by which the aggregate present fair
salable value of all assets and other properties of the Borrower and all of the
Guarantors exceeds the amount of all of the debts and liabilities (including
contingent, subordinated, unmatured, and unliquidated liabilities, but
excluding the obligations of the Borrower and the Guarantors hereunder) of the
Borrower and all of the Guarantors; provided, however, that, for purposes of
calculating the Pro Rata Shares of the Guarantors in respect of any payment of
Guaranteed Obligations, any Guarantor that became a Guarantor subsequent to the
date of any such payment shall be deemed to have been a Guarantor on the date
of such payment and the financial information for such Guarantor as of the date
such Guarantor became a Guarantor shall be utilized for such Guarantor in
connection with such payment; and (d) "Contribution Share" shall mean, for any
Guarantor in respect of any Excess Payment made by any other Guarantor, the
ratio (expressed as a percentage) as of the date of such Excess Payment of (i)
the amount by which the aggregate present fair salable value of all of its
assets and properties exceeds the amount of all debts and liabilities of such
Guarantor (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of such Guarantor hereunder) to (ii)
the amount by which the aggregate present fair salable value of all assets and
other properties of the Borrower and all of the Guarantors other than the maker
of such Excess Payment exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of the Borrower and the Guarantors hereunder) of
the Borrower and all of the Guarantors other than the maker of such Excess
Payment; provided, however, that, for purposes of calculating the Contribution
Shares of the Guarantors in respect of any Excess Payment, any Guarantor that
became a Guarantor subsequent to the date of any such Excess Payment shall be
deemed to have been a Guarantor on the date of such Excess Payment and the
financial information for such Guarantor as of the date such Guarantor became a
Guarantor shall be utilized for such Guarantor
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in connection with such Excess Payment. This Section 4.6 shall not be deemed
to affect any right of subrogation, indemnity, reimbursement or contribution
that any Guarantor may have under applicable law against the Borrower in
respect of any payment of Guaranteed Obligations. Notwithstanding the
foregoing, all rights of contribution against any Guarantor shall terminate
from and after such time, if ever, that such Guarantor shall be relieved of its
obligations pursuant to Section 8.4.
4.7 CONTINUING GUARANTEE.
The guarantee in this Section 4 is a continuing guarantee, and shall apply
to all Credit Party Obligations whenever arising.
4.8 LIMITATION OF LIABILITY OF PARENT.
Notwithstanding any provision to the contrary set forth in this Section 4,
in no event shall the Parent be liable or obligated, pursuant to the terms of
this Credit Agreement, for the liabilities of the Borrower under the Credit
Documents, except as may be specifically provided in the Pledge Agreement.
Nothing herein contained shall limit or be construed to (i) limit the
obligations and liabilities of the Parent in accordance with the terms of the
Pledge Agreement or (ii) affect or diminish any rights of any Person against
any other Person arising from misappropriation or misapplication of any funds
or for such other Person's fraud, gross negligence or willful misconduct. The
provisions of this Section 4.8 shall survive the termination of this Credit
Agreement.
SECTION 5
CONDITIONS
5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Credit Agreement and to
make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) Executed Credit Documents. Receipt by the Agent of duly
executed copies of: (i) this Credit Agreement; (ii) the Notes; (iii) the
Collateral Documents and (iv) all other Credit Documents, each in form
and substance acceptable to the Agent in its sole discretion.
(b) Corporate Documents. Receipt by the Agent of the following:
(i) Charter Documents. Copies of the articles or certificates
of incorporation or other charter documents of each Credit Party
certified to be true
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and complete as of a recent date by the appropriate Governmental
Authority of the state or other jurisdiction of its incorporation
and certified by a secretary or assistant secretary of such Credit
Party to be true and correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws of each Credit Party
certified by a secretary or assistant secretary of such Credit
Party to be true and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the Board of
Directors of each Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated
therein and authorizing execution and delivery thereof, certified
by a secretary or assistant secretary of such Credit Party to be
true and correct and in force and effect as of the Closing Date.
(iv) Good Standing. Copies of certificates of good standing,
existence or its equivalent with respect to each Credit Party
certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of incorporation and
each other jurisdiction in which the failure to so qualify and be
in good standing would be reasonably likely to have a Material
Adverse Effect.
(v) Incumbency. An incumbency certificate of each Credit
Party certified by a secretary or assistant secretary to be true
and correct as of the Closing Date.
(c) Financial Statements. Receipt by the Agent and the Lenders of
(i) a satisfactory pro forma consolidated balance sheet (as of September
30, 1997) and income statement (for the four fiscal quarters ended
September 30, 1997) of the Borrower giving effect to the acquisition of
Arbor and the transactions contemplated by the Merger Agreement and
reflecting estimated purchase price accounting adjustments, (which pro
forma income statement shall indicate a Consolidated EBITDA of a least
$160 million) and (ii) such other information relating to the Borrower
and its Subsidiaries or Arbor as the Agent may reasonably require in
connection with the structuring and syndication of credit facilities of
the type described herein.
(d) Opinion of Counsel.
(i) a legal opinion of Xxxxxxx Xxxx Slate Xxxxxxx & Xxxx,
general counsel for the Credit Parties, substantially in the form
of Schedule 5.1(d)(i); and
(ii) a legal opinion of special local counsel for each Credit
Party not incorporated in the State of New York or Delaware,
substantially in the form of Schedule 5.1(d)(ii).
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(e) Environmental Information. The Agent shall be satisfied with
any available environmental assessment reports and related documents of a
recent date with respect to all Real Properties and all other material
real property owned or leased by the Parent, any Consolidated Party,
Arbor or any of Arbor's Subsidiaries.
(f) Personal Property Collateral. The Agent shall have received:
(i) all stock certificates evidencing the Capital Stock
pledged to the Agent pursuant to the Pledge Agreement, together
with duly executed in blank undated stock powers attached thereto;
and
(ii) duly executed consents as are necessary, in the Agent's
sole discretion, to perfect the Lenders' security interest in the
Collateral.
(g) Corporate Structure. The corporate capital and ownership
structure of the Parent and the Consolidated Parties (after giving effect
to consummation of the Tender Offer on the Closing Date) shall be as
described in Schedule 5.1(g).
(h) Equity Investment. Receipt by the Agent of evidence that a cash
equity investment of at least $45 million shall have been made in the
Borrower by the Parent on terms that are satisfactory to the Agent.
(i) Government Consent. Receipt by the Agent of evidence that all
governmental, shareholder and material third party consents (including,
without limitation, (i) Xxxx-Xxxxx-Xxxxxx clearance and (ii) the consent
of any existing lender, lessor and/or bondholder to the extent that any
such Indebtedness to such Person is to remain in place after the Closing
Date) and approvals necessary or desirable in connection with the
acquisition of Arbor and the related financings and other transactions
contemplated hereby and expiration of all applicable waiting periods
without any action being taken by any authority that would be reasonably
likely to restrain, prevent or impose any material adverse conditions on
the acquisition of Arbor or such other transactions or that would be
reasonably likely to seek or threaten any of the foregoing, and no law or
regulation shall be applicable which in the judgment of the Agent would
be reasonably likely to have such effect.
(j) Material Adverse Effect. No material adverse change shall have
occurred since December 31, 1996 in the condition (financial or
otherwise), business, management or prospects of the Parent and the
Consolidated Parties taken as a whole or Arbor and Arbor's Subsidiaries
taken as a whole.
(k) Litigation. There shall not exist (i) any order, decree,
judgment, ruling or injunction which restrains the consummation of the
acquisition of Arbor in the manner contemplated by the Merger Agreement
or (ii) any pending or threatened action, suit, investigation or
proceeding against the Parent, any Consolidated Party, Arbor or any of
Arbor's Subsidiaries that would be reasonably likely to have a Material
Adverse Effect.
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(l) Other Indebtedness. Receipt by the Agent of evidence that,
after the acquisition of Arbor, the Parent and the Consolidated Parties
shall have no Funded Indebtedness other than (i) the Indebtedness under
the Credit Documents and (ii) the Indebtedness described on Schedule 8.1
(including Indebtedness of Arbor).
(m) Merger Agreement and Tender Offer. There shall not have been
any material modification, amendment, supplement or waiver to the Merger
Agreement or any other document executed in connection with the Tender
Offer (together with the Merger Agreement, the "Purchase Documents")
without the prior written consent of the Agent, including, but not
limited to, any modification, amendment, supplement or waiver relating to
the amount or type of consideration to be paid in connection with the
acquisition of Arbor and the contents of all disclosure schedules and
exhibits, and the acquisition of at least 51% of the outstanding shares
of capital stock of Arbor shall have been consummated in accordance with
the terms of the Tender Offer (without waiver or modification of any
conditions precedent, representations or warranties of the buyer
thereunder, unless approved in writing by the Agent) and the purchase
price paid for said shares of Arbor shall not exceed $45 per share. The
Agent shall have received final Purchase Documents, together with all
exhibits and schedules thereto, certified by an officer of the Borrower.
(n) Change in Market. The absence of any material disruption of, or
a material adverse change in, financial, banking or capital market
conditions in the U.S. and Canada.
(o) Officer's Certificates. The Agent shall have received a
certificate or certificates executed by an Executive Officer of the
Borrower as of the Closing Date stating that (A) the Parent and each
Consolidated Party is in compliance with all existing financial
obligations, (B) all governmental, shareholder and third party consents
and approvals, if any, with respect to the Credit Documents and the
transactions contemplated thereby have been obtained, (C) no action,
suit, investigation or proceeding is pending or threatened in any court
or before any arbitrator or governmental instrumentality that purports to
affect the Parent or any Consolidated Party or any transaction
contemplated by the Credit Documents, if such action, suit, investigation
or proceeding would be reasonably likely to have a Material Adverse
Effect, (D) the transactions contemplated by the Tender Offer have been
consummated in accordance with the terms thereof and (E) immediately
after giving effect to consummation of the Tender Offer on the Closing
Date and the initial borrowings under the Credit Documents (1) each of
the Credit Parties is Solvent, (2) no Default or Event of Default exists,
(3) all representations and warranties contained herein and in the other
Credit Documents are true and correct in all material respects, and (4)
the Credit Parties are in compliance with each of the financial covenants
set forth in Section 7.11.
(p) Fees and Expenses. Payment by the Credit Parties of all fees
and expenses owed by them to the Lenders and the Agent, including,
without limitation, payment to the Agent of the fees set forth in the Fee
Letter.
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(q) Refinancing. The Agent shall have received evidence to its
satisfaction that the Borrower shall have refinanced all but $75 million
of its existing Indebtedness as of the Closing Date with the proceeds of
the initial Loans made hereunder.
(r) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender, including, but not limited to, information regarding litigation,
tax, accounting, labor, insurance, pension liabilities (actual or
contingent), real estate leases, material contracts, debt agreements,
property ownership and contingent liabilities of the Parent, the
Consolidated Parties, Arbor or any of Arbor's Subsidiaries.
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligations of each Lender to make, convert or extend any Loan and of
the Issuing Lender to issue or extend any Letter of Credit (including the
initial Loans and the initial Letters of Credit) are subject to satisfaction of
the following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:
(a) The Borrower shall have delivered (i) in the case of any
Revolving Loan, any portion of the Tranche A Term Loan, any portion of
the Tranche B Term Loan or any portion of the Tranche C Term Loan, an
appropriate Notice of Borrowing or Notice of Extension/Conversion or (ii)
in the case of any Letter of Credit, the Issuing Lender shall have
received an appropriate request for issuance in accordance with the
provisions of Section 2.2(b);
(b) The representations and warranties set forth in Section 6 shall,
subject to the limitations set forth therein, be true and correct in all
material respects as of such date (except for those which expressly
relate to an earlier date);
(c) There shall not have been commenced against any Credit Party an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or any case, proceeding or other
action for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or for the winding up or
liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged or
unbonded;
(d) No Default or Event of Default shall exist and be continuing
either prior to or after giving effect thereto;
(e) No development or event which has had or would be reasonably
likely to have a Material Adverse Effect shall have occurred since
December 31, 1996;
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(f) Immediately after giving effect to the making of such Loan (and
the application of the proceeds thereof) or to the issuance of such
Letter of Credit, as the case may be, (i) the sum of the aggregate
principal amount of outstanding Revolving Loans plus LOC Obligations
outstanding shall not exceed the Revolving Committed Amount, and (ii) the
LOC Obligations shall not exceed the LOC Committed Amount; and
(g) With respect to the second advance of the Tranche A Term Loan as
provided in Section 2.3(a), (i) the merger of AHC into Arbor shall have
been consummated in accordance with Section 7.15 and pursuant to the
terms of the Merger Agreement and (ii) the Agent shall have received
satisfactory evidence that all existing Indebtedness of Arbor other than
(A) the Indebtedness under the Credit Documents and (B) the Indebtedness
described on Schedule 8.1 has been paid in full.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit pursuant to Section 2.2(b) shall
constitute a representation and warranty by the Borrower of the correctness of
the matters specified in subsections (b), (c), (d), (e) and (f) above, and the
delivery of the Notice of Borrowing with respect to the second advance of the
Tranche A Term Loan shall constitute a representation and warranty by the
Borrower of the correctness of the matters specified in subsection (g) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 FINANCIAL CONDITION.
(a) The audited consolidated and consolidating balance sheet of the
Consolidated Parties as of December 31, 1996 and the audited consolidated
and consolidating statements of earnings and statements of cash flows for
the years ended December 31, 1995 and December 31, 1996 have heretofore
been furnished to each Lender. Such financial statements (including the
notes thereto) (i) have been audited by KPMG Peat Marwick LLP, (ii) have
been prepared in accordance with GAAP consistently, applied throughout
the periods covered thereby and (iii) present fairly (on the basis
disclosed in the footnotes to such financial statements) the consolidated
financial condition, results of operations and cash flows of the
Consolidated Parties as of such date and for such periods. The unaudited
interim balance sheets of the Consolidated Parties as at the end of, and
the related unaudited interim statements of earnings and of cash flows
for, each quarterly period ended after December 31, 1996 and prior to the
Closing Date have heretofore been furnished to each Lender. Such interim
financial statements for each such quarterly period, (i) have been
prepared in accordance with GAAP consistently applied throughout the
periods covered thereby and (ii) present fairly (on the basis disclosed
in the footnotes to such financial statements) the consolidated and
consolidating
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financial condition, results of operations and cash flows of the
Consolidated Parties as of such date and for such periods. During the
period from December 31, 1996 to and including the Closing Date, there
has been no sale, transfer or other disposition by the Parent or any
Consolidated Party of any material part of the business or property of
the Parent and the Consolidated Parties, taken as a whole, and no
purchase or other acquisition by any of them of any business or property
(including any capital stock of any other person) material in relation to
the consolidated financial condition of the Consolidated Parties, taken
as a whole, in each case, which, is not reflected in the foregoing
financial statements or in the notes thereto and has not otherwise been
disclosed in writing to the Lenders on or prior to the Closing Date.
(b) The pro forma consolidated balance sheet of the Consolidated
Parties as of September 30, 1997 giving effect to the Acquisition in
accordance with the terms of the Merger Agreement and reflecting
estimated purchase price accounting adjustments, has heretofore been
furnished to each Lender. Such pro forma balance sheet is based upon
reasonable assumptions made known to the Lenders and upon information not
known by any Credit Party to be incorrect or misleading in any material
respect.
(c) The financial statements delivered to the Lenders pursuant to
Section 7.1(a) and (b), (i) have been prepared in accordance with GAAP
(except as may otherwise be permitted under Section 7.1(a) and (b)) and
(ii) present fairly (on the basis disclosed in the footnotes to such
financial statements) the consolidated and consolidating financial
condition, results of operations and cash flows of the Consolidated
Parties as of such date and for such periods.
6.2 NO MATERIAL CHANGE.
Since December 31, 1996 (with respect to the Parent, the Borrower and the
Subsidiaries of the Borrower other than Arbor and the Subsidiaries of Arbor)
and since the Closing Date (with respect to Arbor and the Subsidiaries of
Arbor), (a) there has been no development or event relating to or affecting the
Parent or a Consolidated Party which has had or would be reasonably likely to
have a Material Adverse Effect and (b) except for the Acquisition of Arbor by
the Borrower pursuant to the Tender Offer and the Merger Agreement and except
as otherwise permitted under this Credit Agreement, no dividends or other
distributions (other than a dividend in an aggregate amount of $1,639,000 paid
upon the Capital Stock in the Borrower on October 31, 1997) have been declared,
paid or made upon the Capital Stock in the Parent or a Consolidated Party nor
has any of the Capital Stock in the Parent or a Consolidated Party been
redeemed, retired, purchased or otherwise acquired for value.
6.3 ORGANIZATION AND GOOD STANDING.
Each of the Parent and the Consolidated Parties (a) is duly organized,
validly existing and is in good standing under the laws of the jurisdiction of
its incorporation or organization, (b) has the corporate or other necessary
power and authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which
it is
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currently engaged and (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing would not be reasonably likely to have a
Material Adverse Effect.
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Credit Parties has the corporate or other necessary power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery
and performance of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained
or made by or on behalf of any Credit Party in connection with the borrowings
or other extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of the Credit Documents to which such
Credit Party is a party, except for (i) consents, authorizations, notices and
filings described in Schedule 6.4, all of which have been obtained or made or
have the status described in such Schedule 6.4 and (ii) filings to perfect the
Liens created by the Collateral Documents. This Credit Agreement has been, and
each other Credit Document to which any Credit Party is a party will be, duly
executed and delivered on behalf of the Credit Parties. This Credit Agreement
constitutes, and each other Credit Document to which any Credit Party is a
party when executed and delivered will constitute, a legal, valid and binding
obligation of such Credit Party enforceable against such party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).
6.5 NO CONFLICTS.
Except as disclosed in Schedule 6.5, neither the execution and delivery of
the Credit Documents, nor the consummation of the transactions contemplated
therein, nor performance of and compliance with the terms and provisions
thereof by such Credit Party will (a) violate or conflict with any provision of
its articles or certificate of incorporation or bylaws or other organizational
or governing documents of such Person, (b) materially violate, contravene or
conflict with any Requirement of Law or any other law, regulation (including,
without limitation, Regulation U, Regulation G or Regulation X), order, writ,
judgment, injunction, decree or permit applicable to it, (c) violate,
contravene or conflict with contractual provisions of, or cause an event of
default under, any indenture, loan agreement, mortgage, deed of trust, contract
or other agreement or instrument to which it is a party or by which it may be
bound, the violation of which would be reasonably to have a Material Adverse
Effect, or (d) result in or require the creation of any Lien (other than those
contemplated in or created in connection with the Credit Documents) upon or
with respect to its properties.
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6.6 NO DEFAULT.
Neither the Parent nor any Consolidated Party is in default in any respect
under any contract, lease, loan agreement, indenture, mortgage, security
agreement or other agreement or obligation to which it is a party or by which
any of its properties is bound which default would be reasonably likely to have
a Material Adverse Effect. No Default or Event of Default has occurred or
exists except as previously disclosed in writing to the Lenders.
6.7 OWNERSHIP.
Each of the Parent and the Consolidated Parties is the owner of, and has
good and marketable title to, all of its respective assets and none of such
assets (except for any Capital Stock or Property of an Unconsolidated
Subsidiary) is subject to any Lien other than Permitted Liens.
6.8 INDEBTEDNESS.
Except as otherwise permitted under Section 8.1, neither the Parent nor
any Consolidated Party has any Indebtedness.
6.9 LITIGATION.
Except as disclosed in Schedule 6.9, there are no actions, suits or legal,
equitable, arbitration or administrative proceedings, pending or, to the
knowledge of any Credit Party, threatened against the Parent or any
Consolidated Party which would be reasonably likely to have a Material Adverse
Effect.
6.10 TAXES.
Each of the Parent and the Consolidated Parties has filed, or caused to be
filed, all tax returns (federal, state, local and foreign) required to be filed
and paid (a) all amounts of taxes shown thereon to be due (including interest
and penalties) and (b) all other taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) owing by it, except for such taxes (i) which are
not yet delinquent, (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP, (iii) for which such Credit Party has been fully
indemnified in a manner reasonably acceptable to the Agent or (iv) such minor
taxes involving not more than $50,000 in potential liability in any particular
instance (or more than $500,000 in the aggregate) imposed by any state or
political subdivision thereof or by the United States government or any
political subdivision thereof. No Credit Party is aware as of the Closing Date
of any proposed tax assessments against the Parent or any Consolidated Party.
6.11 COMPLIANCE WITH LAW.
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Each of the Parent and the Consolidated Parties is in compliance with all
Requirements of Law and all other laws, rules, regulations, orders and decrees
(including without limitation Environmental Laws) applicable to it, or to its
properties, unless such failure to comply would not be reasonably likely to
have a Material Adverse Effect. No Requirement of Law would be reasonably
likely to cause a Material Adverse Effect.
6.12 ERISA.
Except as disclosed and described in Schedule 6.12 attached hereto:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the best knowledge of the Credit Parties, no event or condition
has occurred or exists as a result of which any ERISA Event could
reasonably be expected to occur, with respect to any Plan; (ii) no
"accumulated funding deficiency," as such term is defined in Section 302
of ERISA and Section 412 of the Code, whether or not waived, has occurred
with respect to any Plan; (iii) each Plan has been maintained, operated,
and funded in compliance with its own terms and in material compliance
with the provisions of ERISA, the Code, and any other applicable federal
or state laws; and (iv) no lien in favor of the PBGC or a Plan has arisen
or is reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under
each Single Employer Plan, as of the last annual valuation date prior to
the date on which this representation is made or deemed made (determined,
in each case, in accordance with Financial Accounting Standards Board
Statement 87, utilizing the actuarial assumptions used in such Plan's
most recent actuarial valuation report), did not exceed as of such
valuation date the fair market value of the assets of such Plan.
(c) Neither the Parent, any Consolidated Party nor any ERISA
Affiliate has incurred, or, to the best knowledge of the Credit Parties,
could be reasonably expected to incur, any withdrawal liability under
ERISA to any Multiemployer Plan or Multiple Employer Plan. Neither the
Parent, any Consolidated Party nor any ERISA Affiliate would become
subject to any withdrawal liability under ERISA if the Parent, any
Consolidated Party or any ERISA Affiliate were to withdraw completely
from all Multiemployer Plans and Multiple Employer Plans as of the
valuation date most closely preceding the date on which this
representation is made or deemed made. Neither the Parent, any
Consolidated Party nor any ERISA Affiliate has received any notification
that any Multiemployer Plan is in reorganization (within the meaning of
Section 4241 of ERISA), is insolvent (within the meaning of Section 4245
of ERISA), or has been terminated (within the meaning of Title IV of
ERISA), and no Multiemployer Plan is, to the best knowledge of the Credit
Parties, reasonably expected to be in reorganization, insolvent, or
terminated.
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(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
has occurred with respect to a Plan which has subjected or may subject
the Parent, any Consolidated Party or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section
4975 of the Code, or under any agreement or other instrument pursuant to
which the Parent, any Consolidated Party or any ERISA Affiliate has
agreed or is required to indemnify any person against any such liability.
(e) Neither the Parent, any Consolidated Party nor any ERISA
Affiliates has any material liability with respect to "expected
post-retirement benefit obligations" within the meaning of the Financial
Accounting Standards Board Statement 106. Each Plan which is a welfare
plan (as defined in Section 3(1) of ERISA) to which Sections 601-609 of
ERISA and Section 4980B of the Code apply has been administered in
compliance in all material respects of such sections.
(f) Neither the execution and delivery of this Credit Agreement nor
the consummation of the financing transactions contemplated thereunder
will involve any transaction which is subject to the prohibitions of
Sections 404, 406 or 407 of ERISA or in connection with which a tax could
be imposed pursuant to Section 4975 of the Code. The representation by
the Credit Parties in the preceding sentence is made in reliance upon and
subject to the accuracy of the Lenders' representation in Section 11.15
with respect to their source of funds and is subject, in the event that
the source of the funds used by the Lenders in connection with this
transaction is an insurance company's general asset account, to the
application of Prohibited Transaction Class Exemption 95-60, 60 Fed. Reg.
35,925 (1995), compliance with the regulations issued under Section
401(c)(1)(A) of ERISA, or the issuance of any other prohibited
transaction exemption or similar relief, to the effect that assets in an
insurance company's general asset account do not constitute assets of an
"employee benefit plan" within the meaning of Section 3(3) of ERISA of a
"plan" within the meaning of Section 4975(e)(1) of the Code.
6.13 SUBSIDIARIES.
Set forth on Schedule 6.13 is a complete and accurate list of all
Subsidiaries of each Credit Party and each of its Subsidiaries (except, in the
case of the Parent, only information regarding the Borrower shall be set
forth). Information on Schedule 6.13 includes jurisdiction of incorporation,
the number of shares of each class of Capital Stock outstanding, the number and
percentage of outstanding shares of each class owned (directly or indirectly)
by such Credit Party; and the number and effect, if exercised, of all
outstanding options, warrants, rights of conversion or purchase and all other
similar rights with respect thereto. The outstanding Capital Stock of all such
Subsidiaries is validly issued, fully paid and non-assessable and is owned by
each such Credit Party, directly or indirectly, free and clear of all Liens
(other than those arising under or contemplated in connection with the Credit
Documents). Other than as set forth in Schedule 6.13, no Consolidated Party
has outstanding any securities convertible into or exchangeable for its Capital
Stock nor does any such Person have outstanding any rights to subscribe for or
to purchase or any options for the purchase of, or any agreements providing for
the issuance
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(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to its Capital Stock.
6.14 GOVERNMENTAL REGULATIONS, ETC.
(a) Except as described in Section 2.6, no part of the Letters of
Credit or proceeds of the Loans will be used, directly or indirectly, for
the purpose of purchasing or carrying any "margin stock" within the
meaning of Regulation G or Regulation U, or for the purpose of purchasing
or carrying or trading in any securities. The Borrower will furnish to
the Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in Regulation
U or FR Form G-3 referred to in Regulation G. No indebtedness being
reduced or retired out of the proceeds of the Loans was or will be
incurred for the purpose of purchasing or carrying any margin stock
within the meaning of Regulation U or Regulation G or any "margin
security" within the meaning of Regulation T. "Margin stock" within the
meaning of Regulation U and Regulation G does not constitute more than
25% of the value of the consolidated assets of the Consolidated Parties.
None of the transactions contemplated by this Credit Agreement
(including, without limitation, the direct or indirect use of the
proceeds of the Loans) will violate or result in a violation of the
Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, or regulations issued pursuant thereto, or Regulation
G, T, U or X.
(b) Neither the Parent nor any Consolidated Party is subject to
regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act or the Investment Company Act of 1940, each as amended.
In addition, neither the Parent nor any Consolidated Party is (i) an
"investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, and is not controlled by such
a company, or (ii) a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a
"subsidiary" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(c) No director, executive officer or principal shareholder of the
Parent or any Consolidated Party is a director, executive officer or
principal shareholder of any Lender. For the purposes hereof the terms
"director", "executive officer" and "principal shareholder" (when used
with reference to any Lender) have the respective meanings assigned
thereto in Regulation O issued by the Board of Governors of the Federal
Reserve System.
(d) Each of the Parent and the Consolidated Parties has obtained and
holds in full force and effect, all franchises, licenses, permits,
certificates or determinations of need, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other
rights, consents and approvals which are necessary for the ownership of
its respective Property and to the conduct of its respective businesses
as presently conducted, none of which have been revoked or suspended or
otherwise limited, nor, except as set forth on Schedule 6.14(d), is the
Parent or any Consolidated Party aware of any action to revoke, suspend,
or limit the same.
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(e) Neither the Parent nor any Consolidated Party is in violation of
any applicable statute, regulation or ordinance of the United States of
America, or of any state, city, town, municipality, county or any other
jurisdiction, or of any agency thereof (including without limitation,
environmental laws and regulations), which violation would be reasonably
likely to have a Material Adverse Effect.
(f) Each of the Parent and the Consolidated Parties is current with
all material reports and documents, if any, required to be filed with any
state or federal securities commission or similar agency and is in full
compliance in all material respects with all applicable rules and
regulations of such commissions.
6.15 PURPOSE OF LOANS AND LETTERS OF CREDIT.
The proceeds of the Loans hereunder shall be used solely by the Borrower
(i) to refinance the outstanding principal balance of certain existing Funded
Indebtedness of the Borrower and its Subsidiaries set forth on Schedule 6.15
and certain existing Funded Indebtedness of Arbor and its Subsidiaries set
forth on Schedule 6.15 (collectively, the "Refinancing"), (ii) to pay fees and
expenses in connection with the acquisition of Arbor and the Refinancing in an
aggregate amount not to exceed $30 million, (iii) to finance the purchase of
shares (and options to exercise such shares) of Arbor pursuant to the Tender
Offer and the consummation of the Merger pursuant to the Merger Agreement and
(iv) for working capital and general corporate purposes. The Letters of Credit
shall be used only for or in connection with appeal bonds, reimbursement
obligations arising in connection with industrial revenue, surety and
reclamation bonds, reinsurance, domestic or international trade transactions
and obligations not otherwise aforementioned relating to transactions entered
into by the applicable account party in the ordinary course of business.
6.16 REIMBURSEMENT FROM THIRD PARTY PAYORS.
Each of the Parent and the Consolidated Parties is in compliance with the
written material reimbursement policies, rules and regulations of third party
payors such as Medicare, Medicaid, private insurance companies, health
maintenance organizations, preferred provider organizations, managed care
systems and other third party payors, including, without limitation,
adjustments under any capitation arrangement, fee schedule, discount formula or
cost-based reimbursement the failure to comply with which would be reasonably
likely to have a Material Adverse Effect.
6.17 FRAUD AND ABUSE.
Neither the Parent nor any Consolidated Party, nor any stockholder,
officer or director, acting on behalf of the Parent or any Consolidated Party,
has engaged on behalf of the Parent or any Consolidated Party in any of the
following, except where there would likely be no Material Adverse Effect: (i)
knowingly and willfully making or causing to be made a false statement or
representation of a material fact in any applications for any benefit or
payment under Medicare or Medicaid programs; (ii) knowingly and willfully
making or causing to be made any false statement or representation of a
material fact for use in determining rights to any benefit or payment under
Medicare or Medicaid programs; (iii) any knowing and willful failure by any
Consolidated Party to disclose to the appropriate
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government contractor any material overpayment or other improper payment
received from the Medicare and Medicaid program; or (iv) any knowing and
willful violation of the Federal and State anti-kick-back or fraud and abuse
laws, the regulations promulgated thereunder, or the Xxxxx I and II laws, and
regulations promulgated thereunder.
6.18 ENVIRONMENTAL MATTERS.
Except as disclosed and described in Schedule 6.18 attached hereto:
(a) Each of the facilities and properties owned, leased or operated
by the Parent or any Consolidated Party (the "Real Properties") and all
operations at the Real Properties are in compliance with all applicable
Environmental Laws, and there is no material violation of any
Environmental Law with respect to the Real Properties or the businesses
operated by the Parent or the Consolidated Parties (the "Businesses"),
and there are no conditions relating to the Businesses or Real Properties
that would be reasonably likely to give rise to any material liability
under any applicable Environmental Laws.
(b) None of the Real Properties contains, or has previously
contained, any Materials of Environmental Concern at, on or under the
Real Properties in amounts or concentrations that constitute or
constituted a material violation of, or would be reasonably likely to
give rise to material liability under, Environmental Laws.
(c) Neither the Parent nor any Consolidated Party has received any
written or verbal notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Real Properties or the
Businesses, nor does the Parent or any Consolidated Party have knowledge
or reason to believe that any such notice will be received or is being
threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Real Properties, or generated, treated, stored or
disposed of at, on or under any of the Real Properties or any other
location, in each case by or on behalf of the Parent or any Consolidated
Party in violation of, or in a manner that would be reasonably likely to
give rise to material liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative action
is pending or, to the best knowledge of any Credit Party, threatened,
under any Environmental Law to which the Parent or any Consolidated Party
is or will be named as a party, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Parent, the Consolidated Parties,
the Real Properties or the Businesses.
(f) There has been no release or, threat of release of Materials of
Environmental Concern at or from the Real Properties, or arising from or
related to the
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operations (including, without limitation, disposal) of the Parent or any
Consolidated Party in connection with the Real Properties or otherwise in
connection with the Businesses, in violation of or in amounts or in a
manner that would be reasonably likely to give rise to material liability
under Environmental Laws.
6.19 INTELLECTUAL PROPERTY.
Each of the Parent and the Consolidated Parties owns, or has the legal
right to use, all trademarks, tradenames, copyrights, technology, know-how and
processes (the "Intellectual Property") necessary for each of them to conduct
its business as currently conducted except for those the failure to own or have
such legal right to use would not be reasonably likely to have a Material
Adverse Effect. Except as provided on Schedule 6.19, no claim has been
asserted and is pending by any Person challenging or questioning the use of any
such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does any Credit Party know of any such claim, and to
the Credit Parties' knowledge the use of such Intellectual Property by the
Parent or any Consolidated Party does not infringe on the rights of any Person,
except for such claims and infringements that in the aggregate, would not be
reasonably likely to have a Material Adverse Effect.
6.20 SOLVENCY.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement (including without limitation the
acquisition of Arbor by the Borrower), will be Solvent.
6.21 INVESTMENTS.
All Investments of each of the Parent and the Consolidated Parties are
Permitted Investments.
6.22 DISCLOSURE.
Neither this Credit Agreement nor any financial statements delivered to
the Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of the Parent or any Consolidated Party in connection
with the transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained therein or herein not misleading.
6.23 NO BURDENSOME RESTRICTIONS.
Neither the Parent not any Consolidated Party is a party to any agreement
or instrument or subject to any other obligation or any charter or corporate
restriction or any provision of any applicable law, rule or regulation which,
individually or in the aggregate, would be reasonably likely to have a Material
Adverse Effect.
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6.24 BROKERS' FEES.
Except as disclosed and described in Schedule 6.24 attached hereto,
neither the Parent nor any Consolidated Party has any obligation to any Person
in respect of any finder's, broker's, investment banking or other similar fee
in connection with any of the transactions contemplated under the Credit
Documents.
6.25 LABOR MATTERS.
Except as disclosed and described in Schedule 6.25 attached hereto, there
are no collective bargaining agreements or Multiemployer Plans covering the
employees of the Parent or any Consolidated Party as of the Closing Date and,
except for matters the aggregate cost of which to the Consolidated Parties does
not exceed $2,500,000, neither the Parent nor any Consolidated Party has
suffered any strikes, walkouts, work stoppages or other material labor
difficulty within the last five years which have had or would be reasonably
likely to have a Material Adverse Effect.
6.26 NATURE OF BUSINESS.
As of the Closing Date, each of the Parent and the Consolidated Parties is
engaged in the businesses within the health care industry, including providing
long-term care in owned, leased and managed long-term care and retirement
facilities, providing ancillary services to those in residence at such
long-term care facilities and providing assisted living and home care products
and services.
6.27 REPRESENTATIONS AND WARRANTIES FROM MERGER AGREEMENT.
As of the Closing Date, each of the representations and warranties made in
the Merger Agreement by Extendicare and AHC and Arbor is true and correct in
all material respects.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 INFORMATION COVENANTS.
The Borrower will furnish, or cause to be furnished, to the Agent and each
of the Lenders:
(a) Annual Financial Statements. As soon as available, and in any
event within 90 days after the close of each fiscal year of the
Consolidated Parties, a consolidated
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balance sheet and income statement of the Consolidated Parties, as of the
end of such fiscal year, together with related consolidated statements of
operations and retained earnings and of cash flows for such fiscal year,
setting forth in comparative form consolidated figures for the preceding
fiscal year, all such financial information described above to be in
reasonable form and detail and audited by independent certified public
accountants of recognized national standing reasonably acceptable to the
Agent and whose opinion shall be to the effect that such financial
statements have been prepared in accordance with GAAP (except for changes
with which such accountants concur) and shall not be limited as to the
scope of the audit or qualified as to the status of the Consolidated
Parties as a going concern.
(b) Quarterly Financial Statements. As soon as available, and in
any event within 45 days after the close of each fiscal quarter of the
Consolidated Parties (other than the fourth fiscal quarter, in which case
90 days after the end thereof) a consolidated and consolidating balance
sheet and income statement of the Consolidated Parties, as of the end of
such fiscal quarter, together with related consolidated and consolidating
statements of operations and retained earnings and of cash flows for such
fiscal quarter in each case setting forth in comparative form
consolidated and consolidating figures for the corresponding period of
the preceding fiscal year, all such financial information described above
to be in reasonable form and detail and reasonably acceptable to the
Agent, and accompanied by a certificate of the chief financial officer of
the Borrower to the effect that such quarterly financial statements
fairly present in all material respects the financial condition of the
Consolidated Parties and have been prepared in accordance with GAAP,
subject to changes resulting from audit and normal year-end audit
adjustments.
(c) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a
certificate of the chief financial officer of the Borrower substantially
in the form of Exhibit 7.1(c), (i) demonstrating compliance with the
financial covenants contained in Section 7.11 by calculation thereof as
of the end of each such fiscal period and (ii) stating that no Default or
Event of Default exists, or if any Default or Event of Default does
exist, specifying the nature and extent thereof and what action the
Credit Parties propose to take with respect thereto.
(d) Annual Business Plan and Budgets. Within 30 days after the end
of each fiscal year of the Borrower, beginning with the fiscal year
ending December 31, 1998, an annual business plan and budget of the
Consolidated Parties containing, among other things, pro forma financial
statements for the next fiscal year and each fiscal quarter thereof.
(e) Compliance With Certain Provisions of the Credit Agreement.
Within 90 days after the end of each fiscal year of the Borrower, a
certificate containing information regarding the amount of all Asset
Dispositions, Debt Issuances and Equity Issuances that were made during
the prior fiscal year.
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(f) Accountant's Certificate. Within the period for delivery of the
annual financial statements provided in Section 7.1(a), a certificate of
the accountants conducting the annual audit stating that they have
reviewed this Credit Agreement and stating further whether, in the course
of their audit, they have become aware of any Default or Event of Default
and, if any such Default or Event of Default exists, specifying the
nature and extent thereof.
(g) Auditors' Reports. Promptly upon receipt thereof, a copy of any
other report or "management letter" submitted by independent accountants
to any Consolidated Party in connection with any annual, interim or
special audit of the books of such Person.
(h) Reports. Promptly upon transmission or receipt thereof, (i)
copies of any filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies
of all financial statements, proxy statements, notices and reports as any
Consolidated Party shall send to a holder of any Indebtedness owed by any
Consolidated Party in its capacity as such a holder and (ii) upon the
request of the Agent, all reports and written information to and from the
United States Environmental Protection Agency, or any state or local
agency responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or local
agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety
matters.
(i) Notices. Upon obtaining knowledge thereof, the Borrower will
give written notice to the Agent promptly of (i) the occurrence of an
event or condition consisting of a Default or Event of Default,
specifying the nature and existence thereof and what action the Credit
Parties propose to take with respect thereto, and (ii) the occurrence of
any of the following with respect to the Parent or any Consolidated Party
(A) the pendency or commencement of any litigation, arbitral or
governmental proceeding against such Person which if adversely determined
is reasonably likely to have a Material Adverse Effect, (B) the
institution of any proceedings (including but not limited to
investigations) against such Person with respect to, or the receipt of
notice by such Person of potential liability or responsibility for
violation, or alleged violation of any federal, state or local law, rule
or regulation of any Governmental Authority, including but not limited
to, Environmental Laws, the violation of which would be reasonably likely
to have a Material Adverse Effect, (C) any notice or determination
concerning the imposition of any material withdrawal liability by a
Multiemployer Plan against such Person or any ERISA Affiliate, the
determination that a Multiemployer Plan is, or is expected to be, in
reorganization within the meaning of Title IV of ERISA or the termination
of any Plan or (D) receipt by any Borrower or any of its Subsidiaries of
(1) any notice of loss of Joint Commission on Accreditation of Healthcare
Organizations accreditation, loss of participation under any material
reimbursement program or loss of applicable and material health care
licenses at any facility owned or leased or managed by the Borrower or
any of its Subsidiaries that would be reasonably likely to have a
Material Adverse Effect; and (2) any other material deficiency notice,
compliance order or adverse report issued by any Governmental Authority
or accreditation commission having jurisdiction over licensing,
accreditation or operation of any such facility or by any Governmental
Authority or private
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insurance company pursuant to a provider agreement, which, if not
promptly complied with or cured, would be reasonably likely to result in
a Material Adverse Effect.
(j) ERISA. Upon obtaining knowledge thereof, the Borrower will give
written notice to the Agent promptly (and in any event within five
business days) of: (i) of any event or condition, including, but not
limited to, any Reportable Event, that constitutes, or might reasonably
lead to, an ERISA Event; (ii) with respect to any Multiemployer Plan, the
receipt of notice as prescribed in ERISA or otherwise of any material
withdrawal liability assessed against the Borrower or any of its ERISA
Affiliates, or of a determination that any Multiemployer Plan is in
reorganization or insolvent (both within the meaning of Title IV of
ERISA); (iii) the failure to make full payment on or before the due date
(including extensions) thereof of all amounts which the Parent, any
Consolidated Party or any ERISA Affiliate is required to contribute to
each Plan pursuant to its terms and as required to meet the minimum
funding standard set forth in ERISA and the Code with respect thereto; or
(iv) any change in the funding status of any Plan that would be
reasonably likely to have a Material Adverse Effect, together with a
description of any such event or condition or a copy of any such notice
and a statement by the chief financial officer of the Borrower briefly
setting forth the details regarding such event, condition, or notice, and
the action, if any, which has been or is being taken or is proposed to be
taken by the Credit Parties with respect thereto. Promptly upon request,
the Credit Parties shall furnish the Agent and the Lenders with such
additional information concerning any Plan as may be reasonably
requested, including, but not limited to, copies of each annual
report/return (Form 5500 series), as well as all schedules and
attachments thereto required to be filed with the Department of Labor
and/or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each "plan year" (within the meaning of Section 3(39)
of ERISA).
(k) Environmental. The Credit Parties will cause the Consolidated
Parties to conduct and complete all investigations, studies, sampling,
and testing and all remedial, removal, and other actions necessary to
address all Materials of Environmental Concern on , from or affecting any
of the Real Properties to the extent necessary to be in compliance with
all Environmental Laws and with the validly issued orders and directives
of all Governmental Authorities with jurisdiction over such Real
Properties to the extent any failure would be reasonably likely to have a
Material Adverse Effect.
(l) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of the Parent or any Consolidated Party as the Agent
or the Required Lenders may reasonably request.
7.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, the
Credit Parties will cause each of the
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Parent and the Consolidated Parties to do all things necessary to preserve and
keep in full force and effect its existence, rights, franchises and authority.
7.3 BOOKS AND RECORDS.
The Credit Parties will cause each of the Parent and the Consolidated
Parties to keep complete and accurate books and records of its transactions in
accordance with good accounting practices on the basis of GAAP (including the
establishment and maintenance of appropriate reserves).
7.4 COMPLIANCE WITH LAW.
The Credit Parties will cause each of the Parent and the Consolidated
Parties to comply with all laws, rules, regulations and orders, and all
applicable restrictions imposed by all Governmental Authorities, applicable to
it and its Property, including but not limited to the Social Security Act,
Medicare Regulations, Medicaid Regulations, OSHA and applicable State license
and certificate of need or determination of need laws and regulations if
noncompliance with any such law, rule, regulation, order or restriction would
be reasonably likely to have a Material Adverse Effect. The Credit Parties
will cause each of the Consolidated Parties to implement a compliance program
meeting applicable U.S. sentencing guidelines within 60 days of the Closing
Date.
7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
The Credit Parties will cause each of the Parent and the Consolidated
Parties to pay and discharge (a) all taxes, assessments and governmental
charges or levies imposed upon it, or upon its income or profits, or upon any
of its properties, before they shall become delinquent, (b) all lawful claims
(including claims for labor, materials and supplies) which, if unpaid, would
likely give rise to a Lien upon any of its properties, and (c) except as
prohibited hereunder, all of its other Indebtedness as it shall become due;
provided, however, that neither the Parent nor any Consolidated Party shall be
required to pay any such tax, assessment, charge, levy, claim or Indebtedness
which is being contested in good faith by appropriate proceedings and as to
which adequate reserves therefor have been established in accordance with GAAP,
unless the failure to make any such payment (i) would be reasonably likely to
give rise to an immediate right to foreclose on a Lien securing such amounts or
(ii) would be reasonably likely to have a Material Adverse Effect.
7.6 INSURANCE.
The Credit Parties will cause each of the Parent and the Consolidated
Parties to at all times maintain in full force and effect insurance (including
worker's compensation insurance, liability insurance, casualty insurance and
business interruption insurance) in such amounts, covering such risks and
liabilities and with such deductibles or self-insurance retentions as are in
accordance with normal industry practice (or as otherwise required by the
Collateral Documents). The Agent shall be named as loss payee or mortgagee, as
its interest may appear, and/or additional insured with respect to any such
insurance providing coverage in respect of any
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Collateral, and each provider of any such insurance shall agree, by endorsement
upon the policy or policies issued by it or by independent instruments
furnished to the Agent, that it will give the Agent thirty (30) days prior
written notice before any such policy or policies shall be altered or canceled,
and that no act or default of the Parent, any Consolidated Party or any other
Person shall affect the rights of the Agent or the Lenders under such policy or
policies. The present insurance coverage of the Parent and the Consolidated
Parties is outlined as to carrier, policy number, expiration date, type and
amount on Schedule 7.6.
7.7 MAINTENANCE OF PROPERTY.
The Credit Parties will cause each of the Parent and the Consolidated
Parties to maintain and preserve its properties and equipment material to the
conduct of its business in good repair, working order and condition, normal
wear and tear and casualty and condemnation excepted, and will make, or cause
to be made, in such properties and equipment from time to time all repairs,
renewals, replacements, extensions, additions, betterments and improvements
thereto as may be needed or proper, to the extent and in the manner customary
for companies in similar businesses.
7.8 PERFORMANCE OF OBLIGATIONS.
The Credit Parties will cause each of the Parent and the Consolidated
Parties to perform in all material respects all of its obligations under the
terms of all material agreements, indentures, mortgages, security agreements or
other debt instruments to which it is a party or by which it is bound.
7.9 USE OF PROCEEDS.
The Borrower will use the proceeds of the Loans and will use the Letters
of Credit solely for the purposes set forth in Section 6.15.
7.10 AUDITS/INSPECTIONS.
The Credit Parties will cause each of the Parent and the Consolidated
Parties to permit, upon reasonable notice and during normal business hours,
representatives appointed by the Agent, including, without limitation,
independent accountants, agents, attorneys, and appraisers to visit and inspect
its property, including its books and records, its accounts receivable and
inventory, its facilities and its other business assets, and to make
photocopies or photographs thereof and to write down and record any information
such representative obtains and shall permit the Agent or its representatives
to investigate and verify the accuracy of information provided to the Lenders
and to discuss all such matters with the officers, employees and
representatives of such Person; provided, however, that so long as no Event of
Default is then continuing, such inspections shall be limited to once per
calendar year.
7.11 FINANCIAL COVENANTS.
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(a) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio,
as of the last day of each fiscal quarter of the Consolidated Parties,
shall be greater than or equal to:
(i) as of December 31, 1997, March 31, 1998, June 30, 1998,
September 30, 1998, December 31, 1998, March 31, 1999, June 30,
1999 and September 30, 1999, 1.30 to 1.00;
(ii) as of December 31, 1999, March 31, 2000, June 30, 2000
and September 30, 2000, 1.35 to 1.00;
(iii) as of December 31, 2000, March 31, 2001, June 30, 2001
and September 30, 2001, 1.40 to 1.00;
(iv) as of December 31, 2001, March 31, 2002, June 30, 2002,
September 30, 2002, December 31, 2002, March 31, 2003, June 30,
2003 and September 30, 2003, 1.45 to 1.00; and
(v) as of December 31, 2003 and the last day of each fiscal
quarter of the Consolidated Parties thereafter, 1.50 to 1.00.
(b) Senior Leverage Ratio. The Senior Leverage Ratio, as of the
last day of each fiscal quarter of the Consolidated Parties after the
Tranche C Term Loan has been paid in full, shall be less than or equal
to:
(i) as of December 31, 1997, March 31, 1998, June 30, 1998 and
September 30, 1998, 4.00 to 1.00;
(ii) as of December 31, 1998, March 31, 1999, June 30, 1999
and September 30, 1999, 3.75 to 1.00;
(iii) as of December 31, 1999, March 31, 2000, June 30, 2000
and September 30, 2000, 3.50 to 1.00;
(iv) as of December 31, 2000, March 31, 2001, June 30, 2001
and September 30, 2001, 3.25 to 1.00; and
(v) as of December 31, 2001, and the last day of each fiscal
quarter of the Consolidated Parties thereafter, 3.00 to 1.00.
(c) Total Leverage Ratio. The Total Leverage Ratio, as of the last
day of each fiscal quarter of the Consolidated Parties, shall be less
than or equal to:
(i) until the Tranche C Term Loan has been paid in full:
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(A) as of December 31, 1997, March 31, 1998, June 30,
1998 and September 30, 1998, 5.50 to 1.00;
(B) as of, December 31, 1998, March 31, 1999, June 30,
1999 and September 30, 1999, 5.25 to 1.00;
(C) as of December 31, 1999, March 31, 2000, June 30,
2000 and September 30, 2000, 4.375 to 1.00;
(D) as of December 31, 2000, March 31, 2001, June 30,
2001 and September 30, 2001, 4.00 to 1.00; and
(E) as of December 31, 2001, and the last day of each
fiscal quarter of the Consolidated Parties thereafter, 3.50
to 1.00.
(ii) after the Tranche C Term Loan has been paid in full:
(A) as of December 31, 1997, March 31, 1998, June 30,
1998 and September 30, 1998, 5.50 to 1.00;
(B) as of, December 31, 1998, March 31, 1999, June 30,
1999 and September 30, 1999, 5.25 to 1.00;
(C) as of December 31, 1999, March 31, 2000, June 30,
2000 and September 30, 2000, 4.75 to 1.00;
(D) as of December 31, 2000, March 31, 2001, June 30,
2001 and September 30, 2001, 4.25 to 1.00; and
(E) as of December 31, 2001, and the last day of each
fiscal quarter of the Consolidated Parties thereafter, 3.75
to 1.00.
(d) Consolidated Net Worth. At all times Consolidated Net Worth
shall be greater than or equal to the sum of $192,000,000 {85% of
consolidated net worth as of 9/30/97 minus deferred financing costs
prepayment penalties net of taxes}, increased on a cumulative basis (i)
as of the end of each fiscal quarter of the Consolidated Parties,
commencing with the fiscal quarter ending September 30, 1997 by an amount
equal to 50% of Consolidated Net Income (to the extent positive) for the
fiscal quarter then ended and (ii) as of the date that any Equity
Issuance is consummated, by an amount equal to 100% of the Net Cash
Proceeds of such Equity Issuance.
7.12 ADDITIONAL CREDIT PARTIES.
As soon as practicable and in any event within 30 days after (i) any
Person becomes a direct or indirect Material Domestic Subsidiary of the
Borrower or (ii) any indirect or direct
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Subsidiary of the Borrwer which is not a Guarantor hereunder becomes a
guarantor with respect to any Subordinated Indebtedness, the Borrower shall
provide the Agent with written notice thereof setting forth information in
reasonable detail describing all of the assets of such Person and shall (a)
cause such Person to execute a Joinder Agreement in substantially the same form
as Exhibit 7.12, (b) cause 100% of the Capital Stock of such Person to be
delivered to the Agent (together with undated stock powers signed in blank) and
pledged to the Agent pursuant to an appropriate pledge agreement(s) in
substantially the form of the Pledge Agreement and otherwise in form acceptable
to the Agent and (c) cause such Person to deliver such other documentation as
the Agent may reasonably request in connection with the foregoing, including,
without limitation, appropriate UCC-1 financing statements, certified
resolutions and other organizational and authorizing documents of such Person,
favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to above) and other items of the types required to be
delivered pursuant to Section 5.1(c), all in form, content and scope reasonably
satisfactory to the Agent.
7.13 PLEDGED ASSETS.
The Credit Parties will cause 100% of the Capital Stock in the Borrower
and in each direct or indirect Subsidiary of the Borrower to be subject at all
times to a first priority, perfected Lien in favor of the Agent pursuant to the
terms and conditions of the Collateral Documents or such other security
documents as the Agent shall reasonably request.
7.14 INTEREST RATE PROTECTION.
Within 180 days following the Closing Date, the Borrower shall enter into
interest rate protection agreements protecting against fluctuations in interest
rates as to which the material terms are reasonably satisfactory to the Agent,
which agreements shall provide coverage in an amount equal to at least (i) if
Subordinated Indebtedness in an aggregate principal amount of at least $200
million is outstanding, $75 million or (ii) in all other cases, $275 million.
Said interest rate protection agreements shall be for a duration of at least 3
years.
7.15 CONSUMMATION OF MERGER.
Within 5 Business Days following the Closing Date (or, if less than 90% of
the shares of Arbor acquired by AHC pursuant to the Tender Offer, within 90
days following the Closing Date), the Merger Date shall have occurred pursuant
to the Merger Agreement and the price paid for any remaining shares of capital
stock of Arbor shall not exceed $45 per share. At such time, AHC shall be
merged into Arbor and all existing Funded Indebtedness of Arbor shall be
refinanced using proceeds of the second advance under the Tranche A Term Loan.
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SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
8.1 INDEBTEDNESS.
The Credit Parties will not permit the Parent or any Consolidated Party to
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(b) Indebtedness of the Borrower and its Subsidiaries set forth in
Schedule 8.1 (and renewals, refinancings and extensions thereof on terms
and conditions no less favorable to such Person than such existing
Indebtedness);
(c) purchase money Indebtedness (including Capital Leases or
Synthetic Leases) hereafter incurred by the Borrower or any of its
Subsidiaries to finance the purchase of fixed assets provided that (i)
the total of all such Indebtedness for all such Persons taken together
shall not exceed an aggregate principal amount of $75,000,000 at any one
time outstanding (including any such Indebtedness referred to in
subsection (b) above); (ii) such Indebtedness when incurred shall not
exceed the purchase price of the asset(s) financed; and (iii) no such
Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the time of such refinancing;
(d) obligations of the Borrower in respect of (i) Hedging Agreements
and (ii) any other interest rate protection agreement or foreign currency
exchange agreement entered into with any Person which is not a Lender in
order to manage existing or anticipated interest rate or exchange rate
risks and not for speculative purposes;
(e) intercompany Indebtedness arising out of loans and advances
permitted under Section 8.6; and
(f) (i) Subordinated Indebtedness of the Borrower in an aggregate
principal amount of up to $300,000,000; and
(ii) Guaranty Obligations of any Subsidiary Guarantor with
respect to any Indebtedness of the Borrower permitted under Section
8.1(f)(i).
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8.2 LIENS.
The Credit Parties will not permit the Parent or any Consolidated Party to
contract, create, incur, assume or permit to exist any Lien with respect to any
of its Property, whether now owned or after acquired, except for Permitted
Liens.
8.3 NATURE OF BUSINESS.
The Credit Parties will not permit the Parent or any Consolidated Party to
substantively and materially alter the character or conduct of the business
conducted by such Person as of the Closing Date.
8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC.
Except in connection with an Asset Disposition permitted by the terms of
Section 8.5, the Credit Parties will not permit the Parent or any Consolidated
Party to enter into any transaction of merger or consolidation or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution); provided
that, notwithstanding the foregoing provisions of this Section 8.4, (a) the
Borrower may merge or consolidate with any of its Subsidiaries provided that
(i) the Borrower shall be the continuing or surviving corporation, (ii) the
Credit Parties shall cause to be executed and delivered such documents,
instruments and certificates as the Agent may request so as to cause the Credit
Parties to be in compliance with the terms of Section 7.13 after giving effect
to such transaction and (iii) the Borrower shall have delivered to the Agent a
Pro Forma Compliance Certificate demonstrating that, upon giving effect on a
Pro Forma Basis to such transaction, no Default or Event of Default would
exist, (b) any Credit Party other than the Parent or the Borrower may merge or
consolidate with any other Credit Party other than the Parent or the Borrower
provided that (i) the Credit Parties shall cause to be executed and delivered
such documents, instruments and certificates as the Agent may request so as to
cause the Credit Parties to be in compliance with the terms of Section 7.13
after giving effect to such transaction and (ii) the Borrower shall have
delivered to the Agent a Pro Forma Compliance Certificate demonstrating that,
upon giving effect on a Pro Forma Basis to such transaction, no Default or
Event of Default would exist, (c) any Consolidated Party which is not a Credit
Party may be merged or consolidated with or into any Credit Party other than
the Parent provided that (i) such Credit Party shall be the continuing or
surviving corporation, (ii) the Credit Parties shall cause to be executed and
delivered such documents, instruments and certificates as the Agent may request
so as to cause the Credit Parties to be in compliance with the terms of Section
7.13 after giving effect to such transaction and (iii) the Borrower shall have
delivered to the Agent a Pro Forma Compliance Certificate demonstrating that,
upon giving effect on a Pro Forma Basis to such transaction, no Default or
Event of Default would exist, (d) any Consolidated Party which is not a Credit
Party may be merged or consolidated with or into any other Consolidated Party
which is not a Credit Party provided the Borrower shall have delivered to the
Agent a Pro Forma Compliance Certificate demonstrating that, upon giving effect
on a Pro Forma Basis to such transaction, no Default or Event of Default would
exist and (e) any Wholly-Owned Subsidiary of the Borrower may dissolve,
liquidate or wind up its affairs at any time.
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8.5 ASSET DISPOSITIONS.
The Credit Parties will not permit the Parent or any Consolidated Party to
make any Asset Disposition (including, without limitation, any Sale and
Leaseback Transaction) other than Excluded Asset Dispositions unless (a) the
consideration paid in connection therewith is cash or Cash Equivalents, (b) if
such transaction is a Sale and Leaseback Transaction, such transaction is
permitted by the terms of Section 8.13, (c) such transaction does not involve
the sale or other disposition of a minority equity interest in any Consolidated
Party, (d) the aggregate net book value of all of the assets sold or otherwise
disposed of in all such transactions during any fiscal year of the Consolidated
Parties shall not exceed $35,000,000, (e) the Borrower shall have delivered to
the Agent a Pro Forma Compliance Certificate demonstrating that, upon giving
effect on a Pro Forma Basis to such transaction, no Default or Event of Default
would exist hereunder, and (f) no later than 30 days prior to such Asset
Disposition, the Agent and the Lenders shall have received a certificate of an
officer of the Borrower specifying the anticipated or actual date of such Asset
Disposition, briefly describing the assets to be sold or otherwise disposed of
and setting forth the net book value of such assets, the aggregate
consideration and the Net Cash Proceeds to be received for such assets in
connection with such Asset Disposition, and thereafter the Borrower shall,
within the period of 365 days following the consummation of such Asset
Disposition (with respect to any such Asset Disposition, the "Application
Period"), apply (or cause to be applied) an amount equal to the Net Cash
Proceeds of such Asset Disposition to (i) the purchase, acquisition or, in the
case of improvements to real property, construction of Eligible Assets or (ii)
to the prepayment of the Loans in accordance with the terms of Section
3.3(b)(ii).
Upon the sale of Capital Stock of a Consolidated Party permitted by this
Section 8.5, the Agent shall deliver to the Borrower, upon the Borrower's
request and at the Borrower's expense, such documentation as is reasonably
necessary to evidence the release of the Agent's security interest, if any, in
such Capital Stock, including, without limitation, amendments or terminations
of UCC financing statements, if any, the return of stock certificates, if any,
and the release of such Consolidated Party from all of its obligations, if any,
under the Credit Documents; provided however, the Agent shall not be obligated
to take any of the foregoing actions unless such Consolidated Party has been
released under all of its obligations arising under agreements evidencing
Subordinated Indebtedness.
8.6 INVESTMENTS.
The Credit Parties will not permit the Parent or any Consolidated Party to
make Investments in or to any Person, except for Permitted Investments.
8.7 RESTRICTED PAYMENTS.
The Credit Parties will not permit the Parent or any Consolidated Party
to, directly or indirectly, declare, order, make or set apart any sum for or
pay any Restricted Payment, except (a) to make dividends payable solely in the
same class of Capital Stock of such Person, (b) to make dividends or other
distributions payable to any Credit Party other than the Parent (directly or
indirectly through Subsidiaries), (c) the Borrower may pay cash dividends to
the Parent, and the
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Parent may pay corresponding cash dividends to its shareholders, during any
fiscal year provided that (i) the Total Leverage Ratio for the immediately
preceding fiscal quarter is less than 2.5 to 1.0 and (ii) the Borrower shall
have delivered to the Agent a Pro Forma Compliance Certificate demonstrating
that, upon giving effect on a Pro Forma Basis to such Restricted Payment, no
Default or Event of Default would exist hereunder, (d) as permitted by Section
8.8, (e) the Parent may make a dividend or other distribution to its
shareholders of (i) the Capital Stock of any Unconsolidated Subsidiary and (ii)
any Property or cash distributed to the Parent by an Unconsolidated Subsidiary,
(f) other Restricted Payments by the Parent in an aggregate amount not to
exceed $5,000,000 during any fiscal year of the Borrower, (g) provided that no
Default or Event of Default has occurred and is continuing at such time or
would be directly or indirectly caused as a result thereof, to make interest
payments in respect of any Subordinated Indebtedness, including payment of
accrued interest and premium, if any, payable in connection with a redemption
of Subordinated Indebtedness permitted under Section 8.8 and (h) the
Acquisition of Arbor by the Borrower pursuant to the Tender Offer and the
Merger Agreement.
8.8 PREPAYMENTS OF INDEBTEDNESS, ETC.
If any Default or Event of Default has occurred and is continuing or would
be directly or indirectly caused as a result thereof, the Credit Parties will
not permit the Parent or any Consolidated Party to (a) after the issuance
thereof, amend or modify (or permit the amendment or modification of) any of
the terms of any Indebtedness if such amendment or modification would add or
change any terms in a manner adverse to the issuer of such Indebtedness, or
shorten the final maturity or average life to maturity or require any payment
to be made sooner than originally scheduled or increase the interest rate
applicable thereto or change any subordination provision thereof, or (b) (i)
make (or give any notice with respect thereto) any voluntary or optional
payment or prepayment or redemption or acquisition for value of (including
without limitation, by way of depositing money or securities with the trustee
with respect thereto before due for the purpose of paying when due), refund,
refinance or exchange of any other Indebtedness (including without limitation
any Subordinated Indebtedness) or (ii) make (or give any notice with respect
thereto) any voluntary or optional payment or prepayment, redemption,
acquisition for value or defeasance of (including without limitation, by way of
depositing money or securities with the trustee with respect thereto before due
for the purpose of paying when due), refund, refinance or exchange of any
Subordinated Indebtedness.
8.9 TRANSACTIONS WITH AFFILIATES.
The Credit Parties will not permit the Parent or any Consolidated Party to
enter into or permit to exist any transaction or series of transactions with
any officer, director, shareholder, Subsidiary or Affiliate of such Person
other than (a) advances of working capital to any Credit Party other than the
Parent, (b) transfers of cash and assets to any Credit Party other than the
Parent, (c) transactions permitted by Section 8.1, Section 8.4, Section 8.5,
Section 8.6, or Section 8.7, (d) normal compensation and reimbursement of
expenses of officers and directors and (e) except as otherwise specifically
limited in this Credit Agreement, other transactions which are entered into in
the ordinary course of such Person's business on terms and conditions
substantially
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as favorable to such Person as would be obtainable by it in a comparable
arms-length transaction with a Person other than an officer, director,
shareholder, Subsidiary or Affiliate.
8.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.
The Credit Parties will not permit the Parent or any Consolidated Party to
change its fiscal year or amend, modify or change its articles of incorporation
(or corporate charter or other similar organizational document) or bylaws (or
other similar document) without the prior written consent of the Required
Lenders.
8.11 LIMITATION ON RESTRICTED ACTIONS.
The Credit Parties will not permit any Consolidated Party 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 Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured
by, its profits, (b) pay any Indebtedness or other obligation owed to any
Credit Party, (c) make loans or advances to any Credit Party, (d) sell, lease
or transfer any of its properties or assets to any Credit Party, or (e) act as
a Guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Credit
Agreement and the other Credit Documents, (ii) any indenture or other agreement
governing or evidencing any Subordinated Indebtedness, in each case as
originally approved by the Required Lenders, (iii) applicable law, (iv) any
document or instrument governing Indebtedness incurred pursuant to Section
8.1(c), provided that any such restriction contained therein relates only to
the asset or assets constructed or acquired in connection therewith or (v) any
Permitted Lien or any document or instrument governing any Permitted Lien,
provided that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien.
8.12 OWNERSHIP OF SUBSIDIARIES; LIMITATIONS ON PARENT.
Notwithstanding any other provisions of this Credit Agreement to the
contrary:
(a) The Credit Parties will not permit the Parent or any Consolidated
Party to (i) permit any Person to own any Capital Stock of any Subsidiary
of the Borrower (other than the Borrower or any Wholly-Owned Subsidiary of
the Borrower and, with respect to Arbor prior to the Merger Date,
shareholders of Arbor that have not tendered their shares in connection
with the Tender Offer), (ii) permit any Subsidiary of the Borrower to issue
Capital Stock (except to the Borrower or to a Wholly-Owned Subsidiary of
the Borrower), (iii) permit, create, incur, assume or suffer to exist any
Lien thereon, in each case (A) except to qualify directors where required
by applicable law, (B) except as a result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under Section
8.4 or Section 8.5 or (C) except for Permitted Liens and (iv)
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notwithstanding anything to the contrary contained in clause (ii) above,
permit any Subsidiary of the Borrower to issue any shares of preferred
Capital Stock.
(b) The Parent shall not (i) hold any assets other than the Capital
Stock of the Borrower and the other direct Subsidiaries of the Parent, (ii)
have any liabilities other than (A) the liabilities under the Credit
Documents, (B) tax liabilities in the ordinary course of business, (C)
loans and advances permitted under Section 8.9 and (D) corporate,
administrative and operating expenses in the ordinary course of business
and (iii) engage in any business other than (A) owning the Capital Stock of
the Borrower and its other Subsidiaries and activities incidental or
related thereto and (B) acting as a Guarantor hereunder and pledging the
Capital Stock of the Borrower to the Agent, for the benefit of the Lenders,
pursuant to the Pledge Agreement.
8.13 SALE LEASEBACKS.
The Credit Parties will not permit the Parent or any Consolidated Party
to, directly or indirectly, enter into any Sale and Leaseback Transaction
pursuant to which the Parent or such Consolidated Party, as applicable, shall
become liable as lessee or as guarantor or other surety in respect of the
related lease.
8.14 GROWTH CAPITAL EXPENDITURES.
The Credit Parties will not permit Consolidated Growth Capital
Expenditures for any fiscal year, taken together with the aggregate
consideration (including any assumption of liabilities (other than current
working capital liabilities not constituting Indebtedness), but excluding
consideration consisting of any Capital Stock of the Borrower or capital
contributed by Extendicare) paid by the Consolidated Parties for all Permitted
Acquisitions during such fiscal year, to exceed (i) for fiscal year 1998
(including the period from the Closing Date through the last day of fiscal year
1997), $150 million (excluding for purposes hereof the Acquisition of Arbor),
(ii) for each of fiscal years 1999 and 2000, $175 million and (iii) for each
fiscal year thereafter, $200 million.
8.15 NO FURTHER NEGATIVE PLEDGES.
The Credit Parties will not permit the Parent or any Consolidated Party to
enter into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or requiring the grant of any
security for such obligation if security is given for some other obligation,
except (a) pursuant to this Credit Agreement and the other Credit Documents,
(b) pursuant to any indenture or other agreement governing or evidencing any
Subordinated Indebtedness, in each case as originally approved by the Required
Lenders, (c) pursuant to any document or instrument governing Indebtedness
incurred pursuant to Section 8.1(c), provided that any such restriction
contained therein relates only to the asset or assets constructed or acquired
in connection therewith and (d) in connection with any Permitted Lien or any
document or instrument governing any Permitted Lien, provided that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien.
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8.16 NO FOREIGN SUBSIDIARIES.
The Credit Parties will not permit any Consolidated Party to create, acquire or
permit to exist any direct or indirect Foreign Subsidiary.
SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any principal of any of
the Loans or of any reimbursement obligations arising from drawings
under Letters of Credit, or
(ii) default, and such default shall continue for three (3) or
more Business Days, in the payment when due of any interest on the
Loans or on any reimbursement obligations arising from drawings under
Letters of Credit, or of any Fees or other amounts owing hereunder,
under any of the other Credit Documents or in connection herewith or
therewith; or
(b) Representations. Any representation, warranty or statement made
or deemed to be made by any Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material
respect on the date as of which it was deemed to have been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.2, 7.4, 7.9, 7.11, 7.12,
7.13, 7.15 or 8.1 through 8.16, inclusive;
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(ii) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.1(a), (b) (c) or (d) and
such default shall continue unremedied for a period of at least 5 days
after the earlier of a responsible officer of a Credit Party becoming
aware of such default or notice thereof by the Agent; or
(iii) default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in
subsections (a), (b), (c)(i) or (c)(ii) of this Section 9.1) contained
in this Credit Agreement and such default shall continue unremedied
for a period of at least 30 days after the earlier of a responsible
officer of a Credit Party becoming aware of such default or notice
thereof by the Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall default in the
due performance or observance of any term, covenant or agreement in any of
the other Credit Documents (subject to applicable grace or cure periods, if
any), or (ii) except as a result of or in connection with a dissolution,
merger or disposition of a Subsidiary permitted under Section 8.4 or
Section 8.5, any Credit Document shall fail to be in full force and effect
or to give the Agent and/or the Lenders the Liens, rights, powers and
privileges purported to be created thereby, or any Credit Party shall so
state in writing; or
(e) Guaranties. Except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under Section
8.4 or Section 8.5, the guaranty given by any Guarantor hereunder
(including any Additional Credit Party) or any provision thereof shall
cease to be in full force and effect, or any Guarantor (including any
Additional Credit Party) hereunder or any Person acting by or on behalf of
such Guarantor shall deny or disaffirm such Guarantor's obligations under
such guaranty, or any Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed
or observed pursuant to any guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect to
the Parent or any Consolidated Party; or
(g) Defaults under Other Agreements.
(i) The Parent or any Consolidated Party shall default in the
performance or observance (beyond the applicable grace period with
respect thereto, if any) or any material obligation or condition of
any contract or lease material to the Parent and the Consolidated
Parties taken as a whole; or
(ii) With respect to any Indebtedness (including without
limitation any Subordinated Indebtedness but not including
Indebtedness outstanding under this Credit Agreement) in excess of
$5,000,000 in the aggregate for the Parent and the Consolidated
Parties taken as a whole, (A) the Parent or any Consolidated Party
shall default in any payment (beyond the applicable grace period with
respect
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thereto, if any) with respect to any such Indebtedness, or (B) the
occurrence and continuance of a default in the observance or
performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or
any other event or condition shall occur or condition exist, the
effect of which default or other event or condition is to cause, or
permit, the holder or holders of such Indebtedness (or trustee or
agent on behalf of such holders) to cause (determined without regard
to whether any notice or lapse of time is required), any such
Indebtedness to become due prior to its stated maturity; or (C) any
such Indebtedness shall be declared due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment, prior
to the stated maturity thereof; or
(h) Judgments. One or more judgments or decrees shall be entered
against one or more of the Parent and the Consolidated Parties involving a
liability of $5,000,000 or more in the aggregate (to the extent not paid or
fully covered by insurance provided by a carrier who has acknowledged
coverage and has the ability to perform) and any such judgments or decrees
shall not have been vacated, discharged or stayed or bonded pending appeal
within 30 days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such event
or condition would be reasonably likely to have a Material Adverse Effect:
(i) any "accumulated funding deficiency," as such term is defined in
Section 302 of ERISA and Section 412 of the Code, whether or not waived,
shall exist with respect to any Plan, or any lien shall arise on the assets
of the Parent, any Consolidated Party or any ERISA Affiliate in favor of
the PBGC or a Plan; (ii) an ERISA Event shall occur with respect to a
Single Employer Plan, which is, in the reasonable opinion of the Agent,
likely to result in the termination of such Plan for purposes of Title IV
of ERISA; (iii) an ERISA Event shall occur with respect to a Multiemployer
Plan or Multiple Employer Plan, which is, in the reasonable opinion of the
Agent, likely to result in (A) the termination of such Plan for purposes of
Title IV of ERISA, or (B) the Parent, any Consolidated Party or any ERISA
Affiliate incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or
insolvency or (within the meaning of Section 4245 of ERISA) such Plan; or
(iv) any prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) or breach of fiduciary responsibility shall
occur which may subject the Parent, any Consolidated Party or any ERISA
Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of
ERISA or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which the Parent, any Consolidated Party or any
ERISA Affiliate has agreed or is required to indemnify any person against
any such liability; or
(j) Ownership. There shall occur a Change of Control; or
(k) Medicaid, Medicare, Etc. The Borrower or any Subsidiary, to the
extent, if any, presently participating or required by law to participate,
in Medicaid or Medicare programs is excluded from or shall otherwise fail
to be eligible for any reason to
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participate in Medicaid or Medicare programs or to accept assignments or
rights to reimbursement under Medicaid Regulations or Medicare Regulations,
such failure could reasonably be expected to have a Material Adverse
Effect, and such failure shall also continue beyond the completion of any
appeal process diligently pursued by the Borrower or such Subsidiary in
good faith.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures in
Section 11.6), the Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any or all of the
following actions:
(a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any accrued
interest in respect of all Loans, any reimbursement obligations arising
from drawings under Letters of Credit and any and all other indebtedness or
obligations of any and every kind owing by the Borrower to the Agent and/or
any of the Lenders hereunder to be due whereupon the same shall be
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.
(c) Cash Collateral. Direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence of an Event
of Default under Section 9.1(f), it will immediately pay) to the Agent
additional cash, to be held by the Agent, for the benefit of the Lenders,
in a cash collateral account as additional security for the LOC Obligations
in respect of subsequent drawings under all then outstanding Letters of
Credit in an amount equal to the maximum aggregate amount which may be
drawn under all Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents including, without
limitation, all rights and remedies existing under the Collateral
Documents, all rights and remedies against a Guarantor and all rights of
set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations arising from drawings under Letters of
Credit, all accrued interest in respect thereof, all accrued and unpaid Fees
and other indebtedness or obligations owing to the Agent and/or any of the
Lenders hereunder automatically shall immediately become due and payable
without the giving of any notice or other action by the Agent or the Lenders.
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SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT, POWERS AND IMMUNITIES.
Each Lender hereby irrevocably appoints and authorizes the Agent to act as
its agent under this Credit Agreement and the other Credit Documents with such
powers and discretion as are specifically delegated to the Agent by the terms
of this Credit Agreement and the other Credit Documents, together with such
other powers as are reasonably incidental thereto. The Agent (which term as
used in this sentence and in Section 10.5 and the first sentence of Section
10.6 hereof shall include its Affiliates and its own and its Affiliates'
officers, directors, employees, and agents): (a) shall not have any duties or
responsibilities except those expressly set forth in this Credit Agreement and
shall not be a trustee or fiduciary for any Lender; (b) shall not be
responsible to the Lenders for any recital, statement, representation, or
warranty (whether written or oral) made in or in connection with any Credit
Document or any certificate or other document referred to or provided for in,
or received by any of them under, any Credit Document, or for the value,
validity, effectiveness, genuineness, enforceability, or sufficiency of any
Credit Document, or any other document referred to or provided for therein or
for any failure by any Credit Party or any other Person to perform any of its
obligations thereunder; (c) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any Credit Party or the satisfaction of any
condition or to inspect the property (including the books and records) of any
Credit Party or any of its Subsidiaries or Affiliates; (d) shall not be
required to initiate or conduct any litigation or collection proceedings under
any Credit Document; and (e) shall not be responsible for any action taken or
omitted to be taken by it under or in connection with any Credit Document,
except for its own gross negligence or willful misconduct. The Agent may
employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.
10.2 RELIANCE BY AGENT.
The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants, and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until the Agent receives and accepts
an Assignment and Acceptance executed in accordance with Section 11.3(b)
hereof. As to any matters not expressly provided for by this Credit Agreement,
the Agent shall not be required to exercise any discretion or take any action,
but shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of the
Required Lenders, and such instructions shall be binding on all of the Lenders;
provided, however, that the Agent shall not be required to take any action that
exposes the Agent to personal liability or that is contrary to any Credit
Document
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or applicable law or unless it shall first be indemnified to its satisfaction
by the Lenders against any and all liability and expense which may be incurred
by it by reason of taking any such action.
10.3 DEFAULTS.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Agent has received
written notice from a Lender or the Borrower specifying such Default or Event
of Default and stating that such notice is a "Notice of Default". In the event
that the Agent receives such a notice of the occurrence of a Default or Event
of Default, the Agent shall give prompt notice thereof to the Lenders. The
Agent shall (subject to Section 10.2 hereof) take such action with respect to
such Default or Event of Default as shall reasonably be directed by the
Required Lenders, provided that, unless and until the Agent shall have received
such directions, the Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interest of the
Lenders.
10.4 RIGHTS AS A LENDER.
With respect to its Commitment and the Loans made by it, NationsBank (and
any successor acting as Agent) in its capacity as a Lender hereunder shall have
the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not acting as the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the Agent in
its individual capacity. NationsBank (and any successor acting as Agent) and
its Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any
Credit Party or any of its Subsidiaries or Affiliates as if it were not acting
as Agent, and NationsBank (and any successor acting as Agent) and its
Affiliates may accept fees and other consideration from any Credit Party or any
of its Subsidiaries or Affiliates for services in connection with this Credit
Agreement or otherwise without having to account for the same to the Lenders.
10.5 INDEMNIFICATION.
The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Borrower
under such Section) ratably in accordance with their respective Commitments or,
if the Commitments have been terminated, ratably in accordance with their
respective outstanding Loans and Participation Interests (including the
Participation Interests of the Issuing Lender in any Letters of Credit), for
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys' fees), or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against the Agent (including by any Lender) in any way relating to or
arising out of any Credit Document or the transactions contemplated thereby or
any action taken or omitted by the Agent under any Credit Document; provided
that no Lender shall be liable for any of the foregoing to the extent they
arise from the gross negligence or willful misconduct of the Person to be
indemnified. Without limitation of the foregoing, each Lender agrees to
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reimburse the Agent promptly upon demand for its ratable share of any costs or
expenses payable by the Borrower under Section 11.5, to the extent that the
Agent is not promptly reimbursed for such costs and expenses by the Borrower.
The agreements in this Section 10.5 shall survive the repayment of the Loans,
LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.
Each Lender agrees that it has, independently and without reliance on the
Agent or any other Lender, and based on such documents and information as it
has deemed appropriate, made its own credit analysis of the Credit Parties and
their Subsidiaries and decision to enter into this Credit Agreement and that it
will, independently and without reliance upon the Agent or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under the Credit Documents. Except for notices, reports, and other
documents and information expressly required to be furnished to the Lenders by
the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition, or business of any Credit Party or any of its Subsidiaries
or Affiliates that may come into the possession of the Agent or any of its
Affiliates.
10.7 SUCCESSOR AGENT.
The Agent may resign at any time by giving notice thereof to the Lenders
and the Borrower. Upon any such resignation, the Required Lenders shall have
the right to appoint a successor Agent. If no successor Agent shall have been
so appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a commercial bank organized under the laws of
the United States of America having combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor, such successor shall thereupon succeed to and become vested with all
the rights, powers, discretion, privileges, and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 10 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.
SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy
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(or other facsimile device) to the number set out below, (c) the Business Day
following the day on which the same has been delivered prepaid to a reputable
national overnight air courier service, or (d) the third Business Day following
the day on which the same is sent by certified or registered mail, postage
prepaid, in each case to the respective parties at the address, in the case of
the Borrower, Guarantors and the Agent, set forth below, and, in the case of
the Lenders, set forth on Schedule 2.1(a), or at such other address as such
party may specify by written notice to the other parties hereto:
if to the Borrower or the Guarantors:
Extendicare Health Services, Inc.
000 Xxxx Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Extendicare Inc.
0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Agent:
NationsBank, N. A.
Independence Center, 15th Floor
NC1-001-15-04
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Agency Services
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
NationsBank, N. A.
NationsBank Corporate Center
000 X. Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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Attn: Xxxxxxx X. (Xxxx) Xxxxx, III
11.2 RIGHT OF SET-OFF; ADJUSTMENTS.
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its Affiliates) is hereby authorized at any time and
from time to time, to the fullest extent permitted 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
any of its Affiliates) to or for the credit or the account of any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Notes, under any other Credit Document
or otherwise, irrespective of whether such Lender shall have made any demand
under hereunder or thereunder and although such obligations may be unmatured.
Each Lender agrees promptly to notify any affected Credit Party after any such
set-off and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 11.2 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender may have.
11.3 BENEFIT OF AGREEMENT.
(a) This Credit Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided that none of the Credit Parties may assign or
transfer any of its interests and obligations without prior written consent
of the Lenders; provided further that the rights of each Lender to
transfer, assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth in this Section 11.3.
(b) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Loans, its Notes,
and its Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this
Credit Agreement, any such partial assignment shall be in an amount at
least equal to $5,000,000 (or, if less, the remaining amount of the
Commitment being assigned by such Lender) or an integral multiple of
$1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under
this Credit Agreement and the Notes; and
(iv) the parties to such assignment shall execute and deliver to
the Agent for its acceptance an Assignment and Acceptance in the form
of Exhibit
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11.3(b) hereto, together with any Note subject to such assignment
and a processing fee of $3,500.
Upon execution, delivery, acceptance and recordation of such Assignment
and Acceptance, the assignee thereunder shall be a party hereto and, to
the extent of such assignment, have the obligations, rights, and benefits
of a Lender hereunder and the assigning Lender shall, to the extent of
such assignment, relinquish its rights and be released from its
obligations under this Credit Agreement (except as set forth in Section
11.9). Upon the consummation of any assignment pursuant to this Section
11.3(b), the assignor, the Agent and the Borrower shall make appropriate
arrangements so that, if required, new Notes are issued to the assignor
and the assignee. If the assignee is not incorporated under the laws of
the United States of America or a state thereof, it shall deliver to the
Borrower and the Agent certification as to exemption from deduction or
withholding of Taxes in accordance with Section 3.11.
(c) The Agent shall maintain at its address referred to in Section
11.1 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names, addresses and any
U.S. taxpayer identification numbers of the Lenders and the Commitment
of, and principal amount of the Loans owing to (the "Ownership
Information"), each Lender from time to time (the "Register"). Any
transfer of an ownership interest in any Loan, including any right to
principal or interest payable with respect to the Loan, shall be subject
to and conditioned upon the due recordation of such transfer and the
Ownership Information with respect to the transferee in the Register and
such transfer shall be effective only upon such recordation (and not
prior thereto). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Agent and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Credit Agreement.
The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit
11.3(b) hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt
notice thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons in
all or a portion of its rights and obligations under this Credit
Agreement (including all or a portion of its Commitment and its Loans);
provided, however, that (i) such Lender's obligations under this Credit
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) the participant shall be entitled to the benefit of
the yield protection provisions contained in Sections 3.7 through 3.12,
inclusive, and the right of set-off contained in Section 11.2, and (iv)
the Borrower shall continue to deal solely and directly with such Lender
in connection
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with such Lender's rights and obligations under this Credit Agreement,
and such Lender shall retain the sole right to enforce the obligations of
the Borrower relating to its Loans and its Notes and to approve any
amendment, modification, or waiver of any provision of this Credit
Agreement (other than amendments, modifications, or waivers decreasing
the amount of principal of or the rate at which interest is payable on
such Loans or Notes, extending any scheduled principal payment date or
date fixed for the payment of interest on such Loans or Notes, or
extending its Commitment).
(f) Notwithstanding any other provision set forth in this Credit
Agreement, any Lender may at any time assign and pledge all or any
portion of its Loans and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release
the assigning Lender from its obligations hereunder.
(g) Any Lender may furnish any information concerning the Borrower
or any of its Subsidiaries in the possession of such Lender from time to
time to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 11.14
hereof.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Agent or any Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Agent or any Lender and any of the Credit
Parties shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and
remedies provided herein are cumulative and not exclusive of any rights or
remedies which the Agent or any Lender would otherwise have. No notice to or
demand on any Credit Party in any case shall entitle the Borrower or any other
Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agent or the Lenders
to any other or further action in any circumstances without notice or demand.
11.5 EXPENSES; INDEMNIFICATION.
(a) The Borrower agrees to pay on demand all reasonable costs and expenses
of the Agent in connection with the syndication, preparation, execution,
delivery, administration, modification, and amendment of this Credit Agreement,
the other Credit Documents, and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of counsel for
the Agent (including the cost of internal counsel) with respect thereto and
with respect to advising the Agent as to its rights and responsibilities under
the Credit Documents. The Borrower further agrees to pay on demand all
reasonable costs and expenses of the Agent and the Lenders, if any (including,
without limitation, reasonable attorneys' fees and expenses and the cost of
internal counsel), in connection with the enforcement (whether through
negotiations,
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legal proceedings, or otherwise) of the Credit Documents and the other
documents to be delivered hereunder.
(b) The Borrower agrees to indemnify and hold harmless the Agent and each
Lender and each of their Affiliates and their respective officers, directors,
employees, agents, and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities, costs, and expenses
(including, without limitation, reasonable attorneys' fees) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation, or proceeding or
preparation of defense in connection therewith and whether or not the
Indemnified Party is a party thereto) the Credit Documents, any of the
transactions contemplated herein or the actual or proposed use of the proceeds
of the Loans, except to the extent such claim, damage, loss, liability, cost,
or expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 11.5 applies, such indemnity
shall be effective whether or not such investigation, litigation or proceeding
is brought by the Borrower, its directors, shareholders or creditors or an
Indemnified Party or any other Person or any Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 11.5 shall survive the repayment of the Loans, LOC Obligations and
other obligations under the Credit Documents and the termination of the
Commitments hereunder.
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is
in writing and entered into by, or approved in writing by, the Required Lenders
and the Borrower, provided, however, that:
(i) without the consent of each Lender affected thereby, neither
this Credit Agreement nor any other Credit Document may be amended to
(a) extend the final maturity of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit, or extend or waive any Principal
Amortization Payment of any Loan, or any portion thereof,
(b) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or Fees hereunder,
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(c) reduce or waive the principal amount of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(d) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver of
any Default or Event of Default or mandatory reduction in the
Commitments shall not constitute a change in the terms of any
Commitment of any Lender),
(e) except as the result of or in connection with an Asset
Disposition permitted by Section 8.5, release all or substantially
all of the Collateral,
(f) except as the result of or in connection with a
dissolution, merger or disposition of a Consolidated Party
permitted under Section 8.4, release the Borrower or substantially
all of the other Credit Parties from its or their obligations under
the Credit Documents (including, without limitation, the
obligations of each Guarantor set forth in Section 4),
(g) amend, except, modify or waive any provision of this
Section 11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13,
3.14, 3.15, 9.1(a), 11.2, 11.3, 11.5 or 11.9,
(h) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders, or
(i) consent to the assignment or transfer by the Borrower or
all or substantially all of the other Credit Parties of any of its
or their rights and obligations under (or in respect of) the Credit
Documents except as permitted thereby;
(ii) without the consent of Lenders holding in the aggregate more
than 50% of the outstanding Tranche A Term Loans, more than 50% of the
outstanding Tranche B Term Loans and more than 50% of the outstanding
Tranche C Term Loans, the time for or the amount or the manner of
application of proceeds of any mandatory prepayment required by Section
3.3(b)(ii), (iii), (iv) or (v) hereof may not be extended;
(iii) without the consent of the Agent, no provision of Section 10
may be amended;
(iv) without the consent of the Issuing Lender, no provision of
Section 2.2 may be amended.
Notwithstanding the fact that the consent of all the Lenders is required
in certain circumstances as set forth above, (x) each Lender is entitled
to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender
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acknowledges that the provisions of Section 1126(c) of the Bankruptcy
Code supersedes the unanimous consent provisions set forth herein and (y)
the Required Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any
of the parties hereto of an executed counterpart of this Credit Agreement shall
be as effective as an original executed counterpart hereof and shall be deemed
a representation that an original executed counterpart hereof will be
delivered.
11.8 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 SURVIVAL.
All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.6, 3.9, 3.11, 3.12, 10.5 or 11.5 shall survive the execution
and delivery of this Credit Agreement, the making of the Loans, the issuance of
the Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive delivery of the Notes and the making of the Loans
hereunder.
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. Any legal action or proceeding with respect to
this Credit Agreement or any other Credit Document shall be brought in
the courts of the State of New York, New York County or of the United
States in the District Court for the Southern District of New York, and,
by execution and delivery of this Credit Agreement, each of the Credit
Parties hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the nonexclusive jurisdiction of
such courts. Each of the Credit Parties further irrevocably consents to
the service of process out of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to it at the address set out for
notices pursuant to Section 11.1, such service to become effective three
(3) days after
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such mailing. Nothing herein shall affect the right of the Agent or any
Lender to serve process in any other manner permitted by law or to
commence legal proceedings or to otherwise proceed against any Credit
Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
(C) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE LENDERS,
THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
11.11 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 ENTIRETY.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.13 BINDING EFFECT; TERMINATION.
(a) This Credit Agreement shall become effective at such time on or
after the Closing Date when it shall have been executed by the Borrower,
the Guarantors and the Agent, and the Agent shall have received copies
hereof (telefaxed or otherwise) which, when taken together, bear the
signatures of each Lender, and thereafter this Credit Agreement shall be
binding upon and inure to the benefit of the Borrower, the Guarantors,
the Agent and each Lender and their respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the
other Credit Documents shall remain outstanding, no Letters of Credit
shall be outstanding, all of the
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Credit Party Obligations have been irrevocably satisfied in full and all
of the Commitments hereunder shall have expired or been terminated.
11.14 CONFIDENTIALITY.
The Agent and each Lender (each, a "Lending Party") agrees to keep
confidential any information furnished or made available to it by any Credit
Party pursuant to this Credit Agreement that in good faith is marked
confidential; provided that nothing herein shall prevent any Lending Party from
disclosing such information (a) to any other Lending Party or any Affiliate of
any Lending Party or any Approved Fund, or any officer, director, employee,
agent, auditor or advisor of any Lending Party or Affiliate of any Lending
Party, (b) as required by any law, rule, legal process or regulation, (c) upon
the order of any court or administrative agency, (d) upon the request or demand
of any regulatory agency or authority, (e) that is or becomes available to the
public or that is or becomes available to any Lending Party other than as a
result of a disclosure by any Lending Party prohibited by this Credit
Agreement, (f) in connection with any litigation to which such Lending Party or
any of its Affiliates may be a party, (g) to the extent necessary in connection
with the exercise of any remedy under this Credit Agreement or any other Credit
Document, and (h) subject to provisions substantially similar to those
contained in this Section 11.14, to any actual or proposed participant or
assignee or to any direct or indirect contractual counterparties in swap
agreements or to the professional advisors of such swap counterparties.
Notwithstanding anything to the contrary contained herein, in no event shall
any patient records or patient-related information be disclosed by any Lending
Party except pursuant to clause (b) or (c) of the preceding sentence, and, in
the case of such disclosure, the applicable Lending Party will use reasonable
best efforts to promptly notify the Borrower and will cooperate with the
Borrower in obtaining a protective order or other confidential treatment of
the related patient records or patient-related information.
11.15 SOURCE OF FUNDS.
Each of the Lenders hereby represents and warrants to the Borrower that at
least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any separate
account maintained by such Lender in which any employee benefit plan (or
its related trust) has any interest;
(b) to the extent that any part of such funds constitutes assets
allocated to any separate account maintained by such Lender, such Lender
has disclosed to the Borrower the name of each employee benefit plan whose
assets in such account exceed 10% of the total assets of such account as of
the date of such purchase (and, for purposes of this subsection (b), all
employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan);
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(c) to the extent that any part of such funds constitutes assets of
an insurance company's general account, such insurance company has
complied with all of the requirements of the regulations issued under
Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific benefit
plans which such Lender has identified in writing to the Borrower.
As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.16 CONFLICT.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[Signature Page to Follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: EXTENDICARE HEALTH SERVICES, INC.,
a Delaware corporation
By:_______________________________
Name:_____________________________
Title:____________________________
PARENT: EXTENDICARE HOLDINGS, INC.,
a Wisconsin corporation
By:_______________________________
Name:_____________________________
Title:____________________________
SUBSIDIARY
GUARANTORS: EXTENDICARE HEALTH FACILITY
HOLDINGS, INC.,
a Delaware corporation
By:______________________________
Name:____________________________
Title:___________________________
EXTENDICARE HEALTH FACILITIES, INC.,
a Wisconsin corporation
By:______________________________
Name:____________________________
Title:___________________________
COVENTRY CARE, INC.,
a Pennsylvania corporation
By:______________________________
Name:____________________________
Title:___________________________
[Signatures Continued.]
X-0
000
XXXXXXXX HEALTH FACILITIES, INC.,
a Delaware corporation
By:_______________________________
Name:_____________________________
Title:____________________________
EXTENDICARE HOMES, INC.,
a Delaware corporation
By:_______________________________
Name:_____________________________
Title:____________________________
UNITED PROFESSIONAL COMPANIES, INC.,
a Delaware corporation
By:_______________________________
Name:_____________________________
Title:____________________________
THE PROGRESSIVE STEP CORPORATION,
a Wisconsin corporation
By:_______________________________
Name:_____________________________
Title:____________________________
EXTENDICARE OF INDIANA, INC.,
a Delaware corporation
By:_______________________________
Name:_____________________________
Title:____________________________
UNITED REHABILITATION SERVICES, INC.,
a Wisconsin corporation
By:_______________________________
Name:_____________________________
Title:____________________________
[Signatures Continued.]
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EDGEWOOD NURSING CENTER, INC.,
a Pennsylvania corporation
By:_______________________________
Name:_____________________________
Title:____________________________
ELDER CREST, INC.,
a Pennsylvania corporation
By:_______________________________
Name:_____________________________
Title:____________________________
HAVEN CREST, INC.,
a Pennsylvania corporation
By:_______________________________
Name:_____________________________
Title:____________________________
MEADOW CREST, INC.,
a Pennsylvania corporation
By:_______________________________
Name:_____________________________
Title:____________________________
OAK HILL HOME OF REST AND CARE, INC.,
a Pennsylvania corporation
By:_______________________________
Name:_____________________________
Title:____________________________
EXTENDICARE GREAT TRAIL, INC.,
a Delaware corporation
By:_______________________________
Name:_____________________________
Title:____________________________
[Signatures Continued.]
S-3
000
XXX XXXX XXXXXXX XXXXXXXXXXXX
XXXXXX, XXX.,
a Washington corporation
By:_______________________________
Name:_____________________________
Title:____________________________
UNITED PROFESSIONAL SERVICES, INC.,
a Wisconsin corporation
By:_______________________________
Name:_____________________________
Title:____________________________
ARBOR HEALTH CARE COMPANY,
a Delaware corporation
By:_______________________________
Name:_____________________________
Title:____________________________
ADULT SERVICES UNLIMITED, INC.,
a Pennsylvania corporation
By:_______________________________
Name:_____________________________
Title:____________________________
ALTERNACARE PLUS ENTERPRISES, INC.,
an Ohio corporation
By:_______________________________
Name:_____________________________
Title:____________________________
ARBORS EAST, INC.,
an Ohio corporation
By:_______________________________
Name:_____________________________
Title:____________________________
[Signatures Continued.]
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119
ARBORS AT FT. XXXXX, INC.,
an Indiana corporation
By:_______________________________
Name:_____________________________
Title:____________________________
ARBORS AT TOLEDO, INC.,
an Ohio corporation
By:_______________________________
Name:_____________________________
Title:____________________________
BAY GERIATRIC PHARMACY, INC.,
a Florida corporation
By:_______________________________
Name:_____________________________
Title:____________________________
THE DRUGGIST, INC.,
an Ohio corporation
By:_______________________________
Name:_____________________________
Title:____________________________
HEALTH POCONOS, INC.,
a Pennsylvania corporation
By:_______________________________
Name:_____________________________
Title:____________________________
[Signatures Continued.]
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HOME CARE PHARMACY, INC. OF
FLORIDA,
a Florida corporation
By:_______________________________
Name:_____________________________
Title:____________________________
XXXXXXXX PROPERTIES, INC.,
an Ohio corporation
By:_______________________________
Name:_____________________________
Title:____________________________
POLY-STAT COMPUTER
APPLICATIONS, INC.
an Ohio corporation
By:_______________________________
Name:_____________________________
Title:____________________________
POLY-STAT SUPPLY CORPORATION,
an Ohio corporation
By:_______________________________
Name:_____________________________
Title:____________________________
Q.D. PHARMACY, INC.,
a Michigan corporation
By:_______________________________
Name:_____________________________
Title:____________________________
AHC ACQUISITION CORP.,
a Delaware corporation
By:_______________________________
Name:_____________________________
Title:____________________________
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LENDERS: NATIONSBANK, N. A.,
individually in its capacity as a
Lender and in its capacity as Agent
By:_______________________________
Name:_____________________________
Title:____________________________
S-1
000
XXXXX XXXX XX XXXXXX
By:_______________________________
Name:_____________________________
Title:____________________________
S-2
123
FIRSTAR BANK MILWAUKEE, N.A.
By:_______________________________
Name:_____________________________
Title:____________________________
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124
CREDIT LYONNAIS NEW YORK BRANCH
By:_______________________________
Name:_____________________________
Title:____________________________
X-0
000
XXXXXX XXXXXXX
By:_______________________________
Name:_____________________________
Title:____________________________
By:_______________________________
Name:_____________________________
Title:____________________________
S-5
000
XXX XXXX XX XXXX XXXXXX
By:_______________________________
Name:_____________________________
Title:____________________________
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127
KEY CORPORATE CAPITAL INC.
By:_______________________________
Name:_____________________________
Title:____________________________
S-7
128
LASALLE NATIONAL BANK
By:_______________________________
Name:_____________________________
Title:____________________________
S-8
129
TORONTO DOMINION (TEXAS), INC.
By:_______________________________
Name:_____________________________
Title:____________________________
S-9
000
XXXXX XXXXXXXX XXXX XX XXXXXXX
By:_______________________________
Name:_____________________________
Title:____________________________
S-10
000
XXXX XX XXXXXXXX
By:_______________________________
Name:_____________________________
Title:____________________________
S-11
000
XXX XXXX XX XXX XXXX
By:_______________________________
Name:_____________________________
Title:____________________________
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133
BANK ONE, N.A.
By:_______________________________
Name:_____________________________
Title:____________________________
S-13
134
THE FUJI BANK, LTD., CHICAGO BRANCH
By:_______________________________
Name:_____________________________
Title:____________________________
S-14
135
THE SUMITOMO BANK, LIMITED
By:_______________________________
Name:_____________________________
Title:____________________________
By:_______________________________
Name:_____________________________
Title:____________________________
S-15
136
FIRST BANK NATIONAL ASSOCIATION
By:_______________________________
Name:_____________________________
Title:____________________________
S-16
137
BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
By:_______________________________
Name:_____________________________
Title:____________________________
S-17
138
COMERICA BANK
By:_______________________________
Name:_____________________________
Title:____________________________
X-00
000
XXXXXXX XXXX
By:_______________________________
Name:_____________________________
Title:____________________________
S-19
140
XXX XXXXXX AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By:_______________________________
Name:_____________________________
Title:____________________________
S-20
141
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:_______________________________
Name:_____________________________
Title:____________________________
S-21
000
XXXXXXX XXXXXXX PRIME RATE TRUST
By:_______________________________
Name:_____________________________
Title:____________________________
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BANKBOSTON, N.A.
By:_______________________________
Name:_____________________________
Title:____________________________
S-23
144
XXXXXXX XXXXX SENIOR FLOATING RATE
FUND, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
X-00
000
XXXXXXX CAPITAL FUNDING LLC
By:_______________________________
Name:_____________________________
Title:____________________________
S-25
146
CRESCENT/MACH I PARTNERS, L.P.
By: TCW Asset Management Company,
its Investment Manager
By:_______________________________
Name:_____________________________
Title:____________________________
S-26
147
KZH-CRESCENT CORPORATION
By:_______________________________
Name:_____________________________
Title:____________________________
S-27
148
ROYALTON COMPANY
By: Pacific Investment Management
Company, as its Investment Advisor
By:_______________________________
Name:_____________________________
Title:____________________________
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149
XXXXXXX NATIONAL LIFE INSURANCE
COMPANY
By: PPM America, Inc., as attorney-in-fact,
on behalf of Xxxxxxx National Life
Insurance Company
By:_______________________________
Name:_____________________________
Title:____________________________
S-29
150
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO
(a unit of The Chase Manhattan Bank)
By:_______________________________
Name:_____________________________
Title:____________________________
S-30
151
KZH HOLDING CORPORATION III
By:_______________________________
Name:_____________________________
Title:____________________________
S-31
152
THE ING CAPITAL SENIOR SECURED
HIGH INCOME FUND, L.P.
By:_______________________________
Name:_____________________________
Title:____________________________
S-32
153
KZH-ING-2 CORPORATION
By:_______________________________
Name:_____________________________
Title:____________________________
S-33
154
DEEPROCK & COMPANY
By: Xxxxx Van Management, as
Investment Advisor
By:_______________________________
Name:_____________________________
Title:____________________________
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SCHEDULE 1.1A
EXISTING LETTERS OF CREDIT
S-1
156
SCHEDULE 1.1B
INVESTMENTS
X-0
000
XXXXXXXX 1.1C
LIENS
1
158
SCHEDULE 2.1(A)
LENDER ADDRESSES AND COMMITMENTS
1
159
SCHEDULE 5.1(D)(I)
FORM OF OPINION OF XXXXXXX XXXX SLATE XXXXXXX & XXXX
1
160
SCHEDULE 5.1(d)(ii)
FORM OF LOCAL CORPORATE COUNSEL OPINION
1
161
SCHEDULE 6.4
REQUIRED CONSENTS, AUTHORIZATIONS, NOTICES AND FILINGS
1
162
SCHEDULE 6.9
LITIGATION
1
163
SCHEDULE 6.12
ERISA
1
164
SCHEDULE 6.13
SUBSIDIARIES
1
165
SCHEDULE 6.14(D)
REVOCATION, SUSPENSION OR LIMITATION OF LICENSES, PERMITS AND FRANCHISES
1
166
SCHEDULE 6.18
ENVIRONMENTAL DISCLOSURES
1
167
SCHEDULE 6.19
INTELLECTUAL PROPERTY
1
168
SCHEDULE 6.20(A)
MORTGAGED PROPERTIES
1
169
SCHEDULE 6.20(B)
COLLATERAL LOCATIONS
1
170
SCHEDULE 6.20(C)
CHIEF EXECUTIVE OFFICES/
PRINCIPAL PLACES OF BUSINESS
1
171
SCHEDULE 7.6
INSURANCE
1
172
SCHEDULE 8.1
INDEBTEDNESS
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173
EXHIBIT 1.1A
FORM OF PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Pledge Agreement") is entered into as of
November 26, 1997 among EXTENDICARE HEALTH SERVICES, INC., a Delaware
corporation (the "Borrower"), EXTENDICARE HOLDINGS, INC. (the "Parent") and
certain Subsidiaries of the Borrower (individually a "Guarantor", and
collectively the "Guarantors"; together with the Borrower and the Parent,
individually a "Pledgor", and collectively the "Pledgors") and NATIONSBANK,
N.A., in its capacity as agent (in such capacity, the "Agent") for the lenders
from time to time party to the Credit Agreement described below (the
"Lenders").
RECITALS
WHEREAS, pursuant to that certain Credit Agreement dated as of the date
hereof (as amended, modified, extended, renewed or replaced from time to time,
the "Credit Agreement") among the Borrower, the Guarantors, the Lenders and the
Agent, the Lenders have agreed to make Loans and issue Letters of Credit upon
the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
to issue Letters of Credit under the Credit Agreement that the Pledgors shall
have executed and delivered this Pledge Agreement to the Agent for the ratable
benefit of the Lenders.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Credit Agreement.
For purposes of this Pledge Agreement, the term "Lender" shall include any
Affiliate of any Lender which has entered into a Hedging Agreement with the
Borrower.
2. Pledge and Grant of Security Interest. To secure the prompt payment
and performance in full when due, whether by lapse of time or otherwise, of the
Pledgor Obligations (as defined in Section 3 hereof), each Pledgor hereby
pledges and assigns to the Agent, for the benefit of the Lenders, and grants to
the Agent, for the benefit of the Lenders, a continuing security interest in
any and all right, title and interest of such Pledgor in and to the following,
whether now owned or existing or owned, acquired, or arising hereafter
(collectively, the "Pledged Collateral"):
(a) Pledged Shares. 100% (or, if less, the full amount owned by
such Pledgor) of the issued and outstanding shares of capital stock owned
by such Pledgor of each Material Domestic Subsidiary set forth on
Schedule 2(a) attached hereto, in each
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case together with the certificates (or other agreements or instruments),
if any, representing such shares, and all options and other rights,
contractual or otherwise, with respect thereto (collectively, together
with the shares of capital stock described in Section 2(b) and 2(c)
below, the "Pledged Shares"), including, but not limited to, the
following:
(i) all shares or securities representing a dividend on any of
the Pledged Shares, or representing a distribution or return of
capital upon or in respect of the Pledged Shares, or resulting from
a stock split, revision, reclassification or other exchange
therefor, and any subscriptions, warrants, rights or options issued
to the holder of, or otherwise in respect of, the Pledged Shares;
and
(ii) without affecting the obligations of the Pledgors under
any provision prohibiting such action hereunder or under the Credit
Agreement, in the event of any consolidation or merger involving
the issuer of any Pledged Shares and in which such issuer is not
the surviving corporation, all shares of each class of the capital
stock of the successor corporation formed by or resulting from such
consolidation or merger.
(b) Additional Shares. 100% (or, if less, the full amount owned by
such Pledgor) of the issued and outstanding shares of capital stock owned
by such Pledgor of any Person which hereafter becomes a Material Domestic
Subsidiary, including, without limitation, the certificates representing
such shares.
(c) Other Equity Interests. Any and all other Capital Stock owned
by each Pledgor in any Material Domestic Subsidiary.
(d) Proceeds. All proceeds and products of the foregoing, however
and whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that a Pledgor may from time to time
hereafter deliver additional shares of stock to the Agent as collateral
security for the Pledgor Obligations. Upon delivery to the Agent, such
additional shares of stock shall be deemed to be part of the Pledged Collateral
of such Pledgor and shall be subject to the terms of this Pledge Agreement
whether or not Schedule 2(a) is amended to refer to such additional shares.
3. Security for Pledgor Obligations. The security interest created hereby
in the Pledged Collateral of each Pledgor constitutes continuing collateral
security for all of the following, whether now existing or hereafter incurred
(collectively, the "Pledgor Obligations"):
(a) In the case of the Borrower, the prompt performance and
observance by the Borrower of all obligations of the Borrower under the
Credit Agreement, the Notes, this Pledge Agreement and the other Credit
Documents to which the Borrower is a party;
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(b) In the case of the Guarantors, the prompt performance and
observance by such Guarantor of all obligations of such Guarantor under
the Credit Agreement, this Pledge Agreement and the other Credit
Documents to which such Guarantor is a party, including, without
limitation, its guaranty obligations arising under Section 4 of the
Credit Agreement; and
(c) All liabilities arising under Hedging Agreements and all
obligations and liabilities incurred in connection with collecting and
enforcing the Pledgor Obligations.
4. Delivery of the Pledged Collateral. Each Pledgor hereby agrees that:
(a) Each Pledgor shall deliver to the Agent (i) simultaneously with
or prior to the execution and delivery of this Pledge Agreement, all
certificates representing the Pledged Shares of such Pledgor and (ii)
promptly upon the receipt thereof by or on behalf of a Pledgor, all other
certificates and instruments constituting Pledged Collateral of a
Pledgor. Prior to delivery to the Agent, all such certificates and
instruments constituting Pledged Collateral of a Pledgor shall be held in
trust by such Pledgor for the benefit of the Agent pursuant hereto. All
such certificates shall be delivered in suitable form for transfer by
delivery or shall be accompanied by duly executed instruments of transfer
or assignment in blank, substantially in the form provided in Exhibit
4(a) attached hereto.
(b) Additional Securities. If such Pledgor shall receive by virtue
of its being or having been the owner of any Pledged Collateral, any (i)
stock certificate, including without limitation, any certificate
representing a stock dividend or distribution in connection with any
increase or reduction of capital, reclassification, merger,
consolidation, sale of assets, combination of shares, stock splits,
spin-off or split-off, promissory notes or other instrument; (ii) option
or right, whether as an addition to, substitution for, or an exchange
for, any Pledged Collateral or otherwise; (iii) dividends payable in
securities; or (iv) distributions of securities in connection with a
partial or total liquidation, dissolution or reduction of capital,
capital surplus or paid-in surplus, then such Pledgor shall receive such
stock certificate, instrument, option, right or distribution in trust for
the benefit of the Agent, shall segregate it from such Pledgor's other
property and shall deliver it forthwith to the Agent in the exact form
received together with any necessary endorsement and/or appropriate stock
power duly executed in blank, substantially in the form provided in
Exhibit 4(a), to be held by the Agent as Pledged Collateral and as
further collateral security for the Pledgor Obligations.
(c) Financing Statements. Each Pledgor shall execute and deliver to
the Agent such UCC or other applicable financing statements as may be
reasonably requested by the Agent in order to perfect and protect the
security interest created hereby in the Pledged Collateral of such
Pledgor.
5. Representations and Warranties. Each Pledgor hereby represents and
warrants to the Agent, for the benefit of the Lenders, that:
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(a) Authorization of Pledged Shares. The Pledged Shares are duly
authorized and validly issued, are fully paid and nonassessable and are
not subject to the preemptive rights of any Person. All other shares of
stock constituting Pledged Collateral will be duly authorized and validly
issued, fully paid and nonassessable and not subject to the preemptive
rights of any Person.
(b) Title. Each Pledgor has good and indefeasible title to the
Pledged Collateral of such Pledgor and will at all times be the legal and
beneficial owner of such Pledged Collateral free and clear of any Lien,
other than Permitted Liens. There exists no "adverse claim" within the
meaning of Section 8-302 of the Uniform Commercial Code as in effect in
the State of New York (the "UCC") with respect to the Pledged Shares of
such Pledgor.
(c) Exercising of Rights. The exercise by the Agent of its rights
and remedies hereunder will not violate any law or governmental
regulation or any material contractual restriction binding on or
affecting a Pledgor or any of its property.
(d) Pledgor's Authority. No authorization, approval or action by,
and no notice or filing with any Governmental Authority or with the
issuer of any Pledged Stock is required either (i) for the pledge made by
a Pledgor or for the granting of the security interest by a Pledgor
pursuant to this Pledge Agreement or (ii) for the exercise by the Agent
or the Lenders of their rights and remedies hereunder (except as may be
required by laws affecting the offering and sale of securities) or as may
be required with respect to the Agent or any Lender.
(e) Security Interest/Priority. This Pledge Agreement creates a
valid security interest in favor of the Agent for the benefit of the
Lenders, in the Pledged Collateral. The taking possession by the Agent
of the certificates representing the Pledged Shares and all other
certificates and instruments constituting Pledged Collateral will perfect
and establish the first priority of the Agent's security interest in the
Pledged Shares and, when properly perfected by filing or registration, in
all other Pledged Collateral represented by such Pledged Shares and
instruments securing the Pledgor Obligations. Except as set forth in
this Section 5(e), no action is necessary to perfect or otherwise protect
such security interest.
(f) No Other Shares. Other than as set forth on Schedule 2(a)
attached hereto, no Pledgor owns any shares of stock in any Material
Domestic Subsidiary.
6. Covenants. Each Pledgor hereby covenants, that so long as any of the
Pledgor Obligations remain outstanding or any Credit Document or Hedging
Agreement is in effect or any Letter of Credit shall remain outstanding, and
until all of the Commitments shall have been terminated, such Pledgor shall:
(a) Books and Records. Xxxx its books and records (and shall cause
the issuer of the Pledged Shares of such Pledgor to xxxx its books and
records) to reflect the
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security interest granted to the Agent, for the benefit of the Lenders,
pursuant to this Pledge Agreement.
(b) Defense of Title. Warrant and defend title to and ownership of
the Pledged Collateral of such Pledgor at its own expense against the
claims and demands of all other parties claiming an interest therein,
keep the Pledged Collateral free from all Liens, except for Permitted
Liens, and not sell, exchange, transfer, assign, lease or otherwise
dispose of Pledged Collateral of such Pledgor or any interest therein,
except as permitted under the Credit Agreement and the other Credit
Documents.
(c) Further Assurances. Promptly execute and deliver at its expense
all further instruments and documents and take all further action that
may be necessary and desirable or that the Agent may reasonably request
in order to (i) perfect and protect the security interest created hereby
in the Pledged Collateral of such Pledgor (including without limitation
any and all action necessary to satisfy the Agent that the Agent has
obtained a first priority perfected security interest in any capital
stock); (ii) enable the Agent to exercise and enforce its rights and
remedies hereunder in respect of the Pledged Collateral of such Pledgor;
and (iii) otherwise effect the purposes of this Pledge Agreement,
including, without limitation and if requested by the Agent, delivering
to the Agent irrevocable proxies in respect of the Pledged Collateral of
such Pledgor.
(d) Amendments. Not make or consent to any amendment or other
modification or waiver with respect to any of the Pledged Collateral of
such Pledgor or enter into any agreement or allow to exist any
restriction with respect to any of the Pledged Collateral of such Pledgor
other than pursuant hereto or as may be permitted under the Credit
Agreement.
(e) Compliance with Securities Laws. File all reports and other
information now or hereafter required to be filed by such Pledgor with
the United States Securities and Exchange Commission and any other state,
federal or foreign agency in connection with the ownership of the Pledged
Collateral of such Pledgor.
7. Advances by Lenders. On failure of any Pledgor to perform any of the
covenants and agreements contained herein, the Agent may, at its sole option
and in its sole discretion, perform the same and in so doing may expend such
sums as the Agent may reasonably deem advisable in the performance thereof,
including, without limitation, the payment of any insurance premiums, the
payment of any taxes, a payment to obtain a release of a Lien or potential
Lien, expenditures made in defending against any adverse claim and all other
expenditures which the Agent or the Lenders may make for the protection of the
security hereof or which may be compelled to make by operation of law. All
such sums and amounts so expended shall be repayable by the Pledgors on a joint
and several basis promptly upon timely notice thereof and demand therefor,
shall constitute additional Pledgor Obligations and shall bear interest from
the date said amounts are expended at the default rate specified in Section 3.1
of the Credit Agreement for Revolving Loans that are Base Rate Loans. No such
performance of any covenant or agreement by the Agent or the Lenders on behalf
of any Pledgor, and no such advance or expenditure therefor, shall relieve the
Pledgors of any default under the terms of
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this Pledge Agreement, the other Credit Documents or any Hedging Agreement.
The Lenders may make any payment hereby authorized in accordance with any xxxx,
statement or estimate procured from the appropriate public office or holder of
the claim to be discharged without inquiry into the accuracy of such xxxx,
statement or estimate or into the validity of any tax assessment, sale,
forfeiture, tax lien, title or claim except to the extent such payment is being
contested in good faith by a Pledgor in appropriate proceedings and against
which adequate reserves are being maintained in accordance with GAAP.
8. Events of Default. The occurrence of an event which under the Credit
Agreement would constitute an Event of Default shall be an Event of Default
hereunder (an "Event of Default").
9. Remedies.
(a) General Remedies. Upon the occurrence of an Event of Default
and during the continuation thereof, the Agent and the Lenders shall
have, in respect of the Pledged Collateral of any Pledgor, in addition to
the rights and remedies provided herein, in the Credit Documents, in the
Hedging Agreements or by law, the rights and remedies of a secured party
under the UCC or any other applicable law.
(b) Sale of Pledged Collateral. Upon the occurrence of an Event of
Default and during the continuation thereof, without limiting the
generality of this Section and without notice, the Agent may, in its sole
discretion, sell or otherwise dispose of or realize upon the Pledged
Collateral, or any part thereof, in one or more parcels, at public or
private sale, at any exchange or broker's board or elsewhere, at such
price or prices and on such other terms as the Agent may deem
commercially reasonable, for cash, credit or for future delivery or
otherwise in accordance with applicable law. To the extent permitted by
law, any Lender may in such event, bid for the purchase of such
securities. Each Pledgor agrees that, to the extent notice of sale shall
be required by law and has not been waived by such Pledgor, any
requirement of reasonable notice shall be met if notice, specifying the
place of any public sale or the time after which any private sale is to
be made, is personally served on or mailed, postage prepaid, to such
Pledgor, in accordance with the notice provisions of Section 11.1 of the
Credit Agreement at least 10 days before the time of such sale. The
Agent shall not be obligated to make any sale of Pledged Collateral of
such Pledgor regardless of notice of sale having been given. The Agent
may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
(c) Private Sale. Upon the occurrence of an Event of Default and
during the continuation thereof, the Pledgors recognize that the Agent
may deem it impracticable to effect a public sale of all or any part of
the Pledged Shares or any of the securities constituting Pledged
Collateral and that the Agent may, therefore, determine to make one or
more private sales of any such securities to a restricted group of
purchasers who will be obligated to agree, among other things, to acquire
such securities for their own account,
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for investment and not with a view to the distribution or resale thereof.
Each Pledgor acknowledges that any such private sale may be at prices
and on terms less favorable to the seller than the prices and other terms
which might have been obtained at a public sale and, notwithstanding the
foregoing, agrees that such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Agent shall have no
obligation to delay sale of any such securities for the period of time
necessary to permit the issuer of such securities to register such
securities for public sale under the Securities Act of 1933. Each
Pledgor further acknowledges and agrees that any offer to sell such
securities which has been (i) publicly advertised on a bona fide basis in
a newspaper or other publication of general circulation in the financial
community of New York, New York (to the extent that such offer may be
advertised without prior registration under the Securities Act of 1933),
or (ii) made privately in the manner described above shall be deemed to
involve a "public sale" under the UCC, notwithstanding that such sale may
not constitute a "public offering" under the Securities Act of 1933, and
the Agent may, in such event, bid for the purchase of such securities.
(d) Retention of Pledged Collateral. In addition to the rights and
remedies hereunder, upon the occurrence of an Event of Default, the Agent
may, after providing the notices required by Section 9-505(2) of the UCC
or otherwise complying with the requirements of applicable law of the
relevant jurisdiction, retain all or any portion of the Pledged
Collateral in satisfaction of the Pledgor Obligations. Unless and until
the Agent shall have provided such notices, however, the Agent shall not
be deemed to have retained any Pledged Collateral in satisfaction of any
Pledgor Obligations for any reason.
(e) Nonrecourse Obligation of Parent. The Pledgor Obligations of
the Parent hereunder shall be limited to the property and interests
pledged by the Parent to secure such Pledgor Obligations hereunder.
10. Rights of the Agent.
(a) Power of Attorney. In addition to other powers of attorney
contained herein, each Pledgor hereby designates and appoints the Agent,
on behalf of the Lenders, and each of its designees or agents as
attorney-in-fact of such Pledgor, irrevocably and with power of
substitution, with authority to take any or all of the following actions
upon the occurrence and during the continuance of an Event of Default:
(i) to demand, collect, settle, compromise, adjust and give
discharges and releases concerning the Pledged Collateral of such
Pledgor, all as the Agent may reasonably determine;
(ii) to commence and prosecute any actions at any court for
the purposes of collecting any of the Pledged Collateral of such
Pledgor and enforcing any other right in respect thereof;
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(iii) to defend, settle or compromise any action brought and,
in connection therewith, give such discharge or release as the
Agent may deem reasonably appropriate;
(iv) to pay or discharge taxes, liens, security interests, or
other encumbrances levied or placed on or threatened against the
Pledged Collateral of such Pledgor;
(v) to direct any parties liable for any payment under any of
the Pledged Collateral to make payment of any and all monies due
and to become due thereunder directly to the Agent or as the Agent
shall direct;
(vi) to receive payment of and receipt for any and all monies,
claims, and other amounts due and to become due at any time in
respect of or arising out of any Pledged Collateral of such
Pledgor;
(vii) to sign and endorse any drafts, assignments, proxies,
stock powers, verifications, notices and other documents relating
to the Pledged Collateral of such Pledgor;
(viii) to settle, compromise or adjust any suit, action or
proceeding described above and, in connection therewith, to give
such discharges or releases as the Agent may deem reasonably
appropriate;
(ix) execute and deliver all assignments, conveyances,
statements, financing statements, renewal financing statements,
pledge agreements, affidavits, notices and other agreements,
instruments and documents that the Agent may determine necessary in
order to perfect and maintain the security interests and liens
granted in this Pledge Agreement and in order to fully consummate
all of the transactions contemplated therein;
(x) to exchange any of the Pledged Collateral of such Pledgor
or other property upon any merger, consolidation, reorganization,
recapitalization or other readjustment of the issuer thereof and,
in connection therewith, deposit any of the Pledged Collateral of
such Pledgor with any committee, depository, transfer agent,
registrar or other designated agency upon such terms as the Agent
may determine;
(xi) to vote for a shareholder resolution, or to sign an
instrument in writing, sanctioning the transfer of any or all of
the Pledged Shares of such Pledgor into the name of the Agent or
one or more of the Lenders or into the name of any transferee to
whom the Pledged Shares of such Pledgor or any part thereof may be
sold pursuant to Section 10 hereof; and
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(xii) to do and perform all such other acts and things as the
Agent may reasonably deem to be necessary, proper or convenient in
connection with the Pledged Collateral of such Pledgor.
This power of attorney is a power coupled with an interest and shall be
irrevocable (i) for so long as any of the Pledgor Obligations remain
outstanding, any Credit Document or any Hedging Agreement is in effect or
any Letter of Credit shall remain outstanding and (ii) until all of the
Commitments shall have been terminated. The Agent shall be under no duty
to exercise or withhold the exercise of any of the rights, powers,
privileges and options expressly or implicitly granted to the Agent in
this Pledge Agreement, and shall not be liable for any failure to do so
or any delay in doing so. The Agent shall not be liable for any act or
omission or for any error of judgment or any mistake of fact or law in
its individual capacity or its capacity as attorney-in-fact except acts
or omissions resulting from its gross negligence or willful misconduct.
This power of attorney is conferred on the Agent solely to protect,
preserve and realize upon its security interest in Pledged Collateral.
(b) Performance by the Agent of Pledgor's Obligations. If any
Pledgor fails to perform any agreement or obligation contained herein,
the Agent itself may perform, or cause performance of, such agreement or
obligation, and the expenses of the Agent incurred in connection
therewith shall be payable by the Pledgors on a joint and several basis
pursuant to Section 13 hereof.
(c) Assignment by the Agent. To the extent provided in the Credit
Agreement, the Agent may from time to time assign the Pledgor Obligations
and any portion thereof and/or the Pledged Collateral and any portion
thereof, and the assignee shall be entitled to all of the rights and
remedies of the Agent under this Pledge Agreement in relation thereto.
(d) The Agent's Duty of Care. Other than the exercise of reasonable
care to assure the safe custody of the Pledged Collateral while being
held by the Agent hereunder, the Agent shall have no duty or liability to
preserve rights pertaining thereto, it being understood and agreed that
Pledgors shall be responsible for preservation of all rights in the
Pledged Collateral of such Pledgor, and the Agent shall be relieved of
all responsibility for Pledged Collateral upon surrendering it or
tendering the surrender of it to the Pledgors. The Agent shall be deemed
to have exercised reasonable care in the custody and preservation of the
Pledged Collateral in its possession if such Pledged Collateral is
accorded treatment substantially equal to that which the Agent accords
its own property, which shall be no less than the treatment employed by a
reasonable and prudent agent in the industry, it being understood that
the Agent shall not have responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders
or other matters relating to any Pledged Collateral, whether or not the
Agent has or is deemed to have knowledge of such matters; or (ii) taking
any necessary steps to preserve rights against any parties with respect
to any Pledged Collateral.
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(e) Voting Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have occurred and be
continuing, to the extent permitted by law, each Pledgor may
exercise any and all voting and other consensual rights pertaining
to the Pledged Collateral of such Pledgor or any part thereof for
any purpose not inconsistent with the terms of this Pledge
Agreement or the Credit Agreement; and
(ii) Upon the occurrence and during the continuance of an
Event of Default, all rights of a Pledgor to exercise the voting
and other consensual rights which it would otherwise be entitled to
exercise pursuant to paragraph (i) of this Section shall cease and
all such rights shall thereupon become vested in the Agent which
shall then have the sole right to exercise such voting and other
consensual rights.
(f) Dividend Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have occurred and be
continuing and subject to Section 4(b) hereof, each Pledgor may
receive and retain any and all dividends (other than stock
dividends and other dividends constituting Pledged Collateral which
are addressed hereinabove) or interest paid in respect of the
Pledged Collateral to the extent such dividends or interest, as
applicable, are allowed under the Credit Agreement.
(ii) Upon the occurrence and during the continuance of an
Event of Default:
(A) all rights of a Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to
receive and retain pursuant to paragraph (i) of this Section
shall cease and all such rights shall thereupon be vested in
the Agent which shall then have the sole right to receive and
hold as Pledged Collateral such dividends and interest
payments; and
(B) all dividends and interest payments which are
received by a Pledgor contrary to the provisions of paragraph
(A) of this Section shall be received in trust for the
benefit of the Agent, shall be segregated from other property
or funds of such Pledgor, and shall be forthwith paid over to
the Agent as Pledged Collateral in the exact form received,
to be held by the Agent as Pledged Collateral and as further
collateral security for the Pledgor Obligations.
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(g) Release of Pledged Collateral. The Agent may release any of the
Pledged Collateral from this Pledge Agreement or may substitute any of
the Pledged Collateral for other Pledged Collateral without altering,
varying or diminishing in any way the force, effect, lien, pledge or
security interest of this Pledge Agreement as to any Pledged Collateral
not expressly released or substituted, and this Pledge Agreement shall
continue as a first priority lien on all Pledged Collateral not expressly
released or substituted.
11. Rights of Required Lenders. All rights of the Agent hereunder, if not
exercised by the Agent, may be exercised by the Required Lenders.
12. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Pledgor
Obligations and any proceeds of any Pledged Collateral, when received by the
Agent or any of the Lenders in cash or its equivalent, will be applied in
reduction of the Pledgor Obligations in the order set forth in Section 3.15(b)
of the Credit Agreement, and each Pledgor irrevocably waives the right to
direct the application of such payments and proceeds and acknowledges and
agrees that the Agent shall have the continuing and exclusive right to apply
and reapply any and all such payments and proceeds in the Agent's sole
discretion, notwithstanding any entry to the contrary upon any of its books and
records.
13. Costs of Counsel. At all times hereafter, the Pledgors agree to
promptly pay upon demand any and all reasonable costs and expenses of the Agent
or the Lenders, (a) as required under Section 11.5 of the Credit Agreement and
(b) as necessary to protect the Pledged Collateral or to exercise any rights or
remedies under this Pledge Agreement or with respect to any Pledged Collateral.
All of the foregoing costs and expenses shall constitute Pledgor Obligations
hereunder.
14. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement in every
respect and shall remain in full force and effect so long as any of the
Pledgor Obligations remain outstanding or any Credit Document or Hedging
Agreement is in effect or any Letter of Credit shall remain outstanding,
and until all of the Commitments thereunder shall have terminated (other
than any obligations with respect to the indemnities and the
representations and warranties set forth in the Credit Documents). Upon
such payment and termination, this Pledge Agreement shall be
automatically terminated and the Agent and the Lenders shall, upon the
request and at the expense of the Pledgors, forthwith release all of its
liens and security interests hereunder and shall executed and deliver all
UCC termination statements and/or other documents reasonably requested by
the Pledgors evidencing such termination. Notwithstanding the foregoing
all releases and indemnities provided hereunder shall survive termination
of this Pledge Agreement.
(b) This Pledge Agreement shall continue to be effective or be
automatically reinstated, as the case may be, if at any time payment, in
whole or in part, of any of the Pledgor Obligations is rescinded or must
otherwise be restored or returned by the Agent
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or any Lender as a preference, fraudulent conveyance or otherwise under
any bankruptcy, insolvency or similar law, all as though such payment had
not been made; provided that in the event payment of all or any part of
the Pledgor Obligations is rescinded or must be restored or returned, all
reasonable costs and expenses (including without limitation any
reasonable legal fees and disbursements) incurred by the Agent or any
Lender in defending and enforcing such reinstatement shall be deemed to
be included as a part of the Pledgor Obligations.
15. Amendments; Waivers; Modifications. This Pledge Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 11.6 of the Credit Agreement.
16. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Pledgor, its successors and assigns and shall inure, together with the rights
and remedies of the Agent and the Lenders hereunder, to the benefit of the
Agent and the Lenders and their successors and permitted assigns; provided,
however, that none of the Pledgors may assign its rights or delegate its duties
hereunder without the prior written consent of each Lender or the Required
Lenders, as required by the Credit Agreement. To the fullest extent permitted
by law, each Pledgor hereby releases the Agent and each Lender, and its
successors and assigns, from any liability for any act or omission relating to
this Pledge Agreement or the Collateral, except for any liability arising from
the gross negligence or willful misconduct of the Agent, or such Lender, or its
officers, employees or agents.
17. Notices. All notices required or permitted to be given under this
Pledge Agreement shall be in conformance with Section 11.1 of the Credit
Agreement.
18. Counterparts. This Pledge Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
19. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.
20. Governing Law; Submission to Jurisdiction; Venue.
(a) THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this Pledge Agreement may be brought in the
courts of the State of New York or of the United States in New York City,
and, by execution and delivery of this Pledge Agreement, each Pledgor
hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of such courts. Each
Pledgor further irrevocably consents
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to the service of process out of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to it at the address for notices
pursuant to Section 11.1 of the Credit Agreement, such service to become
effective 30 days after such mailing. Nothing herein shall affect the
right of the Agent to serve process in any other manner permitted by law
or to commence legal proceedings or to otherwise proceed against any
Pledgor in any other jurisdiction.
(b) Each Pledgor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Pledge
Agreement brought in the courts referred to in subsection (a) hereof and
hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court
has been brought in an inconvenient forum.
21. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH
OF THE PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
22. Severability. If any provision of any of the Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
23. Entirety. This Pledge Agreement, the other Credit Documents and the
Hedging Agreements represent the entire agreement of the parties hereto and
thereto, and supersede all prior agreements and understandings, oral or
written, if any, including any commitment letters or correspondence relating to
the Credit Documents, the Hedging Agreements or the transactions contemplated
herein and therein.
24. Survival. All representations and warranties of the Pledgors
hereunder shall survive the execution and delivery of this Pledge Agreement,
the other Credit Documents and the Hedging Agreements, the delivery of the
Notes and the making of the Loans and the issuance of the Letters of Credit
under the Credit Agreement.
25. Other Security. To the extent that any of the Pledgor Obligations are
now or hereafter secured by property other than the Pledged Collateral
(including, without limitation, real and other personal property owned by a
Pledgor), or by a guarantee, endorsement or property of any other Person, then
the Agent and the Lenders shall have the right to proceed against such other
property, guarantee or endorsement upon the occurrence of any Event of Default,
and the Agent and the Lenders have the right, in their sole discretion, to
determine which rights, security, liens, security interests or remedies the
Agent and the Lenders shall at any time pursue, relinquish, subordinate, modify
or take with respect thereto, without in any way modifying or affecting any of
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them or any of the Agent's and the Lenders' rights or the Pledgor Obligations
under this Pledge Agreement, under any other of the Credit Documents or under
any Hedging Agreement.
26. Joint and Several Obligations of Pledgors.
(a) Each of the Pledgors is accepting joint and several liability
hereunder in consideration of the financial accommodation to be provided
by the Lenders under the Credit Agreement, for the mutual benefit,
directly and indirectly, of each of the Pledgors and in consideration of
the undertakings of each of the Pledgors to accept joint and several
liability for the obligations of each of them.
(b) Each of the Pledgors jointly and severally hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Pledgors with
respect to the payment and performance of all of the Pledgor Obligations
arising under this Pledge Agreement, the other Credit Documents and the
Hedging Agreements, it being the intention of the parties hereto that all
the Pledgor Obligations shall be the joint and several obligations of
each of the Pledgors without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary contained herein
or in any other of the Credit Documents, to the extent the obligations of
a Guarantor shall be adjudicated to be invalid or unenforceable for any
reason (including, without limitation, because of any applicable state or
federal law relating to fraudulent conveyances or transfers) then the
obligations of each Guarantor hereunder shall be limited to the maximum
amount that is permissible under applicable law (whether federal or state
and including, without limitation, the Bankruptcy Code).
[remainder of page intentionally left blank]
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Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: EXTENDICARE HEALTH SERVICES, INC.,
a Delaware corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
GUARANTORS: EXTENDICARE HOLDINGS, INC.,
a Wisconsin corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
EXTENDICARE HEALTH FACILITY
HOLDINGS, INC.,
a Delaware corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
EXTENDICARE HEALTH FACILITIES, INC.,
a Wisconsin corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
COVENTRY CARE, INC.,
a Pennsylvania corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
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188
NORTHERN HEALTH FACILITIES, INC.,
a Delaware corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
EXTENDICARE HOMES, INC.,
a Delaware corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
UNITED PROFESSIONAL COMPANIES, INC.,
a Delaware corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
THE PROGRESSIVE STEP CORPORATION,
a Wisconsin corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
EXTENDICARE OF INDIANA, INC.,
a Delaware corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
UNITED REHABILITATION SERVICES, INC.,
a Wisconsin corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
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189
EDGEWOOD NURSING CENTER, INC.,
a Pennsylvania corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
ELDER CREST, INC.,
a Pennsylvania corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
HAVEN CREST, INC.,
a Pennsylvania corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
MEADOW CREST, INC.,
a Pennsylvania corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
OAK HILL HOME OF REST AND CARE, INC.,
a Pennsylvania corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
EXTENDICARE GREAT TRAIL, INC.,
a Delaware corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
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000
XXX XXXX XXXXXXX CONVALESCENT
CENTER, INC.,
a Washington corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
UNITED PROFESSIONAL SERVICES, INC.,
a Wisconsin corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
ARBOR HEALTH CARE COMPANY,
a Delaware corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
ADULT SERVICES UNLIMITED, INC.,
a Pennsylvania corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
ALTERNACARE PLUS ENTERPRISES, INC.,
an Ohio corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
ARBORS EAST, INC.,
an Ohio corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
-18-
191
ARBORS AT FT. XXXXX, INC.,
an Indiana corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
ARBORS AT TOLEDO, INC.,
an Ohio corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
BAY GERIATRIC PHARMACY, INC.,
a Florida corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
THE DRUGGIST, INC.,
an Ohio corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
HEALTH POCONOS, INC.,
a Pennsylvania corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
HOME CARE PHARMACY, INC. OF
FLORIDA,
a Florida corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
-19-
192
XXXXXXXX PROPERTIES, INC.,
an Ohio corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
POLY-STAT COMPUTER
APPLICATIONS, INC.
an Ohio corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
POLY-STAT SUPPLY CORPORATION,
an Ohio corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
Q.D. PHARMACY, INC.,
a Michigan corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
AHC ACQUISITION CORP.,
a Delaware corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
Accepted and agreed to in Charlotte, North Carolina as of the date first
above written.
NATIONSBANK, N.A., as Agent
By: ______________________________
Name: ____________________________
Title: ___________________________
-20-
193
Schedule 2(a)
to
Pledge Agreement
dated as of November 26, 1997
in favor of NationsBank, N.A.
as Agent
PLEDGED STOCK
PLEDGOR: EXTENDICARE HEALTH
SERVICES, INC. (F/K/A UNITED HEALTH, INC.)
Number of Certificate Percentage
Name of Subsidiary Shares Number Ownership
------------------ --------- ----------- ----------
United Holdings, Inc., n/k/a
Extendicare Health Facility
Holdings, Inc. 308 4 100%
United Health Development Corporation,
n/k/a The Progressive Step Corporation 1000 1 100%
Union Prescription Centers, Inc.,
n/k/a United Professional Companies, Inc. 10 3 100%
Union Prescription Centers, Inc.,
n/k/a United Professional Companies, Inc. 1 4 100%
-1-
194
PLEDGOR: EXTENDICARE HOLDINGS, INC.
Number of Certificate Percentage
Name of Subsidiary Shares Number Ownership
------------------ --------- ----------- ----------
United Health, Inc., n/k/a
Extendicare Health Services, Inc. 947 10 100%
PLEDGOR: EXTENDICARE HEALTH FACILITY
HOLDINGS, INC. (F/K/A UNITED HOLDINGS, INC.)
Number of Certificate Percentage
Name of Subsidiary Shares Number Ownership
------------------ --------- ----------- ----------
Unicare Health Facilities, Inc., n/k/a
Extendicare Health Facilities, Inc. 100 13 100%
Unicare Homes, Inc., n/k/a
Extendicare Homes, Inc. 500 1 100%
Unicare Homes, Inc, n/k/a
Extendicare Homes, Inc. 500 2 100%
Unicare of Indiana, Inc., n/k/a
Extendicare of Indiana, Inc. 10 1 100%
Unicare Ancillary Services, Inc., n/k/a
United Rehabilitation Services, Inc. 1 1 100%
PLEDGOR: EXTENDICARE HEALTH FACILITIES,
INC. (F/K/A UNICARE HEALTH FACILITIES, INC.)
Number of Certificate Percentage
Name of Subsidiary Shares Number Ownership
------------------ --------- ----------- ----------
Coventry Care, Inc. 508,268 6 100%
Class A
Common
Northern Health Facilities, Inc. 100 1 100%
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PLEDGOR: COVENTRY CARE, INC.
Number of Certificate Percentage
Name of Subsidiary Shares Number Ownership
------------------ --------- ----------- ----------
Envir-Care Centers, Inc., n/k/a
Edgewood Nursing Center, Inc. 20 1 100%
Elder Crest, Inc. 1000 1 100%
Haven Crest, Inc. 3600 1 100%
Common
Voting Stock
Haven Crest, Inc. 13,680 2 100%
Class A
Common Stock
Meadow Crest, Inc. 100 1 100%
Oak Hill Home of Rest and Care, Inc. 2500 1 100%
PLEDGOR: NORTHERN HEALTH FACILITIES, INC.
Number of Certificate Percentage
Name of Subsidiary Shares Number Ownership
------------------ --------- ----------- ----------
Extendicare Great Trail, Inc. 10 1 100%
PLEDGOR: EXTENDICARE HOMES, INC.
(F/K/A UNICARE HOMES, INC.)
Number of Certificate Percentage
Name of Subsidiary Shares Number Ownership
------------------ --------- ----------- ----------
Fir Lane Terrace Convalescent
Center, Inc. 5000 3 100%
-3-
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PLEDGOR: UNITED PROFESSIONAL COMPANIES, INC.
(F/K/A UNION PRESCRIPTION CENTERS, INC.)
Number of Certificate Percentage
Name of Subsidiary Shares Number Ownership
------------------ --------- ----------- ----------
UHF Purchasing Services, Inc., n/k/a
United Professional Services, Inc. 500 5 100%
PLEDGOR: ARBOR HEALTH CARE COMPANY
Number of Certificate Percentage
Name of Subsidiary Shares Number Ownership
------------------ --------- ----------- ----------
Adult Services Unlimited, Inc. 900 2 100%
Alternacare Plus Enterprises, Inc. 100 4 100%
Arbors East, Inc. 100 1 100%
Arbors at Fort Xxxxx, Inc. 100 1 100%
Arbors at Toledo, Inc. 100 1 100%
Bay Geriatric Pharmacy, Inc. 200 16 100%
The Druggist, Inc. 100 2 100%
Health Poconos, Inc. 100 2 100%
Home Care Pharmacy, Inc. of Florida 1176.46 11 100%
Xxxxxxxx Properties, Inc. 950 A-3 100%
Class A
Xxxxxxxx Properties, Inc. 50 B-2 100%
Class B
Poly-Stat Computer Applications, Inc. 500 4 100%
Poly-Stat Supply Corporation 700 3 100%
Q.D. Pharmacy, Inc. 2000 6 100%
-4-
197
Exhibit 4(a)
to
Pledge Agreement
dated as of November 26, 1997
in favor of NationsBank, N.A.
as Agent
Irrevocable Stock Power
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
the following shares of capital stock of _____________________, a ____________
corporation:
No. of Shares Certificate No.
------------- ---------------
and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such capital stock and to take
all necessary and appropriate action to effect any such transfer. The agent
and attorney-in-fact may substitute and appoint one or more persons to act for
him. The effectiveness of a transfer pursuant to this stock power shall be
subject to any and all transfer restrictions referenced on the face of the
certificates evidencing such interest or in the certificate of incorporation or
bylaws of the subject corporation, to the extent they may from time to time
exist.
_______________,
a ______________ corporation
By: _____________________________
Name: ___________________________
Title: __________________________
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198
EXHIBIT 2.1(B)(I)
FORM OF NOTICE OF BORROWING
NationsBank, N. A.,
as Agent for the Lenders
000 Xxxxx Xxxxx Xxxxxx
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, EXTENDICARE HEALTH SERVICES, INC. (the "Borrower"),
refers to the Credit Agreement dated as of November 26, 1997 (as amended,
modified, restated or supplemented from time to time, the "Credit Agreement"),
among the Borrower, the Guarantors, the Lenders and NationsBank, N. A., as
Agent. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement. The Borrower
hereby gives notice pursuant to Section 2.1 of the Credit Agreement that it
requests a Revolving Loan advance under the Credit Agreement, and in connection
therewith sets forth below the terms on which such Loan advance is requested to
be made:
(A) Date of Borrowing (which is a Business Day) _______________________
(B) Principal Amount of Borrowing _______________________
(C) Interest rate basis _______________________
(D) Interest Period and the last day thereof _______________________
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c), (d), (e) and (f) (and, if this Notice of
Borrowing is being delivered with respect to the second advance of the Tranche
A Term Loan, subsection (g)) of such Section, are true and correct.
EXTENDICARE HEALTH SERVICES, INC.
By: ___________________________
Name: _________________________
Title: ________________________
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199
EXHIBIT 2.1(E)
FORM OF REVOLVING NOTE
$_________________ November 26, 1997
FOR VALUE RECEIVED, EXTENDICARE HEALTH SERVICES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
__________________________, its successors and assigns (the "Lender"), at the
office of NationsBank, N. A., as Agent (the "Agent"), at 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxx Center, NC1-001-15-04, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
(or at such other place or places as the holder hereof may designate), at the
times set forth in the Credit Agreement dated as of the date hereof among the
Borrower, the Guarantors, the Lenders and the Agent (as it may be as amended,
modified, restated or supplemented from time to time, the "Credit Agreement";
all capitalized terms not otherwise defined herein shall have the meanings set
forth in the Credit Agreement), but in no event later than the Maturity Date,
in Dollars and in immediately available funds, the principal amount of
________________________DOLLARS ($____________) or, if less than such principal
amount, the aggregate unpaid principal amount of all Revolving Loans made by
the Lender to the Borrower pursuant to the Credit Agreement, and to pay
interest from the date hereof on the unpaid principal amount hereof, in like
money, at said office, on the dates and at the rates selected in accordance
with Section 2.1(d) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note,
and all other indebtedness of the Borrower to the Lender shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and
interest, all costs of collection, including reasonable attorneys' fees.
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained by or on
behalf of the Borrower as provided in Section 11.3(c) of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
EXTENDICARE HEALTH SERVICES, INC.
By: __________________________
Name: ________________________
Title: _______________________
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200
EXHIBIT 2.3(F)
FORM OF TRANCHE A TERM NOTE
$_________________ November 26, 1997
FOR VALUE RECEIVED, EXTENDICARE HEALTH SERVICES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
__________________________, its successors and assigns (the "Lender"), at the
office of NationsBank, N. A., as Agent (the "Agent"), at 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxx Center, NC1-001-15-04, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
(or at such other place or places as the holder hereof may designate), at the
times set forth in the Credit Agreement dated as of the date hereof among the
Borrower, the Guarantors, the Lenders and the Agent (as it may be as amended,
modified, restated or supplemented from time to time, the "Credit Agreement";
all capitalized terms not otherwise defined herein shall have the meanings set
forth in the Credit Agreement), but in no event later than the Maturity Date,
in Dollars and in immediately available funds, the principal amount of
________________________DOLLARS ($____________), and to pay interest from the
date hereof on the unpaid principal amount hereof, in like money, at said
office, on the dates and at the rates selected in accordance with Section
2.3(e) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note,
and all other indebtedness of the Borrower to the Lender shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and
interest, all costs of collection, including reasonable attorneys' fees.
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained by or on
behalf of the Borrower as provided in Section 11.3(c) of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
EXTENDICARE HEALTH SERVICES, INC.
By: __________________________
Name: ________________________
Title: _______________________
1
201
EXHIBIT 2.4(F)
FORM OF TRANCHE B TERM NOTE
$_________________ November 26, 1997
FOR VALUE RECEIVED, EXTENDICARE HEALTH SERVICES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
__________________________, its successors and assigns (the "Lender"), at the
office of NationsBank, N. A., as Agent (the "Agent"), at 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxx Center, NC1-001-15-04, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
(or at such other place or places as the holder hereof may designate), at the
times set forth in the Credit Agreement dated as of the date hereof among the
Borrower, the Guarantors, the Lenders and the Agent (as it may be as amended,
modified, restated or supplemented from time to time, the "Credit Agreement";
all capitalized terms not otherwise defined herein shall have the meanings set
forth in the Credit Agreement), but in no event later than the Maturity Date,
in Dollars and in immediately available funds, the principal amount of
________________________DOLLARS ($____________), and to pay interest from the
date hereof on the unpaid principal amount hereof, in like money, at said
office, on the dates and at the rates selected in accordance with Section
2.4(e) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note,
and all other indebtedness of the Borrower to the Lender shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and
interest, all costs of collection, including reasonable attorneys' fees.
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained by or on
behalf of the Borrower as provided in Section 11.3(c) of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
EXTENDICARE HEALTH SERVICES, INC.
By: __________________________
Name: ________________________
Title: _______________________
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202
EXHIBIT 2.5(E)
FORM OF TRANCHE C TERM NOTE
$_________________ November 26, 1997
FOR VALUE RECEIVED, EXTENDICARE HEALTH SERVICES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
__________________________, its successors and assigns (the "Lender"), at the
office of NationsBank, N. A., as Agent (the "Agent"), at 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxx Center, NC1-001-15-04, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
(or at such other place or places as the holder hereof may designate), at the
times set forth in the Credit Agreement dated as of the date hereof among the
Borrower, the Guarantors, the Lenders and the Agent (as it may be as amended,
modified, restated or supplemented from time to time, the "Credit Agreement";
all capitalized terms not otherwise defined herein shall have the meanings set
forth in the Credit Agreement), but in no event later than the Maturity Date,
in Dollars and in immediately available funds, the principal amount of
________________________DOLLARS ($____________), and to pay interest from the
date hereof on the unpaid principal amount hereof, in like money, at said
office, on the dates and at the rates selected in accordance with Section
2.5(d) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note,
and all other indebtedness of the Borrower to the Lender shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and
interest, all costs of collection, including reasonable attorneys' fees.
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained by or on
behalf of the Borrower as provided in Section 11.3(c) of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
EXTENDICARE HEALTH SERVICES, INC.
By: __________________________
Name: ________________________
Title: _______________________
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203
EXHIBIT 3.2
FORM OF NOTICE OF EXTENSION/CONVERSION
NationsBank, N. A.,
as Agent for the Lenders
000 Xxxxx Xxxxx Xxxxxx
Independence Center, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, EXTENDICARE HEALTH SERVICES, INC. (the "Borrower"),
refers to the Credit Agreement dated as of November 26, 1997 (as amended,
modified, restated or supplemented from time to time, the "Credit Agreement"),
among the Borrower, the Guarantors, the Lenders and NationsBank, N. A., as
Agent. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement. The Borrower
hereby gives notice pursuant to Section 3.2 of the Credit Agreement that it
requests an extension or conversion of a [Revolving Loan] [Tranche A Term Loan]
[Tranche B Term Loan] [Tranche C Term Loan] outstanding under the Credit
Agreement, and in connection therewith sets forth below the terms on which such
extension or conversion is requested to be made:
(A) Loan Type/Tranche _______________________
(B) Date of Extension or Conversion
(which is the last day of the
the applicable Interest Period) _______________________
(C) Principal Amount of Extension or Conversion _______________________
(D) Interest rate basis _______________________
(E) Interest Period and the last day thereof ______________________
1
204
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c), (d), (e) and (f) of such Section, are true and
correct.
EXTENDICARE HEALTH SERVICES, INC.
By: __________________________
Name: ________________________
Title: _______________________
2
205
EXHIBIT 7.1(C)
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, 19___.
I, ______________________, [Title] of EXTENDICARE HEALTH SERVICES, INC.
(the "Borrower") hereby certify that, to the best of my knowledge and belief,
with respect to that certain Credit Agreement dated as of November 26, 1997 (as
amended, modified, restated or supplemented from time to time, the "Credit
Agreement"; all of the defined terms in the Credit Agreement are incorporated
herein by reference) among the Borrower, the Guarantors, the Lenders and
NationsBank, N. A., as Agent:
a. The company-prepared financial statements which accompany
this certificate are true and correct in all material respects and
have been prepared in accordance with GAAP applied on a consistent
basis, subject to changes resulting from normal year-end audit
adjustments; and
b. Since ___________ (the date of the last similar
certification, or, if none, the Closing Date) no Default or Event of
Default has occurred under the Credit Agreement.
Delivered herewith are detailed calculations demonstrating compliance by
the Credit Parties with the financial covenants contained in Section 7.11 of
the Credit Agreement as of the end of the fiscal period referred to above.
This ______ day of ___________, 19__.
EXTENDICARE HEALTH SERVICES, INC.
By: __________________________
Name: ________________________
Title: _______________________
1
206
Attachment to Officer's Certificate
COMPUTATION OF FINANCIAL COVENANTS
2
207
EXHIBIT 7.12
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of _____________, 19__,
is by and between _____________________, a ___________________ (the
"Subsidiary"), and NATIONSBANK, N. A., in its capacity as Agent under that
certain Credit Agreement (as it may be amended, modified, restated or
supplemented from time to time, the "Credit Agreement"), dated as of November
26, 1997, by and among EXTENDICARE HEALTH SERVICES, INC., a Delaware
corporation (the "Borrower"), the Guarantors, the Lenders and NationsBank, N.
A., as Agent. All of the defined terms in the Credit Agreement are
incorporated herein by reference.
The Subsidiary is an Additional Credit Party, and, consequently, the
Credit Parties are required by Section 7.12 of the Credit Agreement to cause
the Subsidiary to become a "Guarantor".
Accordingly, the Subsidiary hereby agrees as follows with the Agent, for
the benefit of the Lenders:
1. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Credit Agreement and a "Guarantor" for all purposes of the Credit Agreement,
and shall have all of the obligations of a Guarantor thereunder as if it had
executed the Credit Agreement. The Subsidiary hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
applicable to the Guarantors contained in the Credit Agreement. Without
limiting the generality of the foregoing terms of this paragraph 1, the
Subsidiary hereby (i) jointly and severally together with the other Guarantors,
guarantees to each Lender and the Agent, as provided in Section 4 of the Credit
Agreement, the prompt payment and performance of the Credit Party Obligations
in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise) strictly in accordance with the terms thereof.
2. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Pledge Agreement, and shall have all the obligations of a "Pledgor" thereunder
as if it had executed the Pledge Agreement. The Subsidiary hereby ratifies, as
of the date hereof, and agrees to be bound by, all the terms, provisions and
conditions contained in the Pledge Agreement. Without limiting the generality
of the foregoing terms of this paragraph 3, the Subsidiary hereby pledges and
assigns to the Agent, for the benefit of the Lenders, and grants to the Agent,
for the benefit of the Lenders, a continuing security interest in any and all
right, title and interest of the Subsidiary in and to Pledged Shares (as such
term is defined in Section 2 of the Pledge Agreement) listed on Schedule 1
attached hereto and the other Pledged Collateral (as such term is defined in
Section 2 of the Pledge Agreement).
1
208
3. The address of the Subsidiary for purposes of all notices and other
communications is ____________________, ____________________________, Attention
of ______________ (Facsimile No. ____________).
4. The Subsidiary hereby waives acceptance by the Agent and the Lenders of
the guaranty by the Subsidiary under Section 4 of the Credit Agreement upon the
execution of this Agreement by the Subsidiary.
5. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
6. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the Subsidiary has caused this Joinder Agreement to be
duly executed by its authorized officers, and the Agent, for the benefit of the
Lenders, has caused the same to be accepted by its authorized officer, as of
the day and year first above written.
[SUBSIDIARY]
By: ___________________________
Name: _________________________
Title: ________________________
Acknowledged and accepted:
NATIONSBANK, N. A., as Agent
By: __________________________
Name: ________________________
Title: _______________________
2
209
SCHEDULE 1
TO FORM OF JOINDER AGREEMENT
[Pledged Shares]
3
210
EXHIBIT 11.3(B)
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of November 26, 1997,
as amended and modified from time to time thereafter (the "Credit Agreement")
among EXTENDICARE HEALTH SERVICES, INC., the other Credit Parties party
thereto, the Lenders party thereto and NationsBank, N.A., as Agent. Terms
defined in the Credit Agreement are used herein with the same meanings.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, without recourse
and without representation or warranty except as expressly set forth herein,
and the Assignee hereby purchases and assumes from the Assignor, an interest in
and to the Assignor's rights and obligations under the Credit Agreement and the
other Credit Documents as of the date hereof equal to the percentage interest
specified on Schedule 1 of all outstanding rights and obligations under the
Credit Agreement and the other Credit Documents. After giving effect to such
sale and assignment, the Assignee's Commitment and the amount of the Loans
owing to the Assignee will be as set forth on Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Documents or any other instrument or
document furnished pursuant thereto; (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any
Credit Party or the performance or observance by any Credit Party of any of its
obligations under the Credit Documents or any other instrument or document
furnished pursuant thereto; and (iv) attaches the Notes held by the Assignor
and requests that the Agent exchange such Notes for new Notes payable to the
order of the Assignee in an amount equal to the Commitment assumed by the
Assignee pursuant hereto and to the Assignor in an amount equal to the
Commitment retained by the Assignor, if any, as specified on Schedule 1.
211
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 7.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor 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 the Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement as are delegated to the
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service or other forms required under Section 3.11.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement
and the Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Notes
for periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
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212
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date hereof.
____________________, as Assignor
By: ______________________________
Name: ____________________________
Title: ___________________________
_____________________, as Assignee
By: ______________________________
Name: ____________________________
Title: ___________________________
Notice address of Assignee:
<>
__________________________________
__________________________________
Attn: ____________________________
Telephone: (___) ________________
Telecopy: (___) ________________
CONSENTED TO:
NATIONSBANK, N.A., *
as Agent
By: _________________________
Name: _______________________
Title: ______________________
EXTENDICARE HEALTH SERVICES, INC.*
By: _________________________
Name: _______________________
Title: ______________________
___________
* Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee."
* Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee."
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213
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment*:
(e) Revolving Commitment Percentage Assigned
(expressed as a percentage set forth to at least 8 decimals) %
(f) Revolving Commitment Percentage of Assignee
after giving effect to this Assignment and Acceptance
as of the Effective Date (set forth to at least 8 decimals) %
(g) Revolving Commitment Percentage of Assignor
after giving effect to this Assignment and Acceptance
as of the Effective Date (set forth to at least 8 decimals) %
(h) Revolving Committed Amount as of Effective Date $_____________
(i) Dollar Amount of Assignor's Revolving Commitment
Percentage as of the Effective Date (the amount set
forth in (h) multiplied by the percentage set forth in (g)) $_____________
(j) Dollar Amount of Assignee's Revolving Commitment
Percentage as of the Effective Date (the amount set
forth in (h) multiplied by the percentage set forth in (f)) $_____________
(k) Tranche A Term Loan Commitment Percentage Assigned
(expressed as a percentage set forth to at least 8 decimals) %
(l) Tranche A Term Loan Commitment Percentage of Assignee
after giving effect to this Assignment and Acceptance
on the Effective Date (set forth to at least 8 decimals) %
(m) Tranche A Term Loan Commitment Percentage of Assignor
after giving effect to this Assignment and Acceptance
on the Effective Date (set forth to at least 8 decimals) %
(n) Outstanding Balance of Tranche A Term Loan as of
the Effective Date $_____________
___________
*This date should be no earlier than five Business Days after delivery of this
Assignment and Acceptance to the Agent.
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214
(o) Principal Amount of Assignor's portion of the Tranche A
Term Loan after giving effect to this Assignment and
Acceptance on Effective Date (the amount set forth
in (n) multiplied by the percentage set forth in (m)) $_____________
(p) Principal Amount of Assignee's portion of the Tranche A
Term Loan after giving effect to this Assignment and
Acceptance on Effective Date (the amount set forth in (n)
multiplied by the percentage set forth in (l)) $_____________
(q) Tranche B Term Loan Commitment Percentage Assigned
(expressed as a percentage set forth to at least 8 decimals) %
(r) Tranche B Term Loan Commitment Percentage of Assignee
after giving effect to this Assignment and Acceptance
on the Effective Date (set forth to at least 8 decimals) %
(s) Tranche B Term Loan Commitment Percentage of Assignor
after giving effect to this Assignment and Acceptance
on the Effective Date (set forth to at least 8 decimals) %
(t) Outstanding Balance of Tranche B Term Loan as of
the Effective Date $_____________
(u) Principal Amount of Assignor's portion of the Tranche B
Term Loan after giving effect to this Assignment and
Acceptance on Effective Date (the amount set forth
in (t) multiplied by the percentage set forth in (s)) $_____________
(v) Principal Amount of Assignee's portion of the Tranche B
Term Loan after giving effect to this Assignment and
Acceptance on Effective Date (the amount set forth in (t)
multiplied by the percentage set forth in (q)) $_____________
(w) Tranche C Term Loan Commitment Percentage Assigned
(expressed as a percentage set forth to at least 8 decimals) %
(x) Tranche C Term Loan Commitment Percentage of Assignee
after giving effect to this Assignment and Acceptance
on the Effective Date (set forth to at least 8 decimals) %
(y) Tranche C Term Loan Commitment Percentage of Assignor
after giving effect to this Assignment and Acceptance
on the Effective Date (set forth to at least 8 decimals) %
(z) Outstanding Balance of Tranche C Term Loan as of
the Effective Date $_____________
(aa) Principal Amount of Assignor's portion of the Tranche C
Term Loan after giving effect to this Assignment and
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215
Acceptance on Effective Date (the amount set forth
in (z) multiplied by the percentage set forth in (y)) $_____________
(bb) Principal Amount of Assignee's portion of the Tranche C
Term Loan after giving effect to this Assignment and
Acceptance on Effective Date (the amount set forth in (z)
multiplied by the percentage set forth in (w)) $_____________
9
