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Exhibit 10.1
CREDIT AGREEMENT
Dated
as of October 30, 2007
Between
NATIONAL HEALTHCARE CORPORATION
and
BANK OF AMERICA, N.A.
$75,000,000
TABLE OF CONTENTS
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Section
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Page
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Article
1. DEFINITIONS AND ACCOUNTING TERMS
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1
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1.01 Defined
Terms
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1
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1.02 Other
Interpretive Provisions
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15
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1.03 Accounting
Terms
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15
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1.04 Rounding
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16
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1.05 References
to Agreements and Laws
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16
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1.06 Times
of Day
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16
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1.07 Letter
of Credit Amounts
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16
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Article
2. THE COMMITMENT AND CREDIT EXTENSIONS
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16
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2.01 Loans
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16
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2.02 Borrowings,
Conversions and Continuations of Loans
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17
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2.03 Letters
of Credit
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18
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2.04 Prepayments
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23
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2.05 Termination
or Reduction of Commitment.
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23
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2.06 Repayment
of Loans
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24
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2.07 Interest.
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2.08 [Reserved]
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24
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2.09 Computation
of Interest and Fees
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24
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2.10 Evidence
of Debt
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25
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2.11 Payments
Generally
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25
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2.12 Extension
of Maturity Date
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25
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Article
3. TAXES, YIELD PROTECTION AND ILLEGALITY
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26
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3.01 Taxes
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26
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3.02 Illegality
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27
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3.03 Inability
to Determine Eurodollar Rate
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27
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3.04 Increased
Cost and Reduced Return; Capital Adequacy
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27
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3.05 Funding
Losses
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28
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3.06 Requests
for Compensation
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28
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3.07 Survival
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29
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Article
4. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
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29
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4.01 Conditions
of Initial Credit Extension
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29
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4.02 Conditions
to all Credit Extensions
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30
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Article
5. REPRESENTATIONS AND WARRANTIES
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31
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5.01 Existence,
Qualification and Power; Compliance with Laws
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31
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5.02 Authorization;
No Contravention
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31
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5.03 Governmental
Authorization; Other Consents
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5.04 Binding
Effect
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32
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5.05 Financial
Statements; No Material Adverse Effect
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32
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5.06 Litigation
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32
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5.07 No
Default
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33
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5.08 Ownership
of Property; Liens
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33
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5.09 Environmental
Compliance
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33
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5.10 Insurance
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33
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5.11 Taxes
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33
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5.12 ERISA
Compliance
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33
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5.13 Subsidiaries
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34
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5.14 Margin
Regulations; Investment Company Act
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34
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5.15 Disclosure
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34
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5.16 Compliance
with Laws
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35
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5.17 Intellectual
Property; Licenses, Etc
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35
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5.18 Certain
Subsidiaries
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35
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Article
6. AFFIRMATIVE COVENANTS
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35
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6.01 Financial
Statements
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35
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6.02 Certificates;
Other Information
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36
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6.03 Notices
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37
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6.04 Payment
of Obligations
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37
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6.05 Preservation
of Existence, Etc
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38
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6.06 Maintenance
of Properties
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38
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6.07 Maintenance
of Insurance
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38
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6.08 Compliance
with Laws
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38
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6.09 Books
and Records
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38
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6.10 Inspection
Rights
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39
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6.11 Use
of Proceeds
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39
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6.12 Additional
Guarantors
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39
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6.13 Termination
of Commitment and Prepayment
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39
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Article
7. NEGATIVE COVENANTS
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39
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7.01 Liens
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39
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7.02 Investments
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41
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7.03 Indebtedness
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42
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7.04 Fundamental
Changes
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43
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7.05 Dispositions
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43
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7.06 Restricted
Payments
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44
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7.07 Change
in Nature of Business
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45
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7.08 Transactions
with Affiliates
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45
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7.09 Burdensome
Agreements
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45
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7.10 Use
of Proceeds
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45
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7.11 Equity
Interests of Premier Group and Premier Plus
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45
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Article
8. EVENTS OF DEFAULT AND REMEDIES
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45
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8.01 Events
of Default
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45
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8.02 Remedies
Upon Event of Default
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48
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8.03 Application
of Funds
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48
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Article
9. MISCELLANEOUS
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48
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9.01 Amendments;
Etc
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48
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9.02 Notices
and Other Communications; Facsimile Copies
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48
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9.03 No
Waiver; Cumulative Remedies
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50
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9.04 Attorney
Costs, Expenses and Taxes
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50
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9.05 Indemnification
by the Borrower
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50
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9.06 Payments
Set Aside
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51
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9.07 Successors
and Assigns.
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51
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9.08 Confidentiality
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53
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9.09 Set-off
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54
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9.10 Interest
Rate and Loan Charge Limitations
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54
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9.11 Counterparts
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54
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9.12 Integration
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54
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9.13 Survival
of Representations and Warranties
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55
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9.14 Severability
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55
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9.15 Governing
Law
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55
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9.16 Waiver
of Right to Trial by Jury
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56
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9.17 USA
Patriot Act Notice
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56
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9.18 Time
of the Essence
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56
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9.19 Entire
Agreement
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56
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SIGNATURES
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S-1
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SCHEDULES
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5.06 Litigation
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5.13 Subsidiaries
and Other Equity Investments
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7.01 Existing
Liens
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7.02 Existing
Investments
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7.03 Existing
Indebtedness
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9.02 Notice
Addresses and Lending Office
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EXHIBITS
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Form of
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A Loan
Notice
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B Note
C Guaranty
D Pledge
and Security Agreement
E Opinion
Matters
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("
Agreement ") is entered into as of October 30,
2007, by and between NATIONAL HEALTHCARE CORPORATION, a
Delaware corporation (the " Borrower ") and BANK OF
AMERICA, N.A., a national banking association (the "
Lender ").
The Borrower has requested
that the Lender provide a revolving credit facility, and the
Lender is willing to do so on the terms and conditions set
forth herein.
In consideration of the
mutual covenants and agreements herein contained, the parties
hereto covenant and agree as follows:
ARTICLE 1.
DEFINITIONS AND ACCOUNTING TERMS
1.01
Defined Terms . As
used in this Agreement, the following terms shall have the meanings
set forth below:
"
Affiliate " means, with respect to any Person, another
Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under
common Control with the Person specified. "
Control " means the possession, directly or indirectly,
of the power to direct or cause the direction of the
management or policies of a Person, whether through the
ability to exercise voting power, by contract or
otherwise. " Controlling " and "
Controlled " have meanings correlative
thereto. Without limiting the generality of the
foregoing, a Person shall be deemed to be Controlled by
another Person if such other Person possesses, directly or
indirectly, power to vote 10% or more of the securities having
ordinary voting power for the election of directors, managing
general partners or the equivalent.
"
Agreement " means this Credit Agreement.
"
Applicable Rate " means a per annum rate equal
to:
(a) with
respect to Base Rate Loans, 0.00%;
(b) with
respect to Eurodollar Rate Loans, 0.25%; and
(c) with
respect to Letters of Credit, 0.25%.
"
Approved Fund " has the meaning specified in
Section 9.07(f) .
"
Attorney Costs " means and includes all fees, expenses
and disbursements of any law firm or other external
counsel.
"
Attributable Indebtedness " means, on any date,
(a) in respect of any capital lease of any Person, the
capitalized amount thereof that would appear on a balance
sheet of such Person prepared as of such date in accordance
with GAAP, and (b) in respect of any Synthetic Lease
Obligation, the capitalized amount of the remaining lease
payments under the relevant lease that
would
appear on a balance sheet of such Person prepared as of such
date in accordance with GAAP if such lease were accounted for
as a capital lease.
"
Audited Financial Statements " means the audited
consolidated balance sheet of the Borrower and its
Subsidiaries for the fiscal year ended December 31, 2006, and
the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year of
the Borrower and its Subsidiaries, including the notes
thereto.
"
Availability Period " means the period from and
including the Closing Date to the earlier of (a) the Maturity
Date and (b) the date of termination of the
Commitment.
"
Base Rate " means for any day a fluctuating rate per
annum equal to the higher of (a) the Federal Funds Rate
plus 1/2 of 1% and (b) the rate of interest in effect for
such day as publicly announced from time to time by the Lender
as its "prime rate." The "prime rate" is a rate set
by the Lender based upon various factors including the
Lender's costs and desired return, general economic conditions
and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such rate
announced by the Lender shall take effect at the opening of
business on the day specified in the public announcement of
such change.
"
Base Rate Loan " means a Loan that bears interest based
on the Base Rate.
"
Borrower " has the meaning specified in the
introductory paragraph hereto.
"
Business Day " means any day other than a Saturday,
Sunday or other day on which commercial banks are authorized
to close under the Laws of, or are in fact closed in, the
state where the Lending Office is located and, if such day
relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between
banks in the London interbank eurodollar market.
"
Cash Collateralize " has the meaning specified in
Section 2.03(f) .
"
Change of Control " means, with respect to any Person,
an event or series of events by which:
(a) any
"person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, but excluding any employee benefit plan of such
person or its subsidiaries, and any person or entity acting in
its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, except that a person or group shall be
deemed to have "beneficial ownership" of all securities that
such person or group has the right to acquire (such right, an
" option right "), whether such right is exercisable
immediately or only after the passage of time), directly or
indirectly, of 25% or more of the equity securities of such
Person entitled to vote for members of the board of directors
or equivalent governing body of such Person on a fully-diluted
basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any
option right); or
(b) a
majority of the members of the board of directors or other
equivalent governing body of such Person cease to be composed
of individuals (i) who were members of that board or
equivalent governing body on the Closing Date, (ii) whose
election or nomination to that board or equivalent governing
body was approved by individuals referred to in
clause (i) above constituting at the time of such
election or nomination at least a majority of that board or
equivalent governing body or (iii) whose election or
nomination to that board or other equivalent governing body
was approved by individuals referred to in clauses (i)
and (ii) above constituting at the time of such
election or nomination at least a majority of that board or
equivalent governing body (excluding, in the case of both
clause (ii) and clause (iii) , any
individual whose initial nomination for, or assumption of
office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of
proxies or consents for the election or removal of one or more
directors by any person or group other than a solicitation for
the election of one or more directors by or on behalf of the
board of directors).
"
Closing Date " means the first date all the conditions
precedent in Section 4.01 are satisfied or waived
by the Lender.
"
Code " means the Internal Revenue Code of
1986.
"
Collateral " has the meaning specified in the Pledge
and Security Agreement.
"
Commitment " means the obligation of the Lender to make
Loans and L/C Credit Extensions hereunder in an aggregate
principal amount at any one time not to exceed $75,000,000, as
such amount may be adjusted from time to time in accordance
with this Agreement.
"
Consolidated NHR " has the meaning specified in the
definition of "NHR Acquisition".
"
Contractual Obligation " means, as to any Person, any
provision of any security issued by such Person or of any
agreement, instrument or other undertaking to which such
Person is a party or by which it or any of its property is
bound.
"
Control " has the meaning specified in the definition
of "Affiliate".
"
Credit Extension " means each of the following:
(a) a borrowing of a Loan and (b) an L/C Credit
Extension.
"
Debtor Relief Laws " means the Bankruptcy Code of the
United States, and all other liquidation, conservatorship,
bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United
States or other applicable jurisdictions from time to time in
effect and affecting the rights of creditors
generally.
"
Davis Acquisition Sub " has the meaning specified in
the definition of "NHR Acquisition".
"
Default " means any event or condition that constitutes
an Event of Default or that, with the giving of any notice,
the passage of time, or both, would be an Event of
Default.
"
Default Rate " means an interest rate equal to
(a) the Base Rate plus (b) the Applicable
Rate, if any, applicable to Base Rate Loans plus
(c) 2% per annum; provided , however , that
with respect to a Eurodollar Rate Loan, the Default Rate shall
be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per
annum, in each case to the fullest extent permitted by
applicable Laws.
"
Disposition " or " Dispose " means the sale,
transfer, license, lease or other disposition (including any
sale and leaseback transaction) of any property by any Person,
including any sale, assignment, transfer or other disposal,
with or without recourse, of any notes or accounts receivable
or any rights and claims associated therewith.
"
Dollar " and " $ " mean lawful money of the
United States.
"
Domestic Subsidiary " means any Subsidiary that is
organized under the laws of any political subdivision of the
United States.
"
Eligible Assignee " has the meaning specified in
Section 9.07(f) .
"
Environmental Laws " means any and all Federal, state,
local, and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the
environment or the release of any materials into the
environment, including those related to hazardous substances
or wastes, air emissions and discharges to waste or public
systems.
"
Environmental Liability " means any liability,
contingent or otherwise (including any liability for damages,
costs of environmental remediation, fines, penalties or
indemnities), of the Borrower, any other Loan Party or any of
their respective Subsidiaries directly or indirectly resulting
from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed
or imposed with respect to any of the foregoing.
"
Equity Interests " means any and all shares, interests,
participations or other equivalents (however designated) of
capital stock of a corporation, any and all equivalent
ownership interests in a Person other than a corporation,
including partnership interests and membership interests, and
any and all warrants, rights or options to purchase or other
arrangements or rights to acquire any of the
foregoing.
"
ERISA " means the Employee Retirement Income Security
Act of 1974.
"
ERISA Affiliate " means any trade or business (whether
or not incorporated) under common control with the Borrower
within the meaning of Section 414(b) or (c) of the Code
(and
Sections 414(m)
and (o) of the Code for purposes of provisions relating to
Section 412 of the Code).
"
ERISA Event " means (a) a Reportable Event with
respect to a Pension Plan; (b) a withdrawal by the
Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of
ERISA) or a cessation of operations that is treated as such a
withdrawal under Section 4062(e) of ERISA; (c) a
complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing
of a notice of intent to terminate, the treatment of a Plan
amendment as a termination under Sections 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an
event or condition that constitutes grounds under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any
liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of
ERISA, upon the Borrower or any ERISA Affiliate.
"
Eurodollar Base Rate " has the meaning specified in the
definition of Eurodollar Rate.
"
Eurodollar Rate " means for any Interest Period with
respect to any Eurodollar Rate Loan, a rate per annum
determined by the Lender pursuant to the following
formula:
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Eurodollar
Rate =
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Eurodollar Base Rate
1.00
– Eurodollar Reserve Percentage
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where:
"
Eurodollar Base Rate " means, for such Interest Period,
the rate per annum equal to the British Bankers Association
LIBOR Rate (" BBA LIBOR "), as published by Reuters (or
other commercially available source providing quotations of
BBA LIBOR as determined by the Lender from time to time) at
approximately 11:00 a.m., London time, two Business Days
prior to the first day of such Interest Period, for Dollar
deposits (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period,
rounded upward, if necessary, to a whole multiple of 1/100 of
1%. If such rate is not available at such time for
any reason, then the " Eurodollar Base Rate " for such
Interest Period shall be the rate per annum determined by the
Lender to be the rate at which deposits in Dollars for
delivery on the first day of such Interest Period in same day
funds in the approximate amount of the Eurodollar Rate Loan
being made, continued or converted by Lender and with a term
equivalent to such Interest Period would be offered by
Lender's London Branch to major banks in the London interbank
eurodollar market at their request at approximately
11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.
"
Eurodollar Reserve Percentage " means, for any day
during any Interest Period, the reserve percentage (expressed
as a decimal, carried out to five decimal places) in effect on
such day applicable to the Lender under regulations issued
from time to time by the FRB for determining the maximum
reserve requirement (including any emergency,
supplemental
or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The Eurodollar Rate for each
outstanding Eurodollar Rate Loan shall be adjusted
automatically as of the effective date of any change in the
Eurodollar Reserve Percentage.
"
Eurodollar Rate Loan " means a Loan that bears interest
based on the Eurodollar Rate.
"
Eurodollar Reserve Percentage " has the meaning
specified in the definition of Eurodollar Rate.
"
Event of Default " has the meaning specified in
Section 8.01 .
"
Excluded Grantors " means City Corporation, a Tennessee
corporation, NHC Healthcare/Lake City, Inc., a Florida
corporation, and NHC Healthcare/Pensacola, Inc., a Florida
corporation.
"
Facility " means a nursing home, home healthcare, long
term rehabilitation, assisted living, outpatient
rehabilitation, senior living, senior care or hospice
facility, or a rehabilitation facility operated in partnership
with a sports medicine healthcare provider.
"
Federal Funds Rate " means, for
any day, the rate per annum equal to the weighted average of
the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds
brokers on such day, as published 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 (rounded upward, if necessary, to a whole multiple of
1/100 of 1%) charged to the Lender on such day on such
transactions as determined by the Lender.
"
Foreign Subsidiary " means any Subsidiary that is not a
Domestic Subsidiary.
"
FRB " means the Board of Governors of the Federal
Reserve System of the United States.
"
Fund " has the meaning specified in
Section 9.07(f) .
"
GAAP " means generally accepted accounting principles
in the United States set forth in the opinions and
pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting
Standards Board, or such other principles as may be approved
by a significant segment of the accounting profession in the
United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"
Governmental Authority " means any nation or
government, any state or other political subdivision thereof,
any agency, authority, instrumentality, regulatory body,
court,
administrative
tribunal, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative
powers or functions of or pertaining to
government.
"
Guarantors " means, individually and collectively, the
Subsidiaries of the Borrower named below, together with each
other Person that hereafter becomes a Guarantor in accordance
with the terms and conditions of this Agreement, including
Section 6.12 . On the date of this
Agreement, the Guarantors are:
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Name of Guarantor
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Jurisdiction of Organization
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NHC/Delaware,
Inc.
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Delaware
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NHC/OP,
L.P.
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Delaware
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NHC
Delaware Investments Inc.
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Delaware
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City
Corporation
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Tennessee
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NHC
Healthcare/Lake City, Inc.
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Florida
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NHC
Healthcare/Pensacola, Inc.
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Florida
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"
Guaranty " means the Guaranty made by the Guarantors in
favor of the Lender, substantially in the form of
Exhibit C .
"
Guarantee " means, as to any Person, any (a) any
obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation payable or performable by
another Person (the " primary obligor ") in any manner,
whether directly or indirectly, and including any obligation
of such Person, direct or indirect, (i) to purchase or
pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to
purchase or lease property, securities or services for the
purpose of assuring the obligee in respect of such
Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to
maintain working capital, equity capital or any other
financial statement condition or liquidity or level of income
or cash flow of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or other obligation,
or (iv) entered into for the purpose of assuring in any other
manner the obligee in respect of such Indebtedness or other
obligation of the payment or performance thereof or to protect
such obligee against loss in respect thereof (in whole or in
part), or (b) any Lien on any assets of such Person
securing any Indebtedness or other obligation of any other
Person, whether or not such Indebtedness or other obligation
is assumed by such Person. The amount of any
Guarantee shall be deemed to be an amount equal to the stated
or determinable amount of the related primary obligation, or
portion thereof, in respect of which such Guarantee is made
or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term
"Guarantee" as a verb has a corresponding
meaning.
"
Hazardous Materials " means all explosive or
radioactive substances or wastes and all hazardous or toxic
substances, wastes or other pollutants, including petroleum or
petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any
nature regulated pursuant to any Environmental
Law.
"
Honor Date " has the meaning specified in
Section 2.03(c)(i) .
"
Indebtedness " means, as to any Person at a particular
time, without duplication, all of the following, whether or
not included as indebtedness or liabilities in accordance with
GAAP:
(a) all
obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures,
notes, loan agreements or other similar
instruments;
(b) all
direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers'
acceptances, bank guaranties, surety bonds and similar
instruments;
(c) net
obligations of such Person under any Swap
Contract;
(d) all
obligations of such Person to pay the deferred purchase price
of property or services (other than trade accounts payable in
the ordinary course of business);
(e) indebtedness
(excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall
have been assumed by such Person or is limited in
recourse;
(f) capital
leases and Synthetic Lease Obligations; and
(g) all
Guarantees of such Person in respect of any of the
foregoing.
For
all purposes hereof, the Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture
(other than a joint venture that is itself a corporation or
limited liability company) in which such Person is a general
partner or a joint venturer, unless such Indebtedness is
expressly made non-recourse to such Person. The
amount of any net obligation under any Swap Contract on any
date shall be deemed to be the Swap Termination Value thereof
as of such date. The amount of any capital lease or
Synthetic Lease Obligation as of any date shall be deemed to
be the amount of Attributable Indebtedness in respect thereof
as of such date.
"
Indemnified Liabilities " has the meaning specified in
Section 9.05 .
"
Indemnitees " has the meaning specified in
Section 9.05 .
"
Interest Payment Date " means, (a) as to any
Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan and the Maturity Date; provided
, however , that if any Interest Period for a
Eurodollar Rate Loan exceeds three months, the respective
dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan, the last Business Day of
each March, June, September and December and the Maturity
Date.
"
Interest Period " means, as to each Eurodollar Rate
Loan, the period commencing on the date such Eurodollar Rate
Loan is disbursed or converted to or continued as a Eurodollar
Rate Loan and ending on the date one, two, three or six months
thereafter, as selected by the Borrower in its Loan Notice;
provided that:
(i) any
Interest Period that would otherwise end on a day that is not
a Business Day (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall be extended to the next succeeding
Business Day; and
(ii) no
Interest Period shall extend beyond the Maturity
Date.
"
Investment " means, as to any Person, any direct or
indirect acquisition or investment by such Person, whether by
means of (a) the purchase or other acquisition of capital
stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of
debt of, or purchase or other acquisition of any other debt or
equity participation or interest in, another Person, including
any partnership or joint venture interest in such other
Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another
Person that constitute a business unit.
"
IP Rights " has the meaning specified in
Section 5.17 .
"
IRS " means the United States Internal Revenue
Service.
"
Laws " means, collectively, all international, foreign,
Federal, state and local statutes, treaties, rules,
guidelines, regulations, ordinances, codes and administrative
or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or
administration thereof, and all applicable administrative
orders, directed duties, requests, licenses, authorizations
and permits of, and agreements with, any Governmental
Authority, in each case whether or not having the force of
law.
"
L/C Credit Extension " means, with respect to any
Letter of Credit, the issuance thereof or extension of the
expiry date thereof, or the renewal or increase of the amount
thereof.
"
L/C Obligations " means, as at any date of
determination, the aggregate undrawn amount of all outstanding
Letters of Credit plus the aggregate of all
unreimbursed drawings under all Letters of
Credit.
"
Lending Office " means the office or offices of the
Lender described as such on Schedule 9.02 , or
such other office or offices as the Lender may from time to
time notify the Borrower.
"
Letter of Credit " means a standby letter of credit
issued hereunder.
"
Letter of Credit Application " means an application and
agreement for the issuance or amendment of a Letter of Credit
in the form from time to time in use by the
Lender.
"
Letter of Credit Expiration Date " means the day that
is seven days prior to the Maturity Date then in effect (or,
if such day is not a Business Day, the next preceding Business
Day).
"
Letter of Credit Sublimit " means an amount equal to
$5,000,000. The Letter of Credit Sublimit is part
of, and not in addition to, the Commitment.
"
Lien " means any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory
or other), charge, or preference, priority or other security
interest or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title
retention agreement, and any financing lease having
substantially the same economic effect as any of the
foregoing).
"
Loan " has the meaning specified in
Section 2.01 .
"
Loan Documents " means this Agreement, any Note, the
Guaranty, the Pledge and Security Agreement and any Swap
Contracts between a Loan Party and the Lender or an Affiliate
of the Lender that relate to the Obligations or a portion
thereof.
"
Loan Notice " means a notice of (a) a borrowing
of a Loan, (b) a conversion of a Loan from one Type to
the other, or (c) a continuation of a Eurodollar Rate
Loan as the same Type, pursuant to Section 2.02(a)
, which, if in writing, shall be substantially in the form of
Exhibit A .
"
Loan Parties " means, collectively, the Borrower and
each Guarantor.
"
Material Adverse Effect " means (a) a material
adverse change in, or a material adverse effect upon, the
operations, business, properties, liabilities (actual or
contingent), condition (financial or otherwise) of the
Borrower or the Borrower and its Subsidiaries taken as a
whole; (b) a material impairment of the ability of any
Loan Party to perform its obligations under any Loan Document
to which it is a party; or (c) a material adverse effect
upon the legality, validity, binding effect or enforceability
against any Loan Party of any Loan Document to which it is a
party.
"
Maturity Date " means the later of (a) the day that is
364 days after the Closing Date and (b) if maturity is
extended pursuant to Section 2.12 , such extended
maturity date as determined pursuant to such
Section.
"
Multiemployer Plan " means any employee benefit plan of
the type described in Section 4001(a)(3) of ERISA, to
which the Borrower or any ERISA Affiliate makes or is
obligated to make contributions, or during the preceding five
plan years, has made or been obligated to make
contributions.
"
NHR Acquisition " means the consummation of the
transactions that are the subject of or contemplated by the
NHR Acquisition Agreement, including:
(1) The
consolidation of National Health Realty, Inc., a Maryland
corporation, with its wholly-owned subsidiary New NHR, Inc., a
Maryland corporation, with the consolidated company thereafter
being named and known as "National Health Realty, Inc.", a
Maryland corporation (" Consolidated NHR
").
(2) The
merger of NHR/Delaware, Inc., a Delaware corporation and a
wholly-owned subsidiary of Consolidated NHR, with and into
Consolidated NHR with the result that Consolidated NHR is the
surviving Person.
(3) The
merger of Consolidated NHR with and into Davis Acquisition Sub
LLC, a Delaware limited liability company (" Davis
Acquisition Sub "), with the result that Davis Acquisition
Sub is the surviving Person.
(4) The
merger of NHR/OP with and into Davis Acquisition Sub, with the
result that Davis Acquisition Sub is the surviving
Person.
"
NHR Acquisition Agreement " means the Agreement and
Plan of Merger dated December 20, 2006, as amended by
Amendment and Waiver No. 1 to Agreement and Plan of
Mergers dated April 6, 2007 and by Amendment No. 2
to Agreement and Plan of Merger dated August 3, 2007, all
by and among Davis Acquisition Sub, NHC/OP, the Borrower and
National Health Realty, Inc., a Maryland
corporation.
"
NHC/OP " means NHC/OP, L.P., a Delaware limited
partnership.
"
NHR/OP " means NHR/OP, L.P., a Delaware limited
partnership.
"
Note " means a promissory note made by the Borrower in
favor of the Lender evidencing Loans made by the Lender,
substantially in the form of Exhibit B
.
"
Obligations " means all advances to, and debts,
liabilities, obligations, covenants and duties of, any Loan
Party arising under any Loan Document or otherwise with
respect to any Loan or Letter of Credit, whether direct or
indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter
arising and including interest and fees that accrue after the
commencement by or against any Loan Party or any Subsidiary
thereof of any proceeding under any Debtor Relief Laws naming
such Person as the debtor in such proceeding, regardless of
whether such interest and fees are allowed claims in such
proceeding.
"
Organization Documents " means, (a) with respect
to any corporation, the charter, certificate of incorporation
or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S.
jurisdiction); (b) with respect to any limited liability
company, the certificate or articles of formation or
organization and operating agreement; and (c) with
respect to any partnership, joint venture, trust or other form
of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any
agreement, instrument, filing or notice with respect thereto
filed in connection with its formation or organization with
the applicable Governmental Authority in the jurisdiction of
its formation or organization and, if applicable, any
certificate or articles of formation or organization of such
entity.
"
Outstanding Amount " means (i) with respect to
Loans on any date, the aggregate outstanding principal amount
thereof after giving effect to any borrowings and prepayments
or repayments of Loans occurring on such date; and
(ii) with respect to any L/C Obligations on any date, the
amount of such L/C Obligations on such date after giving
effect to any L/C Credit
Extension
occurring on such date and any other changes in the aggregate
amount of the L/C Obligations as of such date, including as a
result of any reimbursements of outstanding unpaid drawings
under any Letters of Credit or any reductions in the maximum
amount available for drawing under Letters of Credit taking
effect on such date.
"
Participant " has the meaning specified in
Section 9.07(c) .
"
PBGC " means the Pension Benefit Guaranty
Corporation.
"
Pension Plan " means any "employee pension benefit
plan" (as such term is defined in Section 3(2) of ERISA),
other than a Multiemployer Plan, that is subject to
Title IV of ERISA and is sponsored or maintained by the
Borrower or any ERISA Affiliate or to which the Borrower or
any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other
plan described in Section 4064(a) of ERISA, has made
contributions at any time during the immediately preceding
five plan years.
"
Permitted Liens " means Liens permitted by
Section 7.01 .
"
Person " means any natural person, corporation, limited
liability company, trust, joint venture, association, company,
partnership, Governmental Authority or other
entity.
"
Plan " means any "employee benefit plan" (as such term
is defined in Section 3(3) of ERISA) established by the
Borrower or, with respect to any such plan that is subject to
Section 412 of the Code or Title IV of ERISA, any
ERISA Affiliate.
"
Pledge and Security Agreement " means the Pledge and
Security Agreement made by the Loan Parties (other than the
Excluded Grantors) in favor of the Lender, substantially in
the form of Exhibit D .
"
Post-Acquisition NHR " means National Health Realty,
LLC, a Delaware limited liability company that formerly was
known as Davis Acquisition Sub LLC, a Delaware limited
liability company.
"
Premier Group " means Premier Group Insurance Company,
a Tennessee corporation.
"
Premier Plus " means Premier Plus Insurance Company,
Ltd., an exempted company incorporated in the Cayman Islands
with limited liability.
"
Reportable Event " means any of the events set forth in
Section 4043(c) of ERISA, other than events for which the
30-day notice period has been waived.
"
Request for Credit Extension "
means (a) with respect to a borrowing,
conversion or continuation of a Loan, a Loan Notice, and
(b) with respect to an L/C Credit Extension, a Letter of
Credit Application.
"
Required Guarantor " means (i) each Guarantor
identified by name in the definition of "Guarantor"
hereinabove set forth, (ii) upon consummation of the NHR
Acquisition, Post-Acquisition NHR, and (iii) each
existing and future direct Subsidiary of the Borrower other
than
(a) FMSC,
Inc., a Florida corporation, (b) National Healthcare
Center of Fort Oglethorpe, L.P., a Tennessee limited
partnership, (c) Premier Group, and (d) Premier
Plus.
"
Responsible Officer " means (i) for the Borrower,
its chief executive officer, president, senior vice president
and controller, senior vice president and treasurer or
secretary, and (ii) for each
other Loan Party, its chief executive officer, president,
chief financial officer, chief accounting officer, treasurer,
assistant treasurer or secretary, as
applicable. Any document delivered hereunder that
is signed by a Responsible Officer of a Loan Party shall be
conclusively presumed to have been authorized by all necessary
corporate, partnership or other action on the part of such
Loan Party and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Loan
Party.
"
Restricted Payment " means any dividend or other
distribution (whether in cash, securities or other property)
with respect to any capital stock or other equity interest of
the Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or
termination of any such capital stock or other equity interest
or of any option, warrant or other right to acquire any such
capital stock or other equity interest.
"
Royal Health Acquisition " means the purchase by
Borrower or NHC/OP of the Equity Interests of the Persons (or
all or substantially all of the assets of such Persons;
provided that the Facility described in
clause (v) below may be excluded) that are
controlled by James Mamary and his Affiliates, that operate
under the name "Royal Health Group" (see
www.royalhealthgroup.com) and that collectively own and
operate five Facilities in Massachusetts providing long-term
care and related rehabilitation services named (i) Royal
Megansett Nursing & Retirement Home (North Falmouth),
(ii) Royal Nursing Center (downtown Falmouth),
(iii) Cape Code Nursing & Rehabilitation Center
(Bourne), (iv) Taber Street Nursing & Rehabilitation
Center (New Bedford), and (v) The Royal at Harwich
Village (Harwich).
"
SEC " means the Securities and Exchange Commission, or
any Governmental Authority succeeding to any of its principal
functions.
"
Single-Asset Nursing Home Subsidiary " shall mean a
Subsidiary of NHC/OP that owns, leases, operates or manages a
single Facility and that has no other material assets other
than those that relate solely and directly to the ownership,
leasing, operation or management, as applicable, of that
Facility.
"
Subsidiary " of a Person means a corporation,
partnership, joint venture, limited liability company or other
business entity of which a majority of the shares of
securities or other interests having ordinary voting power for
the election of directors or other governing body (other than
securities or interests having such power only by reason of
the happening of a contingency) are at the time beneficially
owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or
both, by such Person. Unless otherwise specified,
all references herein to a "Subsidiary" or to "Subsidiaries"
shall refer to a Subsidiary or Subsidiaries of the
Borrower.
"
Swap Contract " means (a) any and all rate swap
transactions, basis swaps, credit derivative transactions,
forward rate transactions, commodity swaps, commodity options,
forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or
forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange
transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate
swap transactions, currency options, spot contracts, or any
other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the
foregoing), whether or not any such transaction is governed by
or subject to any master agreement, and (b) any and all
transactions of any kind, and the related confirmations, that
are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International
Swaps and Derivatives Association, Inc., any International
Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any
related schedules, a " Master Agreement "), including
any such obligations or liabilities under any Master
Agreement.
"
Swap Termination Value " means, in respect of any one
or more Swap Contracts, after taking into account the effect
of any legally enforceable netting agreement relating to such
Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination
value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date
referenced in clause (a) , the amount(s)
determined as the mark-to-market value(s) for such Swap
Contracts, as determined based upon one or more mid-market or
other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include the Lender or
any Affiliate of the Lender).
"
Synthetic Lease Obligation " means the monetary
obligation of a Person under (a) a so-called "synthetic"
lease, including any off balance sheet or tax retention lease
that would be characterized as, or under GAAP would receive
the same accounting treatment as, a so-called "synthetic"
lease, or (b) an agreement for the use or possession of
property creating obligations that do not appear on the
balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting
treatment).
"
Threshold Amount " means $10,000,000.
"
Total Outstandings " means the aggregate Outstanding
Amount of all Loans and all L/C Obligations.
"
Type " means, with respect to a Loan, its character as
a Base Rate Loan or a Eurodollar Rate Loan.
"
Unfunded Pension Liability " means the excess of a
Pension Plan's benefit liabilities under
Section 4001(a)(16) of ERISA, over the current value of
that Pension Plan's assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to
Section 412 of the Code for the applicable plan
year.
"
Uninsured Liabilities " shall mean any losses, damages,
costs, expenses or liabilities (including any losses, damages,
costs, expenses or liabilities resulting from property damage
or casualty, general liability, professional liability,
workers' compensation and business interruption claims)
incurred by the Borrower or any Subsidiary that are not
covered by insurance but with respect to which insurance
coverage is available to Persons engaged in the same or
similar business as the Borrower and its
Subsidiaries.
"
United States " and " U.S. " mean the United
States of America.
1.02
Other Interpretive Provisions . With
reference to this Agreement and each other Loan Document, unless
otherwise specified herein or in such other Loan
Document:
(a)
The
meanings of defined terms are equally applicable to the singular
and plural forms of the defined terms.
(b)
(i) The
words " herein ," " hereto ," " hereof " and "
hereunder " and words of similar import when used in any
Loan Document shall refer to such Loan Document as a whole and not
to any particular provision thereof.
(ii) Article,
Section, Exhibit and Schedule references are to the Loan
Document in which such reference appears.
(iii) The
terms " include ", " includes " and "
including " are by way of example and not
limitation.
(iv) Unless
the context clearly indicates otherwise, the disjunctive "
or " includes the conjunctive " and
".
(v) The
term " documents " includes any and all instruments,
documents, agreements, certificates, notices, reports,
financial statements and other writings, however evidenced,
whether in physical or electronic form.
(c)
In
the computation of periods of time from a specified date to a later
specified date, the word " from " means " from and
including ;" the words " to " and " until " each
mean " to but excluding ;" and the word " through "
means " to and including ."
(d)
Section
headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan
Document.
1.03
Accounting Terms.
(a)
All
accounting terms not specifically or completely defined herein
shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, as
in effect from time to time, applied in a manner consistent with
that used in preparing the Audited Financial Statements, except as
otherwise specifically prescribed herein.
(b)
If
at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and
either the Borrower or the Lender shall so request, the Lender and
the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of
such change in GAAP (subject to the approval of the Lender),
provided that until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP
prior to such change therein and (ii) the Borrower shall
provide to the Lender financial statements and other documents
required under this Agreement or as reasonably requested hereunder
setting forth a reconciliation between calculations of such ratio
or requirement made before and after giving effect to such change
in GAAP.
1.04
Rounding . Any
financial ratios required to be maintained by the Borrower pursuant
to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number
(with a rounding-up if there is no nearest number).
1.05
References to Agreements and Laws . Unless
otherwise expressly provided herein, (a) references to
Organization Documents, agreements (including the Loan Documents)
and other contractual instruments shall be deemed to include all
subsequent amendments, restatements, extensions, supplements and
other modifications thereto, but only to the extent that such
amendments, restatements, extensions, supplements and other
modifications are not prohibited by any Loan Document, and
(b) references to any Law shall refer to such law as in effect
from time to time and shall include all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
1.06
Times of Day . Unless
otherwise specified, all references herein to times of day shall be
references to Central time (daylight or standard, as
applicable).
1.07
Letter of Credit Amounts . Unless
otherwise specified, all references herein to the amount of a
Letter of Credit at any time shall be deemed to mean the stated
amount of such Letter of Credit after giving effect to all
increases thereof contemplated by such Letter of Credit or the
Letter of Credit Application therefor.
ARTICLE 2.
THE COMMITMENT AND CREDIT EXTENSIONS
2.01
Loans .
(a)
Subject
to the terms and conditions set forth herein, the Lender agrees to
make loans (each such loan, a " Loan ") to the Borrower from
time to time, on any Business Day during the Availability Period,
in an aggregate amount not to exceed at any time outstanding the
amount of the Commitment; provided, however , that after
giving effect to any borrowing, the Total Outstandings shall not
exceed the Commitment. Within the limits of the
Commitment, and subject to the other terms and conditions hereof,
the Borrower may borrow under this Section 2.01 ,
prepay under Section 2.04 , and
reborrow
under this Section 2.01 . A Loan may be
a Base Rate Loan or a Eurodollar Rate Loan, as further
provided herein.
(b)
Notwithstanding
the foregoing or any other provision of this Agreement that may be
to the contrary, prior to the time that the NHR Acquisition has
been fully consummated and Post-Acquisition NHR has complied with
the requirements of Section 6.12 , (i) the Total
Outstandings shall not exceed $25,000,000, and (ii) the
proceeds of Loans shall be used solely for the purpose of paying
the cash portion of the Merger Consideration (as defined in the NHR
Acquisition Agreement) and paying fees, costs and expenses incurred
in connection with the consummation of the transactions that are
the subject of the NHR Acquisition Agreement.
2.02
Borrowings, Conversions and Continuations of Loans
.
(a)
Each
borrowing, each conversion of a Loan from one Type to the other,
and each continuation of a Eurodollar Rate Loan shall be made upon
the Borrower's irrevocable notice to the Lender, which may be given
by telephone. Each such notice must be received by the
Lender not later than 12:00 noon (i) three Business Days prior
to the requested date of any borrowing of, conversion to or
continuation of a Eurodollar Rate Loan or of any conversion of a
Eurodollar Rate Loan to a Base Rate Loan, and (ii) on the
requested date of any borrowing of a Base Rate
Loan. Notwithstanding anything to the contrary contained
herein, but subject to the provisions of
Section 9.02(d) , any such telephonic notice may be
given by an individual who has been authorized in writing to do so
by a Responsible Officer of the Borrower. Each such
telephonic notice must be confirmed promptly by delivery to the
Lender of a written Loan Notice, appropriately completed and signed
by a Responsible Officer of the Borrower. Each borrowing
of, conversion to or continuation of a Eurodollar Rate Loan shall
be in a principal amount of $250,000 or a whole multiple of $50,000
in excess thereof. Except as provided in
Section 2.03(c) , each borrowing of or conversion to a
Base Rate Loan shall be in a principal amount of $100,000 or a
whole multiple of $50,000 in excess thereof. Each Loan
Notice (whether telephonic or written) shall specify
(i) whether the Borrower is requesting a borrowing, a
conversion of a Loan from one Type to the other, or a continuation
of a Eurodollar Rate Loan, (ii) the requested date of the
borrowing, conversion or continuation, as the case may be (which
shall be a Business Day), (iii) the principal amount of the
Loan to be borrowed, converted or continued, (iv) the Type of
Loan to be borrowed or to which an existing Loan is to be
converted, and (v) if applicable, the duration of the Interest
Period with respect thereto. If the Borrower fails to
specify a Type of Loan in a Loan Notice or if the Borrower fails to
give a timely notice requesting a conversion or continuation, then
the applicable Loan shall be made as, or converted to, a Base Rate
Loan. Any such automatic conversion to a Base Rate Loan
shall be effective as of the last day of the Interest Period then
in effect with respect to the applicable Eurodollar Rate
Loan. If the Borrower requests a borrowing of,
conversion to, or continuation of a Eurodollar Rate Loan in any
such Loan Notice, but fails to specify an Interest Period, it will
be deemed to have specified an Interest Period of one
month.
(b)
Upon
satisfaction of the applicable conditions set forth in
Section 4.02 (and, if a borrowing is the initial Credit
Extension, Section 4.01 ), the Lender shall
make
the
proceeds of each Loan available to the Borrower either by
(i) crediting the account of the Borrower on the books of
the Lender with the amount of such proceeds or (ii) wire
transfer of such proceeds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the
Lender by the Borrower; provided, however , that if on
the date of the Loan Notice with respect to such borrowing is
given, there are drawings under Letters of Credit that have
not been reimbursed by the Borrower, then the proceeds of such
borrowing shall be applied, first , to the payment in
full of any such unreimbursed drawings, and second , to
the Borrower as provided above.
(c)
Except
as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period
for such Eurodollar Rate Loan. During the existence of a
Default, no Loan may be requested as, converted to or continued as
Eurodollar Rate Loans without the consent of the
Lender.
(d)
The
Lender shall promptly notify the Borrower of the interest rate
applicable to any Interest Period for a Eurodollar Rate Loan upon
determination of such interest rate. The determination
of the Eurodollar Rate by the Lender shall be conclusive in the
absence of manifest error.
(e)
After
giving effect to all borrowings, all conversions of Loans from one
Type to the other, and all continuations of Loans as the same Type,
there shall not be more than thirty Interest Periods in
effect.
2.03
Letters of Credit .
(a)
The Letter of Credit Commitment .
(i)
Subject
to the terms and conditions set forth herein, the Lender agrees
(A) from time to time on any Business Day during the period
from the Closing Date until the Letter of Credit Expiration Date,
to issue Letters of Credit for the account of the Borrower or a
Subsidiary specified by the Borrower, and to amend Letters of
Credit previously issued by it, in accordance with
subsection (b) below, and (B) to honor drafts
under the Letters of Credit; provided that the Lender shall
not be obligated to make any L/C Credit Extension with respect to
any Letter of Credit if as of the date of such L/C Credit
Extension, (y) the Total Outstandings would exceed the
Commitment or (z) the Outstanding Amount of the L/C
Obligations would exceed the Letter of Credit
Sublimit. Within the foregoing limits, and subject to
the terms and conditions hereof, the Borrower's ability to obtain
Letters of Credit shall be fully revolving, and accordingly the
Borrower may, during the foregoing period, obtain Letters of Credit
to replace Letters of Credit that have expired or that have been
drawn upon and reimbursed.
(ii)
The
Lender shall be under no obligation to issue any Letter of Credit
if:
(A)
any
order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the
Lender from issuing such Letter of Credit, or any Law applicable to
the Lender or any request or
directive
(whether or not having the force of law) from any Governmental
Authority with jurisdiction over the Lender shall prohibit, or
request that the Lender refrain from, the issuance of letters
of credit generally or such Letter of Credit in particular or
shall impose upon the Lender with respect to such Letter of
Credit any restriction, reserve or capital requirement (for
which the Lender is not otherwise compensated hereunder) not
in effect on the Closing Date, or shall impose upon the Lender
any unreimbursed loss, cost or expense that was not applicable
on the Closing Date and that the Lender in good faith deems
material to it;
(B)
[Reserved];
(C)
the
expiry date of such requested Letter of Credit would occur after
the Letter of Credit Expiration Date (unless the requested Letter
of Credit will be Cash Collateralized);
(D)
the
issuance of such Letter of Credit would violate one or more
policies of the Lender; or
(E)
such
Letter of Credit is in an initial amount less than $100,000, or is
to be used for a purpose other than general corporate purposes of
the Borrower and its Subsidiaries or is to be denominated in a
currency other than Dollars.
(iii)
Notwithstanding
the foregoing or any other provision of this Agreement that may be
to the contrary, the Lender shall be under no obligation to issue
any Letter of Credit unless the NHR Acquisition has been fully
consummated and Post-Acquisition NHR has complied with the
requirements of Section 6.12 .
(iv)
The
Lender shall be under no obligation to amend any Letter of Credit
if (A) the Lender would have no obligation at such time to
issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does
not accept the proposed amendment to such Letter of
Credit.
(b)
Procedures for Issuance and Amendment of Letters of Credit
.
(i)
Each
Letter of Credit shall be issued or amended, as the case may be,
upon the request of the Borrower delivered to the Lender in the
form of a Letter of Credit Application, appropriately completed and
signed by a Responsible Officer of the Borrower. Such
L/C Application must be received by the Lender not later than 12:00
noon, at least two Business Days (or such later date and time as
the Lender may agree in a particular instance in its sole
discretion) prior to the proposed issuance date or date of
amendment, as the case may be. In the case of a request
for an initial issuance of a Letter of Credit, such Letter of
Credit Application shall specify in form and detail satisfactory to
the Lender: (A) the proposed issuance date of the requested
Letter of Credit (which shall be a Business Day); (B) the
amount thereof; (C) the expiry date thereof;
(D) the
name and address of the beneficiary thereof; (E) the
documents to be presented by such beneficiary in case of any
drawing thereunder; (F) the full text of any certificate
to be presented by such beneficiary in case of any drawing
thereunder; and (G) such other matters as the Lender may
require. In the case of a request for an amendment
of any outstanding Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to
the Lender (A) the Letter of Credit to be amended;
(B) the proposed date of amendment thereof (which shall
be a Business Day); (C) the nature of the proposed
amendment; and (D) such other matters as the Lender may
require.
(ii)
Upon
the Lender's determination that the requested issuance or amendment
is permitted in accordance with the terms hereof, then, subject to
the terms and conditions hereof, the Lender shall, on the requested
date, issue a Letter of Credit for the account of the Borrower or
enter into the applicable amendment, as the case may be, in each
case in accordance with the Lender's usual and customary business
practices.
(iii)
Promptly
after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the
beneficiary thereof, the Lender will also deliver to the Borrower a
true and complete copy of such Letter of Credit or
amendment.
(c)
Drawings and Reimbursements .
(i)
Upon
receipt from the beneficiary of any Letter of Credit of any notice
of a drawing under such Letter of Credit, the Lender shall notify
the Borrower thereof. Not later than 12:00 noon on the
date of any payment by the Lender under a Letter of Credit (each
such date, an " Honor Date "), the Borrower shall reimburse
the Lender in an amount equal to the amount of such
drawing. If the Borrower fails to so reimburse the
Lender, the Borrower shall be deemed to have requested a borrowing
of a Base Rate Loan to be disbursed on the Honor Date in an amount
equal to the amount of such unreimbursed drawing, without regard to
the minimum and multiples specified in Section 2.02 for
the principal amount of Base Rate Loans, but subject to the amount
of the unutilized portion of the Commitment and the conditions set
forth in Section 4.02 (other than the delivery of a
Loan Notice).
(ii)
If
the Borrower fails to reimburse the Lender for any drawing under
any Letter of Credit (whether by means of a borrowing or
otherwise), such unreimbursed amount shall be due and payable on
demand (together with interest) and shall bear interest at the
Default Rate.
(d)
Obligations Absolute . The obligation of the
Borrower to reimburse the Lender for each drawing under each Letter
of Credit shall be absolute, unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the
following:
(i)
any
lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other agreement or instrument relating
thereto;
(ii)
the
existence of any claim, counterclaim, set-off, defense or other
right that the Borrower may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be
acting), the Lender or any other Person, whether in connection with
this Agreement, the transactions contemplated hereby or by such
Letter of Credit or any agreement or instrument relating thereto,
or any unrelated transaction;
(iii)
any
draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue
or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make
a drawing under such Letter of Credit;
(iv)
any
payment by the Lender under such Letter of Credit against
presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit; or any payment made
by the Lender under such Letter of Credit to any Person purporting
to be a trustee in bankruptcy, debtor-in-possession, assignee for
the benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any transferee
of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law; or
(v)
any
other circumstance or happening whatsoever, whether or not similar
to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge
of, the Borrower.
The Borrower shall
promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event
of any claim of noncompliance with the Borrower's
instructions or other irregularity, the Borrower will
immediately notify the Lender. The Borrower shall
be conclusively deemed to have waived any such claim against
the Lender and its correspondents unless such notice is given
as aforesaid.
(e)
Role of Lender . The Borrower agrees that, in paying
any drawing under a Letter of Credit, the Lender shall not have any
responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy
of any such document or the authority of the Person executing or
delivering any such document. The Borrower hereby
assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit;
provided, however , that this assumption is not intended to,
and shall not, preclude the Borrower's pursuing such rights and
remedies as it may have against the beneficiary or transferee at
law or under any other agreement. None of the Lender,
any of its Affiliates, any of the respective officers, directors,
employees, agents or attorneys-in-fact of the Lender and its
Affiliates, nor any of the
respective
correspondents, participants or assignees of the Lender shall
be liable or responsible for any of the matters described in
clauses (i) through (v) of
Section 2.03(d) ; provided, however , that
anything in such clauses to the contrary notwithstanding, the
Borrower may have a claim against the Lender, and the Lender
may be liable to the Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower that the Borrower
proves were caused by the Lender's willful misconduct or gross
negligence or the Lender's willful failure to pay under any
Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly
complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the
foregoing, the Lender may accept documents that appear on
their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the
contrary, and the Lender shall not be responsible for the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of
Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason.
(f)
Cash Collateral . Upon the request of the Lender,
(i) if the Lender has honored any full or partial drawing
request under any Letter of Credit and such drawing has not been
reimbursed on the applicable Honor Date (whether by means of a
borrowing or otherwise), or (ii) if, as of the Letter of
Credit Expiration Date, any Letter of Credit may for any reason
remain outstanding and partially or wholly undrawn, the Borrower
shall immediately Cash Collateralize the then Outstanding Amount of
all L/C Obligations (in an amount equal to such Outstanding Amount
determined as of the applicable Honor Date or the Letter of Credit
Expiration Date, as the case may be). For purposes
hereof, " Cash Collateralize " means to pledge and deposit
with or deliver to the Lender, as collateral for the L/C
Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the
Lender. Derivatives of such term have corresponding
meanings. The Borrower hereby grants to the Lender a
security interest in all such cash, deposit accounts and all
balances therein and all proceeds of the foregoing. Cash
collateral shall be maintained in blocked, non-interest bearing
deposit accounts at the Lender.
(g)
Applicability of ISP98 and UCP . Unless otherwise
expressly agreed by the Lender and the Borrower when a Letter of
Credit is issued, (i) the rules of the "International Standby
Practices 1998" published by the Institute of International Banking
Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter
of Credit, and (ii) the rules of the Uniform Customs and
Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce (the " ICC ") at the time
of issuance (including the ICC decision published by the Commission
on Banking Technique and Practice on April 6, 1998 regarding
the European single currency (euro)) shall apply to each commercial
Letter of Credit.
(h)
Letter of Credit Fees . The Borrower shall pay to
the Lender a Letter of Credit fee for each Letter of Credit equal
to the Applicable Rate times the daily maximum amount available to
be drawn under such Letter of Credit (whether or not such
maximum
amount
is then in effect under such Letter of
Credit). Such letter of credit fees shall be
computed on a quarterly basis in arrears. Such
letter of credit fees shall be due and payable on the first
Business Day after the end of each March, June, September and
December, commencing with the first such date to occur after
the issuance of such Letter of Credit, on the Letter of Credit
Expiration Date and thereafter on demand. If there
is any change in the Applicable Rate during any quarter, the
daily maximum amount of each Letter of Credit shall be
computed and multiplied by the Applicable Rate separately for
each period during such quarter that such Applicable Rate was
in effect.
(i)
Documentary and Processing Charges Payable to Lender
. The Borrower shall pay to the Lender the customary
issuance, presentation, amendment and other processing fees, and
other standard costs and charges, of the Lender relating to letters
of credit as from time to time in effect. Such customary
fees and standard costs and charges are due and payable on demand
and are nonrefundable.
(j)
Conflict with Letter of Credit Application . In the
event of any conflict between the terms hereof and the terms of any
Letter of Credi
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