================================================================================
$100,000,000
CREDIT AGREEMENT
among
THE KINDERCARE REALTY TRUST 1999
as Borrower
The Several Lenders
from Time to Time Parties Hereto
BANK OF AMERICA, N.A.,
as Co-Documentation Agent
THE BANK OF NOVA SCOTIA,
as Syndication Agent
BANKERS TRUST COMPANY,
as Syndication Agent
and
THE CHASE MANHATTAN BANK,
as Administrative Agent,
Book Manager and Lead Arranger
Dated as of September 2, 1999
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS ......................................................1
1.1 Defined Terms ...................................................1
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS 1
2.1 Commitments .....................................................1
2.2 Notes............................................................1
2.3 Procedure for Borrowing..........................................2
2.4 Commitment Fees..................................................3
2.5 Prepayments......................................................3
2.6 Conversion and Continuation Options..............................4
2.7 Minimum Amounts of Tranches......................................4
2.8 Interest Rates and Payment Dates.................................4
2.9 Computation of Interest..........................................5
2.10 Inability to Determine Interest Rate.............................5
2.11 Pro Rata Treatment and Payments..................................6
2.12 Illegality.......................................................6
2.13 Requirements of Law..............................................7
2.14 Indemnity........................................................8
2.15 Taxes............................................................8
2.16 Notice of Certain Costs.........................................10
2.17 Change of Lending Office........................................11
2.18 Replacements of Lender under Certain Circumstances..............11
SECTION 3. REPRESENTATIONS AND WARRANTIES...................................11
SECTION 4. CONDITIONS PRECEDENT.............................................11
4.1 Conditions to Effectiveness.....................................11
4.2 Conditions to Each Loan.........................................12
SECTION 5. COVENANTS........................................................12
5.1 Other Activities................................................12
5.2 Ownership of Property, Indebtedness.............................12
5.3 Disposition of Assets...........................................13
5.4 Compliance with Operative Agreements............................13
5.5 Further Assurances..............................................13
5.6 Notices.........................................................13
5.7 Discharge of Liens..............................................13
5.8 Recordkeeping...................................................13
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SECTION 6. REMEDIAL PROVISIONS..............................................13
6.1 Events of Default...............................................13
SECTION 7. THE AGENT........................................................17
7.1 Appointment.....................................................17
7.2 Delegation of Duties............................................18
7.3 Exculpatory Provisions..........................................18
7.4 Reliance by Agent...............................................18
7.5 Notice of Default...............................................18
7.6 Non-Reliance on Agent and Other Lenders.........................19
7.7 Indemnification.................................................19
7.8 Agent in Its Individual Capacity................................20
7.9 Successor Agent.................................................20
7.10 Co-Documentation and Syndication Agents.........................20
SECTION 8. MATTERS RELATING TO PAYMENTS AND COLLATERAL......................20
8.1 The Account.....................................................20
8.2 Proceeds of Collateral; Proceeds Remaining in Account...........22
8.3 Certain Remedial Matters........................................23
8.4 Release of the Property, etc. ..................................24
SECTION 9. MISCELLANEOUS....................................................24
9.1 Amendments and Waivers..........................................24
9.2 Notices.........................................................25
9.3 No Waiver; Cumulative Remedies..................................26
9.4 Survival of Representations and Warranties......................26
9.5 Successors and Assigns; Participations and Assignments..........26
9.6 Participations..................................................26
9.7 Assignments.....................................................27
9.8 The Register; Disclosure; Pledges to Federal Reserve Banks......29
9.9 Adjustments; Set-Off............................................29
9.10 Counterparts....................................................30
9.11 Severability....................................................30
9.12 Integration.....................................................30
9.13 GOVERNING LAW...................................................30
9.14 SUBMISSION TO JURISDICTION; WAIVERS.............................31
9.15 Acknowledgments.................................................31
9.16 WAIVERS OF JURY TRIAL...........................................32
9.17 Nonrecourse.....................................................32
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EXHIBITS
--------
Exhibit A-1 Form of Tranche A Note
Exhibit A-2 Form of Tranche B Note
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Designation Agreement
SCHEDULES
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Schedule 1.1 Commitments of Lenders
CREDIT AGREEMENT, dated as of September 2, 1999 among THE KINDERCARE REALTY
TRUST 1999, a Delaware business trust (the "Borrower"), BANK OF AMERICA, N.A., a
national banking association, as Co-Documentation Agent, THE BANK OF NOVA
SCOTIA, a Delaware corporation, as Syndication Agent, BANKERS TRUST COMPANY, as
Syndication Agent, the several banks and other financial institutions from time
to time parties to this Agreement (the "Lenders") and THE CHASE MANHATTAN BANK,
a New York banking corporation, as agent for the Lenders hereunder (in such
capacity, the "Agent"), Administrative Agent, Book Manager and Lead Arranger.
The parties hereto hereby agree as follows:
1. SECTION DEFINITIONS
1.1 Defined Terms . Capitalized terms used herein but not otherwise
defined in this Agreement shall have the respective meanings set forth in Annex
A attached to the Participation Agreement dated as of the date hereof among
Lessee, the Borrower, the Investor, the Agent and the Lenders.
2. SECTION AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. (a) Subject to the terms and conditions hereof, each
Lender severally agrees to make revolving credit loans (the "Loans") to the
Borrower from time to time during the Commitment Period for the purpose of
enabling the Borrower to acquire the Properties and to pay Project Costs, in an
aggregate principal amount not to exceed the amount of such Lender's Commitment.
During the Commitment Period the Borrower may use the Commitments by borrowing,
prepaying the Loans in whole or in part, and reborrowing, all in accordance with
the terms and conditions hereof.
(b) The Loans may from time to time be (i) Eurodollar Loans, (ii) ABR
Loans, or (iii) a combination thereof, as determined by the Borrower and
notified to the Agent in accordance with Sections 2.3 and 2.6, provided that no
Loan shall be made as a Eurodollar Loan after the day that is one month prior to
the Maturity Date.
2.2 Notes. The Loans made by each Lender shall be evidenced by a
promissory note of the Borrower, substantially in the form of Exhibit A-1, in
the case of Tranche A Loans (each, a "Tranche A Note"), or Exhibit A-2, in the
case of Tranche B Loans (each, a "Tranche B Note"), with appropriate insertions
as to payee, date and principal amount, payable to the order of such Lender and
in a principal amount equal to the lesser of (a) the initial Commitment of such
Lender and (b) the aggregate outstanding principal amount of all Tranche A Loans
or Tranche B Loans, as the case may be, made by such Lender. Each Lender is
hereby authorized to record the date, Type and amount of each Loan made by such
Lender, each continuation thereof, each conversion of all or a portion thereof
to another Type, the date and amount of each payment or prepayment of principal
thereof and, in the case of Eurodollar Loans, the length of each Interest Period
with respect thereto, on the schedule
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annexed to and constituting a part of its Note, and any such recordation shall
constitute prima facie evidence of the existence and accuracy of the loans
therein recorded, in the absence of manifest error, provided that the failure to
make any such recordation or any error in such recordation shall not affect the
Borrower's actual obligations hereunder or under such Note. Each Note shall (i)
be dated the Initial Closing Date, (ii) be stated to mature on the Maturity Date
and (iii) provide for the payment of interest in accordance with Section 2.8.
2.3 Procedure for Borrowing . The Borrower may borrow under the
Commitments during the Commitment Period on any Business Day, provided that the
Borrower shall deliver to the Agent an irrevocable Requisition (which
Requisition must be received by the Agent prior to 12:00 Noon, New York City
time, three Business Days prior to the requested Borrowing Date, unless the
borrowing is to be entirely ABR Loans, in which event such Requisition must be
received one Business Day prior to the requested Borrowing Date), specifying (i)
the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the
borrowing is to be of Eurodollar Loans, ABR Loans or a combination thereof and
(iv) if the borrowing is to be entirely or partly of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Periods therefor. Each borrowing under the Commitments (other
than borrowings of Interest Payment Loans) shall be in an amount equal to (x) in
the case of ABR Loans, at least $500,000 or a whole multiple of $100,000 in
excess thereof (or if less, the Total Available Commitments or the amount
representing Property Acquisition Costs for any Property) and (y) in the case of
Eurodollar Loans, at least $500,000 or a whole multiple of $100,000 in excess
thereof. Upon receipt of any such Requisition from the Borrower, the Agent shall
promptly notify each Lender thereof. Each Lender will make the amount of its pro
rata share of each borrowing available to the Agent for the account of the
Borrower at the office of the Agent specified in Section 9.2 prior to 12:00
Noon, New York City time, on the Borrowing Date requested by the Borrower in
funds immediately available to the Agent. Such borrowing will then be made
available to the Borrower by the Agent crediting an account designated by 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. The Borrower may submit no more than three (3) Requisitions in any
calendar month in total; each Requisition may be applied as to either Project
Costs or Property Acquisition Costs or both but with a maximum of one Project
Cost Requisition per month.
(b) Notwithstanding anything in the foregoing Section 2.3(a) to the
contrary, on each date during the Construction Period with respect to any
Construction Period Property which is one Business Day prior to any Scheduled
Interest Payment Date, the Borrower shall be deemed to have requested a
borrowing pursuant to Section 2.3(a) of ABR Loans in an amount equal to the
aggregate amount of Allocated Interest on the Loans due and payable on such
Scheduled Interest Payment Date with respect to the Construction Period
Properties. The Borrowing Date with respect to any such borrowing shall be the
relevant Scheduled Interest Payment Date (provided, that the making of the Loans
pursuant to such borrowing shall be subject to satisfaction of the applicable
conditions precedent set forth in Section 4.2) and the proceeds of such
borrowing shall be applied to pay such interest. On each such Borrowing Date,
the Tranche A/B Property Cost and the Tranche A/B Construction Property Cost of
each Construction Period
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Property shall be increased by an amount equal to the Allocated Interest paid on
such date with respect to such Property.
(c) A portion of the principal amount of each Loan made by each Lender
equal to the Tranche A Percentage of the principal amount of such Loan shall be
deemed to be a "Tranche A Loan" for the purposes of the Operative Agreements and
the remaining portion of the principal amount of such Loan shall be deemed to be
a "Tranche B Loan" for the purposes of the Operative Agreements, provided that
payments in respect of the Loans shall be allocated to reduce the aggregate
outstanding principal amount of Tranche A Loans and Tranche B Loans of each
Lender in the manner specified in Section 2.11(a).
2.4 Commitment Fees . Promptly after receipt from the Lessee of
payment of any Commitment Fees payable pursuant to the Participation Agreement,
the Agent shall distribute such payment to the Lenders pro rata according to
their respective Commitment Percentages and to the Investors pro rata according
to their Proportionate Share of the Investor Commitment.
2.5 Prepayments . The Borrower may at any time and from time to time
prepay the Loans, in whole or in part, without premium or penalty (other than
breakage costs if due hereunder), upon at least three Business Days' irrevocable
notice to the Agent, specifying the date and amount of prepayment and whether
the prepayment is of Eurodollar Loans, ABR Loans or a combination thereof, and,
if of a combination thereof, the amount allocable to each. Upon receipt of any
such notice the Agent shall promptly notify each Lender thereof. If any notice
of prepayment is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to the
payment date on the amount prepaid and amounts, if any, required to be paid
pursuant to Section 2.14. Partial prepayments pursuant to this Section 2.5(a)
shall be in an aggregate principal amount of $500,000 or a whole multiple of
$100,000 in excess thereof.
(b) If on any date the Agent or the Borrower shall receive, with
respect to any Property, any payment in respect of excess wear and tear pursuant
to Section 21.3 of the Lease (a "Wear and Tear Payment") or any Net Sales
Proceeds Shortfall pursuant to Section 21.3 of the Lease, such payment shall be
applied to prepay the Loans on such date in accordance with Section 8.1(b)(vi).
(c)(i) On any date on which the Lessee is obligated to pay the Lessor
an amount equal to (x) the Termination Value of any Property in connection with
the delivery of a Termination Notice or (y) the Termination Value of any
Property in connection with the exercise of a Purchase Option or Maturity Date
Purchase Option, such amount shall be applied to prepay the Loans on such date
in accordance with Section 8.1(b)(ii), and (ii) on any date on which any
Property shall have been sold pursuant to Section 21 of the Lease, the Borrower
shall prepay the Loans on such date in an amount equal to the proceeds of such
sale (net of costs and expenses described in Section 21.2(i) of the Lease) in
accordance with Section 8.1(b)(iii).
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(d) Each prepayment of the Loans pursuant to Section 2.5(b) or 2.5(c)
shall be allocated to reduce the Tranche A/B Property Cost of the affected
Property. Each prepayment of the Loans pursuant to Section 2.5(a) shall be
allocated to reduce the respective Tranche A/B Property Costs of all Properties,
pro rata according to the Tranche A/B Property Costs of such Properties
immediately before giving effect to such prepayment. Any amounts applied to
reduce the Tranche A/B Property Cost of any Construction Period Property
pursuant to this paragraph (d) shall also be applied to reduce the Tranche A/B
Construction Property Cost of such Property until such Tranche A/B Construction
Property Cost has been reduced to zero.
2.6 Conversion and Continuation Options . The Borrower may elect from
time to time to convert Eurodollar Loans to ABR Loans by giving the Agent at
least one Business Days' prior irrevocable notice of such election, provided
that any such conversion of Eurodollar Loans may only be made on the last day of
an Interest Period with respect thereto. The Borrower may elect from time to
time to convert ABR Loans to Eurodollar Loans by giving the Agent at least three
Business Days' prior irrevocable notice of such election. Any such notice of
conversion to Eurodollar Loans shall specify the length of the initial Interest
Period or Interest Periods therefor. Upon receipt of any such notice the Agent
shall promptly notify each Lender thereof. All or any part of outstanding
Eurodollar Loans or ABR Loans may be converted as provided herein, provided that
no ABR Loan may be converted into a Eurodollar Loan when any Default or Event of
Default has occurred and is continuing, or after the date that is one month
prior to the Maturity Date.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
notice to the Agent, in accordance with the applicable provisions of the term
"Interest Period" set forth in Annex A, of the length of the next Interest
Period to be applicable to such Loans, provided that no Eurodollar Loan may be
continued as such when any Default or Event of Default has occurred and is
continuing, or after the date that is one month prior to the Maturity Date and
provided, further, that if the Borrower shall fail to give any required notice
as described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso such Loans shall be automatically converted to
ABR Loans on the last day of such then expiring Interest Period.
2.7 Minimum Amounts of Tranches . Notwithstanding anything to the
contrary in this Agreement, all borrowings, conversions, continuations and
prepayments of Eurodollar Loans and all selections of Interest Periods shall be
in such amounts and be made pursuant to such elections so that, after giving
effect thereto, (a) the aggregate principal amount of the Eurodollar Loans
comprising each Eurodollar Tranche shall be equal to $750,000 or a whole
multiple of $100,000 in excess thereof and (b) no more than five Eurodollar
Tranches shall be outstanding at any one time.
2.8 Interest Rates and Payment Dates . Each Eurodollar Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Eurodollar Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
ABR.
5
(c) If all or a portion of (i) the principal amount of any Loan, (ii)
any interest payable thereon or (iii) any other amount payable hereunder shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum which is
(A) in the case of overdue principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section 2.8 plus
2% or (B) in the case of overdue interest or any other overdue amount, the ABR
plus 2%, from the date of such non-payment until such amount is paid in full (as
well after as before judgment).
(d) Interest shall be payable in arrears on each Scheduled Interest
Payment Date, provided that (i) interest accruing pursuant to paragraph (c) of
this Section 2.8 shall be payable from time to time on demand and (ii) each
prepayment of the Loans shall be accompanied by accrued interest to the date of
such prepayment on the amount prepaid and breakage costs, if any.
2.9 Computation of Interest . Whenever it is calculated on the basis
of the Prime Rate, interest shall be calculated on the basis of a 365- (or 366-,
as the case may be) day year for the actual days elapsed; and, otherwise,
interest shall be calculated on the basis of a 360-day year for the actual days
elapsed. The Agent shall as soon as practicable notify the Borrower and the
Lenders of each determination of a Eurodollar Rate in respect of any Eurodollar
Tranche. Any change in the interest rate on a Loan resulting from a change in
the ABR or the Eurocurrency Reserve Requirements shall become effective as of
the opening of business on the day on which such change becomes effective. The
Agent shall as soon as practicable notify the Borrower and the Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Agent pursuant to
any provision of this Agreement shall be conclusive and binding on the Borrower
and the Lenders in the absence of manifest error.
2.10 Inability to Determine Interest Rate . If prior to the first day
of any Interest Period:
(a) the Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the eurodollar market, adequate and reasonable means do not exist
for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Agent shall have received notice from the Required Lenders
that the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Eurodollar Loans during such Interest Period,
the Agent shall give telecopy or telephonic notice thereof to the Borrower and
the Lenders as soon as practicable thereafter. If such notice is given (x) any
Eurodollar Loans requested to be made on the first day of such Interest Period
shall be made as ABR Loans and (y) any Loans that,
6
on the first day of such Interest Period, were to be converted to or continued
as Eurodollar Loans shall be converted to or continued as ABR Loans. Until such
notice has been withdrawn by the Agent, no further Eurodollar Loans shall be
made or continued as such, nor shall the Borrower have the right to convert ABR
Loans to Eurodollar Loans.
2.11 Pro Rata Treatment and Payments . Each borrowing by the Borrower
from the Lenders hereunder and any reduction of the Commitments of the Lenders
shall be made pro rata according to the respective Commitment Percentages of the
Lenders. Except as otherwise provided in Section 2.5 or Section 8, each payment
(including each prepayment) by the Borrower on account of principal of and
interest on the Loans shall be made pro rata according to the respective
outstanding principal amounts of the Loans then held by the Lenders (it being
understood that, except as otherwise provided in Section 8, any payment so made
in respect of principal of any Lender's Loans shall be deemed to ratably reduce
the outstanding amount of Tranche A Loans and Tranche B Loans of such Lender).
All payments (including prepayments) to be made by the Borrower hereunder and
under the Notes, whether on account of principal, interest or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Agent, for the account of the
Lenders, at the Agent's office specified in Section 9.2, in Dollars and in
immediately available funds. The Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(b) Unless the Agent shall have been notified in writing by any Lender
prior to a borrowing that such Lender will not make its share of such borrowing
available to the Agent, the Agent may assume that such Lender is making such
amount available to the Agent, and the Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
amount is not made available to the Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the Agent. A certificate of the Agent submitted to any Lender with respect to
any amounts owing under this Section 2.11(b) shall be conclusive in the absence
of manifest error. If such Lender's share of such borrowing is not made
available to the Agent by such Lender within three Business Days of such
Borrowing Date, the Agent shall also be entitled to recover such amount with
interest thereon at the rate per annum applicable to ABR Loans hereunder, on
demand, from the Borrower.
2.12 Illegality . Notwithstanding any other provision herein, if,
after the date hereof, the adoption of or any change in any Requirement of Law
or in the interpretation or
7
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) such
Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 2.14.
2.13 Requirements of Law . If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Note or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by Section 2.15 and changes in the
rate of tax on the overall net income of such Lender) or a franchise tax in
lieu of net income taxes;
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender reasonably deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or to reduce any
amount receivable hereunder in respect thereof, then, in any such case, the
Borrower shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable.
(b) If, after the date hereof, any Lender shall have determined that
any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority, in each case made subsequent to the date hereof, has the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to
8
be material, then from time to time, the Borrower shall promptly pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 2.13, it shall promptly notify the Borrower (with a
copy to the Agent) of the event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to this Section 2.13
submitted by such Lender to the Borrower (with a copy to the Agent) shall be
conclusive in the absence of manifest error. The agreements in this Section 2.13
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
2.14 Indemnity . The Borrower shall indemnify each Lender against any
loss or expense which such Lender may sustain or incur as a consequence of (a)
default by the Borrower in making a borrowing of, conversion into or
continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by the Borrower in making any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement, (c) the
making of a prepayment of Eurodollar Loans on a day which is not the last day of
an Interest Period with respect thereto or (d) such loss or expense not being
covered by the indemnities provided for in Section 12.1(a) of the Participation
Agreement as the result of the application of Section 12.1(b) of the
Participation Agreement. Such indemnification may include an amount equal to the
excess, if any, of (i) 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 such Interest Period (or, 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 Loans provided for herein (excluding, however, the Applicable Eurodollar
Margin included therein, if any) over (ii) 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. A certificate of any Lender setting
forth any amount or amounts which such Lender is entitled to receive pursuant to
this Section and evidencing a loss suffered by such Lender of such amount or
amounts shall be delivered to the Borrower. The provisions of this Section 2.14
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
2.15 Taxes . All payments made by the Borrower under this Agreement
and any Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding (i) net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on the Agent or any Lender and
(ii) any taxes imposed on the Agent or any Lender as a result of a present or
former connection between the Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
the Agent or such Lender having executed, delivered or performed its
9
obligations or received a payment under, or enforced, this Agreement or any
Note). If any such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings ("Non-Excluded Taxes") are required to be withheld
from any amounts payable to the Agent or any Lender hereunder, the amounts so
payable to the Agent or such Lender shall be increased to the extent necessary
to yield to the Agent or such Lender (after payment of all Non-Excluded Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the Borrower shall
not be required to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state thereof if
such Lender fails to comply with the requirements of paragraph (b) of this
Section 2.15. Whenever any Non-Excluded Taxes are payable by the Borrower, as
promptly as possible thereafter the Borrower shall send to the Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Agent the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Agent and the Lenders for any incremental taxes, interest or penalties that
may become payable by the Agent or any Lender as a result of any such failure.
The agreements in this Section 2.15 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not a citizen or resident of the United States
of America, a corporation, partnership or other entity created or organized in
or under the laws of the United States of America, or any estate or trust that
is subject to federal income taxation regardless of the source of its income (a
"Non-U.S. Lender") shall deliver to the Borrower and the Agent (or, in the case
of a Participant, to the Lender from which the related participation shall have
been purchased) two copies of either U.S. Internal Revenue Service Form 1001 or
Form 4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", a Form W-8, or any subsequent versions
thereof or successors thereto (and, if such Non-U.S. Lender delivers a Form W-8,
an annual 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 all payments by the Borrower under this Agreement and
the other Operative Agreements. Such forms shall be delivered by each Non-U.S.
Lender on or before the date it becomes a party to this Agreement (or, in the
case of any Participant, on or before the date such Participant purchases the
related participation). In addition, each Non-U.S. Lender shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify
the Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form
of certification adopted by the U.S. taxing authorities for such purpose).
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(c) The Borrower shall not be required to indemnify any Non-U.S.
Lender, or to pay any additional amounts to any Non-U.S. Lender, in respect of
U.S. Federal withholding tax pursuant to paragraph (a) above to the extent that
(i) the obligation to withhold amounts with respect to U.S. Federal withholding
tax existed on the date such non-U.S. Lender became a party to this Agreement
(or, in the case of a Non-U.S. Participant, on the date such Participant became
a Participant hereunder); provided, however, that this clause (i) shall not
apply to the extent that (x) the indemnity payments or additional amounts any
Lender (or Participant) would be entitled to receive (without regard to this
clause (i)) do not exceed the indemnity payment or additional amounts that the
person making the assignment, participation or transfer to such Lender (or
Participant) would have been entitled to receive in the absence of such
assignment, participation or transfer, or (y) such assignment, participation or
transfer had been requested by the Borrower, (ii) the obligation to pay such
additional amounts would not have arisen but for a failure by such Non-U.S.
Lender or Non-U.S. Participant to comply with the provisions of paragraph (b)
above or (iii) any of the representations or certifications made by a Non-U.S.
Lender or Non-U.S. Participant pursuant to paragraph (b) above are incorrect at
the time a payment hereunder is made, other than by reason of any change in
treaty, law or regulation having effect after the date such representations or
certifications were made.
(d) If the Borrower determines in good faith that a reasonable basis
exists for contesting any taxes for which indemnification has been demanded
hereunder, the relevant Lender or the Agent, as applicable, shall cooperate with
the Borrower in challenging such taxes at the Borrower's expense if so requested
by the Borrower. If any Lender or the Agent, as applicable, receives a refund of
a tax for which a payment has been made by the Borrower pursuant to this
Agreement, which refund in the good faith judgment of such Lender or Agent, as
the case may be, is attributable to such payment made by the Borrower, then the
Lender or Agent, as the case may be, shall reimburse the Borrower for such
amount as the Lender or Agent, as the case may be, determines to be the
proportion of the refund as will leave it, after such reimbursement, in no
better or worse position than it would have been in if the payment had not been
required. A Lender or Agent shall claim any refund that it determines is
available to it, unless it concludes in its reasonable discretion that it would
be adversely affected by making such claim. Neither any Lender nor the Agent
shall be obliged to disclose any information regarding its tax affairs or
computations to the Borrower in connection with this paragraph (d) or any other
provision of this Section 2.15.
(e) Each Lender represents and agrees that, on the date hereof and at
all times during the term of this Agreement, it is not and will not be a conduit
entity participating in a conduit financing arrangement (as defined in Section
7701(1) of the Code and the regulations thereunder) with respect to the
borrowings hereunder unless the Borrower has consented to such arrangement prior
thereto.
2.16 Notice of Certain Costs . Notwithstanding anything in this
Agreement to the contrary, to the extent any notice required by Section 2.13 or
2.15 is given by any Lender more than 180 days after such Lender has knowledge
(or should have had knowledge) of the occurrence of the event giving rise to the
additional cost, reduction in amounts, loss, tax or other additional amounts
described in such Sections, such Lender shall not be entitled to compensation
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under Section 2.13 or 2.15, as the case may be, for any such amounts incurred or
accruing prior to the giving of such notice to the Borrower.
2.17 Change of Lending Office . Each Lender agrees that if it makes
any demand for payment under Section 2.13 or 2.15, or if any adoption or change
of the type described in subsection 2.12 shall occur with respect to it, it
will, if requested by the Borrower, use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions and so long as such
efforts would not be disadvantageous to it, as determined in its sole
discretion) to designate a different lending office if the making of such a
designation would reduce or obviate the need for the Borrower to make payments
under Section 2.13 or 2.15, or would eliminate or reduce the effect of any
adoption or change described in subsection 2.12.
2.18 Replacements of Lender under Certain Circumstances . The Borrower
shall be permitted to replace any Lender that (a) requests reimbursement for
amounts owing pursuant to Section 2.13 or 2.15, (b) is affected in the manner
described in Section 2.12 and as a result thereof any of the actions described
in such Section is required to be taken or (c) becomes a defaulting Lender, with
a replacement bank or other financial institution, provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) the Borrower shall repay (or the replacement bank or institution shall
purchase, at par) all Loans and other amounts (other than any disputed amounts),
pursuant to Section 2.12, 2.13, 2.14 or 2.15, as the case may be, owing to such
replaced Lender prior to the date of replacement, (iv) the replacement bank or
institution, if not already a Lender, and the terms and conditions of such
replacement, shall be reasonably satisfactory to the Agent, (v) the replaced
Lender shall be obligated to make such replacement in accordance with the
provisions of Section 9.7 (provided that the Borrower shall be obligated to pay
the registration and processing fee referred to therein) and (vi) any such
replacement shall not be deemed to be a waiver of any rights that the Borrower,
the Agent or any other Lender shall have against the replaced Lender.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and
to make the Loans, the Borrower hereby represents and warrants to the Agent and
each Lender that the representations and warranties set forth in Section 7 of
the Participation Agreement are true and correct.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness . The effectiveness of this Agreement
is subject to the satisfaction of all conditions precedent set forth in Section
6.1 of the Participation Agreement required by said Section to be satisfied on
or prior to the Initial Closing Date.
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4.2 Conditions to Each Loan . The agreement of each Lender to make any
Loan requested to be made by it on any date is subject to the satisfaction of
the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Borrower, the Lessee or the Guarantors in or
pursuant to the Operative Agreements shall be true and correct in all
material respects on and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the Loans requested to
be made on such date.
(c) Participation Agreement Conditions. With respect to each Loan, the
applicable conditions precedent to the Advance associated therewith
specified in Section 6 of the Participation Agreement shall have been
satisfied.
(d) Investor Contribution. With respect to each Advance, the Agent
shall be satisfied that the Borrower shall receive from the Investor on the
relevant Funding Date an amount equal to the Investor Contribution
associated with such Loan.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Lessee, as of the date of such Loan that the conditions
contained in this Section 4.2 have been satisfied.
SECTION 5. COVENANTS
So long as the Commitments remain in effect, any Note remains
outstanding and unpaid or any other amount is owing to any Lender or the Agent
hereunder:
5.1 Other Activities . Without the consent of Lenders holding at least
66 2/3 % in the aggregate of the Commitment Percentages, the Borrower shall not
conduct, transact or otherwise engage in, or commit to transact, conduct or
otherwise engage in, any business or operations other than the entry into, and
exercise of rights and performance of obligations in respect of, the Operative
Agreements and other activities incidental or related to the foregoing.
5.2 Ownership of Property, Indebtedness . The Borrower shall not own,
lease, manage or otherwise operate any properties or assets other than in
connection with the activities described in Section 5.1, or incur, create,
assume or suffer to exist any Indebtedness or other consensual liabilities or
financial obligations other than as may be incurred, created or assumed or as
may exist in connection with the activities described in Section 5.1 (including
the Loans and other obligations incurred by the Borrower hereunder).
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5.3 Disposition of Assets . The Borrower shall not convey, sell,
lease, assign, transfer or otherwise dispose of any of its property, business or
assets, whether now owned or hereafter acquired, except to the extent expressly
authorized by the Operative Agreements.
5.4 Compliance with Operative Agreements . The Borrower shall at all
times observe and perform all of the covenants, conditions and obligations
required to be performed by it under each Operative Agreement to which it is a
party.
5.5 Further Assurances . At any time and from time to time, upon the
written request of the Agent, the Borrower will, at the sole expense of the
Lessee, promptly and duly execute and deliver such further instruments and
documents and take such further action as the Agent or the Required Lenders may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and the other Operative Agreements and of the rights and
powers herein or therein granted.
5.6 Notices . If on any date the Borrower shall obtain actual
knowledge of the occurrence of a Default or Event of Default, the Borrower will
give prompt written notice thereof to the Agent.
5.7 Discharge of Liens . The Borrower will not create or permit to
exist at any time, and will, at its own expense, promptly take such action as
may be necessary duly to discharge, or cause to be discharged, all Lessor Liens
attributable to it, provided, that the Borrower shall not be required to
discharge any Lessor Lien while the same is being contested in good faith by
appropriate proceedings diligently prosecuted so long as such proceedings shall
not involve any material danger of impairment of any of the Liens contemplated
by the Security Documents or of the sale, forfeiture or loss of, and shall not
materially interfere with the construction, use, operation or disposition of
(including, as a result of the exercise of the Purchase Option), the Property or
title thereto or any interest therein or the payment of Rent.
5.8 Recordkeeping . On each date on which the Tranche A/B Property
Cost or Tranche A/B Construction Property Cost for any Property is increased or
decreased pursuant to this Agreement, the Borrower shall notify the Agent of the
amount of such increase or decrease and the identity of the affected Property.
SECTION 6. REMEDIAL PROVISIONS
6.1 Events of Default. Upon the occurrence of any of the following
specified events (each an "Event of Default"):
(a) The Borrower shall (i) default in the payment when due of any
principal of the Loans or (ii) default, and such default shall continue for
five or more days, in the payment when due of any interest on the Loans or
any other amounts owing hereunder or under any other Credit Document to
which it is a party; or
14
(b) The Borrower shall default in the due performance or observance by
it of any term, covenant or agreement contained in any Credit Document to
which it is a party (other than the terms, covenants or agreements referred
to in paragraph (a) above) and such default shall have continued unremedied
for a period of thirty days after written notice thereof from Agent; or
(c) Any Guarantor shall default in the due performance or observance
by it of any term, covenant or agreement contained in the Guarantee
(including any term, covenant or agreement incorporated by reference in the
Guarantee provided that a default in the due performance or observance of
any such incorporated term, covenant or agreement shall only constitute an
Event of Default hereunder after the giving of notice, if required, and the
expiration of cure periods, if applicable, under the Corporate Credit
Agreement) and such default shall continue for thirty days after written
notice thereof from Agent; or
(d) Any representation, warranty or statement made or deemed made by
the Borrower herein or in any other Credit Document or by the Lessor or the
Lessee in the Participation Agreement, or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto, shall
prove to be incorrect in any material respect on the date as of which made
or deemed made; or
(e) Any representation, warranty or statement made or deemed made by
any Guarantor in the Guarantee or in any other Operative Agreement, or in
any statement or certificate delivered or required to be delivered pursuant
thereto, shall prove to be untrue in any material respect on the date as of
which made or deemed made; or
(f)(i) Any Lease Event of Default shall have occurred and be
continuing or (ii) the Borrower shall default in the due performance or
observance by it of any term, covenant or agreement contained in the
Participation Agreement or the Trust Company shall default in the due
performance or observance by it of any term, covenant or agreement
contained in the Trust Agreement, and in each case under this clause (ii),
such default shall have continued unremedied for a period of at least 30
days after notice to the Borrower by the Agent; or
(g)(i) The Lessee or any of the Restricted Subsidiaries shall (i)
default in any payment with respect to any Indebtedness (including any
Guarantee Obligation, but excluding the Loans) in excess of $20,000,000 in
the aggregate for the Lessee and such Subsidiaries, beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; or (ii) default in the observance or performance
of any other agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or (except in the case of Indebtedness consisting of any Hedge
Agreement) any other event shall occur or condition exist, the effect of
which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness (or a trustee or agent on behalf of
such holder or holders) to cause, with the giving of notice if required,
such
15
Indebtedness to become due prior to its stated maturity or (in the case of
any such Indebtedness constituting a Guarantee Obligation) to become
payable or (ii) without limiting the provisions of clause (i) above, any
such Indebtedness (other than Indebtedness consisting of any Hedge
Agreement) shall be declared to be due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment or as a
mandatory prepayment, prior to the stated maturity thereof; or
(h)(i) The Borrower or the Investor shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or the Borrower or the Investor shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or the Investor any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results
in the entry of an order for relief or any such adjudication or appointment
or (B) remains undismissed, undischarged or unbonded for a period of 90
days; or (iii) there shall be commenced against the Borrower or the
Investor any case, proceeding or other action seeking issuance of a warrant
of attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 90 days from the entry thereof; or (iv) the
Borrower or the Investor shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) the Borrower or the
Investor shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(i)(i) The Lessee or any Specified Subsidiary shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or the Lessee or any Specified Subsidiary shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Lessee or any Specified Subsidiary any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 90 days; or (iii) there shall be commenced against
the Lessee or any Specified Subsidiary any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which
results in the entry of an order for
16
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 90 days from the entry thereof; or (iv) the
Lessee or any Specified Subsidiary shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or
(j) Any Security Document shall cease to be in full force and effect,
or shall cease to give the Agent the Liens, rights, powers and privileges
purported to be created thereby, in favor of the Agent on behalf of the
Lenders, superior to and prior to the rights of all third Persons and
subject to no other Liens (except in each case to the extent expressly
permitted herein or in the other Operative Agreements); or
(k) The Guarantee or any material provision thereof shall cease to be
in full force and effect or any Guarantor shall deny or disaffirm such
Guarantor's obligations under the Guarantee; or
(l) One or more judgments or judicial decrees shall be entered against
the Borrower involving a liability of $100,000 or more in the case of any
one such judgment or $250,000 or more in the aggregate for all such
judgments and decrees for the Borrower (to the extent not paid or fully
covered by insurance, provided by a carrier that has acknowledged coverage)
and any such judgments or decrees shall not have been vacated, discharged
or stayed or bonded pending appeal within 90 days from the entry thereof;
or
(m)(i) Any Plan shall fail to satisfy the minimum funding standard
required for any plan year or part thereof or a waiver of such standard or
extension of any amortization period is sought or granted under Section 412
of the Code; any Plan is or shall have been terminated or is the subject of
termination proceedings under ERISA (including the giving of written notice
thereof); an event shall have occurred or a condition shall exist in either
case entitling the PBGC to terminate any Plan or to appoint a trustee to
administer any Plan (including the giving of written notice thereof); any
Plan shall have an accumulated funding deficiency (whether or not waived);
Lessee or any Subsidiary or any ERISA Affiliate has incurred or is likely
to incur a liability to or on account of a Plan under Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971
or 4975 of the Code (including the giving of written notice thereof); (ii)
there could result from any event or events set forth in clause (i) of this
Section 6.1 (m) the imposition of a lien, the granting of a security
interest, or a liability, or the reasonable likelihood of incurring a lien,
security interest or liability; and (iii) such lien, security interest or
liability will or would be reasonably likely to have a Material Adverse
Effect; or
(n) One or more judgments or decrees shall be entered against the
Lessee or any of the Restricted Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance provided by a carrier not
disputing coverage) of $20,000,000 or more in the aggregate for all such
judgments and decrees for the Lessee and the Restricted Subsidiaries, and
any such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within 60 days from the entry thereof; or
17
(o) A Change of Control shall occur;
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (h) or paragraph (i), automatically the Commitments shall
immediately terminate and the Loans hereunder (with accrued interest thereon)
and all other amounts owing under this Agreement and the Notes shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken so long as such event is
continuing: (i) with the consent of the Required Lenders, the Agent may, or upon
the request of the Required Lenders, the Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) with the consent of the Required Lenders,
the Agent may, or upon the request of the Required Lenders, the Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the Notes to be
due and payable forthwith, whereupon the same shall immediately become due and
payable (any of the foregoing occurrences or actions referred to in clause (A)
or (B) above, an "Acceleration"). Except as expressly provided above in this
Section 6, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
6.2 Certain Defaults. Notwithstanding anything to the contrary
contained in Section 6.1(h), no Event of Default shall occur under Section
6.1(h) with respect to any Investor so long as (i) such Event of Default does
not threaten to interrupt the Lenders' timely receipt of all amounts due under
this Agreement and each of the other Operative Agreements whether pursuant to
the Assignment of Lease or otherwise and (ii) no other Event of Default has
occurred and is continuing.
6.3 Exercise of Remedies. Notwithstanding the foregoing provisions of
this Section 6, the Agent shall not have the right to exercise any rights or
remedies under this Section 6 against the Borrower unless it shall also, at the
direction of the Required Lenders, exercise a remedy (as then permitted and as
such Required Lender shall direct) under the Lease and the Agency Agreement, as
applicable.
SECTION 7. THE AGENT
7.1 Appointment . Each Lender hereby irrevocably designates and
appoints the Agent as the agent of such Lender under this Agreement and the
other Operative Agreements, and each such Lender irrevocably authorizes the
Agent, in such capacity, to take such action on its behalf under the provisions
of this Agreement and the other Operative Agreements and to exercise such powers
and perform such duties as are expressly delegated to the Agent by the terms of
this Agreement and the other Operative Agreements, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Operative Agreement or otherwise exist against the Agent.
18
7.2 Delegation of Duties . The Agent may execute any of its duties
under this Agreement and the other Operative Agreements by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
7.3 Exculpatory Provisions . Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Operative
Agreement (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Lessee or any
officer thereof contained in this Agreement or any other Operative Agreement or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Agent under or in connection with, this Agreement or
any other Operative Agreement or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Operative Agreement or for any failure of the Borrower to perform its
obligations hereunder or thereunder. The Agent shall not be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Operative Agreement, or to inspect the properties, books or records of the
Borrower or the Guarantor.
7.4 Reliance by Agent . The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to the Guarantor), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Operative Agreement unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or 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 or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the other Operative Agreements in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
obligations owing by the Borrower hereunder.
7.5 Notice of Default . The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender, the Borrower or
the Guarantor referring to this Agreement, describing 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, the Agent shall give notice thereof to the
Lenders. The Agent shall take such action with respect to such Default or Event
of Default as shall be reasonably directed by the Required Lenders; provided
that unless and until the Agent
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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 interests of
the Lenders.
7.6 Non-Reliance on Agent and Other Lenders . Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Borrower or the Guarantor, shall be deemed to
constitute any representation or warranty by the Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Borrower and the Guarantor and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Lender also
represents 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 credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Operative Agreements, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower and the Guarantor. Except for
notices, reports and other documents 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 business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower or the Guarantor which
may come into the possession of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
7.7 Indemnification . The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrower or the Guarantor
and without limiting the obligation of the Borrower or the Guarantor to do so),
ratably according to their respective Commitment Percentages in effect on the
date on which indemnification is sought (or, if indemnification is sought after
the date upon which the Commitments shall have terminated and the Loans shall
have been paid in full, ratably in accordance with their Commitment Percentages
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the amounts
owing hereunder) be imposed on, incurred by or asserted against the Agent in any
way relating to or arising out of, the Commitments, this Agreement, any of the
other Operative Agreements or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Agent's gross negligence or willful misconduct. The agreements in this Section
shall survive the payment of the Loans and all other amounts payable hereunder.
20
7.8 Agent in Its Individual Capacity . The Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower or the Guarantor as though the Agent were not the
Agent hereunder and under the other Operative Agreements. With respect to the
Loans made by it, the Agent shall have the same rights and powers under this
Agreement and the other Operative Agreements as any Lender and may exercise the
same as though it were not the Agent, and the terms "Lender" and "Lenders" shall
include the Agent in its individual capacity.
7.9 Successor Agent . The Agent may resign as Agent upon 20 days'
notice to the Lenders and the Borrower. If the Agent shall resign as Agent under
this Agreement and the other Operative Agreements, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall be approved by the Borrower (such approval not to be
unreasonably withheld), whereupon such successor agent shall succeed to the
rights, powers and duties of the Agent, and the term "Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Agent's rights, powers and duties as Agent shall be terminated, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Loans. After any retiring
Agent's resignation as Agent, the provisions of this Section 7 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement and the other Operative Agreements.
7.10 Co-Documentation and Syndication Agents . None of the Lenders
identified on the facing page or signature pages of this Agreement as a
"Co-Documentation Agent" or "Syndication Agent" shall have any right, power,
obligation, liability, responsibility or duty under this Agreement and the other
Operative Documents other than those applicable to all Lenders as such. Without
limiting the foregoing, none of Lenders so identified as a "Co-Documentation
Agent" or "Syndication Agent" shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied,
and will not rely, on any of Lenders so identified in deciding to enter into
this Agreement and the other Operative Documents or in taking or not taking
action hereunder.
SECTION 8. MATTERS RELATING TO PAYMENTS AND COLLATERAL
8.1 The Account . The Agent shall establish an account (the "Account")
into which the Agent shall deposit all payments, receipts and other
consideration of any kind whatsoever paid under the Lease and received by the
Agent pursuant to the Assignment of Lease.
(b) Payments deposited from time to time in the Account shall be paid
out as follows:
(i) Any such payment identified by the Lessee as Basic Rent shall be
paid out of the Account by the Agent on the relevant Specified Interest
Payment Date, and shall be applied, first, ratably to the payment of
interest then due and payable on the Loans until such amounts are paid in
full, second, to the payment to the Borrower of an amount equal
21
to the Investor Yield then due and payable under the Operative Agreements
until such amount is paid in full, and, third, the remainder of such amount
shall be paid out of the Account by the Agent to such Person or Persons as
the Borrower may designate.
(ii) Any payment identified by the Lessee as a payment in respect of
the Termination Value of any Property pursuant to Section 16 of the Lease
or of the Termination Value of any Property pursuant to Section 20 of the
Lease shall be paid out of the Account by the Agent promptly after receipt,
and shall be applied, first, ratably to the payment of the principal of
Tranche B Loans then outstanding in an amount not to exceed the product of
(x) the Tranche A/B Property Cost in respect of such Property and (y) the
Tranche B Percentage in respect of such Property and all interest due and
payable on such amount, second, to the payment to the Borrower of an amount
not to exceed the outstanding Investor Property Cost in respect of such
Property and the Investor Yield due and payable on such amount, third,
ratably to the payment of the principal of Tranche A Loans then outstanding
in an amount not to exceed the product of (x) the Tranche A/B Property Cost
in respect of such Property and (y) the Tranche A Percentage in respect of
such Property and all interest due and payable on such amount, and fourth,
the remainder of such amount shall be paid out of the Account by the Agent
to the Lessee.
(iii) Any payment identified by the Lessee as proceeds of the sale of
any Property pursuant to Section 21 of the Lease (but in any event
excluding costs and expenses described in Section 21.2(i) of the Lease)
("Net Sale Proceeds") shall be paid out of the Account by the Agent
(simultaneously with the payment by the Agent out of the Account of the
Maximum Residual Guarantee Amount pursuant to Section 8.1(b) (v)) promptly
after receipt, and shall be applied, first, ratably to the payment of the
principal of Tranche B Loans then outstanding in an amount not to exceed
the product of (x) the Tranche A/B Property Cost in respect of such
Property and (y) the Tranche B Percentage in respect of such Property and
all interest then due and payable on such amount, second, to the payment to
the Borrower of an amount not to exceed the outstanding Investor Property
Cost in respect of such Property, and third, the remainder of such amount
("Excess Sale Proceeds") shall be held in the Account until the Maturity
Date (or, if earlier, the date of an Acceleration) for application in
accordance with Section 8.1(b)(iv) or 8.2, as the case may be.
(iv) On the Maturity Date any Excess Sale Proceeds contained in the
Account shall be applied as follows: first, ratably to the payment of the
principal and interest on the Loans then outstanding, second, to the
payment to the Borrower of an amount not to exceed the aggregate Investor
Property Cost with respect to all Properties (whether or not the Lease has
terminated with respect to any such Property) and the Investor Yield due
and payable on such amount, and third, to the extent moneys remain after
application pursuant to clauses first and second above, in the manner
specified in Section 8.2.
(v) Any payment identified by the Lessee as the Maximum Residual
Guarantee Amount in respect of any Property shall be paid out of the
Account by the Agent
22
promptly after receipt and shall be applied ratably to the payment of the
principal of Tranche A Loans then outstanding in respect of such Property.
(vi) Any payment identified by the Lessee as a Wear and Tear Payment
or any Net Sale Proceeds Shortfall pursuant to Section 21.3 of the Lease
shall be paid out of the Account by the Agent promptly after receipt, and
shall be applied, first, ratably to the payment of the principal of Tranche
B Loans then outstanding in an amount equal to the product of the Tranche B
Percentage with respect to such Property and the Tranche A/B Property Cost
with respect to such Property (in each case determined as of the date of
sale of such Property pursuant to Section 21 of the Lease immediately prior
to giving effect thereto) and all interest due and payable on such amount,
and second, the remainder of such amount shall be paid out of the Account
by the Agent to the Borrower.
(vii) Any payment identified by the Lessee as Supplemental Rent (other
than any Maximum Residual Guarantee Amount) (but in any event excluding all
Excepted Payments) shall be paid out of the Account by the Agent promptly
after receipt, and shall be applied to the payment of any amounts then
owing to the Agent, the Lenders, the Investor and the other parties to the
Operative Agreements (or any of them) (other than any such amounts payable
pursuant to the preceding provisions of this Section 8.1(b)) as shall be
designated by the Lessee (or, in the absence of such designation, ratably
according to the respective amounts so owing of which the Agent has
received written notice).
In the event that the Lessee shall fail to identify the nature of any payment
deposited by it in the Account, or the Agent in its reasonable judgment shall
determine that the identification made by the Lessee is incorrect or
inappropriate, the nature of such payment shall instead be identified by the
Agent in its reasonable judgment and applied in the manner specified above;
provided, that in the event that the Agent identifies such payment as an
Excepted Payment, such payment shall be paid out of the Account by the Agent to
such Person or Persons as the Borrower may designate.
(c) Upon the termination of the Commitments and the payment in full of
the Loans and all other amounts owing by the Borrower hereunder or under any
other Credit Document, any moneys remaining in the Account shall be paid to the
Borrower or such other Person or Persons as the Borrower may designate.
8.2 Proceeds of Collateral; Proceeds Remaining in Account . All moneys
collected by the Agent under the Guarantee or upon any sale or other disposition
of the Collateral pursuant to any Security Document, together with all other
moneys received by the Agent thereunder and (b) all moneys contained in the
Account on the date of an Acceleration or on the Maturity Date (excluding, in
the case of any application made pursuant to this Section 8.2 on the Maturity
Date, an amount equal to the aggregate amount of Excess Sale Proceeds or Maximum
Residual Guarantee Amount deposited in the Account on or prior to such date,
which amount shall instead be applied on the Maturity Date in accordance with
Section 8.1(b)(iv) or Section 8.1(b)(v), respectively), or deposited in the
Account thereafter, shall be applied as follows:
23
First, to the payment of (x) any and all sums advanced by the Agent in
order to preserve the Collateral or preserve its security interest therein
and (y) the expenses of retaking, holding, preparing for sale or lease,
selling or otherwise disposing or realizing on the Collateral, or of any
exercise by the Agent of its rights under the Security Documents, together
with reasonable attorneys' fees and court costs;
Second, to the payment of the amounts then due and unpaid for
principal of the Tranche B Loans, according to the amounts due and payable
on the Tranche B Loans in respect of principal;
Third, to the payment of the amounts then due and unpaid for principal
of the Tranche A Loans according to the amounts due and payable on the
Tranche A Loans in respect of principal;
Fourth, to the payment of the amounts then due and unpaid for interest
accrued on the Tranche B Loans and the Tranche A Loans, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Tranche B Loans and the Tranche A Loans in respect of
principal;
Fifth, to the payment of an amount equal to the aggregate outstanding
Investor Contribution and all amounts then due and payable on account of
the Investor Yield;
Sixth, to the extent moneys remain after application pursuant to
clauses First through Fifth above, to the Lessee or to whomever may be
lawfully entitled to receive such surplus.
8.3 Certain Remedial Matters . Notwithstanding any other provision of
this Agreement or any other Credit Document:
(i) the Borrower shall at all times to the exclusion of the Agent
retain (A) all rights to Excepted Payments and to demand, collect or
commence an action at law to obtain such payments and to enforce any
judgment with respect thereto and (B) all of its rights under the
Participation Agreement; and
(ii) the Borrower shall at all times retain the right, but not to the
exclusion of the Agent, (A) to receive from the Lessee all notices,
certificates and other documents and all information that the Lessee is
permitted or required to give or furnish to the "Borrower" or the "Lessor"
pursuant to the Lease, the Participation Agreement or any other Operative
Agreement, (B) to inspect the Properties and otherwise exercise rights of
the "Lessor" under Section 10.2 of the Lease, (C) to retain all rights with
respect to insurance that Section 14 of the Lease specifically confers upon
the "Lessor", (D) to provide such insurance as the Lessee shall have failed
to maintain or as the Borrower may desire, (E) to enforce compliance by the
Lessee with the provisions of Sections 8, 9, 10, 11, 14 and 30.10 of the
Lease, and (F) subject to the other applicable provisions of this
Agreement, to perform for the Lessee under Section 17 of the Lease.
24
8.4 Release of the Property, etc. If the Lessee shall at any time
purchase the Property pursuant to Section 16.2 of the Lease or exercise its
Purchase Option with respect to the Property under Section 20 of the Lease, or
if the Property shall be sold in accordance with Section 21 of the Lease, then,
upon satisfaction by the Borrower of its obligation to prepay the Loans pursuant
to Section 2.5(c) and to pay accrued interest on the Loans so prepaid pursuant
to Section 2.8, the Agent shall release the Property from the Liens created by
the Security Documents. In addition, upon the termination of the Commitments and
the payment in full of the Loans and all other amounts owing by the Borrower or
the Guarantor hereunder or under any other Operative Agreement, the Agent shall
release all of the Properties from the Liens created by the Security Documents.
Certain Surplus Land (as defined in Section 20.4 of the Lease) may be partially
released pursuant to Section 20.4 of the Lease. Upon request of the Borrower
following any such release, the Agent shall, at the sole cost and expense of the
Borrower, execute and deliver to the Borrower or the Lessee such documents as
the Borrower shall reasonably request to evidence such release.
(b) Upon request, the Agent shall join in any grant or release
consented to by Lessor pursuant to Section 12.2 of the Lease in order to
subordinate the Lien of the Mortgage and any other Security Documents to such
grant or release or to do a partial release of Surplus Land pursuant to Section
20.4 of the Lease.
(c) Notwithstanding anything to the contrary herein, upon the
termination of the Commitments and the payment in full of (i) the Loans and all
other amounts owing by the Borrower or any Guarantor hereunder or under any
other Operative Agreement and (ii) all amounts owing by the Lessee to the Lessor
or to any other Person under the Operative Agreements, all remaining moneys in
the Account shall be paid out to the Lessee.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers . Neither this Agreement, any other Credit
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 9.1 and
Section 9.3 of the Participation Agreement. The Required Lenders may, or, with
the written consent of the Required Lenders, the Agent may, from time to time,
(a) subject to receipt of the written consent of the Lessee, enter into with the
Borrower or the Guarantors, as applicable, written amendments, supplements or
modifications to the Operative Agreements for the purpose of adding any
provisions to the Operative Agreements or changing in any manner the rights of
the Agent, the Lenders, the Borrower or the Guarantors thereunder or (b) waive,
on such terms and conditions as the Required Lenders or the Agent, as the case
may be, may specify in such instrument, any of the requirements of the Operative
Agreements or any Default or Event of Default and its consequences or (c) market
the Property in accordance with the provisions of Section 22.1(b) of the Lease.
Notwithstanding the foregoing, no such amendment, supplement, modification or
waiver shall (i) reduce the amount or extend the scheduled date of maturity of
any Note, or reduce the stated rate of any interest payable hereunder or any
Commitment Fees payable under the Participation Agreement or extend the
scheduled date of any payment of such interest or
25
Commitment Fees or increase the amount or extend the expiration date of any
Lender's Commitment, in each case without the consent of each Lender directly
and adversely affected thereby, or (ii) amend, modify or waive any provision of
this Section 9.1 or reduce the percentage specified in the definition of
Required Lenders, or consent to the assignment or transfer by the Borrower or
any Guarantor of any of its rights and obligations under the Operative
Agreements or release any portion of the Collateral (except in accordance with
Section 8.4) or release any Guarantor from its obligations under the Guarantee,
in each case without the written consent of all of the Lenders, or (iii) amend,
modify or waive any provision of Section 7 without the written consent of the
then Agent, or (iv) permit other investments by the Lessor without the consent
of Lenders holding 100% in the aggregate of the Commitment Percentages. Any such
waiver and any such amendment, supplement or modification shall apply equally to
each of the Lenders and shall be binding upon the Borrower, the Guarantors, the
Lessee, the Lenders, the Agent and all future holders of the Notes. In the case
of any waiver, the Borrower, the Guarantors, the Lessee, the Lenders and the
Agent shall be restored to their former position and rights under the Operative
Agreements, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
9.2 Notices . All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) when delivered by hand, (b) one
Business Day after delivery to a nationally recognized courier service
specifying overnight delivery, (c) three Business Days after being deposited in
the mail, certified or registered, postage prepaid, or (d) in the case of
facsimile notice, when sent and receipt has been confirmed, addressed as follows
in the case of the Borrower and the Agent, and as set forth in Schedule 1.1 in
the case of the Lenders, or to such other address as may be hereafter notified
by the respective parties hereto and any future holders of the Notes:
The Borrower:
The KinderCare Realty Trust 1999
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Fax: (000) 000-0000
with copies to:
KinderCare Learning Centers, Inc.
000 XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
Attention: Legal Department
Fax: (000) 000-0000
26
Stoel Rives LLP
000 XX Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
Attn: Xxxx X. Xxxxxx
Fax: (000) 000-0000
KinderCare Learning Centers, Inc.
x/x Xxxxxxxx Xxxxxx Xxxxxxx & Co., L.P.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx
Fax: (000) 000-0000
Scotiabanc Inc.
x/x Xxx Xxxx xx Xxxx Xxxxxx
000 XX 0xx Xxx., Xxxxx 000
Xxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxx
Facsimile: (000) 000-0000
The Lenders:
The Bank of Nova Scotia
000 XX 0xx Xxx., Xxxxx 000
Xxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxx
Facsimile: (000) 000-0000
Bank of America, N.A.
000 Xxxxxxxxxx Xxxxxx, Mail Code: CA5-705-41-89
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx Leader, MD
Facsimile: (000)000-0000
The Chase Manhattan Bank
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
Citicorp USA, Inc.
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxx
Facsimile: (000) 000-0000
27
Credit Suisse First Boston
Eleven Madison Avenue, 20th Floor
New York, NY 10010-3629
Attention: Xxxxxx Xxxx
Facsimile: (000) 000-0000
Bankers Trust Company
0 XX Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxxxx/Xxxxx Xxxxxxx
Facsimile: (000) 000-0000/7351
Xxxxxxx Xxxxx Capital Corporation
000 Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxx
Facsimile: (000)000-0000
and
Attention: Xxxxx X.X. Xxxxxx
Facsimile: (000)000-0000
The Agent: The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Credit and Lending Group
Fax: (000) 000-0000
provided that any notice, request or demand to or upon the Agent or the Lenders
pursuant to Section 2.3, 2.5, 2.6, 2.7 or 2.11(b) shall not be effective until
received.
9.3 No Waiver; Cumulative Remedies . No failure to exercise and no
delay in exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Operative Agreements shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties . All representations
and warranties made hereunder, in the other Operative Agreements and in any
document, certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement and the
Notes and the making of the Loans hereunder.
28
9.5 Successors and Assigns; Participations and Assignments . This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Agent, all future holders of the Notes and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of each Lender.
9.6 Participations . Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time sell to one or more
banks, financial institutions or other entities (each, a "Participant")
participating interests in any Loan owing to such Lender, any Note held by such
Lender, any Commitment of such Lender or any other interest of such Lender
hereunder and under the other Operative Agreements; provided, that any such
participation shall be ratable as between the Tranche A Loans and Tranche B
Loans of such Lender. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Note for all purposes under this Agreement
and the Notes, and the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the Notes. In no event shall any
Participant have any right to approve any amendment or waiver of any provision
of this Agreement or any other Operative Agreement, or any consent to any
departure by the Borrower, any Guarantor or any other Person therefrom, except
to the extent that such amendment, waiver or consent would (a) reduce the
principal of, or interest on, any Loan or Note, or postpone the date of the
final maturity of any Loan or Note, or reduce the amount of any Commitment Fee,
in each case to the extent subject to such participation or (b) release all or
substantially all of the Collateral. The Borrower agrees that if amounts
outstanding under this Agreement and the Notes are due and unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement and any Note to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under this Agreement or any Note, provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 9.9(a) as
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 2.13, 2.14 and 2.15
with respect to its participation in the Commitments and the Loans outstanding
from time to time as if it was a Lender; provided that, in the case of Section
2.15, such Participant shall have complied with the requirements of said Section
and provided, further, that no Participant shall be entitled to receive any
greater amount pursuant to any such Section than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
9.7 Assignments . Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time and from time to
time, assign to any Lender or any Affiliate of any Lender (with the consent of
the Lessee if any increased costs would result therefrom) or, with the consent
of the Borrower, Lessee (provided no Event of Default shall exist
29
at the time of such assignment) and the Agent (which in each case shall not be
unreasonably withheld or delayed, it being understood that, without limitation,
the Lessee shall have the right to withhold its consent to any assignment if, in
order for such assignment to comply with applicable law, the Lessee would be
required to obtain the consent of, or make any filing or registration with, any
Governmental Authority), to an additional bank, fund which is regularly engaged
in making, purchasing or investing in loans or securities or financial
institution (each, a "Purchasing Lender") all or any part of its rights and
obligations under this Agreement and the other Operative Agreements pursuant to
an Assignment and Acceptance substantially in the form of Exhibit B (an
"Assignment and Acceptance"), executed by such Purchasing Lender, such assigning
Lender (and, in the case of a Purchasing Lender that is not a Lender or an
Affiliate thereof, by the Borrower, Lessee and the Agent) and delivered to the
Agent for its acceptance and recording in the Register; provided that, except in
the case of an assignment of all of a Lender's rights and obligations under this
Agreement, (i) unless otherwise agreed to by the Borrower, the Lessee and the
Agent, no such assignment to a Purchasing Lender (other than any Lender or any
Affiliate thereof) shall be in an aggregate principal amount of less than
$5,000,000 and (ii) after giving effect to each such assignment, the assigning
Lender (together with any lender which is an affiliate of such assigning Lender)
shall retain Loans and/or Commitments aggregating not less than $5,000,000. Any
such assignment shall be ratable as between the Tranche A Loans and Tranche B
Loans of the assigning Lender. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Purchasing Lender thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with a Commitment as set forth
therein, and (y) the assigning Lender thereunder shall, to the extent provided
in such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto). Such
Assignment and Acceptance shall be deemed to amend this Agreement to the extent,
and only to the extent, necessary to reflect the addition of such Purchasing
Lender and the resulting adjustment of Commitment Percentage arising from the
purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such assigning Lender. Notwithstanding any provision of this
Agreement to the contrary, the consent of (i) the Borrower shall not be required
for any assignment that occurs at any time when any of the events described in
Section 6.1(h) shall have occurred and be continuing with respect to the
Borrower, and (ii) the Lessee shall not be required for any assignment that
occurs at any time when any of the events described in Section 6.1(i) shall have
occurred and be continuing with respect to the Lessee.
(b) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and a Purchasing Lender (and, in the case of a Purchasing
Lender that is not a Lender or an Affiliate thereof, by the Borrower, the Lessee
and the Agent) together with payment to the Agent of a registration and
processing fee of $3,500, the Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto,
record the information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and the Borrower. On or prior to such
effective date, the Borrower, at its own expense, shall execute and deliver to
the Agent new Notes (in exchange for the Notes of the
30
assigning Lender), each in an amount equal to the Commitment assumed by the
relevant Purchasing Lender pursuant to such Assignment and Acceptance, and, if
the assigning Lender has retained a Commitment hereunder, new Notes to the order
of the assigning Lender, each in an amount equal to the Commitment retained by
it hereunder. Such new Notes shall be dated the Effective Date and shall
otherwise be in the form of the Notes replaced thereby.
(c) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Bank") may grant to a special purpose funding vehicle (a
"SPC"), identified as such in writing from time to time by the Granting Bank to
the Agent, Lessee and the Borrower, the option to provide to the Borrower all or
any part of any Advance that such Granting Bank would otherwise be obligated to
make to the Borrower pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to make any Advance, (ii) if an
SPC elects not to exercise such option or otherwise fails to provide all or any
part of such Advance, the Granting Bank shall be obligated to make such Advance
pursuant to the terms hereof. The making of an Advance by an SPC hereunder shall
utilize the Commitment of the Granting Bank to the same extent, and as if, such
Advance were made by such Granting Bank. Each party hereto hereby agrees that no
SPC shall be liable for any indemnity or similar payment obligation under this
Agreement (all liability for which shall remain with the Granting Bank). In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPC, it will not institute against, or
join any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any State thereof. In addition, notwithstanding
anything to the contrary contained in this Section 9.7(c), any SPC may (i) with
notice to, but without the prior written consent of, the Borrower, Lessee
(provided no Event of Default shall exist at the time of such assignment) and
the Agent and without paying any processing fee therefor, assign all or a
portion of its interests in any Advances to the Granting Bank or to any
financial institutions (consented to by the Borrower, Lessee (provided no Event
of Default shall exist at the time of such assignment) and Agent) providing
liquidity and/or credit support to or for the account of such SPC to support the
funding or maintenance of Advances and (ii) disclose on a confidential basis any
non-public information relating to its Advances to any rating agency, commercial
paper dealer or provider of any surety, guarantee or credit or liquidity
enhancement to such SPC. This section may not be amended without the written
consent of the SPC. [The Granting Bank shall indemnify Lessee for the full
amount of any reasonable costs and expenses incurred by Lessee as a result of
the operation of this Section 9.7(c). No SPC created pursuant to this provision
shall have any consent rights as a Lender under any of the Operative
Agreements.]
9.8 The Register; Disclosure; Pledges to Federal Reserve Banks . The
Agent shall maintain at its address referred to in Section 9.2 copy of each
Assignment and Acceptance delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders, the Commitments of
the Lenders, and the principal amount of the Loans owing to each Lender from
time to time. The entries in the Register shall be conclusive, in the absence of
clearly demonstrable error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as the owner of the
Loan recorded therein for all
31
purposes of this 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.
(b) Nothing herein shall prohibit any Lender from pledging or
assigning any Loan or Note to any Federal Reserve Bank in accordance with
applicable law.
9.9 Adjustments; Set-Off . If any Lender (a "Benefitted Lender") shall
at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 6.1(h) or 6.1(i), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Loans, or interest thereon, such Benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loan, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any such rights,
upon the occurrence of an Event of Default, the Agent and each Lender is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by the Agent or such Lender (including, without
limitation, by branches and agencies of the Agent or such Lender wherever
located) to or for the credit or the account of the Borrower against and on
account of the obligations and liabilities of the Borrower to the Agent or such
Lender under this Agreement or under any of the other Operative Agreements,
including, without limitation, all interests in obligations of the Borrower
purchased by any such Lender pursuant to Section 9.9(a), and all other claims of
any nature or description arising out of or connected with this Agreement or any
other Operative Agreement, irrespective of whether or not the Agent or such
Lender shall have made any demand hereunder and although said obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
9.10 Counterparts . This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy transmission of signature pages hereto), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Agent.
9.11 Severability . Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any
32
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
9.12 Integration . This Agreement and the other Operative Agreements
represent the agreement of the Borrower, the Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other
Operative Agreements.
9.13 GOVERNING LAW . THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(INCLUDING 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT
EXCLUDING TO THE MAXIMUM EXTENT PERMITTED BY LAW ALL OTHER CHOICE OF LAW AND
CONFLICTS OF LAW RULES).
9.14 Submission to Jurisdiction; Waivers . The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this agreement and the other operative agreements to
which it is a party, or for recognition and enforcement of any judgement in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 9.2 or at such other address
of which the agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section 9.14 any special, exemplary, punitive or consequential
damages.
9.15 Acknowledgments . The Borrower hereby acknowledges that:
33
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the Notes and the other Operative
Agreements;
(b) neither the Agent nor any Lender has any fiduciary relationship
with or duty to the Borrower arising out of or in connection with this
Agreement or any of the other Operative Agreements, and the relationship
between Agent and Lenders, on one hand, and the Borrower, on the other
hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Operative
Agreements or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrower and the Lenders.
9.16 WAIVERS OF JURY TRIAL . THE BORROWER, THE AGENT AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR
ANY COUNTERCLAIM THEREIN.
9.17 Nonrecourse . Anything to the contrary contained in this
Agreement or in any other Operative Agreement notwithstanding, none of the
Borrower or any Investor or any of their respective officers, directors or
shareholders or any of the their respective successors or assigns (all such
Persons being hereinafter referred to collectively as the "Exculpated Persons"),
shall be personally liable in any respect for any liability or obligation
hereunder or under any other Operative Agreement including the payment of the
principal of, or interest on, the Notes, or for monetary damages for the breach
of performance of any of the covenants contained in this Agreement, the Notes or
any of the other Operative Agreements. The Agent and the Lenders agree that, in
the event any of them pursues any remedies available to them under this
Agreement, the Notes or any other Operative Agreement, neither the Agent nor the
Lenders shall have any recourse against the Borrower, nor any other Exculpated
Person, for any deficiency, loss or claim for monetary damages or otherwise
resulting therefrom and recourse shall be had solely and exclusively against the
Collateral and the Guarantor; but nothing contained herein shall be taken to
prevent recourse against or the enforcement of remedies against the Property in
respect of any and all liabilities, obligations and undertakings contained in
this Agreement, the Notes or any other Operative Agreement. Notwithstanding the
foregoing provisions of this Section 9.17, nothing in this Agreement or any
other Operative Agreement shall (a) constitute a waiver, release or discharge of
any obligation evidenced or secured by this Agreement or any other Credit
Document, (b) limit the right of the Agent or any Lender to name the Borrower as
a party defendant in any action or suit for judicial foreclosure and sale under
any Security Document, or (c) affect in any way the validity or enforceability
of the Guarantee or any other guaranty (whether of payment and/or performance)
given to the Agent or the Lenders, or of any indemnity agreement given by the
Borrower, in connection with the Loans made hereunder.
9.18 Oregon Provisions. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES
AND COMMITMENTS MADE BY LENDERS AFTER OCTOBER 3, 1989
34
CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY
OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S RESIDENCE MUST BE IN
WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY LENDERS TO BE ENFORCEABLE.
The parties hereto have caused this Agreement to be duly executed and delivered
by their proper and duly authorized officers as of the day and year first above
written.
THE KINDERCARE REALTY TRUST 1999
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Trustee
By: XXXXXXXX X. XXXXX
-------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Financial Services Officer
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
By: XXXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
BANK OF AMERICA, N.A., as
Co-Documentation Agent and as a Lender
By: XXXXX X. LEADER
-------------------------------------
Name: Xxxxx X. Leader
Title: Managing Director
THE BANK OF NOVA SCOTIA, as Syndication
Agent and as a Lender
By: XXXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Officer
BANKERS TRUST COMPANY, as Syndication
Agent and as a Lender
By: XXXX XX XXXXX
-------------------------------------
Name: Xxxx Xx Xxxxx
Title: Assistant Vice President
CITICORP USA, INC., as a Lender
By: XXXXXXX X. XXXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director/SCO
CREDIT SUISSE FIRST BOSTON, as a Lender
By: XXXX X'XXXX
-------------------------------------
Name: Xxxx X'Xxxx
Title: Vice President
By: XXXXXXX XXXXX
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: Associate
XXXXXXX XXXXX CAPITAL CORPORATION, as a
Lender
By: XXXXX X.X. XXXXXX
-------------------------------------
Name: Xxxxx X.X. Xxxxxx
Title: Vice President
WILMINGTON TRUST COMPANY, in its
individual capacity, only to the extent
expressly set forth herein
By: XXXX X. XXXXXXXX
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Financial Services Officer
