EXHIBIT (10)-58
EXECUTION COPY
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CREDIT AGREEMENT
by and among,
HEALTHSOUTH CORPORATION,
as Borrower,
UBS AG, STAMFORD BRANCH,
as Administrative Agent
DEUTSCHE BANK AG NEW YORK BRANCH
as Syndication Agent
THE LENDERS PARTY HERETO FROM TIME TO TIME
UBS WARBURG LLC
and
DEUTSCHE BANK SECURITIES INC.
as Joint Lead Arrangers
and
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
as Documentation Agent
October 31, 2000
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TABLE OF CONTENTS
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ARTICLE I Definitions and Terms...................................................................................1
1.1. Definitions...........................................................................................1
1.2. Rules of Interpretation..............................................................................25
1.3. Classes and Types of Loans...........................................................................26
ARTICLE II The Loans.............................................................................................27
2.1. Revolving Credit Loans...............................................................................27
2.2. Facility Extension Loans.............................................................................29
2.3. Payment of Interest..................................................................................30
2.4. Payment of Principal.................................................................................30
2.5. Non-Conforming Payments..............................................................................31
2.6. Notes................................................................................................31
2.7. Pro Rata Payments....................................................................................31
2.8. Reductions...........................................................................................32
2.9. Conversions and Elections of Subsequent Interest Periods.............................................32
2.10. Unused Fees.......................................................................................33
2.11. Deficiency Advances...............................................................................33
2.12. Use of Proceeds...................................................................................33
2.13. Increase and Decrease in Amounts..................................................................33
ARTICLE III Letters of Credit....................................................................................34
3.1. Letters of Credit....................................................................................34
3.2. Reimbursement........................................................................................34
3.3. Letter of Credit Facility Fees.......................................................................37
3.4. Administrative Fees..................................................................................38
3.5. Applications.........................................................................................38
ARTICLE IV Change in Circumstances...............................................................................38
4.1. Increased Cost and Reduced Return....................................................................38
4.2. Limitation on Types of Loans.........................................................................39
4.3. Illegality...........................................................................................40
4.4. Treatment of Affected Loans..........................................................................40
4.5. Compensation.........................................................................................41
4.6. Taxes................................................................................................41
ARTICLE V Conditions to Making Loans and Issuing Letters of Credit...............................................43
5.1. Conditions of Initial Advance........................................................................43
5.2. Conditions of Loans and Letters of Credit............................................................45
ARTICLE VI Representations and Warranties........................................................................46
6.1. Organization and Authority...........................................................................46
6.2. Loan Documents.......................................................................................47
6.3. Solvency.............................................................................................47
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6.4. Subsidiaries and Subsidiaries' Guarantees............................................................47
6.5. Ownership Interests..................................................................................47
6.6. Financial Condition..................................................................................47
6.7. Title to Properties..................................................................................48
6.8. Taxes................................................................................................48
6.9. Other Agreements.....................................................................................48
6.10. Litigation........................................................................................49
6.11. Margin Stock......................................................................................49
6.12. Investment Company................................................................................50
6.13. Patents, Etc......................................................................................50
6.14. No Untrue Statement...............................................................................50
6.15. No Consents, Etc..................................................................................50
6.16. ERISA Requirement.................................................................................50
6.17. No Default........................................................................................51
6.18. Hazardous Materials...............................................................................51
6.19. Employment Matters................................................................................51
6.20. RICO..............................................................................................51
6.21. Reimbursement from Third Party Payors.............................................................51
6.22. Material Adverse Change...........................................................................52
ARTICLE VII Affirmative Covenants................................................................................52
7.1. Financial Statements, Reports, Etc...................................................................52
7.2. Maintain Properties..................................................................................53
7.3. Conduct of Business and Maintenance of Existence, Qualification, Etc.................................54
7.4. Regulations and Taxes................................................................................54
7.5. Insurance............................................................................................54
7.6. True Books...........................................................................................54
7.7. Right of Inspection..................................................................................54
7.8. Observe all Laws.....................................................................................54
7.9. Governmental Licenses................................................................................55
7.10. Covenants Extending to Other Persons..............................................................55
7.11. Officer's Knowledge of Default....................................................................55
7.12. Suits or Other Proceedings........................................................................55
7.13. Notice of Discharge of Hazardous Material or Environmental Complaint..............................55
7.14. Environmental Compliance..........................................................................56
7.15. Continuation of Current Business..................................................................56
7.16. Management Contracts..............................................................................56
7.17. Payment of Obligations............................................................................56
7.18. New Subsidiaries..................................................................................56
ARTICLE VIII Negative Covenants..................................................................................56
8.1. Financial Covenants..................................................................................57
8.2. Investments and Loans................................................................................57
8.3. Indebtedness.........................................................................................57
8.4. Disposition of Assets................................................................................57
8.5. Consolidation or Merger..............................................................................58
8.6. Liens................................................................................................58
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8.7. Dividends and Distributions..........................................................................58
8.8. Acquisitions and Capital Expenditures................................................................58
8.9. Restricted Payments; Other Payments..................................................................59
8.10. Compliance with ERISA.............................................................................59
8.11. Fiscal Year.......................................................................................60
8.12. Dissolution, etc..................................................................................60
8.13. Transactions with Affiliates......................................................................60
ARTICLE IX Events of Default and Acceleration....................................................................60
9.1. Events of Default....................................................................................60
9.2. Administrative Agent to Act..........................................................................63
9.3. Cumulative Rights....................................................................................63
9.4. No Waiver............................................................................................63
9.5. Allocation of Proceeds...............................................................................64
ARTICLE X The Administrative Agent...............................................................................64
10.1. Appointment, Powers, and Immunities...............................................................64
10.2. Reliance by Administrative Agent..................................................................65
10.3. Defaults..........................................................................................65
10.4. Rights as Lender..................................................................................65
10.5. Indemnification...................................................................................66
10.6. Non-Reliance on Administrative Agent and Other Lenders............................................66
10.7. Resignation of Administrative Agent...............................................................66
10.8. Fees..............................................................................................67
ARTICLE XI Miscellaneous.........................................................................................67
11.1. Assignments and Participations....................................................................67
11.2. Notices...........................................................................................69
11.3. No Waiver.........................................................................................70
11.4. Rights of Setoff; Adjustments.....................................................................70
11.5. Survival..........................................................................................71
11.6. Expenses..........................................................................................71
11.7. Amendments and Waivers............................................................................72
11.8. Counterparts......................................................................................72
11.9. Waivers by Borrower...............................................................................72
11.10. Termination.......................................................................................72
11.11. Governing Law.....................................................................................73
11.12. Indemnification...................................................................................73
11.13. Agreement Controls................................................................................74
11.14. Integration.......................................................................................74
11.15. Successors and Assigns............................................................................74
11.16. Severability......................................................................................75
11.17. Lender Addenda....................................................................................75
11.18. Designated Senior Indebtedness....................................................................75
EXHIBIT A Lender Addendum
EXHIBIT B Form of Assignment and Acceptance
EXHIBIT C Notice of Appointment (or Revocation) of Authorized Representative
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EXHIBIT D Form of Borrowing Notice
EXHIBIT E Form of Interest Rate Selection Notice
EXHIBIT F Form of Note
EXHIBIT G Investments
EXHIBIT H Form of Opinion of Borrower's Counsel
EXHIBIT I Compliance Certificate
EXHIBIT J Executive Officers
EXHIBIT K Form of Guarantee
Schedule 1.1(a) Preferred Cash Distribution Arrangement
Schedule 6.4 Subsidiaries
Schedule 6.19 Employment Matters
Schedule 8.3 Existing Subsidiary Indebtedness
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of October 31, 2000 (this
"Agreement") is entered into by and among HEALTHSOUTH CORPORATION, a Delaware
corporation (the "Borrower"), the Lenders signatories hereto (the "Lenders") and
UBS AG, STAMFORD BRANCH, as administrative agent (in such capacity, the
"Administrative Agent").
RECITAL:
The Borrower has requested that the Lenders make available to
the Borrower a revolving credit facility of up to $400,000,000, including a
$20,000,000 sublimit for the issuance of standby letters of credit, the proceeds
of which shall be used as set forth in Section 2.12, and the Lenders have agreed
to make such revolving credit facility available to the Borrower on the
following terms and conditions:
ARTICLE I
Definitions and Terms
1.1. Definitions. (a) For the purposes of this agreement, in
addition to the definitions set forth above, the following terms shall have the
respective meanings set forth below:
"Acquisition" means the acquisition, whether with cash,
property, stock or promise to pay, of all or a portion of a Person or a
Facility or Facilities of a Person, permitted under Section 8.8;
provided such Person, Facility or Facilities is in substantially the
same line of business engaged in by Borrower or its Consolidated
Entities.
"Acquisition/CapEx Basket Amount" means, for any Fiscal Year,
the sum of (a) the Acquisition/CapEx Initial Basket Amount plus (b) 50%
of the amount, if any, of the Acquisition/CapEx Basket Amount
applicable to the immediately preceding Fiscal Year pursuant to the
foregoing clause (a) that was not expended during such immediately
preceding Fiscal Year for Acquisitions pursuant to Section 8.8(a)(ii)
or for Capital Expenditures pursuant to Section 8.8(b). For the
purposes hereof, any amount spent in any Fiscal Year in respect of
Acquisitions pursuant to Section 8.8(a)(ii) or Capital Expenditures
pursuant to Section 8.8(b) shall be applied, first, toward amounts
permitted to be spent during such Fiscal Year pursuant to the foregoing
clause (a) of this definition and, second, to amounts permitted to be
spent during such Fiscal Year pursuant to the foregoing clause (b) of
this definition.
"Acquisition/CapEx Initial Basket Amount" means an amount
equal to $650,000,000.
"Actual/360 Basis" means a method of computing interest or
other charges hereunder on the basis of an assumed year of 360 days for
actual number of days elapsed,
meaning that interest or other charges accrued for each day will be
computed by multiplying the rate per annum applicable on that day by
the unpaid principal balance (or other relevant sum) on that day and
dividing the result by 360.
"Advance" means a borrowing under the Revolving Credit
Facility consisting of the aggregate principal amount of a Revolving
Credit Loan.
"Affiliate" of any specified Person means any other Person (i)
which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such
specified Person; or (ii) which beneficially owns or holds 5% or more
of any class of the outstanding Voting Stock (or in the case of a
Person which is not a corporation, 5% or more of the equity interest)
of such specified Person; or 5% or more of any class of the outstanding
Voting Stock (or in the case of a Person which is not a corporation, 5%
or more of the equity interest) of which is beneficially owned or held
by such specified Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction
of the management and policies of a Person, whether through ownership
of Voting Stock, by contract or otherwise.
"Applicable Commitment Percentage" means, with respect to each
Lender, that portion of the Total Revolving Credit Commitment allocable
to such Lender (a) with respect to Lenders as of the Closing Date, as
set forth on Schedule 1 to the Lender Addendum executed and delivered
by such Lender, and (b) with respect to any Person who becomes a Lender
thereafter, as reflected in each Assignment and Acceptance to which
such Lender is a party assignee; provided that the Applicable
Commitment Percentage of each Lender shall be increased or decreased to
reflect any assignments to or by such Lender effected in accordance
with Section 11. 1.
"Applicable Extension Percentage" means, with respect to each
Lender, that portion of the aggregate amount of Facility Extension
Loans outstanding and allocable to such Lender as in effect from time
to time giving effect to each Assignment and Acceptance to which such
Lender is a party.
"Applicable Lending Office" means, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or an affiliate
of such Lender) designated for such Type of Loan on the signature pages
hereof or such other office of such Lender (or an affiliate of such
Lender) as such Lender may from time to time specify to the
Administrative Agent and the Borrower by written notice in accordance
with the terms hereof as the office by which its Loans of such Type are
to be made and maintained.
"Applicable Margin" means that percent per annum set forth in
the table below under the heading "Applicable Margin for Eurodollar
Rate Loans" or "Applicable Margin for Base Rate Loans", as applicable,
opposite the applicable Tier determined by the highest Rating as in
effect at the time of determination (subject to the provisions of this
definition following the table below):
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RATING APPLICABLE MARGIN FOR APPLICABLE MARGIN
TIER S&P OR MOODYS EURODOLLAR RATE LOANS FOR BASE RATE LOANS
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I BBB+ Baa1 1.250% 0.250%
or higher or higher
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II BBB Baa2 1.500% 0.500%
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III BBB- Baa3 1.750% 0.750%
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IV BB+ Ba1 2.000% 1.000%
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V Less than Less than 2.250% 1.250%
BB+ Ba1
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The Applicable Margin shall be established from time to time
based upon the Rating then in effect. Any change in the Applicable
Margin due to a change in any Rating shall be effective on the date of
such change in such Rating. In the event (i) of a split Rating where
the Ratings are more than one Tier apart, then the Tier next above the
Tier corresponding to the lower Rating shall apply and, (ii) either
Rating is Tier IV or below (or unrated), then (A) the Applicable Margin
shall be Tier IV if either Rating is Tier IV or higher and (B) Tier V
otherwise. In the event that the Borrower shall not have a Rating by
either S&P or Moody's, the Applicable Margin shall be mutually agreed
to by the Borrower, the Administrative Agent and the Lenders and shall
be Tier V until such mutual agreement is reached.
"Applicable Unused Fee" means that percent per annum set forth
in the table below under the heading "Applicable Unused Fee" opposite
the applicable Tier determined by the highest Rating as in effect at
the time of determination (subject to the provisions of this definition
following the table below):
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RATING APPLICABLE UNUSED
TIER S&P OR MOODY'S FEE
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I BBB+ Baa1 0.250%
or higher or higher
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II BBB Baa2 0.375%
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III BBB- Baa3 0.375%
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IV BB+ Ba1 0.500%
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V Less than Less than 0.500%
BB+ Ba1
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The Applicable Unused Fee shall be established from time to
time based upon the Ratings then in effect. Any change in the
Applicable Unused Fee due to a change in any Rating shall be effective
on the date of such change in such Rating. In the event (i) of split
Ratings where the Ratings are more than one Tier apart, then the Tier
next above the Tier corresponding to the lower Rating shall apply and,
(ii) either Rating is Tier IV or below (or unrated), then (A) the
Applicable Unused Fee shall be Tier IV if either Rating is Tier IV or
higher and (B) Tier V otherwise. In the event that the Borrower shall
not have a Rating by either S&P or Moody's, the Applicable Unused Fee
shall be mutually agreed to by the Borrower, the Administrative Agent
and the Lenders and shall be Tier IV until such mutual agreement is
reached.
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"Applications and Agreements for Letters of Credit" means,
collectively, the Applications and Agreements for Letters of Credit, or
similar documentation, executed by the Borrower from time to time and
delivered to the Issuing Bank to support the issuance of Letters of
Credit and which terms shall state that the requested Letter of Credit
is to be issued under this Agreement.
"Assignment and Acceptance" means an Assignment and Acceptance
in the form of Exhibit B (with blanks appropriately filled in) (or in
such other form as shall be approved by the Administrative Agent)
delivered to the Administrative Agent in connection with an assignment
of a Lender's interest under this Agreement pursuant to Section 11. 1.
"Authorized Representative" means any of the Executive
Officers of the Borrower or, with respect to financial matters, the
Treasurer or the Chief Financial Officer of the Borrower, or any other
Person expressly designated by the board of directors of the Borrower
(or the appropriate committee thereof) as an Authorized Representative
of the Borrower, as set forth from time to time in a certificate in the
form of Exhibit C.
"Base Rate" means, for any day, the rate per annum equal to
the higher of (i) the Prime Rate for such day or (ii) the Federal Funds
Rate for such day plus one-half of one percent (1/2%). Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds
Rate shall be effective on the effective date of such change in the
Prime Rate or Federal Funds Rate.
"Base Rate Loan" means a Loan for which the rate of interest
is determined by reference to the Base Rate.
"Base Rate Refunding Loan" means an Advance under the
Revolving Credit Facility which bears interest at a Base Rate made to
satisfy Reimbursement Obligations arising from a drawing under a Letter
of Credit.
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body).
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving Credit
Facility, in the form of Exhibit D.
"Business Day" means, (i) except in the case of a Eurodollar
Rate Loan, any day which is not a Saturday, Sunday or a day on which
banks in the State of New York are authorized or obligated by law,
executive order or governmental decree to be closed and, (ii) with
respect to any Eurodollar Rate Loan, any day which is a Business Day,
as described above, and on which the relevant international financial
markets are open for the transaction of business contemplated by this
Agreement in London, England, and New York, New York.
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"Capital Expenditures" means, for any period, with respect to
any Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a Capital
Lease) of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such period)
which should be capitalized under GAAP on a consolidated balance sheet
of such Person and its Subsidiaries, but for the avoidance of
duplication, excluding any amounts included in Cost of Acquisition with
respect to any Acquisition.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
or any successor thereof.
"Capital Stock" of any Person means any and all shares, rights
to purchase, warrants or options (whether or not currently
exercisable), participation or other equivalents of or interest in
(however designated) the equity (including without limitation common
stock, preferred stock and partnership and joint venture interests) of
such Person (excluding any debt securities that are convertible into,
or exchangeable for, such equity).
"Change of Control" means, at any time:
(i) all or substantially all of the Borrower's assets are sold
as an entirety to any Person or related group of Persons;
(ii) there shall be consummated any consolidation or merger of
the Borrower (A) in which the Borrower is not the continuing or
surviving corporation (other than a consolidation or merger with a
wholly owned Subsidiary of the Borrower in which all shares of the
Borrower's Common Stock outstanding immediately prior to the
effectiveness thereof are changed into or exchanged for the same
consideration) or (B) pursuant to which the Borrower's Common Stock
would be converted into cash, securities or other property, in each
case other than a consolidation or merger of the Borrower in which the
holders of the Borrower's Common Stock immediately prior to the
consolidation or merger have, directly or indirectly, at least a
majority of the total Voting Stock of the continuing or surviving
corporation immediately after such consolidation or merger in
substantially the same proportion as their ownership of the Borrower's
Common Stock immediately before such transaction;
(iii) any "person" or "group" (each as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act), who are not as of the
Closing Date owners of one percent (1%) or more of the Voting Stock of
the Borrower, either (A) becomes the "beneficial owner" (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, of Voting
Stock of the Borrower (or securities convertible into or exchangeable
for such Voting Stock) representing 15% or more of the combined voting
power of all Voting Stock of the Borrower (on a fully diluted basis) or
(B) otherwise has the ability, directly or indirectly, to elect a
majority of the board of directors of the Borrower;
(iv) during any period of up to 24 consecutive months,
commencing on the Closing Date, individuals who at the beginning of
such period were directors of the
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Borrower shall cease for any reason (other than the death, disability
or retirement of an officer of the Borrower that is serving as a
director at such time so long as another officer of the Borrower
replaces such Person as a director) to constitute a majority of the
board of directors of the Borrower;
(v) any Person or two or more Persons acting in concert shall
have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation thereof, will result in
its or their acquisition, of the power to exercise, directly or
indirectly, a controlling influence on the management or policies of
the Borrower, or
(vi) the Borrower is liquidated or dissolved or adopts a plan
of liquidation or dissolution.
"Closing Date" means the date as of which this Agreement is
executed by the Borrower, the Lenders and the Administrative Agent and
on which the conditions set forth in Section 5.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder.
"Common Stock" means the common stock, par value $.01 per
share, of the Borrower.
"Consistent Basis" in reference to the application of GAAP
means the accounting principles observed in the period referred to are
comparable in all material respects to those applied in the preparation
of the audited financial statements of the Borrower referred to in
Section 6.6(a).
"Consolidated Amortization Expense" of the Borrower for any
period means the amortization expense of the Borrower and its
Consolidated Entities for such period (to the extent included in the
computation of Consolidated Net Income), determined on a consolidated
basis in accordance with GAAP.
"Consolidated Depreciation Expense" of the Borrower means the
depreciation expense of the Borrower and its Consolidated Entities for
such period (to the extent included in the computation of Consolidated
Net Income of the Borrower), determined on a consolidated basis in
accordance with GAAP.
"Consolidated EBITDA" means, with respect to the Borrower and
its Consolidated Entities for any Four-Quarter Period ending on the
date of computation thereof, the sum of, without duplication, (i)
Consolidated Net Income, (ii) Consolidated Interest Expense, (iii)
Consolidated Income Tax Expense, (iv) Consolidated Amortization
Expense, (v) Consolidated Depreciation Expense, (vi) the minority
interest of any Person or Persons in the income of Consolidated
Entities for such period, (vii) the non-recurring, non-cash expenses
and cash transaction costs relating to professional fees arising in
conjunction with an Acquisition provided such expenses do not exceed
10% of the Cost of Acquisition and (viii) as applicable, the
non-recurring, non-cash expenses incurred by
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the Borrower and its Consolidated Entities during the three month
period ended September 30, 1999 and the three month period ended
December 31, 1999; all determined on a consolidated basis in accordance
with GAAP applied on a Consistent Basis.
"Consolidated Entity" means any Person whose financial
statements are appropriately consolidated with the Borrower's financial
statements under GAAP.
"Consolidated Indebtedness" means all Indebtedness of the
Borrower and its Consolidated Entities, all determined on a
consolidated basis.
"Consolidated Interest Expense" means, with respect to any
Four-Quarter Period ending on the date of computation thereof, the
gross interest expense of the Borrower and its Consolidated Entities,
including without limitation (i) the current amortized portion of debt
discounts to the extent included in gross interest expense, (ii) the
current amortized portion of all fees (including fees payable in
respect of any Rate Hedging Obligation) payable in connection with the
incurrence of Indebtedness to the extent included in gross interest
expense, (iii) the portion of any payments made in connection with
Capital Leases allocable to interest expense, and (iv) lease payments,
other than the Headquarters Obligations and Hospitals Obligations, made
pursuant to the Headquarters Lease and Hospitals Lease, respectively,
all determined on a consolidated basis in accordance with GAAP applied
on a Consistent Basis.
"Consolidated Net Income" of the Borrower for any period means
the net income (or loss) of the Borrower and its Consolidated Entities
for such period determined on a consolidated basis in accordance with
GAAP, without giving effect to dividends on any series of preferred
stock of any Consolidated Entity, whether or not in cash, to the extent
such consolidated net income was reduced thereby; provided that there
shall be excluded from such net income (for all purposes, other than
compliance with Section 8.1(a), to the extent otherwise included
therein), without duplication, (i) the net income of any Person (other
than a Consolidated Entity) to the extent that any such income has not
actually been received by the Borrower or a Consolidated Entity in the
form of dividends or similar distributions during such period, but
including, in any event, net income of any Person who becomes a
Consolidated Entity whose Acquisition is accounted for on a "pooling of
interests" basis; (ii) except to the extent includable in the
consolidated net income of the Borrower or a Consolidated Entity
pursuant to the foregoing clause (i), the net income of any Person that
accrued prior to the date that (a) such Person becomes a Consolidated
Entity or is merged into or consolidated with a Consolidated Entity or
(b) the assets of such Person are acquired by the Borrower or a
Consolidated Entity; (iii)the net income of any Consolidated Entity to
the extent that the declaration or payment of dividends or similar
distributions by such Consolidated Entity of that income is not
permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Consolidated Entity during such period;
(iv) any gain (or loss), together with any related provisions for taxes
on any such gain, realized during such period by the Borrower or its
Consolidated Entities upon (a) the acquisition of any securities, or
the extinguishment of any Indebtedness, of the Borrower or its
Consolidated Entities or (b) any asset sale by the
7
referent Person or any of its Subsidiaries; (v) any extraordinary gain
(or extraordinary loss), together with any related provision for taxes
or tax benefit resulting from any such extraordinary gain or loss,
realized by the Borrower or its Consolidated Entities during such
period; and (vi) in the case of a successor to any Person by
consolidation, merger or transfer of its assets, any earnings of the
successor prior to such merger, consolidation or transfer of assets.
"Consolidated Net Worth" of the Borrower as of any date means
the Consolidated Stockholders' Equity (including any preferred stock
that is classified as equity under GAAP, other than Disqualified Stock)
of the Borrower and its Consolidated Entities (excluding any equity
adjustment for foreign currency translation for any period subsequent
to the Closing Date) on a consolidated basis at such date, as
determined in accordance with GAAP, less all write-ups subsequent to
the Closing Date in the book value of any asset owned by the Borrower
or any of its Consolidated Entities.
"Consolidated Stockholders' Equity" means at any time as at
which the amount thereof is to be determined, the sum of the following
amounts in respect of the Borrower and the Consolidated Entities: (i)
the par or stated value of all Capital Stock of the Borrower, (ii)
retained earnings, (iii) additional paid in capital, (iv) capital
surplus and (v) earned surplus minus treasury stock.
"Consolidated Tangible Net Assets" means, as of any date on
which the amount thereof is determined, Consolidated Total Assets minus
(without duplication of deductions in respect of items already deducted
in arriving at surplus and retained earnings) (i) all reserves (other
than contingency reserves not allocated to any particular purpose),
including without limitation reserves for depreciation, depletion,
amortization, obsolescence, deferred income taxes, insurance and
inventory valuation, and (ii) the net book value of all assets which
would be treated as intangible assets, such as (without limitation)
goodwill (whether representing the excess of cost over book value of
assets acquired or otherwise), capitalized expenses, unamortized debt
discount and expense, consignment inventory rights, patents,
trademarks, trade names, copyrights, franchises and licenses, all as
determined on a consolidated basis in accordance with GAAP applied on a
Consistent Basis.
"Consolidated Tangible Net Worth" means, as of any date on
which the amount thereof is to be determined, Consolidated
Stockholders' Equity minus (without duplication of deductions in
respect of items already deducted in arriving at surplus and retained
earnings) (i) all reserves (other than contingency reserves not
allocated to any particular purpose), including without limitation
reserves for depreciation, depletion, amortization, obsolescence,
deferred income taxes, insurance and inventory valuation, and (ii) the
net book value of all assets which would be treated as intangible
assets, such as (without limitation) goodwill (whether representing the
excess of cost over book value of assets acquired or otherwise),
capitalized expenses, unamortized debt discount and expense,
consignment inventory rights, patents, trademarks, trade names,
copyrights, franchises and licenses, all as determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis.
8
"Consolidated Total Assets" means, as of any date on which the
amount thereof is to be determined, the net book value of all assets of
the Borrower and its Consolidated Entities as determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis.
"Consolidated Total Capital" means, as of any date on which
the amount thereof is to be determined, the sum of Consolidated
Indebtedness plus Consolidated Stockholders' Equity of the Borrower and
its Consolidated Entities.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 2.9 hereof of a Eurodollar Rate Loan
as a Eurodollar Rate Loan from one Interest Period to the next Interest
Period.
"Contract Provider" means any Person who provides professional
health care services under or pursuant to any contract with the
Borrower or any Subsidiary.
"Controlled Investment Affiliate" of any specified Person,
means any other Person that (i) directly or indirectly through one or
more intermediaries is in control of, is controlled by, or is under
common control with, such specified Person and (ii) is organized by
such specified Person primarily for the purpose of making equity or
debt investments in one or more companies. For purposes of this
definition, "control" of a Person means the power, directly or
indirectly, to direct or cause the direction of the management and
policies of such Person, whether through ownership of Voting Stock, by
contract or otherwise.
"Controlled Partnership" means a general partnership of which
the Borrower or a Subsidiary is a general partner, or a limited
partnership whose general partners include the Borrower or a Subsidiary
(but not including Vanderbilt), or a limited liability company whose
members include the Borrower or a Subsidiary or another Controlled
Partnership, which partnership, whether general or limited, or limited
liability company has assets with a value in excess of $2,000.00, and
with respect to which partnership or limited liability company the
Borrower or a Subsidiary is entitled to receive not less than 50% of
any distributions of cash made to the partners or members thereof,
other than any preferred cash distribution arrangement in existence at
the Closing Date as set forth on Schedule 1.1(a) hereto, or approved by
the Required Lenders in writing, or which is otherwise a Consolidated
Entity.
"Convert", "Conversion" and "Converted" refers to a conversion
pursuant to Section 2.9 or Article IV of one Type of Loan into another
Type of Loan.
"Convertible Subordinated Debentures" means the 3.25%
Convertible Subordinated Debentures due 2003 issued by the Borrower, as
the same may be amended, supplemented, waived or otherwise modified
from time to time.
"Cost of Acquisition" means in respect of any Acquisition, the
sum of (i) the amount of cash paid by the Borrower and its Consolidated
Entities in connection with such Acquisition, (ii) the Fair Market
Value of all Capital Stock or other ownership
9
interests of the Borrower or any Consolidated Entity issued or given in
connection with such Acquisition, (iii) the amount (determined by using
the face amount or the amount payable at maturity, whichever is
greater) of all Indebtedness incurred, assumed or acquired in
connection with such Acquisition, (iv) all additional purchase price
amounts in the form of earnouts and other contingent obligations that
should be recorded on the financial statements of the Borrower and its
Consolidated Entities in connection with Generally Accepted Accounting
Principles, (v) all amounts paid in respect of covenants not to
compete, consulting agreements and other affiliated contracts in
connection with such Acquisition and (vi) the aggregate fair market
value of all other consideration given by the Borrower and its
Consolidated Entities in connection with such Acquisition.
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default.
"Default Rate" means (i) with respect to each Eurodollar Rate
Loan, until the end of the Interest Period applicable thereto, a rate
of two percent (2%) above the Eurodollar Rate applicable to such Loan
plus the Applicable Margin applicable to Eurodollar Loans, and
thereafter at a rate of interest per annum which shall be two percent
(2%) above the Base Rate plus the Applicable Margin applicable to Base
Rate Loans, (ii) with respect to Base Rate Loans, at a rate of interest
per annum which shall be two percent (2%) above the Base Rate plus the
Applicable Margin applicable to Base Rate Loans and (iii) in any case,
the maximum rate permitted by applicable law, if lower.
"Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder
thereof, in whole or in part, on or prior to the Revolving Credit
Termination Date or the Facility Extension Loan Termination Date, if
applicable.
"Dollars" and the symbol "$" mean dollars constituting legal
tender for the payment of public and private debts in the United States
of America.
"Eligible Assignee" means (i) a Lender, (ii) an affiliate of a
Lender, (iii) any Controlled Investment Affiliate of a Lender, and (iv)
any other Person approved by the Administrative Agent and, unless an
Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 11.1, the Borrower,
such approval not to be unreasonably withheld or delayed by the
Borrower or the Administrative Agent and such approval to be deemed
given by the Borrower if no objection is received by the assigning
Lender and the Administrative Agent from the Borrower within two
Business Days after written notice of such proposed assignment has been
provided by the assigning Lender to the Borrower; provided, however,
that neither the Borrower nor an affiliate of the Borrower shall
qualify as an Eligible Assignee.
"Employee Benefit Plan" means any employee benefit plan within
the meaning of Section 3(3) of ERISA which (i) is maintained for
employees of the Borrower or any of its ERISA Affiliates or is assumed
by the Borrower or any of its ERISA Affiliates in
10
connection with any Acquisition or (ii) has at any time been maintained
for the employees of the Borrower or any current or former ERISA
Affiliate.
"Environmental Laws" means any federal, state or local
statute, law, ordinance, code, rule, regulation, order, decree, permit
or license regulating, relating to, or imposing liability or standards
of conduct concerning any environmental matters or conditions,
environmental protection or conservation, including without limitation,
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended; the Superfund Amendments and Reauthorization
Act of 1986, the Resource Conservation and Recovery Act, as amended;
the Toxic Substances Control Act, as amended; the Clean Air Act, as
amended; the Clean Water Act, as amended; together with all regulations
promulgated thereunder, and any other "Superfund" or "Superlien" law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute and all
rules and regulations promulgated thereunder.
"ERISA Affiliate", as applied to the Borrower, means any
Person or trade or business which is a member of a group which is under
common control with the Borrower, who together with the Borrower, is
treated as a single employer within the meaning of Section 414(b) and
(c) of the Code.
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar Rate = Interbank Offered Rate
----------------------
(1- Reserve Requirement)
"Eurodollar Rate Loan" means a Loan for which the rate of
interest is determined by reference to the Eurodollar Rate.
"Event of Default" means any of the occurrences set forth as
such in Section 9. 1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
"Executive Officer" means any Person who from time to time
holds the offices with Borrower listed on Exhibit J.
"Facility" means an inpatient or outpatient rehabilitation
facility, certified outpatient rehabilitation facility, skilled nursing
facility, specialty medical center, specialty orthopedic hospital or
acute care hospital, subacute inpatient facility, transitional living
center, medical office building, outpatient surgery center or
outpatient diagnostic center with all buildings and improvements
associated therewith, that is owned or leased or acquired (as permitted
under Section 8.8), in whole or part, by the Borrower or a Subsidiary
or any Controlled Partnership.
11
"Facility Extension Loan Termination Date" means the Facility
Extension Maturity Date or such earlier date of termination of Lenders'
obligations hereunder as may be determined pursuant to Section 9.1 upon
the occurrence of an Event of Default, or such date on which the
Borrower may voluntarily and permanently terminate the Revolving Credit
Facility by payment in full of all outstanding amounts under the
Facility Extension Loans with all accrued and unpaid interest and fees
thereon.
"Fair Market Value" means, with respect to any capital stock
or other ownership interests issued or given by the Borrower or any
Consolidated Entity in connection with an Acquisition, (i) in the case
of capital stock that is Common Stock and such Common Stock is then
designated as a national market system security by the National
Association of Securities Dealers, Inc. ("NASD") or is listed on a
national securities exchange, the average of the last reported bid and
ask quotations or prices reported thereon for Common Stock or such
other value as may be ascribed to the Common Stock in a definitive
merger or acquisition agreement provided such value is determined
according to customary methods for like transactions and is approved
(to the extent required by Borrower's charter or bylaws) by the
Borrower's board of directors or (ii) in the case of capital stock that
is not Common Stock or in the event that Common Stock is not so
designated by NASD or listed on such national exchange, or in the case
of any other ownership interests, the determination of the fair market
value thereof in good faith by a majority of disinterested members of
the board of directors of the Borrower or such Consolidated Entity, in
each case effective as of the close of business on the Business Day
immediately preceding the closing date of such Acquisition.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of 1%) equal to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding such day, provided
that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and
(b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate
charged to the Administrative Agent (in its individual capacity) on
such day on such transaction as shall be determined by the
Administrative Agent.
"Fiscal Year" means, with respect to the Borrower, the twelve
month fiscal period of the Borrower commencing on January 1 of each
calendar year and ending on December 31 of each calendar year.
"Four-Quarter Period" means a period of four full consecutive
fiscal quarters of the Borrower and its Subsidiaries, taken together as
one accounting period.
"GAAP" or "Generally Accepted Accounting Principles" means
generally accepted accounting principles, being those principles of
accounting set forth in pronouncements of the Financial Accounting
Standards Board or the American Institute
12
of Certified Public Accountants or which have other substantial
authoritative support and are applicable in the circumstances as of the
date of a report.
"Governmental Authority" means any Federal, state, municipal,
national or other governmental department, commission, board, bureau,
court, agency or instrumentality or political subdivision thereof or
any entity or officer exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to any
government or any court, in each case whether associated with a state
of the United States, the United States, or a foreign entity or
government.
"Guarantee" means the guarantee, substantially in the form of
Exhibit K, to which each Guarantor shall become a party.
"Guaranteed Obligations" of any Person means all guaranties
(including guaranties of guaranties and guaranties of dividends and
other monetary obligations), endorsements, assumptions and other
contingent obligations with respect to, or to purchase or to otherwise
pay or acquire, Indebtedness of others; provided, however, that such
term shall not include obligations under leases and other contracts
initially incurred directly by another Person and subsequently directly
assumed by the Person in question, but such term shall include
obligations that, if the same had been initially incurred directly by
the Person in question, would have constituted Guaranteed Obligations.
"Guarantor" means any Subsidiary of the Borrower that directly
or indirectly guarantees any Indebtedness of the Borrower and becomes a
party to the Guarantee.
"Hazardous Material" means and includes any pollutant,
contaminant, or hazardous, toxic or dangerous waste, substance or
material (including without limitation petroleum products,
asbestos-containing materials, and lead), the generation, handling,
storage, disposal, treatment or emission of which is subject to any
Environmental Law.
"HCFA" means the United States Health Care Financing
Administration and any successor thereto.
"Headquarters Lease" means the Amended and Restated Lease
Agreement dated as of October 31, 2000, between First Security Bank,
National Association, a national banking association, not individually,
but solely as Owner Trustee under the HEALTHSOUTH Corporation Trust
1995-1, as Lessor and HEALTHSOUTH Holdings, Inc., a Delaware
corporation, as Lessee, as such Lease Agreement may be amended,
modified, supplemented or restated in its entirety from time to time.
"Headquarters Obligations" means all of the Holder Advances
and Loans, as each such term is defined in the Headquarters
Participation Agreement.
"Headquarters Participation Agreement" means the Amended and
Restated Participation Agreement dated as of October 31, 2000 by and
among HEALTHSOUTH HOLDINGS, INC., as Lessee, FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, not individually,
except as expressly stated herein, but solely as Owner Trustee under
the HEALTHSOUTH Corporation Trust
13
1995-1, THE CHASE MANHATTAN BANK, as Documentation Agent; UBS WARBURG
LLC and DEUTSCHE BANK SECURITIES, INC., as Joint Lead Arrangers;
DEUTSCHE BANK AG NEW YORK BRANCH, as Syndication Agent; UBS AG,
Stamford Branch, as Administrative Agent for the Lenders and the
Holders; UBS AG, Stamford Branch, and the various other banks and
lending institutions which are parties thereto from time to time as
Holders, and UBS AG, Stamford Branch and the various other banks and
lending institutions which are parties thereto from time to time as
Lenders, as such Headquarters Participation Agreement may be amended,
modified, supplemented or restated in its entirety from time to time.
"Hospitals Lease" means the Lease Agreement dated as of
October 31, 2000, between First Security Bank, a national banking
association, not individually, but solely as Owner Trustee under the
HEALTHSOUTH Corporation Trust 2000-1, as Lessor, and HEALTHSOUTH
Corporation, a Delaware corporation, as Lessee, as such Lease Agreement
may be amended, modified, supplemented or restated in its entirety from
time to time.
"Hospitals Obligations" means all of the Holder Advances and
Loans, as each such term is defined in the Hospitals Participation
Agreement.
"Hospitals Participation Agreement" means the Participation
Agreement dated as of October 31, 2000 by and among HEALTHSOUTH
Corporation., as Lessee, FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
national banking association, not individually, except as expressly
stated therein, but solely as Owner Trustee under the HEALTHSOUTH
Corporation Trust 2000-1, THE CHASE MANHATTAN BANK, as Documentation
Agent; UBS WARBURG LLC and DEUTSCHE BANK SECURITIES, INC., as Joint
Lead Arrangers; DEUTSCHE BANK AG NEW YORK BRANCH, as Syndication Agent;
UBS AG, Stamford Branch, as Administrative Agent for the Lenders and
the Holders; UBS AG, Stamford Branch, and the various other banks and
lending institutions which are parties thereto from time to time as
Holders, and UBS AG, Stamford Branch and the various other banks and
lending institutions which are parties thereto from time to time as
Lenders, as such Hospitals Participation Agreement may be amended,
modified, supplemented or restated in its entirety from time to time.
"Indebtedness" of any Person at any date means, without
duplication: (i) all indebtedness of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof); (ii) all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments; (iii) all obligations (contingent or
otherwise) of such Person in respect of letters of credit or other
similar instruments (or reimbursement obligations with respect
thereto); (iv) all obligations of such Person with respect to Rate
Hedging Obligations (excluding, for all purposes of this Agreement
other than Section 9.1(e), those that fix the interest rate on variable
rate indebtedness otherwise permitted hereunder or that protect the
Borrower and or its Consolidated Entities against changes in foreign
exchange rates); (v) obligations of such Person to pay the deferred and
unpaid purchase price of property or services, except trade payables
and accrued expenses incurred in the ordinary course of business; (vi)
all Capitalized Lease Obligations of such Person; (vii) all
indebtedness of
14
others secured by a Lien on any assets of such Person, whether or not
such indebtedness is assumed by such Person; (viii) all Guaranteed
Obligations; (ix) the Headquarters Obligations and the Hospitals
Obligations; and (x) all obligations of a like nature to those
described in clauses (i) through (ix) above of a partnership of which
such Person is a general partner or of a limited liability company of
which such Person is a member. The amount of Indebtedness of any Person
at any date shall be the outstanding balance at such date of all
unconditional obligations as described above, the maximum liability of
such Person for any such contingent obligations at such date and, in
the case of clause (vii), the amount of the Indebtedness secured.
"Interbank Offered Rate" means, for any Eurodollar Rate Loan
for the Interest Period applicable thereto, the rate per annum (rounded
upwards, if necessary, to the nearest one-one hundredth (1/100) of one
percent) appearing on Dow Jones Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such
Interest Period. If for any reason, as determined by the Administrative
Agent, such rate is not available, the term "Interbank Offered Rate"
means, for any Eurodollar Rate Loan for the Interest Period applicable
thereto, the rate per annum (rounded upwards, if necessary, to the
nearest 1 /100 of 1 %) appearing on Reuters Screen LIBO Page as the
London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such
rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).
"Interest Period" means, with respect to any Eurodollar Rate
Loan, each period commencing on the date such Eurodollar Rate Loan is
made or Converted from a Loan of another Type or the last day of the
next preceding Interest Period for such Loan and ending on the
numerically corresponding day in the first, second, third or sixth
calendar month thereafter, as the Borrower may select as provided in
Section 2.3, except that each Interest Period that commences on the
last Business Day of a calendar month (or on any day for which there is
no numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Business Day of the appropriate subsequent
calendar month. Notwithstanding the foregoing: (i) if any Interest
Period for any Eurodollar Rate Loan would otherwise end after the
Revolving Credit Termination Date (with respect to Revolving Credit
Loans) or the Facility Extension Loan Termination Date (with respect to
Facility Extension Loans), such Interest Period shall end on the
Revolving Credit Termination Date or the Facility Extension Loan
Termination Date, as applicable; (ii) each Interest Period that would
otherwise end on a day which is not a Business Day shall end on the
next succeeding Business Day (or, in the case of an Interest Period for
a Eurodollar Rate Loan, if such next succeeding Business Day falls in
the next succeeding calendar month, on the next preceding Business
Day); and (iii) notwithstanding clauses (i) and (ii) above, no Interest
Period for any Loan shall have a duration of less than one month (in
the case of a Eurodollar Rate Loan) and, if the Interest Period for any
Eurodollar Rate Loan would otherwise be a shorter period, such Loan
shall not be available hereunder for such period.
15
"Interest Rate Selection Notice" means the written notice
delivered by an Authorized Representative in connection with the
election of a subsequent Interest Period for any Eurodollar Rate Loan
or the Conversion of any Eurodollar Rate Loan into a Base Rate Loan or
the Conversion of any Base Rate Loan into a Eurodollar Rate Loan,
substantially in the form of Exhibit E.
"Issuing Bank" means UBS AG, Stamford Branch, as issuer of
Letters of Credit under Article III.
"LC Account Agreement" means the LC Account Agreement dated as
of the date hereof among the Borrower, the Administrative Agent and the
Lenders, as amended, modified or supplemented from time to time.
"Lender Addendum" means, with respect to any initial Lender, a
Lender Addendum, substantially in the form of Exhibit A, to be executed
and delivered by such Lender on the Closing Date as provided in Section
11.17.
"Letter of Credit" means a standby letter of credit issued by
the Issuing Bank pursuant to Article III for the account of the
Borrower in favor of a Person advancing credit or securing an
obligation on behalf of the Borrower.
"Letter of Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to acquire Participations in
respect of Letters of Credit and Reimbursement Obligations up to an
aggregate amount at any one time outstanding equal to such Lender's
Applicable Commitment Percentage of the Total Letter of Credit
Commitment as the same may be increased or decreased from time to time
pursuant to this Agreement.
"Letter of Credit Facility" means, the facility described in
Article III providing for the issuance by the Issuing Bank for the
account of the Borrower of Letters of Credit in an aggregate stated
amount at any time outstanding not exceeding, together with all
Reimbursement Obligations, the Total Letter of Credit Commitment.
"Letter of Credit Outstandings" means, as of any date of
determination, the aggregate amount remaining undrawn under all Letters
of Credit plus Reimbursement Obligations then outstanding.
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, the Borrower and any
Subsidiary shall be deemed to be the owner of any property which it has
acquired or holds subject to a conditional sale agreement, financing
lease, or other arrangement pursuant to which title to the property has
been retained by or vested in some other Person for security purposes.
16
"Loan" or "Loans" means any Revolving Credit Loans,
Reimbursement Obligations and Letter of Credit Outstandings and all
extensions and renewals thereof, including, if applicable and without
limitation, any Facility Extension Loans.
"Loan Documents" means this Agreement, the Notes, the LC
Account Agreement, the Applications and Agreements for Letter of Credit
and all other instruments and documents heretofore or hereafter
executed or delivered to or in favor of any Lender or the
Administrative Agent in connection with the Loans made, Letters of
Credit issued and transactions contemplated under this Agreement, as
the same may be amended, supplemented or replaced from time to time.
"Material Adverse Effect" means a material adverse effect on
(i) the business, properties, operations, condition or prospects,
financial or otherwise, of the Borrower and its Consolidated Entities,
taken as a whole, (ii) the ability of the Borrower to pay or perform
its obligations, liabilities and indebtedness under the Loan Documents
as such payment or performance becomes due in accordance with the terms
thereof, or (iii) the rights, powers and remedies of the Administrative
Agent or any Lender under any Loan Document or the validity, legality
or enforceability thereof (including for purposes of clauses (ii) and
(iii) the imposition of burdensome conditions thereon).
"Material Group" means, at any time, any group, whether one or
more, or combination of Consolidated Entities (a) whose assets, in the
aggregate, constitute 5% or more of the assets of the Borrower and the
Consolidated Entities on a consolidated basis or (b) whose net
revenues, in the aggregate, constitute 5% or more of the net revenues
of the Borrower and the Consolidated Entities on a consolidated basis.
"Medicaid Certification" means certification by HCFA or a
state agency or entity under contract with HCFA that a health care
operation is in compliance with all the conditions of participation set
forth in the Medicaid Regulations.
"Medicaid Provider Agreement" means an agreement entered into
between a state agency or other entity administering the Medicaid
program and a health care operation under which the health care
operation agrees to provide services for Medicaid patients in
accordance with the terms of the agreement and Medicaid Regulations.
"Medicaid Regulations" means, collectively, (i) all federal
statutes (whether set forth in Title XIX of the Social Security Act or
elsewhere) affecting the medical assistance program established by
Title XIX of the Social Security Act and any statutes succeeding
thereto; (ii) all applicable provisions of all federal rules,
regulations, manuals and orders of all Governmental Authorities
promulgated pursuant to or in connection with the statutes described in
clause (i) above and all federal administrative, reimbursement and
other guidelines of all Governmental Authorities having the force of
law promulgated pursuant to or in connection with the statutes
described in clause (i) above; (iii) all state statutes and plans for
medical assistance enacted in connection with the statutes and
provisions described in clauses (i) and (ii) above; and (iv) all
applicable provisions of all rules, regulations, manuals and orders of
all Governmental Authorities promulgated pursuant to or in connection
with the statutes described in clause (iii) above
17
and all state administrative, reimbursement and other guidelines of all
Governmental Authorities having the force of law promulgated pursuant
to or in connection with the statutes described in clause (ii) above,
in each case as may be amended, supplemented or otherwise modified from
time to time.
"Medicare Certification" means certification by HCFA or a
state agency or entity under contract with HCFA that a health care
operation is in compliance with all the conditions of participation set
forth in the Medicare Regulations.
"Medicare Provider Agreement" means an agreement entered into
between a state agency or other entity administering the Medicare
program and a health care operation under which the health care
operation agrees to provide services for Medicare patients in
accordance with the terms of the agreement and Medicare Regulations.
"Medicare Regulations" means, collectively, all federal
statutes (whether set forth in Title XVIII of the Social Security Act
or elsewhere) affecting the health insurance program for the aged and
disabled established by Title XVIII of the Social Security Act and any
statutes succeeding thereto; together with all applicable provisions of
all rules, regulations, manuals and orders and administrative,
reimbursement and other guidelines having the force of law of all
Governmental Authorities (including without limitation, Health and
Human Services ("HHS"), HCFA, the Office of the Inspector General for
HHS, or any Person succeeding to the functions of any of the foregoing)
promulgated pursuant to or in connection with any of the foregoing
having the force of law, as each may be amended, supplemented or
otherwise modified from time to time.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions
within the preceding six (6) Fiscal Years.
"1999 10-K" means the Borrower's Annual Report on Form 10-K
for the Fiscal Year Ended December 31, 1999
"Notes" means, the promissory notes of the Borrower evidencing
the Loans executed and delivered to the Lenders as provided in Section
2.6, substantially in the form of Exhibit F, with appropriate
insertions as to amounts, dates and names of Lenders.
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the principal and
interest on the Loans, (ii) the Reimbursement Obligations and otherwise
in respect of the Letters of Credit, (iii) all liabilities of the
Borrower to any Lender which arise under a Swap Agreement, and (iv) the
payment and performance of all other obligations, liabilities and
Indebtedness of the Borrower to the Lenders or the Administrative Agent
hereunder, under any one or more of the other Loan Documents or with
respect to the Loans.
18
"Participation" means, with respect to any Lender (other than
the Issuing Bank) and a Letter of Credit, the extension of credit
represented by the participation of such Lender hereunder in the
liability of the Issuing Bank in respect of a Letter of Credit issued
by the Issuing Bank in accordance with the terms hereof.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" means any employee pension benefit plan within
the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412
of the Code and which (i) is maintained for employees of the Borrower
or any of its ERISA Affiliates or is assumed by the Borrower or any of
its ERISA Affiliates in connection with any Acquisition or (ii) has at
any time been maintained for the employees of the Borrower or any
current or former ERISA Affiliate.
"Permitted Encumbrances" means:
(1) liens for taxes, assessments and other governmental
charges that are not delinquent or that are being contested in good
faith by appropriate proceedings duly pursued;
(2) mechanic's, materialmen's, contractor's, landlord's or
other similar liens arising in the ordinary course of business,
securing obligations that are not delinquent or that are being
contested in good faith by appropriate proceedings duly pursued;
(3) restrictions, exceptions, reservations, easements,
conditions, limitations and other matters of record that do not
materially adversely affect the value or utility of the affected
property;
(4) Liens on assets securing Indebtedness the proceeds of
which are used to acquire such
assets;
(5) Liens and other matters approved in writing by the
Required Lenders; and
(6) Liens in favor of landlords, the amount secured by which
landlords' Liens, in the aggregate, would not materially adversely
affect the Borrower or a Material Group.
"Permitted Investments" means:
(1) direct obligations of, or obligations the payment of which
is guaranteed by, the United States of America or an interest in any
trust or fund that invests solely in such obligations or repurchase
agreements, properly secured, with respect to such obligations.
(2) direct obligations of agencies or instrumentalities of the
United States of America having a rating of A or higher by S&P or A2 or
higher by Moody's;
19
(3) a certificate of deposit issued by, or other
interest-bearing deposits with, a bank which is a Lender or an
affiliate of a Lender, or a bank having its principal place of business
in the United States of America and having equity capital of not less
than $250,000,000;
(4) a certificate of deposit issued by, or other
interest-bearing deposits with, any other bank organized under the laws
of the United States of America or any state thereof, provided that
such deposit is either (i) insured by the Federal Deposit Insurance
Corporation or (ii) properly secured by such bank by pledging direct
obligations of the United States of America having a market value not
less than the face amount of such deposits;
(5) the capital stock of and partnership interests in, and
loans made by the Borrower to, Controlled Partnerships and
Subsidiaries;
(6) prime commercial paper maturing within 270 days of the
acquisition thereof and, at the time of acquisition, having a rating of
A-1 or higher by S&P, or P-1 or higher by Moody's;
(7) eligible banker's acceptances, repurchase agreements and
tax-exempt municipal bonds having a maturity of less than one year, in
each case having a rating, or that is the full recourse obligation of a
person whose senior debt is rated, A or higher by S&P or A2 or higher
by Moody's;
(8) loans made by the Borrower or a Consolidated Entity in an
aggregate amount of $2,000,000 or less to employees of the Borrower or
of a Consolidated Entity;
(9) loans made by the Borrower or a Controlled Partnership in
an aggregate amount of $1,000,000 or less to limited partners (or
potential limited partners) of Controlled Partnerships for the purpose
of enabling such limited partners to acquire limited partnership
interests in Controlled Partnerships, to operate their practices or to
restructure partnership interests;
(10) loans in an aggregate amount of up to $20,000,000 made by
the Borrower to the HEALTHSOUTH Employee Stock Benefit Plan;
(11) scholarship loans made by the Borrower in an aggregate
amount not exceeding $1,000,000 to individuals who meet certain
eligibility requirements as established by the Borrower from time to
time;
(12) up to 100% of the outstanding shares of stock of
Caretenders Healthcorp (formerly known as Senior Services, Inc.)
provided that aggregate costs incurred to purchase such shares shall
not exceed $12,000,000;
(13) other investments of less than $5,000,000 in the
aggregate expressly approved in writing by the Administrative Agent and
investments of $5,000,000 or greater expressly approved in writing by
the Required Lenders;
20
(14) any other investment having a rating of A or higher or
A-1 or higher by S&P or A2 or higher or P-1 or higher by Moody's;
(15) loans to health care practitioners and other persons not
to exceed in the aggregate $5,000,000;
(16) investments in Acacia Venture Partners, HEALTHSMART,
Caremark Rx, Inc. and Austin Medical Office Building which in the
aggregate do not exceed $5,000,000; and
(17) additional investments existing on the Closing Date and
described in Exhibit G.
"Person" means an individual, partnership, corporation,
limited liability company, trust, unincorporated organization,
association, joint venture or a government or agency or political
subdivision thereof.
"Prime Rate" means the per annum rate of interest established
from time to time by the Administrative Agent as its prime rate, which
rate may not be the lowest rate of interest charged by the
Administrative Agent to its customers.
"Principal Office" means the office of the Administrative
Agent at 677 Washington Boulevard, Stamford, Connecticut 06901,
Attention: Jennifer Poccia, or such other office and address as the
Administrative Agent may from time to time designate.
"Rate Hedging Obligations" means any and all obligations of
the Borrower or any Consolidated Entity, whether absolute or contingent
and howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect the Borrower or such Consolidated
Entity from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or
exchange transactions, including, but not limited to,
Dollar-denominated or cross-currency interest rate exchange agreements,
forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options,
puts, warrants and those commonly known as interest rate "swap"
agreements; and (ii) any and all cancellations, buybacks, reversals,
terminations or assignments of any of the foregoing.
"Rating" means the rating of senior unsecured Indebtedness of
the Borrower in effect at any time which rating is made by either of
Moody's or S&P.
"Regulation D" means Regulation D of the Board as the same may
be amended or supplemented from time to time.
"Reimbursement Obligation" means, at any time, the obligation
of the Borrower with respect to any Letter of Credit to reimburse the
Issuing Bank and the Lenders to the extent of their respective
Participations (including by the receipt by the Issuing Bank of
21
proceeds of Loans pursuant to Section 3.2) for amounts theretofore paid
by the Issuing Bank pursuant to a drawing under such Letter of Credit.
"Required Lenders" means, as of any date, Lenders on such date
having Credit Exposures (as defined below) aggregating at least 51% of
the aggregate Credit Exposures of all the Lenders on such date. For
purposes of the preceding sentence, the amount of the "Credit Exposure"
of each Lender shall be equal to the aggregate principal amount of the
Loans, so long as there exists no Event of Default, owing to such
Lender plus the aggregate unutilized amounts of such Lender's Revolving
Credit Commitment plus the amount of such Lender's Applicable
Commitment Percentage of Letter of Credit Outstandings; provided that,
if any Lender shall have failed to pay to the Issuing Bank its
Applicable Commitment Percentage of any drawing under any Letter of
Credit resulting in an outstanding Reimbursement Obligation, such
Lender's Credit Exposure attributable to Letters of Credit and
Reimbursement Obligations shall be deemed to be held by the Issuing
Bank for purposes of this definition.
"Reserve Requirement" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained
under regulations issued from time to time by the Board by member banks
of the Federal Reserve System (or any successor) by member banks of the
Federal Reserve System against "Eurocurrency liabilities" (as such term
is used in Regulation D). Without limiting the effect of the foregoing,
the Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to (i) any category of
liabilities which includes deposits by reference to which the
Eurodollar Rate is to be determined, or (ii) any category of extensions
of credit or other assets which include Eurodollar Rate Loans. The
Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
"Restricted Payment" means (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock of Borrower or any of its Consolidated Entities (other than
those payable or distributable solely to the Borrower) now or hereafter
outstanding, except a dividend payable solely in shares of a class of
stock to the holders of that class; (b) any redemption, conversion,
exchange, retirement or similar payment, purchase or other acquisition
for value, direct or indirect, of any shares of any class of stock of
the Borrower or any of its Consolidated Entities (other than those
payable or distributable solely to the Borrower) now or hereafter
outstanding; (c) any payment made to retire, or to obtain the surrender
of, any outstanding warrants, options or other rights to acquire shares
of any class of stock of the Borrower or any of its Consolidated
Entities now or hereafter outstanding; (d) any issuance and sale of
capital stock of any Consolidated Entity of the Borrower (or any
option, warrant or right to acquire such stock) other than to the
Borrower; and (e) any optional or voluntary payment, prepayment,
repurchase or redemption of, or otherwise voluntary or optional
defeasance of any Subordinated Debt, including, without limitation, the
New Senior Subordinated Notes and the Convertible Subordinated
Debentures, or the segregation of funds for any such payment,
prepayment, repurchase, redemption or defeasance.
22
"Revolving Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to make Revolving Credit Loans to
the Borrower up to an aggregate principal amount at any one time
outstanding equal to such Lender's Applicable Commitment Percentage of
the Total Revolving Credit Commitment.
"Revolving Credit Facility" means the facility described in
Article II providing for Loans to the Borrower by the Lenders in the
aggregate principal amount of the Total Revolving Credit Commitment.
"Revolving Credit Loan" means any borrowing pursuant to an
Advance provided for by Section 2.1, which may be Base Rate Loans or
Eurodollar Rate Loans.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving Credit
Loans then outstanding.
"Revolving Credit Termination Date" means (i) the Stated
Termination Date or (ii) such earlier date of termination of Lenders'
obligations hereunder as may be determined pursuant to Section 9.1 upon
the occurrence of an Event of Default, or (iii) such date on which the
Borrower may voluntarily and permanently terminate the Revolving Credit
Facility by payment in full of all Revolving Credit Outstandings and
all Letter of Credit Outstandings and cancellation of all Letters of
Credit, together with all accrued and unpaid interest and fees thereon.
"S&P" means Standard & Poor's Rating Group, a division of The
McGraw Hill Companies.
"Senior Debt" means (i) the Obligations and (ii) all
obligations of the Borrower and its Subsidiaries, now or hereafter
existing under the Credit Agreement dated as of June 23, 1998 by and
among the Borrower, as borrower, Nationsbank National Association, as
Administrative Agent and Arranger, J.P. Morgan Securities Inc.,
Deutsche Bank AG and Scotiabanc, Inc., as Syndication Agents and
Co-Arrangers, and the other lenders party thereto from time to time, as
amended and in effect from time to time.
"Single Employer Plan" means any employee pension benefit plan
covered by Title IV of ERISA in respect of which the Borrower or any
Subsidiary is an "employer" as described in Section 4001(b) of ERISA
and which is not a Multiemployer Plan.
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(i) the fair value of its assets (both at fair valuation and
at present fair saleable value on an orderly basis) is in excess of the
total amount of its liabilities, including contingent obligations; and
(ii) it is then able and expects to be able to pay its debts
as they mature; and
23
(iii) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
"Stated Termination Date" means October 30, 2001.
"Subordinated Debt" means any unsecured Indebtedness of the
Borrower or any Consolidated Entity (other than inter-company
Indebtedness) which is subordinated in right of payment in all respects
to the Senior Debt in a manner reasonably acceptable to the
Administrative Agent.
"Subsidiary" means any corporation or other entity in which
more than 50% of its outstanding Voting Stock or more than 50% of all
equity interests is owned directly or indirectly by the Borrower and/or
by one or more of the Borrower's Subsidiaries.
"Swap Agreement" means one or more agreements between the
Borrower and any Person with respect to any Indebtedness under the Loan
Documents, on terms mutually acceptable to Borrower and such Person and
approved by each of the Lenders, which agreements create Rate Hedging
Obligations; provided, however, that no such approval of the Lenders
shall be required to the extent such agreements are entered into
between the Borrower and any Lender.
"Termination Event" means: (i) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder (unless
the notice requirement has been waived by applicable regulation); or
(ii) the withdrawal of the Borrower or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001 (a)(2) of ERISA or was deemed such
under Section 4062(e) of ERISA; or (iii) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under
Section 4041 of ERISA; or (iv) the institution of proceedings to
terminate a Pension Plan by the PBGC; or (v) any other event or
condition which would constitute grounds under Section 4042(a) of ERISA
for the termination of, or the appointment of a trustee to administer,
any Pension Plan; or (vi) the partial or complete withdrawal of the
Borrower or any ERISA Affiliate from a Multiemployer Plan; or (vii) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302
of ERISA; or (viii) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Section 4241
or Section 4245 of ERISA, respectively; or (ix) any event or condition
which results in the termination of a Multiemployer Plan under Section
4041A of ERISA or the institution by the PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.
"Total Letter of Credit Commitment" means an amount not to
exceed $20,000,000.
"Total Revolving Credit Commitment" means a principal amount
equal to $400,000,000, as reduced from time to time in accordance with
Section 2.1(a) and Section 2.8.
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"Unused Amount" means with respect to each Lender, (a) the
Revolving Credit Commitment of such Lender less (b) such Lender's pro
rata share of outstanding Revolving Credit Loans and Letter of Credit
Outstandings; provided that in no event shall such amount be a negative
number.
"Vanderbilt" means Vanderbilt Stallworth Rehabilitation
Hospital, L.P., the partners of which are the Borrower, Vanderbilt
University and Vanderbilt Health Services.
"Voting Stock" means shares of Capital Stock issued by a
corporation, or equivalent interests in any other Person, the holders
of which are ordinarily, in the absence of contingencies, entitled to
vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been
suspended by the happening of such a contingency.
(b) Other Defined Terms. The following terms shall have the
meanings defined for such terms in the Sections set forth
below:
Term Section
----- -------
Administrative Agent Preamble
Affected Loans 4.4
Affected Type 4.4
Compliance Certificate 7.1(c)
Contractual Obligation 6.2(c)
Eurodollar Margin 2.2(c)(ii)(C)
Event of Default 9.1
Facility Extension Loan 2.2(b)
Facility Extension Loan Maturity Date 2.2(b)
Facility Extension Notice 2.2(a)
Indemnified Parties 11.12
Indemnified Liabilities 11.12
New Senior Subordinated Notes 5.1(c)
Notice of Default 10.3
Other Taxes 4.6(b)
Pro Forma Financial Statements 6.6(d)
Refinancing 5.1(c)
Register 11.1(b)
Related LC Documents 3.2(i)
Requirement of Law 6.2(b)
Taxes 4.6(a)
1.2. Rules of Interpretation.
(a) All accounting terms not specifically defined herein shall
have the meanings assigned to such terms and shall be interpreted in accordance
with GAAP applied on a Consistent Basis.
25
(b) The headings, subheadings and table of contents used
herein or in any other Loan Document are solely for convenience of reference and
shall not constitute a part of any such document or affect the meaning,
construction or effect of any provision thereof.
(c) Except as otherwise expressly provided, references herein
to articles, sections, paragraphs, clauses, annexes, appendices, exhibits and
schedules are references to articles, sections, paragraphs, clauses, annexes,
appendices, exhibits and schedules in or to this Agreement.
(d) All definitions set forth herein or in any other Loan
Document shall apply to the singular as well as the plural form of such defined
term, and all references to the masculine gender shall include reference to the
feminine or neuter gender, and vice versa, as the context may require.
(e) When used herein or in any other Loan Document, words such
as "hereunder", "hereto", "hereof" and "herein" and other words of like import
shall, unless the context clearly indicates to the contrary, refer to the whole
of the applicable document and not to any particular article, section,
subsection, paragraph or clause thereof.
(f) References to "including" means including without limiting
the generality of any description preceding such term, and for purposes hereof
the rule of ejusdem generis shall not be applicable to limit a general
statement, followed by or referable to an enumeration of specific matters, to
matters similar to those specifically mentioned.
(g) All dates and times of day specified herein shall refer to
such dates and times at New York, New York.
(h) Each of the parties to the Loan Documents and their
counsel have reviewed and revised, or requested (or had the opportunity to
request) revisions to, the Loan Documents, and any rule of construction that
ambiguities are to be resolved against the drafting party shall be inapplicable
in the construing and interpretation of the Loan Documents and all exhibits,
schedules and appendices thereto.
(i) Any reference to an officer of the Borrower or any other
Person by reference to the title of such officer shall be deemed to refer to
each other officer of such Person, however titled, exercising the same or
substantially similar functions.
(j) All references to any agreement or document as amended,
modified or supplemented, or words of similar effect, shall mean such document
or agreement, as the case may be, as amended, modified or supplemented from time
to time only as and to the extent permitted therein and in the Loan Documents.
1.3. Classes and Types of Loans. Loans hereunder are
distinguished by Class and Type. The Class of a Loan refers to whether such Loan
is a Revolving Credit Loan or a Facility Extension Loan. The "Type" of a Loan
refers to whether such Loan is a Base Rate Loan or a Eurodollar Rate Loan, each
of which constitutes a Type. Loans may be identified by both Class and Type.
26
ARTICLE II
The Loans
2.1. Revolving Credit Loans. (a) Commitment. Subject to the
terms and conditions of this Agreement, each Lender severally agrees to make
Advances to the Borrower under the Revolving Credit Facility from time to time
from the Closing Date until the Revolving Credit Termination Date (such Advance
by each Lender being made on a pro rata basis as to the total borrowing
requested by the Borrower on any day determined by such Lender's Applicable
Commitment Percentage), in an aggregate principal amount for each Lender up to
but not exceeding the Revolving Credit Commitment of such Lender, provided,
however, that (i) the Lenders will not be required and shall have no obligation
to make any such Advance if the applicable conditions precedent thereto set
forth in Article V have not been satisfied and (ii) immediately after giving
effect to each such Advance, the principal amount of Revolving Credit
Outstandings plus Letter of Credit Outstandings shall not exceed the Total
Revolving Credit Commitment. Within such limits, the Borrower may borrow, repay
and reborrow under the Revolving Credit Facility on any Business Day from the
Closing Date until, but (as to borrowings and reborrowings) not including, the
Revolving Credit Termination Date; provided, however, that (y) no Revolving
Credit Loan that is a Eurodollar Rate Loan shall be made which has an Interest
Period that extends beyond the Revolving Credit Termination Date and (z) each
Revolving Credit Loan that is a Eurodollar Rate Loan may, subject to the
provisions of Section 2.4, be repaid only on the last day of the Interest Period
with respect thereto unless such payment is accompanied by the additional
payment, if any, required by Section 4.5.
(b) Amounts. The aggregate unpaid principal amount of the
Revolving Credit Outstandings plus Letter of Credit Outstandings shall not
exceed the Total Revolving Credit Commitment and, in the event there shall be
outstanding any such excess, the Borrower shall immediately make such payments
and prepayments as shall be necessary to comply with this restriction. Each
Revolving Credit Loan hereunder, other than Base Rate Refunding Loans, and each
Conversion under Section 2.9, shall be in an amount of at least $2,000,000, and,
if greater than $2,000,000, an integral multiple of $500,000 with respect to
Eurodollar Rate Loans and $100,000 with respect to Base Rate Loans.
(c) Advances. (i) An Authorized Representative shall give the
Administrative Agent (1) at least three (3) Business Days' irrevocable written
notice by telefacsimile transmission of a Borrowing Notice or Interest Rate
Selection Notice (as applicable) with appropriate insertions, effective upon
receipt, of each Revolving Credit Loan that is a Eurodollar Rate Loan (whether
representing an additional borrowing hereunder or the Conversion of a borrowing
hereunder from Base Rate Loans to Eurodollar Rate Loans) prior to 10:30 A.M. and
(2) irrevocable written notice by telefacsimile transmission of a Borrowing
Notice or Interest Rate Selection Notice (as applicable) with appropriate
insertions, effective upon receipt, of each Revolving Credit Loan (other than
Base Rate Refunding Loans to the extent the same are effected without notice
pursuant to Section 2.1(c)(iv)) that is a Base Rate Loan (whether representing
an additional borrowing hereunder or the Conversion of borrowing hereunder from
Eurodollar Rate Loans to Base Rate Loans) prior to 10:30 A.M. on the day of such
proposed Revolving Credit Loan. Each such notice shall specify the amount of the
borrowing, the Type of Loan (Base Rate or Eurodollar Rate), the date of
borrowing and if a
27
Eurodollar Rate Loan the Interest Period to be used in the computation of
interest. Notice of receipt of such Borrowing Notice or Interest Rate Selection
Notice, as the case may be, together with the amount of each Lender's portion of
an Advance requested thereunder, shall be provided by the Administrative Agent
to each Lender by telefacsimile transmission with reasonable promptness, but
(provided the Administrative Agent shall have received such notice by 10:30
A.M.) not later than 1:00 P.M. on the same day as the Administrative Agent's
receipt of such notice.
(ii) Not later than 2:00 P.M. on the date specified for each
borrowing under this Section 2.1, each Lender shall, pursuant to the terms and
subject to the conditions of this Agreement, make the amount of the Loan or
Loans to be made by it on such day available by wire transfer to the
Administrative Agent in the amount of its pro rata share determined according to
such Lender's Applicable Commitment Percentage of the Revolving Credit Loans to
be made on such day. Such wire transfer shall be directed to the Administrative
Agent at the Principal Office and shall be in the form of Dollars constituting
immediately available funds. The amount so received by the Administrative Agent
shall, subject to the terms and conditions of this Agreement, be made available
to the Borrower by delivery of the proceeds thereof as shall be directed in the
applicable Borrowing Notice by the Authorized Representative and reasonably
acceptable to the Administrative Agent.
(iii) The Borrower shall have the option to elect the duration
of the initial and any subsequent Interest Periods and to Convert the Revolving
Credit Loans in accordance with Section 2.9. Eurodollar Rate Loans and Base Rate
Loans may be outstanding at the same time; provided, however, there shall not be
outstanding at any one time Revolving Credit Loans having more than eight (8)
different Interest Periods. If the Administrative Agent does not receive a
Borrowing Notice or an Interest Rate Selection Notice giving notice of election
of the duration of an Interest Period or of Conversion of any Loan to or
Continuation of a Loan as a Eurodollar Rate Loan by the time prescribed by
Section 2.1(c) or 2.9, the Borrower shall be deemed to have elected to Convert
such Loan to (or Continue such Loan as) a Base Rate Loan until the Borrower
notifies the Administrative Agent in accordance with Section 2.9.
(iv) Notwithstanding the foregoing, if a drawing is made under
any Letter of Credit, such drawing is honored by the Issuing Bank prior to the
Revolving Credit Termination Date, and the Borrower shall not immediately fully
reimburse the Issuing Bank in respect of such drawing, (A) provided that the
conditions to making a Revolving Credit Loan as herein provided shall then be
satisfied, the Reimbursement Obligation arising from such drawing shall be paid
to the Issuing Bank by the Administrative Agent without the requirement of
notice to or from the Borrower from immediately available funds which shall be
advanced as a Base Rate Refunding Loan by each Lender under the Revolving Credit
Facility in an amount equal to such Lender's Applicable Commitment Percentage of
such Reimbursement Obligation, and (B) if the conditions to making a Loan as
herein provided shall not then be satisfied, each of the Lenders shall fund by
payment to the Administrative Agent (for the benefit of the Issuing Bank) in
immediately available funds the purchase from the Issuing Bank of their
respective Participations in the related Reimbursement Obligation based on their
respective Applicable Commitment Percentages. If a drawing is presented under
any Letter of Credit in accordance with the terms thereof and the Borrower shall
not immediately reimburse the Issuing Bank in respect thereof, then notice of
such drawing or payment shall be provided promptly by the Issuing Bank to the
28
Administrative Agent and the Administrative Agent shall provide notice to each
Lender by telephone or telefacsimile transmission. If notice to the Lenders of a
drawing under any Letter of Credit is given by the Administrative Agent at or
before 12:00 noon on any Business Day, each Lender shall, pursuant to the
conditions specified in this Section 2.1(c)(iv), either make a Base Rate
Refunding Loan or fund the purchase of its Participation in the amount of such
Lender's Applicable Commitment Percentage of such drawing or payment and shall
pay such amount to the Administrative Agent for the account of the Issuing Bank
at the Principal Office in Dollars and in immediately available funds before
2:30 P.M. on the same Business Day. If notice to the Lenders of a drawing under
a Letter of Credit is given by the Administrative Agent after 12:00 noon on any
Business Day, each Lender shall, pursuant to the conditions specified in this
Section 2.1(c)(iv), either make a Base Rate Refunding Loan or fund the purchase
of its Participation in the amount of such Lender's Applicable Commitment
Percentage of such drawing or payment and shall pay such amount to the
Administrative Agent for the account of the Issuing Bank at the Principal Office
in Dollars and in immediately available funds before 12:00 noon on the next
following Business Day. Any such Base Rate Refunding Loan shall be deemed to be
advanced as a Base Rate Loan as of the date the relevant drawing is honored by
the Issuing Bank, and shall Continue as a Base Rate Loan unless and until the
Borrower Converts such Base Rate Loan in accordance with the terms of Section
2.9.
2.2. Facility Extension Loans. (a) The Borrower may, by
written irrevocable notice to the Administrative Agent (such notice being a
"Facility Extension Notice") given no later than sixty days prior to the Stated
Termination Date, convert the Revolving Credit Outstandings on the Stated
Termination Date into term loans on the terms and conditions set forth in this
Section 2.2; provided, however, that the Lenders will not be required and shall
have no obligation to convert any Revolving Credit Outstandings pursuant to the
terms in this Section 2.2 if the applicable conditions precedent thereto set
forth in Article V have not been satisfied. No Facility Extension Loan that is a
Eurodollar Rate Loan shall be made which has an Interest Period that extends
beyond the Facility Extension Loan Termination Date and each Facility Extension
Loan that is a Eurodollar Rate Loan may, subject to the provisions of Section
2.4, be repaid only on the last day of the Interest Period with respect thereto
unless such payment is accompanied by the additional payment, if any, required
by Section 4.5. The Administrative Agent shall promptly transmit any Facility
Extension Notice to each Lender.
(b) If the Borrower delivers a Facility Extension Notice, each
Lender severally agrees that the Revolving Credit Outstandings owing to such
Lender on the Stated Termination Date shall be converted into a term loan (a
"Facility Extension Loan") with a maturity date of June 22, 2003 (the "Facility
Extension Loan Maturity Date"). The Facility Extension Loans may from time to
time be Base Rate Loans or Eurodollar Loans, as determined by the Borrower and
notified to the Administrative Agent in accordance with Sections 2.2(c) and 2.9.
(c) In the event that a Facility Extension Notice has been
delivered, an Authorized Representative shall give the Administrative Agent at
least three (3) Business Days' prior to the Stated Termination Date an
irrevocable written notice by telefacsimile transmission stating if all or any
portion of the Facility Extension Loans are to be Eurodollar Rate Loans, and the
length of the initial Interest Period applicable thereto.
29
(d) On the date on which the Borrower provides the Facility
Extension Notice according to Section 2.2(a) above, the Borrower agrees to pay
to the Administrative Agent, for the benefit of each Lender, an extension fee
equal to .25% of the amount of the Facility Extension Loan to be made by such
Lender.
2.3. Payment of Interest. (a) The Borrower shall pay interest
to the Administrative Agent for the account of each Lender on the outstanding
and unpaid principal amount of each Loan made by such Lender for the period
commencing on the date of such Loan until such Loan shall be due at the then
applicable Base Rate for Base Rate Loans or applicable Eurodollar Rate for
Eurodollar Rate Loans as designated by the Authorized Representative pursuant to
Section 2.1 or 2.2 plus, in each case, the Applicable Margin applicable to such
Loans; provided, however, that if any amount payable under this Agreement shall
not be paid when due (at maturity, by acceleration or otherwise, subject to the
provisions of Section 9.1(a)), all amounts outstanding hereunder shall bear
interest thereafter until such overdue amount shall be paid in full at the
Default Rate.
(b) Interest on each Loan shall be computed on an Actual/360
Basis. Interest on each Loan shall be paid (i) quarterly in arrears on the last
Business Day of each March, June, September and December, commencing December
31, 2000, for each Base Rate Loan. (ii) on the last day of the applicable
Interest Period for each Eurodollar Rate Loan and, if such Interest Period
extends for more than three (3) months, at intervals of three (3) months after
the first day of such Interest Period, and (iii) upon the Revolving Credit
Termination Date and the Facility Extension Loan Termination Date. Interest
payable at the Default Rate shall be payable on demand.
2.4. Payment of Principal (a) Unless converted to a Facility
Extension Loan pursuant to Section 2.2, the principal amount of each Revolving
Credit Loan shall be due and payable to the Administrative Agent for the benefit
of each Lender in full on the Stated Termination Date, or earlier as
specifically provided herein. The Facility Extension Loan of each Lender shall
mature in 8 equal quarterly installments, the first 7 such installments payable
on the last Business Day of the following months: September, 2001; December,
2001; March, 2002; June, 2002; September, 2002; December, 2002; March, 2003; and
the last installment payable on the Facility Extension Loan Maturity Date
(b) From time to time, the Borrower may prepay the Loans, in
whole or in part, without premium or penalty, upon at least four (4) Business
Days' irrevocable written notice to the Administrative Agent, specifying the
date and amount of prepayment and whether the prepayment is of Eurodollar Loans,
Base Rate Loans or a combination thereof, and if a combination thereof, the
amount allocable to each. 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. Upon
receipt of any notice of prepayment, the Administrative Agent shall promptly
notify each Lender thereof. Notwithstanding anything to the contrary herein, the
principal amount of any Eurodollar Rate Loan may be prepaid only at the end of
the applicable Interest Period unless the Borrower shall pay to the
Administrative Agent for the account of the Lenders the additional amount, if
any, required under Section 4.5. All prepayments of Revolving Credit Loans and,
where applicable, Facility Extension Loans made by the Borrower shall be in the
amount of $5,000,000 or such
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greater amount which is an integral multiple of $1,000,000, or the amount equal
to all Revolving Credit Outstandings or, where applicable, outstanding amounts
under the Facility Extension Loans, as the case may be, or such other amount as
necessary to comply with Section 2.1(b) or Section 2.9. Partial prepayments of
the Facility Extension Loans shall be applied to the installments of principal
under the Facility Extension Loans in the inverse order of their scheduled
maturities. Amounts prepaid on account of the Facility Extension Loans may not
be reborrowed.
2.5. Non-Conforming Payments. (a) Each payment of principal
(including any prepayment) and payment of interest and fees, and any other
amount required to be paid to the Lenders with respect to the Loans, shall be
made to the Administrative Agent at the Principal Office, for the account of
each Lender, in Dollars and in immediately available funds, without setoff,
deduction or counterclaim before 10:00 A.M. on the date such payment is due. The
Administrative Agent may, but shall not be obligated to, debit the amount of any
such payment which is not made by such time to any ordinary deposit account, if
any, of the Borrower with the Administrative Agent. The Administrative Agent
shall promptly notify the Borrower of any such debit; however, failure to give
such notice shall not affect the validity of such debit.
(b) The Administrative Agent shall deem any payment made by or
on behalf of the Borrower hereunder that is not made both in Dollars and in
immediately available funds and prior to 10:00 A.M. to be a non-conforming
payment. Any such payment shall not be deemed to be received by the
Administrative Agent until the later of (i) the time such funds become available
funds and (ii) the next Business Day. Any non-conforming payment may constitute
or become a Default or Event of Default. Interest shall continue to accrue on
any principal as to which a non-conforming payment is made until the later of
(x) the date such funds become available funds or (y) the next Business Day at
the Default Rate from the date such amount was due and payable.
(c) In the event that any payment hereunder becomes due and
payable on a day other than a Business Day, then such due date shall be extended
to the next succeeding Business Day unless provided otherwise under the
definition of "Interest Period"; provided that interest shall continue to accrue
during the period of any such extension and provided further, that in no event
shall any such due date be extended beyond the Stated Termination Date or the
Facility Extension Termination Date, as the case may be.
2.6. Notes(a) . The Loans of each Lender shall be evidenced by
the Register (as defined in Section 11.1(b)) and by a loan account maintained by
such Lender. The Borrower hereby agrees that, upon request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to the requesting
Lender a promissory note of the Borrower evidencing the Loans of such Lender,
substantially in the form of Exhibit F, with appropriate insertions.
2.7. Pro Rata Payments. Except as otherwise provided herein,
(a) each payment on account of the principal of and interest on the Revolving
Credit Loans, the Facility Extension Loans and the fees described in Section
2.2(d), Section 2.10 and the first sentence of Section 3.3(a) shall be made to
the Administrative Agent for the account of the Lenders pro rata based on their
Applicable Commitment Percentages with respect to the Revolving Credit Loans and
the Applicable Extension Percentages, with respect to the Facility Extension
Loans, (b) all
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payments to be made by the Borrower for the account of each of the Lenders on
account of principal, interest and fees, shall be made without diminution,
setoff, recoupment or counterclaim, and (c) the Administrative Agent will
promptly distribute to the Lenders in immediately available funds payments
received in fully collected, immediately available funds from the Borrower.
2.8. Reductions. The Borrower shall, by irrevocable notice
from an Authorized Representative, have the right from time to time but not more
frequently than once each calendar month, upon not less than three (3) Business
Days' written notice to the Administrative Agent, effective upon receipt, to
permanently reduce the Total Revolving Credit Commitment. The Administrative
Agent shall give each Lender, within one (1) Business Day of receipt of such
notice, telefacsimile notice, or telephonic notice (confirmed in writing), of
such reduction. Each such reduction shall be in the aggregate amount of
$10,000,000 or such greater amount which is in an integral multiple of
$1,000,000, or the entire remaining Total Revolving Credit Commitment, and shall
permanently reduce the Total Revolving Credit Commitment. Each reduction of the
Total Revolving Credit Commitment shall be accompanied by payment of Revolving
Credit Loans to the extent that the principal amount of Revolving Credit
Outstandings plus Letter of Credit Outstandings exceeds the Total Revolving
Credit Commitment after giving effect to such reduction, together with accrued
and unpaid interest on the amounts prepaid. If any such reduction shall result
in the payment of any Eurodollar Rate Loan other than on the last day of the
Interest Period of such Eurodollar Rate Loan such prepayment shall be
accompanied by amounts due, if any, under Section 4.5.
2.9. Conversions and Elections of Subsequent Interest Periods.
Subject to the limitations set forth below and in Article IV, the Borrower may:
(a) upon delivery, effective upon receipt, of a properly
completed Interest Rate Selection Notice to the Administrative Agent at or
before 10:30 A.M. on any Business Day, Convert all or a part of Eurodollar Rate
Loans to Base Rate Loans on the last day of the Interest Period for such
Eurodollar Rate Loans; and
(b) provided that no Default or Event of Default shall have
occurred and be continuing, upon delivery, effective upon receipt, of a properly
completed Interest Rate Selection Notice to the Administrative Agent at or
before 10:30 A.M. three (3)) Business Days prior to the date of such election or
Conversion:
(i) subject to Section 2.2(c), elect a subsequent Interest
Period for all or a portion of Eurodollar Rate Loans to begin on the
last day of the then current Interest Period for such Eurodollar Rate
Loans; and
(ii) Convert Base Rate Loans to Eurodollar Rate Loans on any
Business Day.
Each election and Conversion pursuant to this Section 2.9
shall be subject to the limitations on Eurodollar Rate Loans set forth in the
definition of "Interest Period" herein and in Sections 2.1, 2.2, 2.4 and Article
IV. The Administrative Agent shall give written notice to each Lender of such
notice of
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election or Conversion prior to 3:00 P.M. on the day such notice of election or
Conversion is received. All such Continuations or Conversions of Loans shall be
effected pro rata based on the Applicable Commitment Percentages of the Lenders.
2.10. Unused Fees.
(a) For the period beginning on the Closing Date and ending on
the Revolving Credit Termination Date, the Borrower agrees to pay to the
Administrative Agent, for the benefit of each Lender, an unused fee equal to the
Applicable Unused Fee multiplied by the average daily Unused Amount of such
Lender. Such fees shall be due in arrears on the last Business Day of each
March, June, September and December commencing on the last business day of
December, 2000 to and on the Revolving Credit Termination Date.
(b) Notwithstanding the foregoing, so long as any Lender fails
to make available any portion of its Revolving Credit Commitment when requested,
such Lender shall not be entitled to receive payment of its pro rata share of
such fees until such Lender shall make available such portion. All fees payable
pursuant to this Section 2.10 shall be calculated on an Actual/360 Basis.
2.11. Deficiency Advances. No Lender shall be responsible for
any default of any other Lender in respect of such other Lender's obligation to
make any Loan or fund its purchase of any Participation hereunder nor shall the
Revolving Credit Commitment of any Lender hereunder be increased as a result of
such default of any other Lender. Without limiting the generality of the
foregoing, in the event any Lender shall fail to advance funds to the Borrower
under the Revolving Credit Facility as herein provided, the Administrative Agent
may in its discretion, but shall not be obligated to, advance under the
Revolving Credit Commitment of the Administrative Agent, as a Lender, all or any
portion of such amount or amounts (each, a "deficiency advance") and shall
thereafter be entitled to payments of principal of and interest on such
deficiency advance in the same manner and at the same interest rate or rates to
which such other Lender would have been entitled had it made such advance under
its Revolving Credit Commitment; provided that, upon payment to the
Administrative Agent from such other Lender of the entire outstanding amount of
each such deficiency advance, together with accrued and unpaid interest thereon,
from the most recent date or dates interest was paid to the Administrative Agent
by the Borrower on each Loan comprising such deficiency advance at the Federal
Funds Rate, then such payment shall be credited against the Revolving Credit
Commitment of the Administrative Agent in full payment of such deficiency
advance and the Borrower shall be deemed to have borrowed the amount of such
deficiency advance from such other Lender as of the most recent date or dates,
as the case may be, upon which any payments of interest were made by the
Borrower thereon.
2.12. Use of Proceeds. The proceeds of the Loans made pursuant
to this Agreement shall be used by the Borrower to repay existing indebtedness
and for general corporate purposes, including working capital needs, capital
expenditures and permitted Acquisitions.
2.13. Increase and Decrease in Amounts. The amount of the
Total Revolving Credit Commitment which shall be available to the Borrower as
Advances shall be reduced by the aggregate amount of Letter of Credit
Outstandings.
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ARTICLE III
Letters of Credit
3.1. Letters of Credit. The Issuing Bank agrees, subject to
the terms and conditions of this Agreement, upon request of the Borrower to
issue from time to time for the account of the Borrower Letters of Credit, upon
delivery to the Issuing Bank of an Application and Agreement for Letter of
Credit relating thereto in form and content acceptable to the Issuing Bank;
provided, that (i) the Letter of Credit Outstandings shall not exceed the Total
Letter of Credit Commitment, (ii) no Letter of Credit shall be issued if the
applicable conditions set forth in Article V shall not have been satisfied, and
(iii) no Letter of Credit shall be issued if, after giving effect thereto,
Letter of Credit Outstandings plus the aggregate principal amount of Revolving
Credit Outstandings shall exceed the Total Revolving Credit Commitment. No
Letter of Credit shall have an expiry date (including all rights of the Borrower
or any beneficiary named in such Letter of Credit to require renewal) or payment
date occurring later than the fifth Business Day prior to the Revolving Credit
Termination Date. All Letters of Credit shall be denominated in Dollars.
3.2. Reimbursement. (a) The Borrower hereby unconditionally
agrees to pay to the Issuing Bank immediately on demand at the Principal Office
all amounts required to pay all drafts drawn or purporting to be drawn under the
Letters of Credit and all reasonable expenses incurred by the Issuing Bank in
connection with the Letters of Credit, and in any event and without demand to
place in possession of the Issuing Bank (which shall include Advances under the
Revolving Credit Facility if permitted by Section 2.1(c)) sufficient funds to
pay all debts and liabilities arising in respect of any Letter of Credit. The
Issuing Bank agrees to give the Borrower prompt notice of any request for a draw
under a Letter of Credit. The Issuing Bank may charge any account the Borrower
may have with it for any and all amounts the Issuing Bank pays under a Letter of
Credit, plus charges and reasonable expenses as from time to time agreed to by
the Issuing Bank and the Borrower; provided that to the extent permitted by
Section 2.1(c)(iv), amounts shall be paid pursuant to Advances under the
Revolving Credit Facility. The Borrower agrees to pay the Issuing Bank interest
on any Reimbursement Obligations not paid when due hereunder at the Default
Rate.
(b) In accordance with the provisions of Section 2.1(c), the
Issuing Bank shall notify the Administrative Agent of any drawing under any
Letter of Credit promptly following the receipt by the Issuing Bank of such
drawing.
(c) (i) Each Lender (other than the Issuing Bank) shall
automatically acquire on the date of issuance thereof a Participation in the
liability of the Issuing Bank in respect of each Letter of Credit in an amount
equal to such Lender's Applicable Commitment Percentage of such liability, and
to the extent that the Borrower is obligated to pay the Issuing Bank under
Section 3.2(a), each Lender (other than the Issuing Bank) thereby shall
absolutely, unconditionally and irrevocably assume, and shall be unconditionally
obligated to pay to the Issuing Bank as hereinafter described, its Applicable
Commitment Percentage of the liability of the Issuing Bank under such Letter of
Credit.
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(ii) Each Lender (including the Issuing Bank in its capacity
as a Lender) shall, subject to the terms and conditions of Article II, pay to
the Administrative Agent for the account of the Issuing Bank at the Principal
Office in Dollars and in immediately available funds, an amount equal to its
Applicable Commitment Percentage of any drawing under a Letter of Credit, such
funds to be provided in the manner described in Section 2.1(c)(iv) plus interest
at the Federal Funds Rate for the period from and including the date the drawing
under a Letter of Credit is made to the date of such payment.
(iii) Simultaneously with the making of each payment by a
Lender to the Issuing Bank pursuant to Section 2.1(c)(iv)(B), such Lender shall,
automatically and without any further action on the part of the Issuing Bank or
such Lender, acquire a Participation in an amount equal to such payment
(excluding the portion thereof constituting interest accrued prior to the date
such Lender made its payment) in the related Reimbursement Obligation of the
Borrower. The Reimbursement Obligations of the Borrower shall be immediately due
and payable whether by Advances made in accordance with Section 2.1(c)(iv) or
otherwise.
(iv) Each Lender's obligation to make payment to the
Administrative Agent for the account of the Issuing Bank pursuant to Section
2.1(c)(iv) and this Section 3.2(c), and the right of the Issuing Bank to receive
the same, shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and shall be made without any offset, abatement,
withholding or reduction whatsoever. If any Lender is obligated to pay but does
not pay amounts to the Administrative Agent for the account of the Issuing Bank
in full upon such request as required by Section 2.1(c)(iv) or this Section
3.2(c), such Lender shall, on demand, pay to the Administrative Agent for the
account of the Issuing Bank interest on the unpaid amount for each day during
the period commencing on the date of notice given to such Lender pursuant to
Section 2.1(c) until such Lender pays such amount to the Administrative Agent
for the account of the Issuing Bank in full at the Federal Funds Rate.
(v) In the event the Lenders have purchased Participations in
any Reimbursement Obligation as set forth in clause (ii) above, then at any time
payment (in fully collected, immediately available funds) of such Reimbursement
Obligation, in whole or in part, is received by the Issuing Bank from the
Borrower, the Issuing Bank shall promptly pay to each Lender an amount equal to
its Applicable Commitment Percentage of such payment from the Borrower.
(d) Promptly following the end of each calendar quarter, the
Issuing Bank shall deliver to the Administrative Agent and the Administrative
Agent shall deliver to each Lender a notice describing the aggregate undrawn
amount of all Letters of Credit at the end of such quarter. The Administrative
Agent shall promptly notify each Lender of the issuance of a Letter of Credit.
(e) The issuance by the Issuing Bank of each Letter of Credit
shall, in addition to the conditions precedent set forth in Article V, be
subject to the conditions that such Letter of Credit be in such form and contain
such terms as shall be reasonably satisfactory to the Issuing Bank consistent
with the then current practices and procedures of the Issuing Bank with respect
to similar letters of credit, and the Borrower shall have executed and delivered
such other instruments and agreements relating to such Letters of Credit as the
Issuing Bank shall have
35
reasonably requested consistent with such practices and procedures and shall not
be in conflict with any of the express terms herein contained.
(f) The Borrower agrees that the Issuing Bank may, in its sole
discretion, accept or pay, as complying with the terms of any Letter of Credit,
any drafts or other documents otherwise in order which may be signed or issued
by an administrator, executor, trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, liquidator, receiver, attorney in fact or
other legal representative of a party who is authorized under such Letter of
Credit to draw or issue any drafts or other documents.
(g) Without limiting the generality of the provisions of
Section 11.12, the Borrower hereby agrees to indemnify and hold harmless the
Issuing Bank, each other Lender and the Administrative Agent from and against
any and all claims and damages, losses, liabilities, reasonable costs and
expenses which the Issuing Bank, such other Lender or the Administrative Agent
may incur (or which may be claimed against the Issuing Bank, such other Lender
or the Administrative Agent) by any Person by reason of or in connection with
the issuance or transfer of or payment or failure to pay under any Letter of
Credit; provided that the Borrower shall not be required to indemnify the
Issuing Bank, any other Lender or the Administrative Agent for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to the
extent, (i) determined by a final judgment of a court of competent jurisdiction
to have been incurred by reason of the gross negligence or willful misconduct of
such Person to be indemnified or (ii) in the case of the Issuing Bank, caused by
the failure of the Issuing Bank to pay under any Letter of Credit after the
presentation to it of a request for payment strictly complying with the terms
and conditions of such Letter of Credit, unless such payment is prohibited by
any law, regulation, court order or decree. The indemnification and hold
harmless provisions of this Section 3.2(g) shall survive repayment of the
Obligations, occurrence of the Revolving Credit Termination Date or the Facility
Extension Loan Termination Date, as the case may be, and expiration or
termination of this Agreement.
(h) Without limiting the Borrower's rights as set forth in
Section 3.2(g), the obligation of the Borrower to immediately reimburse the
Issuing Bank for drawings made under Letters of Credit and to repay Loans made
under Section 2.1(c) and the Issuing Bank's and each Lender's right to receive
such payment shall be absolute, unconditional and irrevocable, and such
obligations of the Borrower shall be performed strictly in accordance with the
terms of this Agreement and such Letters of Credit and the related Applications
and Agreement for any Letter of Credit, under all circumstances whatsoever,
including the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit, the obligation supported by any Letter of Credit or any other
agreement or instrument relating thereto (collectively, the "Related LC
Documents");
(ii) any amendment or waiver of or any consent to or departure
from all or any of the Related LC Documents;
(iii) the existence of any claim, setoff, defense (other than
the defense of payment in accordance with the terms of this Agreement)
or other rights which the Borrower may have at any time against any
beneficiary or any transferee of a Letter of Credit (or any
36
persons or entities for whom any such beneficiary or any such
transferee may be acting), the Administrative Agent, the Lenders or any
other Person, whether in connection with the Loan Documents, the
Related LC Documents or any unrelated transaction;
(iv) any breach of contract or other dispute between the
Borrower and any beneficiary or any transferee of a Letter of Credit
(or any persons or entities for whom such beneficiary or any such
transferee may be acting), the Administrative Agent, the Lenders or any
other Person;
(v) any draft, statement or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(vi) any delay, extension of time, renewal, compromise or
other indulgence or modification granted or agreed to by the
Administrative Agent or the requisite number of Lenders, with or
without notice to or approval by the Borrower in respect of any of
Borrower's Obligations under this Agreement; or
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing;
provided, however, that nothing in this Section 3.2(h) shall give the Issuing
Bank any right to reimbursement for drawings made under a Letter of Credit
otherwise than pursuant to a request for payment strictly complying with the
terms and conditions of such Letter of Credit unless the Borrower has
specifically waived such strict compliance in writing.
3.3. Letter of Credit Facility Fees. (a) The Borrower shall
pay to the Administrative Agent, for the pro rata benefit of the Lenders based
on their Applicable Commitment Percentages, a fee on the aggregate amount
available to be drawn on each outstanding Letter of Credit at a rate equal to
the Applicable Margin for Eurodollar Rate Loans as set forth in the definition
of "Applicable Margin". In addition, the Borrower agrees to pay to the
Administrative Agent for the benefit of the Issuing Bank an issuance fee equal
to one-eighth of one percent (1/8%) per annum times the amount of outstanding
Letters of Credit. Such fees shall be due with respect to each Letter of Credit
quarterly in arrears on the last Business Day of each March, June, September and
December, the first such payment to be made on the last business day of
December, 2000. The fees described in this Section 3.3 shall be calculated on an
Actual/360 Basis.
(b) The Borrower acknowledges that the Issuing Bank as issuer
of each Letter of Credit will be required by applicable rules and regulations of
the Board to maintain reserves for its liability to honor draws made pursuant to
a Letter of Credit notwithstanding the obligation of the Lenders for a
Participation in such liability. The Borrower agrees to promptly reimburse the
Issuing Bank for all additional costs which it may hereafter incur solely by
reason of its acting as issuer of the Letters of Credit and its being required
to reserve for such liability, it being understood by the Borrower that other
interest and fees payable under this Agreement do not include compensation of
the Issuing Bank for such reserves. The Issuing Bank shall furnish to the
Borrower at the time of its demand for payment of such additional costs, the
computation
37
of such additional cost which shall be conclusive absent manifest error,
provided that such computations are made on a reasonable basis.
3.4. Administrative Fees. The Borrower shall pay to the
Issuing Bank such administrative fee and other fees, if any, in connection with
the Letters of Credit in such amounts and at such times as the Issuing Bank and
the Borrower shall agree from time to time.
3.5. Applications. To the extent that any provision of any
Application and Agreement for Letters of Credit is inconsistent with the
provisions of this Article III, the provisions of this Article III shall apply.
ARTICLE IV
Change in Circumstances
4.1. Increased Cost and Reduced Return. (a) If, after the date
hereof, the adoption of any applicable law, rule, or regulation, or any change
in any applicable law, rule, or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any such governmental
authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Rate Loans, or its obligation to make Eurodollar Rate Loans,
or change the basis of taxation of any amounts payable to such Lender
(or its Applicable Lending Office) under this Agreement in respect of
any Eurodollar Rate Loans (other than taxes imposed on the overall net
income of such Lender by the jurisdiction in which such Lender has its
principal office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Eurodollar
Rate) relating to any extensions of credit or other assets of, or any
deposits with or other liabilities or commitments of, such Lender (or
its Applicable Lending Office), including the Revolving Credit
Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or on the London interbank market any other condition affecting
this Agreement or any extensions of credit or liabilities or
commitments hereunder;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Rate Loans or to reduce any sum received or
receivable by such Lender (or its Applicable Lending Office) under this
Agreement with respect to any Eurodollar Rate Loans, then the Borrower shall
38
pay to such Lender on demand such amount or amounts as will compensate such
Lender for such increased cost or reduction; provided that no Lender will be
entitled to any compensation for any such increased cost or reduction if demand
for payment thereof is made by such Lender more than 180 days after the
occurrence of the circumstances giving rise to such claim. If any Lender
requests compensation by the Borrower under this Section 4.1(a), the Borrower
may, by notice to such Lender (with a copy to the Administrative Agent), suspend
the obligation of such Lender to make or Continue Loans of the Type with respect
to which such compensation is requested, or to Convert Loans of any other Type
into Loans of such Type, until the event or condition giving rise to such
request ceases to be in effect (in which case the provisions of Section 4.4
shall be applicable); provided that such suspension shall not affect the right
of such Lender to receive the compensation so requested.
If, after the date hereof, any Lender shall have determined
that the adoption of any applicable law, rule, or regulation regarding
capital adequacy or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such governmental
authority, central bank, or comparable agency, has or would have the
effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of such
Lender's obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change,
request, or directive (taking into consideration its policies with
respect to capital adequacy), then from time to time upon demand the
Borrower shall pay to such Lender such additional amount or amounts as
will compensate such Lender for such reduction.
(b) Each Lender shall promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
Section and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to it. Any Lender claiming compensation under this Section shall
furnish to the Borrower and the Administrative Agent a statement setting forth
the additional amount or amounts to be paid to it hereunder which shall be
conclusive in the absence of manifest error. In determining such amount, such
Lender may use any reasonable averaging and attribution methods that such Lender
uses for its customers that are similarly situated to the Borrower.
4.2. Limitation on Types of Loans. If on or prior to the first
day of any Interest Period for any Eurodollar Rate Loan:
(a) the Administrative Agent reasonably determines (which
determination shall be conclusive) that by reason of circumstances
affecting the relevant market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for such Interest Period; or
(b) the Required Lenders reasonably determine (which
determination shall be conclusive) and notify the Administrative Agent
that the Eurodollar Rate will not
39
adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Rate Loans for such Interest Period;
then the Administrative Agent shall give the Borrower prompt notice thereof
specifying the relevant Type of Loans and the relevant amounts or periods, and
so long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Loans of such Type, Continue Loans of such Type,
or to Convert Loans of any other Type into Loans of such Type and the Borrower
shall, on the last day(s) of the then current Interest Period(s) for the
outstanding Loans of the affected Type, either prepay such Loans or Convert such
Loans into another Type of Loan in accordance with the terms of this Agreement.
4.3. Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Eurodollar Rate Loans
hereunder, then such Lender shall promptly notify the Borrower thereof and such
Lender's obligation to make or Continue Eurodollar Rate Loans and to Convert
other Types of Loans into Eurodollar Rate Loans shall be suspended until such
time as such Lender may again make, maintain, and fund Eurodollar Rate Loans (in
which case the provisions of Section 4.4 shall be applicable).
4.4. Treatment of Affected Loans. If the obligation of any
Lender to make a Eurodollar Rate Loan or to Continue, or to Convert Loans of any
other Type into, Loans of a particular Type shall be suspended pursuant to
Section 4.1 or 4.3 hereof (Loans of such Type being herein called "Affected
Loans" and such Type being herein called the "Affected Type"), such Lender's
Affected Loans shall be automatically Converted into Base Rate Loans on the last
day(s) of the then current Interest Period(s) for Affected Loans (or, in the
case of a Conversion required by Section 4.3 hereof, on such earlier date as
such Lender may specify to the Borrower with a copy to the Administrative Agent)
and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 4.1 or 4.3 hereof that gave rise to such
Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been
so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Affected Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by
such Lender as Loans of the Affected Type shall be made or Continued
instead as Base Rate Loans, and all Loans of such Lender that would
otherwise be Converted into Loans of the Affected Type shall be
Converted instead into (or shall remain as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 4.1 or 4.3 hereof that gave
rise to the Conversion of such Lender's Affected Loans pursuant to this Section
4.4 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Loans of the Affected Type made
by other Lenders are outstanding, such Lender's Base Rate Loans shall be
automatically Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Loans of the Affected Type, to the extent
necessary so that, after giving effect thereto, all Loans held by the Lenders
holding Loans of the Affected Type and by such Lender
40
are held pro rata (as to principal amounts, Types, and Interest Periods) in
accordance with their respective Revolving Credit Commitments.
4.5. Compensation. Upon the request of any Lender, the
Borrower shall pay to such Lender such amount or amounts as shall be sufficient
(in the reasonable opinion of such Lender) to compensate it for any loss, cost,
or expense (including loss of anticipated profits) incurred by it as a result
of:
(a) any payment, prepayment, or Conversion of a Eurodollar
Rate Loan for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 9.1) on a date other than
the last day of the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Article V to be satisfied) to borrow, Convert, Continue, or prepay a
Eurodollar Rate Loan on the date for such borrowing, Conversion,
Continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, Continuation, or Conversion under this
Agreement.
4.6. Taxes. (a) Any and all payments by the Borrower to or for
the account of any Lender or the Administrative Agent hereunder or under any
other Loan Document shall be made free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender and the Administrative Agent, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction under the laws of
which such Lender (or its Applicable Lending Office) or the Administrative Agent
(as the case may be) is organized or any political subdivision thereof (all such
non-excluded taxes, duties, levies, imposts, deductions, charges, withholdings,
and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
under this Agreement or any other Loan Document to any Lender or the
Administrative Agent, (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.6) such Lender or the
Administrative Agent receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law, and (iv) the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 11.2, the original or a certified copy of a receipt evidencing
payment thereof.
(b) In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or property
taxes or charges or similar levies which arise from any payment made under this
Agreement or any other Loan Document or from the execution or delivery of, or
otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 4.6)
41
paid by such Lender or the Administrative Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and delivery
of this Agreement in the case of each Lender listed on the signature pages
hereof and on or prior to the date on which it becomes a Lender in the case of
each other Lender, and from time to time thereafter if requested in writing by
the Borrower or the Administrative Agent (but only so long as such Lender
remains lawfully able to do so), shall provide the Borrower and the
Administrative Agent with two copies of (i) Internal Revenue Service Form W-8BEN
or W-8-ECI, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the rate
of withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States and (ii) any other form or
certificate required by any taxing authority (including any certificate required
by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying that
such Lender is entitled to an exemption from or a reduced rate of tax on
payments pursuant to this Agreement or any of the other Loan Documents.
Contemporaneously with the delivery of the appropriate Internal Revenue Service
form, each Lender which is not a "bank" within the meaning of Section
881(c)(5)(A) of the Code and intends to claim the "portfolio interest" exemption
described above shall provide the Borrower and the Administrative Agent (but
only so long as such Lender remains lawfully able to do so) a certificate
representing that such 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).
(e) For any period with respect to which a Lender has failed
to provide the Borrower and the Administrative Agent with the appropriate form
pursuant to Section 4.6(d) (unless such failure is due to a change in treaty,
law, or regulation occurring subsequent to the date on which a form originally
was required to be provided), such Lender shall not be entitled to
indemnification under Section 4.6(a), 4.6(b), or 4.6(c) with respect to Taxes
imposed by the United States; provided, however, that should a Lender, which is
otherwise exempt from or subject to a reduced rate of withholding tax, become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Lender shall reasonably request to
assist such Lender to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to
or for the account of any Lender pursuant to this Section 4.6, then such Lender
will agree to use reasonable efforts to change the jurisdiction of its
Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the judgment of such
Lender, is not otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of
Taxes, the Borrower shall furnish to the Administrative Agent the original or a
certified copy of a receipt evidencing such payment.
42
(h) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 4.6 shall survive the termination of the Revolving
Credit Termination Date, the Facility Extension Loan Termination Date, if
applicable, and the repayment of the Loans.
ARTICLE V
Conditions to Making Loans and Issuing Letters of Credit
5.1. Conditions of Initial Advance. The occurrence of the
Closing Date, and the obligation of the Lenders to make the initial Revolving
Credit Loans on the Closing Date, shall be conditioned upon the satisfaction of
the following conditions precedent in the sole judgment of the Administrative
Agent:
(a) the Administrative Agent shall have received on the
Closing Date, in form and substance satisfactory to the Administrative Agent,
the following:
(i) executed originals of each of this Agreement, the LC
Account Agreement and the other Loan Documents, together with all
schedules and exhibits thereto;
(ii) the favorable written opinion or opinions with respect to
the Loan Documents and the transactions contemplated thereby of counsel
to the Borrower dated the Closing Date, addressed to the Administrative
Agent and the Lenders and satisfactory to Simpson Thacher & Bartlett,
special counsel to the Administrative Agent, substantially in the form
of Exhibit H;
(iii) resolutions of the board of directors of the Borrower
certified by its secretary or assistant secretary as of the Closing
Date, approving and adopting the Loan Documents to be executed by the
Borrower, and authorizing the execution and delivery and performance
thereof;
(iv) specimen signatures of officers of the Borrower executing
the Loan Documents on behalf of the Borrower, certified by the
secretary or assistant secretary of the Borrower;
(v) the charter documents of the Borrower certified as of a
recent date by the Secretary of State of its state of organization;
(vi) the bylaws of the Borrower certified as of the Closing
Date as true and correct by its secretary or assistant secretary;
(vii) certificates issued as of a recent date by the Secretary
of State of the jurisdiction of formation of the Borrower as to the
valid existence and good standing of the Borrower;
(viii) notice of appointment of the initial Authorized
Representative(s);
43
(ix) evidence of all insurance required by the Loan Documents;
(x) a certificate substantially in the form of Exhibit I
completed as of June 30, 2000;
(xi) evidence that all fees, costs and expenses payable by the
Borrower on the Closing Date to the Administrative Agent and the
Lenders have been paid in full;
(xii) such other documents, instruments, certificates and
opinions as the Administrative Agent or any Lender may reasonably
request on or prior to the Closing Date in connection with the
consummation of the transactions contemplated hereby.
(b) In the good faith judgment of the Administrative Agent and
the Lenders:
(i) there shall not have occurred or become known to the
Administrative Agent or the Lenders any event, condition, situation or
status since December 31, 1999 that has had or could reasonably be
expected to result in a Material Adverse Effect;
(ii) no litigation, action, suit, investigation or other
arbitral, administrative or judicial proceeding shall be pending or
threatened which could reasonably be expected to result in a Material
Adverse Effect; and
(iii) the Borrower and its Consolidated Entities shall have
received all approvals, consents and waivers, and shall have made or
given all necessary filings and notices, as shall be required to
consummate the transactions contemplated hereby without the occurrence
of any default under, conflict with or violation of (A) any applicable
law, rule, regulation, order or decree of any Governmental Authority or
arbitral authority or (B) any agreement, document or instrument to
which any of the Borrower or any Consolidated Entity is a party or by
which any of them or their properties is bound, except for such
approvals, consents, waivers, filings and notices the receipt, making
or giving of which will not have a Material Adverse Effect.
(c) The following refinancing (the "Refinancing") shall have
occurred or shall occur simultaneously with the occurrence of the Closing Date:
(i) The Borrower shall have issued and sold not less than
$350,000,000 of senior subordinated notes having terms and conditions
acceptable to the Administrative Agent (the "New Senior Subordinated
Notes");
(ii) The Closing Date under (and as defined in) the
Headquarters Participation Agreement shall have occurred, and the
refinancing of the notes and equity issued by HEALTHSOUTH Corporation
Trust 1995-1 shall have occurred;
(iii) The Closing Date under (and as defined in) the Hospitals
Participation Agreement shall have occurred, and the refinancing of the
notes and equity issued by HEALTHSOUTH Corporation Trust 2000-1 shall
have occurred;
44
(iv) All amounts outstanding under the Borrower's Short Term
Credit Agreement, dated as of December 15, 1999 shall have been repaid
in full, and all commitments to extend credit thereunder shall have
been terminated.
(d) The Borrower shall have made available to the Lenders the
pro forma consolidated balance sheets of the Borrower as of December 31, 1999
and June 30, 2000.
(e) No litigation by any entity (private or governmental)
shall be pending or threatened with respect to any of the transactions
contemplated hereby or any other documentation executed in connection herewith
or therewith or the transactions contemplated hereby (including, without
limitation, the Refinancing).
5.2. Conditions of Loans and Letters of Credit. The
obligations of the Lenders to make any Loans including, without limitation, the
conversion of any Revolving Credit Loans to Facility Extension Loans, and the
Issuing Bank to issue Letters of Credit, hereunder on or subsequent to the
Closing Date, are subject to the satisfaction of the following conditions:
(a) the Administrative Agent shall have received a Borrowing
Notice or Facility Extension Notice, as applicable, if required by
Article II;
(b) the representations and warranties of the Borrower and the
Subsidiaries set forth in Article VI and in each of the other Loan
Documents shall be true and correct in all material respects on and as
of the date of such Advance, Letter of Credit issuance or renewal or
Facility Extension Loan, with the same effect as though such
representations and warranties had been made on and as of such date,
except to the extent that such representations and warranties expressly
relate to an earlier date and except that the financial statements
referred to in Section 6.6(a) shall be deemed to be those financial
statements most recently delivered to the Administrative Agent and the
Lenders pursuant to Section 7.1 from the date financial statements are
delivered to the Administrative Agent and the Lenders in accordance
with such Section;
(c) in the case of the issuance of a Letter of Credit, the
Borrower shall have executed and delivered to the Issuing Bank an
Application and Agreement for the Letter of Credit in form and content
acceptable to the Issuing Bank together with such other instruments and
documents as it shall request;
(d) at the time of (and after giving effect to) each Advance,
conversion to Facility Extension Loan or the issuance of a Letter of
Credit, no Default or Event of Default shall have occurred and be
continuing; and
(e) immediately after giving effect to:
(i) a Loan, the aggregate principal balance of all
outstanding Loans for each Lender plus such Lender's
Applicable Commitment Percentage of the aggregate amount of
Letter of Credit Outstandings shall not exceed such Lender's
Revolving Credit Commitment;
45
(ii) a Letter of Credit or renewal thereof, the
aggregate principal balance of all outstanding Participations
in Letters of Credit and Reimbursement Obligations (or in the
case of the Issuing Bank, its remaining interest after
deduction of all Participations in Letters of Credit and
Reimbursement Obligations of other Lenders) for each Lender
and in the aggregate shall not exceed, respectively, (X) such
Lender's Letter of Credit Commitment or (Y) the Total Letter
of Credit Commitment; and
(iii) a Loan or a Letter of Credit or renewal
thereof, the sum of Letter of Credit Outstandings plus the
aggregate principal amount of Revolving Credit Outstandings
shall not exceed the Total Revolving Credit Commitment.
Each borrowing of a Revolving Credit Loan or conversion to a Facility
Extension Loan hereunder and each issuance of a Letter of Credit hereunder shall
constitute a representation and warranty by the Borrower to the effect that the
conditions set forth in clauses (b) and (d) have been satisfied as of the date
of such borrowing.
ARTICLE VI
Representations and Warranties
The Borrower represents and warrants with respect to itself
and (to the extent expressly set forth below) its Consolidated Entities (which
representations and warranties shall survive the delivery of the documents
mentioned herein and the making of Loans and the issuance of a Letter of
Credit), that:
6.1. Organization and Authority. (a) The Borrower and each
Consolidated Entity is a corporation, partnership or limited liability company
duly organized and validly existing under the laws of the jurisdiction of its
formation;
(b) The Borrower and each Consolidated Entity (x) has the
requisite power and authority to own its properties and assets and to carry on
its business as now being conducted and as contemplated in the Loan Documents,
and (y) is qualified to do business in every jurisdiction in which failure so to
qualify would have a Material Adverse Effect;
(c) The Borrower has the power and authority to execute,
deliver and perform this Agreement, and to borrow and obtain other extensions of
credit hereunder, and to execute, deliver and perform each of the other Loan
Documents to which it is a party; and
(d) When executed and delivered, each of the Loan Documents to
which the Borrower is a party will be the legal, valid and binding obligation or
agreement, as the case may be, of the Borrower, enforceable against the Borrower
in accordance with its terms, subject to the effect of any applicable
bankruptcy, moratorium, insolvency, reorganization or other similar law
affecting the enforceability of creditors' rights generally and to the effect of
general principles of equity (whether considered in a proceeding at law or in
equity).
46
6.2. Loan Documents. The execution, delivery and performance
by the Borrower of each of the Loan Documents and the credit extensions
hereunder:
(a) have been duly authorized by all requisite corporate
actions (including any required shareholder approval) of the Borrower
required for the lawful execution, delivery and performance thereof;
(b) do not violate any provisions of (i) applicable law, rule
or regulation, (ii) any judgment, writ, order, determination, decree or
arbitral award of any Governmental Authority or arbitral authority
binding on the Borrower or any Subsidiary or its or any Subsidiary's
properties, or (iii) the charter documents or bylaws of the Borrower
(each instance of (i), (ii) or (iii), a "Requirement of Law");
(c) do not and will not conflict with, result in a breach of
or constitute an event of default, or an event which, with notice or
lapse of time or both, would constitute an event of default, under any
contract, indenture, agreement or other instrument or document to which
Borrower or any Consolidated Entity is a party, or by which the
properties or assets of the Borrower or any Consolidated Entity are
bound (each, a "Contractual Obligation"); and
(d) do not and will not result in the creation or imposition
of any Lien upon any of the properties or assets of Borrower or any
Subsidiary.
6.3. Solvency. The Borrower is Solvent and the Borrower and
its Consolidated Entities taken as a whole are Solvent, in each case after
giving effect to the transactions contemplated by the Loan Documents.
6.4. Subsidiaries and Subsidiaries' Guarantees. The Borrower
has no Subsidiaries other than those Persons listed as Subsidiaries in Schedule
6.4 and additional Subsidiaries created or acquired after the Closing Date. As
of the Closing Date, no Subsidiary has directly or indirectly guaranteed any
Indebtedness of the Borrower.
6.5. Ownership Interests. The Borrower owns no interest in any
Person other than the Persons listed in Schedule 6.4, equity investments in
Persons not constituting Subsidiaries permitted under Section 8.2 and additional
Subsidiaries created or acquired after the Closing Date.
6.6. Financial Condition. (a) The Borrower has heretofore
furnished to the Administrative Agent and each Lender an audited consolidated
balance sheet of the Borrower and its Consolidated Entities as at December 31,
1999 and the notes thereto and the related consolidated statements of income,
stockholders' equity and cash flows for the Fiscal Year then ended as examined
and certified by Ernst & Young LLP. Except as set forth therein, such financial
statements (including the notes thereto) present fairly the financial condition
of the Borrower and its Consolidated Entities as of the end of such Fiscal Year
and results of their operations and the changes in its stockholders' equity for
the Fiscal Year, all in conformity with GAAP applied on a Consistent Basis,
subject however, in the case of unaudited interim statements to year end audit
adjustments.
47
(b) Since December 31, 1999, there has been no material
adverse change in the condition, financial or otherwise, of the Borrower or any
of its Consolidated Entities, or in the businesses, properties, performance,
prospects or operations of the Borrower or any of its Consolidated Entities nor
have such businesses or properties been materially adversely affected as a
result of any fire, explosion, earthquake, accident, strike, lockout,
combination of workers, flood, embargo or act of God.
(c) Neither the Borrower nor any Consolidated Entity has any
material Indebtedness, Guaranteed Obligations or other obligations or
liabilities, direct or contingent, in an aggregate amount in excess of $300,000
other than (i) the liabilities reflected in such balance sheet and the notes
thereto, (ii) obligations arising under this Agreement, (iii) the New Senior
Subordinated Notes and (iv) liabilities incurred in the ordinary course of
business.
(d) The unaudited pro forma balance sheets of Borrower and the
Consolidated Entities as at December 31, 1999 and June 30, 2000, (including the
notes thereto (the "Pro Forma Financial Statements"), copies of which have been
furnished to the Administrative Agent, have been prepared giving effect to the
financings and refinancings contemplated by this Agreement as if such
transactions had occurred on the dates of such pro forma balance sheets. The Pro
Forma Financial Statements have been prepared based on the best information
available to the Borrower on the date of delivery thereof, and present fairly on
a pro forma basis the estimated financial position and results of operations of
the Borrower, based upon the assumptions described in the preceding sentence.
6.7. Title to Properties. The Borrower and each Consolidated
Entity has good and marketable title to all its real and personal properties,
subject to no transfer restrictions or Liens of any kind, except for the
transfer restrictions and Liens permitted by this Agreement.
6.8. Taxes. The Borrower and each Consolidated Entity have
filed or caused to be filed all federal, state and local tax returns which are
required to be filed by it and, except for taxes and assessments being contested
in good faith by appropriate proceedings diligently conducted and against which
reserves reflected in the financial statements described in Section 6.6(a) and
satisfactory to the Borrower's independent certified public accountants have
been established, have paid or caused to be paid all taxes as shown on said
returns or on any assessment received by it, to the extent that such taxes have
become due.
6.9. Other Agreements. Except as disclosed in or incorporated
by reference in the 1999 10-K:
(a) neither the Borrower nor any Consolidated Entity is a
party to or subject to any judgment, order, decree, agreement, lease or
instrument, or subject to other restrictions, compliance with the terms
of which individually or in the aggregate could reasonably be likely to
have a Material Adverse Effect;
(b) neither the Borrower nor any Consolidated Entity is in
default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in (i) any Medicaid
Provider Agreement, Medicare Provider Agreement or other agreement or
instrument to which the Borrower or any Consolidated Entity
48
is a party, which default has resulted in, or if not remedied within
any applicable grace period could result in, the revocation,
termination, cancellation or suspension of Medicaid Certification or
Medicare Certification of Borrower or any Consolidated Entity which
could have a Material Adverse Effect or (ii) any other agreement or
instrument to which the Borrower or any Consolidated Entity is a party,
which default has, or if not remedied within any applicable grace
period could reasonably be likely to have, a Material Adverse Effect;
(c) to the knowledge of Borrower's Executive Officers, no
Contract Provider is a party to any judgment, order, decree, agreement
or instrument, or subject to restrictions, compliance with the terms of
which could individually or in the aggregate reasonably be likely to
have a Material Adverse Effect; and
(d) to the knowledge of Borrower's Executive Officers, no
Contract Provider is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions
contained in any Medicaid Provider Agreement, Medicare Provider
Agreement or other agreement or instrument to which such Person is a
party, which default has resulted in, or if not remedied within any
applicable grace period could result in, the revocation, termination,
cancellation or suspension of Medicaid Certification or Medicare
Certification of such Person, which revocation; termination,
cancellation or suspension could reasonably be likely to have a
Material Adverse Effect.
6.10. Litigation. Except as disclosed in or incorporated by
reference in the 1999 10-K, there is no action, suit, investigation or
proceeding at law or in equity or by or before any governmental instrumentality
or agency or arbitral body pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any Consolidated Entity or, to the
knowledge of the Borrower, pending or threatened by or against any Contract
Provider, or affecting the Borrower or any Consolidated Entity or, to the
knowledge of the Borrower, any Contract Provider or any properties or rights of
the Borrower or any Consolidated Entity or, to the knowledge of the Borrower,
any Contract Provider, which could reasonably be likely (i) to result in the
revocation, termination, cancellation or suspension of Medicaid Certification or
Medicare Certification of such Person, which revocation, termination,
cancellation or suspension could reasonably be likely to have a Material Adverse
Effect, or (ii) to have a Material Adverse Effect.
6.11. Margin Stock. The proceeds of the borrowings and other
extensions of credit made hereunder will be used by the Borrower only for the
purposes expressly authorized herein. None of such proceeds will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin
stock or for the purpose of reducing or retiring any Indebtedness which was
originally incurred to purchase or carry margin stock or for any other purpose
which might constitute any of the Loans or Letters of Credit under this
Agreement a "purpose credit" within the meaning of Regulation U or Regulation X
of the Board. Neither the Borrower nor any Administrative Agent acting in its
behalf has taken or will take any action which might cause this Agreement or any
of the documents or instruments delivered pursuant hereto to violate any
regulation of the Board or to violate the Exchange Act or the Securities Act of
1933, as amended, or any state securities laws.
49
6.12. Investment Company. Neither the Borrower nor any
Consolidated Entity is an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended (15 U.S.C.
ss. 80a-1, et seq.). The application of the proceeds of the Loans and repayment
thereof by the Borrower and the issuance of Letters of Credit and the
performance by the Borrower and any Consolidated Entity of the transactions
contemplated by the Loan Documents will not violate any provision of said Act,
or any rule, regulation or order issued by the Securities and Exchange
Commission thereunder.
6.13. Patents, Etc. The Borrower and each Consolidated Entity
owns or has the right to use, under valid license agreements or otherwise, all
material patents, licenses, franchises, trademarks, trademark rights, trade
names, trade name rights, trade secrets, service marks, service mark rights and
copyrights necessary to or used in the conduct of its businesses as now
conducted and as contemplated by the Loan Documents, without known conflict by,
or with, any patent, license, franchise, trademark, trade secret, trade name,
service mark, copyright or other proprietary right of, any other Person.
6.14. No Untrue Statement. Neither (a) this Agreement nor any
other Loan Document or certificate or document executed and delivered by or on
behalf of the Borrower or any Consolidated Entity in accordance with or pursuant
to any Loan Document nor (b) any statement, representation, or warranty provided
to the Administrative Agent or any Lender in connection with the negotiation or
preparation of the Loan Documents contains any misrepresentation or untrue
statement of material fact or omits to state a material fact necessary, in light
of the circumstance under which it was made, in order to make any such warranty,
representation or statement contained therein not misleading.
6.15. No Consents, Etc. Neither the respective businesses or
properties of the Borrower or any Consolidated Entity, nor any relationship
between the Borrower or any Consolidated Entity and any other Person, nor any
circumstance in connection with the execution, delivery and performance of the
Loan Documents and the transactions contemplated thereby, is such as to require
a consent, approval or authorization of, or filing, registration or
qualification with, any Governmental Authority or any other Person on the part
of the Borrower or any Consolidated Entity as a condition to the execution,
delivery and performance of, or consummation of the transactions contemplated
by, or the validity or enforceability of, the Loan Documents, which, if not
obtained or effected, would be reasonably likely to have a Material Adverse
Effect, or if so, such consent, approval, authorization, filing, registration or
qualification has been duly obtained or effected, as the case may be.
6.16. ERISA Requirement. (i) The execution and delivery of the
Loan Documents will not involve any prohibited transaction within the meaning of
ERISA, (ii) the Borrower and each ERISA Affiliate has fulfilled its obligations
under the minimum funding standards imposed by ERISA and each is in compliance
in all material respects with the applicable provisions of ERISA, and (iii) no
"Reportable Event," as defined in Section 4043(b) of ERISA, has occurred with
respect to any plan maintained by the Borrower or any of its ERISA Affiliates.
50
6.17. No Default. As of the date hereof, there does not exist
any Default or Event of Default.
6.18. Hazardous Materials. The Borrower and each Consolidated
Entity is in compliance with all applicable Environmental Laws in all material
respects. Neither the Borrower nor any Consolidated Entity has been notified of
any action, suit, proceeding or investigation which, and neither the Borrower
nor any Consolidated Entity is aware of any facts which, (i) calls into
question, or could reasonably be expected to call into question, compliance in
all material respects by the Borrower or any Consolidated Entity with any
Environmental Laws, (ii) which seeks, or could reasonably be expected to form
the basis of a meritorious proceeding, to suspend, revoke or terminate any
material license, permit or approval necessary for the generation, handling,
storage, treatment or disposal of any Hazardous Material, or (iii) seeks to
cause, or could reasonably be expected to form the basis of a meritorious
proceeding to cause, any property of the Borrower or any Consolidated Entity
material to the operations of the Borrower or such Consolidated Entity to be
subject to any material restrictions on ownership, use, occupancy or
transferability under any Environmental Law.
6.19. Employment Matters. (a) Except as set forth on Schedule
6.19, none of the employees of the Borrower or any Consolidated Entity is
subject to any collective bargaining agreement and there are no strikes, work
stoppages, election or decertification petitions or proceedings, unfair labor
charges, equal opportunity proceedings. or other material labor/employee related
controversies or proceedings pending or, to the best knowledge of the Borrower,
threatened against the Borrower or any Consolidated Entity or between the
Borrower or any Consolidated Entity and any of its employees, other than
employee grievances, controversies or proceedings arising in the ordinary course
of business which could not reasonably be likely, individually or in the
aggregate, to have a Material Adverse Effect; and
(b) Except to the extent a failure to maintain compliance
would not have a Material Adverse Effect, the Borrower and each Consolidated
Entity is in compliance in all respects with all applicable laws, rules and
regulations pertaining to labor or employment matters, including without
limitation those pertaining to wages, hours, occupational safety and taxation
and there is neither pending nor threatened any litigation, administrative
proceeding or, to the knowledge of the Borrower, any investigation, in respect
of such matters which, if decided adversely, could reasonably be likely,
individually or in the aggregate, to have a Material Adverse Effect.
6.20. RICO. Neither the Borrower nor any Consolidated Entity
is engaged in or has engaged in any course of conduct that could subject any of
their respective properties to any Lien, seizure or other forfeiture under any
criminal law, racketeer influenced and corrupt organizations law, civil or
criminal, or other similar laws.
6.21. Reimbursement from Third Party Payors. The accounts
receivable of the Borrower and each Consolidated Entity and each Contract
Provider have been and will continue to be adjusted to reflect reimbursement
policies of third party payors such as Medicare, Medicaid, Blue Cross/Blue
Shield, private insurance companies, health maintenance organizations, preferred
provider organizations, alternative delivery systems, managed care systems,
government contracting agencies and other third party payors. In particular,
accounts
51
receivable relating to such third party payors do not and shall not exceed
amounts any obligee is entitled to receive under any capitation arrangement, fee
schedule, discount formula, cost-based reimbursement or other adjustment or
limitation to its usual charges.
6.22. Material Adverse Change. Since December 31, 1999, there
has been no development or event, which has had or could reasonably be expected
to have a Material Adverse Effect.
ARTICLE VII
Affirmative Covenants
The Borrower hereby agrees that, so long as the Revolving
Credit Commitments remain in effect, any Letter of Credit remains outstanding or
any Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, unless the Required Lenders shall otherwise consent in writing, the
Borrower will, and where applicable will cause each Consolidated Entity to:
7.1. Financial Statements, Reports, Etc. The Borrower shall
deliver or cause to be delivered to the Administrative Agent and each Lender:
(a) Not later than 50 days after the end of each of the first
three quarters of each Fiscal Year, a balance sheet and a statement of
income of the Borrower and its Consolidated Entities on a consolidated
basis and a statement of cash flow of the Borrower and its Consolidated
Entities on a consolidated basis for such calendar quarter and for the
period beginning on the first day of such Fiscal Year and ending on the
last day of such quarter (in sufficient detail to indicate the
Borrower's and each Consolidated Entity's compliance with the financial
covenants set forth in Section 8.1), together with statements in
comparative form for the corresponding date or period in the preceding
Fiscal Year as summarized in the Borrower's Form 10-Q for the
corresponding period, and certified as to fairness, accuracy and
completeness by the chief executive officer, chief financial officer or
Treasurer of the Borrower.
(b) Not later than 100 days after the end of each Fiscal Year,
financial statements (including a balance sheet, a statement of income,
a statement of changes in shareholders' equity and a statement of cash
flow) of the Borrower and its Consolidated Entities on a consolidated
basis for such Fiscal Year (in sufficient detail to indicate the
Borrower's and each Consolidated Entity's compliance with the financial
covenants set forth in Section 8.1), together with statements in
comparative form as of the end of and for the preceding Fiscal Year as
summarized in the Borrower's Form 10-K for the corresponding period,
and accompanied by an opinion of certified public accountants
acceptable to the Administrative Agent, which opinion shall state in
effect that such financial statements (A) were audited using generally
accepted auditing standards, (B) were prepared in accordance with
generally accepted accounting principles applied on a
52
Consistent Basis, and (C) present fairly the financial condition and
results of operations of the Borrower and its Consolidated Entities for
the periods covered.
(c) Together with the financial statements required by
subsections (a) and (b) above a compliance certificate duly executed by
the chief executive officer or chief financial officer or Treasurer of
the Borrower in the form of Exhibit I ("Compliance Certificate").
(d) Contemporaneously with the distribution thereof to the
Borrower's or any Consolidated Entity's stockholders or partners or the
filing thereof with the Securities and Exchange Commission, as the case
may be, copies of all statements, reports, notices and filings
distributed by the Borrower or any Consolidated Entity to its
stockholders or partners or filed with the Securities and Exchange
Commission (including reports on SEC Forms 10-K, 10-Q and 8-K).
(e) Promptly after the Borrower knows or has reason to know of
the occurrence of any "reportable event" under Section 4043 of ERISA
applicable to the Borrower or any ERISA Affiliate, a certificate of the
president or chief financial officer of the Borrower setting forth the
details as to such "reportable event" and the action that the Borrower
or the ERISA Affiliate has taken or will take with respect thereto, and
promptly after the filing or receiving thereof, copies of all reports
and notices that the Borrower and each Consolidated Entity files under
ERISA with the Internal Revenue Service or the PBGC or the United
States Department of Labor.
(f) Promptly after the Borrower or any of its Consolidated
Entities becomes aware of the commencement thereof, notice of any
investigation, action, suit or proceeding before any Governmental
Authority involving the condemnation or taking under the power of
eminent domain of any of its property or the revocation or suspension
of any permit, license, certificate of need or other governmental
requirement applicable to any Facility.
(g) Within 10 days of the receipt by the Borrower or any of
its Consolidated Entities, copies of all material deficiency notices,
compliance orders or adverse reports issued by any Governmental
Authority or accreditation commission having jurisdiction over
licensing, accreditation or operation of a Facility or by any
Governmental Authority or private insurance company pursuant to a
provider agreement, which, if not promptly complied with or cured,
could result in the suspension or forfeiture of any license,
certification or accreditation necessary in order for such Facility to
carry on its business as then conducted or the termination of any
material insurance or reimbursement program available to such Facility.
(h) Such other information regarding any Facility or the
financial condition or operations of the Borrower or its Consolidated
Entities as the Administrative Agent shall reasonably request from time
to time or at any time.
7.2. Maintain Properties. Maintain all properties necessary to
its operations in good working order and condition, make all needed repairs,
replacements and renewals to such
53
properties, and maintain free from Liens all trademarks, trade names, service
marks, patents, copyrights, trade secrets, know-how, and other intellectual
property and proprietary information (or adequate licenses thereto), in each
case as are reasonably necessary to conduct its business as currently conducted
or as contemplated hereby, all in accordance with customary and prudent business
practices.
7.3. Conduct of Business and Maintenance of Existence,
Qualification, Etc. Except as otherwise expressly permitted under Section 8.4,
do or cause to be done all things necessary to preserve and keep in full force
and effect its existence and all material rights and franchises, maintain its
license or qualification to do business as a foreign corporation and good
standing in each jurisdiction in which its ownership or lease of property or the
nature of its business makes such license or qualification necessary and comply
with all Contractual Obligations and Requirements of Law except to the extent
that failure to comply therewith would not, in the aggregate, have a Material
Adverse Effect.
7.4. Regulations and Taxes. Comply in all material respects
with or contest in good faith all statutes and governmental regulations and pay
all taxes, assessments, governmental charges, claims for labor, supplies, rent
and any other obligation which, if unpaid, would become a Lien against any of
its properties except liabilities being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves acceptable
to the Borrower's independent certified public accountants have been established
unless and until any Lien resulting therefrom attaches to any of its property
and becomes enforceable by its creditors.
7.5. Insurance. At all times maintain in force, and pay all
premiums and costs related to, insurance coverages in amounts deemed by the
management of the Borrower to be sufficient in accordance with usual and
customary business practices and any other coverages required under applicable
governmental requirements. The Borrower shall deliver to the Administrative
Agent annually on or before each anniversary date of this Agreement, and at such
other time or times as the Administrative Agent may request (but not more often
than monthly), a certificate of the president or chief financial officer of the
Borrower setting out in such detail as the Administrative Agent may reasonably
require a description of all insurance coverages maintained by the Borrower and
each Consolidated Entity. The Administrative Agent shall have no obligation to
give the Borrower or any Consolidated Entity notice of any notification received
by the Administrative Agent with respect to any insurance policies or take any
steps to protect the Borrower's or any Consolidated Entity's interests under
such policies.
7.6. True Books. Keep true books of record and account in
which full, true and correct entries will be made of all of its dealings and
transactions, and set up on its books such reserves as may be required by GAAP
with respect to doubtful accounts and all taxes, assessments, charges, levies
and claims and with respect to its business in general, and include such
reserves in interim as well as year-end financial statements.
7.7. Right of Inspection. Permit the representatives of any
Lender to visit and inspect any of the properties, corporate books and financial
reports of the Borrower or any Subsidiary and to discuss its affairs, finances
and accounts with its principal officers and independent certified public
accountants, all at reasonable times, at reasonable intervals and with
reasonable prior notice.
54
7.8. Observe all Laws. Conform to and duly observe, and cause
all Contract Providers to conform to and duly observe, in all material respects
all laws, rules and regulations and all other valid requirements of any
regulatory authority with respect to the conduct of its business, including
without limitation Titles XVII and XIX of the Social Security Act, Medicare
Regulations, Medicaid Regulations, and all laws, rules and regulations of
Governmental Authorities pertaining to the licensing of professional and other
health care providers, except where the failure to do so could not reasonably be
likely to have a Material Adverse Effect.
7.9. Governmental Licenses. Obtain and maintain, and use
reasonable effort to cause all Contract Providers to obtain and maintain, all
licenses, permits, certifications and approvals of all applicable Governmental
Authorities as are required for the conduct of its business as currently
conducted and herein contemplated, including without limitation professional
licenses, Medicaid Certifications and Medicare Certifications, except where the
failure to do so could not reasonably be likely to have a Material Adverse
Effect.
7.10. Covenants Extending to Other Persons. Cause each of its
Consolidated Entities to do with respect to itself, its business and its assets,
each of the things required of the Borrower in Sections 7.2 through 7.9, 7.15
and 7.16 inclusive.
7.11. Officer's Knowledge of Default. Upon any Executive
Officer of the Borrower obtaining knowledge of any Default or Event of Default
or any default or event of default under any other obligation of the Borrower or
any Consolidated Entity to any Lender, or any event, development or occurrence
which could reasonably be expected to have a Material Adverse Effect, cause such
Executive Officer or an Authorized Representative to promptly notify the
Administrative Agent of the nature thereof, the period of existence thereof, and
what action the Borrower or such Consolidated Entity proposes to take with
respect thereto. The Administrative Agent shall notify the Lenders of receipt of
such notice.
7.12. Suits or Other Proceedings. Upon any Executive Officer
of the Borrower obtaining knowledge of any litigation or other proceedings being
instituted (i) against the Borrower or any Subsidiary, or any attachment, levy,
execution or other process being instituted against any assets of the Borrower
or any Subsidiary or Controlled Partnership, which if adversely determined could
reasonably be likely to have a Material Adverse Effect or (ii) against the
Borrower, any Subsidiary or any Contract Provider (but only with respect to
services provided to the Borrower or any Consolidated Entity) to suspend, revoke
or terminate any Medicaid Provider Agreement, Medicaid Certification, Medicare
Provider Agreement or Medicare Certification, which suspension, revocation or
termination could reasonably be likely to have a Material Adverse Effect, cause
such Executive Officer or an Authorized Representative to promptly deliver to
the Administrative Agent written notice thereof stating the nature and status of
such litigation, dispute, proceeding, levy, execution or other process.
7.13. Notice of Discharge of Hazardous Material or
Environmental Complaint. Promptly provide to the Administrative Agent true,
accurate and complete copies of any and all notices, complaints, orders,
directives, claims, or citations received by the Borrower or any Consolidated
Entity relating to any of the following which is likely to have a Material
Adverse Effect: (a) violation or alleged violation by the Borrower or any
Consolidated Entity of any applicable Environmental Law; (b) release or
threatened release by the Borrower or any
55
Consolidated Entity, or at any Facility or property owned or leased or operated
by the Borrower or any Consolidated Entity, of any Hazardous Material, except
where occurring legally; or (c) liability or alleged liability of the Borrower
or any Consolidated Entity for the costs of cleaning up, removing, remediating
or responding to a release of Hazardous Materials.
7.14. Environmental Compliance. If the Borrower or any
Consolidated Entity shall receive any letter, notice, complaint, order,
directive, claim or citation from any Governmental Authority alleging that the
Borrower or any Consolidated Entity has violated any Environmental Law or is
liable for the costs of cleaning up, removing, remediating or responding to a
release of Hazardous Materials, within the time period permitted by the
applicable Environmental Law or the Governmental Authority responsible for
enforcing such Environmental Law, remove or remedy, or cause the applicable
Consolidated Entity to remove or remedy, such violation or release or satisfy
such liability unless and only during the period that the applicability of such
Environmental Law, the fact of such violation or liability or what is required
to remove or remedy such violation is being contested by the Borrower or the
applicable Consolidated Entity by appropriate proceedings diligently conducted
and all reserves with respect thereto as may be required under GAAP, if any,
have been made, and no Lien in connection therewith shall have attached to any
property of the Borrower or the applicable Consolidated Entity which shall have
become enforceable against creditors of such Person.
7.15. Continuation of Current Business. Not engage in any
business other than the business now being conducted by the Borrower (including
its Consolidated Entities) and other businesses directly related to such
services.
7.16. Management Contracts. Not enter into any agreement
whereby the management, supervision or control of its business or any Facility
shall be delegated to or placed in any persons other than its governing body and
officers, the Borrower or a Consolidated Entity, except that management of the
Facility owned by Vanderbilt Stallworth Rehabilitation Hospital, L.P. is vested
in part in a Governance Committee and in part in a Subsidiary of the Borrower
pursuant to the applicable limited partnership agreement and a management
agreement.
7.17. Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Subsidiaries, as the case may be.
7.18. New Subsidiaries. Promptly cause any Subsidiary that
shall, after the Closing Date, directly or indirectly guarantee any Indebtedness
of the Borrower (x) to execute and deliver the Guarantee to the Administrative
Agent or (y) to become a party to such Guarantee, should such Guarantee already
be in existence.
56
ARTICLE VIII
Negative Covenants
The Borrower hereby agrees that, so long as the Revolving
Credit Commitments remain in effect, any Letter of Credit remains outstanding or
any Loan or other amount is owing to any Lender or the Administrative Agent
hereunder, unless the Required Lenders shall otherwise consent in writing, the
Borrower will not, nor will it permit any Consolidated Entity to:
8.1. Financial Covenants. (a) Minimum Net Worth. Permit
Consolidated Net Worth to be less than $2,750,000,000 plus (A) 50% of
Consolidated Net Income (if positive and including for purposes of this Section
8.1(a) only any extraordinary gain), on an ongoing basis for each fiscal quarter
beginning with the fiscal quarter ended June 30, 1998, plus (B) the aggregate
amount of all increases, if any, in its capital accounts resulting from the
issuance of Capital Stock or conversion of debt into Capital Stock or other
securities properly classified as equity in accordance with GAAP, or from the
sale or other disposition of treasury shares, from the date of this Agreement
through the date of determination plus (C) without duplication, any addition to
Consolidated Stockholders' Equity resulting from an Acquisition after the
Closing Date which shall be accounted for on a pooling-of-interests basis.
(b) Consolidated EBITDA to Consolidated Interest Expense
Ratio. Permit the ratio of Consolidated EBITDA for any Four-Quarter Period to
Consolidated Interest Expense for such Four-Quarter Period to be less than or
equal to 3.00 to 1.00.
(c) Consolidated Indebtedness to Consolidated Total Capital.
Permit the ratio of Consolidated Indebtedness to Consolidated Total Capital at
any time to equal or exceed 0.60 to 1.00.
(d) Consolidated Indebtedness to Consolidated EBITDA. Permit
the ratio of Consolidated Indebtedness at any date of determination to
Consolidated EBITDA for the Four-Quarter Period of the Borrower most recently
ended on or prior to such date of determination to exceed 3.50 to 1.00.
8.2. Investments and Loans. Purchase or otherwise acquire any
stock, security, obligation or evidence of indebtedness of, make any capital
contribution to, own any equity interest in, or make any loan or advance to, any
other Person; provided, however, that the Borrower and its Consolidated Entities
may (A) continue to hold all stock of and own partnership interests in the
Persons that constitute Consolidated Entities on the Closing Date and Persons
that thereafter become Consolidated Entities as a result of Acquisitions
permitted under Section 8.8; (B) make Permitted Investments; and (C) make other
investments in an aggregate amount while this Agreement is outstanding not
exceeding 15% of Consolidated Total Assets.
8.3. Indebtedness. Permit to exist Indebtedness, howsoever
evidenced, of Subsidiaries and Controlled Partnerships (exclusive of
Indebtedness to the Borrower) in an aggregate amount at any time exceeding the
greater of $70,000,000 or 15% of Consolidated
57
Tangible Net Worth, excluding, however, Indebtedness of Subsidiaries and
Controlled Partnerships existing as of the date hereof and described on Schedule
8.3.
8.4. Disposition of Assets. Sell, lease or otherwise dispose
of assets in excess of 15% of Consolidated Total Assets as at the Closing Date
plus an amount equal to 15% of assets acquired following the Closing Date.
8.5. Consolidation or Merger. Merge or consolidate with
another Person unless (i) in the case of a merger or consolidation of the
Borrower, the Borrower is the continuing or surviving entity, (ii) in the case
of a merger or consolidation involving a Consolidated Entity, the continuing or
surviving entity is majority-owned by the Borrower (with such majority ownership
constituting a controlling interest), and (iii) before and after giving effect
to the proposed merger or consolidation, no Default or Event of Default shall
exist.
8.6. Liens. Incur, create, assume or permit to exist any Lien
upon any of its accounts receivable, contract rights, chattel paper, inventory,
equipment, instruments, general intangibles or other personal or real property
of any character, whether now owned or hereafter acquired, other than (i) Liens
that constitute Permitted Encumbrances, and (ii) Liens on assets which at no
time have a book value of greater than 5% of Consolidated Total Assets.
8.7. Dividends and Distributions. Permit any Consolidated
Entity to be or become subject to any restrictions on the ability of such
Consolidated Entity to pay dividends or to make partnership distributions other
than as required by this Agreement or restrictions imposed by applicable law.
8.8. Acquisitions and Capital Expenditures. In any Fiscal
Year, (a) make an Acquisition or enter into any agreement to make an Acquisition
unless (i) (A) the Person or Facility to be acquired is in substantially the
same line of business presently engaged in by the Borrower or its Consolidated
Entities, (B) if the Cost of Acquisition exceeds $150,000,000 the Borrower shall
have furnished to the Administrative Agent (1) pro forma historical financial
statements as of the end of the most recently completed Fiscal Year of the
Borrower and most recent interim fiscal quarter, if applicable, giving effect to
such Acquisition and (2) a Compliance Certificate prepared on an historical pro
forma basis giving effect to such Acquisition, which certificate shall
demonstrate that no Default or Event of Default would exist immediately after
giving effect thereto and (C) the entire consideration paid for such Acquisition
is common stock of the Borrower or (ii) (A) the Person or Facility to be
acquired is in substantially the same line of business presently engaged in by
the Borrower or its Consolidated Entities, (B) if the Cost of Acquisition
exceeds $150,000,000 the Borrower shall have furnished to the Administrative
Agent (1) pro forma historical financial statements as of the end of the most
recently completed Fiscal Year of the Borrower and most recent interim fiscal
quarter, if applicable, giving effect to such Acquisition and (2) a Compliance
Certificate prepared on an historical pro forma basis giving effect to such
Acquisition, which certificate shall demonstrate that no Default or Event of
Default would exist immediately after giving effect thereto and (C) (1) the
aggregate amount of consideration (other than consideration in the form of
common stock of the Borrower) paid in such Acquisition and all other
Acquisitions consummated in such Fiscal Year pursuant to this clause (ii), plus
(2) the aggregate amount expended by the Borrower and its Subsidiaries for
Capital Expenditures during such Fiscal Year, does not exceed the
58
Acquisition/CapEx Basket Amount for such Fiscal Year; or (b) make or commit to
make any Capital Expenditure unless (i) the aggregate amount expended by the
Borrower and its Subsidiaries for Capital Expenditures during such Fiscal Year,
plus (ii) the aggregate amount of consideration (other than consideration in the
form of Common Stock) paid by the Borrower and its Subsidiaries during such
Fiscal Year pursuant to the foregoing clause (a)(ii) in respect of Acquisitions,
does not exceed the Acquisition/CapEx Basket Amount for such Fiscal Year.
8.9. Restricted Payments; Other Payments. (a) Make any
Restricted Payment or apply or set apart any of their assets therefor or agree
to do any of the foregoing; provided, however, the Borrower may make Restricted
Payments in an amount not exceeding $50,000,000 in any Fiscal Year (on a
non-cumulative basis, with the effect that amounts not paid in any Fiscal Year
may not be carried over for payment in a subsequent period) if immediately prior
and immediately after giving effect thereto no Default or Event of Default shall
exist or occur and be continuing.
(b) (i) amend, modify or otherwise change, or consent or agree
to any amendment, modification, waiver or other change to, any of the terms of
any Subordinated Debt (other than any such amendment, modification, waiver or
other change which (A) would extend the maturity or reduce the amount of any
payment of principal thereof, reduce the rate or extend the date for payment of
interest thereon or relax any covenant or other restriction applicable to the
Borrower or any of its Subsidiaries and (B) does not involve the payment of a
consent fee), or (ii) designate any Indebtedness (other than the Senior Debt) as
"Designated Senior Indebtedness" for the purposes of any instrument governing
any Subordinated Debt, including, without limitation, the Indentures governing
the New Senior Subordinated Notes and the Convertible Subordinated Debentures.
8.10. Compliance with ERISA. With respect to any Pension Plan,
Employee Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event which would
result in a liability on the part of the Borrower or any ERISA
Affiliate to the PBGC which liability would have a Material Adverse
Effect; or
(b) permit the present value of all benefit liabilities under
all Pension Plans to exceed the current value of the assets of such
Pension Plans allocable to such benefit liabilities; or
(c) permit any accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code) with respect to any
Pension Plan, whether or not waived; or
(d) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto; or
(e) engage, or permit any Subsidiary or any ERISA Affiliate to
engage, in any prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code for
59
which a civil penalty pursuant to Section 502(I) of ERISA or a tax
pursuant to Section 4975 of the Code may be imposed; or
(f) permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or establish or amend any
Employee Benefit Plan which establishment or amendment could result in
liability to the Borrower or any ERISA Affiliate or increase the
obligation of the Borrower or any ERISA Affiliate to a Multiemployer
Plan which liability or increase, individually or together with all
similar liabilities and increases, is in excess of $5,000,000; or
(g) fail, or permit any Subsidiary or any ERISA Affiliate to
fail, to establish, maintain and operate each Employee Benefit Plan in
compliance in all material respects with the provisions of ERISA, the
Code and all other applicable laws and the regulations and
interpretations thereof.
8.11. Fiscal Year. Change its Fiscal Year (other than a change
to conform the fiscal year of a Consolidated Entity to that of the Borrower).
8.12. Dissolution, etc. Wind up, liquidate or dissolve
(voluntarily or involuntarily) or commence or suffer any proceedings seeking any
such winding up, liquidation or dissolution, except in connection with a merger
or consolidation permitted pursuant to Section 8.5 or where the liquidation or
dissolution of a Consolidated Entity occurs in the ordinary course of business
and does not have a Material Adverse Effect.
8.13. Transactions with Affiliates. Other than transactions
permitted under Sections 8.2 and 8.5, enter into any transaction after the
Closing Date, including, without limitation, the purchase, sale, lease or
exchange of property, real or personal, or the rendering of any service, with
any Affiliate of the Borrower, except (a) that such Persons may render services
to the Borrower for compensation at the same rates generally paid by Persons
engaged in the same or similar businesses for the same or similar services, (b)
that the Borrower may render services to such Persons for compensation at the
same rates generally charged by the Borrower and (c) in either case in the
ordinary course of business and pursuant to the reasonable requirements of the
Borrower's business consistent with past practice of the Borrower and upon fair
and reasonable terms no less favorable to the Borrower than would be obtained in
a comparable arm's-length transaction with a Person not an Affiliate.
ARTICLE IX
Events of Default and Acceleration
9.1. Events of Default. If any one or more of the following
events (herein called "Events of Default") shall occur for any reason whatsoever
(and whether such occurrence shall be voluntary or involuntary or come about or
be effected by operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or regulation of any
Governmental Authority), that is to say:
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(a) the Borrower shall fail to pay (i) when due, any principal
payable under the terms hereof or any Reimbursement Obligation or (ii)
not later than five Business Days of the date when due, any interest or
fees payable under the terms hereof or any other amount payable under
this Agreement or any other of the other Obligations or any other
amount owed to the Administrative Agent or any of the Lenders under or
in connection with the Loan Documents; or
(b) the Borrower or any Material Group shall default in the
performance or observance of any other provision of this Agreement
(other than the provisions of Article VII and Article VIII) , except as
covered by clause (a) above, and shall not cure such default within
thirty days after the first to occur of (i) the date the Administrative
Agent or any Lender gives written or telephonic notice of such default
to the Borrower or (ii) the date the Borrower otherwise has notice
thereof; or
(c) the Borrower or any Material Group shall default in the
observance or performance of any provision in Article VII or Article
VIII; or
(d) the Administrative Agent shall reasonably determine that
any statement, certification, representation or warranty contained
herein, or in any of the other Loan Documents or in any report,
financial statement, certificate or other instrument delivered to the
Administrative Agent or any Lender by or on behalf of the Borrower or
any Consolidated Entity, was misleading or untrue in any material
respect at the time it was made or deemed made; or
(e) default shall be made (i) in the payment of any
Indebtedness exceeding $5,000,000 (other than the Obligations) of the
Borrower or any Consolidated Entity when due or (ii) in the
performance, observance or fulfillment of any term or covenant
contained in any agreement or instrument under or pursuant to which any
such Indebtedness may have been issued, created, assumed, guaranteed or
secured by Borrower or any Consolidated Entity, if the effect of such
default in the performance, observance or fulfillment is to accelerate
the maturity of such Indebtedness or to permit the holder thereof to
cause such Indebtedness to become due prior to its stated maturity, and
the amount of the Indebtedness involved exceeds $5,000,000, and such
default shall not be cured within 10 days after the occurrence of such
default; or
(f) the Borrower or any Material Group shall fail to pay or
admit in writing its inability to pay its or their debts generally as
they come due, or a receiver, trustee, liquidator or other custodian
shall be appointed for the Borrower or any Material Group or for any of
the property of the Borrower or any Material Group or a petition in
bankruptcy, or under any insolvency law, shall be filed by or against
the Borrower or any Material Group or the Borrower or any Material
Group shall apply for the benefit of, or take advantage of, any law for
relief of debtors, or enter into an arrangement or composition with, or
make an assignment for the benefit of, creditors; or
(g) final judgment for the payment of money in excess of an
aggregate of $500,000 shall be rendered against the Borrower or any
Material Group, and the same
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shall remain undischarged for a period of 30 days during which
execution shall not be effectively stayed; or
(h) an event of default, as therein defined, shall occur under
any other Loan Document; or
(i) this Agreement, the Loans, the LC Account Agreement, or
any part thereof, shall be deemed unenforceable by a court of competent
jurisdiction or shall no longer be effective; or
(j) the Borrower or any Consolidated Entity shall, other than
in the ordinary course of business (as determined by past practices),
suspend all or any part of its operations material to the conduct of
the business of the Borrower and its Consolidated Entities, taken as a
whole, for a period of more than 60 days;
(k) the Borrower or any Consolidated Entity shall breach any
of the material terms or conditions of any agreement under which any
Rate Hedging Obligations are created and such breach shall continue
beyond any grace period, if any, relating thereto pursuant to the terms
of such agreement, or the Borrower or any Consolidated Entity shall
disaffirm or seek to disaffirm any such agreement or any of its
obligations thereunder;
(l) there shall occur (i) any cancellation, revocation,
suspension or termination of any Medicare Certification, Medicare
Provider Agreement, Medicaid Certification or Medicaid Provider
Agreement affecting the Borrower, any Subsidiary or any Contract
Provider, or (ii) the loss of any other permits, licenses,
authorizations, certifications or approvals from any federal, state or
local Governmental Authority or termination of any contract with any
such authority, in either case which cancellation, revocation,
suspension, termination or loss (X) in the case of any suspension or
temporary loss only, continues for a period greater than 60 days and
(Y) results in the suspension or termination of operations of the
Borrower or any Subsidiary or in the failure of the Borrower or any
Subsidiaries or any Contract Provider to be eligible to participate in
Medicare or Medicaid programs or to accept assignments of rights to
reimbursement under Medicaid Regulations or Medicare Regulations, if
and only if such Person, in the ordinary course of business,
participates in the Medicare or Medicare programs or accepts
assignments of rights to reimbursement thereunder; provided that any
such events described in this Section 9.1(1) shall constitute an Event
of Default only if such event shall result either singly or in the
aggregate in the termination, cancellation, suspension or material
impairment of operations or rights to reimbursement which produce 5% or
more of the Borrower's gross revenues (on an annualized basis); or
(m) there shall occur a Change of Control;
then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall then be continuing and shall have not been
waived,
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(A) either or both of the following actions may be taken: (i)
the Administrative Agent, with the consent of the Required Lenders,
may, and at the direction of the Required Lenders shall, declare any
obligation of the Lenders and the Issuing Bank to make further Loans or
to issue additional Letters of Credit terminated, whereupon the
obligation of each Lender to make further Loans and of the Issuing Bank
to issue additional Letters of Credit hereunder shall terminate
immediately, and (ii) the Administrative Agent shall at the direction
of the Required Lenders, at their option, declare by notice to the
Borrower any or all of the Obligations to be immediately due and
payable, and the same, including all interest accrued thereon and all
other obligations of the Borrower to the Administrative Agent and the
Lenders, shall forthwith become immediately due and payable without
presentment, demand, protest, notice or other formality of any kind,
all of which are hereby expressly waived, anything contained herein or
in any instrument evidencing the Obligations to the contrary
notwithstanding; provided, however, that notwithstanding the above, if
there shall occur an Event of Default under clause (f) above with
respect to the Borrower, then the obligation of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder
shall automatically terminate and any and all of the Obligations shall
be immediately due and payable without the necessity of any action by
the Administrative Agent or the Required Lenders or notice to the
Administrative Agent or the Lenders; and
(B) the Borrower shall, upon demand of the Administrative
Agent or the Required Lenders, deposit cash with the Administrative
Agent in an amount equal to the aggregate amount remaining undrawn
under all outstanding Letters of Credit, as collateral security for the
repayment of any future drawings or payments under such Letters of
Credit, and such amounts shall be held by the Administrative Agent
pursuant to the terms of the LC Account Agreement; and
(C) the Administrative Agent and each of the Lenders shall
have all of the rights and remedies available under the Loan Documents
or under any applicable law.
9.2. Administrative Agent to Act. In case any one or more
Events of Default shall occur and be continuing and not have been waived, the
Administrative Agent may, and at the direction of the Required Lenders shall,
proceed to protect and enforce their rights or remedies either by suit in equity
or by action at law, or both, whether for the specific performance of any
covenant, agreement or other provision contained herein or in any other Loan
Document, or to enforce the payment of the Obligations or any other legal or
equitable right or remedy.
9.3. Cumulative Rights. No right or remedy herein conferred
upon the Lenders or the Administrative Agent is intended to be exclusive of any
other rights or remedies contained herein or in any other Loan Document, and
every such right or remedy shall be cumulative and shall be in addition to every
other such right or remedy contained herein and therein or now or hereafter
existing at law or in equity or by statute, or otherwise.
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9.4. No Waiver. No course of dealing between the Borrower and
any Lender or the Administrative Agent or any failure or delay on the part of
any Lender or the Administrative Agent in exercising any rights or remedies
under any Loan Document or otherwise available to it shall operate as a waiver
of any rights or remedies and no single or partial exercise of any rights or
remedies shall operate as a waiver or preclude the exercise of any other rights
or remedies hereunder or of the same right or remedy on a future occasion.
9.5. Allocation of Proceeds. If an Event of Default has
occurred and not been waived, and the maturity of the Loans has been accelerated
pursuant to this Article IX, all payments received by the Administrative Agent
hereunder, in respect of any principal of or interest on the Obligations or any
other amounts payable by the Borrower hereunder, shall be applied by the
Administrative Agent in the following order:
(i) amounts due to the Lenders pursuant to Section 2.2(d),
Section 2.10, Section 3.3 or Section 11.6;
(ii) amounts due to the Administrative Agent and the Issuing
Bank pursuant to Section 10.8, Section 3.3 and Section 3.4;
(iii) payments of interest, to be applied pro rata based on
the proportion which the principal amount of outstanding Loans and
Reimbursement Obligations of each Lender bears to the total of all
outstanding Loans and Reimbursement Obligations;
(iv) payments of principal, to be applied pro rata based on
the proportion which the principal amount of outstanding Loans and
Reimbursement Obligations of each Lender bears to the total of all
outstanding Loans and Reimbursement Obligations;
(v) payment of cash amounts to the Administrative Agent
pursuant to Section 9.1(B);
(vi) payments of all other amounts due under this Agreement,
if any, to be applied in accordance with each Lender's pro rata share
of all such other amounts due to the Lenders; and
(vii) any surplus remaining after application as provided for
herein, to the Borrower or otherwise as may be required by applicable
law.
ARTICLE X
The Administrative Agent
10.1. Appointment, Powers, and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its
Administrative Agent under this Agreement and the other Loan Documents with such
powers and discretion as are specifically delegated to the Administrative Agent
by the terms of this Agreement and the other Loan Documents, together with such
other powers as are reasonably incidental thereto. The
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Administrative Agent (which term as used in this sentence and in Section 10.5
and the first sentence of Section 10.6 hereof shall include its affiliates and
its own and its affiliates' officers, directors, employees, and agents): (a)
shall not have any duties or responsibilities except those expressly set forth
in this Agreement and shall not be a trustee or fiduciary for any Lender; (b)
shall not be responsible to the Lenders for any recital, statement,
representation, or warranty (whether written or oral) made in or in connection
with any Loan Document or any certificate or other document referred to or
provided for in, or received by any of them under, any Loan Document, or for the
value, validity, effectiveness, genuineness, enforceability, or sufficiency of
any Loan Document, or any other document referred to or provided for therein or
for any failure by any Person to perform any of its obligations thereunder; (c)
shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any
Person or the satisfaction of any condition or to inspect the property
(including the books and records) of any Person; (d) shall not be required to
initiate or conduct any litigation or collection proceedings under any Loan
Document; and (e) shall not be responsible for any action taken or omitted to be
taken by it under or in connection with any Loan Document, except for its own
negligence or willful misconduct. The Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care. The
Joint Lead Arrangers, the Documentation Agent and Syndication Agent, in such
respective capacities, shall have no responsibilities, and shall incur no
liabilities under this Agreement.
10.2. Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely upon any certification, notice, instrument,
writing, or other communication (including, without limitation, any thereof by
telephone or telefacsimile) believed by it to be genuine and correct and to have
been signed, sent or made by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel, independent accountants, and other
experts selected by the Administrative Agent. The Administrative Agent may deem
and treat the payee of any Note as the holder thereof for all purposes hereof
unless and until the Administrative Agent receives and accepts an Assignment and
Acceptance executed in accordance with Section 11.1 hereof. As to any matters
not expressly provided for by this Agreement, the Administrative Agent shall not
be required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding on all of the Lenders; provided, however, that the
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is contrary to any Loan
Document or applicable law or unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking any such action.
10.3. Defaults. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of a Default or Event of Default
unless the Administrative Agent has received written notice from a Lender or the
Borrower specifying such Default or Event of Default and stating that such
notice is a "Notice of Default". In the event that the Administrative Agent
receives such a notice of the occurrence of a Default or Event of Default, the
Administrative Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall (subject to Section 10.2 hereof) take such action
with respect to such Default or Event of Default as shall reasonably be directed
by the Required Lenders, provided that, unless
65
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Lenders.
10.4. Rights as Lender. With respect to its Revolving Credit
Commitment and the Loans made by it, UBS AG, Stamford Branch (and any successor
acting as Administrative Agent) in its capacity as a Lender hereunder shall have
the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not acting as the Administrative Agent, and the term
"Lender" or "Lenders" shall, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. UBS AG, Stamford Branch (and
any successor acting as Administrative Agent) and its affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to,
make investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with the Borrower or any of its Subsidiaries
or affiliates as if it were not acting as Administrative Agent, and UBS AG,
Stamford Branch (and any successor acting as Administrative Agent) and its
affiliates may accept fees and other consideration from the Borrower or any of
its Subsidiaries or affiliates for services in connection with this Agreement or
otherwise without having to account for the same to the Lenders.
10.5. Indemnification. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed under Section 11.12 hereof,
but without limiting the obligations of the Borrower under such Section) ratably
in accordance with their respective Revolving Credit Commitments, for any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, reasonable costs and expenses (including attorneys' fees and
disbursements), or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Administrative Agent (including
by any Lender) in any way relating to or arising out of any Loan Document or the
transactions contemplated thereby (including, without limitation, the
Refinancing or any transactions connected therewith) or any action taken or
omitted by the Administrative Agent under any Loan Document; provided that no
Lender shall be liable for any of the foregoing to the extent they arise (as
determined by a final judgment of a court of competent jurisdiction) from the
gross negligence or willful misconduct of the Person to be indemnified. Without
limitation of the foregoing, each Lender agrees to reimburse the Administrative
Agent promptly upon demand for its ratable share of any costs or expenses
payable by the Borrower under Section 11.6, to the extent that the
Administrative Agent is not promptly reimbursed for such costs and expenses by
the Borrower. The agreements contained in this Section shall survive payment in
full of the Loans and all other amounts payable under this Agreement.
10.6. Non-Reliance on Administrative Agent and Other Lenders.
Each Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Borrower and its Subsidiaries and decision to enter into this Agreement and that
it will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under the Loan Documents. Except for notices,
reports and other documents and information expressly
66
required to be furnished to the Lenders by the Administrative Agent hereunder,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the affairs,
financial condition, or business of the Borrower or any of its Subsidiaries or
affiliates that may come into the possession of the Administrative Agent or any
of its affiliates.
10.7. Resignation of Administrative Agent. The Administrative
Agent may resign at any time by giving notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Administrative Agent subject to the approval of the
Borrower so long as no Default or Event of Default shall have occurred and be
continuing, such approval not to be unreasonably withheld. If no successor
Administrative Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be a commercial bank organized under the laws
of the United States of America having combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor, such successor shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges, and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article X shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.
10.8. Fees. The Borrower agrees to pay to the Administrative
Agent, for its individual account, an annual Administrative Agent's fee as from
time to time agreed to by the Borrower and Administrative Agent in writing.
ARTICLE XI
Miscellaneous
11.1. Assignments and Participations. (a) Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Loans and its Revolving Credit Commitment); provided, however,
that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment by a Lender to an
affiliate of such Lender or a Controlled Investment Affiliate of such
Lender, or to another Lender, or an assignment of all of a Lender's
rights and obligations under this Agreement, any such partial
assignment shall be in an amount at least equal to $4,000,000 or an
integral multiple of $1,000,000 in excess thereof;
67
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under
this Agreement; and
(iv) the parties to such assignment shall execute and deliver
to the Administrative Agent for its acceptance an Assignment and
Acceptance together with any Note subject to such assignment and a
processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section the assignor, the
Administrative Agent and the Borrower shall make appropriate arrangements so
that, if requested, new Notes are issued to the assignor and the assignee. If
the assignee is not incorporated under the laws of the United States of America
or a state thereof, it shall deliver to the Borrower and the Administrative
Agent certification as to exemption from deduction or withholding of Taxes in
accordance with Section 4.6.
(b) The Administrative Agent shall maintain at its address
referred to in Section 11.2 (or such other address as the Administrative Agent
may specify thereunder) a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and addresses
of the Lenders and the Revolving Credit Commitment of, and principal amount of
the Loans owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender (with respect to entries relating to
such Lender) at any reasonable time and from time to time upon reasonable prior
notice.
(c) Upon its receipt of an Assignment and Acceptance executed
by the parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form of
Exhibit B hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(d) Each Lender may sell participations to one or more Persons
in all or a portion of its rights, obligations or rights and obligations under
this Agreement (including all or a portion of its Revolving Credit Commitment or
its Loans); provided, however, that (i) any such participation in a Revolving
Credit Commitment, but not its Loans, shall be in an amount at least equal to
$4,000,000 or an integral multiple of $1,000,000 in excess thereof, (ii) such
Lender's obligations under this Agreement shall remain unchanged, (iii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iv) the participant shall be entitled to the
benefit of the yield protection provisions contained in Article IV and the right
of set-off contained in Section 11.4, and (v) the Borrower shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender shall retain the
sole right to enforce the
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obligations of the Borrower relating to its Loans and to approve any amendment,
modification, or waiver of any provision of this Agreement (other than
amendments, modifications, or waivers decreasing the amount of principal of or
the rate at which interest is payable on such Loans, extending any scheduled
principal payment date or date fixed for the payment of interest on such Loans,
or extending its Revolving Credit Commitment).
(e) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 11.1 concerning assignments of
Loans relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including any pledge or
assignment by a Lender of any Loan to any Federal Reserve Bank in accordance
with applicable law.
(f) Any Lender may furnish any information concerning the
Borrower or any of its Subsidiaries in the possession of such Lender from time
to time to assignees and participants (including prospective assignees and
participants); provided, however that such Lender shall (a) take reasonable and
customary measures to safeguard the confidentiality of non-public information
and (b) advise such assignees or participants of the confidentiality of such
non-public information.
11.2. Notices. Any notice shall be conclusively deemed to have
been received by any party hereto and be effective (i) on the day on which
delivered (including hand delivery by commercial courier service) to such party
(against receipt therefor), (ii) on the date of receipt at such address,
telefacsimile number or telex number as may from time to time be specified by
such party in written notice to the other parties hereto or otherwise received),
in the case of notice by telegram, telefacsimile or telex, respectively (where
the receipt of such message is verified by return), or (iii) on the fifth
Business Day after the day on which mailed, if sent prepaid by certified or
registered mail, return receipt requested, in each case delivered, transmitted
or mailed, as the case may be, to the address, telex number or telefacsimile
number, as appropriate, set forth below or such other address or number as such
party shall specify by notice hereunder:
(a) if to the Borrower:
Malcolm E. McVay, Senior Vice President and
Treasurer
HEALTHSOUTH Corporation
One HealthSouth Parkway
Birmingham, Alabama 35243
Tel: 205-969-6140
Fax: 205-969-4620
Email: tadd.mcvay@healthsouth.com
with a copy to:
William W. Horton
HEALTHSOUTH Corporation
One HealthSouth Parkway
69
Birmingham, Alabama 35243
Tel: 205-969-4977
Fax: 205-969-4730
Email: bill.horton@healthsouth.com
(b) if to the Administrative Agent:
UBS AG STAMFORD BRANCH
677 Washington Boulevard
Stamford, Connecticut 06901
Attention: Jennifer Poccia
Tel: 203-719-3834
Fax: 203-719-3888
Email: jennifer.poccia@ubsw.com
Reference: HealthSouth
(c) if to the Lenders:
At the addresses set forth on each Lender's Addendum
and on the signature page of each Assignment and
Acceptance.
11.3. No Waiver. No failure or delay on the part of the
Administrative Agent, any Lender or the Borrower in the exercise of any right,
power or privilege hereunder shall operate as a waiver of any such right, power
or privilege nor shall any such failure or delay preclude any other or further
exercise thereof. The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law.
11.4. Rights of Setoff; Adjustments. (a) The Borrower agrees
that the Administrative Agent and each Lender shall have a Lien for all the
Obligations of the Borrower upon all deposits or deposit accounts of any kind,
or any interest in any deposits or deposit accounts thereof, now or hereafter
pledged, mortgaged, transferred or assigned to the Administrative Agent or such
Lender or otherwise in the possession or control of the Administrative Agent or
such Lender (other than for safekeeping) for any purpose for the account or
benefit of the Borrower and including any balance of any deposit account or of
any credit of the Borrower with the Administrative Agent or such Lender, whether
now existing or hereafter established and hereby authorizes the Administrative
Agent and each Lender at any time or times from and after the occurrence of a
Default or an Event of Default with or without prior notice to set off against
and apply such balances or any part thereof to such of the Obligations of the
Borrower to the Lenders then past due and in such amounts as they may elect, and
whether or not the collateral or the responsibility of other Person primarily,
secondarily or otherwise liable may be deemed adequate.
(b) If any Lender (a "benefitted Lender") shall at any time
receive any payment of all or part of the Loans owing to it, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, or otherwise), in a greater
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proportion than any such payment to or collateral received by any other Lender,
if any, in respect of such other Lender's Loans owing to it, or interest
thereon, such benefited Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Loans owing
to it, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefited 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
benefited Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Borrower agrees that any Lender so purchasing a participation from a Lender
pursuant to this Section 11.4 may, to the fullest extent permitted by law,
exercise all of its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Person were the direct
creditor of the Borrower in the amount of such participation.
11.5. Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the issuance of the Letters of Credit and the execution and delivery to the
Lenders of this Agreement and shall continue in full force and effect so long as
any of Obligations remain outstanding or any Lender has any commitment hereunder
or the Borrower has continuing obligations hereunder unless otherwise provided
herein. Whenever in this Agreement any of the parties hereto is referred to,
such reference shall be deemed to include the successors and permitted assigns
of such party and all covenants, provisions and agreements by or on behalf of
the Borrower which are contained in the Loan Documents shall inure to the
benefit of the successors and permitted assigns of the Lenders or any of them.
11.6. Expenses. The Borrower agrees (a) to pay or reimburse
the Administrative Agent for all its reasonable and customary out-of-pocket
costs and expenses incurred in connection with the preparation, negotiation and
execution of, and any amendment, supplement or modification to, this Agreement
or any of the other Loan Documents, and the consummation of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to the Administrative Agent, (b) to pay or
reimburse the Administrative Agent and each Lender for all their reasonable
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, including without limitation, the reasonable
fees and disbursements of their counsel, (c) to pay, indemnify and hold harmless
the Administrative Agent and each Lender from any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any failure
of Borrower to pay or delay of Borrower in paying, documentary, stamp, excise,
withholding and other similar taxes, if any, which may be payable or determined
to be payable in connection with the execution and delivery of, or consummation
of any amendment, supplement or modification of, or any waiver or consent under
or in respect of, this Agreement, and (d) from and after the occurrence of any
Event of Default to pay, and indemnify and hold harmless the Administrative
Agent and each Lender from and against, any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement or in any respect relating to the transactions contemplated hereby or
thereby (all the foregoing, collectively, the "indemnified liabilities");
provided, however, that the Borrower shall have no obligation hereunder with
respect to indemnified
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liabilities arising from (i) the willful misconduct or gross negligence of the
party seeking indemnification, as determined by a final judgment of a court of
competent jurisdiction (ii) legal proceedings commenced against the
Administrative Agent or any Lender by any security holder or creditor thereof
arising out of and based upon rights afforded any such security holder or
creditor solely in its capacity as such, (iii) any taxes imposed upon the
Administrative Agent or any Lender other than the documentary, stamp, excise,
withholding and similar taxes described in clause (c) above or any tax resulting
from any change described in Section 4.1, which tax would be payable to Lenders
by Borrower pursuant to Article IV, (iv) taxes imposed as a result of a transfer
or assignment of any Loan or Revolving Credit Commitment, participation or
assignment of a portion of rights therein, (v) any taxes imposed upon any
assignee of any Loan or Revolving Credit Commitment, or (vi) by reason of the
failure of the Administrative Agent or any Lender to perform its or their
obligations under this Agreement. The agreements in this subsection shall
survive the Revolving Credit Termination Date, the Facility Extension Loan
Termination Date, if applicable, and the repayment of the Loans.
11.7. Amendments and Waivers. Any provision of this Agreement
or any other Loan Document may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the Required
Lenders (and, if Article X or the rights or duties of the Administrative Agent
are affected thereby, by the Administrative Agent); provided that no such
amendment or waiver shall, unless signed by all the Lenders, (i) increase the
Revolving Credit Commitments or the Letter of Credit Commitment of the Lenders,
(ii) reduce the principal of or rate of interest on any Loan or any fees or
other amounts payable hereunder, (iii) postpone any date fixed for the payment
of any scheduled installment of principal of or interest on any Loan or any fees
or other amounts payable hereunder or for termination of any Revolving Credit
Commitment, (iv) change the percentage of the Revolving Credit Commitments or of
the unpaid principal amount of the Loans, or the percentage of Lenders that
constitute Required Lenders or (v) amend the definition of "Required Lenders" or
amend Section 11.15.
11.8. Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, and it shall not be necessary in making proof of this
Agreement to produce or account for more than one such fully-executed
counterpart.
11.9. Waivers by Borrower. IN ANY LITIGATION IN ANY COURT WITH
RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT, THE LOANS, ANY
OF THE OTHER LOAN DOCUMENTS, THE OBLIGATIONS, OR ANY INSTRUMENT OR DOCUMENT
DELIVERED PURSUANT TO THIS AGREEMENT, OR THE VALIDITY, PROTECTION,
INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF, OR ANY OTHER CLAIM OR DISPUTE
HOWSOEVER ARISING BETWEEN THE BORROWER AND THE LENDERS OR THE ADMINISTRATIVE
AGENT, EACH PARTY TO THIS AGREEMENT HEREBY WAIVES, TO THE EXTENT PERMITTED BY
LAW, TRIAL BY JURY IN CONNECTION WITH ANY SUCH LITIGATION.
11.10. Termination. The termination of this Agreement shall
not affect any rights of the Borrower, the Lenders or the Administrative Agent
or any obligation of the Borrower, the Lenders or the Administrative Agent,
arising prior to the effective date of such termination, and the provisions
hereof shall continue to be fully operative until all transactions entered into
or rights created or obligations incurred prior to such termination have been
fully disposed of,
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concluded or liquidated and the Obligations arising prior to or after such
termination have been irrevocably paid in full. The rights granted to the
Administrative Agent for the benefit of the Lenders hereunder and under the
other Loan Documents shall continue in full force and effect, notwithstanding
the termination of this Agreement, until all of the Obligations have been paid
in full after the termination hereof or the Borrower has furnished the Lenders
and the Administrative Agent with an indemnification satisfactory to the
Administrative Agent and each Lender with respect thereto. All representations,
warranties, covenants, waivers and agreements contained herein shall survive
termination hereof until payment in full of the Obligations unless otherwise
provided herein. Notwithstanding the foregoing, if after receipt of any payment
of all or any part of the Obligations, any Lender is for any reason compelled to
surrender such payment to any Person because such payment is determined to be
void or voidable as a preference, impermissible setoff, a diversion of trust
funds or for any other reason, this Agreement shall continue in full force and
the Borrower shall be liable to, and shall indemnify and hold such Lender
harmless for, the amount of such payment surrendered until such Lender shall
have been finally and irrevocably paid in full. The provisions of the foregoing
sentence shall be and remain effective notwithstanding any contrary action which
may have been taken by the Lenders in reliance upon such payment, and any such
contrary action so taken shall be without prejudice to the Lenders' rights under
this Agreement and shall be deemed to have been conditioned upon such payment
having become final and irrevocable.
11.11. Governing Law. (a) THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States for
the Southern District of New York, and appellate courts from any
thereof;
(ii) 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;
(iii) agrees that service of process in any such action or
proceeding may be efected 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 11.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto; and
(iv) 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 sue in any other jurisdiction.
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11.12. Indemnification. In consideration of the execution and
delivery of this Agreement by the Administrative Agent and each Lender and the
extension of the Revolving Credit Commitments, the Borrower hereby indemnifies,
exonerates and holds free and harmless the Administrative Agent and each Lender
and each of their respective officers, directors, employees, affiliates and
agents (collectively, the "Indemnified Parties") from and against any and all
actions, causes of action, claims, suits, losses, costs, liabilities and
damages, and expenses incurred in connection therewith (irrespective of whether
any such Indemnified Party is a party to the action for which indemnification
hereunder is sought), including reasonable attorneys' fees and disbursements
(collectively, the "Indemnified Liabilities"), incurred by the Indemnified
Parties or any of them as a result of, or arising out of, or relating to, any of
the following:
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan or
supported by any Letter of Credit;
(b) the entering into and performance of this Agreement and
any other Loan Document by any
of the Indemnified Parties;
(c) provided Lenders have no ownership interest in real
property of Borrower, any investigation, litigation or proceeding
related to any environmental cleanup, audit, compliance or other matter
relating to the protection of the environment or the release by the
Borrower or any of its Subsidiaries or Controlled Partnerships of any
hazardous waste material; or
(d) provided Lenders have no ownership interest in real
property of Borrower, the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releases from
any real property owned or operated by the Borrower or any Subsidiary
or Controlled Partnership of any hazardous waste material (including
any losses, liabilities, damages, injuries, costs, expenses or claims
asserted or arising under any environmental laws), regardless of
whether caused by, or within the control of, the Borrower or such
Subsidiary or Controlled Partnerships,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or willful misconduct as determined by a final judgment of a court of
competent jurisdiction, and if and to the extent that the foregoing undertaking
may be unenforceable for any reason, the Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The agreements in this
Section 11.12 shall survive the Revolving Credit Termination Date, the Facility
Extension Loan Termination Date, if applicable, and the repayment of the Loans.
11.13. Agreement Controls. In the event that any term of any
of the Loan Documents other than this Agreement conflicts with any term of this
Agreement, the terms and provisions of this Agreement shall control.
11.14. Integration. This Agreement and the other Loan
Documents represent the final agreement between the parties as to the subject
matter hereof or thereof and may not be
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contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties. There are no oral agreements between the parties.
11.15. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that the Borrower may not assign or
transfer its rights or obligations hereunder without the prior written consent
of the Administrative Agent and all Lenders. The Administrative Agent and the
Lenders may assign or transfer their interest hereunder but only as provided
herein.
11.16. Severability. If any provision of this Agreement or the
other Loan Documents shall be determined to be illegal or invalid as to one or
more of the parties hereto, then such provision shall remain in effect with
respect to all parties, if any, as to whom such provision is neither illegal nor
invalid, and in any event all other provisions hereof shall remain effective and
binding on the parties hereto.
11.17. Lender Addenda. Each initial Lender shall become a
party to this Agreement by delivering to the Administrative Agent a Lender
Addendum duly executed by such Lender, the Borrower and the Administrative
Agent.
11.18. Designated Senior Indebtedness. For purposes of the
Convertible Subordinated Debentures and the New Senior Subordinated Notes, the
Obligations shall be designated "Designated Senior Indebtedness".
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IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed and delivered in New York, New York by their
proper and duly authorized officers as of the day and year first written above.
HEALTHSOUTH CORPORATION
By: /s/Malcolm E. McVay
--------------------------------
Name: Malcolm E. McVay
Title: Senior Vice President and Treasurer
UBS AG, STAMFORD BRANCH, as Administrative Agent
By: /s/Daniel W. Ladd III
-----------------------------------
Name: Daniel W. Ladd III
Title: Executive Director
By: /s/Wilfred V. Saint
---------------------------------
Name: Wilfred V. Saint
Title: Associate Director