SECOND
AMENDED AND RESTATED
CREDIT AGREEMENT
among
HEALTHSOUTH CORPORATION
(Formerly named HEALTHSOUTH REHABILITATION CORPORATION)
and
NATIONSBANK, N.A.(CAROLINAS)
(Formerly named NATIONSBANK OF NORTH CAROLINA,
NATIONAL ASSOCIATION,)
as Agent
and
LENDERS AS SIGNATORIES HERETO,
--------
$1,000,000,000 Revolving Credit Facility
Dated as of April 11, 1995
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
REVOLVING FACILITY TERMS AND COLLATERAL
SECTION 2.1 Syndicated Loans.................................................................................. 24
SECTION 2.2 Advances of Syndicated Loans...................................................................... 25
SECTION 2.3 Competitive Bid Loans............................................................................. 26
SECTION 2.4 Payments.......................................................................................... 30
SECTION 2.5 Joint and Several Obligations..................................................................... 30
SECTION 2.6 Pledge Agreement.................................................................................. 32
SECTION 2.7 Prepayment........................................................................................ 32
SECTION 2.8 Notes............................................................................................. 33
SECTION 2.9 Reduction in Revolving Facility................................................................... 33
SECTION 2.10 Unused Fee........................................................................................ 34
SECTION 2.11 Lending Offices................................................................................... 34
SECTION 2.12 Letter of Credit Borrowings....................................................................... 34
SECTION 2.13 Pro Rata Payments................................................................................. 38
SECTION 2.14 Deficiency Advances............................................................................... 38
SECTION 2.15 Extension of Termination Date..................................................................... 39
ARTICLE III
INTEREST ON SYNDICATED LOANS
SECTION 3.1 Applicable Interest Rates......................................................................... 40
SECTION 3.2 Procedure for Exercising Interest Rate Options.................................................... 40
SECTION 3.3 Base Rate......................................................................................... 40
SECTION 3.4 Fixed Rate........................................................................................ 41
SECTION 3.5 Changes in Syndicated Margin. ................................................................... 41
ARTICLE IV
TERMINATION OF LIBOR-BASED RATE AND YIELD PROTECTION
SECTION 4.1 Suspension of Loans............................................................................... 42
SECTION 4.2 Compensation...................................................................................... 43
SECTION 4.3 Taxes............................................................................................. 43
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Organization, Powers, Existence, etc.............................................................. 46
SECTION 5.2 Authorization of Borrowing, etc................................................................... 46
SECTION 5.3 Liabilities....................................................................................... 46
SECTION 5.4 Taxes............................................................................................. 47
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SECTION 5.5 Litigation........................................................................................ 47
SECTION 5.6 Agreements........................................................................................ 47
SECTION 5.7 Use of Proceeds................................................................................... 47
SECTION 5.8 ERISA Requirement................................................................................. 47
SECTION 5.9 Subsidiaries...................................................................................... 47
SECTION 5.10 Principal Place of Business....................................................................... 48
SECTION 5.11 Environmental Laws................................................................................ 48
SECTION 5.12 Disclosure........................................................................................ 48
SECTION 5.13 Licenses.......................................................................................... 48
SECTION 5.14 Title to Properties............................................................................... 48
SECTION 5.15 Status of Loans................................................................................... 49
ARTICLE VI
GENERAL CONDITIONS OF LENDING
SECTION 6.1 Representations and Warranties.................................................................... 50
SECTION 6.2 No Default........................................................................................ 50
SECTION 6.3 Supporting Documents.............................................................................. 50
SECTION 6.4 No Adverse Change................................................................................. 52
SECTION 6.5 Effective Date.................................................................................... 52
ARTICLE VII
GENERAL COVENANTS OF THE BORROWER
SECTION 7.1 Existence, Properties, etc........................................................................ 53
SECTION 7.2 Payment of Indebtedness, Taxes, etc............................................................... 53
SECTION 7.3 Financial Statements, Reports, etc................................................................ 53
SECTION 7.4 Litigation Notice................................................................................. 55
SECTION 7.5 Default Notice.................................................................................... 56
SECTION 7.6 Further Assurances................................................................................ 56
SECTION 7.7 Insurance......................................................................................... 56
SECTION 7.8 Covenants Regarding Financial Condition........................................................... 56
SECTION 7.9 Continuation of Current Business.................................................................. 60
SECTION 7.10 Management Contracts.............................................................................. 60
SECTION 7.11 Cooperation; Inspection of Properties............................................................. 60
SECTION 7.12 Use of Proceeds................................................................................... 61
SECTION 7.13 Limit on Investment in HEALTHSOUTH of
Birmingham, Inc................................................................................... 61
SECTION 7.14 Additional Consolidated Entities.................................................................. 61
SECTION 7.15 ERISA. .......................................................................................... 61
SECTION 7.16 Priority.......................................................................................... 62
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.1 Events of Default................................................................................. 63
SECTION 8.2 Agent to Act...................................................................................... 66
SECTION 8.3 Cumulative Rights................................................................................. 66
SECTION 8.4 No Waiver......................................................................................... 66
SECTION 8.5 Default........................................................................................... 66
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SECTION 8.6 Allocation of Proceeds............................................................................ 67
ARTICLE IX
THE AGENT
SECTION 9.1 Appointment....................................................................................... 68
SECTION 9.2 Attorneys-in-fact................................................................................. 68
SECTION 9.3 Limitation on Liability........................................................................... 68
SECTION 9.4 Reliance.......................................................................................... 68
SECTION 9.5 Notice of Default................................................................................. 69
SECTION 9.6 No Representations................................................................................ 69
SECTION 9.7 Indemnification................................................................................... 70
SECTION 9.8 Lender............................................................................................ 70
SECTION 9.9 Resignation....................................................................................... 70
SECTION 9.10 Sharing of Payments, etc.......................................................................... 71
SECTION 9.11 Fees.............................................................................................. 71
SECTION 9.12 Independent Agreements............................................................................ 71
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Assignments and Participations................................................................... 72
SECTION 10.2 Notices.......................................................................................... 74
SECTION 10.3 No Waiver........................................................................................ 75
SECTION 10.4 Setoff........................................................................................... 75
SECTION 10.5 Survival......................................................................................... 76
SECTION 10.6 Expenses......................................................................................... 76
SECTION 10.7 Amendments....................................................................................... 77
SECTION 10.8 Counterparts..................................................................................... 78
SECTION 10.9 Waivers by Borrower.............................................................................. 78
SECTION 10.10 Termination...................................................................................... 78
SECTION 10.11 Governing Law.................................................................................... 79
SECTION 10.12 Indemnification.................................................................................. 79
SECTION 10.13 Agreement Controls............................................................................... 80
SECTION 10.14 Integration...................................................................................... 80
SECTION 10.15 Successors and Assigns........................................................................... 80
SECTION 10.16 Severability..................................................................................... 81
SECTION 10.17 Usury Savings Clause............................................................................. 81
Exhibit A - Applicable Commitment Percentage
Exhibit B - Form of Assignment and Acceptance
Exhibit C-1 - Form of Partnership Guaranty Agreement
Exhibit C-2 - Form of Subsidiary Guaranty Agreement
Exhibit D - Form of Request for Advance or Interest Rate
Election
Exhibit E - Form of Competitive Bid Quote Request
Exhibit F - Form of Competitive Bid Quote
Exhibit G - Subsidiaries and Controlled Partnerships
Exhibit H-1 - Form of Syndicated Note
Exhibit H-2 - Form of Competitive Bid Note
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Exhibit I - Form of Compliance Certificate and Schedules
Thereto
Exhibit J - Summary of Insurance
Exhibit K - Outstanding Letters of Credit
Exhibit L - Investments or Equity Interest
Exhibit M - Subsidiaries and Controlled Partnerships
Exhibit N - Existing Liens
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
--------------------------------------------
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 11,
1995 (this "Agreement") is entered into by and among HEALTHSOUTH CORPORATION
(formerly named HEALTHSOUTH Rehabilitation Corporation), a Delaware corporation
(the "Borrower"), the Lenders as signatories hereto (the "Lenders") and
NATIONSBANK, N.A. (CAROLINAS) (formerly named NationsBank of North Carolina,
National Association), a national banking association (the "Agent").
RECITAL:
--------
Pursuant to a Credit Agreement dated as of November 20, 1992 as amended
by Amendments No. 1 and No. 2 (the "Original Agreement"), the lenders party
thereto (the "Original Lenders") have agreed to make loans and cause to be
issued letters of credit all in an aggregate outstanding amount of not to exceed
$390,000,000. Pursuant to the terms of the Original Agreement all Participating
Subsidiaries and Participating Partnerships (each defined in the Original
Agreement) have guaranteed payment of all Credit Obligations (as defined in the
Original Agreement). In addition, the Borrower, and certain of the Participating
Subsidiaries have executed and delivered to the Agent, for the benefit of the
Lenders, Pledge Agreements conveying the property described therein as security
for the Credit Obligations. At the request of the Borrower, by Amended and
Restated Credit Agreement dated June 7, 1994 (the "First Restated Agreement")
the Borrower, the Agent and certain of the Original Lenders together with
additional lenders (collectively the "Existing Lenders") amended and restated
the Original Agreement thereby increasing the amount of the credit facility to
$550,000,000, changing certain provisions of the Original Agreement and
resulting in the addition of certain Participating Subsidiaries. The Borrower
has requested that the First Restated Agreement be further amended and restated
in its entirety in order to increase the amount of the credit facility, to
further change certain of the provisions contained therein and to increase the
number of lenders participating therein. Accordingly, the Borrower, the Lenders
and the Agent agree that the First Restated Agreement is hereby amended and
restated in its entirety as follows, effective as of the Effective Date:
ARTICLE I
---------
DEFINITIONS
-----------
SECTION 1.1 For the purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
All accounting terms not otherwise defined herein have the
meanings assigned to them, and all computations herein provided for
shall be made, in accordance with generally accepted accounting
principles applied on a consistent basis. All references herein to
"GAAP" refer to such principles as they exist at the date of
application thereof.
All references in this instrument to designated "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections and subdivisions of this instrument as originally executed.
The terms "herein", "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.
The terms "include," "including" and similar terms shall be
construed as if followed by the phrase "without being limited to."
All Article and Section captions herein are used for
reference only and in no way limit or describe the scope or intent of,
or in any way affect, this Agreement.
Words importing the singular number shall mean and include
the plural number and visa versa.
All recitals set forth in this Agreement are hereby
incorporated in the operative provisions of this Agreement.
No inference in favor of or against either party shall be
drawn from the fact that such party or its counsel has drafted any
portion hereof.
The term "person" shall include individual, corporation,
partnership, limited liability company, joint venture, association,
trust, unincorporated organization and any government or any agency or
political subdivision thereof.
Absolute Rate shall have the meaning assigned to such term
in Section 2.3(c)(ii)(D) hereof.
Absolute Rate Auction shall mean a solicitation of
Competitive Bid Quotes setting forth Absolute Rates pursuant
to Section 2.3 hereof.
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Absolute Rate Loans shall mean the Competitive Bid Loans the
interest rates on which are determined on the basis of Absolute Rates
set at Absolute Rate Auctions.
Acquisition means the acquisition, whether with cash,
property, stock or promise to pay all or a portion of a person or a
Facility or Facilities of a person, permitted under Section 7.8(a)(12)
hereof; provided (i) such Person or Facilities is in the same line of
business engaged in by Borrower or its Consolidated Entities, (ii) the
person or Facility to be acquired does not oppose the acquisition, and
(iii) at the time of giving effect to such Acquisition such person or
Facility is a Consolidated Entity.
Actual/360 Basis shall mean 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
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 Facility
consisting of the aggregate principal amount of a Syndicated Loan or a
Competitive Bid Loan.
Affiliate of any specified person shall mean any other
person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified person. For
purposes of this definition "control" when used with respect to any
specified person means the power to direct the management and policies
of such person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
Applicable Commitment Percentage means, for each Lender, a
fraction, the numerator of which shall be the then amount of such
Lender's Commitment and the denominator of which shall be the Revolving
Facility, which Applicable Commitment Percentage for each Lender as of
the Closing Date is as set forth in Exhibit A attached hereto and
incorporated herein by reference; 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 10.1 hereof.
Applicable Lending Office shall mean, for each Lender and
for each Type of Loan, the "Lending Office" of such Lender (or of an
Affiliate of such Lender) designated for such Type of Loan on the
signature pages hereof or such other office of such Lender (or of an
Affiliate of such Lender) as such Lender may from time to time specify
to the Agent and the Borrower as the office by which its Loans of such
Type are to be made and maintained.
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Application shall mean the Application and Agreement for
Letter of Credit pursuant to which the Borrower may apply for the
issuance of a Letter of Credit by NationsBank as provided in Section
2.12 hereof.
Assignment and Acceptance shall mean an Assignment and
Acceptance in the form of Exhibit B (with blanks appropriately filled
in) delivered in connection with an assignment of a portion of the
Lender's interest under this Agreement pursuant to Section 10.1.
Base Rate shall mean the higher of (i) the Prime Rate or
(ii) the Federal Funds Effective Rate plus 1/2% per annum.
Base Rate Loans shall mean Syndicated Loans that bear
interest at rates based upon the Base Rate.
Business Day shall mean (a) any day on which commercial
banks are not authorized or required to close in Charlotte, North
Carolina and New York City and (b) if such day relates to the giving of
notices or quotes in connection with a LIBOR Auction or to a borrowing
of, a payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a LIBOR Loan or a
LIBOR Market Loan or a notice by the Borrower with respect to any such
borrowing, payment, prepayment, Conversion or Interest Period, any day
on which dealings in Dollar deposits are carried out in the London
interbank market.
Capital Expenditure shall mean any expenditure or liability
that is properly charged to a capital account or otherwise capitalized
on the consolidated balance sheet in accordance with GAAP and Cost of
Acquisition. There shall not be included as a Capital Expenditure the
portion of the purchase price of any Acquisition which is paid for with
Capital Stock of the Borrower.
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).
Capitalized Lease Obligations of any person means the
obligation of such person to pay rent or other amounts under a lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
Class shall have the meaning assigned to such term in
Section 1.2 hereof.
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Closing Date shall mean the date of this Agreement.
Collateral shall mean all property covered by the Pledge
Agreements or that otherwise at any time secures any of the Credit
Obligations.
Commitment shall mean, as to each Lender, the obligation of
such Lender to make Syndicated Loans pursuant to Section 2.1 hereof in
an aggregate amount at any one time outstanding up to but not exceeding
the amount set opposite such Lender's name on the signature pages
hereof under the caption "Commitment" (as the same may be limited or
reduced at any time or from time to time pursuant to Section 2.5(a) and
Section 2.9 hereof); provided that the Commitment of each Lender shall
be increased or decreased to reflect any assignments to or by such
Lender effected in accordance with Section 10.1 hereof.
Common Stock means the common stock, par value $.01 per
share, of the Borrower.
Competitive Bid Borrowing shall have the meaning assigned to
such term in Section 2.3(b) hereof.
Competitive Bid Loans shall mean the Loans provided for by
Section 2.3 hereof.
Competitive Bid Notes shall mean the promissory notes
provided for by Section 2.8(b) hereof and all promissory notes
delivered in substitution or exchange therefor, in each case as the
same shall be modified and supplemented and in effect from time to
time.
Competitive Bid Quote shall mean an offer in accordance with
Section 2.3(c) hereof by a Lender to make a Competitive Bid Loan with
one single specified interest rate.
Competitive Bid Quote Request shall have the meaning
assigned to such term in Section 2.3(b) hereof.
Compliance Certificate shall have the meaning attributed to
that term in Section 7.3(3) below.
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 Cash Flow means, for Borrower and its
Consolidated Entities for any Four-Quarter Period, Consolidated Net
Income, plus amounts that have been deducted in determining
Consolidated Net Income for such period for (i) Consolidated Income Tax
Expense, (ii) Consolidated Interest Expense, (iii) Consolidated
Depreciation Expense, (iv) Consolidated Amortization Expense, (v) the
minority interests
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of any person or persons in Consolidated Entities and (vi) for periods
ending (a) on or before June 30, 1995 the lesser of the sum of up to
$45,000,000 (representing expenses related to Borrower's acquisition of
certain rehabilitation facilities and related assets of NovaCare
Rehabilitation Hospital Division and the acquisition of Surgical Health
Corporation) or the actual amount of such expenses and (b) after June
30, 1995, without duplication, any amounts, net of Federal income tax
effects, representing expenses relating to an Acquisition, up to a
maximum of 10% of the Cost of Acquisition thereof, determined on a
consolidated basis in accordance with GAAP.
Consolidated Current Maturities means Principal Maturities
of the Borrower and its Consolidated Entities.
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 Entity shall mean any person whose financial
statements are appropriately consolidated with the Borrower's financial
statements under GAAP.
Consolidated Fixed Charge Coverage Ratio means with respect
to any Four-Quarter Period the ratio of (A) Consolidated Net Income
plus amounts that have been deducted in determining Consolidated Net
Income for such period for (i) Consolidated Interest Expense, (ii)
Consolidated Depreciation Expense, (iii) Consolidated Lease Expense,
(iv) Consolidated Income Tax Expense, (v) Consolidated Amortization
Expense, and (vi) for periods ending (a) on or before June 30, 1995 the
lesser of the sum of up to $45,000,000 (representing expenses related
to Borrower's acquisition of certain rehabilitation facilities and
related assets of NovaCare Rehabilitation Hospital Division and the
acquisition of Surgical Health Corporation) or the actual amount of
such expenses and (b) after June 30, 1995, without duplication, any
amounts, net of Federal income tax effects, representing expenses
relating to an Acquisition, up to a maximum of 10% of the Cost of
Acquisition thereof, determined on a consolidated basis in accordance
with GAAP, less Capital Expenditures to (B) the sum of (i) Consolidated
Interest Expense, (ii) Consolidated Lease Expense, (iii) Consolidated
Current Maturities, and (iv) Restricted Payments; provided, however,
that (x) for the first quarter period calculations of Fiscal Year 1995,
Capital Expenditures for the Four-Quarter Period shall be assumed to be
$150,000,000, (y) for the second and third quarter period calculations
of Fiscal Year 1995, Capital Expenditures for the Four-Quarter Period
shall be assumed to be $185,000,000, and (z) the actual 1995 Fiscal
Year Capital Expenditures (excluding the Cost of Acquisition of
Surgical Health Corporation and NovaCare Rehabilitation Hospital
Division) shall be utilized for calculations at the end of the fourth
quarter of Fiscal Year 1995. After December 31, 1995, for the
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first three quarters of each Fiscal Year, Capital Expenditures will be
assumed to equal the greater of the prior Fiscal Year Capital
Expenditures or $185,000,000, with the actual Fiscal Year Capital
Expenditures shall be utilized for calculations at the end of the
fourth quarter of such Fiscal Year.
Consolidated Income Tax Expense of the Borrower for any
period means the provision for taxes based on income and profits of the
Borrower and its Consolidated Entities to the extent such income or
profits were included in computing Consolidated Net Income for such
period.
Consolidated Interest Expense of the Borrower for any period
means the Interest Expense of the Borrower and its Consolidated
Entities for such period, determined on a consolidated basis in
accordance with GAAP, but including as Interest Expense lease payments,
other than the Headquarters Obligations, made pursuant to the
Headquarters Lease.
Consolidated Lease Expense means for any period all Lease
Payments paid or accrued during such period under operating leases
(whether or not constituting rental expense) by the Borrower and its
Consolidated Entities determined on a consolidated basis in accordance
with GAAP, but excluding as Lease Payments lease payments made pursuant
to the Headquarters Lease.
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 7.8(a)(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; (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
Subsidiary 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 Subsidiary
during such period; (iv) any gain (or loss), together with any related
provisions for taxes on any such gain, realized during
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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 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 such 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 such person 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 such Borrower
or any of its Consolidated Entities.
Consolidated Stockholders' Equity shall mean 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 Total Capital shall mean the sum of (i)
Consolidated Stockholders' Equity and (ii) Indebtedness of the Borrower
and its Consolidated Entities.
Controlled Partnership shall mean a general partnership of
which the Borrower or a Subsidiary is a general partner (but not
including Alabama World Football), or a limited partnership whose
general partners include the Borrower or a Subsidiary (but not
including Vanderbilt), which partnership, whether general or limited,
has assets with a value in excess of $2,000.00, and with respect to
which partnership the Borrower or a Subsidiary is entitled to receive
not less than 50% of any distributions of cash made to the partners
thereof, other than any preferred cash distribution arrangement
approved by the Required Lenders in writing.
Convert, Conversion and Converted shall refer to a
conversion pursuant to Section 3.2 hereof of one Type of Syndicated
Loan into another Type of Syndicated Loan, which may be accompanied by
the transfer by a Lender (at its sole discretion) of a Loan from one
Applicable Lending Office to another.
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Convertible Subordinated Debentures means the 5% Convertible
Subordinated Debentures due 2001 of the Borrower dated as of March 27,
24, 1994 in the aggregate original principal amount of $115,000,000.
Costs of Acquisition means 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 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.
Credit Obligations shall mean the Revolving Facility
Obligations, the Letter of Credit Obligations and all other obligations
and debts owing to the Lenders, and arising under the terms of this
Agreement, the Notes, the Applications and the other Loan Documents,
whether now or hereafter incurred, existing or arising, including the
principal amount of all Advances, all Letter of Credit Borrowings and
Reimbursement Obligations with respect thereto, any sums expended by
the Agent or the Lenders in exercising the rights and remedies
described in Section 8.1, all accrued interest on Advances and Letter
of Credit Reimbursement Obligations, and all costs, fees, charges and
expenses incurred and payable in connection therewith, including fees
payable under the terms of, or in connection with, this Agreement, and
all other obligations and debts owing to the Agent or the Lenders
arising in connection with, ancillary to, or in support of Advances and
Letter of Credit Borrowings and all extensions, alterations,
modifications, revisions and renewals of any of the foregoing.
Default shall mean an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.
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 Maturity Date.
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Dollars and the symbol $ shall mean dollars constituting
legal tender for the payment of public and private debts in the United
States of America.
Effective Date means the date on which (i) the Agent shall
receive from the Borrower the fees payable pursuant to the letter dated
April 6, 1995 from the Agent to the Borrower and (ii) each Lender shall
have received the amount of such fees due it.
ERISA shall mean the Employee Retirement Income Security Act
of 1974, as amended.
Event of Default shall have the meaning assigned to such
term in Article VIII hereof.
Facility shall mean an in-patient or out-patient
rehabilitation facility, a certified out-patient rehabilitation
facility, skilled nursing facility, specialty medical center, specialty
orthopedic hospital or acute care hospital, sub-acute in-patient
facility, transitional living center, medical office building,
outpatient surgery center and outpatient diagnostic center with all
buildings and improvements associated therewith, that is owned or
leased, in whole or part, by the Borrower or a Subsidiary or any
partnership controlled directly or indirectly by the Borrower.
Fair Market Value shall mean, 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. ("NASDAQ") 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 on NASDAQ 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 Effective Rate shall mean, for any day, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers
10
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 the day
for which such rate is to be determined is not a Business Day, the
Federal Funds Effective Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published for any
Business Day, and (b) if such rate is not so published for any Business
Day, the Federal Funds Effective Rate for such Business Day shall be
the average rate charged to the Agent on such Business Day on such
transactions as determined by the Agent.
Fiscal Year means the twelve month period of the Borrower
commencing on January 1 of each calendar year and ending December 31 of
each calendar year.
Fixed Rate shall mean the Absolute Rate or the LIBOR- Based
Rate.
Fixed Rate Segment shall mean a Segment to which a Fixed
Rate is (or is proposed to be) applicable.
Four-Quarter Period means a period of four full consecutive
fiscal quarter periods, taken together as one accounting period;
provided, however, for purposes of Section 7.8(a)(2) and 7.8(a)(4) for
periods prior to December 31, 1995 the results of operations shall be
determined for the four-quarter period ending on the last day of (i)
the first quarter of Fiscal Year 1995 by multiplying the results of
operation for the first quarter by four (4), (ii) the second quarter of
Fiscal Year 1995 by multiplying the results of operations for the
second quarter by four (4), (iii) the third quarter of Fiscal Year 1995
by multiplying the results of the second and third quarters by two (2),
and (iv) for the fourth quarter of Fiscal Year 1995 by multiplying the
results of operations of the sum of the second, third and fourth
quarters by four- thirds (4/3's).
GAAP means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the
United States, as from time to time in effect.
Governmental Authority shall mean any federal, state, county
or municipal agency, authority, department, commission, bureau, board
or court.
Governmental Requirements shall mean all laws, rules,
regulations, requirements, ordinances, judgments, decrees, codes and
orders of any Governmental Authority applicable to the Borrower, any
Consolidated Entity or any Facility.
11
Guaranteed Obligations of any person shall mean all
guaranties (including guaranties of guaranties and guaranties of
dividends and other monetary obligations), endorsement, 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.
Guaranty Agreements shall have the meaning attributed to
that term in Section 2.5(a).
Headquarters Lease means the Lease Agreement between
HEALTHSOUTH Holdings, Inc., as Lessee, and First Security Bank of Utah,
N.A., as Lessor, dated as of November 16, 1995 providing for the lease
to HEALTHSOUTH Holdings, Inc. of the land and improvements thereon
located on the property
described on Exhibit O.
Headquarters Obligations means all of the Holder Advances
and Loans, as each such term is defined in the Participation Agreement.
Hedging Obligations of any person means the obligations of
such person pursuant to any interest rate swap agreement, foreign
currency exchange agreement, interest rate collar agreement, option or
futures contract or other similar agreement or arrangement relating to
interest rates or foreign exchange rates.
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 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 Hedging Obligations (other than 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
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; and (ix) the Headquarters Obligations. The amount of
Indebtedness of any person at any date shall be the outstanding balance
at
12
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.
Interest Expense of any person for any period means the
aggregate amount of interest which, in accordance with GAAP, would be
set opposite the caption "interest expense" or any like caption on an
income statement for such person (including, without limitation or
duplication, imputed interest included in Capitalized Lease
Obligations, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing,
the net costs associated with Hedging Obligations, amortization of
financing fees and expenses, the interest portion of any deferred
payment obligation, amortization of discount and all other non-cash
interest expense other than interest amortized to cost of sales) plus
the aggregate amount, if any, by which such interest expense was
reduced as a result of the amortization of deferred debt restructuring
credits for such period.
Interest Period shall mean:
(a) with respect to any LIBOR Loan, each period commencing
on the date such LIBOR 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 or third calendar month thereafter, as the Borrower may select
as provided in Section 3.2 hereof, 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;
(b) with respect to any Absolute Rate Loan, the period
commencing on the date such Absolute Rate Loan is made and ending on
any Business Day up to 180 days thereafter, as the Borrower may select
as provided in Section 2.3(b) hereof; and
(c) with respect to any LIBOR Market Loan, the period
commencing on the date such LIBOR Market Loan is made 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(b) hereof, except that each Interest Period that commences
on the last Business Day of a calendar month (or 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
Competitive Bid Loan would otherwise end after the Termination Date,
such Interest Period shall end on the
13
Termination Date; (ii) if any Interest Period for any LIBOR Loan would
otherwise end after the Termination Date, such Interest Period shall
end on the Termination Date; (iii) 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 LIBOR Loan or a LIBOR Market Loan, if such next succeeding Business
Day falls in the next succeeding calendar month, on the next preceding
Business Day); and (iv) notwithstanding clauses (i), (ii) and (iii)
above, no Interest Period for any Loan (other than an Absolute Rate
Loan) shall have a duration of less than one month (in the case of a
LIBOR Loan or a LIBOR Market Loan) and, if the Interest Period for any
LIBOR Loan or LIBOR Market Loan would otherwise be a shorter period,
such Loan shall not be available hereunder for such period.
LC Account Agreement shall mean the LC Account Agreement
dated as of the date hereof between the Borrower and the Agent, as
amended or modified from time to time.
Lease Payments shall mean all amounts payable under any
lease agreement other than obligations under lease agreements that
constitute Indebtedness.
Letter of Credit Borrowings shall mean as of any date the
maximum aggregate amount that the Agent could be required to pay under
drafts that could properly be drawn in compliance with the terms of all
Letters of Credit outstanding on such date, other than drafts that have
been drawn and paid and not reimbursed.
Letter of Credit Commitment shall mean an amount not to
exceed $50,000,000.
Letter of Credit Obligations shall mean (a) the Letter of
Credit Borrowings and (b) the Reimbursement Obligations and other
obligations under this Agreement and the Applications with respect to
drawings made on Letters of Credit, including obligations with respect
to all principal, interest, fees and other charges related thereto.
Letters of Credit shall mean and include all letters of
credit heretofore or hereafter issued by NationsBank for the account of
the Borrower pursuant to this Agreement.
Liabilities of any person shall mean obligations that are
properly classified as liabilities under GAAP.
LIBOR Auction shall mean a solicitation of Competitive Bid
Quotes setting forth LIBOR Margins based on the LIBOR- Based Rate
pursuant to Section 2.3 hereof.
LIBOR-Based Rate shall mean the rate of interest determined
by the Agent at approximately 11:00 A.M. New York time two (2) Business
Days prior to the commencement of the Interest Period, based upon such
factors as the Agent deems
14
relevant, as the Agent's best estimate of the cost of funds available
to the Agent from the purchase on the London interbank market of funds
in the form of time deposits in Dollars in the approximate amount of
the Segment that is to bear interest at the LIBOR-Based Rate, having a
maturity comparable to the Interest Period during which the LIBOR-Based
Rate is to be in effect, it being expressly understood that (i) the
Agent may not actually purchase any such time deposits and obtain such
funds and (ii) the LIBOR-Based Rate will be an estimate, and for a
variety of reasons, including changing market conditions, the actual
cost of funds to the Agent (if the Agent elects to purchase funds in
the form of time deposits on such date) might vary from the Agent's
estimate.
LIBOR Loans shall mean Syndicated Loans on which interest
rates are determined on the basis of LIBOR-Based Rates plus the
Syndicated Margin.
LIBOR Margin shall have the meaning assigned to such term in
Section 2.3(c)(ii)(C) hereof.
LIBOR Market Loans shall mean Competitive Bid Loans interest
rates on which are determined on the basis of LIBOR- Based Rates
pursuant to a LIBOR Auction.
LIBOR Reserve Requirement shall mean the percentage
(expressed as a decimal) prescribed by the Board of Governors of the
Federal Reserve System (or any successor), on the date on which the
LIBOR-Based Rate is determined, for determining the reserve
requirements of the Agent (including any marginal, emergency,
supplemental, special or other reserves) with respect to liabilities
relating to time deposits purchased in the London interbank market
having a maturity equal to the period during which the LIBOR-Based Rate
will be in effect and in an amount equal to the Segment involved,
without any benefit or credit for any proration, exemptions or offsets
under any now or hereafter applicable regulations.
Lien shall mean any mortgage, pledge, assignment, charge,
encumbrance, lien, security interest or financing lease.
Loan Documents shall mean this Agreement, the Notes, the
Applications, the Subsidiary Guaranty Agreements and amendments
thereto, the Partnership Guaranty Agreements and amendments thereto,
the Pledge Agreements, the LC Account Agreement and all other
agreements, instruments and documents executed or delivered at any time
in connection with the Credit Obligations, or to evidence or secure any
of the Credit Obligations.
Loans shall mean the Syndicated Loans, Competitive Bid
Loans, Letter of Credit Borrowings and Reimbursement Obligations and
all extensions and renewals thereof.
15
Margin Stock shall have the meaning attributed to that term
in Regulation U of the Federal Reserve Board, as amended.
Material Group shall mean, 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.
Multi-employer Plan means an employee pension benefit plan
covered by Title IV of ERISA and in respect of which the Borrower or
any Consolidated Entity is an "employer" as described in Section
4001(b) of ERISA, which is also a multi-employer plan as defined in
Section 4001(a)(3) of ERISA;
NationsBank means NationsBank, N.A. (Carolinas), as a Lender
and as issuer of the Letters of Credit pursuant to Section 2.13 hereof
and any successor thereof.
Notes shall mean the Syndicated Notes and the Competitive
Bid Notes.
Opinion of Counsel shall mean a favorable written opinion of
an attorney or firm of attorneys duly licensed to practice law in the
jurisdiction the laws of which are applicable to the legal matters in
question and who is not an employee of the Borrower or of an Affiliate
of the Borrower.
Participating Partnership shall mean a Controlled
Partnership that (i) all or a portion of an Advance may be used by the
Borrower for the benefit of or loaned by the Borrower to such
Controlled Partnership and (ii) has executed and delivered to the Agent
a Partnership Guaranty Agreement and all other documents necessary to
assume joint and several liability as to the Credit Obligations to the
extent of its Partnership Liabilities.
Participating Subsidiary shall mean a Subsidiary that (i)
all or a portion of an Advance may be used by the Borrower for the
benefit of or loaned by the Borrower to such Subsidiary and (ii) has
executed and delivered to the Agent a Subsidiary Guaranty Agreement and
all other documents necessary to assume joint and several liability as
to the Credit Obligations (in the maximum amount provided for in such
Subsidiary Guaranty Agreement).
Participation shall mean, with respect to any Lender (other
than NationsBank), the extension of credit represented by the
participation of such Lender hereunder in the liability of NationsBank
in respect of a Letter of Credit issued by NationsBank in accordance
with the terms hereof.
16
Participation Agreement means the Participation Agreement
dated November 16, 1995 among HEALTHSOUTH Corporation, as Construction
Agent, HEALTHSOUTH Holdings, Inc., as Lessee, First Security Bank of
Utah, N.A., as Trustee, the Holders identified therein, the Lenders
identified therein, and NationsBank, National Association, as Agent.
Partnership Liability shall mean, with respect to a
Participating Partnership, that part, if any, of an Advance (together
with interest thereon and fees, prepayment premiums and other charges
properly attributable thereto) that is to be received by and used by or
for the benefit of such Participating Partnership, as certified to the
Agent by the Borrower, under Section 2.5, in connection with the
Borrowers' request for such Advance, and Partnership Liabilities shall
mean the aggregate amount of all such parts of Advances that are to be
received by and used by or for the benefit of such Participating
Partnership.
Partnership Guaranty Agreement shall mean a guaranty
agreement of a Participating Partnership in the form attached hereto
and marked Exhibit C-1, as amended and supplemented from time to time.
Permitted Encumbrances shall mean:
(1) taxes, assessments and other governmental charges that
are not delinquent or that are being contested in good faith
by appropriate proceedings duly pursued;
(2) mechanics', 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 other
than Liens that do not adversely affect the value or utility
of the property;
(4) Liens in favor of the Agent for the benefit of the
Lenders under this Agreement;
(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 shall mean:
17
(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 Standard & Poor's Corporation or A2 or higher by Moody's
Investors Service, Inc.;
(3) a certificate of deposit issued by, or other
interest-bearing deposits with, 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 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 Standard & Poor's Corporation,
or P-1 or higher by Moody's Investors Service, Inc.;
(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 Standard & Poor's Corporation or A2 or higher
by Moody's Investors Service, Inc.;
(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;
18
(10) loans in the amount of up to $20,000,000 made by the
Borrower to the HEALTHSOUTH Employee Stock Ownership Plan;
(11) scholarship loans made by the Borrower in an aggregate
amount not exceeding $500,000 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 Agent and
investments of $5,000,000 or greater expressly approved in
writing by the Required Lenders;
(14) any other investment having a rating of A or higher or
A-1 or higher by Standard & Poor's Corporation or A2 or
higher or P-1 or higher by Moody's Investors Service, Inc.;
(15) loans to health care practitioners and other persons
not to exceed in the aggregate $5,000,000;
(16) investments in Wellmark, HEALTHSMART, MedPartners and
Austin Medical Office Building which in the aggregate do not
exceed $3,500,000; and
(17) additional investments existing on the Closing Date and
described in Exhibit L.
Pledge Agreement shall have the meaning attributed to that
term in Section 2.6.
Prime Rate shall mean that rate of interest designated by
the Agent from time to time as its "prime rate", it being expressly
understood and agreed that its prime rate is merely an index rate used
by the Agent to establish lending rates and is not necessarily the
Agent's most favorable lending rate, and that changes in the Agent's
prime rate are discretionary with the Agent. Any change in the Prime
Rate shall be effective as of the date of such change.
Principal Maturities shall mean principal maturing or coming
due on Indebtedness during the next succeeding period of 12 calendar
months.
Principal Office shall mean the principal office of the
Agent located at One Independence Center, 101 North Tryon Street,
Charlotte, North Carolina 28255.
Reimbursement Obligation shall mean at any time, the
obligation of the Borrower with respect to any Letter of
19
Credit to reimburse NationsBank and the Lenders to the extent of their
respective Participations (including by the receipt by NationsBank of
proceeds of Loans pursuant to Section 2.1(b) hereof) for amounts
theretofore paid by NationsBank pursuant to a drawing under such Letter
of Credit.
Request for Advance or Interest Election shall have the
meaning attributed to that term in Section 2.2.
Required Lenders shall mean Lenders having at least 51% of
the aggregate amount of the Commitments or, if the Commitments shall
have terminated, Lenders holding at least 51% of the aggregate unpaid
principal amount of the Loans, provided that if any Lender shall have
failed to fund its portion of any Syndicated Loan pursuant to Section
2.1 and the Agent or NationsBank has made such Loan on such Lender's
behalf, NationsBank shall be deemed the holder of such portion of such
Lender's Commitment for purposes of this definition.
Restricted Payments means dividends (other than dividends
payable exclusively in the form of capital stock) or any other
stockholder distributions to the shareholders of the Borrower or
redemptions or purchases of the common or preferred stock of Borrower
or any principal payments of Subordinated Indebtedness.
Revolving Facility shall mean the credit facility made
available to the Borrower by the Lenders under the terms of Article II
in an aggregate amount of up to $1,000,000,000 as limited pursuant to
Section 2.5(a) and as reduced by Borrower pursuant to Section 2.9
hereof.
Revolving Facility Obligations shall mean the outstanding
principal amount of all Advances, all interest accrued thereon, all
costs, charges, fees and expenses payable in connection therewith, and
all extensions and renewals thereof.
Sale and Leaseback Transaction means, with respect to any
person, an arrangement with any bank, insurance company or other lender
or investor or to which such lender or investor is a party, providing
for the leasing by such person or any of its Subsidiaries of any
property or asset of such person or any of its Subsidiaries which has
been or is being sold or transferred by such person or such Subsidiary
to such lender or investor or to any person to whom funds have been or
are to be advanced by such lender or investor on the security of such
property or asset.
Segment shall mean a portion of the Advances (or all
thereof) with respect to which a particular interest rate is (or is
proposed to be) applicable.
Senior Indebtedness means the Credit Obligations and that
Indebtedness permitted to be incurred pursuant to Section 7.8(a)(5)(B),
(D), (E) and (H) hereof.
20
Senior Subordinated Notes means the 9.5% Senior Subordinated
Notes due 2001 of the Borrower in the aggregate original principal
amount of $250,000,000.
Single Employer Plan means any employee pension benefit plan
covered by Title IV of ERISA and in respect of which the Borrower or
any Consolidated Entity is an "employer" as described in Section
4001(b) of ERISA, which is not a Multi- employer Plan;
Subordinated Indebtedness means the Senior Subordinated
Notes, the Convertible Subordinated Debentures and any other
Indebtedness incurred pursuant to Section 7.8(a)(5)(F) hereof to
refinance the Senior Subordinated Notes or the Convertible Subordinated
Debentures.
Subsidiary shall mean any corporation, more than 50% of the
shares of stock of which having general voting power under ordinary
circumstances to elect the board of directors, managers or trustees of
such corporation, irrespective of whether or not at the time stock of
any other class or classes shall have or might have voting power by
reason of the happening of any contingency, which is owned or
controlled directly or indirectly by the Borrower and which has either
assets with a value exceeding $2,000 or positive annual operating
income.
Subsidiary Guaranty Agreement shall mean a guaranty
agreement of a Participating Subsidiary in the form attached hereto and
marked Exhibit C-2, as amended and supplemented from time to time.
Surgical Health means Surgical Health Corporation, a
Delaware corporation, its Subsidiaries and its Controlled Partnerships.
Surgical Health Subordinated Indebtedness means the 11.5%
Senior Subordinated Notes due July 15, 2004 in the original principal
amount of $75,000,000 issued by Surgical
Health.
Syndicated Loans shall mean the loans provided for by
Section 2.1 hereof, which may be Base Rate Loans or LIBOR Loans.
Syndicated Margin means that percent per annum set forth
below in the case of a LIBOR Loan, which percent shall be the
Syndicated Margin effective on the date of delivery to the Agent of a
Compliance Certificate pursuant to Section 7.3(3) for the fiscal
quarter period as at the end of which the ratio of Indebtedness of the
Borrower and its Consolidated Entities to Consolidated Cash Flow is
greater than or equal to or less than, as the case may be, the ratio
set forth opposite such Syndicated Margin:
21
Syndicated Margin
-----------------
Ratio Rate
----- ----
(a) Greater than or equal to 1 3/8%
4.25 to 1.00
(b) Less than 4.25 to 1.00 but 1 1/8%
equal to or greater than
3.75 to 1.00
(c) Less than 3.75 to 1.00 but 7/8%
equal to or greater than
3.00 to 1.00
(d) Less than 3.00 to 1.00 but 5/8%
equal to or greater than
2.00 to 1.00
(e) Less than 2.00 to 1.00 but 1/2%
equal to or greater than
1.50 to 1.00
(f) Less than 1.50 to 1.00 3/8%
Notwithstanding the foregoing, during the period from the Closing Date
through the date of delivery of a Compliance Certificate for the
quarter period ended June 30, 1995 the Syndicated Margin shall be 1
1/4%. For the purpose of calculating the amount of Indebtedness at
September 30, 1995, the actual amount of outstanding Indebtedness at
September 30, 1995 shall be reduced by $319,000,000.
Syndicated Notes shall mean the promissory notes provided
for by Section 2.8 hereof and all promissory notes delivered in
substitution or exchange thereof, in each case as the same shall be
modified and supplemented and in effect from time to time.
Termination Date means (a) the earlier of (i) October 1,
2000, or (ii) such date as the Borrower may voluntarily terminate the
Revolving Facility by payment in full all Credit Obligations and the
termination of all Commitments, or (iii) the occurrence of an Event of
Default.
Type shall have the meaning assigned to such term in Section
1.2 hereof.
Unused Amount shall mean with respect to each Lender, (a)
the Commitment of such Lender less (b) such Lender's pro rata share of
outstanding Syndicated Loans and Letter of Credit Obligations less (c)
the outstanding principal amount of all Competitive Bid Loans then held
by such Lender.
Unused Margin means that percent per annum set forth below,
which percent shall be the Unused Margin effective upon
22
the date of delivery to the Agent of a Compliance Certificate pursuant
to Section 7.7(3) for the fiscal quarter as at the end of which the
ratio of Indebtedness of the Borrower and its Consolidated Entities to
Consolidated Cash Flow is greater than or equal to or less than, as the
case may be, the ratio
set forth opposite such Unused Margin.
Ratio Unused Margin
----- -------------
(a) Greater than or equal to 3/8%
4.25 to 1.00
(b) Less than 4.25 to 1.00 but 3/8%
equal to or greater than
3.75 to 1.00
(c) Less than 3.75 to 1.00 but 1/4%
equal to or greater than
3.00 to 1.00
(d) Less than 3.00 to 1.00 but 1/4%
equal to or greater than
2.00 to 1.00
(d) Less than 2.00 to 1.00 but 3/16%
equal to or greater than
1.50 to 1.00
(f) Less than 1.50 to 1.00 1/8%
Notwithstanding the foregoing, during the period from the Closing Date
through the date of delivery of a Compliance Certificate for the
quarter ended June 30, 1995 the Unused Margin shall be 3/8%. For the
purpose of calculating the amount of Indebtedness at September 30,
1995, the actual amount of outstanding Indebtedness at September 30,
1995 shall be reduced by $319,000,000.
Vanderbilt shall mean The Vanderbilt Stallworth
Rehabilitation Hospital, L.P., the partners of which are the Borrower,
Vanderbilt University and Vanderbilt Health Services.
SECTION 1.2 Classes and Types of Loans. Loans hereunder are
distinguished by "Class" and by "Type". The "Class" of a Loan refers to whether
such Loan is a Competitive Bid Loan or a Syndicated Loan, each of which
constitutes a Class. The "Type" of a Loan refers to whether such Loan is a Base
Rate Loan, a LIBOR Loan, an Absolute Loan or a LIBOR Market Loan, each of which
constitutes a Type. Loans may be identified by both Class and Type.
23
ARTICLE II
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REVOLVING FACILITY TERMS AND COLLATERAL
---------------------------------------
SECTION 2.1 Syndicated Loans.
(a) From and after the Closing Date to and including the
Termination Date, on the terms and subject to the conditions set forth in this
Agreement, each Lender severally agrees to lend to the Borrower and the Borrower
may borrow, repay and reborrow, an amount not exceeding the amount of the
Commitment of such Lender in effect from time to time, less the amount of such
Lender's Syndicated Loans and the Reimbursement Obligation and Letter of Credit
Borrowings applicable to such Lender; provided, however, that no more than eight
(8) different Interest Periods for both Syndicated Loans and Competitive Bid
Loans may be outstanding at the same time (for which purpose Interest Periods
described in different lettered clauses of the definition of the term "Interest
Period" shall be deemed to be different Interest Periods even if they are
coterminous). All Advances made by the Lenders to the Borrower under this
Agreement with respect to the Revolving Facility shall be evidenced by a
promissory note for each Lender each dated the date of this Agreement payable to
the order of each Lender, duly executed by the Borrower, and in the aggregate
maximum principal amount of $1,000,000,000 all as provided in Section 2.8
hereof. The Advances shall bear interest as provided in Article III below. The
unpaid principal amount of all Loans hereunder shall not exceed the Revolving
Facility and each Syndicated Loan made hereunder shall be allocated pro rata
among Lenders based upon their Applicable Commitment Percentage regardless of
amounts outstanding under Competitive Bid Loans.
(b) If a drawing is made under any Letter of Credit in
accordance with the terms thereof prior to the Termination Date the drawing
shall be paid by the Agent without the requirement of notice from the Borrower
from immediately available funds which shall be advanced by the Lenders under
the Revolving Facility. If a drawing is presented under any Letter of Credit in
accordance with the terms thereof notice of such drawing shall be provided
promptly by NationsBank to the Agent and the Agent shall provide notice to each
Lender by telephone or telecopy. If notice to the Lenders of a drawing under any
Letter of Credit is given by the Agent at or before 12:00 noon Charlotte, North
Carolina time on any Business Day, each Lender shall, pursuant to the conditions
of this Agreement, make a Base Rate Loan in the amount of such Lender's
Applicable Commitment Percentage of such drawing and shall pay such amount to
the Agent for the account of NationsBank at the Principal Office in Dollars and
in immediately available funds before 2:00 P.M. Charlotte, North Carolina time
on the same Business Day. If notice to the Lenders of a drawing under a Letter
of Credit is given by the Agent after 12:00 noon Charlotte, North Carolina time
on any Business Day, each Lender shall, pursuant to the terms and subject to the
conditions of this Agreement, make a Base Rate Loan in the amount of such
Lender's Applicable Commitment Percentage of such drawing and shall pay such
amount to the Agent for the account of NationsBank at the Principal Office in
Dollars and in
24
immediately available funds before 12:00 noon Charlotte, North Carolina time on
the next following Business Day. Such Base Rate Loan shall be deemed made for a
period ending on the following Business Day, which shall be extended
automatically to the next succeeding Business Day unless and until the Borrower
converts such Base Rate Loan in accordance with the terms of Section 3.2 hereof.
SECTION 2.2 Advances of Syndicated Loans. Advances of Syndicated Loans
shall be made no more frequently than three (3) times in each week. Each Advance
shall be in an amount no less than $5,000,000 and multiples of $1,000,000
thereafter. Each request for an Advance must be in writing (which may be by
facsimile transmission) and must be received by the Agent not later than 10:00
a.m., Charlotte, North Carolina, time, (x) at least three Business Days prior to
the date of any LIBOR Loan and (y) on the day which the Advance is to be made in
the case of a Base Rate Loan. Each request for an Advance shall be in the form
attached hereto as Exhibit D ("Request for Advance or Interest Rate Election")
and shall specify the amount of the Advance requested, the day as of which the
Advance is to be made and the part or parts, if any, of the Advance that are to
be used by or for the benefit of Participating Partnerships, specifying the part
allocable to each Participating Partnership, and shall provide the interest rate
information called for in Section 3.2. The Agent shall promptly (not later than
1:00 P.M. Charlotte, North Carolina time) furnish each Lender by telecopy
transmission a copy of each Request for Advance or Interest Rate Election
together with the amount of such Lender's portion of the Advance. Not later than
2:00 P.M. Charlotte, North Carolina time on the date specified for each Advance
hereunder, each Lender shall make available the amount of the Syndicated Loan or
Loans to be made by it on such date to the Agent at the Principal Office, in
Dollars and in immediately available funds, and the amount received by the Agent
shall be made available to the Borrower by depositing the proceeds thereof into
an account with the Agent in the name of the Borrower. The Lenders' obligation
to make Advances shall terminate, if not sooner terminated pursuant to the
provisions of this Agreement, on the Termination Date. Each Request for Advance
or Interest Rate Election, whether submitted under this Section 2.2 in
connection with a requested Advance or under Section 3.2 in connection with an
interest rate election, and each Application shall be signed by an officer of
the Borrower designated as authorized to sign and submit Request for Advance or
Interest Rate Election forms and Applications in the documents submitted to the
Agent pursuant to Section 6.3(a) below. The Borrower may, from time to time, by
written notice to the Agent, terminate the authority of any person to submit
Request for Advance or Interest Rate Election forms and Applications and
designate new or additional persons to so act by delivering to the Agent a
certificate of the Secretary of the Borrower certifying the incumbency and
specimen signature of each such person. The Agent shall be entitled to rely
conclusively upon the authority of any person so designated by the Borrower.
25
SECTION 2.3 Competitive Bid Loans.
(a) In addition to borrowings of Syndicated Loans, at any
time prior to the Termination Date the Borrower may, as set forth in this
Section 2.3, request the Lenders to make offers to make Competitive Bid Loans to
the Borrower in Dollars. The Lenders may, but shall have no obligation to, make
such offers and the Borrower may, but shall have no obligation to, accept any
such offers in the manner set forth in this Section 2.3. Competitive Bid Loans
may be LIBOR Market Loans or Absolute Rate Loans (each a "Type" of Competitive
Bid Loan), provided that:
(i) the aggregate amount of outstanding Competitive Bid
Loans of all Lenders shall not exceed one half of the
Revolving Facility;
(ii) there may be no more than eight (8) different
Interest Periods for both Syndicated Loans and Competitive
Bid Loans outstanding at the same time (for which purpose
Interest Periods described in different lettered clauses of
the definition of the term "Interest Period" shall be deemed
to be different Interest Periods even if they are
coterminous);
(iii) the aggregate amount of outstanding Competitive
Bid Loans of a Lender shall not exceed at any time an amount
equal to such Lender's Commitment;
(iv) the aggregate principal amount of all Competitive
Bid Loans, together with the sum of (i) the aggregate
principal amount of all outstanding Syndicated Loans, (ii)
then outstanding Letter of Credit Borrowings and (iii)
Reimbursement Obligations shall not exceed the aggregate
amount of the Commitments at such time; and
(v) no Competitive Bid Loan shall have a maturity date
subsequent to the Termination Date.
(b) When the Borrower wishes to request offers to make
Competitive Bid Loans, it shall give the Agent (which shall promptly notify the
Lenders) notice (a "Competitive Bid Quote Request") to be received no later than
11:00 a.m. Charlotte, North Carolina time on (x) the fourth Business Day prior
to the date of borrowing proposed therein, in the case of a LIBOR Auction or (y)
the Business Day next preceding the date of borrowing proposed therein, in the
case of an Absolute Rate Auction (or, in any such case, such other time and date
as the Borrower and the Agent, with the consent of the Required Lenders, may
agree). The Borrower may request offers to make Competitive Bid Loans for up to
two (2) different Interest Periods in a single notice (for which purpose
Interest Periods in different lettered clauses of the definition of the term
"Interest Period" shall be deemed to be different Interest Periods even if they
are coterminous); provided that the request for each separate Interest Period
shall be deemed to be a separate Competitive Bid Quote Request for a separate
borrowing (a "Competitive Bid Borrowing") and there shall not be outstanding at
26
any one time more than four (4) Competitive Bid Borrowings. Each such
Competitive Bid Quote Request shall be substantially in the form of Exhibit E
hereto and shall specify as to each Competitive Bid Borrowing:
(i) the proposed date of such borrowing, which shall be
a Business Day;
(ii) the aggregate amount of such Competitive Bid
Borrowing, which shall be at least $10,000,000 (or a larger
multiple of $1,000,000) but shall not cause the limits
specified in Section 2.3(a) hereof to be violated;
(iii) the duration of the Interest Period applicable
thereto;
(iv) whether the Competitive Bid Quotes requested for a
particular Interest Period are seeking quotes for LIBOR
Market Loans or Absolute Rate Loans; and
(v) if the Competitive Bid Quotes requested are seeking
quotes for Absolute Rate Loans, the date on which the
Competitive Bid Quotes are to be submitted if it is before
the proposed date of borrowing (the date on which such
Competitive Bid Quotes are to be submitted is called the
"Quotation Date").
Except as otherwise provided in this Section 2.3(b), no Competitive Bid Quote
Request shall be given within five (5) Business Days (or such other number of
days as the Borrower and the Agent, with the consent of the Required Lenders,
may agree) of any other Competitive Bid Quote Request.
(c) (i) Each Lender may submit one or more Competitive Bid
Quotes, each containing an offer to make a Competitive Bid Loan in response to
any Competitive Bid Quote Request; provided that, if the Borrower's request
under Section 2.3(b) hereof specified more than one Interest Period, such Lender
may make a single submission containing one or more Competitive Bid Quotes for
each such Interest Period. Each Competitive Bid Quote must be submitted to the
Agent not later than (x) 2:00 p.m. Charlotte, North Carolina time on the fourth
Business Day prior to the proposed date of borrowing, in the case of a LIBOR
Auction or (y) 10:00 a.m. Charlotte, North Carolina time on the Quotation Date,
in the case of an Absolute Rate Auction (or, in any such case, such other time
and date as the Borrower and the Agent, with the consent of the Required
Lenders, may agree); provided that any Competitive Bid Quote may be submitted by
NationsBank (or its Applicable Lending Office) only if NationsBank (or such
Applicable Lending Office) notifies the Borrower of the terms of the offer
contained therein not later than (x) 1:00 p.m. Charlotte, North Carolina time on
the fourth Business Day prior to the proposed date of borrowing, in the case of
a LIBOR Auction or (y) 9:45 a.m. Charlotte, North Carolina time on the Quotation
Date, in the case of an Absolute Rate Auction. Subject to Article IV, Article VI
and IX hereof, any
27
Competitive Bid Quote so made shall be irrevocable except with the consent of
the Agent given on the instructions of the Borrower.
(ii) Each Competitive Bid Quote shall be
substantially in the form of Exhibit F hereto and shall specify:
(A) the proposed date of borrowing and the
Interest Period therefor;
(B) the principal amount of the Competitive
Bid Loan for which each such order is being made,
which principal amount shall be at least $2,000,000
(or a larger multiple of $1,000,000); provided that
the aggregate principal amount of all Competitive
Bid Loans for which a Lender submits Competitive
Bid Quotes (x) may not exceed the Commitment of
such Lender and (y) may not exceed the principal
amount of the Competitive Bid Borrowing for a
particular Interest Period for which offers were
requested;
(C) in the case of a LIBOR Auction, the
margin above or below the applicable LIBOR-Based
Rate (the "LIBOR Margin") offered for each such
Competitive Bid Loan, expressed as a percentage
(rounded upwards, if necessary, to the nearest
1/10,000th of 1%) to be added to or subtracted from
the applicable LIBOR-Based Rate;
(D) in the case of an Absolute Rate Auction,
the rate of interest per annum (rounded upwards, if
necessary, to the nearest 1/10,000th of 1%) offered
for each such Competitive Bid Loan (the "Absolute
Rate"); and
(E) the identity of the quoting Lender.
Unless otherwise agreed by the Agent and the Borrower, no Competitive Bid Quote
shall contain qualifying, conditional or similar language or propose terms other
than or in addition to those set forth in the applicable Competitive Bid Quote
Request and, in particular, no Competitive Bid Quote may be conditioned upon
acceptance by the Borrower of all (or some specified minimum) of the principal
amount of the Competitive Bid Loan for which such Competitive Bid Quote is being
made.
(d) The Agent shall (x) in the case of a LIBOR Auction, by
4:00 p.m. Charlotte, North Carolina time on the day a Competitive Bid Quote is
submitted or (y) in the case of an Absolute Rate Auction, as promptly as
practicable after the Competitive Bid Quote is submitted (but in any event not
later than 10:30 a.m. Charlotte, North Carolina time on the Quotation Date),
notify the Borrower of the terms (i) of any Competitive Bid Quote submitted by a
Lender that is in accordance with Section 2.3(c) hereof and (ii) of any
Competitive Bid Quote that amends, modifies or is otherwise inconsistent with a
previous Competitive Bid Quote
28
submitted by such Lender with respect to the same Competitive Bid Quote Request.
Any such subsequent Competitive Bid Quote shall be disregarded by the Agent
unless such subsequent Competitive Bid Quote is submitted solely to correct a
manifest error in such former Competitive Bid Quote. The Agent's notice to the
Borrower shall specify (A) the aggregate principal amount of the Competitive Bid
Borrowing for which orders have been received and (B) the respective principal
amounts and LIBOR Margins or Absolute Rates, as the case may be, so offered by
each Lender (identifying the Lender that made each Competitive Bid Quote).
(e) Not later than 11:00 a.m. Charlotte, North Carolina time
on (x) the third Business Day prior to the proposed date of borrowing, in the
case of a LIBOR Auction or (y) the Quotation Date, in the case of an Absolute
Rate Auction (or, in any such case, such other time and date as the Borrower and
the Agent, with the consent of the Required Lenders, may agree), the Borrower
shall notify the Agent of its acceptance or nonacceptance of the offers so
notified to it pursuant to Section 2.3(d) hereof (and the failure of the
Borrower to give such notice by such time shall constitute nonacceptance) and
the Agent shall promptly notify each affected Lender. In the case of acceptance,
such notice shall specify the aggregate principal amount of offers for each
Interest Period that are accepted. The Borrower may accept any Competitive Bid
Quote in whole or in part (provided that any Competitive Bid Quote accepted in
part shall be at least $2,000,000 or a larger multiple of $1,000,000); provided
that:
(i) the aggregate principal amount of each Competitive
Bid Borrowing may not exceed the applicable amount set forth
in the related Competitive Bid Quote Request;
(ii) the aggregate principal amount of each Competitive
Bid Borrowing shall be at least $10,000,000 (or a larger
multiple of $1,000,000) but shall not cause the limits
specified in Section 2.3(a) hereof to be violated;
(iii) acceptance of offers may be made only in ascending
order of LIBOR Margins or Absolute Rates, as the case may
be, in each case beginning with the lowest rate so offered;
provided, however, that the Borrower, in its sole
discretion, may accept other than the lowest rate where
acceptance of the lowest rate will result in (x) the
outstanding Loans of a Lender or Lenders offering the lowest
rate exceeding such Lender's Commitment and (y) an increase
in the Unused Fee payable by Borrower under Section 2.10
hereof; and
(iv) the Borrower may not accept any offer where the
Agent has correctly advised the Borrower that such offer
fails to comply with Section 2.3(c)(ii) hereof or otherwise
fails to comply with the requirements of this Agreement
(including, without limitation, Section 2.3(a) hereof).
29
If offers are made by two or more Lenders with the same LIBOR Margins or
Absolute Rates, as the case may be, for a greater aggregate principal amount
than the amount in respect of which offers are accepted for the related Interest
Period after the acceptance of all offers, if any, of all lower LIBOR Margins or
Absolute Rates, as the case may be, offered by any Lender for such related
Interest Period, the principal amount of Competitive Bid Loans in respect of
which such offers are accepted shall be allocated by the Borrower among such
Lenders as nearly as possible (in amounts of at least $2,000,000 or larger
multiples of $1,000,000) in proportion to the aggregate principal amount of such
offers. Determinations by the Borrower of the amounts of Competitive Bid Loans
and the lowest bid after adjustment as provided in Section 2.3(e)(iii) shall be
conclusive in the absence of manifest error.
(f) Any Lender whose offer to make any Competitive Bid Loan
has been accepted shall, not later than 1:00 p.m. Charlotte, North Carolina time
on the date specified for the making of such Loan, make the amount of such Loan
available to the Agent at the Principal Office in Dollars and in immediately
available funds, for account of the Borrower. The amount so received by the
Agent shall, subject to the terms and conditions of this Agreement, be made
available to the Borrower on such date by depositing the same, in Dollars and in
immediately available funds, in an account of the Borrower maintained at the
Principal Office.
SECTION 2.4 Payments. All interest accrued on Loans subject to the Base
Rate shall be payable on the last day of each successive March 27,, June, Septe
mber and December, commencing on June 30, 1995 and upon payment in full of such
Loans, and all interest accrued on each Fixed Rate Loan, shall be payable at the
earlier of (i) the end of the applicable Interest Period then in effect or (ii)
the end of each ninety (90) day period in the case of an Absolute Rate and each
three (3) month period in the case of a LIBOR Market Rate. The principal amount
of the Advances shall be due on the Termination Date. All payments of Credit
Obligations shall be payable to the Agent on or before 11:00 A.M. Charlotte,
North Carolina time on the date when due, at the Principal Office in Dollars and
in immediately available funds free and clear of all rights of set-off or
counterclaim.
SECTION 2.5 Joint and Several Obligations.
(a) Each of the Subsidiaries and Controlled Partnerships
named in Exhibit G attached hereto and made a part hereof shall execute and
deliver to the Agent as of the Closing Date either an Amended and Restated
Subsidiary Guaranty Agreement or Amended and Restated Partnership Guaranty
Agreement or a Subsidiary Guaranty Agreement or Partnership Guaranty Agreement,
and each other Subsidiary and Controlled Partnership that is to become after the
Closing Date a Participating Subsidiary or Participating Partnership, as the
case may be, shall, at the time it is to become a Participating Subsidiary or
Participating Partnership, execute and deliver to the Agent a Subsidiary
Guaranty Agreement or Partnership Guaranty Agreement, as the case may be in
30
the form attached hereto as Exhibit C-2 and Exhibit C-1, respectively
("collectively the "Guaranty Agreements"). Notwithstanding the foregoing, in the
event of the Acquisition of Surgical Health and until the obtaining of the
consent to amendments to the Indenture dated June 15, 1994 relating to the
Surgical Health Subordinated Indebtedness in order to permit Surgical Health to
deliver its Guaranty Agreement (the "Necessary Consent"), Surgical Health shall
not be deemed a Participating Subsidiary, provided the amount of loans and
investments by Borrower and its Participating Subsidiaries in Surgical Health do
not exceed the sum of (i) the amount set forth in Section 7.8(a)(7)(F) and (ii)
$50,000,000. Promptly upon the Acquisition of Surgical Health the Borrower shall
use its best efforts to cause the Necessary Consent to be obtained and shall
cause each Participating Subsidiary acquiring Surgical Health Subordinated
Indebtedness to immediately give its consent to the amendments. The Borrower
shall cause Surgical Health to deliver to the Agent its Guaranty Agreement not
later than fifteen (15) days after obtaining the Necessary Consent. Until there
shall have been delivered to the Agent the Guaranty Agreement of Surgical Health
the amount of the Revolving Facility available to the Borrower shall be reduced
by a sum equal to the product of 1.15 times the outstanding principal amount of
Surgical Health Subordinated Indebtedness not owned by Borrower or a
Participating Subsidiary. Notwithstanding any other provision of this Agreement,
until such time as Surgical Health shall have delivered its Guaranty Agreement,
all loans by the Borrower to Surgical Health shall be evidenced by a note or
notes, which note or notes shall be promptly delivered to the Agent as required
by the Pledge Agreement. Upon the acquisition by Borrower or a Participating
Subsidiary of any Surgical Health Subordinated Indebtedness it shall immediately
pledge, assign and deliver to the Agent the notes evidencing such Indebtedness,
such notes to constitute security for payment of Credit Obligations.
(b) Although Advances shall be and heretofore have been made
only to the Borrower, all or portions of such Advances may be used by the
Borrower for the benefit of or loaned by the Borrower to a Participating
Subsidiary or Participating Partnership. As a condition to the use of Loans for
the benefit of Participating Subsidiaries and Participating Partnerships, the
Lenders have required that the Participating Subsidiaries and Participating
Partnerships guaranty the payment of the Credit Obligations of Borrower arising
under this Agreement and the other Loan Documents to the extent set forth in the
respective Guaranty Agreements to which they are a party. Each of the
Participating Subsidiaries and Participating Partnerships separately and
severally, hereby appoints and designates the Borrower as each such party's
agent and attorney-in-fact to act on behalf of each such party for all purposes
of the Loan Documents relating to the Credit Obligations. The Borrower shall
have authority to exercise on behalf of each Participating Subsidiary and
Participating Partnership all rights and powers that the Borrower deems
necessary, incidental or convenient in connection with the Loan Documents
relating to the Credit Obligations, including the authority to execute and
deliver certificates, documents, agreements and other instruments referred to in
or contemplated by such Loan Documents, request Advances hereunder for their
benefit, request for the issuance of Letters of Credit for their benefit,
receive all proceeds of Advances, give all notices, approvals and consents
required or requested from time to time by the Agent or Lenders and take any
other actions and steps that a Participating Subsidiary or a Participating
Partnership could take for its own account in connection with the Loan Documents
from time to time, it being the intent of the Participating Subsidiaries and the
Participating Partnerships to
31
grant to the Borrower plenary power to act on behalf of the Participating
Subsidiaries and the Participating Partnerships in connection with and pursuant
to such Loan Documents. The appointment of the Borrower as agent and
attorney-in-fact for the Participating Subsidiaries and the Participating
Partnerships hereunder shall be coupled with an interest and be irrevocable so
long as any Loan Document relating to the Credit Obligations shall remain in
effect. The Agent or Lenders need not obtain any Participating Subsidiary's or
Participating Partnership's consent or approval for any act taken by the
Borrower pursuant to any Loan Document, and all such acts shall bind and
obligate the Borrower, the Participating Subsidiaries and the Participating
Partnerships, jointly and severally. Each Participating Subsidiary and
Participating Partnership forever waives and releases any claim (whether now or
hereafter arising) against the Agent or Lenders based on the Borrower's lack of
authority to act on behalf of any Participating Subsidiary or Participating
Partnership in connection with the Loan Documents relating to the Revolving
Facility.
SECTION 2.6 Pledge Agreement. As security for the Credit Obligations,
the Borrower and certain of the Participating Subsidiaries have, pursuant to the
Prior Agreement, executed and delivered a pledge and security agreement to the
Agent and shall execute and deliver to the Agent amended and restated pledge
agreements on the Closing Date and from time to time after the Closing Date
pursuant to the terms of Section 7.14 hereof or upon request by the Agent,
pledge and security agreements in form acceptable to the Agent and its counsel
(all being collectively called the "Pledge Agreements") granting to the Agent a
first priority security interest in and lien on (i) all shares of stock of all
Subsidiaries owned directly or indirectly by the Borrower, (ii) all right, title
and interest in and to both the ownership interest of Borrower in any
partnership and all distributions payable to the Borrower or any Subsidiary as a
partner of any partnership (including Controlled Partnerships but not including
Vanderbilt), (iii) all notes payable to Borrower by any Subsidiary or Controlled
Partnership evidencing any loan or advance made by Borrower, and (iv) all
accounts receivable due to Borrower by any Subsidiary or Controlled Partnership
arising by reason of any loan or advance made by Borrower, together with all
financing statements, stock certificates and duly executed stock powers
necessary to perfect the Agent's security interest therein, in each case whether
now owned or hereafter acquired.
SECTION 2.7 Prepayment. The Borrower may at any time prior to the
Termination Date prepay all or any part of the Advances, without premium or
penalty (except as set forth below); provided, however, that no Fixed Rate
Segment may be prepaid during an Interest Period unless the Borrower shall pay
to the Agent the amounts required by Section 4.2 hereof. The Borrower shall pay
all interest accrued to the date of prepayment on any amount prepaid as
permitted under the terms of the next preceding sentence on or prior to the
Termination Date in connection with the prepayment in
32
full of the Credit Obligations and the concurrent termination of this Agreement.
The Borrower shall give the Agent notice of its intent to pay any Base Rate Loan
not later than 11:00 a.m. on the date of payment. Failure to give such notice
shall result in payment of interest through the next succeeding Business Day on
the amount so paid. Each such prepayment shall be in the aggregate amount of
$10,000,000 or such greater amount which is an integral multiple of $1,000,000
or the unpaid balance of all Credit Obligations.
SECTION 2.8 Notes.
(a) The Syndicated Loans made by each Lender shall be
evidenced by a single promissory note of the Borrower substantially in the form
of Exhibit H-1 hereto, dated the date hereof, payable to such Lender in a
principal amount equal to the amount of its Commitment as originally in effect
and otherwise duly completed.
(b) The Competitive Bid Loans made by any Lender shall be
evidenced by a single promissory note of the Borrower substantially in the form
of Exhibit H-2 hereto, dated the date hereof, payable to such Lender and
otherwise duly completed.
(c) The date, amount, Type, interest rate and duration of
Interest Period (if applicable) of each Loan of each Class made by each Lender
to the Borrower, and each payment made on account of the principal thereof,
shall be recorded by such Lender on its books and, prior to any transfer of the
Note evidencing the Loans of such Class held by it, endorsed by such Lender on
the schedule attached to such Note or any continuation thereof; provided that
the failure of such Lender to make, or any error by the Lender in making any
such recordation or endorsement, shall not affect the obligations of the
Borrower to make a payment when due of any amount owing hereunder or under such
Note in respect of the Loans to be evidenced by such Note.
(d) No Lender shall be entitled to have its Notes
subdivided, by exchange for promissory notes of lesser denominations or
otherwise, except in connection with a permitted assignment of all or any
portion of such Lender's Commitment, Loans and Notes pursuant to Section 10.1
hereof.
(e) Each Lender that is an Existing Lender under the First
Restated Agreement shall surrender to the Borrower the promissory notes
delivered to it pursuant to the First Restated Agreement in exchange for the
Notes described in Section 2.8(a) and (b).
SECTION 2.9 Reduction in Revolving Facility. The Borrower shall have
the right from time to time (but not more frequently than once during each
quarterly period), but upon not less than three (3) Business Days written notice
to the Agent to reduce the amount of the Revolving Facility. The Agent shall
give each
33
Lender, within one (1) Business Day thereafter, telephonic notice (confirmed in
writing) of such reduction. Each such reduction shall be in the aggregate
principal amount of $10,000,000 or such greater amount which is an integral
multiple of $1,000,000, and shall permanently reduce the Commitment of each
Lender on a pro rata basis. No such reduction shall result in payment of a Fixed
Rate Loan other than on the last day of the Interest Period of such Loan. Each
reduction of the Revolving Facility shall be accompanied by payment of the Loans
to the extent that the Credit Obligations exceed the Revolving Facility after
giving effect to such reductions together with accrued and unpaid interest on
the amounts prepaid.
SECTION 2.10 Unused Fee. From and after the Effective Date, the
Borrower shall pay to the Agent for the benefit of each Lender a fee (the
"Unused Fee") computed at a per annum rate of the then applicable Unused Margin
times the daily average Unused Amount of such Lender. The Unused Fee shall be
payable quarterly on the last day of each successive March 27,, June, September
and December in each year for the immediately preceding quarterly period,
commencing on June 30, 1995, and upon the Termination Date. The Unused Fee shall
be computed on an Actual/360 Basis.
SECTION 2.11 Lending Offices. The Loans of each Type made by each
Lender shall be made and maintained at such Lender's Applicable Lending Office
for Loans of such Type.
SECTION 2.12 Letter of Credit Borrowings.
(a) NationsBank may issue from time to time in accordance
with Section 6.1, in its sole discretion, for the account of the Borrower
Letters of Credit in an aggregate outstanding stated amount up to but not to
exceed the Letter of Credit Commitment. All Letters of Credit issued pursuant to
this Agreement, shall expire on or before the fifth (5th) Business Day next
preceding the Termination Date. The aggregate Letter of Credit Obligations shall
at no time exceed the Letter of Credit Commitment. In the event that the
Borrower shall pay in full all amounts outstanding under the Revolving Facility
and permanently reduce the Revolving Facility to zero as permitted pursuant to
Section 2.9 hereof, it shall simultaneously cause all obligations of NationsBank
under the Letters of Credit and all obligations of the Lenders with respect to
Participations to be discharged in full, whether by providing replacement
letters of credit therefor or payment in full of the amount outstanding with
respect to the Letter of Credit or the deposit of cash in the amount of
outstanding Letters of Credit with the Agent pursuant to the LC Account
Agreement.
(b) The Borrower hereby unconditionally agrees to pay to
NationsBank on demand at the Principal Office (i) all amounts required to pay
all drafts drawn in accordance with the terms of any Letter of Credit or
purporting to be drawn under the Letters of
34
Credit and (ii) the face amount of each draft complying with any Letter of
Credit accepted by NationsBank on the maturity date of such draft, or in the
event of a Default or Event of Default, and any and all reasonable expenses of
every kind incurred by NationsBank in connection with the Letters of Credit and
in any event and without demand to place in possession of NationsBank (which
shall include Advances under the Revolving Facility if permitted by Section 2.1
hereof) sufficient funds to pay all debts and liabilities arising under any
Letter of Credit. Subject to the terms hereof, the Borrower's obligations to pay
NationsBank under this Section 2.12, and the right of NationsBank to receive the
same, shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever. NationsBank may charge any account the Borrower may
have with it for any and all amounts NationsBank pays under a Letter of Credit,
plus commissions, charges and expenses as from time to time agreed to by
NationsBank and the Borrower; provided that to the extent permitted by Section
2.1(b), amounts shall be paid pursuant to Advances under the Revolving Facility.
The Borrower agrees that NationsBank 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. The Borrower agrees to pay NationsBank
interest on any amounts not paid when due hereunder at the Base Rate plus two
percent (2%), or such lower rate as may be required by law.
(c) In accordance with the provisions of Section 2.1(b)
hereof, NationsBank shall notify the Agent (and shall also notify the Borrower)
of any drawing under any Letter of Credit issued for account of the Borrower as
promptly as practicable following the receipt by NationsBank of such drawing.
(d) Each Lender (other than NationsBank) shall automatically
acquire on the date of issuance thereof, a Participation in the liability of
NationsBank 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 NationsBank under Section 2.12(a), each
Lender (other than NationsBank) thereby shall absolutely, unconditionally and
irrevocably assume, and shall be unconditionally obligated to pay to NationsBank
as hereinafter described, its Applicable Commitment Percentage of the liability
of NationsBank under such Letter of Credit. On the fifth Business Day prior to
the Termination Date, each Lender (including NationsBank in its capacity as a
Lender) shall make a Base Rate Loan to the Borrower by paying to the Agent for
the account of NationsBank 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, all as described and pursuant to
35
Section 2.1(b), but only to the extent any Lender has not previously paid to the
Agent for the account of NationsBank such amount. With respect to drawings under
any of the Letters of Credit, each Lender, upon receipt from the Agent of notice
of a drawing in the manner described in Section 2.1(b), shall promptly pay to
the Agent for the account of NationsBank, prior to the applicable time set forth
in Section 2.1(b), its Applicable Commitment Percentage of such drawing.
Simultaneously with the making of each such payment by a Lender or NationsBank,
such Lender shall, automatically and without any further action on the part of
NationsBank or such Lender, acquire a Participation in an amount equal to such
payment (excluding the portion thereof constituting interest) 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(b) or otherwise. Each Lender's obligation to make
payment to the Agent for the account of NationsBank pursuant to this Section
2.12(d), and the right of NationsBank 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 Agent for the account
of NationsBank in full upon receipt of such notice of a drawing as required by
this Section 2.12(d), such Lender shall, on demand, pay to the Agent for the
account of NationsBank 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(b) until such Lender pays such amount to the Agent for the account of
NationsBank in full at the interest rate per annum for overnight borrowing by
NationsBank from the Federal Reserve Bank.
(e) Promptly following the end of each calendar quarter,
NationsBank shall deliver to the Agent, and the Agent shall deliver to each
Lender, a notice describing the aggregate undrawn amount of Letters of Credit
and aggregate face amount of all drafts accepted and outstanding at the end of
such quarter. Upon the request of any Lender from time to time, NationsBank
shall deliver to the Agent, and the Agent shall deliver to such Lender, any
other information reasonably requested by such Lender with respect to the Letter
of Credit then outstanding.
(f) The issuance by NationsBank of any Letter of Credit
shall be subject to the conditions that such Letter of Credit be in such form,
contain such terms and support such transactions or obligations as shall be
reasonably satisfactory to NationsBank consistent with its then current
practices and procedures with respect to similar letters of credit. All Letters
of Credit shall be issued pursuant to and subject to the Uniform Customs and
Practice for Documentary Creditors, 1993 revision, International Chamber of
Commerce Publication No. 500 and all subsequent amendments and revisions
thereto. The Borrower shall have executed and delivered such other instruments
and agreements relating to
36
such Letter of Credit as NationsBank shall have reasonably requested consistent
with such practices and procedures.
(g) Without duplication of Section 10.12 hereof, the
Borrower hereby indemnifies and holds harmless NationsBank, each other Lender
and the Agent from and against any and all claims and damages, losses,
liabilities, costs or expenses which NationsBank, such other Lender or the Agent
may reasonably incur (or which may be claimed against NationsBank, such other
Lender or the 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 NationsBank, any
other Lender or the Agent for any claims, damages, losses, liabilities, costs or
expenses to the extent, but only to the extent, (i) caused by the willful
misconduct or negligence of the party to be indemnified, (ii) caused by the
failure of NationsBank to pay under any Letter of Credit after the presentation
to it of a request 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, or (iii) paid or payable by any Lender under Section 2.14
or Section 9.10 hereof and provided, further, Borrower shall not be required to
indemnify any Lender from and against any such claims, damages, losses,
liabilities, costs or expenses to the extent attributable to such Lender's
failure to perform its obligations hereunder.
(h) Without limiting Borrower's rights as set forth in
Section 2.12(g) above, the obligation of Borrower to immediately reimburse Agent
for drawings made under the Letter of Credit in accordance with the terms
thereof shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement and the Applications for
such Letters of Credit, under all circumstances whatsoever.
(i) The Borrower agrees to pay to the Agent for the benefit
of the Lenders a per annum Letter of Credit fee equal to the applicable
Syndicated Margin in effect at the time of issuance of each such Letter of
Credit times the amount of outstanding Letter of Credit Borrowings. In addition,
the Borrower agrees to pay to the Agent for its own account an issuance fee
equal to one-eighth of one percent (1/8%) per annum times the amount of
outstanding Letter of Credit Borrowings. Such fees shall be payable quarterly in
arrears on the last day of each March 27,, June, September and December,
beginning, however, on the first such day to occur following the Closing Date.
(j) The Borrower acknowledges that NationsBank as issuer of
the Letter of Credit will be required by applicable rules and regulations of the
Federal Reserve 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
37
reimburse NationsBank for all additional costs which it may hereafter incur
solely by reason of its acting as issuer of the Letter 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 NationsBank for such reserves. NationsBank shall furnish to the Borrower at
the time of its demand for payment of such additional costs, the computation of
such additional cost which shall be conclusive absent manifest error, provided
that such computations are made on a reasonable basis.
(k) The Borrower shall pay to NationsBank administrative and
other fees, if any, in connection with the Letters of Credit in such amounts and
at such times as NationsBank and the Borrower shall agree from time to time.
SECTION 2.13 Pro Rata Payments. Except as otherwise provided herein,
(a) each payment on account of the principal of and interest on the Syndicated
Loans and fees (other than the Agent's fees payable under Section 9.11 hereof,
which shall be retained by the Agent and the fees payable to the Agent for its
own account pursuant to Section 2.12(i) and to NationsBank pursuant to Section
2.12(k) which shall be retained by the Agent or NationsBank, as the case may be)
described in this Agreement shall be made to the Agent for the account of the
Lenders pro rata based on their Applicable Commitment Percentages, (b) each
payment on account of principal of and interest on a Competitive Bid Loan shall
be made to the Agent for the account of the Lender making such Competitive Bid
Loan, and the principal amount of Competitive Bid Loans shall be paid on the
last day of the Interest Period for such Competitive Bid Loan, (c) all 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 set-off or counterclaim, and
(d) the Agent will promptly (to the extent received by the Agent by 12:00 noon,
Charlotte, North Carolina time within the same Business Day, otherwise the next
Business Day if received after 12:00 noon) distribute payments received to the
Lenders.
SECTION 2.14 Deficiency Advances. No Lender shall be responsible for
any default of any other Lender in respect to such other Lender's obligation to
make any Loan hereunder nor shall the 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 (a "failing Lender") shall
fail to advance funds to the Borrower as herein provided, the Agent may in its
discretion, but shall not be obligated to, advance under the Note or Notes in
its favor as a Lender all or any portion of such amount (the "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 failing Lender would have been entitled had such
failing Lender made such Advance under its Note or Notes; provided that, upon
payment to the Agent from such failing Lender
38
of the entire outstanding amount of such deficiency advance, together with
interest thereon, from the most recent date or dates interest was paid to the
Agent by the Borrower on each Loan comprising the deficiency advance at the
interest rate per annum for overnight borrowing by the Agent from the Federal
Reserve Bank, then such payment shall be credited against the Note or Notes of
the 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 failing
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. Acceptance by the
Borrower of a deficiency advance from the Agent shall in no way limit the rights
of the Borrower against a failing Lender.
39
ARTICLE III
-----------
INTEREST ON SYNDICATED LOANS
----------------------------
SECTION 3.1 Applicable Interest Rates. The Borrower shall have the
option to elect to have any Syndicated Loan Segment bear interest at the Base
Rate or the LIBOR-Based Rate plus the applicable Syndicated Margin. For any
period of time and for any Segment with respect to which the Borrower does not
elect another interest rate, such Segment shall bear interest at the Base Rate.
The Borrower's right to elect a LIBOR-Based Rate shall be subject to the
following requirements: (a) each Syndicated Loan Segment shall be in the amount
of $5,000,000 or more and in an integral multiple of $1,000,000 and (b) each
LIBOR-Based Rate Segment shall have a maturity selected by the Borrower of one,
two or three months; provided, however, that no LIBOR-Based Rate Segment shall
have a maturity date later than the Termination Date.
SECTION 3.2 Procedure for Exercising Interest Rate Options. The
Borrower may elect to have a particular interest rate apply to a Segment of a
Syndicated Loan by notifying the Agent in writing (which may be by facsimile
transmission) not later than 10:00 a.m., Charlotte, North Carolina time, three
(3) Business Days prior to the effective date any LIBOR-Based Rate is to become
applicable or on the same day on which a requested Base Rate is to become
applicable. Any notice of interest rate election hereunder shall be irrevocable
and shall be in the form attached hereto as Exhibit D and shall set forth the
following: (a) the amount of the Segment to which the requested interest rate
will apply, (b) the date on which the selected interest rate will become
applicable, (c) whether the interest rate selected is the Base Rate or a LIBOR-
Based Rate, and (d) if the interest rate selected is a LIBOR-Based Rate, the
maturity selected for the Interest Period. On the second Business Day preceding
the Business Day that a requested LIBOR- Based Rate is to become applicable, the
Agent shall use its best efforts to notify the Borrower by telephone of the
Agent's estimate of the applicable LIBOR-Based Rate by 10:00 a.m., Charlotte,
North Carolina time, or as early on that day as may be practical in the
circumstances. The Agent shall not be required to provide an estimate of the
LIBOR-Based Rate on any day on which dealings in deposits in Dollars are not
transacted in the London interbank market. If the Borrower does not immediately
accept a LIBOR-Based Rate quoted by the Agent, the Agent may, in view of
changing market conditions, revise the quoted LIBOR-Based Rate at any time. No
LIBOR-Based Rate shall be effective until mutually agreed upon by the Borrower
and the Agent. If the Agent and the Borrower attempt to agree on a LIBOR-Based
Rate but fail so to agree, or if there is any uncertainty as to whether or not
the Agent and the Borrower have agreed upon a LIBOR-Based Rate, interest shall
accrue on the Segment for which a LIBOR-Based Rate has been selected at the then
applicable Base Rate.
SECTION 3.3 Base Rate. Each Segment subject to the Base Rate shall bear
interest from the date the Base Rate becomes applicable thereto until payment in
full, or until a LIBOR-Based Rate is selected by the Borrower and becomes
applicable thereto, on the
40
unpaid principal balance of such Segment on an Actual/360 Basis. Any change in
the Base Rate shall take effect on the effective date of such change in the Base
Rate designated by the Agent, without notice to the Borrower and without any
further action by the Agent.
SECTION 3.4 Fixed Rate. Each LIBOR-Based Rate Segment shall bear
interest from the date the LIBOR-Based Rate becomes applicable thereto until the
end of the applicable Interest Period on the unpaid principal balance of such
LIBOR-Based Rate Segment at the LIBOR-Based Rate on an Actual/360 Basis plus the
applicable Syndicated Margin.
SECTION 3.5 Changes in Syndicated Margin. Any change in the rate of
interest payable with respect to LIBOR Loans because of a change in the
Syndicated Margin shall become effective as of the day of receipt by the Agent
of the financial statement furnished to the Agent pursuant to Section 7.3(1) and
(2) hereof and the Compliance Certificate required by Section 7.3(3) to
accompany such financial statement and the determination by the Agent, based
upon such Compliance Certificate, that as a result of a change in the ratio of
Indebtedness of the Borrower and its Consolidated Entities to Consolidated Cash
Flow there has been a change in the Syndicated Margin.
41
ARTICLE IV
----------
TERMINATION OF LIBOR-BASED RATE AND YIELD PROTECTION
----------------------------------------------------
SECTION 4.1 Suspension of Loans.
(a) If at any time the Agent shall reasonably determine
(which determination, if reasonable, shall be final, conclusive and binding upon
all parties) that:
(i) by reason of any changes arising after the
Closing Date affecting the London interbank market or
affecting the position of any Lender or the Agent in such
markets, adequate and fair means do not exist for ascertaining
the LIBOR-Based Rate with respect to a LIBOR Loan or LIBOR
Market Loan; or
(ii) the continuation by any Lender of any LIBOR
Loans or LIBOR Market Loans or the funding thereof in the
London interbank market would be unlawful by reason of any
law, governmental rule, regulation, guidelines or order; or
(iii) the continuation by any Lender of any LIBOR
Loans or LIBOR Market Loans or the funding thereof in the
London interbank market would be impracticable as a result of
a contingency occurring after the date of this Agreement that
materially and adversely affects the London interbank market;
then, and in any such event, the Agent shall on such date give notice (by
telephone and confirmed in writing) to the Borrower of such determination. The
obligation of any Lender to make or maintain Fixed Rate Segments so affected or
to permit interest to be computed thereon at the LIBOR-Based Rate shall be
terminated, and interest shall thereafter be computed on the affected Segment or
Segments at the then applicable Base Rate.
(b) It is the intention of the parties that the Fixed Rates
shall accurately reflect the cost to the Lender of maintaining any Fixed Rate
Segment during any period in which interest accrues thereon at a Fixed Rate.
Accordingly:
(i) if by reason of any change after the date
hereof in any applicable law or governmental rule, regulation
or order (or any interpretation thereof and including the
introduction of any new law or governmental rule, regulation
or order), including any change in the LIBOR Reserve
Requirement, the cost to the Lender of maintaining any Fixed
Rate Segment or funding the same by means of a London
interbank market time deposit shall increase, the Fixed Rate
applicable to such Fixed Rate Segment shall be adjusted as
necessary to reflect such change in cost to the Lender,
effective as of the date on which such change in any
applicable law, governmental rule, regulation or order becomes
effective.
42
(ii) If any Lender shall have determined that the
adoption after the date of this Agreement of any law, rule,
regulation or guideline regarding capital adequacy, or any
change in any of the foregoing or in the interpretation or
administration of any of the foregoing by any Governmental
Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Lender (or any lending office of any Lender) or such Lender's
holding company with any request or directive regarding
capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding
company, as a consequence of the Lender's obligations under
this Agreement or the Advances made by such Lender pursuant
hereto to a level below that which such Lender or any such
Lender's holding company could have achieved but for such
adoption, change or compliance (taking into consideration the
Lender's guidelines with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to
time the Borrower shall pay to the Lender such additional
amount or amounts as will compensate the Lender or the
Lender's holding company for any such reduction suffered.
SECTION 4.2 Compensation. The Borrower shall compensate any Lender for
all reasonable losses, expenses and liabilities (including any interest owed by
such Lender to lenders on funds borrowed by such Lender to make or carry any
Fixed Rate Segment and any loss sustained by the Lender in connection with the
re-employment of such funds), that such Lender may sustain: (a) if for any
reason (other than a default by such Lender) following agreement between the
Borrower and the Agent or the Borrower and such Lender, as the case may be, as
to the Fixed Rate applicable to a Fixed Rate Segment the Borrower fails to
accept such Fixed Rate Segment, (b) as a consequence of any unauthorized action
taken or default by the Borrower in the repayment of any Fixed Rate Segment when
required by the terms of this Agreement or (c) with respect to any loss of
income incurred by a Lender (as determined in a reasonable manner by such
Lender) associated with the payment of principal other than the last day of an
Interest Period with respect to any Fixed Rate Loan. A certificate as to the
amount of any additional amounts payable pursuant to Section 4.2 (setting forth
in reasonable detail the basis for requesting such amounts) submitted by such
Lender to the Borrower shall be conclusive, in the absence of manifest error.
The Borrower shall pay to such Lender the amount shown as due on any such
certificate delivered by such Lender within 30 days after the Borrower's receipt
of the same.
SECTION 4.3 Taxes. All payments by the Borrower of principal of, and
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future excise, stamp
or franchise taxes or other taxes, whatsoever imposed by any taxing authority,
but excluding
43
franchise taxes and taxes imposed on or measured by any Lender's net income or
receipts (such non-excluded items being called "Taxes"). In the event that any
withholding or deduction from any payment to be made by the Borrower hereunder
is required in respect of any Taxes pursuant to any applicable law, rule or
regulation, then the Borrower will
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the Agent for the account of the Lender such
additional amount or amounts as is necessary to ensure that the net
amount actually received by each Lender will equal the full amount such
Lender would have received had no such withholding or deduction been
required.
Moreover, if any Taxes are directly asserted against the Agent or any Lender
with respect to any payment received by the Agent or such Lender hereunder, the
Agent or such Lender may pay such Taxes and the Borrower will promptly pay such
additional amounts (including any penalties, interest or expenses) as is
necessary in order that the net amount received by the Agent or such Lender
after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount the Agent or such Lender would have received had no such
Taxes been asserted. Upon the request of the Borrower or the Agent, each Lender
and each participant that is organized under the laws of a jurisdiction other
than the United States shall, prior to the due date of any payments hereunder or
under the Notes, execute and deliver to the Borrower and the Agent, one or more
(as the Borrower or the Agent may reasonably request) United States Internal
Revenue Service Forms 4224 or Forms 1001 or such other forms or documents (or
successor forms or documents), appropriately completed, as may be applicable (if
any are) to establish the extent, if any, to which a payment to such Lender or
participant is exempt from withholding or deduction of Taxes.
If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Lender, the required amounts, receipts or other required documentary
evidence, the Borrower shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by the Lender as a result of any
such failure. For purposes of this Section 4.3, a distribution hereunder by the
Agent or any Lender to or for the account of any Lenders shall be deemed a
payment by the Borrower.
If Taxes are incorrectly or illegally paid or assessed, and if any
Lender or the Agent contests the assessment of such Taxes, such Lender or the
Agent shall refund, to the extent of any refund made to such Lender or the
Agent, any amounts paid by the Borrower under this Section in respect of such
Taxes.
44
Without prejudice to the survival of any other agreements of the
Borrower hereunder or any other Loan Document, the agreements of the Borrower
contained in this Section shall survive the payment in full of all its Credit
Obligations and the termination of all Commitments.
To the extent any Lender shall become liable for the payment of any
Taxes hereunder and shall seek reimbursement therefor pursuant to this Section
4.3, the Borrower shall be entitled, upon the giving of five Business Days
notice to the Agent and such Lender, (i) to replace such Lender with a
substitute lender, and (ii) in connection with such substitution, prepay in full
the outstanding Credit Obligation of the Lender requesting reimbursement without
penalty or payment other than under Section 4.2 hereof.
45
ARTICLE V
---------
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower and each Participating Subsidiary and Participating
Partnership jointly and severally represent and warrant to the Agent and the
Lenders as follows:
SECTION 5.1 Organization, Powers, Existence, etc. (a) The Borrower and
each Consolidated Entity is duly organized or formed, validly existing and in
good standing under the laws of the state in which it is incorporated or formed,
(b) the Borrower and each Consolidated Entity has the power and authority to own
its properties and assets and to carry on its business as now being conducted,
(c) the Borrower and each Consolidated Entity has the power to execute, deliver
and perform the Loan Documents to which it is a party, and (d) the Borrower and
each Consolidated Entity is duly qualified to do business in each state in which
it is required to be so qualified.
SECTION 5.2 Authorization of Borrowing, etc. The execution, delivery
and performance of the Loan Documents (a) have been duly authorized by all
requisite action and (b) will not violate any Governmental Requirement, the
certificate of incorporation, bylaws or partnership agreement of the Borrower or
any Consolidated Entity, or any indenture, agreement or other instrument to
which the Borrower or any Consolidated Entity is a party, or by which the
Borrower or any Consolidated Entity or any of their properties are bound, or be
in conflict with, result in a breach of or constitute (with due notice or lapse
of time or both) a default under, any such indenture, agreement or other
instrument, or result in the creation or imposition of any Lien upon any of the
properties or assets of the Borrower or any Consolidated Entity, except as
required by the terms of this Agreement.
SECTION 5.3 Liabilities. The Borrower has furnished to the Agent and
the Lenders a copy of the audited consolidated balance sheet of the Borrower and
the Consolidated Entities dated as of December 31, 1994 and a statement of
changes in shareholders' equity and the related statements of income and cash
flow as of the end of Fiscal Year 1994. Such financial statements were prepared
in conformity with GAAP consistently applied throughout the period involved, are
in accordance with the books and records of the Borrower and the Consolidated
Entities, are correct and complete and present fairly the financial condition of
the Borrower and the Consolidated Entities as of the date of such financial
statements, and, since the date of such financial statements, no material
adverse change in the financial condition, business or operations of the
Borrower or any of the Consolidated Entities has occurred. Neither the Borrower
nor any Consolidated Entity has any Liabilities, Guaranteed Obligations or other
obligations or liabilities, direct or contingent, in an aggregate amount in
excess of $300,000 other than (a) the Liabilities reflected in such balance
sheet and the notes thereto or (b) Liabilities incurred in the ordinary course
of business.
46
SECTION 5.4 Taxes. The Borrower and each Consolidated Entity has filed
or caused to be filed all federal, state and local tax returns that are required
to be filed, and has paid all taxes as shown on said returns or on any
assessment received by the Borrower or any Consolidated Entity to the extent
that such taxes have become due.
SECTION 5.5 Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of the Borrower, threatened against or
affecting the Borrower, any Consolidated Entity or any Facility, by or before
any Governmental Authority that involve any of the transactions contemplated in
this Agreement or the possibility of any judgment or liability that may result
in a material adverse change in the operations or financial condition of the
Borrower and the Consolidated Entities, on a consolidated basis; and neither the
Borrower nor any Consolidated Entity is in default with respect to any material
Governmental Requirement.
SECTION 5.6 Agreements. Neither the Borrower nor any Consolidated
Entity is in default in the performance, observance or fulfillment of any of the
obligations contained in any agreement or instrument to which it is a party,
which default could have a material adverse effect upon the operations or
financial condition of the Borrower and the Consolidated Entities on a
consolidated basis.
SECTION 5.7 Use of Proceeds. Neither the Borrower nor any Participating
Subsidiary or Participating Partnership intends to use any part of the proceeds
of Advances or proceeds of drawings under Letters of Credit for the purpose of
purchasing or carrying any Margin Stock or retiring any debt incurred to
purchase or carry any Margin Stock or for any other purpose that is not
expressly authorized by this Agreement.
SECTION 5.8 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 Consolidated Entity 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 Title IV of ERISA,
has occurred with respect to any plan maintained by the Borrower or any of its
Consolidated Entities.
SECTION 5.9 Subsidiaries. The Borrower has no direct or indirect equity
ownership in any person other than (a) Controlled Partnerships, Subsidiaries and
Consolidated Entities and (b) those ownership interests listed in Exhibit L.
None of the Subsidiaries or Controlled Partnerships has any direct or indirect
equity ownership in any other person except other Consolidated Entities except
as set forth in subparagraph (b) in the preceding sentence. The Borrower's
ownership interest in each Subsidiary and Controlled Partnership is free and
clear of all Liens, warrants, options, rights to purchase and other interests of
any person except for rights of first refusal that apply to certain limited
partnership interests whose value is not material in amount and rights of first
47
refusal given to certain limited partners of HEALTHSOUTH Rehabilitation Center
of Charlotte Limited Partnership and HEALTHSOUTH Rehabilitation Center of San
Francisco Limited Partnership covering the Borrower's general partnership
interests therein. All capital stock of the Subsidiaries has been duly
authorized and validly issued and is fully paid and non-assessable. There have
been delivered and pledged to the Lender all certificates representing all
capital stock in all Subsidiaries. All now-existing Subsidiaries and Controlled
Partnerships are listed in Exhibit M hereto.
SECTION 5.10 Principal Place of Business. The principal place of
business and chief executive office of the Borrower is at its address shown in
Section 10.2 and will not be changed from such address unless, prior to such
change, the Borrower shall have notified the Agent of the proposed change, and
in no event will the Borrower's principal place of business or chief executive
office be located outside the State of Alabama.
SECTION 5.11 Environmental Laws. The Borrower and each Consolidated
Entity are in material compliance with all applicable federal, state and local
laws and regulations relating to air, water, soil and other environmental
quality and all material laws relating to the handling and disposal of hazardous
waste materials.
SECTION 5.12 Disclosure. No financial statement, document, certificate
or other written communication furnished to the Agent or the Lenders by or on
behalf of the Borrower or any Consolidated Entity or to the extent not a
Consolidated Entity any Participating Subsidiary or Participating Partnership in
connection with any Loan Document contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading. There is no fact known to the
Borrower that materially adversely affects the business or condition of the
Borrower or any Material Group that has not been disclosed herein or in such
financial statements.
SECTION 5.13 Licenses. All material certificates of need, licenses,
permits, accreditations and approvals required by all Governmental Authorities
necessary in order for each Facility to be operated for its intended purpose
have been obtained and are in full force and effect.
SECTION 5.14 Title to Properties. The Borrower has good and marketable
title to all its properties and assets reflected on the balance sheet referred
to in Section 5.3 except for those matters shown on such balance sheet and
except for such properties and assets as have been disposed of since the date of
said balance sheet as no longer used or useful in the conduct of its business or
as have been disposed of in the ordinary course of the business and except that
the property of HEALTHSOUTH Doctors' Hospital, Inc. is held subject to a right
of first refusal benefitting the Dr. John T. Macdonald Foundation. All such
properties and assets are free and clear of all Liens, except as otherwise
permitted or required by the provisions of the Loan Documents.
48
SECTION 5.15 Status of Loans. The Credit Obligations constitute Senior
Indebtedness under the indentures pursuant to which the Subordinated
Indebtedness has been issued and are senior in right of payment and security to
all other Indebtedness of Borrower and its Consolidated Entities other than (x)
Indebtedness described in Section 7.8(5)(B)(D), (E) and (H) as to which
Indebtedness, other than that which is secured which may rank senior in right of
security with respect to the applicable security therefor, the Credit
Obligations are pari passu in right of payment and (y) the Surgical Health
Subordinated Indebtedness until such time as Surgical Health shall deliver its
Guaranty. The Pledge Agreements and the delivery of the Collateral to the Agent
will create for the benefit of the Lenders a valid first priority perfected
security interest in the Collateral.
49
ARTICLE VI
GENERAL CONDITIONS OF LENDING
-----------------------------
Each Lender's obligation to make, continue or convert each Advance or
issue additional Letters of Credit hereunder is subject to the following
conditions precedent:
SECTION 6.1 Representations and Warranties. On the date of each Advance
hereunder and on the date the Borrower presents to the Agent a Request for
Advance or Interest Rate Election form or Competitive Bid Quote Request or
Application, the representations and warranties set forth in this Agreement and
in all other Loan Documents shall be true and correct on and as of such date
with the same effect as though such representations and warranties had been made
on the date of the Advance or on the date the Borrower presents to the Agent a
Request for Advance or Interest Rate Election form or Competitive Bid Quote
Request or Application, as the case may be. Each such warranty and
representation shall be deemed to be continuing in effect so long as this
Agreement remains in effect. The presentation by the Borrower of each Request
for Advance or Interest Rate Election, Competitive Bid Quote Request or
Application shall constitute a representation and warranty by the Borrower to
the Lender that no material adverse change in the financial condition of the
Borrower and the Consolidated Entities, on a consolidated basis, as reflected in
the financial statements delivered to the Agent and Lenders pursuant to Section
5.3 has occurred since the date of such financial statements.
SECTION 6.2 No Default. On the date of each Advance and issuance of a
Letter of Credit hereunder, the Borrower and all Material Groups shall be in
compliance with all the terms and conditions set forth in this Agreement on its
or their part to be observed or performed, and no Event of Default, or event
that upon notice or lapse of time or both would constitute an Event of Default,
shall have occurred and be continuing.
SECTION 6.3 Supporting Documents.
(a) The Agent, on behalf of the Lenders, shall have also
received on the date of execution of this Agreement (i) a copy of resolutions of
the Board of Directors of the Borrower, certified as in full force and effect on
such date by the Secretary of the Borrower, authorizing the execution, delivery
and performance of the Loan Documents and authorizing designated officers of the
Borrower to execute and deliver the Loan Documents on behalf of the Borrower and
to execute and deliver to the Agent Request for Advance or Interest Rate
Election or Competitive Bid Quote Request forms and Applications; (ii) a
certificate of the Secretary of the Borrower, dated such date, certifying that
(A) an attached copy of the Certificate of Incorporation and bylaws of the
Borrower is true and correct as of such date, (B) that the Certificate of
Incorporation and Bylaws of the Borrower have not been amended since the date of
the last amendment attached thereto and (C) the incumbency and specimen
signatures of the designated officers referred to in clause (i) above; (iii) an
Opinion of Counsel to the
50
Borrower in the form required by the Agent; (iv) duly executed Pledge Agreements
by the Borrower, the Participating Subsidiaries and the Participating
Partnerships to the extent applicable, together with all stock powers, stock
certificates and financing statements related thereto; (v) evidence satisfactory
to the Agent of the receipt of all necessary approvals for the acquisition of
NovaCare Rehabilitation Hospital Division (provided, however, that so long as
Borrower or one of its Consolidated Entities shall have entered into a binding
agreement to manage a Facility acquired from NovaCare Rehabilitation Hospital
Division, Borrower shall have a period of up to 180 days to obtain all
governmental approvals for transfer of such Facility), (vi) such additional
supporting documents as the Agent may reasonably request; and (vii) all fees
payable to the Agent and the Lenders.
(b) The Agent, on behalf of the Lenders, shall also have
received on or before the date on which a Subsidiary becomes a Participating
Subsidiary (on or before the Closing Date in the case of each Subsidiary listed
in Exhibit G hereto) (i) a copy of resolutions of the Board of Directors and
shareholders of such Subsidiary (if necessary) certified as in full force and
effect on the date thereof by the Secretary of such Subsidiary, authorizing such
Subsidiary's execution, delivery and performance of, and the assumption of
liability under, the Loan Documents and all other agreements and instruments
that this Agreement contemplates will be executed, delivered and performed by
such Subsidiary; (ii) a copy of the Certificate of Incorporation or Articles of
Incorporation, as the case may be, and Bylaws of such Subsidiary, certified as
true and correct on and as of the date on which Loan Documents are executed and
delivered by the Borrower and such Subsidiary; (iii) an Opinion of Counsel to
such Subsidiary in a form acceptable to the Agent as to the execution and
delivery by such Subsidiary of the Loan Documents and other matters related
thereto; (iv) fully executed copies of all Loan Documents that this Agreement
contemplates will be executed or delivered (or both) by such Subsidiary
(including a fully executed Subsidiary Guaranty Agreement); and (v) such
additional supporting documents as the Agent or its counsel may reasonably
request.
(c) The Agent, on behalf of the Lenders, shall also have
received on or before the date on which a Controlled Partnership becomes a
Participating Partnership (on or before the Closing Date in the case of each
Controlled Partnership listed in Exhibit G hereto) (i) a copy of the partnership
agreement under which such Controlled Partnership was formed, certified as true
and correct on and as of the date of which Loan Documents are executed and
delivered by the Borrower and such Controlled Partnership; (ii) an Opinion of
Counsel to such Controlled Partnership in a form acceptable to the Agent as to
the execution and delivery by such Controlled Partnership of the Loan Documents
and other matters related thereto; (iii) fully executed copies of all Loan
Documents that this Agreement contemplates will be executed or delivered (or
both) by such Controlled Partnership (including a fully executed Partnership
Guaranty Agreement); and (iv) such additional supporting documents as the Agent
or its counsel may reasonably request.
51
(d) The Agent, on behalf of the Lenders, shall also have received on or
prior to the date of the initial Advance under this Agreement, (i) evidence
satisfactory to the Agent of the Acquisition by the Borrower or its
Participating Subsidiaries, or both, of the NovaCare Rehabilitation Hospital
Division, (ii) stock certificates representing all of the issued and outstanding
capital stock of each Subsidiary organized to acquire any portion of the assets
of NovaCare Rehabilitation Hospital Division, (iii) a Guaranty of each such
Subsidiary, and (iv) such other documentation, including but not limited to,
opinions, resolutions and certificates, as the Agent shall request.
SECTION 6.4 No Adverse Change. A further condition to both the
execution of this Agreement and any further Advance hereunder is that there has
been no material adverse change in the condition, business or prospects of the
Borrower or any of the Consolidated Entities since December 31, 1994, the
absence of an order or injunction restraining either the acquisition of NovaCare
Rehabilitation Hospital Division or Surgical Health Corporation and the absence
of any pending or threatened litigation which would have a materially adverse
effect on the ability of the Borrower and the Consolidated Entities to perform
its obligations under this Agreement or any other Loan Document.
SECTION 6.5 Effective Date. Neither the Agent nor any Lender shall be
obligated to make any Advance under this Agreement until the Effective Date nor
shall this Agreement be deemed effective until the Effective Date. Furthermore,
all obligations of the Agent and the Lenders under this Agreement shall
terminate on June 1, 1995 if either (i) the Agent has not received those items
described in Section 6.3 or (ii) the Effective Date has not occurred. The First
Restated Agreement shall continue in full force and effect until the Effective
Date.
52
ARTICLE VII
GENERAL COVENANTS OF THE BORROWER
---------------------------------
From the date on which this Agreement is delivered until payment in
full of the Credit Obligations and the termination in writing of the Lenders'
obligation to extend credit under this Agreement, the Borrower and each
Participating Subsidiary and Participating Partnership, jointly and severally,
covenant and agree that:
SECTION 7.1 Existence, Properties, etc. The Borrower shall, and shall
cause each Consolidated Entity to, (a) do or cause to be done all things
necessary to preserve and keep in full force and effect its existence, rights
and franchises and comply with all Governmental Requirements applicable to it
and (b) at all times maintain, preserve and protect all franchises and trade
names and preserve all of its property used or useful in the conduct of its
business and keep the same in good repair, working order and condition, and from
time to time make, or cause to be made, all needful and proper repairs and
improvements thereto (normal wear and tear excepted).
SECTION 7.2 Payment of Indebtedness, Taxes, etc. The Borrower shall,
and shall cause each Consolidated Entity to, (a) pay its indebtedness and
obligations in accordance with normal terms and (b) pay and discharge or cause
to be paid and discharged promptly all taxes, assessments and other charges or
levies of Governmental Authorities imposed upon it or upon its income and
profits or upon any of its properties before the same shall become in default;
provided, however, that the Borrower and the Consolidated Entities shall not be
required to pay and discharge or cause to be paid and discharged any such
indebtedness, obligation, tax, assessment, charge, levy or claim so long as the
validity thereof shall be duly pursued and contested in good faith by
appropriate proceedings and the Borrower and the Consolidated Entities shall
maintain adequate reserves for such taxes, indebtedness, obligations,
assessments, charges, levies or claims during such proceedings.
SECTION 7.3 Financial Statements, Reports, etc. The Borrower shall
deliver or cause to be delivered to the Agent and each Lender:
(1) Not later than 50 days after the end of each calendar
quarter, a balance sheet and a statement of revenues and expenses of
the Borrower and its Consolidated Entities on a consolidated and on a
consolidating basis (provided Borrower shall report the results of
operations for each specialty medical center on a separate basis and
the results of operations for each of the following business segments
on a separate aggregate basis: outpatient rehabilitation centers,
inpatient rehabilitation hospitals, outpatient surgery centers and
others (to include but not limited to diagnostic centers)) and a
statement of cash flow of the Borrower and its Consolidated Entities on
a consolidated basis for such
53
calendar quarter and for the period beginning on the first day of the
fiscal year and ending on the last day of such calendar quarter (in
sufficient detail to indicate the Borrower's and each Consolidated
Entity's compliance with the financial covenants set forth in this
Article VII), together with statements in comparative form for the
corresponding periods in the preceding fiscal year together with
calculations supporting the same store performance as summarized in the
Borrower's Form 10-Q for the corresponding period, and certified by the
president or chief financial officer of the Borrower.
(2) Not later than 100 days after the end of each fiscal year,
financial statements (including a balance sheet, a statement of
revenues and expenses, a statement of changes in shareholders' equity
and a statement of cash flow) of the Borrower and its Consolidated
Entities on a consolidated and on a consolidating basis (provided
Borrower shall report the results of operations for each specialty
medical center on a separate basis and the results of operations for
each of the following business segments on a separate aggregate basis:
outpatient rehabilitation centers, inpatient rehabilitation hospitals,
outpatient surgery centers and others (to include but not limited to
diagnostic centers)) 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 this Article VII), together with
statements in comparative form for the preceding fiscal year together
with calculations supporting the same store performance 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 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 consistent basis, and (C) present
fairly the financial condition and results of operations of the
Borrower and its Consolidated Entities for the periods covered.
(3) Together with the financial statements required by
paragraphs (1) and (2) above a compliance certificate duly executed by
the chief executive officer or the president or chief financial officer
of the Borrower in the form of Exhibit I attached hereto ("Compliance
Certificate").
(4) Promptly upon receipt thereof, copies of all reports,
management letters and other documents submitted to the Borrower or any
Consolidated Entity by independent accountants in connection with any
annual or interim audit of the books of the Borrower or any
Consolidated Entity made by such accountants.
(5) 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
54
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).
(6) 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 Consolidated Entity, 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 Consolidated Entity 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 Pension
Benefit Guaranty Corporation or the United States Department of Labor.
(7) 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.
(8) 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 the Facility to
carry on its business as then conducted or the termination of any
material insurance or reimbursement program available to the Facility.
(9) Such other information regarding any Facility or the
financial condition or operations of the Borrower or its Consolidated
Entities as the Agent shall reasonably request from time to time or at
any time.
SECTION 7.4 Litigation Notice. The Borrower shall, promptly after the
same shall have become known to any officer of the Borrower, notify the Agent in
writing of any action, suit or proceeding at law or in equity or by or before
any Governmental Authority that, if adversely determined, might impair the
ability of the Borrower or any Material Group to perform its obligations under
this Agreement or any other Loan Document or might materially and adversely
affect the business or condition, financial or otherwise, of the Borrower or any
Material Group.
55
SECTION 7.5 Default Notice. The Borrower shall promptly give notice in
writing to the Agent of the occurrence of any Default or Event of Default.
SECTION 7.6 Further Assurances. The Borrower shall at its cost and
expense, upon the request of the Agent, duly execute and deliver, or cause to be
duly executed and delivered, to the Agent such further instruments and do and
cause to be done such further acts as may be reasonably necessary or proper in
the opinion of the Agent or its counsel to carry out more effectively the
provisions and purposes of the Loan Documents.
SECTION 7.7 Insurance. The Borrower and each Consolidated Entity shall
at all times maintain in force, and pay all premiums and costs related to,
insurance coverages comparable to the coverages reviewed by the Agent prior to
the Closing Date a summary of which coverage is set forth in Exhibit J hereto
and any other coverages required under applicable Governmental Requirements. The
Borrower shall deliver to the Agent annually on or before the anniversary date
of this Agreement, and at such other time or times as the 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 Agent may reasonably
require a description of all insurance coverages maintained by the Borrower and
each Consolidated Entity. The Agent shall have no obligation to give the
Borrower or any Consolidated Entity notice of any notification received by the
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.
SECTION 7.8 Covenants Regarding Financial Condition.
(a) The Borrower covenants and agrees that:
(1) Minimum Net Worth. Consolidated Net Worth shall
not be less than $416,000,000 plus (A) 75% of Consolidated Net
Income (if positive and including for purposes of this Section
7.8(a)(1) only any extraordinary gain), on an ongoing basis
for each fiscal quarter beginning with the fiscal quarter
ending March 27, 31, 1995, 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 generally accepted accounting
principles, 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-interest basis.
(2) Fixed Charge Coverage Ratio. The Consolidated
Fixed Charge Coverage Ratio shall not at any time be less than
1.10 to 1.00.
56
(3) Senior Indebtedness to Consolidated Total
Capital. The ratio of Senior Indebtedness to Consolidated
Total Capital shall be at all times prior to January 1, 1996
less than .55 to 1.00, from January 1, 1996 through December
31, 1996 less than .50 to 1.00 and at all times on and after
January 1, 1997 less than .45 to 1.00.
(4) Indebtedness to Consolidated Cash Flow. The ratio
of Indebtedness of the Borrower and its Consolidated Entities
to Consolidated Cash Flow shall at all times during the
periods set forth below be less than the ratio set forth
opposite such period:
Ratio of
------------------------------
Consolidated
Period Indebtedness to Cash Flow
------ ------------ ------------
Closing Date through 4.50 1.00
December 31, 1995
January 1, 1996 through 4.00 1.00
December 31, 1996
January 1, 1997 and 3.50 1.00
Thereafter
(5) Indebtedness. The Borrower and Consolidated
Entities on a consolidated basis will not incur, or otherwise
become liable with respect to, any Indebtedness other than (A)
the Credit Obligations; (B) Indebtedness described in Exhibit
K which Indebtedness shall not be modified or amended; (C) the
Senior Subordinated Notes and the Convertible Subordinated
Debentures; (D) up to $50,000,000 of Indebtedness, including
Indebtedness incurred to purchase property, plant or
equipment; (E) Guaranteed Obligations permitted under Section
7.8(a)(6); (F) Subordinated Indebtedness of the Borrower, the
proceeds of which are used to permanently reduce the principal
portion of the Senior Subordinated Notes or the Convertible
Subordinated Debentures so long as such Subordinated
Indebtedness is (i) unsecured, (ii) bears interest at a rate
of 15% or less per annum, (iii) contains covenants,
restrictions, terms of subordination and redemption provisions
no less favorable to the Lenders than those contained in
Indentures pursuant to which the Senior Subordinated Notes or
Convertible Subordinated Debentures, as the case may be, were
issued, as such Indentures exist on the Closing Date, (iv)
prohibits payment of principal whether by its terms or by
prepayment prior to the earlier of 100 days next following the
Termination Date or November 1, 2000, and (v) does not result
in an increase in the amount of outstanding Indebtedness, (G)
upon the acquisition of Surgical Health Corporation, the
Surgical Health Subordinated Indebtedness and (H) the
Headquarters Obligations.
57
(6) Guarantees. Borrower and the Consolidated
Entities on a consolidated basis will not incur any Guaranteed
Obligations (whether by directly guaranteeing obligations of
another person or by agreement to purchase the indebtedness of
any other person, or entering into an agreement for the
furnishing of funds to any other person through the purchase
of goods, supplies or services or by way of stock purchase,
contribution, advance or loan for the purpose of paying or
discharging the indebtedness of any other person or
otherwise), in an aggregate amount in excess of $50,000,000,
except for (A) the endorsement of negotiable instruments in
the ordinary course of business for collection; (B)
obligations arising by reason of the Borrower's status as a
general partner of a Controlled Partnership; (C) obligations
to advance funds to Subsidiaries and Controlled Partnerships,
but only so long as the note or notes or accounts receivable
evidencing the advance of such funds is assigned to the Agent
as security for the Credit Obligations; (D) the guarantees
arising under the Guaranty Agreements; (E) the guarantee of up
to $22,000,000 of Indebtedness of Vanderbilt, (F) guarantees
of Indebtedness incurred to pay the principal amount of the
Credit Obligations, provided that, concurrently with the
incurrence of such Guaranteed Obligation, the Borrower and the
Agent agree in writing to reduce the credit available to the
Borrower under this Agreement by an amount equal to the amount
of such Guaranteed Obligations and the Borrower pays any fee
required to be paid in connection with such reduction and (G)
guarantees of the Headquarters Obligations.
(7) Investments and Loans. Borrower will not and will
not permit any Consolidated Entity, directly or indirectly, to
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
such 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; (B)
acquire stock or partnership interests in, and assets of, any
new Consolidated Entity acquired at a Cost of Acquisition of
up to $50,000,000; (C) make Permitted Investments; (D) make
investments in an aggregate amount during the term of this
Agreement not exceeding $50,000,000 in corporations,
partnerships or joint ventures who do not constitute
Consolidated Entities, (E) subject to continuing compliance
with all of the other covenants and conditions contained in
this Agreement, make any Acquisition of a person who shall
become a Consolidated Entity the primary form of consideration
of which is the Common Stock of Borrower with the Cost of
Acquisition not to exceed $150,000,000, and such acquisition
to be accounted for as a pooling of interests, (F) acquire
Surgical Health Corporation for a
58
Cost of Acquisition of approximately $240,000,000 and (G)
acquire Surgical Care Affiliates, Inc. for a Cost of
Acquisition of approximately $1,400,000,000 provided (i) such
acquisition is accounted for as a pooling of interests, (ii)
there shall be delivered to the Agent all of the outstanding
capital stock of Surgical Care Affiliates, Inc., and (iii)
Surgical Care Affiliates, Inc. or its successor shall become a
Participating Subsidiary and shall have furnished the Agent a
Guaranty Agreement pursuant to Section 2.5(a).
(8) Disposition of Assets. Borrower and the
Consolidated Entities on a consolidated basis will not without
the consent of the Required Lenders (which consent shall not
be unreasonably withheld), sell, lease, transfer or otherwise
dispose of in excess of 10% of their total properties and
assets over the term of this Agreement.
(9) Consolidation or Merger. Borrower and its
Consolidated Entities may merge or consolidate with another
person only if (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
under this Agreement; provided that in the case of any
consolidation or merger with a person which (x) is not a
Consolidated Entity either before or after giving effect to
such merger or consolidation and (y) the total assets of such
person exceed $50,000,000, the Required Lenders shall have
consented thereto.
(10) Liens. Borrower will not, and will not permit
any Consolidated Entity to, 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, (ii) Liens
existing as of the date hereof and described on Exhibit N
hereof and (iii) Liens securing Indebtedness incurred under
Section 7.8(a)(5)(D) so long as the Lien extends only to the
asset acquired with such Indebtedness.
(11) Dividends and Distributions. Borrower will not
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.
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(12) Acquisitions. Prior to entering into any
agreement to acquire any person or Facility the estimated Cost
of Acquisition of which exceeds $50,000,000, the Borrower
shall provide to the Agent evidence satisfactory to the Agent,
(i) that the person or Facility to be acquired is in the same
line of business presently engaged in by the Borrower or its
Consolidated Entities, (ii) that the person or Facility to be
acquired does not oppose the Acquisition, and (iii) if the
Cost of Acquisition exceeds $50,000,000 (other than an
Acquisition under Section 7.8(a)(7)(E)), the Required Lenders
shall have consented thereto.
(13) Restricted Payments. Borrower will not make
Restricted Payments except Borrower may (i) redeem the
Surgical Subordinated Indebtedness, (ii) repay up to
$10,000,000 of Subordinated Indebtedness in any Fiscal Year,
and (iii) make other Restricted Payments in any Fiscal Year so
long as Borrower shall deliver to the Agent prior to making
any other such Restricted Payment a Compliance Certificate
demonstrating that on a pro forma basis after giving effect to
such payment no Default or Event of Default exists.
(b) Except as otherwise expressly provided in this
Section 7.8, (i) the Borrower shall also cause and require each of its
Consolidated Entities to observe and perform each of the covenants and
agreements of this section to be observed and performed by the
Borrower, whether or not a specific reference is made to the
Consolidated Entities in each such covenant (other than the financial
covenants set forth in paragraphs (1) through (4) of subsection (a)
above, which apply to the Borrower and the Consolidated Entities on a
consolidated basis), and (ii) all computations required in connection
with such financial covenants and the limitations set forth in
paragraphs (5) through (11) of subsection (a) above shall be made for
the Borrower and its Consolidated Entities on a combined or
consolidated basis, in accordance with generally accepted accounting
principles, after elimination of intercompany items.
SECTION 7.9 Continuation of Current Business. Neither the Borrower nor
any Consolidated Entity will (i) engage in any business other than the business
now being conducted by it and other businesses directly related to providing
rehabilitation services (including outpatient surgery, diagnostic services and
management of physician practices) or orthopedic surgery related acute care
similar in operation (but not in scope) to the HEALTHSOUTH Medical Center
Facility or (ii) acquire or attempt to acquire any person who is opposed to such
acquisition.
SECTION 7.10 Management Contracts. Neither the Borrower nor any
Consolidated Entity will 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,
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except that (i) 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 and (ii) the Facility known as
Nashville REHAB HOSPITAL located in Nashville, Tennessee may be managed by an
independent body until such time as such Facility is sold.
SECTION 7.11 Cooperation; Inspection of Properties. The Borrower shall,
and shall cause the Consolidated Entities to, permit the Lenders and their
representatives to inspect the Borrower's and the Consolidated Entities'
properties and assets, and to inspect, review and audit the Borrower's and the
Consolidated Entities' books and records from time to time and at any time.
SECTION 7.12 Use of Proceeds. The Borrower shall use the proceeds of
Advances exclusively to repay short-term Indebtedness to NationsBank, to
purchase the equity and assume the net working capital obligation of NovaCare
Rehabilitation Hospital Division for a total Cost of Acquisition not to exceed
$235,000,000, to refinance the 11.5% Senior Subordinated Notes due 2004 of
Surgical Health Corporation, to provide funding for the acquisition and
development of Facilities and to provide working capital to the Borrower, the
Participating Subsidiaries and the Participating Partnerships.
SECTION 7.13 Limit on Investment in HEALTHSOUTH of Birmingham, Inc. The
Borrower will not cause or permit its aggregate direct and indirect investment,
whether by stock purchase, capital contribution, advance, loan, guarantee or
otherwise, in HEALTHSOUTH of Birmingham, Inc. to exceed at any time $500,000.
SECTION 7.14 Additional Consolidated Entities. On the last day of each
fiscal quarter of the Borrower (or such earlier time as the Agent may request)
the Borrower will cause each Consolidated Entity that is hereafter acquired or
created to become a Participating Subsidiary or Participating Partnership by
execution of a Guaranty Agreement and all other documents necessary to cause it
to become jointly and severally liable for the Credit Obligations (subject to
the limitations provided in the Guaranty Agreement) and the Borrower or the
Participating Subsidiary or the Participating Partnership, if applicable, shall
execute a Pledge Agreement as more particularly described in Section 2.6 herein
and shall deliver or cause to be delivered all financing statements, stock
certificates and duly executed stock powers necessary to perfect the Agent's
security interest granted under such Pledge Agreement.
SECTION 7.15 ERISA. With respect to all employee pension benefit plans
maintained by the Borrower or any Subsidiary, the Borrower shall not:
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(i) terminate any of such employee pension benefit plans so as to
incur any liability to the Pension Benefit Guaranty Corporation
established pursuant to ERISA;
(ii) allow or suffer to exist any prohibited transaction involving
any of such employee pension benefit plans or any trust created
thereunder which would subject the Borrower or a Subsidiary to a tax or
penalty or other liability on prohibited transactions imposed under
Internal Revenue Code Section 4975 or ERISA;
(iii) fail to pay to any such employee pension benefit plan any
contribution which it is obligated to pay under the terms of such plan;
(iv) allow or suffer to exist any accumulated funding deficiency,
whether or not waived, with respect to any such employee pension
benefit plan;
(v) allow or suffer to exist any occurrence of a reportable event
or any other event or condition, which presents a material risk of
termination by the Pension Benefit Guaranty Corporation of any such
employee pension benefit plan that is a Single Employer Plan, which
termination could result in any liability to the Pension Benefit
Guaranty Corporation; or
(vi) incur any withdrawal liability with respect to any
Multi-employer Plan.
SECTION 7.16 Priority. The Borrower and its Subsidiaries will at all
times (i) cause the Agent to have a duly perfected first priority security
interest in the Collateral and (ii) cause the Credit Obligations to be senior in
right of payment to all other Indebtedness of the Borrower, and its Consolidated
Entities, except as otherwise described in Section 5.15 hereof.
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ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
------------------------------
SECTION 8.1 Events of Default. The following shall constitute Events of
Default under this Agreement:
(a) the Borrower or any Participating Subsidiary or any
Participating Partnership shall fail to pay when due any principal payable under
the terms of any Note or any Reimbursement Obligation or (ii) three Business
Days of the date when due any interest or fees payable under the terms of any
Note or any amount payable under this Agreement, any Guaranty Agreement or any
other of the other Credit Obligations or any other amount owed to the Agent or
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 hereof), 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 Agent or Lenders gives written or telephonic notice of the
default to the Borrower or (ii) the date the Borrower otherwise has notice
thereof; or
(c) the Borrower or any Participating Subsidiary or any
Participating Partnership or any Material Group shall default in the observance
or performance of any provision in Article VII hereof; or
(d) the Agent shall 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 Agent or any Lender by or on behalf of the Borrower
or any Participating Subsidiary or any Participating Partnership was misleading
or untrue in any material respect at the time it was made; or
(e) default shall be made (i) in the payment of any
Indebtedness (other than the Credit 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 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 such default shall not be cured within 10 days after the
occurrence of such default, and the amount of the Indebtedness involved exceeds
$3,000,000; or
(f) the Borrower or any Material Group shall fail 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
63
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 any
aggregate of $50,000 shall be rendered against the Borrower or any Participating
Subsidiary or any Participating Partnership or any Material Group, and the same
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) if any of the Guaranty Agreements, Notes, Pledge
Agreements or LC Account Agreement shall be deemed unenforceable by a court of
competent jurisdiction or shall no longer be effective; or
(j) if any person or group of persons acting together who are
not as at the Closing Date owners of one percent (1%) or more of the Capital
Stock of the Borrower having voting rights shall own directly or indirectly
fifteen percent (15%) or more of the Capital Stock of the Borrower having voting
rights; or
(k) if (i) the Borrower or any Consolidated Entity shall
engage in any prohibited transaction (as described in Section 7.15(ii) hereof),
which is not subject to a statutory or administrative exemption, involving any
employee pension benefit plan of the Borrower or any Consolidated Entity, (ii)
any accumulated funding deficiency (as referred to in Section 7.15(iv) hereof),
whether or not waived, shall exist with respect to any Single Employer Plan,
(iii) a reportable event (as referred to in Section 7.15(v) hereof) (other than
a reportable event for which the statutory notice requirement to the Pension
Benefit Guaranty Corporation has been waived by regulation) shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed to administer or to terminate, any Single Employer
Plan, which reportable event or institution or proceedings is, in the reasonable
opinion of the Required Lenders, likely to result in the termination of such
Single Employer Plan for purposes of Title IV of ERISA, and in the case of such
a reportable event, the continuance of such reportable event shall be unremedied
for sixty (60) days after notice of such reportable event pursuant to Section
4043(a), (c) or (d) of ERISA is given, as the case may be, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, and such
termination results in a material liability of the Borrower or any Consolidated
Entity to such Single Employer Plan or the Pension Benefit Guaranty Corporation,
(v) the Borrower or any Subsidiary shall withdraw from a Multi-employer Plan for
purposes of Title IV of ERISA, and, as a result of any such withdrawal, the
Borrower or any Consolidated Entity shall incur withdrawal liability to such
Multi-employer Plan, or (vi) any other event or condition shall occur or exist;
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and in each case in clauses (i) through (vi) of this Section 8.1(k), such event
or condition, together with all other such events or conditions, if any, could
subject the Borrower or any Consolidated Entity to any tax, penalty or other
liabilities in excess of $100,000, and in each such case the event or condition
is not remedied to the satisfaction of the Required Lenders within ninety (90)
days after the earlier of (i) receipt of notice of such event or condition by
the Authorized Representative from the Agent or (ii) the date the Borrower
becomes aware of such event or condition;
then, and in any such event and at any time thereafter, if such Event of Default
shall then be continuing,
(A) either or both of the following actions may be
taken: (i) the Agent may, and at the direction of the Required
Lenders shall, declare any obligation of the Lenders to make
further Loans or issue Letters of Credit terminated, whereupon
the obligation of each Lender to make further Loans or
NationsBank to issue Letters of Credit, hereunder shall
terminate immediately, and (ii) the Agent shall at the
direction of the Required Lenders, at their option, declare by
notice to the Borrower any or all of the Credit Obligations to
be immediately due and payable, and the same, including all
interest accrued thereon and all other obligations of the
Borrower to 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 Credit Obligations to the contrary
notwithstanding; provided, however, that notwithstanding the
above, if there shall occur an Event of Default under clause
(f) above, then the obligation of the Lenders to lend
hereunder shall automatically terminate and any and all of the
Credit Obligations shall be immediately due and payable
without the necessity of any action by the Agent or the
Required Lenders or notice to the Agent or the Lenders;
(B) Borrower shall immediately deposit cash with the
Agent in an amount equal to the amount of any Letters of
Credit remaining undrawn or unpaid, as collateral security for
the repayment of any future drawings or payments under such
Letters of Credit, and Borrower shall forthwith deposit and
pay such amounts and such amounts shall be held by Agent
pursuant to the terms of the LC Account Agreement; and
(C) the Agent, on behalf of the Lenders, shall have
all of the following rights and remedies in addition to all of
the rights and remedies of a secured party under the Uniform
Commercial Code in respect of the Collateral and otherwise be
available under the Loan Documents or under any applicable
law: the Agent may at any time and from time to time, with or
without judicial process or
65
the aid and assistance of others and without incurring any
liability to the Borrower, upon ten (10) days' notice to the
Borrower sell or otherwise dispose of any Collateral, at
public or private sale or proceedings or otherwise, by one or
more contracts, in one or more parcels, at the same or
different times, with or without having the Collateral at the
place of sale or other disposition, for cash and/or credit,
and upon any terms, at such place(s) and time(s) and to such
person(s) as the Agent deems best; if any Collateral is sold
by the Agent upon credit or for future delivery, the Agent
shall not be liable for the failure of the purchaser to pay
for same and in such event the Agent may resell such
Collateral in accordance with the provisions hereof provided
the Borrower shall be given credit for proceeds received by
reason of such sale; the Agent or any Lender may buy any
Collateral at any public sale and, the Agent or any Lender may
buy such Collateral at private sale so long as such sale is
made in a commercially reasonable manner and in each case may
make payment therefor by any means. Except to the extent the
Agent shall have failed to take action required under this
Agreement, no Lenders shall be entitled to enforce the
provisions of this subsection (C) of Section 8.1
independently.
SECTION 8.2 Agent to Act. In case any one or more Events of Default
shall occur and be continuing, the 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.
SECTION 8.3 Cumulative Rights. No right or remedy herein conferred upon
the Lenders, the Agent and the Borrower 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.
SECTION 8.4 No Waiver. No course of dealing between the Borrower and
any Lender or the Agent or any failure or delay on the part of any Lender, the
Agent or the Borrower in exercising any rights or remedies hereunder shall
operate as a waiver of any rights or remedies hereunder and no single or partial
exercise of any rights or remedies hereunder 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.
SECTION 8.5 Default. The Agent and the Lenders shall have no right to
accelerate any of the Loans upon, or to institute any action or proceeding
before any court to realize upon Collateral as a result of, the occurrence of
any Default which shall not also constitute an Event of Default; provided,
however, nothing
66
contained in this sentence shall in any respect impair or adversely affect the
right, power and authority of the Agent and the Lenders (i) to take any action
expressly required or permitted to be taken under the Loan Documents upon the
occurrence of any Default (and including any action or proceeding which the
Agent may determine to be necessary or appropriate in furtherance of any such
expressly authorized action) and (ii) to take any action provided under the Loan
Documents or otherwise available by statute, at law or in equity upon the
occurrence of any Default.
SECTION 8.6 Allocation of Proceeds. If an Event of Default has occurred
and is continuing, and the maturity of the Notes has been accelerated pursuant
to this Article VIII, all payments received by the Agent hereunder in respect of
any principal of or interest on the Credit Obligations or any other amounts
payable by the Borrower hereunder shall be applied by the Agent in the following
order:
(i) amounts due to the Lenders pursuant to Sections 2.10
hereof;
(ii) amounts due to the Agent and NationsBank pursuant to
Section 9.11 and Section 2.12(i) and (k) hereof;
(iii) payments of interest, to be applied in accordance with
Section 2.13 hereof;
(iv) payments of principal, to be applied in accordance with
Section 2.13 hereof;
(v) payment of cash amounts to the Agent pursuant to Section
8.1(B) hereof; and
(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 principal due to the Lenders.
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ARTICLE IX
THE AGENT
---------
SECTION 9.1 Appointment. Each Lender (including NationsBank in its
capacity as issuer of the Letters of Credit) hereby irrevocably designates and
appoints NationsBank as the Agent of the Lenders under this Agreement, and each
of the Lenders hereby irrevocably authorizes NationsBank as the Agent for such
Lender, to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers as are expressly
delegated to the Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. The Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any of the Lenders, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Agent.
SECTION 9.2 Attorneys-in-fact. The Agent may execute any of its duties
under this Agreement by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Agent shall not be responsible for the gross negligence or willful
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
SECTION 9.3 Limitation on Liability. Neither the Agent nor any of its
officers, directors, employees, agents or attorneys-in-fact shall be liable to
the Lenders for any action lawfully taken or omitted to be taken by it or them
under or in connection with this Agreement except for its or their own gross
negligence or willful misconduct. Neither the Agent nor any of its affiliates
shall be responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower, any of its
Controlled Entities or Controlled Partnerships, or any officer or partner
thereof contained in this Agreement or in any of the other Loan Documents, or in
any certificate, report, statement or other document referred to or provided for
in or received by the Agent under or in connection with this Agreement or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or any of the other Loan Documents, or for any failure of the
Borrower to perform its obligations thereunder. The Agent shall not be under any
obligation to any of the Lenders to ascertain or to inquire as to the observance
or performance of any of the terms, covenants or conditions of this Agreement or
any of the other Loan Documents on the part of the Borrower or to inspect the
properties, books or records of the Borrower or its Controlled Entities or
Controlled Partnerships.
SECTION 9.4 Reliance. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, writing, resolution, notice, consent
certificate, affidavit, letter, cablegram, telegram, telecopy or telex message,
statement, order or
68
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the Agent. The
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless an Assignment and Acceptance shall have been filed with and
accepted by the Agent. The Agent shall be fully justified in failing or refusing
to take any action under this Agreement unless it shall first receive advice or
concurrence of the Lenders or the Required Lenders as provided in this Agreement
or it shall first be indemnified to its satisfaction by the Lenders against any
and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all present and future holders of the Notes.
SECTION 9.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender, or the Borrower or
any of the Subsidiaries referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Agent receives such a notice, the Agent shall promptly give
notice thereof to the Lenders. The Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default as it
shall deem advisable in the best interests of the Lenders.
SECTION 9.6 No Representations. Each Lender expressly acknowledges that
neither the Agent nor any of its affiliates has made any representations or
warranties to it and that no act by the Agent hereafter taken, including any
review of the affairs of the Borrower or any of its Consolidated Entities, shall
be deemed to constitute any representation or warranty by the Agent to any
Lender. Each Lender represents to the Agent that it has, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the financial condition, creditworthiness, affairs, status
and nature of the Borrower and Controlled Partnerships and made its own decision
to enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and to make such investigation as it
deems necessary to inform itself as to the status and affairs, financial or
otherwise, of the Borrower and its Consolidated Entities and
69
Controlled Partnerships. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the affairs, financial condition or
business of the Borrower or any of its Consolidated Entities and Controlled
Partnerships which may come into the possession of the Agent or any of its
affiliates.
SECTION 9.7 Indemnification. The Lenders agree to indemnify the Agent
in its capacity as such (to the extent required to be reimbursed but not
reimbursed by the Borrower or any of its Consolidated Entities and without
limiting any obligations of the Borrower or any of its Consolidated Entities so
to do), ratably according to the respective principal amount of the Notes held
by them at the time of the event with respect to which indemnity is sought (or,
if no Notes are outstanding, ratably in accordance with their respective
Applicable Commitment Percentages as then in effect) from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may at any time (including without limitation at any time following the payment
of the Note) be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement or any other document contemplated
by or referred to herein or the transactions contemplated hereby or any action
taken or omitted by the Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's gross negligence or
willful misconduct. The agreements in this subsection shall survive the payment
of the Obligations and the termination of this Agreement.
SECTION 9.8 Lender. The Agent and its affiliates may make loans to,
accept deposits from and generally engage in any kind of business with the
Borrower and its Consolidated Entities and Controlled Partnerships as though it
were not the Agent hereunder. With respect to its Loans made or renewed by it
and any Note issued to it, the Agent shall have the same rights and powers under
this Agreement as any Lender and may exercise the same as though it were not the
Agent, and the terms "Lender" and "Lenders" shall, unless the context otherwise
indicates, include the Agent in its individual capacity.
SECTION 9.9 Resignation. If the Agent shall resign as Agent under this
Agreement, then the Required Lenders may appoint a successor Agent for the
Lenders, which successor shall be approved by the Borrower, which approval shall
not be unreasonably withheld, which shall be a commercial bank organized under
the laws of the United States or any state thereof, having a combined surplus
and capital of not less than $500,000,000, whereupon such successor Agent shall
succeed to the rights, powers and duties of the former Agent and the obligations
of the former Agent shall be terminated and canceled, without any other or
further act or deed on the part
70
of such former Agent or any of the parties to this Agreement; provided, however,
that the former Agent's resignation shall not become effective until such
successor Agent has been appointed and has succeeded of record to all right,
title and interest of the former Agent in the Collateral; provided, further, if
the Required Lenders cannot agree as to a successor Agent within ninety (90)
days after such resignation, the Agent shall appoint a successor Agent and the
parties hereto agree to execute whatever documents are necessary to effect such
action under this Agreement or any other document executed pursuant to this
Agreement; provided, however in such event all provisions of this Agreement and
the Loan Documents, shall remain in full force and effect. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article IX shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
SECTION 9.10 Sharing of Payments, etc. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, set-off, counterclaim
or otherwise, obtain payment with respect to its Credit Obligations (other than
any payment pursuant to Article IV) which results in its receiving more than its
pro rata share of the aggregate payments with respect to all of the Credit
Obligations (other than any payment pursuant to Article IV), then (A) such
Lender shall be deemed to have simultaneously purchased from the other Lenders a
share in their Credit Obligations so that the amount of the Credit Obligations
held by each of the Lenders shall be pro rata and (B) such other adjustments
shall be made from time to time as shall be equitable to insure that the Lenders
share such payments ratably; provided, however, that for purposes of this
Section 9.10 the term "pro rata" shall be determined with respect to both the
Commitment of each Lender and to the Revolving Facility after subtraction in
each case of amounts, if any, by which any such Lender has not funded its share
of the outstanding Loans and Reimbursement Obligations. If all or any portion of
any such excess payment is thereafter recovered from the Lender which received
the same, the purchase provided in this Section 9.10 shall be rescinded to the
extent of such recovery, without interest. The Borrower expressly consents to
the foregoing arrangements and agrees that each Lender so purchasing a portion
of the other Lenders' Obligations may exercise all rights of payment (including,
without limitation, all rights of set-off, banker's lien or counterclaim) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.
SECTION 9.11 Fees. The Borrower agrees to pay to the Agent, for its
individual account, in advance a quarterly Agent's fee in such amount as shall
be agreed to from time to time.
SECTION 9.12 Independent Agreements. The provisions contained in
Sections 9.1 through 9.8 and 9.10 (other than the last sentence thereof) of this
Article IX constitute independent obligations and agreements of the Agent and
the Lenders and the Borrower shall not be deemed a party thereto nor bound
thereby. Borrower does acknowledge the rights of Lenders and Agent under
Sections 9.9, 9.11 and the last sentence of Section 9.10 hereof.
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ARTICLE X
MISCELLANEOUS
-------------
SECTION 10.1 Assignments and Participations.
(a) At any time after the Closing Date each Lender may, with
the prior consent of the Agent and the Borrower, which consent shall not be
unreasonably withheld, assign to one or more banks or financial institutions all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of the Notes payable to its order);
provided, that (i) each such assignment shall be of a constant, and not a
varying, percentage of all of the assigning Lender's rights and obligations
(including Loans and Participations) under this Agreement (ii) for each
assignment involving the issuance and transfer of Notes, the assigning Lender
shall execute an Assignment and Acceptance and the Borrower hereby consents to
execute replacement Notes to give effect to the assignment, (iii) the minimum
Commitment which shall be assigned is (x) $5,000,000, in the case of an
assignment by one existing Lender to another existing Lender, and (y)
$10,000,000 in all other cases, and in multiples of $1,000,000 in excess
thereof, (together with which the assigning Lender's applicable portion of
Participations and the Letter of Credit Commitment shall also be assigned) and
(iv) such assignee shall have an office located in the United States. Upon such
execution, delivery, approval and acceptance, from and after the effective date
specified in each Assignment and Acceptance, (x) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder or
under such Notes have been assigned or negotiated to it pursuant to such
Assignment and Acceptance have the rights and obligations of a Lender hereunder
(including, in respect of the Collateral, all the rights and obligations of a
Lender, as fully as if such assignee had been named as a Lender in this
Agreement) and a holder of such Notes and (y) the assignor thereunder shall, to
the extent that rights and obligations hereunder or under such Notes have been
assigned or negotiated by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its future obligations under this
Agreement. No assignee shall have the right to further assign its rights and
obligations pursuant to this Section 10.1. Any Lender who makes an assignment
shall pay to the Agent a one-time administrative fee of $3,000.00 which fee
shall not be reimbursed by Borrower.
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) the assignment made
under such Assignment and Acceptance is made under such Assignment and
Acceptance without recourse; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or any Controlled Entity or Controlled Partnership or
the performance or observance by the Borrower or any Controlled Entity or
Controlled Partnership of any of its obligations under any Loan Document or any
other instrument or document furnished pursuant hereto;
72
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements delivered pursuant to Section
7.3 and such other Loan Documents and other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement, the Note and the other Loan Documents as are delegated to the Agent
by the terms hereof and thereof, together with such powers as are reasonably
incidental thereto; and (vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender and a holder of such
Note.
(c) The Agent shall maintain at its address referred to herein
a copy of each Assignment and Acceptance delivered to and accepted by it.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender, the Agent shall give prompt notice thereof to Borrower.
(e) Each Lender may sell participations to one or more banks
or other entities as to all or a portion of its rights and obligations under
this Agreement; provided, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any Notes issued to it for the
purpose of this Agreement, (iv) such participations shall be in a minimum amount
of $5,000,000 and in multiples of $1,000,000 in excess thereof, and shall
include an allocable portion of such Lender's Participation, and (v) Borrower,
the Agent and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement and with regard to any and all payments to be made under this
Agreement; provided, that the participation agreement between a Lender and its
participants may provide that such Lender will obtain the approval of such
participant prior to such Lender's agreeing to any amendment or waiver of any
provisions of this Agreement which would (A) extend the maturity of the Notes,
(B) reduce the interest rate hereunder, (C) increase the Commitment of the
Lender granting the participation or (D) release all or any substantial part of
the Collateral other than in accordance with the terms of the Loan Documents,
and (vi) the sale of any such participations which require Borrower to file a
registration statement with the United States Securities and Exchange Commission
or under the securities regulations or laws of any state shall not be permitted.
(f) Notwithstanding the provisions of this Section 10.1 to the
contrary, any Lender may assign all or any portion of its
73
interest in Loans to its Affiliates without approval of the Agent or Borrower
upon payment of the administrative fee described in Section 10.1(a) above, and
all or any portion of its interest in Loans to the Federal Reserve Bank without
approval of the Agent or Borrower and without payment of any fees.
SECTION 10.2 Notices. Any notice shall be conclusively deemed to have
been received by any party hereto and be effective on the day on which delivered
to such party (against receipt therefor) at the address set forth below or such
other address as such party shall specify to the other parties in writing (or,
in the case of telephonic notice or notice by telecopy, telegram or telex (where
the receipt of such message is verified by return) expressly provided for
hereunder, when received at such telephone, telecopy or telex number as may from
time to time be specified in written or verbal notice to the other parties
hereto or otherwise received), or if sent prepaid by certified or registered
mail return receipt requested on the third Business Day after the day on which
mailed, addressed to such party at said address:
(a) if to the Borrower or a Participating Partnership or
a Participating Subsidiary at:
Two Perimeter Park South
Suite 224W
Birmingham, Alabama 35243
Attention: Richard M. Scrushy
with a copy to:
Chief Financial Officer
HealthSouth Corporation
Suite 224W
Two Perimeter Park South
Birmingham, Alabama 35243
and with a copy to:
Treasurer
HealthSouth Corporation
Suite 224W
Two Perimeter Park South
Birmingham, Alabama 35243
and with a copy to:
J. Brooke Johnston, Jr.
Haskell Slaughter Young
1200 AmSouth-Harbert Plaza
1901 6th Avenue North
Birmingham, Alabama 35203
74
(b) if to the Agent at:
One Independence Center
15th Floor
101 North Tryon Street
Charlotte, North Carolina 28255
Attention: Agency Services
With a copy to:
600 Peachtree Street, N.E.
21st Floor
Atlanta, Georgia 30308-2212
Attention: Corporate Banking
(c) if to NationsBank in its capacity as issuer of the
Letters of Credit:
NationsBank, N.A. (Carolinas)
One Independence Center, 15th Floor
101 North Tryon Street
Charlotte, North Carolina 28255
Attention: Letter of Credit Department
(d) if to the Lenders:
At the addresses set forth on the signature pages
hereof or on the signature page of each Assignment
and Acceptance.
SECTION 10.3 No Waiver. No failure or delay on the part of the 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.
SECTION 10.4 Setoff. The Borrower, each Participating Subsidiary and
each Participating Partnership, agrees that the Agent and each Lender shall have
a lien for all the Credit 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 Agent or such Lender or otherwise in the possession or control of the
Agent or such Lender (other than for safekeeping) for any purpose for the
account or benefit of the Borrower, each Participating Subsidiary and each
Participating Partnership, and including any balance of any deposit account or
of any credit of the Borrower, each Participating Subsidiary and each
Participating Partnership, with the Agent or such Lender, whether now existing
or hereafter established, hereby authorizing the Agent and each Lender at any
time or times from and after the occurrence of a Default or Event of Default
with or without prior notice to apply such balances or any part thereof to such
of the Credit Obligations of the Borrower to the Lenders then past due and in
such amounts as
75
they may elect, and whether or not the collateral or the responsibility of other
persons primarily, secondarily or otherwise liable may be deemed adequate. For
the purposes of this paragraph, all remittances and property shall be deemed to
be in the possession of the Agent or such Lender as soon as the same may be put
in transit to it by mail or carrier or by other bailee.
SECTION 10.5 Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the expiration of the Letters of Credit and the execution and delivery to the
Lenders of this Agreement and the Notes and shall continue in full force and
effect so long as any of the Credit Obligations remain outstanding or any Lender
has any Commitment hereunder. 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 this Agreement and the
Notes shall inure to the benefit of the successors and permitted assigns of the
Lenders or any of them and any rights of the Borrower hereunder shall inure to
the benefit of successors and assigns of Borrower to the extent Lenders may
consent to succession or assignment.
SECTION 10.6 Expenses. The Borrower agrees (a) to pay or reimburse the
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 and customary fees and
disbursements of counsel to the Agent, (b) to pay or reimburse the Agent for all
its 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 the Agent harmless 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, indemnify, and hold the Agent harmless 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 liabilities arising from (i)
the willful misconduct or negligence of the party seeking indemnification, (ii)
legal proceedings commenced against
76
the 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 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 hereof,
(iv) taxes imposed as a result of a transfer or assignment of any Note,
participation or assignment of a portion of its rights, (v) any taxes imposed
upon any transferee of any Note, or (vi) or by reason of the failure of the
Agent or any Lender to perform its or their obligations under this Agreement.
The agreements in this subsection shall survive repayment of the Notes and all
other Credit Obligations hereunder.
SECTION 10.7 Amendments. No amendment, modification or waiver of any
provision of this Agreement or any of the Loan Documents and no consent by the
Lenders to any departure therefrom by the Borrower shall be effective unless
such amendment, modification or waiver shall be in writing and signed by the
Agent and the Borrower, but only upon having received the written consent of the
Required Lenders, and the same shall then be effective only for the period and
on the conditions and for the specific instances and purposes specified in such
writing; provided, however, that, no such amendment, modification or waiver
(i) which changes, extends or waives any provision of Section
2.10, Section 2.12(i), Section 9.10, this Section 10.7 or Section
10.15, the amount of or the due date of any scheduled installment or
other payment of or the rate of interest or other amounts payable on or
with respect to any Credit Obligation, changes the definition of
Required Lenders, which increases or extends the Commitment of any
Lender or which increases or extends the Termination Date or which
waives any condition to the making of any Loan shall be effective
unless in writing and signed by each of the Lenders; provided, however,
the Required Lenders may in their sole discretion waive any Default or
Event of Default (other than any Event of Default under Section 8.1(a)
as to which only the Lender which is the payee of a Note may waive the
failure to make a payment of principal or interest due on such Note and
Section 8.1(f) as to which all Lenders must waive such Event of
Default);
(ii) which releases Collateral or any Guarantor (other than in
accordance with the terms of the Loan Documents) shall be effective
unless with the written consent of each of the Lenders; or
(iii) which affects the rights, privileges, immunities or
indemnities of the Agent, shall be effective unless in writing and
signed by the Agent.
Notwithstanding any provision of the other Loan Documents to the contrary, as
between the Agent and the Lenders, execution by the Agent shall not be deemed
conclusive evidence that the Agent has
77
obtained the written consent of the Required Lenders; however, the Borrower
shall be entitled to rely on the signature of the Agent as evidence of consent.
No notice to or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances, except
as provided by law or as otherwise expressly provided herein. No delay or
omission on any Lender's, the Agent's or the Borrower's part in exercising any
right, remedy or option shall operate as a waiver of such or any other right,
remedy or option or of any Default or Event of Default.
SECTION 10.8 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.
SECTION 10.9 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 Notes, any of the other Loan Documents, the Collateral, the Credit
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 Agent, the Borrower and each Lender and the Agent hereby waive,
to the extent permitted by law, trial by jury in connection with any such
litigation.
The Borrower, the Agent and the Lenders believe that, inasmuch as this
Agreement and the transactions contemplated hereby have been entered into and
consummated outside the State of Alabama, such transactions constitute
transactions in interstate commerce, so that neither the Agent nor any of the
Lenders is required, solely by entering into this Agreement and consummating the
transactions contemplated hereby, to qualify to do business as a foreign
corporation within the State of Alabama. Notwithstanding the foregoing, however,
the Borrower hereby irrevocably waives all rights that it may have to raise, in
any action brought by any of the Lenders or the Agent to enforce the rights of
the Lenders and the Agent hereunder or under any of the other Loan Documents, or
the obligations of the Borrower hereunder or thereunder, any defense which is
based upon the failure of any of the Lenders or the Agent to qualify to do
business as a foreign corporation in the State of Alabama, including, but not
limited to, any defenses based upon ss. 232 of the Alabama Constitution of 1901,
ss. 10-2A-247 of the Code of Alabama (1975) or ss. 40-14-4 of the Code of
Alabama (1975), or any successor provision to any thereof. The foregoing waiver
is made knowingly and voluntarily and is a material inducement for the Agent and
the Lenders to enter into the transactions contemplated by this Agreement or any
of the other Loan Documents.
SECTION 10.10 Termination. The termination of this Agreement shall not
affect any rights of the Borrower, the Lenders or the Agent or any obligation of
the Borrower, the Lenders or the Agent, arising prior to the effective date of
such termination, and the provisions hereof shall continue to be fully operative
until all
78
transactions entered into or rights created or obligations incurred prior to
such termination have been fully disposed of, concluded or liquidated and the
Credit Obligations arising prior to or after such termination have been
irrevocably paid in full. The security interests, liens and rights granted to
the 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 Credit Obligations have been
paid in full after the termination hereof or the Borrower has furnished the
Lenders and the Agent with an indemnification satisfactory to the 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 Credit 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.
SECTION 10.11 Governing Law. All documents executed pursuant to the
transactions contemplated herein, including, without limitation, this Agreement
and each of the Loan Documents shall be deemed to be contracts made under, and
for all purposes shall be construed in accordance with, the internal laws and
judicial decisions of the State of North Carolina; provided that this Section
10.11 shall not affect the applicability of, and interpretation or construction
of appropriate terms and provisions under the Uniform Commercial Code of any
jurisdiction which govern the security interests in any of the Collateral. The
Borrower hereby submits to the jurisdiction and venue of the state and federal
courts of North Carolina for the purposes of resolving disputes hereunder or
arising out of the transaction contemplated hereby or for the purposes of
collection.
SECTION 10.12 Indemnification. In consideration of the execution and
delivery of this Agreement by the Agent and each Lender and the extension of the
Commitments, and so long as the Agent and Lenders have fulfilled their
obligations hereunder, the Borrower hereby indemnifies, exonerates and holds the
Agent and each Lender and each of their respective officers, directors,
employees and agents (collectively, the "Indemnified Parties") free and harmless
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
79
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 Participating Subsidiaries or Participating
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 thereof 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
Participating Subsidiary or Participating Partnerships,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's
negligence or willful misconduct, 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.
SECTION 10.13 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.
SECTION 10.14 Integration. This Agreement and the Loan Documents
represent the final agreement between the parties and may not be contradicted by
evidence of prior, contemporaneous, or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the parties.
SECTION 10.15 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
80
obligations hereunder without the prior written consent of the Agent and all
Lenders. The Agent and the Lenders may assign or transfer their interest
hereunder but only as provided herein.
SECTION 10.16 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.
SECTION 10.17 Usury Savings Clause. Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes, including
all charges or fees in connection therewith deemed in the nature of interest
under North Carolina law, shall not exceed the Highest Lawful Rate (as such term
is defined below). If the rate of interest (determined without regard to the
preceeding sentence) under this Agreement at any time exceeds the Highest Lawful
Rate (as defined below), the outstanding amount of the Loans made hereunder
shall bear interest at the Highest Lawful Rate until the total amount of
interest due hereunder equals the amount of interest which would have been due
hereunder if the stated rates of interest set forth in this Agreement had at all
times been in effect. In addition, if when the Loans made hereunder are repaid
in full the total interest due hereunder (taking into account the increase
provided for above) is less than the total amount of interest which would have
been due hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect, then to the extent permitted by law, the
Borrower shall pay to the Agent an amount equal to the difference between the
amount of the interest paid and the amount of interest which would have been
paid if the Highest Lawful Rate had at all times been in effect. Notwithstanding
the foregoing, it is the intention of the Lenders and the Borrower to conform
strictly to any applicable usury laws. Accordingly, if any Lender contracts for,
charges, or receives any consideration which constitutes interest in excess of
the Highest Lawful Rate, then any such excess shall be cancelled automatically
and, if previously paid, shall at such Lender's option be applied to the
outstanding amount of the Loans made hereunder or be refunded to the Borrower.
As used in this paragraph, the term "Highest Lawful Rate" means the maximum
lawful interest rate, if any, that at any time or from time to time may be
contracted for, charged, or received under the laws applicable to such Lender
which are presently in effect or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow a higher
maximum nonusurious interest rate than applicable laws now allow.
81
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
HEALTHSOUTH CORPORATION
WITNESS:
- -----------------------
By:_______________________________
_______________________ Name: Michael D. Martin
Title: Senior Vice President and
Treasurer
82
NATIONSBANK N.A. (CAROLINAS),
as Agent for the Lenders
By:________________________________
Name: Douglas E. Coltharp
Title: Senior Vice President
COMMITMENT: NATIONSBANK, N.A. (CAROLINAS)
$80,000,000
By:________________________________
Name: Douglas E. Coltharp
Title: Senior Vice President
Lending Office:
100 South Tryon Street
Charlotte, North Carolina 28255
Wire Transfer Instructions:
NationsBank, N.A. (Carolinas)
Charlotte, North Carolina
ABA #053000196
Reference: HEALTHSOUTH Corporation
Attention: Agency Services
83
COMMITMENT: THE BANK OF NOVA SCOTIA
$70,000,000
By:________________________________
Name:______________________________
Title:_____________________________
Lending Office:
The Bank of Nova Scotia
Atlanta Agency
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Wire Transfer Instructions:
The Bank of Nova Scotia
New York Agency, for further
credit to BNS-Atlanta Agency
New York, New York
ABA # 026002532
Account # 0606634
Attention: Houston-Atlanta Team
Reference: HEALTHSOUTH
84
COMMITMENT: AMSOUTH BANK, N.A.
$20,000,000
By:________________________________
Name:______________________________
Title: Senior Vice President
Lending Office:
AmSouth Bank, N.A.
1900 5th Avenue
Birmingham, Alabama
Wire Transfer Instructions:
AmSouth Bank, N.A.
Birmingham, Alabama
ABA #062000019
Reference: Acct # 50214327
HEALTHSOUTH
Attention: Lisa Mann
85
COMMITMENT: NATIONAL CITY BANK, KENTUCKY
$40,000,000
By:________________________________
Name:______________________________
Title: Senior Vice President
Lending Office:
101 S. Fifth Street, 8th Floor
Louisville, Kentucky 40202
Wire Transfer Instructions:
National City Bank, Kentucky
Louisville, Kentucky
ABA # 0830-0005-6
Reference: HEALTHSOUTH
Attention: Sandy Walker
86
COMMITMENT: FIRST UNION NATIONAL BANK OF
$70,000,000 NORTH CAROLINA
By:________________________________
Name:______________________________
Title: Vice President
Lending Office:
One First Union Plaza
Charlotte, North Carolina 28288-0735
Wire Transfer Instructions:
First National Union Bank of
North Carolina
Charlotte, North Carolina
ABA # 053000219
Acct # 465906 0001802
Reference: HEALTHSOUTH
Attention: Sue Patterson
87
COMMITMENT: WACHOVIA BANK OF GEORGIA, N.A.
$70,000,000
By:________________________________
Name:______________________________
Title: Vice President
Lending Office:
Wachovia Bank of Georgia
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Wire Transfer Instructions:
Wachovia Bank of Georgia
Atlanta, Georgia
ABA #061000010
Acct # 18-800-621
Attention: Becky Creel
88
COMMITMENT: PNC BANK, KENTUCKY, INC.
$40,000,000
By:________________________________
Name:______________________________
Title:_____________________________
Lending Office:
PNC Bank, Kentucky, Inc.
500 West Jefferson Street
Louisville, Kentucky 40202
Wire Transfer Instructions:
PNC Bank, Kentucky, Inc.
Louisville, Kentucky
ABA #083-000-108
Account #3000990597
Reference: HEALTHSOUTH
Attention: Margie Pate
89
COMMITMENT: THE DAIWA BANK, LIMITED
$20,000,000
By:________________________________
Name:______________________________
Title:_____________________________
By:________________________________
Name:______________________________
Title:_____________________________
Lending Office:
Daiwa Bank, Chicago Branch
Chicago, Illinois
Wire Transfer Instructions:
The Daiwa Bank, Limited
Chicago Branch
Chicago, Illinois
ABA #071006075
Reference: HealthSouth
Attention: Maria Martinez
90
COMMITMENT: THE BANK OF TOKYO, LTD.,
$40,000,000 Atlanta Agency
By:________________________________
Name: Rodney J. Carson
Title: Vice President & Manager
Lending Office:
The Bank of Tokyo, Ltd.
New York, New York
Wire Transfer Instructions:
The Bank of Tokyo, Ltd.
New York, New York
ABA #0260-0963-2
For further credit:
AC 30001680
The Bank of Tokyo, Ltd.
Atlanta Agency
Attention: Glynnis Slaten
91
COMMITMENT: MELLON BANK, N.A.
$40,000,000
By:________________________________
Name:______________________________
Title:_____________________________
Lending Office:
Mellon Bank, N.A.
Two Mellon Bank Center
Pittsburgh, Pennsylvania 15259
Wire Transfer Instructions:
Mellon Bank, N.A.
Pittsburgh, Pennsylvania 15259
ABA # 043000261
Acct # 990873800
Reference: HEALTHSOUTH
Attention: Loan Administrator
Terpsie Katsafanas
92
COMMITMENT: HIBERNIA NATIONAL BANK
$20,000,000
By:________________________________
Title:_____________________________
Lending Office:
313 Carondelet Street
New Orleans, Louisiana 70130
Wire Transfer Instructions:
Hibernia National Bank
P. O. Box 61540
New Orleans, Louisiana 70161
ABA # 065000090
Acct # 0520-36615
National Accounts
Reference: HEALTHSOUTH
Attention: Hal Hopson
93
COMMITMENT: THE BANK OF CALIFORNIA, N.A.
$20,000,000
By:________________________________
Name:______________________________
Title:_____________________________
Lending Office:
Los Angeles, California 90071
Wire Transfer Instructions:
The Bank of California, N.A.
San Francisco, California
ABA # 121000015
Acct # 001-060-235
Reference: HEALTHSOUTH
Attention: Hisako Sakamoto
94
COMMITMENT: COOPERATIVE CENTRALE RAIFFEISEN-
$40,000,000 BOERENLEENBANK, B.A.
"RaboBank Nederland, New York Branch"
By:________________________________
Name:______________________________
Title:_____________________________
Lending Office:
New York, New York 10167
Wire Transfer Instructions:
Bank of New York
New York, New York
ABA # 021000018
For the Account of RaboBank
Acct # 8026002533
Reference: HEALTHSOUTH
Attention: Corporate Services
95
COMMITMENT: SHAWMUT BANK CONNECTICUT, N.A.
$20,000,000
By:________________________________
Name:______________________________
Title:_____________________________
Lending Office:
Shawmut Bank Connecticut, N.A.
Hartford, Connecticut
Wire Transfer Instructions:
Shawmut Bank Connecticut, N.A.
Hartford, Connecticut
ABA # 011900445
Acct # 00-6612-7761
Reference: HEALTHSOUTH
Attention: Sandy Sousa
96
COMMITMENT: TORONTO DOMINION (TEXAS), INC.
$70,000,000
By:______________________________
Name:____________________________
Title:___________________________
Lending Office:
The Toronto-Dominion Bank
909 Fannin Street, 17th Floor
Houston, Texas 77010
Wire Transfer Instructions:
The Toronto-Dominion Bank
ABA # 0260003243
Favor: TD Houston
Acct # 2159251
Reference: HEALTHSOUTH
Attention: Lisa Allison
97
COMMITMENT: WELLS FARGO BANK, N.A.
$40,000,000
By:______________________________
Name:____________________________
Title:___________________________
Lending Office:
420 Montgomery Street, 9th Floor
San Francisco, California 94163
Wire Transfer Instructions:
Wells Fargo Bank, N.A.
San Francisco, California
ABA # 121000248
BNF = Corporate Loan Operations
OBI = HEALTHSOUTH Corporation
98
COMMITMENT: FIRST AMERICAN NATIONAL BANK
$20,000,000
By:_____________________________
Name:___________________________
Title:__________________________
Lending Office:
300 Union Street, 2nd Floor
Nashville, Tennessee 37237-0203
Wire Transfer Instructions:
First American National Bank
300 Union Street, 2nd Floor
Nashville, Tennessee 37237-0203
ABA # 064-000-017
Wire Transfer Clearing Account
# 090-125-6
Attention: Frenisa D. Joy
Commercial Loan Operations
99
COMMITMENT: FLEET BANK OF MASSACHUSETTS, N.A.
$20,000,000
By:_____________________________
Name:___________________________
Title:__________________________
Lending Office:
75 State Street
Boston, Massachusetts 02109
Wire Transfer Instructions:
Fleet Bank of Massachusetts, N.A.
ABA # 011-000-138
Account # 1510351
For credit to: Commercial Loan Services
Attention: Agent Bank
Department
100
COMMITMENT: ABN AMRO BANK N.V.
$20,000,000
By:_____________________________
Name:___________________________
Title:__________________________
Lending Office:
One Ravinia Drive, Suite 1200
Atlanta, Georgia 30346
Wire Transfer Instructions:
Federal Reserve Bank, NY, NY
Favor of: ABN*AMRO New York
ABA # 0260-09580
Further credit to: ABN*AMRO Atlanta
Account # 651-0-010197-41
101
COMMITMENT: DEUTSCHE BANK AG, New York Branch
$20,000,000 and/or Cayman Islands Branch
By:_____________________________
Name:___________________________
Title:__________________________
By:_____________________________
Name:___________________________
Title:__________________________
Lending Office:
31 West 52nd Street
New York, New York 10019
Wire Transfer Instructions:
Deutsche Bank AG
New York, New York 10019
ABA # 026003780
Favor: Deutsche Bank AG,
New York Branch
Attention: Noble Samuel - CF-OPS
102
COMMITMENT: LTCB TRUST COMPANY
$40,000,000
By:_____________________________
Name:___________________________
Title:__________________________
Lending Office:
165 Broadway
New York, New York 10006
Wire Transfer Instructions:
Funds transferred to:
Bankers Trust Company
ABA # 021001033
Name of Account: LTCB Trust Company
Account # 04-203-606
103
COMMITMENT: THE BOATMENS NATIONAL BANK OF
$20,000,000 ST. LOUIS
By:_____________________________
Name:___________________________
Title:__________________________
Lending Office:
P. O. Box 236
St. Louis, Missouri 63166
Wire Transfer Instructions:
The Boatman's National Bank of
St. Louis
St. Louis, Missouri 63166
ABA # 081000032
Account # 101409997409
Attention: Commercial Loan Service
104
COMMITMENT: THE SANWA BANK LIMITED, ATLANTA
$20,000,000 AGENCY
By:_____________________________
Name:___________________________
Title:__________________________
Lending Office:
133 Peachtree Street, N.E.
Suite 4750
Atlanta, Georgia 30303
Wire Transfer Instructions:
The Sanwa Bank Limited
New York, New York
ABA # 026009823
Account # 999669
For the Account of Atlanta
Reference: HEALTHSOUTH
105
COMMITMENT: CREDITANSTALT CORPORATE FINANCE, INC.
$20,000,000
By:_____________________________
Name:___________________________
Title:__________________________
By:_____________________________
Name:___________________________
Title:__________________________
Lending Office:
245 Park Avenue
New York, New York 10167
Wire Transfer Instructions:
Chemical Bank
New York, New York
Account: Critanstalt New York
ABA # 021000128
Account # 544-7-73095
Attention: HEALTHSOUTH Corporation
106
COMMITMENT: DRESDNER BANK AG, NEW YORK BRANCH
$20,000,000 AND GRAND CAYMAN BRANCH
By:_____________________________
Name:___________________________
Title:__________________________
Lending Office:
75 Wall Street
New York, New York 10005
Wire Transfer Instructions:
Chase Manhattan Bank
(Favor of Dresdner Bank AG)
ABA # 021000021
Account # 920-1-059079
Reference: HEALTHSOUTH
107
COMMITMENT: FUJI BANK
$20,000,000
By:_____________________________
Name:___________________________
Title:__________________________
Lending Office:
________________________
________________________
Wire Transfer Instructions:
________________________
________________________
________________________
ABA # _________________
Account # ________________
Attention: ___________________
108
COMMITMENT: NIPPON CREDIT BANK
$20,000,000
By:_____________________________
Name: Bernardo E. Correa-Henschke
Title:__________________________
Lending Office:
550 S. Hope Street, Suite 2500
Los Angeles, California 90071
Wire Transfer Instructions:
Bank of America, San Francisco
1850 Gateway Boulevard, 8th Floor
Concord, California 94520
ABA # 1210-0035-8
Account # 62908-31126
Account Name: The Nippon Credit Bank,
Ltd., Los Angeles
Attention: Loan Administration
109
COMMITMENT: THE INDUSTRIAL BANK OF JAPAN, LIMITED
$40,000,000
By:_____________________________
Name:___________________________
Title:__________________________
Lending Office:
New York Branch
245 Park Avenue
New York, New York 10169
Wire Transfer Instructions:
Fed Wire Industrial Bank of
Japan Limited New York Branch
ABA # 026008345
Reference: HEALTHSOUTH Corporation
Attention: Credit Administration
110
COMMITMENT: THE SUMITOMO BANK, LIMITED
$20,000,000
By:_____________________________
Name:___________________________
Title:__________________________
Lending Office:
________________________
________________________
Wire Transfer Instructions:
________________________
________________________
________________________
ABA # _________________
Account # ________________
Attention: ___________________
111
EXHIBIT A
Applicable
Lender Commitment Percentage
------ ---------------------
NationsBank, N.A. (Carolinas) 8%
The Bank of Nova Scotia 7
First Union National Bank 7
of North Carolina
Mellon Bank, N.A. 4
National City Bank, Kentucky 4
PNC Bank, Kentucky, Inc. 4
Wachovia Bank of Georgia, N.A. 7
Toronto Dominion (Texas), Inc. 7
AmSouth Bank of Alabama 2
The Bank of California, N.A. 2
The Bank of Tokyo, Ltd., Atlanta Agency 4
The Daiwa Bank, Limited 2
Hibernia National Bank 2
Cooperative Centrale Raiffeisen- 4
Boerenleenbank, B.A.
"RaboBank Nederland, New York Branch"
Shawmut Bank Connecticut, N.A. 2
Wells Fargo Bank, N.A. 4
First American National Bank 2
Fleet Bank of Massachusetts, N.A. 2
ABN AMRO Bank N.V. 2
Deutsche Bank AG, New York Branch and/or
Cayman Islands Branch 2
LTCB Trust Company 4
The Boatmens National Bank of St. Louis 2
112
Applicable
Lender Commitment Percentage
- ------ ----------------------
The Sanwa Bank Limited, Atlanta Agency 2%
Creditanstalt Corporate Finance, Inc. 2
Fuji Bank 2
Nippon Credit Bank, Ltd., 2
Los Angeles Agency
Dresdner Bank AG, New York Branch
and Grand Cayman Branch 2
The Sumitomo Bank, Limited 2
The Industrial Bank of Japan, Limited 4
---
100%
113
EXHIBIT B
FORM OF ASSIGNMENT AND ACCEPTANCE
DATED _________________, 19______
Reference is made to the Amended and Restated Credit Agreement dated as
of April 11, 1995 (the "Agreement") among HEALTHSOUTH CORPORATION, a Delaware
corporation ("Borrower"), the Lenders (as defined in the Agreement) and
NATIONSBANK, N.A. (CAROLINAS) as Agent for the Lenders ("Agent"). Unless
otherwise defined herein, terms defined in the Agreement are used herein with
the same meanings.
___________________________________________________________________(the
"Assignor") and ________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, WITHOUT RECOURSE, a
_______%1 interest in and to all of the Assignor's rights and obligations under
the Agreement as of the Effective Date (as defined below), including, without
limitation, such percentage interest in the Loan owing to, and Participations
held by, the Assignor on the Effective Date, and the Notes held by the Assignor.
2. The Assignor (i) represents and warrants that, as of the date
hereof, the aggregate outstanding principal amount of the Loans owing to it
(without giving effect to assignments thereof which have not yet become
effective) is $________ and the aggregate principal amount of Letters of Credit
in which it is deemed to have a Participation under the Agreement is $________;
(ii) represents and warrants that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and clear
of any adverse claim; (iii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Agreement or any of the Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Agreement or any of the Loan Documents or any other instrument or
document furnished pursuant thereto; (iv) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrower or the performance or observance by Borrower of any of its obligations
under the Agreement or any of the Loan Documents or any other instrument or
document furnished pursuant thereto and (v) attaches the Notes referred to in
paragraph 1 above and requests that the Agent exchange such Note for new Note(s)
as follows: A Syndicated Note, dated _____________, 19__ in the principal amount
of $________________, and Competitive Bid Note, dated __________, 19__ --------
1 Specify percentage in no more than 8 decimal points.
114
in the principal amount of $__________ payable to the order of the Assignor, and
a Syndicated Note, dated ____________________________ 19__, in the principal
amount of $_________________ and Competitive Bid Note, dated __________, 19__ in
the principal amount of $__________ payable to the order of the Assignee.
3. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
Section 7.3 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor, or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the
Agreement; (iii) appoints and authorizes the Agent to take such actions on its
behalf and to exercise such powers under the Loan Documents as are delegated to
the Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; (iv) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Agreement are required to
be performed by the Lender; and (v) specifies as its address for notices the
office set forth beneath its name on the signature pages hereof.
4. The effective date for this Assignment and Acceptance shall be
_____________________________ (the "Effective Date"). Following the execution of
this Assignment and Acceptance, it will be delivered to the Agent for acceptance
and recording by the Agent.
5. Upon such acceptance and recording, as of the Effective Date, (i)
the Assignee shall be a party to the Agreement and, to the extent provided in
this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the Loan Documents and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement.
6. Upon such acceptance and recording, from and after the Effective
Date, the Agent shall make all payments under the Agreement and Notes in respect
of the interest assigned hereby (including, without limitation, all payments of
principal, interest, unused fees and letter of credit fees with respect thereto)
to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Agreement and the Notes for periods prior to
the Effective Date directly between themselves.
115
7. This Assignment and Acceptance shall be governed by and construed in
accordance with, the laws of the State of North Carolina.
[NAME OF ASSIGNOR]
By:____________________________________________
Name:
Title:
Notice Address:________________________________
________________________________
________________________________
After the Effective Date
Outstanding Revolving Loans:$__________________
[NAME OF ASSIGNEE]
By:____________________________________________
Name:
Title:
Notice Address:________________________________
________________________________
________________________________
After the Effective Date
Outstanding Revolving Loans:$__________________
Accepted this __________ day of ___________, 19_______
NATIONSBANK, N.A. (CAROLINAS)
By:___________________________________________________
Name:
Title:
Consented to:
HEALTHSOUTH CORPORATION
By:____________________________
Name:
Title:
116
EXHIBIT C-1
PARTNERSHIP GUARANTY AGREEMENT
------------------------------
THIS PARTNERSHIP GUARANTY AGREEMENT (this "Agreement") is entered into
by and between NATIONSBANK, N.A. (CAROLINAS) , a national banking association,
as Agent (the "Agent"), and the other undersigned entity (the "Guarantor") as of
April 11, 1995.
Recitals
--------
A. HEALTHSOUTH Corporation (formerly named HEALTHSOUTH Rehabilitation
Corporation), a Delaware corporation (the "Borrower"), the Agent and the other
lenders party thereto (the "Original Lenders") entered into a Credit Agreement
dated as of November 20, 1992 (such credit agreement as amended by Amendment No.
1 dated August 13, 1993 and Amendment No. 2 dated December 30, 1993, being
referred to as the "Original Agreement") pursuant to which the Original Lenders
agreed to make loans and cause to be issued letters of credit all in an
aggregate outstanding amount not to exceed $390,000,000.
B. At the request of the Borrower, by Amended and Restated Credit
Agreement dated June 7, 1994 (the "First Restated Agreement") the Borrower, the
Agent and certain of the Original Lenders together with additional lenders
(collectively the "Existing Lenders") amended and restated the Original
Agreement, thereby increasing the amount of the credit facility to $550,000,000
and changing certain provisions of the Original Agreement and resulting in the
addition of certain Participating Subsidiaries.
C. The Borrower has requested that the First Restated Agreement be
amended and restated in its entirety in order to increase the amount of the
credit facility, to change certain of the provisions contained therein and to
increase the number of lenders participating therein, and the Agent and the
respective lenders are willing to make such changes by amending and restating
the First Restated Agreement as set forth in the Second Amended and Restated
Credit Agreement of even date herewith, among the Borrower, the Agent and the
lenders party thereto (the "Lenders") (such Second Amended and Restated Credit
Agreement, as amended, modified or supplemented from time to time, being
referred to as the "Credit Agreement"). Capitalized terms used in this
Agreement, unless otherwise defined herein, have the meanings assigned to them
in the Credit Agreement.
D. The Borrower is either directly or through one of its Subsidiaries
the General Partner of the Guarantor, and proceeds of Loans made under the
Credit Agreement have been advanced to and used by the Guarantor.
117
E. The Guarantor will materially benefit from the Loans to be made to
the Borrower and Participating Subsidiaries and Participating Partnerships
pursuant to the Credit Agreement.
F. The Guarantor desires, pursuant to Section 2.5 of the Credit
Agreement, to guarantee, jointly and severally, with the other Participating
Subsidiaries and Participating Partnerships, the Credit Agreement, the Notes and
the other Credit Obligations and to take all other action necessary to become a
Participating Partnership, as defined in the Credit Agreement.
Agreement
---------
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual agreements herein set forth, and to induce the Lenders to continue the
credit extended under the First Restated Agreement and to extend additional
credit under the Credit Agreement, and in further consideration of the
substantial material benefit to accrue to the Guarantor from credit extended and
to be extended by the Lenders under the Credit Agreement, the parties hereto
agree as follows:
1. The Guarantor does hereby, absolutely and unconditionally, jointly
and severally, for the benefit of the Agent and each of the Lenders, guarantee
and become surety for the full and timely payment when due (whether by
acceleration or otherwise) (including amounts which, but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code (or any successor
statute) would become due) for each of the Credit Obligations, whether direct or
indirect, joint or several, absolute or contingent, liquidated or unliquidated,
now or hereafter existing, extended, renewed, replaced, refinanced or
restructured, whether or not from time to time decreased or extinguished and
later increased, created or incurred; provided, however, that the Guarantor's
liability with respect to the Credit Obligations shall be limited to an amount
equal to its Partnership Liabilities.
2. This is a guaranty of payment and not merely of collection. In the
event of any default by the Borrower or any other obligor in payment or
otherwise on any of the Credit Obligations, the Guarantor will pay all or any
portion of the Credit Obligations due or thereafter becoming due, whether by
acceleration or otherwise, without offset of any kind whatsoever, without the
Agent or any Lender first being required to make demand upon the Borrower or any
other obligor or pursue any of its rights against the Borrower or any other
obligor, or against any other person, including other Participating
Subsidiaries, Participating Partnerships and guarantors; and without being
required to liquidate or realize on any collateral security. In any right of
action accruing to the Agent or any Lender, the Agent or such Lender (as the
case may be) may elect to proceed against (a) the Guarantor together with the
Borrower or any other obligor, Participating Subsidiary, Participating
Partnership or guarantor;
118
(b) the Guarantor and the Borrower or any other obligor, Participating
Subsidiary, Participating Partnership or guarantor individually; or (c) the
Guarantor only without having first commenced any action against the Borrower or
any other obligor, Participating Subsidiary, Participating Partnership or
guarantor.
3. The Guarantor hereby unconditionally waives with respect to this
Agreement: (a) notice of acceptance of this Agreement by the Agent or any Lender
and any notice of the incurring by the Borrower or any other obligor,
Participating Subsidiary, Participating Partnership or guarantor of any Credit
Obligation; (b) presentment for payment, notice of nonpayment, demand, protest,
notice of protest and notice of dishonor or default to any party including the
Borrower, the Guarantor or any other obligor, Participating Subsidiary,
Participating Partnership or guarantor; (c) all other notices to which the
Borrower, the Guarantor or any other obligor, Participating Subsidiary,
Participating Partnership or guarantor may be entitled but which may legally be
waived; (d) demand for payments as a condition of liability under this
Agreement; (e) any disability of the Borrower or any other obligor or any
defense available to the Borrower or any other obligor, including absence or
cessation of the Borrower's or any other obligor's liability for any reason
whatsoever; (f) any defense or circumstances which might otherwise constitute a
legal or equitable discharge of a guarantor or surety; and (g) all rights under
any state or federal statute dealing with or affecting the rights of creditors.
4. The Guarantor acknowledges that it has had full and complete access
to the underlying papers relating to the Credit Obligations and all other papers
executed by any person in connection with the Credit Obligations, has reviewed
them and is fully aware of the meaning and effect of their contents. The
Guarantor is fully informed of all circumstances that bear upon the risks of
executing this Agreement and which a diligent inquiry would reveal. The
Guarantor has adequate means to obtain from the Borrower on a continuing basis
information concerning the Borrower's financial condition and is not depending
on the Agent or Lenders to provide such information, now or in the future. The
Guarantor agrees that neither the Agent nor the Lenders shall have any
obligation to advise or notify the Guarantor or to provide the Guarantor with
any data or information. The execution and delivery of this Agreement is not a
condition precedent (and the Agent and the Lenders have not in any way implied
that the execution of this Agreement is a condition precedent) to the Lenders'
making, extending or modifying any loan or any other financial accommodation to
or for the Guarantor otherwise than under the Credit Agreement.
5. The Guarantor hereby specifically acknowledges and agrees, without
limiting the generality of the other provisions of this Agreement, to be bound
by the terms and conditions specified in Section 2.5(b) of the Credit Agreement.
119
6. The Guarantor hereby agrees that its guaranty of the Credit
Obligations is joint and several, continuing, absolute and unconditional
(subject to the proviso of Section 1 above). Without limiting the generality of
the foregoing, the Guarantor's obligations and liability hereunder and its
guaranty of the Notes and any other Loan Document shall not be released,
discharged, impaired, modified or in any way affected by (a) the invalidity or
unenforceability of any Loan Document, (b) the failure of the Agent or the
Lenders to give the Guarantor a copy of any notice given to the Borrower or any
other obligor, Participating Subsidiary, Participating Partnership or guarantor,
(c) any modification, amendment or supplement of any obligation, covenant or
agreement contained in any Loan Document, (d) any compromise, settlement,
release or termination of any obligation, covenant or agreement in any Loan
Document, (e) any waiver of payment, performance or observance by or in favor of
the Borrower or any other obligor, Participating Subsidiary, Participating
Partnership or guarantor of any obligation, covenant or agreement under any Loan
Document, (f) any consent, extension, indulgence or other action or inaction, or
any exercise or non-exercise of any right, remedy or privilege with respect to
any Loan Document, (g) the extension of time for payment or performance of any
Credit Obligations, (h) the release or discharge of the Lenders' claims against
any collateral now or at any time hereafter securing any of the Credit
Obligations, the Borrower or any other Participating Subsidiary or Participating
Partnership by operation of law or otherwise or (i) any other matter that might
otherwise be raised in avoidance of, or in defense against an action to enforce,
the obligations of the Guarantor under this Agreement or its guaranty of any
Credit Obligations.
7. The Guarantor hereby repeats and reaffirms each of the
representations and warranties contained in Article V of the Credit Agreement,
to the extent they are applicable to a Participating Partnership; and the
Guarantor hereby represents and warrants to the Agent and the Lenders that all
such representations and warranties are true with respect to the Guarantor.
8. The Guarantor covenants and agrees with the Agent and each Lender as
follows:
(a) The Guarantor will comply with all of the obligations,
requirements and restrictions in the covenants contained in Article VII
of the Credit Agreement, to the extent they are applicable to a
Participating Partnership.
(b) The Guarantor hereby irrevocably waives with respect to
this Agreement any legal or equitable right to recover from the
Borrower or any other obligor, Participating Subsidiary or
Participating Partnership or guarantor, including without limitation,
any right of subrogation, indemnity, reimbursement or contribution or
any other right of the Guarantor as a
120
creditor of the Borrower or any other obligor, Participating
Subsidiary, Participating Partnership or guarantor.
(c) The Guarantor further waives any rights that might
otherwise be available to Guarantor pursuant to ss. 26-4 through ss.
26-7 of the North Carolina General Statutes.
9. The Guarantor irrevocably (a) acknowledges that this Agreement will
be accepted by the Agent and Lenders and performed by the Guarantor in the State
of North Carolina (which is the state in which the Agent's main office is
located); (b) submits to the jurisdiction of each state or federal court sitting
in North Carolina (collectively, the "Courts") over any suit, action or
proceeding arising out of or relating to this Agreement (individually, an
"Agreement Action"); (c) waives, to the fullest extent permitted by law, any
obligation or defense that the Guarantor may now or hereafter have based on
improper venue, lack of personal jurisdiction, inconvenience of forum or any
similar matter in any Agreement Action brought in any of the Courts; (d) agrees
that final judgment in any Agreement Action brought in any of the Courts shall
be conclusive and binding upon the Guarantor and may be enforced in any other
court to the jurisdiction of which the Guarantor is subject, by a suit upon such
judgment; (e) designates Michael D. Martin, or any successor Treasurer of
HEALTHSOUTH Corporation, whose address is HEALTHSOUTH Corporation, Two Perimeter
Park South, Suite 224W, Birmingham, Alabama 35243, as the Guarantor's authorized
agent to accept and acknowledge on the Guarantor's behalf service of any and all
process that may be served in any Agreement Action in any of the Courts; (f)
agrees, if such agent shall cease so to act, irrevocably to designate and
appoint without delay another such agent in the State of North Carolina
satisfactory to the Agent; (g) consents to the service of process on the
Guarantor in any Agreement Action by the mailing of a copy thereof by registered
or certified mail, postage prepaid, to (i) the Guarantor at the Guarantor's
address designated in or pursuant to Section 10.2 of the Credit Agreement or
(ii) the agent for service of process appointed by the Guarantor under this
Section 9; (h) agrees that service in either manner specified in clause (g) next
above shall in every respect be effective and binding on the Guarantor to the
same extent as though such service of process were served on the Guarantor in
person by a person duly authorized to serve such process; and (i) AGREES THAT
THE PROVISIONS OF THIS SECTION, EVEN IF FOUND NOT TO BE STRICTLY ENFORCEABLE BY
ANY COURT, SHALL CONSTITUTE "FAIR WARNING" TO THE GUARANTOR THAT THE EXECUTION
OF THIS AGREEMENT MAY SUBJECT THE GUARANTOR TO THE JURISDICTION OF THE COURTS OF
THE STATE OF NORTH CAROLINA WITH RESPECT TO ANY AGREEMENT ACTIONS, AND THAT IT
IS FORESEEABLE BY THE GUARANTOR THAT THE GUARANTOR MAY BE SUBJECTED TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NORTH CAROLINA AND MAY BE SUED IN
THAT STATE IN ANY AGREEMENT ACTIONS. Nothing in this Section 9 shall limit or
restrict the Agent's or any Lender's right to serve process or bring Agreement
Actions in manners and in courts otherwise as herein provided.
121
10. The Guarantor agrees that it is, and for all purposes of the
Credit Agreement and the Note shall be, a Participating Partnership.
11. (a) THE GUARANTY PURSUANT TO THIS AGREEMENT IS A CONTINUING
GUARANTY AND SHALL CONTINUE IN FULL FORCE AND EFFECT UNTIL SUCH TIME AS ALL
OBLIGATIONS SHALL HAVE BEEN PAID IN FULL AND THE AGENT AND EACH LENDER SHALL BE
UNDER NO FURTHER OBLIGATION TO LEND OR ADVANCE FUNDS TO THE BORROWER OR ANY
OTHER PERSON CONSTITUTING CREDIT OBLIGATIONS OR TO ISSUE LETTERS OF CREDIT.
(b) If claim is ever made upon the Agent or any Lender for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Credit Obligations (including without limitation any claim that such payment
constitutes or constituted a preference or preferential transfer under
bankruptcy or other law or a fraudulent conveyance, or any other claim under
bankruptcy or other law) and the Agent or such Lender repays all or part of said
amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property,
or (b) any settlement or compromise of any such claim effected by the Agent or
any Lender with any such claimant (including the original obligor), then and in
such event the Guarantor agrees that any such judgment, decree, order,
settlement or compromise shall be binding upon it, notwithstanding any
revocation hereof or the cancellation of any Note or other instrument evidencing
any Credit Obligation or any security therefor, and the Guarantor shall be and
remain liable to the Agent and the Lenders for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by the
Agent or any Lender. Nothing contained in this Section 11(b) shall be deemed to
require any Participating Partnership to pay more than an amount equal to its
Partnership Liabilities.
(c) When taking action under this Agreement, the Agent will have the
same level of responsibility and the same protections as set forth in the Credit
Agreement for the Agent's actions thereunder.
12. This Agreement shall bind the Guarantor's successors and assigns
and shall inure to the benefit of, and be enforceable by, the Agent and each of
the Lenders and their respective successors and assigns. This Agreement may only
be waived, modified or amended by a written instrument signed by the Agent and
the party against which the enforcement thereof is sought. THIS AGREEMENT SHALL
IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUCTED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NORTH CAROLINA. If any term of this Agreement shall be invalid or
unenforceable, the remainder of this Agreement shall remain in force and effect.
This Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which shall constitute one agreement. This Agreement and
the other Loan Documents constitute the entire agreement of the parties with
respect to the subject matter hereof
122
and supersede any inconsistent agreement with respect to the subject matter
hereof and thereof.
13. TO THE EXTENT PERMITTED BY LAW, THE GUARANTOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
WITH RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE AGENT, ANY LENDER OR THE GUARANTOR. THIS PROVISION IS A MATERIAL INDUCEMENT
TO THE AGENT AND EACH LENDER MAKING THE LOANS AVAILABLE TO THE BORROWER AND
PARTICIPATING PARTNERSHIPS AND PARTICIPATING SUBSIDIARIES.
14. Additional Waiver. The Guarantor and the Agent believe that,
inasmuch as this Agreement and the transactions contemplated hereby have been
entered into and consummated outside the State of Alabama, such transactions
constitute transactions in interstate commerce, so that neither the Agent nor
any of the Lenders is required, solely by entering into this Agreement and
consummating the transactions contemplated hereby, to qualify to do business as
a foreign corporation within the State of Alabama. Notwithstanding the
foregoing, however, the Guarantor hereby irrevocably waives all rights that it
may have to raise, in any action brought by any of the Lenders or the Agent to
enforce the rights of the Lenders and the Agent hereunder, or the obligations of
the Guarantor hereunder, any defense which is based upon the failure of any of
the Lenders or the Agent to qualify to do business as a foreign corporation in
the State of Alabama, including, but not limited to, any defenses based upon ss.
232 of the Alabama Constitution of 1901, ss. 10-2A-247 of the Code of Alabama
(1975) or ss. 40-14-4 of the Code of Alabama (1975), or any successor provision
to any thereof. The foregoing waiver is made knowingly and voluntarily and is a
material inducement for the Agent and the Lenders to enter into the transactions
contemplated by this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed by the Guarantor
on the date first written above.
[NAME OF PARTNERSHIP]
ATTEST:
By:______________________ By:___________________________
Name:____________________ Name:_________________________
Title:___________________ Title:________________________
NATIONSBANK, N.A. (CAROLINAS)
By:______________________
Name:____________________
Title:___________________
123
EXHIBIT C-2
SUBSIDIARY GUARANTY AGREEMENT
-----------------------------
THIS SUBSIDIARY GUARANTY AGREEMENT (this "Agreement") is entered into
by and between NATIONSBANK, N.A. (CAROLINAS), a national banking association, as
Agent (the "Agent"), and the other undersigned entity (the "Guarantor") as of
______________________ , 1995.
Recitals
--------
A. HEALTHSOUTH Corporation (formerly named HEALTHSOUTH Rehabilitation
Corporation), a Delaware corporation (the "Borrower"), the Agent and the other
lenders party thereto (the "Original Lenders) entered into a Credit Agreement
dated as of November 20, 1992 (such credit agreement as amended or supplemented
by Amendment No. 1 dated August 13, 1993, and Amendment No. 2 dated December 30,
1993, being referred to as the "Original Agreement") pursuant to which the
Original Lenders agreed to make loans and cause to be issued letters of credit
all in an aggregate outstanding amount not to exceed $390,000,000.
B. At the request of the Borrower, by Amended and Restated Credit
Agreement dated June 7, 1994 (The "First Restated Agreement") the Borrower, the
Agent and certain of the Original Lenders together with additional lenders
(collectively the "Existing Lenders") amended and restated the Original
Agreement, thereby increasing the amount of the credit facility to $550,000,000
and changing certain provisions of the Original Agreement and resulting in the
addition of certain Participating Subsidiaries.
C. The Borrower has requested that the First Restated Agreement be
amended and restated in its entirety in order to increase the amount of the
credit facility, to change certain of the provisions contained therein and to
increase the number of lenders participating therein, and the Agent and the
respective lenders are willing to make such changes by amending and restating
the First Restated Agreement as set forth in the Second Amended and Restated
Credit Agreement of even date herewith, among the Borrower, the Agent and the
lenders party thereto (the "Lenders") (such Second Amended and Restated Credit
Agreement, as amended, modified or supplemented from time to time, being
referred to as the "Credit Agreement"). Capitalized terms used in this
Agreement, unless otherwise defined herein, have the meanings assigned to them
in the Credit Agreement.
D. The Guarantor is a Subsidiary of the Borrower, and proceeds of
Loans made under the Credit Agreement have been advanced to and used by the
Guarantor.
124
E. The Guarantor will materially benefit from the Loans to be made to
the Borrower and Participating Subsidiaries and Participating Partnerships
pursuant to the Credit Agreement.
F. The Guarantor desires, pursuant to Section [2.5] of the Credit
Agreement, to guarantee, jointly and severally, with the other Participating
Subsidiaries and Participating Partnerships, the Credit Agreement, the Notes and
the other Credit Obligations and to take all other action necessary to become a
Participating Subsidiary, as defined in the Credit Agreement.
Agreement
---------
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual agreements herein set forth, and to induce the Lenders to continue the
credit extended under the First Restated Agreement and to extend credit under
the Credit Agreement and in further consideration of the substantial material
benefit to accrue to the Guarantor from credit extended and to be extended by
the Lenders under the Credit Agreement, the parties hereto agree as follows:
1. The Guarantor does hereby, absolutely and unconditionally, jointly
and severally, for the benefit of the Agent and each of the Lenders, guarantee
and become surety for the full and timely payment when due (whether by
acceleration or otherwise) (including amounts which, but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code (or any successor
statute) would become due) for each of the Credit Obligations, whether direct or
indirect, joint or several, absolute or contingent, liquidated or unliquidated,
now or hereafter existing, extended, renewed, replaced, refinanced or
restructured, whether or not from time to time decreased or extinguished and
later increased, created or incurred; provided, however, that the Guarantor's
liability with respect to the Credit Obligations shall be limited to an amount
equal to the greater of (i) 95% of the Guarantor's Net Worth (as hereinafter
defined) from time to time; or (ii) the amount that in a legal proceeding
brought within the applicable limitations period is determined by the final,
non-appealable order of a court having jurisdiction over the issue and the
applicable parties to be the amount of value given by the Lenders, or received
by the Guarantor, in exchange for the obligations of the Guarantor under this
Agreement. As used in this Section 1, "Net Worth" shall mean (x) the fair value
of the property of the Guarantor from time to time (taking into consideration
the value, if any, of rights of subrogation, contribution and indemnity), minus
(y) the total liabilities of the Guarantor (including contingent liabilities
[discounted in appropriate instances], but excluding liabilities of the
Guarantor under this Agreement) from time to time.
2. This is a guaranty of payment and not merely of collection. In the
event of any default by the Borrower or any other obligor in payment or
otherwise on any of the Credit
125
Obligations, the Guarantor will pay all or any portion of the Credit Obligations
due or thereafter becoming due, whether by acceleration or otherwise, without
offset of any kind whatsoever, without the Agent or any Lender first being
required to make demand upon the Borrower or any other obligor or pursue any of
its rights against the Borrower or any other obligor, or against any other
Person, including other Participating Subsidiaries, Participating Partnerships
and guarantors; and without being required to liquidate or realize on any
collateral security. In any right of action accruing to the Agent or any Lender,
the Agent or such Lender (as the case may be) may elect to proceed against (a)
the Guarantor together with the Borrower or any other obligor, Participating
Subsidiary, Participating Partnership or guarantor; (b) the Guarantor and the
Borrower or any other obligor, Participating Subsidiary, Participating
Partnership or guarantor individually; or (c) the Guarantor only without having
first commenced any action against the Borrower or any other obligor,
Participating Subsidiary, Participating Partnership or guarantor.
3. The Guarantor hereby unconditionally waives with respect to this
Agreement: (a) notice of acceptance of this Agreement by the Agent or any Lender
and any notice of the incurring by the Borrower or any other obligor,
Participating Subsidiary, Participating Partnership or guarantor of any Credit
Obligation; (b) presentment for payment, notice of nonpayment, demand, protest,
notice of protest and notice of dishonor or default to any party including the
Borrower, the Guarantor or any other obligor, Participating Subsidiary,
Participating Partnership or guarantor; (c) all other notices to which the
Borrower, the Guarantor or any other obligor, Participating Subsidiary,
Participating Partnership or guarantor may be entitled but which may legally be
waived; (d) demand for payments as a condition of liability under this
Agreement; (e) any disability of the Borrower or any other obligor or any
defense available to the Borrower or any other obligor, including absence or
cessation of the Borrower's or any other obligor's liability for any reason
whatsoever; (f) any defense or circumstances which might otherwise constitute a
legal or equitable discharge of a guarantor or surety; and (g) all rights under
any state or federal statute dealing with or affecting the rights of creditors.
4. The Guarantor acknowledges that it has had full and complete access
to the underlying papers relating to the Credit Obligations and all other papers
executed by any person in connection with the Credit Obligations, has reviewed
them and is fully aware of the meaning and effect of their contents. The
Guarantor is fully informed of all circumstances that bear upon the risks of
executing this Agreement and which a diligent inquiry would reveal. The
Guarantor has adequate means to obtain from the Borrower on a continuing basis
information concerning the Borrower's financial condition and is not depending
on the Agent or Lenders to provide such information, now or in the future. The
Guarantor agrees that neither the Agent nor the Lenders shall have
126
any obligation to advise or notify the Guarantor or to provide the Guarantor
with any data or information. The execution and delivery of this Agreement is
not a condition precedent (and the Agent and the Lenders have not in any way
implied that the execution of this Agreement is a condition precedent) to the
Lenders' making, extending or modifying any loan or any other financial
accommodation to or for the Guarantor otherwise than under the Credit Agreement.
5. The Guarantor hereby specifically acknowledges and agrees, without
limiting the generality of the other provisions of this Agreement, to be bound
by the terms and conditions specified in Section 2.5(b) of the Credit Agreement.
6. The Guarantor hereby agrees that its guaranty of the Credit
Obligations is joint and several, continuing, absolute and unconditional
(subject to the proviso of Section 1 above). Without limiting the generality of
the foregoing, the Guarantor's obligations and liability hereunder and its
guaranty of the Notes and any other Loan Document shall not be released,
discharged, impaired, modified or in any way affected by (a) the invalidity or
unenforceability of any Loan Document , (b) the failure of the Agent or the
Lenders to give the Guarantor a copy of any notice given to the Borrower or any
other obligor, Participating Subsidiary, Participating Partnership or guarantor,
(c) any modification, amendment or supplement of any obligation, covenant or
agreement contained in any Loan Document , (d) any compromise, settlement,
release or termination of any obligation, covenant or agreement in any Loan
Document , (e) any waiver of payment, performance or observance by or in favor
of the Borrower or any other obligor, Participating Subsidiary , Participating
Partnership or guarantor of any obligation, covenant or agreement under any Loan
Document , (f) any consent, extension, indulgence or other action or inaction,
or any exercise or non-exercise of any right, remedy or privilege with respect
to any Loan Document , (g) the extension of time for payment or performance of
any Credit Obligations, (h) the release or discharge of the Lenders' claims
against any collateral now or at any time hereafter securing any of the Credit
Obligations, the Borrower or any other Participating Subsidiary or Participating
Partnership by operation of law or otherwise or (i) any other matter that might
otherwise be raised in avoidance of, or in defense against an action to enforce,
the obligations of the Guarantor under this Agreement or its guaranty of any
Credit Obligations .
7. The Guarantor hereby repeats and reaffirms each of the
representations and warranties contained in Article V of the Credit Agreement,
to the extent they are applicable to a Participating Partnership; and the
Guarantor hereby represents and warrants to the Agent and the Lenders that all
such representations and warranties are true with respect to the Guarantor.
127
8. The Guarantor covenants and agrees with the Agent and each Lender as
follows:
(a) The Guarantor will comply with all of the obligations,
requirements and restrictions in the covenants contained in the Credit
Agreement, including Article VII and Section 10.4, to the extent they
are applicable to a Participating Subsidiary.
(b) The Guarantor hereby irrevocably waives with respect to
this Agreement any legal or equitable right to recover from the
Borrower or any other obligor, Participating Subsidiary, Participating
Partnership or guarantor, including without limitation, any right of
subrogation, indemnity, reimbursement or contribution or any other
rights of the Guarantor as a creditor of the Borrower or any other
obligor, Participating Subsidiary, Participating Partnership or
guarantor.
(c) The Guarantor further waives any rights that might
otherwise be available to Guarantor pursuant to ss. 26-4 through ss.
26-7 of the North Carolina General Statutes.
9. The Guarantor irrevocably (a) acknowledges that this Agreement will
be accepted by the Agent and Lenders and performed by the Guarantor in the State
of North Carolina (which is the state in which the Agent's main office is
located); (b) submits to the jurisdiction of each state or federal court sitting
in North Carolina (collectively, the "Courts") over any suit, action or
proceeding arising out of or relating to this Agreement (individually, an
"Agreement Action"); (c) waives, to the fullest extent permitted by law, any
obligation or defense that the Guarantor may now or hereafter have based on
improper venue, lack of personal jurisdiction, inconvenience of forum or any
similar matter in any Agreement Action brought in any of the Courts; (d) agrees
that final judgment in any Agreement Action brought in any of the Courts shall
be conclusive and binding upon the Guarantor and may be enforced in any other
court to the jurisdiction of which the Guarantor is subject, by a suit upon such
judgment; (e) designates Michael D. Martin, or any successor Treasurer of
HEALTHSOUTH Corporation whose address is HEALTHSOUTH Corporation, Two Perimeter
Park South, Suite 224W, Birmingham, Alabama 35243, as the Guarantor's authorized
agent to accept and acknowledge on the Guarantor's behalf service of any and all
process that may be served in any Agreement Action in any of the Courts; (f)
agrees, if such agent shall cease so to act, irrevocably to designate and
appoint without delay another such agent in the State of North Carolina
satisfactory to the Agent; (g) consents to the service of process on the
Guarantor in any Agreement Action by the mailing of a copy thereof by registered
or certified mail, postage prepaid, to (i) the Guarantor at the Guarantor's
address designated in or pursuant to Section 10.2 of the Credit Agreement or
(ii) the agent for service of process appointed by the Guarantor under this
Section 9; (h) agrees that service in either manner specified in
128
clause (g) next above shall in every respect be effective and binding on the
Guarantor to the same extent as though such service of process were served on
the Guarantor in person by a person duly authorized to serve such process; and
(i) AGREES THAT THE PROVISIONS OF THIS SECTION, EVEN IF FOUND NOT TO BE STRICTLY
ENFORCEABLE BY ANY COURT, SHALL CONSTITUTE "FAIR WARNING" TO THE GUARANTOR THAT
THE EXECUTION OF THIS AGREEMENT MAY SUBJECT THE GUARANTOR TO THE JURISDICTION OF
THE COURTS OF THE STATE OF NORTH CAROLINA WITH RESPECT TO ANY AGREEMENT ACTIONS,
AND THAT IT IS FORESEEABLE BY THE GUARANTOR THAT THE GUARANTOR MAY BE SUBJECTED
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NORTH CAROLINA AND MAY BE SUED
IN THAT STATE IN ANY AGREEMENT ACTIONS. Nothing in this Section 9 shall limit or
restrict the Agent's or any Lender's right to serve process or bring Agreement
Actions in manners and in courts otherwise as herein provided.
10. The Guarantor agrees that it is, and for all purposes of the Credit
Agreement and the Note shall be, a Participating Subsidiary.
11. (a) THE GUARANTY PURSUANT TO THIS AGREEMENT IS A CONTINUING
GUARANTY AND SHALL CONTINUE IN FULL FORCE AND EFFECT UNTIL SUCH TIME AS ALL
OBLIGATIONS SHALL HAVE BEEN PAID IN FULL AND THE AGENT AND EACH LENDER SHALL BE
UNDER NO FURTHER OBLIGATION TO LEND OR ADVANCE FUNDS TO THE BORROWER OR ANY
OTHER PERSON CONSTITUTING CREDIT OBLIGATIONS.
(b) If claim is ever made upon the Agent or any Lender for
repayment or recovery of any amount or amounts received in payment or on account
of any of the Credit Obligations (including without limitation any claim that
such payment constitutes or constituted a preference or preferential transfer
under bankruptcy or other law or a fraudulent conveyance, or any other claim
under bankruptcy or other law) and the Agent or such Lender repays all or part
of said amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property,
or (b) any settlement or compromise of any such claim effected by the Agent or
any Lender with any such claimant (including the original obligor), then and in
such event each Guarantor agrees that any such judgment, decree, order,
settlement or compromise shall be binding upon it, notwithstanding any
revocation hereof or the cancellation of any Note or other instrument evidencing
any Credit Obligation or any security therefor, and each Guarantor shall be and
remain liable to the Agent and the Lenders for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by the
Agent or any Lender.
(c) When taking action under this Agreement, the Agent will
have the same level of responsibility and the same protections as set forth in
the Credit Agreement for the Agent's actions thereunder.
129
12. This Agreement shall bind the Guarantor's successors and assigns
and shall inure to the benefit of, and be enforceable by, the Agent and each of
the Lenders and their respective successors and assigns. This Agreement may only
be waived, modified or amended by a written instrument signed by the Agent and
the party against which the enforcement thereof is sought. THIS AGREEMENT SHALL
IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUCTED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NORTH CAROLINA. If any term of this Agreement shall be invalid or
unenforceable, the remainder of this Agreement shall remain in force and effect.
This Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which shall constitute one agreement. This Agreement and
the other Loan Documents constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede any inconsistent agreement
with respect to the subject matter hereof and thereof.
13. TO THE EXTENT PERMITTED BY LAW, THE GUARANTOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
WITH RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE AGENT, ANY LENDER OR THE GUARANTOR. THIS PROVISION IS A MATERIAL INDUCEMENT
TO THE AGENT AND EACH LENDER MAKING THE LOANS AVAILABLE TO THE BORROWER AND
PARTICIPATING PARTNERSHIPS AND PARTICIPATING SUBSIDIARIES.
14. Additional Waiver. The Guarantor and the Agent believe that,
inasmuch as this Agreement and the transactions contemplated hereby have been
entered into and consummated outside the State of Alabama, such transactions
constitute transactions in interstate commerce, so that neither the Agent nor
any of the Lenders is required, solely by entering into this Agreement and
consummating the transactions contemplated hereby, to qualify to do business as
a foreign corporation within the State of Alabama. Notwithstanding the
foregoing, however, the Guarantor hereby irrevocably waives all rights that it
may have to raise, in any action brought by any of the Lenders or the Agent to
enforce the rights of the Lenders and the Agent hereunder, or the obligations of
the Guarantor hereunder, any defense which is based upon the failure of any of
the Lenders or the Agent to qualify to do business as a foreign corporation in
the State of Alabama, including, but not limited to, any defenses based upon ss.
232 of the Alabama Constitution of 1901, ss. 10-2A-247 of the Code of Alabama
(1975) or ss. 40-14-4 of the Code of Alabama (1975), or any successor provision
to any thereof. The foregoing waiver is made knowingly and voluntarily and is a
material inducement for the Agent and the Lenders to enter into the transactions
contemplated by this Agreement.
[Reminder of page intentionally left blank.]
130
IN WITNESS WHEREOF, this Agreement has been executed by the Guarantor
on the date first written above.
[NAME OF PARTNERSHIP]
ATTEST:
By:______________________ By:___________________________
Name:____________________ Name:_________________________
Title:______________Secretary Title:________________________
NATIONSBANK, N.A. (CAROLINAS)
By:______________________
Name:____________________
Title:___________________
131
EXHIBIT D
---------
HEALTHSOUTH CORPORATION
REQUEST FOR ADVANCE OR INTEREST RATE ELECTION
---------------------------------------------
Under the Second Amended and Restated Credit Agreement dated as of
April 11, 1995 (the "Credit Agreement") entered into by HEALTHSOUTH CORPORATION,
a Delaware corporation (the "Borrower"), and NATIONSBANK, N.A. (CAROLINAS), a
national banking association (the "Agent"), and the Lenders party thereto:
Request for Advance
-------------------
Pursuant to Section 2.2 of the Credit Agreement, the Borrower hereby
requests an Advance as follows:
(a) Amount of Advance - $__________.
(b) Date as of which the Advance is to be made -
___________.
(c) Part or parts, if any, of the Advance that are to be
used by or for the benefit of Participating
Partnerships:
Part Allocable
Name of to such
Participating Participating
Partnership Partnership
----------- -----------
(d) The following interest rate information is provided
by respect to the Segment represented by the Advance:
(i) the interest rate shall be [the Base Rate] [the
LIBOR-Based Rate] (circle one).
(ii) If a LIBOR-Based Rate is selected, the maturity
selected for the Interest Period is [one month] [two
months] [three months] for a LIBOR-Based Rate (circle
one, if applicable).
Interest Rate Election
----------------------
Pursuant to Section 3.2 of the Credit Agreement, the Borrower makes the
following interest rate election with respect to the Segment in the principal
amount of $__________ that matures on ____________.
132
(a) The amount of the Segment to which the requested
interest rate will apply - $________.
(b) The date on which the selected interest rate will
become applicable - __________.
(c) The interest rate selected is [the Base Rate] [the
LIBOR-Based Rate] (circle one).
(d) If a LIBOR-Based Rate is selected, the maturity
selected for the Interest Period is [one month] [two
months] [three months] for a LIBOR-Based Rate (circle
one, if applicable).
In accordance with Section 6.1 of the Credit Agreement, the
presentation by the Borrower of this Request for Advance or Interest Rate
Election constitutes a representation and warranty by the Borrower to the Agent
and the Lenders that no material adverse change in the financial condition of
the Borrower and the Consolidated Entities, on a consolidated basis, as
reflected in the financial statements referred to in Section 5.3 of the Credit
Agreement, has occurred since the date of such financial statements and that the
representations and warranties of Borrower contained in the Credit Agreement
continue to be true and correct (except the financial statements referred to in
Section 5.3 shall be deemed those most recently delivered to the Agent pursuant
to Section 7.3).
Dated __________.
HEALTHSOUTH CORPORATION
By:________________________________
Its___________________________
133
EXHIBIT E
FORM OF COMPETITIVE BID QUOTE REQUEST
-------------------------------------
[Date]
To: NationsBank, N.A. (Carolinas)
From: HEALTHSOUTH Corporation
Re: Competitive Bid Quote Request
Pursuant to Section 2.3 of the Second Amended and Restated Credit
Agreement dated as of April 11, 1995 (as modified and supplemented from time to
time, the "Credit Agreement") among HEALTHSOUTH Corporation, the lenders named
therein and NationsBank, N.A. (Carolinas) as agent, we hereby give notice that
we request Competitive Bid Quotes for the following proposed Competitive Bid
Borrowing(s):
Borrowing Quotation Interest
Date Date 1 Amount 2 Type 3 Period 4
- ---------------- ---------------- ----------------- -------------- --------------
Terms used herein have the meanings assigned to them in the Credit
Agreement.
HEALTHSOUTH CORPORATION
By:________________________________
Title:
- --------------
<FN>
1 For use if an Absolute Rate in an Absolute Rate Auction is requested to
be submitted before the Borrowing Date.
2 Each amount must be $10,000,000 or a larger multiple of $1,000,000.
3 Insert either "LIBOR Margin" (in the case of LIBOR Market Loans) or
"Absolute Rate" (in the case of Absolute Rate Loans).
4 One, two three or six months, in the case of a LIBOR Market Loan or, in
the case of an Absolute Rate Loan, a period of up to 180 days after the making
of such Absolute Rate Loan and ending on a Business Day.
</FN>
134
EXHIBIT F
FORM OF COMPETITIVE BID QUOTE
-----------------------------
To: NationsBank, N.A. (Carolinas), as Agent
Attention:
Re: Competitive Bid Quote to HEALTHSOUTH Rehabilitation
Corporation (the "Borrower")
The Competitive Bid Quote is given in accordance with Section 2.3(c) of
the Second Amended and Restated Credit Agreement dated as of April 11, 1995 (as
modified and supplemented from time to time, the "Credit Agreement") among
HEALTHSOUTH Corporation, the lenders named therein and NationsBank, N.A.
(Carolinas), as agent. Terms defined in the Credit Agreement are used herein as
defined therein.
In response to the Borrower's invitation dated __________, 199_, we
hereby make the following Competitive Bid Quote(s) on the following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. We hereby offer to make Competitive Bid Loan(s) in
the following principal amount[s], for the following Interest Period(s)
and at the following rate(s):
Borrowing Quotation Interest
Date Date 1 Amount2 Type3 Period 4 Rate5
- ---------------- ---------------- ------ ---- -------------- ----
- -------------------
<FN>
1 As specified in the related Competitive Bid Quote Request.
2 The principal amount bid for each Interest Period may not exceed the
principal amount requested. Bids must be made for at least $2,000,000 or a
larger multiple of $1,000,000.
3 Indicate "LIBOR Margin" (in the case of LIBOR Market Loans) or "Absolute
Rate" (in the case of Absolute Rate Loans).
4 One, two, three or six months, in the case of a LIBOR Market Loan or, in
the case of an Absolute Rate Loan, a period of up to 180 days after the making
of such Absolute Rate Loan and ending on a Business Day, as specified in the
related Competitive Bid Market Quote Request.
</FN>
135
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Credit Agreement,
irrevocably obligate[s] us to make the Competitive Bid Loan(s) for which any
offer(s) (is/are) accepted, in whole or in part (subject to the third sentence
of Section 2.3(e) of the Credit Agreement).
Very truly yours,
[NAME OF BANK]
By:________________________________
Authorized Officer
Dated: __________, ____
_____________________
5(...continued)
5 For a LIBOR Market Loan, specify margin over or under the London
interbank offered rate determined for the applicable Interest Period. Specify
percentage (rounded to the nearest 1/10,000 of 1%) and specify whether "PLUS" or
"MINUS". For an Absolute Rate Loan, specify rate of interest per annum (rounded
to the nearest 1/10,000 of 1%).
136
EXHIBIT G
HEALTHSOUTH Rehabilitation Corporation
PARTICIPATING SUBSIDIARIES
--------------------------
PARTICIPATING PARTNERSHIPS
--------------------------
137
138
EXHIBIT H-1
[Form of Syndicated Note]
PROMISSORY NOTE
$_____________1 ____________, 199_
FOR VALUE RECEIVED, HEALTHSOUTH CORPORATION, a Delaware corporation
(the "Borrower"), hereby promises to pay to ____________________________2 (the
"Lender"), for account of its Applicable Lending Office provided for by the
Credit Agreement referred to below, at the principal office of NationsBank, N.A.
(Carolinas) at One Independence Center, 101 North Tryon Street, Charlotte, North
Carolina 28255, the principal sum of ______________3 Dollars (or such lesser
amount as shall equal the aggregate unpaid principal under the Credit
Agreement), in lawful money of the United States of America and in immediately
available funds, on the dates and in the principal amounts provided in the
Credit Agreement, and to pay interest on the unpaid principal amount of each
such Syndicated Loan, at such office, in like money and funds, for the period
commencing on the date of such Syndicated Loan until such Syndicated Loan shall
be paid in full, at the rates per annum and on the dates provided in the Credit
Agreement.
The date, amount, Type, interest rate and duration of Interest Period
(if applicable) of each Syndicated Loan made by the Lender to the Borrower, and
each payment made on account of the principal thereof, shall be recorded by the
Lender on its books and, prior to any transfer of this Note, endorsed by the
Lender on the schedule attached hereto or any continuation thereof, provided
that the failure of the Lender to make any such recordation or endorsement shall
not affect the obligations of the Borrower to make a payment when due of any
amount owing under the Credit Agreement or hereunder in respect of the
Syndicated Loans made by the Lender.
This Note is one of the Syndicated Notes referred to in the Second
Amended and Restated Credit Agreement dated as of April 11, 1995 (as modified
and supplemented from time to time, the "Credit Agreement") among the Borrower,
the Lenders named therein and NationsBank, N.A. (Carolinas), as Agent, and
evidences Syndicated Loans made by the Lender thereunder. Terms used but not
defined in this Note have the respective meanings assigned to them in the Credit
Agreement.
___________________
1 Insert the amount of Lender's Commitment.
2 Insert name of Lender in capital letters.
3 Insert Lender's Commitment in words.
139
The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein. In the event this Note is not
paid when due at any stated or accelerated maturity, the Borrower agrees to pay,
in addition to the principal and interest, all costs of collection, including
reasonable attorney's fees.
Except as permitted by Section 10.1(a) of the Credit Agreement, this
Note may not be assigned by the Lender to any other Person.
This Note shall be governed by, and construed in accordance with, the
law of the State of North Carolina.
HEALTHSOUTH CORPORATION
ATTEST:
By:
____________________________
By:______________________ Vice President
Assistant Secretary
[CORPORATE SEAL]
140
SCHEDULE OF SYNDICATED LOANS
This Note evidences Syndicated Loans made, continued or converted under
the within-described Credit Agreement to the Borrower, on the dates, in the
principal amounts, of the Types, bearing interest at the rates and having
Interest Periods (if applicable) of the continuations, conversions and
prepayments of principal set forth below:
Principal
Date Amount Type Maturity Amount Unpaid
of of of Interest Date of Paid or Principal Notation
Loan Loan Loan Rate Loan Prepaid Amount Made by
- ----- ----- ---- ------ ------ ------- ------- -------
141
EXHIBIT H-2
[Form of Competitive Bid Note]
PROMISSORY NOTE
$_____________1 ____________, 1994
FOR VALUE RECEIVED, HEALTHSOUTH CORPORATION, a Delaware corporation
(the "Borrower"), hereby promises to pay to ____________________________2 (the
"Lender"), for account of its Applicable Lending Office provided for by the
Credit Agreement referred to below, at the principal office of NationsBank, N.A.
(Carolinas), Independence Center, 101 North Tryon Street, Charlotte, North
Carolina 28255, the aggregate unpaid principal amount of the Competitive Bid
Loans made by the Lender to the Borrower under the Credit Agreement, in lawful
money of the United States of America and in immediately available funds, on the
dates and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Competitive Bid Loan, at
such office, in like money and funds, for the period commencing on the date of
such Competitive Bid Loan until such Competitive Bid Loan shall be paid in full,
at the rates per annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and maturity date of each
Competitive Loan made by the Lender to the Borrower, and each payment made on
account of the principal thereof, shall be recorded by the Borrower on its books
and, prior to any transfer of this Note, endorsed by the Borrower on the
schedule attached hereto or any continuation thereof, provided that the failure
of the Lender to make any such recordation or endorsement shall not affect the
obligations of the Borrower to make a payment when due of any amount owing under
the Credit Agreement or hereunder in respect of the Competitive Bid Loans made
by the Lender.
This Note is one of the Competitive Bid Notes referred to in the Second
Amended and Restated Credit Agreement dated as of April 11, 1995 (as modified
and supplemented from time to time, the "Credit Agreement") among the Borrower,
the Lenders named therein and NationsBank, N.A. (Carolinas), as Agent, and
evidences Competitive Bid Loans made by the Lender thereunder. Terms used but
not defined in this Note have the respective meanings assigned to them in the
Credit Agreement.
_________________
1 Insert the amount of Lender's Commitment.
2 Insert name of Lender in capital letters.
142
The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of
Competitive Bid Loans upon the terms and conditions specified therein. In the
event this Note is not paid when due at any stated or accelerated maturity, the
Borrower agrees to pay, in addition to the principal and interest, all costs of
collection, including reasonable attorney's fees.
Except as permitted by Section 10.1(a) of the Credit Agreement, this
Note may not be assigned by the Lender to any other Person.
This Note shall be governed by, and construed in accordance with, the
law of the State of North Carolina.
HEALTHSOUTH CORPORATION
ATTEST:
By:
______________________________
By:______________________ Vice President
Assistant Secretary
[CORPORATE SEAL]
143
SCHEDULE OF COMPETITIVE BID LOANS
This Note evidences Loans made under the within-described Credit
Agreement to the Borrower, on the dates, in the principal amounts, of the Types,
bearing interest at the rates and maturing on the dates set forth below, subject
to the payments and prepayments of principal set forth below:
Principal
Date Amount Type Maturity Amount Unpaid
of of of Interest Date of Paid or Principal Notation
Loan Loan Loan Rate Loan Prepaid Amount Made by
- ---- ------ ---- ----- ------ ------- ------- -------
144
EXHIBIT I
---------
FORM OF
COMPLIANCE CERTIFICATE
----------------------
Reference is made to that certain Second Amended and Restated Credit
Agreement between HEALTHSOUTH Corporation, a Delaware corporation (the
"Borrower"), NationsBank, N.A. (Carolinas), a national banking association (the
"Agent"), and the Lenders party thereto, dated as of April 11, 1995 (the "Credit
Agreement"). Capitalized terms used in this certificate and the Schedule
attached hereto, unless otherwise defined herein, have the meanings assigned to
them in the Credit Agreement.
The undersigned does hereby certify to the Agent as follows:
1. He is the duly elected and serving [chief financial office or chief
executive officer] of the Borrower.
2. He has reviewed the terms of the Credit Agreement and the other Loan
Documents and has made, or has caused to be made under his supervision, a review
of the transactions and conditions of the Borrower and its Consolidated Entities
through the date on which this certificate is delivered to the Agent. No Event
of Default or event that upon notice or lapse of time or both would constitute
an Event of Default under the Credit Agreement has occurred and is continuing as
of the date this certificate is delivered to the Lender, except as
follows:________________________________________________________________________
________________________________________________________________________________
[Give detailed description or insert "none" if appropriate].
3. The computations relating to the Borrower's financial conditions set
forth on Schedule I-1 attached hereto were true and correct as of __________,
19__ (such date being the last day of the most recently ended fiscal calendar
quarter) and there has been no material adverse change in such amounts upon
which such computations are based through the date on which this certificate is
delivered to the Lender.
4. The principal amount of the Partnership Liabilities of each
Participating Partnership as the date hereof is set forth on Schedule I-2
attached hereto.
___________________________________
________ of HEALTHSOUTH CORPORATION
__________, 19__
145
SCHEDULE I-1
------------
Financial Covenant Compliance
-----------------------------
The following financial covenant calculations are made as of
_______________ (the "Determination Date").
1. Consolidated Net Worth
A. Consolidated Net Worth at ___________
Determination Date
B. Consolidated Net Worth ___________
Required (calculated below)
a) Greater of (i) Consolidated
net worth at 3/31/95 minus
$10,000,000 or (ii)
$416,000,000 ___________
b) Consolidated Net Income for
successive fiscal quarters
x 75% ___________
c) Net proceeds of any sale of
Capital Stock ___________
d) (a) + (b) + (c) (Required) ___________
2. Consolidated Fixed Charge Coverage
A. Consolidated Net Income ___________
B. Consolidated Interest Expense ___________
C. Consolidated Depreciation Expense ___________
D. Consolidated Lease Expense ___________
E. Consolidated Income Tax Expense ___________
F. Consolidated Amortization Expense ___________
G. Allowable acquisition expense ___________
H. 2A + 2B + 2C + 2D + 2E + 2F + 2G ___________
I. Capital Expenditures ___________
J. 2H - 2I ___________
K. Consolidated Interest Expense ___________
L. Consolidated Lease Expense ___________
M. Consolidated Current Maturities ___________
N. Restricted Payments ___________
O. 2K + 2L + 2M + 2N ___________
P. J/O ___________
Required: Not less than 1.10 to 1.00
Actual Capital Expenditures for the period ___________
3. Senior Leverage Ratio
A. Senior Indebtedness ___________
B. Consolidated Total Capital ___________
C. A./B. ___________
146
Required: Less than 0.55 to 1.00 prior to January 1, 1996, less
than 0.50 to 1.00 from January 1, 1996 through
December 31, 1996, and less than 0.45 to 1.00 on and
after January 1, 1997.
4. Consolidated Indebtedness/Consolidated Cash Flow
A. Indebtedness ___________
B. Consolidated Cash Flow ___________
C. A./B. ____ to 1.00
D. Required ____ to 1.00
Required: Not more than the levels established for certain
periods as described in section 7.8(a)(4) of the
Credit Agreement
147
SCHEDULE I-2
------------
Partnership Liabilities
-----------------------
Name of Partnership Partnership Liabilities
- ------------------- -----------------------
148
EXHIBIT J
---------
SUMMARY OF INSURANCE
--------------------
See Attached.
149
EXHIBIT K
----------
EXISTING INDEBTEDNESS AND
OUTSTANDING LETTERS OF CREDIT
-----------------------------
150
151
EXHIBIT L
HEALTHSOUTH Rehabilitation Corporation
Investments of Equity Interests
Maximum
Name Investment
---- ----------
Austin Surgery Center (MOB) $1,920,600
Kinetikos Medical (Stock) 100,000
Capstone (REIT) 99,000
ODEA (MOB) 127,361
Cumberland Health Associates (Rehab Facility
Building & Loan) 4,895,000
Allegheny Rehab Associates (Rehab Facility
Buiding & Loan) 6,230,000
RIOSA (Rehab Facility Building) 1,370,000
Med Partners (Stock) 2,110,646
HealthSmart (Stock and Debt) 150,000
Wellmark (Stock) 1,000,000
PRI (PT Partnership) 600,000
Caretenders Healthcorp (Stock) 7,369,806
National Bank Injury Network (Stock) 3,000,000
SportsMed LLC (Debentures and Notes) 2,000,000
Fountainhead Holding, Inc. (Stock) -0-
Specialty Alliance (HPO) 75,000
NME (Variance Loan) 185,000
Blair Health (Loan) 3,101,000
Ft. Smith (Loan) 5,000
Montgomery (Loan) 299,968
Capital Region (Loan) 212,968
Ocean Health (Loan) 1,142,387
Arizona Spine Care (Loan) 50,000
Mary Shields Hospital (Mortgage Loan) 195,424
Northeast Hospital (Loan) 1,725,000
152
EXHIBIT M
SUBSIDIARIES AND CONTROLLED PARTNERSHIPS
153
154
155
156
157
158
EXHIBIT N
---------
EXISTING LIENS
---------------
159