EXHIBIT (10)-17
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THIRD
AMENDED AND RESTATED
CREDIT AGREEMENT
by and among
HEALTHSOUTH CORPORATION,
as Borrower,
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
April 18, 1996
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Terms
1.1. Definitions............................................................................................... 2
1.2. Rules of Interpretation................................................................................... 30
1.3. Classes and Types of Loans................................................................................ 31
ARTICLE II
The Loans
2.1. Syndicated Loans.......................................................................................... 32
2.2. Competitive Bid Loans..................................................................................... 35
2.3. Payment of Interest....................................................................................... 40
2.4. Payment of Principal...................................................................................... 40
2.5. Non-Conforming Payments................................................................................... 41
2.6. Notes..................................................................................................... 41
2.7. Pro Rata Payments......................................................................................... 42
2.8. Reductions................................................................................................ 42
2.9. Conversions and Elections of Subsequent Interest
Periods................................................................................................... 43
2.10. Increase and Decrease in Amounts.......................................................................... 44
2.11. Unused Fees............................................................................................... 44
2.12. Deficiency Advances....................................................................................... 44
2.13. Use of Proceeds........................................................................................... 45
2.14. Extension of Stated Termination Date...................................................................... 45
ARTICLE III
Letters of Credit
3.1. Letters of Credit......................................................................................... 48
3.2. Reimbursement............................................................................................. 48
3.3. Letter of Credit Facility Fees............................................................................ 52
3.4. Administrative Fees....................................................................................... 52
ARTICLE IV
Termination of Eurodollar Rate and Yield Protection
4.1. Suspension of Loans....................................................................................... 53
4.2. Compensation.............................................................................................. 54
4.3. Taxes..................................................................................................... 55
ARTICLE V
Conditions to Making Loans and Issuing Letters of Credit
5.1. Conditions of Initial Advance............................................................................. 57
5.2. Conditions of Loans and Letters of Credit................................................................. 59
ARTICLE VI
Representations and Warranties
6.1. Organization and Authority................................................................................ 61
6.2. Loan Documents............................................................................................ 61
6.3. Solvency.................................................................................................. 62
6.4. Subsidiaries.............................................................................................. 62
6.5. Ownership Interests....................................................................................... 62
6.6. Financial Condition....................................................................................... 62
6.7. Title to Properties....................................................................................... 63
6.8. Taxes..................................................................................................... 63
6.9. Other Agreements.......................................................................................... 63
6.10. Litigation................................................................................................ 64
6.11. Margin Stock.............................................................................................. 64
6.12. Investment Company........................................................................................ 65
6.13. Patents, Etc.............................................................................................. 65
6.14. No Untrue Statement....................................................................................... 65
6.15. No Consents, Etc.......................................................................................... 65
6.16. ERISA Requirement......................................................................................... 66
6.17. No Default................................................................................................ 66
6.18. Hazardous Materials....................................................................................... 66
6.19. Employment Matters........................................................................................ 66
6.20. RICO...................................................................................................... 67
6.21. Reimbursement from Third Party Payors..................................................................... 67
ARTICLE VII
Affirmative Covenants
7.1. Financial Statements, Reports, Etc........................................................................ 68
7.2. Maintain Properties....................................................................................... 70
7.3. Existence, Qualification, Etc............................................................................. 70
7.4. Regulations and Taxes..................................................................................... 70
7.5. Insurance................................................................................................. 70
7.6. True Books................................................................................................ 70
7.7. Right of Inspection....................................................................................... 71
7.8. Observe all Laws.......................................................................................... 71
7.9. Governmental Licenses..................................................................................... 71
7.10. Covenants Extending to Other Persons...................................................................... 71
7.11. Officer's Knowledge of Default............................................................................ 71
7.12. Suits or Other Proceedings................................................................................ 71
7.13. Notice of Discharge of Hazardous Material or
Environmental Complaint................................................................................... 72
7.14. Environmental Compliance.................................................................................. 72
7.15. Continuation of Current Business.......................................................................... 73
7.16. Management Contracts...................................................................................... 73
ARTICLE VIII
Negative Covenants
8.1. Financial Covenants....................................................................................... 74
8.2. Investments and Loans..................................................................................... 74
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8.3. Indebtedness.............................................................................................. 74
8.4. Disposition of Assets..................................................................................... 75
8.5. Consolidation or Merger................................................................................... 75
8.6. Liens..................................................................................................... 75
8.7. Dividends and Distributions............................................................................... 75
8.8. Acquisitions.............................................................................................. 75
8.9. Restricted Payments....................................................................................... 75
8.10. Compliance with ERISA..................................................................................... 76
8.11. Fiscal Year............................................................................................... 76
8.12. Dissolution, etc.......................................................................................... 76
ARTICLE IX
Events of Default and Acceleration
9.1. Events of Default......................................................................................... 78
9.2. Agent to Act.............................................................................................. 81
9.3. Cumulative Rights......................................................................................... 81
9.4. No Waiver................................................................................................. 81
9.5. Allocation of Proceeds.................................................................................... 81
ARTICLE X
The Agent
10.1. Appointment.............................................................................................. 83
10.2. Attorneys-in-fact........................................................................................ 83
10.3. Limitation on Liability.................................................................................. 83
10.4. Reliance................................................................................................. 83
10.5. Notice of Default........................................................................................ 84
10.6. No Representations....................................................................................... 84
10.7. Indemnification.......................................................................................... 85
10.8. Lender................................................................................................... 85
10.9. Resignation.............................................................................................. 85
10.10. Sharing of Payments, etc................................................................................. 86
10.11. Fees..................................................................................................... 87
10.12. Independent Agreements................................................................................... 87
ARTICLE XI
Miscellaneous
11.1. Assignments and Participations........................................................................... 88
11.2. Notices.................................................................................................. 90
11.3. No Waiver................................................................................................ 91
11.4. Setoff................................................................................................... 92
11.5. Survival................................................................................................. 92
11.6. Expenses................................................................................................. 92
11.7. Amendments............................................................................................... 93
11.8. Counterparts............................................................................................. 94
11.9. Waivers by Borrower...................................................................................... 94
11.10. Termination.............................................................................................. 95
11.11. Governing Law............................................................................................ 96
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11.12. Indemnification.......................................................................................... 96
11.13. Agreement Controls....................................................................................... 97
11.14. Integration.............................................................................................. 97
11.15. Successors and Assigns................................................................................... 97
11.16. Severability............................................................................................. 97
11.17. Usury Savings Clause..................................................................................... 97
EXHIBIT A Applicable Commitment Percentages...................................................................A-1
EXHIBIT B Form of Assignment and Acceptance...................................................................B-1
EXHIBIT C Notice of Appointment (or Revocation)
of Authorized Representative........................................................................C-1
EXHIBIT D Form of Borrowing Notice............................................................................D-1
EXHIBIT E Form of Competitive Bid Note........................................................................E-1
EXHIBIT F Form of Interest Rate Selection Notice..............................................................F-1
EXHIBIT G Form of Line of Credit Note.........................................................................G-1
EXHIBIT H Investments.........................................................................................H-1
EXHIBIT I Form of Revolving Note..............................................................................I-1
EXHIBIT J Form of Competitive Bid Quote Request...............................................................J-1
EXHIBIT K Form of Competitive Bid Quote.......................................................................K-1
EXHIBIT L Form of Opinion of Borrower's Counsel...............................................................L-1
EXHIBIT M Compliance Certificate..............................................................................M-1
EXHIBIT N Executive Officers..................................................................................N-1
Schedule 6.4 Subsidiaries
Schedule 6.19 Employment Matters
Schedule 8.3 Existing Subsidiary Indebtedness
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THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 18,
1996 (this "Agreement") is entered into by and among HEALTHSOUTH CORPORATION, a
Delaware corporation (the "Borrower"), the Lenders signatories hereto (the
"Lenders") and NATIONSBANK, N.A., a national banking association, as agent for
the Lenders (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") 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 as defined in the Original
Agreement) guaranteed payment of all Credit Obligations (as defined in the
Original Agreement). In addition, the Borrower and certain of the Participating
Subsidiaries 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 (the "First Restatement 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. At the request
of the Borrower, by Second Amended and Restated Credit Agreement dated April 11,
1995, as amended by Amendment No. 1 and Amendment No. 2 (the "Second Restated
Agreement"), the Borrower, the Agent and the First Restatement Lenders together
with additional lenders (the "Second Restated Lenders") amended and restated the
First Restated Agreement thereby increasing the amount of the credit facility to
$1,000,000,000, changing certain provisions of the First Restated Agreement and
resulting in the addition of certain Participating Subsidiaries and
Participating Partnerships. The Borrower has requested that the Second Restated
Agreement be further amended and restated in its entirety in order to increase
the amount of the credit facility and to further change certain of the
provisions contained therein and to change certain of the lenders participating
therein. Accordingly, the Borrower, the Lenders and the Agent agree that the
Second Restated Agreement is hereby amended and restated in its entirety as
follows, effective as of the Closing Date:
ARTICLE I
Definitions and Terms
---------------------
1.1. Definitions. For the purposes of this Agreement, in addition
to the definitions set forth above, the following terms shall have the
respective meanings set forth below:
"Absolute Rate" shall have the meaning assigned to such term
in Section 2.2(c)(ii)(D).
"Absolute Rate Auction" shall mean a solicitation of
Competitive Bid Quotes setting forth Absolute Rates pursuant
to Section 2.2.
"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, of all or a portion of a Person or a
Facility or Facilities of a Person, permitted under Section 8.8;
provided such Person or Facilities is in substantially the same line of
business engaged in by Borrower or its Consolidated Entities.
"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 Credit
Facility or Line of Credit Facility consisting of the aggregate
principal amount of a Syndicated Loan or a Competitive Bid Loan.
"Affiliate" of any specified Person means any other Person (i)
which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such
specified Person; or (ii) which beneficially owns or holds 5% or more
of any class of the outstanding voting stock (or in the case of a
Person which is not a corporation, 5% or more of the equity interest)
of such specified Person; or 5% or more of any class of the outstanding
voting stock (or in the case of a Person which is not a corporation, 5%
or more of the equity interest) of which is beneficially owned or held
by such specified Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction
of the
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management and policies of a Person, whether through ownership of
voting stock, by contract or otherwise.
"Applicable Commitment Percentage" means, with respect to each
Lender, that portion of the Total Line of Credit Commitment and Total
Revolving Credit Commitment allocable to such Lender (a) with respect
to Lenders as of the Closing Date, as set forth on Exhibit A, and (b)
with respect to any Person who becomes a Lender thereafter, as
reflected in each Assignment and Acceptance to which such Lender is a
party assignee; provided that the Applicable Commitment Percentage of
each Lender shall be increased or decreased to reflect any assignments
to or by such Lender effected in accordance with Section 11.1.
"Applicable Margin" means that number of basis points per
annum set forth below determined based upon the more favorable of
either (i) the highest Rating of outstanding senior unsecured
Indebtedness of the Borrower from time to time or (ii) the ratio of
Consolidated EBITDA to Consolidated Interest Expense for the
Four-Quarter Period most recently ended as specified below:
Rating
------
Ratio of Consolidated Applicable
EBITDA to Consolidated Interest S&P or Moody's Margin
------------------------------- -------------- ------
a) Greater than 7.50 to 1.00 A- A3 25 b.p.
b) Equal to or Less than 7.50
to 1.00 but Greater than
6.50 to 1.00 BBB+ Baa1 30
c) Equal to or Less than 6.50
to 1.00 but Greater than
5.50 to 1.00 BBB Baa2 35
d) Equal to or Less than 5.50
to 1.00 but Greater than
4.50 to 1.00 BBB- Baa3 45
e) Equal to or Less than 4.50
to 1.00 but Greater than
3.50 to 1.00 BB+ Ba1 55
f) Equal to or Less than 3.50
to 1.00 but Greater than
3.00 to 1.00 BB Ba2 62.5
g) Equal to or Less than 3.00
to 1.00 but Greater than BB- Ba3
2.50 to 1.00 or Lower 75
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The Applicable Margin shall be established in the case of a Rating from
time to time based upon the Rating then in effect and, in the case of
the ratio, at the end of each fiscal quarter of the Borrower (the
"Ratio Determination Date"). Any change in the Applicable Margin
following each Ratio Determination Date shall be determined based upon
the computations set forth in the Compliance Certificate, subject to
review and approval of such computations by the Agent, and shall be
effective commencing on the date following the date such certificate is
received until the date following the date on which a new Compliance
Certificate is delivered or is required to be delivered, whichever
shall first occur; provided however, if the Borrower shall fail to
deliver any such certificate within the time period required by Section
7.1, then the Applicable Margin shall be 2% until the appropriate
certificate is so delivered. From the Closing Date to the first Ratio
Determination Date, the Applicable Margin shall be 45 basis points
unless there is an improvement in the Rating from the Rating in effect
at the Closing Date.
"Applicable Unused Fee" means that number of basis points per
annum set forth below, which shall be determined based upon the more
favorable of either (i) the highest Rating of outstanding senior
unsecured Indebtedness of the Borrower from time to time or (ii) the
ratio of Consolidated EBITDA to Consolidated Interest Expense for the
Four-Quarter Period most recently ended as specified below:
Rating Applicable Unused Fee
------ ---------------------
Ratio of Consolidated Line of Revolving
EBITDA to Consolidated Interest S&P or Moody's Credit Facility Credit Facility
------------------------------- -------------- --------------- ---------------
a) Greater than 7.50 to 1.00 A- A3 8 b.p. 9 b.p.
b) Equal to or Less than 7.50
to 1.00 but Greater than
6.50 to 1.00 BBB+ Baa1 9 10
c) Equal to or Less than 6.50
to 1.00 but Greater than
5.50 to 1.00 BBB Baa2 10 12.5
d) Equal to or Less than 5.50
to 1.00 but Greater than
4.50 to 1.00 BBB- Baa3 12.5 15
e) Equal to or Less than 4.50
to 1.00 but Greater than
3.50 to 1.00 BB+ Ba1 15 17.5
f) Equal to or Less than 3.50
to 1.00 but Greater than
3.00 to 1.00 BB Ba2 17.5 20
g) Equal to or Less than 3.00
to 1.00 but Greater than BB- Ba3
2.50 to 1.00 or Lower 22.5 25
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The Applicable Unused Fee shall be established in the case of a Rating
from time to time based upon the Rating then in effect, and in the case
of the ratio, at the end of each fiscal quarter of the Borrower (the
"Ratio Determination Date"). Any change in the Applicable Unused Fee
following each Ratio Determination Date shall be determined based upon
the computations set forth in the Compliance Certificate, subject to
review and approval of such computations by the Agent and shall be
effective commencing on the date following the date such certificate is
received until the date following the date on which a new Compliance
Certificate is delivered or is required to be delivered, whichever
shall first occur; provided however, if the Borrower shall fail to
deliver any such certificate within the time period required by Section
7.1, then the Applicable Unused Fee shall be 2%. From the Closing Date
to the first Ratio Determination Date, the Applicable Unused Fee shall
be 15 basis points on the Revolving Credit Facility and 12.5 basis
points on the Line of Credit Facility unless there is an improvement in
the Rating from the Rating in effect at the Closing Date.
"Applications and Agreements for Letters of Credit" means,
collectively, the Applications and Agreements for Letters of Credit, or
similar documentation, executed by the Borrower from time to time and
delivered to the Issuing Bank to support the issuance of Letters of
Credit.
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit B (with blanks appropriately filled
in) delivered to the Agent in connection with an assignment of a
Lender's interest under this Agreement pursuant to Section 11.1.
"Authorized Representative" means any of the Executive
Officers of the Borrower or, with respect to financial matters, the
Treasurer or the chief financial officer of the Borrower, or any other
Person expressly designated by the Board of Directors of the Borrower
(or the appropriate committee thereof) as an Authorized Representative
of the Borrower, as set forth from time to time in a certificate in the
form of Exhibit C.
"Base Rate" means the per annum rate of interest equal to the
greater of (i) the Prime Rate or (ii) the Federal Funds Effective Rate
plus one-half of one percent (1/2%). Any change in the Base Rate
resulting from a change in the Prime Rate or the Federal Funds
Effective Rate shall become effective as of 12:01 A.M. of the Business
Day on which each such change occurs. The Base Rate is a reference rate
used by the Agent in determining interest rates on certain loans and is
not intended to be the lowest rate of interest charged on any extension
of credit to any debtor.
5
"Base Rate Loan" means a Loan for which the rate of interest
is determined by reference to the Base Rate.
"Base Rate Segment" means a Segment bearing interest or to
bear interest at the Base Rate.
"Base Rate Refunding Loan" means an Advance under the
Revolving Credit Facility which bears interest at a Base Rate made to
satisfy Reimbursement Obligations arising from a drawing under a Letter
of Credit.
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body).
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving Credit
Facility or Line of Credit Facility, in the form of Exhibit D.
"Business Day" means, (i) except in the case of a Eurodollar
Loan, any day which is not a Saturday, Sunday or a day on which banks
in the States of New York and North Carolina are authorized or
obligated by law, executive order or governmental decree to be closed
and, (ii) with respect to any Eurodollar Rate Loan, any day which is a
Business Day, as described above, and on which the relevant
international financial markets are open for the transaction of
business contemplated by this Agreement in London, England, New York,
New York and Charlotte, North Carolina.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof.
"Capital Stock" of any Person means any and all shares, rights
to purchase, warrants or options (whether or not currently
exercisable), participation or other equivalents of or interest in
(however designated) the equity (including without limitation common
stock, preferred stock and partnership and joint venture interests) of
such Person (excluding any debt securities that are convertible into,
or exchangeable for, such equity).
"Change of Control" means, at any time:
(i) any "person" or "group" (each as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act), who are not as of
the Closing Date owners of one percent (1%) or more of the
Voting Stock of the Borrower, either (A) becomes the
"beneficial owner" (as defined in Rule 13d-3 of the Exchange
Act), directly or indirectly, of Voting Stock of the Borrower
(or securities convertible into or
6
exchangeable for such Voting Stock) representing 15% or more
of the combined voting power of all Voting Stock of the
Borrower (on a fully diluted basis) or (B) otherwise has the
ability, directly or indirectly, to elect a majority of the
board of directors of the Borrower;
(ii) during any period of up to 24 consecutive months,
commencing on the Closing Date, individuals who at the
beginning of such period were directors of the Borrower shall
cease for any reason (other than the death, disability or
retirement of an officer of the Borrower that is serving as a
director at such time so long as another officer of the
Borrower replaces such Person as a director) to constitute a
majority of the board of directors of the Borrower; or
(iii) any Person or two or more Persons acting in concert
shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation
thereof, will result in its or their acquisition, of the power
to exercise, directly or indirectly, a controlling influence
on the management or policies of the Borrower.
"Closing Date" means the date as of which this Agreement is
executed by the Borrower, the Lenders and the Agent and on which the
conditions set forth in Section 5.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder.
"Commitment" shall mean, as to each Lender, the obligation of
such Lender to make Loans pursuant to Section 2.1 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 2.8); 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 11.1.
"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 2.2(b).
"Competitive Bid Loans" shall mean the Loans provided for by
Section 2.2.
7
"Competitive Bid Notes" shall mean the promissory notes
provided for by Section 2.6(c) substantially in the form of Exhibit E
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 2.2(c) 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 2.2(b).
"Compliance Certificate" shall have the meaning attributed to
that term in Section 7.1(c).
"Consistent Basis" in reference to the application of GAAP
means the accounting principles observed in the period referred to are
comparable in all material respects to those applied in the preparation
of the audited financial statements of the Borrower referred to in
Section 6.6(a).
"Consolidated Amortization Expense" of the Borrower for any
period means the amortization expense of the Borrower and its
Consolidated Entities for such period (to the extent included in the
computation of Consolidated Net Income), determined on a consolidated
basis in accordance with GAAP.
"Consolidated Depreciation Expense" of the Borrower means the
depreciation expense of the Borrower and its Consolidated Entities for
such period (to the extent included in the computation of Consolidated
Net Income of the Borrower), determined on a consolidated basis in
accordance with GAAP.
"Consolidated EBITDA" means, with respect to the Borrower and
its Consolidated Entities for any Four-Quarter Period ending on the
date of computation thereof, the sum of, without duplication, (i)
Consolidated Net Income, (ii) Consolidated Interest Expense, (iii)
Consolidated Income Tax Expense, (iv) Consolidated Amortization
Expense, (v) Consolidated Depreciation Expense and (vi) the minority
interest of any Person or Persons in Consolidated Entities, all
determined on a consolidated basis in accordance with GAAP applied on a
Consistent Basis.
"Consolidated Entity" shall mean any Person whose financial
statements are appropriately consolidated with the Borrower's financial
statements under GAAP.
"Consolidated Indebtedness" means all Indebtedness of the
Borrower and its Consolidated Entities, all determined on a
consolidated basis.
8
"Consolidated Interest Expense" means, with respect to any
Four-Quarter Period ending on the date of computation thereof, the
gross interest expense of the Borrower and its Consolidated Entities,
including without limitation (i) the current amortized portion of debt
discounts to the extent included in gross interest expense, (ii) the
current amortized portion of all fees (including fees payable in
respect of any Rate Hedging Obligation) payable in connection with the
incurrence of Indebtedness to the extent included in gross interest
expense, (iii) the portion of any payments made in connection with
Capital Leases allocable to interest expense, and (iv) lease payments,
other than the Headquarters Obligations, made pursuant to the
Headquarters Lease, all determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis.
"Consolidated Net Income" of the Borrower for any period means
the net income (or loss) of the Borrower and its Consolidated Entities
for such period determined on a consolidated basis in accordance with
GAAP, without giving effect to dividends on any series of preferred
stock of any Consolidated Entity, whether or not in cash, to the extent
such consolidated net income was reduced thereby; provided that there
shall be excluded from such net income (for all purposes, other than
compliance with Section 8.1(a), to the extent otherwise included
therein), without duplication, (i) the net income of any Person (other
than a Consolidated Entity) to the extent that any such income has not
actually been received by the Borrower or a Consolidated Entity in the
form of dividends or similar distributions during such period, but
including, in any event, net income of any Person who becomes a
Consolidated Entity whose Acquisition is accounted for on a "pooling of
interests" basis; (ii) except to the extent includable in the
consolidated net income of the Borrower or a Consolidated Entity
pursuant to the foregoing clause (i), the net income of any Person that
accrued prior to the date that (a) such Person becomes a Consolidated
Entity or is merged into or consolidated with a Consolidated Entity or
(b) the assets of such Person are acquired by the Borrower or a
Consolidated Entity; (iii) the net income of any Consolidated Entity to
the extent that the declaration or payment of dividends or similar
distributions by such Consolidated Entity of that income is not
permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Consolidated Entity during such period;
(iv) any gain (or loss), together with any related provisions for taxes
on any such gain, realized during such period by the Borrower or its
Consolidated Entities upon (a) the acquisition of any securities, or
the extinguishment of any Indebtedness, of the Borrower or its
Consolidated Entities or (b) any asset sale by the referent person or
any of its Subsidiaries; (v) any extraordinary gain (or
9
extraordinary loss), together with any related provision for taxes or
tax benefit resulting from any such extraordinary gain or loss,
realized by the Borrower or its Consolidated Entities during such
period; and (vi) in the case of a successor to any Person by
consolidation, merger or transfer of its assets, any earnings of the
successor prior to such merger, consolidation or transfer of assets;
provided, further, however, that there shall be added back to net
income non-recurring, non-cash expenses and cash transaction costs
relating to professional fees arising in conjunction with an
Acquisition provided such expenses do not exceed 10% of the Cost of
Acquisition.
"Consolidated Net Worth" of the Borrower as of any date means
the Consolidated Stockholders' Equity (including any preferred stock
that is classified as equity under GAAP, other than Disqualified Stock)
of the Borrower and its Consolidated Entities (excluding any equity
adjustment for foreign currency translation for any period subsequent
to the Closing Date) on a consolidated basis at such date, as
determined in accordance with GAAP, less all write-ups subsequent to
the Closing Date in the book value of any asset owned by the Borrower
or any of its Consolidated Entities.
"Consolidated Stockholders' Equity" 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 Tangible Net Worth" means, as of any date on
which the amount thereof is to be determined, Consolidated
Stockholders' Equity minus (without duplication of deductions in
respect of items already deducted in arriving at surplus and retained
earnings) (i) all reserves (other than contingency reserves not
allocated to any particular purpose), including without limitation
reserves for depreciation, depletion, amortization, obsolescence,
deferred income taxes, insurance and inventory valuation and (ii) the
net book value of all assets which would be treated as intangible
assets, such as (without limitation) goodwill (whether representing the
excess of cost over book value of assets acquired or otherwise),
capitalized expenses, unamortized debt discount and expense,
consignment inventory rights, patents, trademarks, trade names,
copyrights, franchises and licenses, all as determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis.
"Consolidated Total Assets" means, as of any date on which the
amount thereof is to be determined, the net book value of all assets of
the Borrower and its Consolidated
10
Entities as determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis.
"Consolidated Total Capital" means, as of any date on which
the amount thereof is to be determined, the sum of Consolidated
Indebtedness plus Consolidated Shareholders' Equity of the Borrower and
its Consolidated Entities.
"Contract Provider" means any Person who provides professional
health care services under or pursuant to any contract with the
Borrower or any Subsidiary.
"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), or a limited liability company whose members
include the Borrower or a Subsidiary or another Controlled Partnership,
which partnership, whether general or limited, or limited liability
company has assets with a value in excess of $2,000.00, and with
respect to which partnership or limited liability company the Borrower
or a Subsidiary is entitled to receive not less than 50% of any
distributions of cash made to the partners or members thereof, other
than any preferred cash distribution arrangement in existence at the
Closing Date or approved by the Required Lenders in writing, or which
is otherwise a Consolidated Entity.
"Cost of Acquisition" means, in respect of any Acquisition,
the sum of (i) the amount of cash paid by the Borrower and its
Consolidated Entities in connection with such Acquisition, (ii) the
Fair Market Value of all Capital Stock or other ownership 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.
11
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default.
"Default Rate" means (i) with respect to each Eurodollar Rate
Loan and Eurodollar Rate Segment, until the end of the Interest Period
applicable thereto, a rate of two percent (2%) plus the Eurodollar Rate
applicable to such Loan or Segment, and thereafter at a rate of
interest per annum which shall be two percent (2%) plus the Base Rate,
(ii) with respect to Base Rate Loans and Base Rate Segments, at a rate
of interest per annum which shall be two percent (2%) plus the Base
Rate and (iii) in any case, the maximum rate permitted by applicable
law, if lower.
"Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder
thereof, in whole or in part, on or prior to the Revolving Credit
Termination Date.
"Dollars" and the symbol "$" mean dollars constituting legal
tender for the payment of public and private debts in the United States
of America.
"Employee Benefit Plan" means any employee benefit plan within
the meaning of Section 3(3) of ERISA which (i) is maintained for
employees of the Borrower or any of its ERISA Affiliates or is assumed
by the Borrower or any of its ERISA Affiliates in connection with any
Acquisition or (ii) has at any time been maintained for the employees
of the Borrower or any current or former ERISA Affiliate.
"Environmental Laws" means, collectively, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, the Superfund Amendments and Reauthorization Act of 1986, the
Resource Conservation and Recovery Act, as amended, the Toxic
Substances Control Act, as amended, the Clean Air Act, as amended, the
Clean Water Act, as amended, any other "Superfund" or "Superlien" law
or any other federal, or applicable state or local statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating
to, or imposing liability or standards of conduct concerning, any
Hazardous Material.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute and all rules
and regulations promulgated thereunder.
"ERISA Affiliate", as applied to the Borrower, means any
Person or trade or business which is a member of a group which
12
is under common control with the Borrower, who together with the
Borrower, is treated as a single employer within the meaning of Section
414(b) and (c) of the Code.
"Eurodollar Auction" shall mean a solicitation of Competitive
Bid Quotes setting forth Eurodollar Margins based on the Interbank
Offered Rate pursuant to Section 2.2.
"Eurodollar Margin" shall have the meaning assigned to such
term in Section 2.2(c)(ii)(C).
"Eurodollar Market Loans" shall mean Competitive Bid Loans
interest rates on which are determined on the basis of Interbank
Offered Rate pursuant to a Eurodollar Auction.
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
--------------------------------
Rate 1- Eurodollar Reserve Percentage Margin
"Eurodollar Rate Loan" means a Loan or Segment of a Loan for
which the rate of interest is determined by reference to the Eurodollar
Rate.
"Eurodollar Rate Segment" means a Segment bearing interest or
to bear interest at the Eurodollar Rate.
"Eurodollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D or any successor regulation, as the maximum
reserve requirement (including any basic, supplemental, emergency,
special, or marginal reserves) applicable with respect to Eurocurrency
liabilities as that term is defined in Regulation D (or against any
other category of liabilities that includes deposits by reference to
which the interest rate on Eurodollar Rate Loans is determined),
whether or not the Agent or any Lender has any Eurocurrency liabilities
subject to such requirements, without benefits of credits or proration,
exceptions or offsets that may be available from time to time to the
Agent or any Lender. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" means any of the occurrences set forth as
such in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
"Executive Officer" means any Person who from time to time
holds the offices with Borrower listed on Exhibit N.
13
"Facility" shall mean an inpatient or outpatient
rehabilitation facility, certified outpatient rehabilitation facility,
skilled nursing facility, specialty medical center, specialty
orthopedic hospital or acute care hospital, subacute inpatient
facility, transitional living center, medical office building,
outpatient surgery center or outpatient diagnostic center with all
buildings and improvements associated therewith, that is owned or
leased, in whole or part, by the Borrower or a Subsidiary or any
partnership controlled directly or indirectly by the Borrower.
"Facility Termination Date" means the date on which both the
Revolving Credit Termination Date and the Line of Credit Termination
Date shall have occurred, no Letters of Credit shall remain outstanding
and the Borrower shall have fully, finally and irrevocably paid and
satisfied all Obligations.
"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. ("NASD") or is listed on a
national securities exchange, the average of the last reported bid and
ask quotations or prices reported thereon for Common Stock or such
other value as may be ascribed to the Common Stock in a definitive
merger or acquisition agreement provided such value is determined
according to customary methods for like transactions and is approved
(to the extent required by Borrower's charter or bylaws) by the
Borrower's Board of Directors or (ii) in the case of capital stock that
is not Common Stock or in the event that Common Stock is not so
designated by NASD or listed on such national exchange, or in the case
of any other ownership interests, the determination of the fair market
value thereof in good faith by a majority of disinterested members of
the board of directors of the Borrower or such Consolidated Entity, in
each case effective as of the close of business on the Business Day
immediately preceding the closing date of such Acquisition.
"Federal Funds Effective Rate" means, for any day, the rate
per annum (rounded upward to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New
York on the Business Day next succeeding such day, provided that (a) if
such day is not a Business Day, the Federal Funds Effective Rate for
such day shall be such rate on such transactions on the next preceding
Business Day, and (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Effective Rate for such day
shall be the average rate
14
quoted to the Agent on such day on such transaction as determined by
the Agent.
"Fiscal Year" means the twelve month fiscal period of the
Borrower commencing on January 1 of each calendar year and ending on
December 31 of each calendar year.
"Fixed Rate" shall mean the Absolute Rate or the Interbank
Offered Rate plus the Applicable Margin or the Eurodollar Margin, as
the case may be.
"Fixed Rate Loan" means a Loan for which the rate of interest
is determined by reference to the Fixed 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 quarters of the Borrower and its Subsidiaries, taken together as
one accounting period; provided, however, for purposes of this
Agreement, for periods prior to December 31, 1996 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 1996 by
multiplying the results of operations for the first quarter by four
(4), (ii) the second quarter of Fiscal Year 1996 by multiplying the
results of operations for the first and second quarters by two (2), and
(iii) for the third quarter of Fiscal Year 1996 by multiplying the
results of operations of the sum of the first, second and third
quarters by four-thirds (4/3's).
"GAAP" or "Generally Accepted Accounting Principles" means
generally accepted accounting principles, being those principles of
accounting set forth in pronouncements of the Financial Accounting
Standards Board or the American Institute of Certified Public
Accountants or which have other substantial authoritative support and
are applicable in the circumstances as of the date of a report.
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity or officer exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a
foreign entity or government.
"Guaranteed Obligations" of any person shall mean all
guaranties (including guaranties of guaranties and guaranties of
dividends and other monetary obligations), endorsements, assumptions
and other contingent obligations with respect to,
15
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.
"Hazardous Material" means and includes any hazardous, toxic
or dangerous waste, substance or material, the generation, handling,
storage, disposal, treatment or emission of which is subject to any
Environmental Law.
"HCFA" means the United States Health Care Financing
Administration and any successor thereto.
"Headquarters Lease" means the 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 therein, as such Lease Agreement may
be amended, modified or supplemented from time to time.
"Headquarters Obligations" means all of the Holder Advances
and Loans, as each such term is defined in the Participation Agreement.
"Indebtedness" of any Person at any date means, without
duplication: (i) all indebtedness of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof); (ii) all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments; (iii) all obligations (contingent or
otherwise) of such Person in respect of letters of credit or other
similar instruments (or reimbursement obligations with respect
thereto); (iv) all obligations of such Person with respect to Rate
Hedging Obligations (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; (ix) the Headquarters Obligations;
and (x) all obligations of a like nature to those described in clauses
(i) through (ix) above of a partnership of which such Person is a
general partner. The
16
amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as
described above, the maximum liability of such Person for any such
contingent obligations at such date and, in the case of clause (vii),
the amount of the Indebtedness secured.
"Interbank Offered Rate" means, with respect to any Eurodollar
Rate Loan or Eurodollar Rate Segment or Eurodollar Market Loans for the
Interest Period applicable thereto, the average (rounded upward to the
nearest one-sixteenth (1/16) of one percent) per annum rate of interest
determined by the Agent (each such determination to be conclusive and
binding absent manifest error) as of two Business Days prior to the
first day of such Interest Period, as the effective rate at which
deposits in immediately available funds in Dollars are being, have
been, or would be offered or quoted by the Agent to major banks in the
applicable interbank market for Eurodollar deposits at any time during
the Business Day which is the second Business Day immediately preceding
the first day of such Interest Period, for a term comparable to such
Interest Period and in the amount of such Eurodollar Rate Loan or
Eurodollar Rate Segment or Eurodollar Market Loan. If no such offers or
quotes are generally available for such amount, then the Agent shall be
entitled to determine the Eurodollar Rate by estimating in its
reasonable judgment the per annum rate (as described above) that would
be applicable if such quote or offers were generally available.
"Interest Period" shall mean:
(i) with respect to any Eurodollar Rate Loan, each period
commencing on the date such Eurodollar Rate Loan is made or converted
from a Loan of another Type or the last day of the next preceding
Interest Period for such Loan and ending on the numerically
corresponding day in the first, second, third or sixth calendar month
thereafter, as the Borrower may select as provided in Section 2.3,
except that each Interest Period that commences on the last Business
Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Business Day of the appropriate subsequent
calendar month;
(ii) 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 2.2(b); and
(iii) with respect to any Eurodollar Market Loan, the period
commencing on the date such Eurodollar Market Loan is made and ending
on the numerically corresponding day in the first, second, third or
sixth calendar month thereafter, as
17
the Borrower may select as provided in Section 2.2(b), 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 Revolving Credit
Termination Date, such Interest Period shall end on the Revolving
Credit Termination Date; (ii) if any Interest Period for any Eurodollar
Rate Loan would otherwise end after the Revolving Credit Termination
Date or Line of Credit Termination Date, such Interest Period shall end
on the Revolving Credit Termination Date or Line of Credit Termination
Date, respectively; (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 Eurodollar
Rate Loan or a Eurodollar 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
Eurodollar Rate Loan or a Eurodollar Market Loan) and, if the Interest
Period for any Eurodollar Rate Loan or Eurodollar Market Loan would
otherwise be a shorter period, such Loan shall not be available
hereunder for such period.
"Interest Rate Selection Notice" means the written notice
delivered by an Authorized Representative in connection with the
election of a subsequent Interest Period for any Eurodollar Rate Loan
or Eurodollar Rate Segment or the conversion of any Eurodollar Rate
Loan or Eurodollar Rate Segment into a Base Rate Loan or Base Rate
Segment or the conversion of any Base Rate Loan or Base Rate Segment
into a Eurodollar Rate Loan or Eurodollar Rate Segment, in the form of
Exhibit F.
"Issuing Bank" means NationsBank as issuer of Letters of
Credit under Article III.
"LC Account Agreement" means the LC Account Agreement dated as
of the date hereof between the Borrower and the Issuing Bank, as
amended, modified or supplemented from time to time.
"Lending Office" means, as to each Lender and for each Type of
Loan, the Lending Office of such Lender (or an Affiliate of such
Lender) designated for such Type of Loan on the signature pages hereof
or in an Assignment and Acceptance or such other office of such Lender
(or of an affiliate of
18
such Lender) as such Lender may from time to time specify to an
Authorized Representative and the Agent as the office by which its
Loans are to be made and maintained.
"Letter of Credit" means a standby letter of credit issued by
the Issuing Bank pursuant to Article III for the account of the
Borrower in favor of a Person advancing credit or securing an
obligation on behalf of the Borrower.
"Letter of Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to acquire Participations in
respect of Letters of Credit and Reimbursement Obligations up to an
aggregate amount at any one time outstanding equal to such Lender's
Applicable Commitment Percentage of the Total Letter of Credit
Commitment as the same may be increased or decreased from time to time
pursuant to this Agreement.
"Letter of Credit Facility" means the facility described in
Article III providing for the issuance by the Issuing Bank for the
account of the Borrower of Letters of Credit in an aggregate stated
amount at any time outstanding not exceeding, together with all
Reimbursement Obligations, the Total Letter of Credit Commitment.
"Letter of Credit Outstandings" means, as of any date of
determination, the aggregate amount remaining undrawn under all Letters
of Credit plus Reimbursement Obligations then outstanding.
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, the Borrower and any
Subsidiary shall be deemed to be the owner of any property which it has
acquired or holds subject to a conditional sale agreement, financing
lease, or other arrangement pursuant to which title to the property has
been retained by or vested in some other Person for security purposes.
"Line of Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to make Line of Credit Loans to
the Borrower in a principal amount equal to such Lender's Applicable
Commitment Percentage of the Total Line of
Credit Commitment.
"Line of Credit Facility" means the facility described in
Section 2.1(b) providing for Line of Credit Loans to the
19
Borrower by the Lenders in the original principal amount of the Total Line of
Credit Commitment.
"Line of Credit Loan" means a loan made pursuant to the Line
of Credit Facility in accordance with Section 2.1(b).
"Line of Credit Notes" means, collectively, the promissory
notes of the Borrower evidencing Line of Credit Loans executed and
delivered to the Lenders as provided in Section 2.6(b) substantially in
the form of Exhibit G, with appropriate insertions as to amounts, dates
and names of Lenders.
"Line of Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of Line of Credit Loans
then outstanding and all interest accrued thereon.
"Line of Credit Termination Date" means (i) the Stated
Termination Date or (ii) such earlier date of termination of Lenders'
obligations pursuant to Section 9.1 upon the occurrence of an Event of
Default, or (iii) such date as the Borrower may voluntarily and
permanently terminate the Line of Credit Facility by payment in full of
all Line of Credit Outstandings.
"Loan" or "Loans" means any Syndicated Loans, Competitive Bid
Loans, Reimbursement Obligations and Letter of Credit Outstandings and
all extensions and renewals thereof.
"Loan Documents" means this Agreement, the Notes, the LC
Account Agreement, the Applications and Agreements for Letter of
Credit, and all other instruments and documents heretofore or hereafter
executed or delivered to or in favor of any Lender or the Agent in
connection with the Loans made, Letters of Credit issued and
transactions contemplated under this Agreement, as the same may be
amended, supplemented or replaced from time to time.
"Material Adverse Effect" means a material adverse effect on
(i) the business, properties, operations or condition, financial or
otherwise, of the Borrower and its Consolidated Entities, taken as a
whole, (ii) the ability of the Borrower to pay or perform its
obligations, liabilities and indebtedness under the Loan Documents as
such payment or performance becomes due in accordance with the terms
thereof, or (iii) the rights, powers and remedies of the Agent or any
Lender under any Loan Document or the validity, legality or
enforceability thereof (including for purposes of clauses (ii) and
(iii) the imposition of burdensome conditions thereon).
"Material Group" shall mean, at any time, any group, whether
one or more, or combination of Consolidated Entities
20
(a) whose assets, in the aggregate, constitute 5% or more of the assets
of the Borrower and the Consolidated Entities on a consolidated basis
or (b) whose net revenues, in the aggregate, constitute 5% or more of
the net revenues of the Borrower and the Consolidated Entities on a
consolidated basis.
"Medicaid Certification" means certification by HCFA or a
state agency or entity under contract with HCFA that a health care
operation is in compliance with all the conditions of participation set
forth in the Medicaid Regulations.
"Medicaid Provider Agreement" means an agreement entered into
between a state agency or other entity administering the Medicaid
program and a health care operation under which the health care
operation agrees to provide services for Medicaid patients in
accordance with the terms of the agreement and Medicaid Regulations.
"Medicaid Regulations" means, collectively, (i) all federal
statutes (whether set forth in Title XIX of the Social Security Act or
elsewhere) affecting the medical assistance program established by
Title XIX of the Social Security Act and any statutes succeeding
thereto; (ii) all applicable provisions of all federal rules,
regulations, manuals and orders of all Governmental Authorities
promulgated pursuant to or in connection with the statutes described in
clause (i) above and all federal administrative, reimbursement and
other guidelines of all Governmental Authorities having the force of
law promulgated pursuant to or in connection with the statutes
described in clause (i) above; (iii) all state statutes and plans for
medical assistance enacted in connection with the statutes and
provisions described in clauses (i) and (ii) above; and (iv) all
applicable provisions of all rules, regulations, manuals and orders of
all Governmental Authorities promulgated pursuant to or in connection
with the statutes described in clause (iii) above and all state
administrative, reimbursement and other guidelines of all Governmental
Authorities having the force of law promulgated pursuant to or in
connection with the statutes described in clause (ii) above, in each
case as may be amended, supplemented or otherwise modified from time to
time.
"Medicare Certification" means certification by HCFA or a
state agency or entity under contract with HCFA that a health care
operation is in compliance with all the conditions of participation set
forth in the Medicare Regulations.
"Medicare Provider Agreement" means an agreement entered into
between a state agency or other entity administering the Medicare
program and a health care operation under which the health care
operation agrees to provide services for Medicare
21
patients in accordance with the terms of the agreement and Medicare
Regulations.
"Medicare Regulations" means, collectively, all federal
statutes (whether set forth in Title XVIII of the Social Security Act
or elsewhere) affecting the health insurance program for the aged and
disabled established by Title XVIII of the Social Security Act and any
statutes succeeding thereto; together with all applicable provisions of
all rules, regulations, manuals and orders and administrative,
reimbursement and other guidelines having the force of law of all
Governmental Authorities (including without limitation, Health and
Human Services ("HHS"), HCFA, the Office of the Inspector General for
HHS, or any Person succeeding to the functions of any of the foregoing)
promulgated pursuant to or in connection with any of the foregoing
having the force of law, as each may be amended, supplemented or
otherwise modified from time to time.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions
within the preceding six (6) Fiscal Years.
"NationsBank" means NationsBank, National Association.
"Notes" means, collectively, the Line of Credit Notes and the
Revolving Notes and the Competitive Bid Notes.
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the principal and
interest on the Loans as evidenced by the Notes, (ii) the Reimbursement
Obligations and otherwise in respect of the Letters of Credit, and
(iii) the payment and performance of all other obligations, liabilities
and Indebtedness of the Borrower to the Lenders or the Agent hereunder,
under any one or more of the other Loan Documents or with respect to
the Loans.
"Participation" means, with respect to any Lender (other than
the Issuing Bank) and a Letter of Credit, the extension of credit
represented by the participation of such Lender hereunder in the
liability of the Issuing Bank in respect of a Letter of Credit issued
by the Issuing Bank in accordance with the terms hereof.
"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
22
Trustee, the Holders identified therein, the Lenders identified
therein, and NationsBank, National Association, as Agent.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" means any employee pension benefit plan within the
meaning of Section 3(2) of ERISA, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412
of the Code and which (i) is maintained for employees of the Borrower
or any of its ERISA Affiliates or is assumed by the Borrower or any of
its ERISA Affiliates in connection with any Acquisition or (ii) has at
any time been maintained for the employees of the Borrower or any
current or former ERISA Affiliate.
"Permitted Encumbrances" shall mean:
(1) liens for taxes, assessments and other governmental
charges that are not delinquent or that are being contested in
good faith by appropriate proceedings duly pursued;
(2) 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 materially adversely affect the value or
utility of the affected property;
(4) Liens on assets securing Indebtedness the proceeds of
which are used to acquire such assets;
(5) Liens and other matters approved in writing by the
Required Lenders; and
(6) Liens in favor of landlords, the amount secured by which
landlords' Liens, in the aggregate, would not materially
adversely affect the Borrower or a Material Group.
"Permitted Investments" shall mean:
(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.
23
(2) direct obligations of agencies or instrumentalities of the
United States of America having a rating of A or higher by S&P
or A2 or higher by Moody's;
(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 issued by, or other
interest-bearing deposits with, any other bank organized under
the laws of the United States of America or any state thereof,
provided that such deposit is either (i) insured by the
Federal Deposit Insurance Corporation or (ii) properly secured
by such bank by pledging direct obligations of the United
States of America having a market value not less than the face
amount of such deposits;
(5) the capital stock of and partnership interests in, and
loans made by the Borrower to, Controlled Partnerships and
Subsidiaries;
(6) prime commercial paper maturing within 270 days of the
acquisition thereof and, at the time of acquisition, having a
rating of A-1 or higher by S&P, or P-1 or higher by Moody's;
(7) eligible banker's acceptances, repurchase agreements and
tax-exempt municipal bonds having a maturity of less than one
year, in each case having a rating, or that is the full
recourse obligation of a person whose senior debt is rated, A
or higher by S&P or A2 or higher by Moody's;
(8) loans made by the Borrower or a Consolidated Entity in an
aggregate amount of $2,000,000 or less to employees of the
Borrower or of a Consolidated Entity;
(9) loans made by the Borrower or a Controlled Partnership in
an aggregate amount of $1,000,000 or less to limited partners
(or potential limited partners) of Controlled Partnerships for
the purpose of enabling such limited partners to acquire
limited partnership interests in Controlled Partnerships, to
operate their practices or to restructure partnership
interests;
(10) loans in an aggregate amount of up to $20,000,000 made by
the Borrower to the HEALTHSOUTH Employee Stock Benefit Plan;
24
(11) scholarship loans made by the Borrower in an aggregate
amount not exceeding $1,000,000 to individuals who meet
certain eligibility requirements as established by the
Borrower from time to time;
(12) up to 100% of the outstanding shares of stock of
Caretenders Healthcorp (formerly known as Senior Services,
Inc.) provided that aggregate costs incurred to purchase such
shares shall not exceed $12,000,000;
(13) other investments of less than $5,000,000 in the
aggregate expressly approved in writing by the 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 S&P or A2 or higher or P-1 or higher
by Moody's;
(15) loans to health care practitioners and other persons not
to exceed in the aggregate $5,000,000;
(16) investments in Acacia Venture Partners, Wellmark,
HEALTHSMART, MedPartners and Austin Medical Office Building
which in the aggregate do not exceed $5,000,000; and
(17) additional investments existing on the Closing Date
and described in Exhibit H.
"Person" means an individual, partnership, corporation,
limited liability company, trust, unincorporated organization,
association, joint venture or a government or agency or political
subdivision thereof.
"Prime Rate" means the rate of interest per annum announced
publicly by the Agent as its prime rate from time to time.
"Principal Office" means the office of the Agent at
NationsBank, National Association, Independence Center, 15th Floor, NC1
001-15-04, Charlotte, North Carolina 28255, Attention: Agency Services,
or such other office and address as the Agent may from time to time
designate.
"Rate Hedging Obligations" means any and all obligations of
the Borrower or any Consolidated Entity, whether absolute or contingent
and howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
25
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar- denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts, warrants and
those commonly known as interest rate "swap" agreements; and (ii) any
and all cancellations, buybacks, reversals, terminations or assignments
of any of the foregoing.
"Rating" means the rating of senior unsecured Indebtedness of
the Borrower in effect at any time which rating is made by either of
Moody's or S&P.
"Regulation D" means Regulation D of the Board as the same may
be amended or supplemented from time to time.
"Reimbursement Obligation" shall mean, at any time, the
obligation of the Borrower with respect to any Letter of Credit to
reimburse the Issuing Bank and the Lenders to the extent of their
respective Participations (including by the receipt by the Issuing Bank
of proceeds of Loans pursuant to Section 3.2) for amounts theretofore
paid by the Issuing Bank pursuant to a drawing under such Letter of
Credit.
"Required Lenders" means, as of any date, Lenders on such date
having Credit Exposures (as defined below) aggregating at least 51% of
the aggregate Credit Exposures of all the Lenders on such date. For
purposes of the preceding sentence, the amount of the "Credit Exposure"
of each Lender shall be equal to the aggregate principal amount of the
Loans without regard to any Competitive Bid Loan, so long as there
exists no Event of Default, owing to such Lender plus the aggregate
unutilized amounts of such Lender's Line of Credit Commitment and
Revolving Credit Commitment plus the amount of such Lender's Applicable
Commitment Percentage of Letter of Credit Outstandings; provided that,
if any Lender shall have failed to pay to the Issuing Bank its
Applicable Commitment Percentage of any drawing under any Letter of
Credit resulting in an outstanding Reimbursement Obligation, such
Lender's Credit Exposure attributable to Letters of Credit and
Reimbursement Obligations shall be deemed to be held by the Issuing
Bank for purposes of this definition.
"Restricted Payment" means (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of
Borrower or any of its Consolidated Entities (other than those payable
or distributable solely to the Borrower) now or hereafter outstanding,
except a dividend payable solely in shares of a class of stock to the
holders of that class; (b) any redemption, conversion, exchange,
retirement or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of
26
stock of the Borrower or any of its Consolidated Entities (other than
those payable or distributable solely to the Borrower) now or hereafter
outstanding; (c) any payment made to retire, or to obtain the surrender
of, any outstanding warrants, options or other rights to acquire shares
of any class of stock of the Borrower or any of its Consolidated
Entities now or hereafter outstanding; and (d) any issuance and sale of
capital stock of any Consolidated Entity of the Borrower (or any
option, warrant or right to acquire such stock) other than to the
Borrower.
"Revolving Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to make Revolving Loans to the
Borrower up to an aggregate principal amount at any one time
outstanding equal to such Lender's Applicable Commitment Percentage of
the Total Revolving Credit Commitment.
"Revolving Credit Facility" means the facility described in
Section 2.1(a) providing for Loans to the Borrower by the Lenders in
the aggregate principal amount of the Total Revolving Credit
Commitment.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving Loans
then outstanding and all interest accrued thereon.
"Revolving Credit Termination Date" means (i) March 31, 2001
or (ii) such earlier date of termination of Lenders' obligations
pursuant to Section 9.1 upon the occurrence of an Event of Default, or
(iii) such date as the Borrower may voluntarily and permanently
terminate the Revolving Credit Facility by payment in full of all
Revolving Credit Outstandings, Competitive Bid Loans and Letter of
Credit Outstandings and cancellation of all Letters of Credit.
"Revolving Loan" means any borrowing pursuant to an Advance
under the Revolving Credit Facility in accordance with Section 2.1(a).
"Revolving Notes" means, collectively, the promissory notes of
the Borrower evidencing Revolving Loans executed and delivered to the
Lenders as provided in Section 2.6(a) substantially in the form of
Exhibit I, with appropriate insertions as to amounts, dates and names
of Lenders.
"S&P" means Standard & Poor's, a division of The McGraw Hill
Companies.
"Segment" means a portion of a Loan (or all thereof) with
respect to which a particular interest rate is (or is proposed to be)
applicable.
27
"Single Employer Plan" means any employee pension benefit plan
covered by Title IV of ERISA in respect of which the Borrower or any
Subsidiary is an "employer" as described in Section 4001(b) of ERISA
and which is not a Multiemployer Plan.
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including contingent obligations; and
(ii) it is then able and expects to be able to pay
its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
"Stated Termination Date" means March 31, 1997 or such later
date as the parties may agree pursuant to Section 2.14.
"Subordinated Debt" means any unsecured Indebtedness of the
Borrower or any Consolidated Entity (other than inter-company
Indebtedness) which is subordinated in right of payment in all respects
to the Obligations in a manner reasonably acceptable to the Agent.
"Subsidiary" means any corporation or other entity in which
more than 50% of its outstanding voting stock or more than 50% of all
equity interests is owned directly or indirectly by the Borrower and/or
by one or more of the Borrower's Subsidiaries.
"Swap Agreement" means one or more agreements between the
Borrower and any Person with respect to Indebtedness evidenced by any
or all of the Notes, on terms mutually acceptable to Borrower and such
Person and approved by each of the Lenders, which agreements create
Rate Hedging Obligations; provided, however, that no such approval of
the Lenders shall be required to the extent such agreements are entered
into between the Borrower and any Lender.
"Syndicated Loans" shall mean the Revolving Loans and Line of
Credit Loans provided for by Section 2.1, which may be Base Rate Loans
or Eurodollar Rate Loans.
"Termination Event" means: (i) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder (unless the
notice requirement has been waived by applicable regulation); or (ii)
the withdrawal of the Borrower or any ERISA Affiliate from a Pension
Plan during a plan year
28
in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or was deemed such under Section 4068(f) of ERISA;
or (iii) the termination of a Pension Plan, the filing of a notice of
intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA; or (iv) the
institution of proceedings to terminate a Pension Plan by the PBGC; or
(v) any other event or condition which would constitute grounds under
Section 4042(a) of ERISA for the termination of, or the appointment of
a trustee to administer, any Pension Plan; or (vi) the partial or
complete withdrawal of the Borrower or any ERISA Affiliate from a
Multiemployer Plan; or (vii) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA; or (viii) any event or
condition which results in the reorganization or insolvency of a
Multiemployer Plan under Section 4241 or Section 4245 of ERISA,
respectively; or (ix) any event or condition which results in the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by the PBGC of proceedings to terminate a Multiemployer
Plan under Section 4042 of ERISA.
"Total Letter of Credit Commitment" means an amount not to exceed
$75,000,000.
"Total Line of Credit Commitment" means a principal amount
equal to $350,000,000, as reduced from time to time in accordance with
Section 2.1(b) and Section 2.8.
"Total Revolving Credit Commitment" means a principal amount
equal to $900,000,000, as reduced from time to time in accordance with
Section 2.1(a) and Section 2.8.
"Type" shall have the meaning assigned to such term in Section
1.3.
"Unused Amount" shall mean with respect to each Lender, (a)
the Revolving Credit Commitment of such Lender less (b) such Lender's
pro rata share of outstanding Revolving Loans and Letter of Credit
Outstandings less (c) the outstanding principal amount of all
Competitive Bid Loans then held by such Lender; provided, that in no
event shall such amount be a negative number.
"Vanderbilt" shall mean Vanderbilt Stallworth Rehabilitation
Hospital, L.P., the partners of which are the Borrower, Vanderbilt
University and Vanderbilt Health Services.
"Voting Stock" means shares of Capital Stock issued by a
corporation, or equivalent interests in any other Person, the holders
of which are ordinarily, in the absence of contingencies, entitled to
vote for the election of directors (or persons performing similar
functions) of such Person, even
29
if the right so to vote has been suspended by the happening of such a
contingency.
1.2 Rules of Interpretation.
-----------------------
(a) All accounting terms not specifically defined herein
shall have the meanings assigned to such terms and shall be interpreted
in accordance with GAAP applied on a Consistent Basis.
(b) The headings, subheadings and table of contents used
herein or in any other Loan Document are solely for convenience of
reference and shall not constitute a part of any such document or
affect the meaning, construction or effect of any provision thereof.
(c) Except as otherwise expressly provided, references
herein to articles, sections, paragraphs, clauses, annexes, appendices,
exhibits and schedules are references to articles, sections,
paragraphs, clauses, annexes, appendices, exhibits and schedules in or
to this Agreement.
(d) All definitions set forth herein or in any other Loan
Document shall apply to the singular as well as the plural form of such
defined term, and all references to the masculine gender shall include
reference to the feminine or neuter gender, and vice versa, as the
context may require.
(e) When used herein or in any other Loan Document, words
such as "hereunder", "hereto", "hereof" and "herein" and other words of
like import shall, unless the context clearly indicates to the
contrary, refer to the whole of the applicable document and not to any
particular article, section, subsection, paragraph or clause thereof.
(f) References to "including" means including without
limiting the generality of any description preceding such term, and for
purposes hereof the rule of ejusdem generis shall not be applicable to
limit a general statement, followed by or referable to an enumeration
of specific matters, to matters similar to those specifically
mentioned.
(g) All dates and times of day specified herein shall refer
to such dates and times at Charlotte, North Carolina.
(h) Each of the parties to the Loan Documents and their
counsel have reviewed and revised, or requested (or had the opportunity
to request) revisions to, the Loan Documents, and any rule of
construction that ambiguities are to be resolved against the drafting
party shall be inapplicable in the construing and interpretation of the
Loan Documents and all exhibits, schedules and appendices thereto.
30
(i) Any reference to an officer of the Borrower or any
other Person by reference to the title of such officer shall be deemed
to refer to each other officer of such Person, however titled,
exercising the same or substantially similar functions.
(j) All references to any agreement or document as
amended, modified or supplemented, or words of similar effect, shall
mean such document or agreement, as the case may be, as amended,
modified or supplemented from time to time only as and to the extent
permitted therein and in the Loan Documents.
1.3. Classes and Types of Loans. Loans hereunder are distinguished
by "Class" and by "Type". The "Class" of a Loan refers to whether such Loan is a
Competitive Bid Loan or a Syndicated Loan (and if a Syndicated Loan, a Revolving
Loan or Line of Credit Loan), each of which constitutes a Class. The "Type" of a
Loan refers to whether such Loan is a Base Rate Loan, a Eurodollar Rate Loan, an
Absolute Rate Loan or a Eurodollar Market Loan, each of which constitutes a
Type. Loans may be identified by both Class and Type.
31
ARTICLE II
The Loans
---------
2.1. Syndicated Loans.
----------------
(a) Revolving Credit Facility. Subject to the terms and
conditions of this Agreement, each Lender severally agrees to make Advances to
the Borrower under the Revolving Credit Facility from time to time from the
Closing Date until the Revolving Credit Termination Date on a pro rata basis as
to the total borrowing requested by the Borrower on any day determined by such
Lender's Applicable Commitment Percentage up to but not exceeding the Revolving
Credit Commitment of such Lender, provided, however, that the Lenders will not
be required and shall have no obligation to make any such Advance (i) so long as
a Default or an Event of Default has occurred and is continuing or (ii) if the
maturity of any of the Notes has been accelerated as a result of an Event of
Default; provided further, however, that immediately after giving effect to each
such Advance, the aggregate principal amount of Revolving Credit Outstandings
plus Letter of Credit Outstandings plus outstanding Competitive Bid Loans shall
not exceed the Total Revolving Credit Commitment. Within such limits, the
Borrower may borrow, repay and reborrow under the Revolving Credit Facility on a
Business Day from the Closing Date until, but (as to borrowings and
reborrowings) not including, the Revolving Credit Termination Date; provided,
however, that (y) no Revolving Loan that is a Eurodollar Rate Loan shall be made
which has an Interest Period that extends beyond the Revolving Credit
Termination Date and (z) each Revolving Loan that is a Eurodollar Rate Loan may,
subject to the provisions of Section 2.4, be repaid only on the last day of the
Interest Period with respect thereto unless such payment is accompanied by the
additional payment, if any, required by Section 4.2.
(b) Line of Credit Facility. Subject to the terms and
conditions of this Agreement, each Lender severally agrees to make Advances to
the Borrower under the Line of Credit Facility from time to time from the
Closing Date until the Line of Credit Termination Date on a pro rata basis as to
the total borrowing requested by the Borrower on any day determined by such
Lender's Applicable Commitment Percentage up to but not exceeding the Line of
Credit Commitment of such Lender, provided, however, that the Lenders will not
be required and shall have no obligation to make any such Advance (i) so long as
a Default or an Event of Default has occurred and is continuing or (ii) if the
maturity of any of the Notes has been accelerated as a result of an Event of
Default; provided further, however, that immediately after giving effect to each
such Advance, the principal amount of Line of Credit Outstandings shall not
exceed the Total Line of Credit Commitment. Within such limits, the Borrower may
borrow, repay and reborrow under the Line of Credit Facility on a Business Day
from the Closing Date until, but (as to borrowings and reborrowings) not
32
including, the Line of Credit Termination Date; provided, however, that (y) no
Line of Credit Loan that is a Eurodollar Rate Loan shall be made which has an
Interest Period that extends beyond the Line of Credit Termination Date and (z)
each Line of Credit Loan that is a Eurodollar Rate Loan may, subject to the
provisions of Section 2.4, be repaid only on the last day of the Interest Period
with respect thereto unless such payment is accompanied by the additional
payment, if any, required by Section 4.2.
(c) Amounts. The aggregate unpaid principal amount of
the Revolving Credit Outstandings plus Letter of Credit Outstandings plus
outstanding Competitive Bid Loans shall not exceed at any time the Total
Revolving Credit Commitment, and the aggregate unpaid principal amount of the
Line of Credit Outstandings shall not exceed the Total Line of Credit Commitment
and, in the event there shall be outstanding any such excess, the Borrower shall
immediately make such payments and prepayments as shall be necessary to comply
with this restriction. Each Syndicated Loan hereunder, other than Base Rate
Refunding Loans, and each conversion under Section 2.9, shall be in an amount of
at least $5,000,000, and, if greater than $5,000,000, an integral multiple of
$1,000,000.
(d) Advances. An Authorized Representative shall give
the Agent (1) at least three (3) Business Days' irrevocable written notice by
telefacsimile transmission of a Borrowing Notice or Interest Rate Selection
Notice (as applicable) with appropriate insertions, effective upon receipt, of
each Syndicated Loan that is a Eurodollar Rate Loan (whether representing an
additional borrowing hereunder or the conversion of a borrowing hereunder from
Base Rate Loans to Eurodollar Rate Loans) prior to 10:30 A.M. and (2)
irrevocable written notice by telefacsimile transmission of a Borrowing Notice
or Interest Rate Selection Notice (as applicable) with appropriate insertions,
effective upon receipt, of each Syndicated Loan (other than Base Rate Refunding
Loans to the extent the same are effected without notice pursuant to Section
2.1(d)(iv)) that is a Base Rate Loan (whether representing an additional
borrowing hereunder or the conversion of borrowing hereunder from Eurodollar
Rate Loans to Base Rate Loans) prior to 10:30 A.M. on the day of such proposed
Syndicated Loan. Each such notice shall specify the amount of the borrowing,
whether the Loan is a Revolving Loan or Line of Credit Loan, the Type of Loan
(Base Rate or Eurodollar Rate), the date of borrowing and, if a Eurodollar Rate
Loan, the Interest Period to be used in the computation of interest. Notice of
receipt of such Borrowing Notice or Interest Rate Selection Notice, as the case
may be, together with the amount of each Lender's portion of an Advance
requested thereunder, shall be provided by the Agent to each Lender by
telefacsimile transmission with reasonable promptness, but (provided the Agent
shall have received such notice by 10:30 A.M.) not later than 1:00 P.M. on the
same day as the Agent's receipt of such notice.
33
(ii) Not later than 2:00 P.M. on the date specified for each
borrowing under this Section 2.1, each Lender shall, pursuant to the terms and
subject to the conditions of this Agreement, make the amount of the Loan or
Loans to be made by it on such day available by wire transfer to the Agent in
the amount of its pro rata share, determined according to such Lender's
Applicable Commitment Percentage of the Syndicated Loan or Syndicated Loans to
be made on such day. Such wire transfer shall be directed to the Agent at the
Principal Office and shall be in the form of Dollars constituting immediately
available funds. The amount so received by the Agent shall, subject to the terms
and conditions of this Agreement, be made available to the Borrower by delivery
of the proceeds thereof as shall be directed in the applicable Borrowing Notice
by the Authorized Representative and reasonably acceptable to the Agent.
(iii) The Borrower shall have the option to elect the duration of the
initial and any subsequent Interest Periods and to convert the Syndicated Loans
in accordance with Section 2.9. Eurodollar Rate Loans and Base Rate Loans may be
outstanding at the same time, provided, however, there shall not be outstanding
at any one time Loans (whether Syndicated Loans or Competitive Bid Loans) having
more than eight (8) different Interest Periods. If the Agent does not receive a
Borrowing Notice or an Interest Rate Selection Notice giving notice of election
of the duration of an Interest Period or of conversion of any Loan to or
continuation of a Loan as a Eurodollar Rate Loan by the time prescribed by
Section 2.1(d) or 2.9, the Borrower shall be deemed to have elected to convert
such Segment to (or continue such Segment as) a Base Rate Loan until the
Borrower notifies the Agent in accordance with Section 2.9.
(iv) Notwithstanding the foregoing, if a drawing is made under any
Letter of Credit, such drawing is honored by the Issuing Bank prior to the
Revolving Credit Termination Date, and the Borrower shall not immediately fully
reimburse the Issuing Bank in respect of such drawing, (A) provided that the
conditions to making a Revolving Loan as herein provided shall then be
satisfied, the Reimbursement Obligation arising from such drawing shall be paid
to the Issuing Bank by the Agent without the requirement of notice to or from
the Borrower from immediately available funds which shall be advanced as a Base
Rate Refunding Loan by each Lender under the Revolving Credit Facility in an
amount equal to such Lender's Applicable Commitment Percentage of such
Reimbursement Obligation, and (B) if the conditions to making a Revolving Loan
as herein provided shall not then be satisfied, each of the Lenders shall fund
by payment to the Agent (for the benefit of the Issuing Bank) in immediately
available funds the purchase from the Issuing Bank of their respective
Participations in the related Reimbursement Obligation based on their respective
Applicable Commitment Percentages. If a drawing is presented under any Letter of
Credit in accordance with the terms thereof and the Borrower shall not
immediately reimburse the Issuing Bank in respect thereof, then notice of such
drawing or payment shall be provided promptly by the
34
Issuing Bank to the Agent and the Agent shall provide notice to each Lender by
telephone or telefacsimile transmission. If notice to the Lenders of a drawing
under any Letter of Credit is given by the Agent at or before 12:00 noon on any
Business Day, each Lender shall, pursuant to the conditions specified in this
Section 2.1(d)(iv), either make a Base Rate Refunding Loan or fund the purchase
of its Participation in the amount of such Lender's Applicable Commitment
Percentage of such drawing or payment and shall pay such amount to the Agent for
the account of the Issuing Bank at the Principal Office in Dollars and in
immediately available funds before 2:30 P.M. on the same Business Day. If notice
to the Lenders of a drawing under a Letter of Credit is given by the Agent after
12:00 noon on any Business Day, each Lender shall, pursuant to the conditions
specified in this Section 2.1(d)(iv), either make a Base Rate Refunding Loan or
fund the purchase of its Participation in the amount of such Lender's Applicable
Commitment Percentage of such drawing or payment and shall pay such amount to
the Agent for the account of the Issuing Bank at the Principal Office in Dollars
and in immediately available funds before 12:00 noon on the next following
Business Day. Any such Base Rate Refunding Loan shall be advanced as, and shall
continue as, a Base Rate Loan unless and until the Borrower converts such Base
Rate Loan in accordance with the terms of Section 2.9.
2.2. Competitive Bid Loans.
---------------------
(a) In addition to borrowings of Syndicated Loans, at any time
prior to the Revolving Credit Termination Date the Borrower may, as set forth in
this Section 2.2, 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 2.2. Competitive
Bid Loans may be Eurodollar Market Loans or Absolute Rate Loans (each a "Type"
of Competitive Bid Loan), provided that:
(i) the aggregate amount of outstanding Competitive Bid
Loans shall not exceed the Total Revolving Credit Commitment
less the sum of the principal amount of Revolving Credit
Outstandings and Letter of Credit Outstandings;
(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
35
amount equal to such Lender's Revolving Credit Commitment;
(iv) the aggregate principal amount of all Competitive Bid
Loans, together with the sum of (i) the aggregate principal
amount of all outstanding Revolving Loans and (ii) the Letter
of Credit Outstandings shall not exceed the Total Revolving
Credit Commitment at such time; and
(v) no Competitive Bid Loan shall have a maturity date
subsequent to the Revolving Credit 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. on (x) the fourth Business Day prior to the date of borrowing
proposed therein, in the case of a Eurodollar 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 three
(3) 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
any one time more than four (4) Competitive Bid Borrowings. Each such
Competitive Bid Quote Request shall be substantially in the form of Exhibit J
and shall specify as to each Competitive Bid Borrowing:
(i) the proposed date of such Competitive Bid
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
integral multiple of $1,000,000) but shall not cause the
limits specified in Section 2.2(a) 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 Eurodollar
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
36
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 2.2(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 2.2(b) 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. on the fourth Business Day prior to the proposed
date of borrowing, in the case of a Eurodollar Auction or (y) 10:00 a.m. 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. on the fourth Business Day
prior to the proposed date of borrowing, in the case of a Eurodollar Auction or
(y) 9:45 a.m. on the Quotation Date, in the case of an Absolute Rate Auction.
Subject to Article IV, Article VI and Article IX, any 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 K 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 Competitive Bid Quote is
being made, which principal amount shall be at least
$5,000,000 (or a larger integral 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 Revolving Credit 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;
37
(C) in the case of a Eurodollar Auction, the
margin above or below the applicable Interbank
Offered Rate adjusted for any Eurodollar Reserve
Percentage (the "Eurodollar 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 Interbank Offered Rate as so adjusted;
(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 Eurodollar Auction,
by 4:00 p.m. 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. 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 2.2(c) and (ii)
of any Competitive Bid Quote that amends, modifies or is otherwise inconsistent
with a previous Competitive Bid Quote 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 Competitive Bid
Quotes have been received and (B) the respective principal amounts and
Eurodollar 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. on (x) the third Business Day
prior to the proposed date of borrowing, in the case of a Eurodollar 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
38
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
2.2(d) (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 $5,000,000 or a
larger integral 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
integral multiple of $1,000,000) but shall not cause the
limits specified in Section 2.2(a) to be violated;
(iii) acceptance of offers may be made only in ascending
order of Eurodollar 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 other
than Line of Credit Loans of a Lender or Lenders offering the
lowest rate exceeding such Lender's Revolving Credit
Commitment and (y) an increase in the Unused Fee payable by
Borrower under Section 2.11(a); 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 2.2(c)(ii) or otherwise fails to comply
with the requirements of this Agreement (including, without
limitation, Section 2.2(a)).
If offers are made by two or more Lenders with the same Eurodollar Margins or
Absolute Rates, as the case may be, for a greater aggregate principal amount
than the amount in respect of which offers are permitted to be accepted for the
related Interest Period after the acceptance of all offers, if any, of all lower
Eurodollar 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 $5,000,000 or
larger integral multiples of $1,000,000) in proportion to the aggregate
principal amount of such offers. Determinations by the Borrower of the
39
amounts of Competitive Bid Loans and the lowest bid after adjustment as provided
in Section 2.2(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. 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.
2.3. Payment of Interest. (a) The Borrower shall pay interest to
the Agent for the account of each Lender on the outstanding and unpaid principal
amount of each Loan made by such Lender for the period commencing on the date of
such Loan until such Loan shall be due at the then applicable Base Rate for Base
Rate Loans or applicable Fixed Rate for Fixed Rate Loans, as designated by the
Authorized Representative pursuant to Section 2.1 or Section 2.2; provided,
however, that if any amount payable under this Agreement shall not be paid when
due (at maturity, by acceleration or otherwise, subject to the provisions of
Section 9.1(a)), all amounts outstanding hereunder shall bear interest
thereafter at the Default Rate.
(b) Interest on each Loan shall be computed on an Actual/360
Basis. Interest on each Loan shall be paid (i) quarterly in arrears on the last
Business Day of each March, June, September and December, commencing June 30,
1996, for each Base Rate Loan, (ii) on the last day of the applicable Interest
Period for each Fixed Rate Loan and, if such Interest Period extends for more
than three (3) months, at intervals of three (3) months after the first day of
such Interest Period, and (iii) upon the Line of Credit Termination Date or
Revolving Credit Termination Date, as the case may be. Interest payable at the
Default Rate shall be payable on demand.
2.4. Payment of Principal. The principal amount of each Revolving
Loan shall be due and payable to the Agent for the benefit of each Lender in
full on the Revolving Credit Termination Date, or earlier as specifically
provided herein. The principal amount of each Line of Credit Loan shall be due
and payable to the Agent for the benefit of each Lender in full on the Stated
Termination Date, or earlier as specifically provided herein. The principal
amount of each Competitive Bid Loan shall be due and payable to the Agent for
the benefit of the applicable Lender in full on the last day of the Interest
Period applicable thereto, or earlier as specifically provided herein. The
principal amount of any Base Rate Loan may be prepaid in whole or in part at any
time. The principal amount of any Fixed Rate Loan may be prepaid only at
40
the end of the applicable Interest Period unless the Borrower shall pay to the
Agent for the account of the Lenders the additional amount, if any, required
under Section 4.2. All prepayments of Syndicated Loans made by the Borrower
shall be in the amount of $5,000,000 or such greater amount which is an integral
multiple of $1,000,000, or the amount equal to all Revolving Credit Outstandings
or Line of Credit Outstandings, as the case may be, or such other amount as
necessary to comply with Section 2.1(c) or Section 2.9.
2.5. Non-Conforming Payments. (a) Each payment of principal (including
any prepayment) and payment of interest and fees, and any other amount required
to be paid to the Lenders with respect to the Loans, shall be made to the Agent
at the Principal Office, for the account of each Lender, in Dollars and in
immediately available funds before 10:00 A.M. on the date such payment is due.
The Agent may, but shall not be obligated to, debit the amount of any such
payment which is not made by such time to any ordinary deposit account, if any,
of the Borrower with the Agent. The Agent shall promptly notify the Borrower of
any such debit; however, failure to give such notice shall not affect the
validity of such debit.
(b) The Agent shall deem any payment made by or on behalf of the
Borrower hereunder that is not made both in Dollars and in immediately available
funds and prior to 10:00 A.M. to be a non-conforming payment. Any such payment
shall not be deemed to be received by the Agent until the later of (i) the time
such funds become available funds and (ii) the next Business Day. Any
non-conforming payment may constitute or become a Default or Event of Default.
Interest shall continue to accrue on any principal as to which a non-conforming
payment is made until the later of (x) the date such funds become available
funds or (y) the next Business Day at the Default Rate from the date such amount
was due and payable.
(c) In the event that any payment hereunder or under the Notes
becomes due and payable on a day other than a Business Day, then such due date
shall be extended to the next succeeding Business Day unless provided otherwise
under clause (ii) of the definition of "Interest Period"; provided that interest
shall continue to accrue during the period of any such extension and provided
further, that in no event shall any such due date be extended beyond the
Revolving Credit Termination Date or Line of Credit Termination Date, as the
case may be.
2.6. Notes. (a) Revolving Loans made by each Lender shall be
evidenced by the Revolving Note payable to the order of such Lender in the
respective amount of its Applicable Commitment Percentage of the Revolving
Credit Commitment, which Revolving Note shall be dated the Closing Date or a
later date pursuant to an Assignment and Acceptance and shall be duly completed,
executed and delivered by the Borrower.
41
(b) Line of Credit Loans made by each Lender shall be evidenced by the
Line of Credit Note payable to the order of such Lender in the respective amount
of its Applicable Commitment Percentage of the Line of Credit Commitment, which
Line of Credit Note shall be dated the Closing Date or a later date pursuant to
an Assignment and Acceptance and shall be duly completed, executed and delivered
by the Borrower.
(c) Competitive Bid Loans made by each Lender shall be evidenced by the
Competitive Bid Note payable to the order of such Lender and representing the
obligation of the Borrower to pay the lesser of (a) the aggregate amount of the
Revolving Credit Commitment of such Lender and (b) the unpaid principal amount
of all Competitive Bid Loans made by such Lender, with interest on the unpaid
principal amount from time to time outstanding of each Competitive Bid Loan
evidenced thereby as prescribed in Section 2.3. Each Lender is hereby authorized
to record the date and amount of each Competitive Bid Loan made by such Lender,
the maturity date thereof, the date and amount of each payment of principal
thereof and the interest rate with respect thereto on the schedule attached to
and constituting part of its Competitive Bid Note, and any such recordation
shall constitute prima facie evidence of the accuracy of the information so
recorded; provided, however, that the failure to make any such recordation shall
not affect the obligations of the Borrower hereunder or under any Competitive
Bid Note. Each Competitive Bid Note shall be dated the Closing Date or a later
date pursuant to an Assignment and Acceptance and shall be duly completed,
executed and delivered by the Borrower.
2.7. Pro Rata Payments. Except as otherwise provided herein, (a)
each payment on account of the principal of and interest on the Syndicated Loans
and the fees described in Section 2.11 and the first sentence of Section 3.3(a)
shall be made to the Agent for the account of the Lenders pro rata based on
their Applicable Commitment Percentages, (b) 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 diminution, setoff, recoupment or
counterclaim, and (c) the Agent will promptly distribute to the Lenders in
immediately available funds payments received in fully collected, immediately
available funds from the Borrower.
2.8. Reductions. The Borrower shall, by irrevocable notice from an
Authorized Representative, have the right from time to time but not more
frequently than once each calendar month, upon not less than three (3) Business
Days' written notice to the Agent, effective upon receipt, to permanently reduce
the Total Revolving Credit Commitment or the Total Line of Credit Commitment.
The Agent shall give each Lender, within one (1) Business Day of receipt of such
notice, telefacsimile notice, or telephonic notice (confirmed in writing), of
such reduction. Each such reduction shall be in the aggregate amount of
$10,000,000 or such greater amount which is
42
in an integral multiple of $1,000,000, or the entire remaining Total Revolving
Credit Commitment or the Total Line of Credit Commitment, and shall permanently
reduce the Total Revolving Credit Commitment or the Total Line of Credit
Commitment, as the case may be. Each reduction of the Total Revolving Credit
Commitment shall be accompanied by payment of the Revolving Loans and
Competitive Bid Loans to the extent that the principal amount of Revolving
Credit Outstandings plus Letter of Credit Outstandings plus outstanding
Competitive Bid Loans exceeds the Total Revolving Credit Commitment after giving
effect to such reduction, together with accrued and unpaid interest on the
amounts prepaid. Each reduction of the Total Line of Credit Commitment shall be
accompanied by payment of Line of Credit Loans to the extent that the principal
amount of Line of Credit Outstandings exceeds the Total Line of Credit
Commitment after giving effect to such reduction, together with accrued and
unpaid interest on the amounts prepaid. If any such reduction shall result in
the payment of any Fixed Rate Loan other than on the last day of the Interest
Period of such Fixed Rate Loan such prepayment shall be accompanied by amounts
due, if any, under Section 4.2.
2.9. Conversions and Elections of Subsequent Interest Periods.
Provided that no Default or Event of Default shall have occurred and be
continuing and subject to the limitations set forth below and in Article IV, the
Borrower may:
(a) upon delivery, effective upon receipt, of a properly
completed Interest Rate Selection Notice to the Agent on or before 10:30 A.M. on
any Business Day, convert all or a part of Eurodollar Rate Loans under either
the Revolving Credit Facility or the Line of Credit Facility to Base Rate Loans
on the last day of the Interest Period for such Eurodollar Rate Loans; and
(b) upon delivery, effective upon receipt, of a properly
completed Interest Rate Selection Notice to the Agent on or before 10:30 A.M.
three (3) Business Days prior to the date of such election or conversion:
(i) elect a subsequent Interest Period for all
or a portion of Eurodollar Rate Loans under either the
Revolving Credit Facility or the Line of Credit Facility to
begin on the last day of the then current Interest Period for
such Eurodollar Rate Loans; and
(ii) convert Base Rate Loans under either the
Revolving Credit Facility or the Line of Credit Facility to
Eurodollar Rate Loans on any Business Day.
Each election and conversion pursuant to this Section 2.9 shall be
subject to the limitations on Eurodollar Rate Loans set forth in the definition
of "Interest Period" herein and in Sections 2.1 and 2.4 and Article IV. The
Agent shall give written notice to each Lender of such notice of election or
conversion prior to 3:00
43
P.M. on the day such notice of election or conversion is received. All such
continuations or conversions of Loans shall be effected pro rata based on the
Applicable Commitment Percentages of the Lenders.
2.10. Increase and Decrease in Amounts. The amount of the Total
Revolving Credit Commitment which shall be available to the Borrower as Advances
shall be reduced by the aggregate amount of Letter of Credit Outstandings.
2.11. Unused Fees.
(a) Revolving Credit Facility. For the period beginning on the Closing
Date and ending on the Revolving Credit Termination Date, the Borrower agrees to
pay to the Agent, for the benefit of each Lender, an unused fee equal to the
Applicable Unused Fee multiplied by the average daily Unused Amount of such
Lender. Such fees shall be due in arrears on the last Business Day of each
March, June, September and December commencing June 30, 1996 to and on the
Revolving Credit Termination Date.
(b) Line of Credit Facility. For the period beginning on the Closing
Date and ending on the Line of Credit Termination Date, the Borrower agrees to
pay to the Agent, for the pro rata benefit of the Lenders based on their
Applicable Commitment Percentages, an unused fee equal to the Applicable Unused
Fee multiplied by the average daily amount by which the Total Line of Credit
Commitment exceeds the aggregate principal amount of Line of Credit
Outstandings. Such fees shall be due in arrears on the last Business Day of each
March, June, September and December commencing June 30, 1996 to and on the Line
of Credit Termination Date.
(c) Notwithstanding the foregoing, so long as any Lender fails to make
available any portion of its Revolving Credit Commitment or Line of Credit
Commitment when requested, such Lender shall not be entitled to receive payment
of its pro rata share of such fees until such Lender shall make available such
portion. All fees payable pursuant to this Section 2.11 shall be calculated on
an Actual/360 Basis.
2.12. Deficiency Advances. No Lender shall be responsible for any
default of any other Lender in respect of such other Lender's obligation to make
any Loan or fund its purchase of any Participation hereunder nor shall the
Revolving Credit Commitment or Line of Credit Commitment of any Lender hereunder
be increased as a result of such default of any other Lender. Without limiting
the generality of the foregoing, in the event any Lender shall fail to advance
funds to the Borrower under the Revolving Credit Facility or the Line of Credit
Facility as herein provided, the Agent may in its discretion, but shall not be
obligated to, advance under the Revolving Note or Line of Credit Note, as the
case may be, in its favor as a Lender all or any portion of such amount or
amounts (each, a "deficiency advance") and shall thereafter be
44
entitled to payments of principal of and interest on such deficiency advance in
the same manner and at the same interest rate or rates to which such other
Lender would have been entitled had it made such advance under its Revolving
Note or Line of Credit Note, as the case may be; provided that, upon payment to
the Agent from such other Lender of the entire outstanding amount of each such
deficiency advance, together with accrued and unpaid interest thereon, from the
most recent date or dates interest was paid to the Agent by the Borrower on each
Loan comprising such deficiency advance at the interest rate per annum for
overnight borrowing by the Agent from the Federal Reserve Bank of Richmond,
Virginia, then such payment shall be credited against the applicable Note 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 other
Lender as of the most recent date or dates, as the case may be, upon which any
payments of interest were made by the Borrower thereon.
2.13. Use of Proceeds. The proceeds of the Loans made pursuant to
this Agreement shall be used by the Borrower to provide funding for the
acquisition and development of Facilities and to provide for the working capital
needs and other corporate purposes of the Borrower and its Consolidated
Entities.
2.14. (a) Extension of Stated Termination Date. At the request of
the Borrower the Lenders may, in their sole discretion, elect to extend the
Stated Termination Date then in effect for additional periods of up to 364 days
each; provided, however, that at no time shall the committed term of the Line of
Credit Facility exceed 364 days. The Borrower shall notify the Lenders of its
request for such an extension by delivering to the Agent and the Lenders notice
of such request signed by an Authorized Representative not more than ninety (90)
days nor less than sixty (60) days prior to the Stated Termination Date then in
effect. If the Lenders shall elect to so extend, the Agent shall notify the
Borrower in writing within sixty (60) days of its receipt of such request for
extension of the decision of the Lenders as to whether to extend the Stated
Termination Date. Failure by any Lender to respond to a request for an extension
shall constitute a refusal of such Lender to give its consent to such extension.
Failure by the Agent to give such notice shall constitute refusal by the Lenders
to extend the Stated Termination Date. The Borrower, with the consent of the
Agent, shall be entitled to replace any Lender who is unwilling to consent to
the extension of the Stated Termination Date. Any Lender which elects not to
consent to an extension shall cooperate with the Borrower and the Agent in
assigning its interest as provided in Section 11.1 to a new lender; provided,
all obligations to such assigning Lender shall be paid in full, no assignment
fee shall be payable by such assigning Lender but shall be paid by Borrower and
such assigning Lender shall be entitled to the benefits of this Agreement set
forth in Sections 3.2(g), 11.6, and 11.12 and Article IV. In no event shall the
Stated Termination Date extend beyond the Revolving Credit Termination Date.
45
(b) Amortization of Line of Credit Loans Outstanding at the
Maturity Date.
(i) Election to Amortize. The Borrower shall have the option
to pay all of the outstanding principal balance of the Line of Credit
Loans outstanding as of the Line of Credit Termination Date, provided
the Line of Credit Termination Date occurs on or prior to March 31,
1999, in eight (8) equal consecutive quarterly installments on the last
day of each March, June, September and December commencing with the
first of such dates to occur after the Line of Credit Termination Date
(each such date referred to herein as a "Term Loan Amortization Date"
and the last such date referred to herein as the "Term Loan Termination
Date"). The Borrower may exercise such option by giving written notice
to the Agent at least fifteen (15) days prior to the Line of Credit
Termination Date. In the event the Line of Credit Termination Date
shall occur subsequent to March 31, 1999 the Borrower shall have the
option upon the giving of fifteen (15) days' notice prior to the end of
a calendar quarter to pay the then outstanding Line of Credit Loans in
quarterly installments, which installments shall be in approximately
equal amounts determined by dividing the number of full calendar
quarters remaining from the date of exercise of such option to March
31, 2001 by such outstanding Line of Credit Loans. If the Agent does
not receive such notification within the time period specified in the
preceding two sentences (and unless such Line of Credit Termination
Date has been extended in accordance with the terms of subsection (a)
above), the principal amount of all Line of Credit Loans shall be due
and payable on the Line of Credit Termination Date. Line of Credit
Loans remaining outstanding after the Line of Credit Termination Date
at the election of the Borrower in accordance with the terms of this
subsection (b) shall be referred to collectively as the "Term Loans".
The Term Loans may be comprised of Base Rate Loans and Eurodollar Rate
Loans as the Borrower may elect in accordance with the provisions
hereof. Amounts repaid or prepaid on the Term Loans may not be
reborrowed. For purposes of this Agreement, in the event that the
Borrower shall elect to amortize the Line of Credit Loans outstanding
as of the Line of Credit Termination Date in accordance herewith, then
on and after the Line of Credit Termination Date (x) references herein
to the "Total Line of Credit Commitment" shall mean the aggregate
principal amount of the Term Loans as of the Line of Credit Termination
Date less all payments made or required to be made with respect to the
Term Loans hereunder, whether scheduled amortization payment, voluntary
or optional prepayment or otherwise, (y) references herein to "Line of
Credit Commitment" shall mean, with respect to each Lender, the
obligation of such Lender to make Term Loans in a principal amount
equal to such Lender's Applicable Commitment Percentage of the
aggregate Term Loans and (z) references herein to "Line of Credit
Termination Date"
46
shall mean the Term Loan Termination Date. Any prepayments of the Term
Loan shall be applied to installments of principal in the inverse order
of maturities.
(ii) Interest on Term Loans. The Term Loans shall bear
interest on the same terms as apply to Line of Credit Loans prior to
the Line of Credit Termination Date.
47
ARTICLE III
3.1. Letters of Credit. The Issuing Bank agrees, subject to the terms
and conditions of this Agreement, upon request of the Borrower to issue from
time to time for the account of the Borrower Letters of Credit upon delivery to
the Issuing Bank of an Application and Agreement for Letter of Credit relating
thereto in form and content acceptable to the Issuing Bank; provided, that (i)
the Letter of Credit Outstandings shall not exceed the Total Letter of Credit
Commitment, (ii) no Letter of Credit shall be issued so long as a Default or an
Event of Default has occurred or is continuing or if the applicable conditions
set forth in Article V shall not have been satisfied and (iii) no Letter of
Credit shall be issued if, after giving effect thereto, Letter of Credit
Outstandings plus the aggregate principal amount of Revolving Credit
Outstandings and outstanding Competitive Bid Loans shall exceed the Total
Revolving Credit Commitment. No Letter of Credit shall have an expiry date
(including all rights of the Borrower or any beneficiary named in such Letter of
Credit to require renewal) or payment date occurring later than the fifth
Business Day prior to the Revolving Credit Termination Date.
3.2. Reimbursement.
(a) The Borrower hereby unconditionally agrees to pay to the
Issuing Bank immediately on demand at the Principal Office all amounts required
to pay all drafts drawn or purporting to be drawn under the Letters of Credit
and all reasonable expenses incurred by the Issuing Bank in connection with the
Letters of Credit, and in any event and without demand to place in possession of
the Issuing Bank (which shall include Advances under the Revolving Credit
Facility if permitted by Section 2.1(d)) sufficient funds to pay all debts and
liabilities arising in respect of any Letter of Credit. The Issuing Bank agrees
to give the Borrower prompt notice of any request for a draw under a Letter of
Credit. The Issuing Bank may charge any account the Borrower may have with it
for any and all amounts the Issuing Bank pays under a Letter of Credit, plus
charges and reasonable expenses as from time to time agreed to by the Issuing
Bank and the Borrower; provided that to the extent permitted by Section
2.1(d)(iv), amounts shall be paid pursuant to Advances under the Revolving
Credit Facility. The Borrower agrees to pay the Issuing Bank interest on any
Reimbursement Obligations not paid when due hereunder at the Base Rate plus two
percent (2.0%), or the maximum rate permitted by applicable law, if lower, such
rate to be calculated on an Actual/360 Basis.
(b) In accordance with the provisions of Section 2.1(d), the
Issuing Bank shall notify the Agent of any drawing under any Letter of Credit
promptly following the receipt by the Issuing Bank of such drawing.
48
(c) Each Lender (other than the Issuing Bank) shall automatically
acquire on the date of issuance thereof a Participation in the liability of the
Issuing Bank in respect of each Letter of Credit in an amount equal to such
Lender's Applicable Commitment Percentage of such liability, and to the extent
that the Borrower is obligated to pay the Issuing Bank under Section 3.2(a),
each Lender (other than the Issuing Bank) thereby shall absolutely,
unconditionally and irrevocably assume, and shall be unconditionally obligated
to pay to the Issuing Bank as hereinafter described, its Applicable Commitment
Percentage of the liability of the Issuing Bank under such Letter of Credit.
(i) Each Lender (including the Issuing Bank in its capacity as
a Lender) shall, subject to the terms and conditions of Article II, pay
to the Agent for the account of the Issuing Bank at the Principal
Office in Dollars and in immediately available funds, an amount equal
to its Applicable Commitment Percentage of any drawing under a Letter
of Credit, such funds to be provided in the manner described in Section
2.1(d)(iv).
(ii) Simultaneously with the making of each payment by a
Lender to the Issuing Bank pursuant to Section 2.1(d)(iv)(B), such
Lender shall, automatically and without any further action on the part
of the Issuing Bank or such Lender, acquire a Participation in an
amount equal to such payment (excluding the portion thereof
constituting interest accrued prior to the date such Lender made its
payment) in the related Reimbursement Obligation of the Borrower. The
Reimbursement Obligations of the Borrower shall be immediately due and
payable whether by Advances made in accordance with Section 2.1(d)(iv)
or otherwise.
(iii) Each Lender's obligation to make payment to the Agent
for the account of the Issuing Bank pursuant to Section 2.1(d)(iv) and
this Section 3.2(c), and the right of the Issuing Bank to receive the
same, shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and shall be made without any offset,
abatement, withholding or reduction whatsoever. If any Lender is
obligated to pay but does not pay amounts to the Agent for the account
of the Issuing Bank in full upon such request as required by Section
2.1(d)(iv) or this Section 3.2(c), such Lender shall, on demand, pay to
the Agent for the account of the Issuing Bank interest on the unpaid
amount for each day during the period commencing on the date of notice
given to such Lender pursuant to Section 2.1(d) until such Lender pays
such amount to the Agent for the account of the Issuing Bank in full at
the interest rate per annum for overnight borrowing by the Agent from
the Federal Reserve Bank of Richmond, Virginia.
49
(iv) In the event the Lenders have purchased Participations in
any Reimbursement Obligation as set forth in clause (ii) above, then at
any time payment (in fully collected, immediately available funds) of
such Reimbursement Obligation, in whole or in part, is received by
Issuing Bank from the Borrower, the Issuing Bank shall promptly pay to
each Lender an amount equal to its Applicable Commitment Percentage of
such payment from the Borrower.
(d) Promptly following the end of each calendar quarter, the
Issuing Bank shall deliver to the Agent and the Agent shall deliver to each
Lender a notice describing the aggregate undrawn amount of all Letters of Credit
at the end of such quarter. The Agent shall promptly notify each Lender of the
issuance of a Letter of Credit.
(e) The issuance by the Issuing Bank of each Letter of Credit
shall, in addition to the conditions precedent set forth in Article V, be
subject to the conditions that such Letter of Credit be in such form and contain
such terms as shall be reasonably satisfactory to the Issuing Bank consistent
with the then current practices and procedures of the Issuing Bank with respect
to similar letters of credit, and the Borrower shall have executed and delivered
such other instruments and agreements relating to such Letters of Credit as the
Issuing Bank shall have reasonably requested consistent with such practices and
procedures and shall not be in conflict with any of the express terms herein
contained. All Letters of Credit shall be issued pursuant to and subject to the
Uniform Customs and Practice for Documentary Credits, 1993 revision,
International Chamber of Commerce Publication No. 500 and all subsequent
amendments and revisions thereto.
(f) The Borrower agrees that Issuing Bank may, in its sole
discretion, accept or pay, as complying with the terms of any Letter of Credit,
any drafts or other documents otherwise in order which may be signed or issued
by an administrator, executor, trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, liquidator, receiver, attorney in fact or
other legal representative of a party who is authorized under such Letter of
Credit to draw or issue any drafts or other documents.
(g) Without limiting the generality of the provisions of Section
11.12, the Borrower hereby agrees to indemnify and hold harmless the Issuing
Bank, each other Lender and the Agent from and against any and all claims and
damages, losses, liabilities, reasonable costs and expenses which the Issuing
Bank, such other Lender or the Agent may incur (or which may be claimed against
the Issuing Bank, 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 the Issuing Bank, any other Lender or the Agent for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to the
50
extent, (i) caused by the willful misconduct or negligence of the party to be
indemnified or (ii) in the case of the Issuing Bank, caused by the failure of
the Issuing Bank to pay under any Letter of Credit after the presentation to it
of a request for payment strictly complying with the terms and conditions of
such Letter of Credit, unless such payment is prohibited by any law, regulation,
court order or decree. The indemnification and hold harmless provisions of this
Section 3.2(g) shall survive repayment of the Obligations, occurrence of the
Revolving Credit Termination Date and expiration or termination of this
Agreement.
(h) Without limiting the Borrower's rights as set forth in Section
3.2(g), the obligation of the Borrower to immediately reimburse the Issuing Bank
for drawings made under Letters of Credit and to repay Loans made under Section
2.1(d) and the Issuing Bank's and each Lender's right to receive such payment
shall be absolute, unconditional and irrevocable, and such obligations of the
Borrower shall be performed strictly in accordance with the terms of this
Agreement and such Letters of Credit and the related Applications and Agreement
for any Letter of Credit, under all circumstances whatsoever, including the
following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit, the obligation supported by any Letter of Credit or any other
agreement or instrument relating thereto (collectively, the "Related LC
Documents");
(ii) any amendment or waiver of or any consent to or departure
from all or any of the Related LC Documents;
(iii) the existence of any claim, setoff, defense (other than
the defense of payment in accordance with the terms of this Agreement)
or other rights which the Borrower may have at any time against any
beneficiary or any transferee of a Letter of Credit (or any persons or
entities for whom any such beneficiary or any such transferee may be
acting), the Agent, the Lenders or any other Person, whether in
connection with the Loan Documents, the Related LC Documents or any
unrelated transaction;
(iv) any breach of contract or other dispute between the
Borrower and any beneficiary or any transferee of a Letter of Credit
(or any persons or entities for whom such beneficiary or any such
transferee may be acting), the Agent, the Lenders or any other Person;
(v) any draft, statement or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(vi) any delay, extension of time, renewal, compromise or
other indulgence or modification granted or agreed to by the Agent or
the requisite number of Lenders,
51
with or without notice to or approval by the Borrower in respect of any
of Borrower's Obligations under this Agreement; or
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing;
provided, however, that nothing in this Section 3.2(h) shall give the Issuing
Bank any right to reimbursement for drawings made under a Letter of Credit
otherwise than pursuant to a request for payment strictly complying with the
terms and conditions of such Letter of Credit unless the Borrower has
specifically waived such strict compliance in writing.
3.3. Letter of Credit Facility Fees. (a) The Borrower shall pay to the
Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, a fee on the aggregate amount available to be drawn on
each outstanding Letter of Credit at a rate equal to the Applicable Margin. In
addition, the Borrower agrees to pay to the Agent for the benefit of the Issuing
Bank an issuance fee equal to one-eighth of one percent (1/8%) per annum times
the amount of outstanding Letters of Credit. Such fees shall be due with respect
to each Letter of Credit quarterly in arrears on the last Business Day of each
March, June, September and December, the first such payment to be made on the
first such date occurring after the date of issuance of a Letter of Credit. The
fees described in this Section 3.3 shall be calculated on the basis of a year of
360 days for the actual number of days elapsed.
(b) The Borrower acknowledges that the Issuing Bank as issuer of each
Letter of Credit will be required by applicable rules and regulations of the
Board to maintain reserves for its liability to honor draws made pursuant to a
Letter of Credit notwithstanding the obligation of the Lenders for a
Participation in such liability. The Borrower agrees to promptly reimburse the
Issuing Bank for all additional costs which it may hereafter incur solely by
reason of its acting as issuer of the Letters of Credit and its being required
to reserve for such liability, it being understood by the Borrower that other
interest and fees payable under this Agreement do not include compensation of
the Issuing Bank for such reserves. The Issuing Bank shall furnish to the
Borrower at the time of its demand for payment of such additional costs, the
computation of such additional cost which shall be conclusive absent manifest
error, provided that such computations are made on a reasonable basis.
3.4. Administrative Fees. The Borrower shall pay to the Issuing Bank
such administrative fee and other fees, if any, in connection with the Letters
of Credit in such amounts and at such times as the Issuing Bank and the Borrower
shall agree from time to time.
52
ARTICLE IV
Termination of Eurodollar Rate and Yield Protection
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 applicable interbank market or affecting the position of
any Lender or the Agent in such market, adequate and fair means do not
exist for ascertaining the Interbank Offered Rate with respect to a
Eurodollar Loan or Eurodollar Market Loan; or
(ii) the continuation by any Lender of any Eurodollar Loans or
Eurodollar Market Loans or the funding thereof in the applicable
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 Eurodollar Loans
or Eurodollar Market Loans or the funding thereof in the applicable
interbank market would be impracticable as a result of a contingency
occurring after the date of this Agreement that materially and
adversely affects the applicable 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 based upon the Interbank Offered 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 each 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
Eurodollar Reserve Percentage, the cost to any Lender of maintaining
any Fixed Rate Segment or funding the same by means of an interbank
market time deposit in the relevant interbank market shall increase,
the Fixed Rate applicable to such Fixed Rate Segment shall be adjusted
53
as necessary to reflect such change in cost to such Lender, effective
as of the date on which such change in any applicable law, governmental
rule, regulation or order becomes effective; and
(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 such
Lender's obligations under this Agreement or the Advances made by such
Lender pursuant hereto, to a level below that which such Lender or such
Lender's holding company could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's
guidelines with respect to capital adequacy) by an amount reasonably
deemed by such Lender to be material, then from time to time the
Borrower shall pay to such Lender such additional amount or amounts as
will compensate such Lender or such Lender's holding company for any
such reduction suffered.
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 such 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 this 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
54
amount shown as due on any such certificate delivered by such Lender within 30
days after the Borrower's receipt of the same.
4.3. 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
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 each affected 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
55
indemnify the Lenders for any incremental Taxes, interest or penalties that may
become payable by any 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 (less the costs and expenses incurred by such Lender in connection with
such contest, including legal fees).
Without prejudice to the survival of any other agreements of the
Borrower hereunder or under any other Loan Document, the agreements of the
Borrower contained in this Section shall survive the payment in full of all its
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, cause the
payment in full of the outstanding Obligation due to the Lender requesting
reimbursement without penalty or payment other than under Section 4.2; provided,
all obligations to such assigning Lender shall be paid in full, no assignment
fee shall be payable by such assigning Lender but shall be paid by Borrower and
such assigning Lender shall be entitled to the benefits of this Agreement set
forth in Sections 3.2(g), 11.6 and 11.12 and Article IV.
56
ARTICLE V
5.1. Conditions of Initial Advance. The obligation of the Lenders to
make the initial Advance under the Revolving Credit Facility, the Line of Credit
Facility or the Competitive Bid Facility, and of the Issuing Bank to issue the
initial Letter of Credit, is subject to the conditions precedent that:
(a) the Agent shall have received on the Closing Date, in form
and substance satisfactory to the Agent and Lenders, the following:
(i) executed originals of each of this Agreement, the Notes,
the LC Account Agreement and the other Loan Documents, together
with all schedules and exhibits thereto;
(ii) the favorable written opinion or opinions with respect to
the Loan Documents and the transactions contemplated thereby of
counsel to the Borrower dated the Closing Date, addressed to the
Agent and the Lenders and satisfactory to Smith Helms Mulliss &
Moore, L.L.P., special counsel to the Agent, substantially in the
form of Exhibit L;
(iii) resolutions of the board of directors of the Borrower
certified by its secretary or assistant secretary as of the
Closing Date, approving and adopting the Loan Documents to be
executed by the Borrower, and authorizing the execution and
delivery and performance thereof;
(iv) specimen signatures of officers of the Borrower executing
the Loan Documents on behalf of the Borrower, certified by the
secretary or assistant secretary of the Borrower;
(v) the charter documents of the Borrower certified as of a
recent date by the Secretary of State of its state of
organization;
(vi) the bylaws of the Borrower certified as of the Closing
Date as true and correct by its secretary or assistant secretary;
(vii) certificates issued as of a recent date by the Secretary
of State of the jurisdiction of formation of the Borrower as to
the valid existence and good standing of the Borrower;
57
(viii) appropriate certificates of qualification to do
business, good standing and, where appropriate, authority to
conduct business under assumed name, issued in respect of the
Borrower as of a recent date by the Secretary of State or
comparable official of each jurisdiction in which the failure to
be qualified to do business or authorized so to conduct business
could have a Material Adverse Effect;
(ix) notice of appointment of the initial Authorized
Representative(s);
(x) evidence of all insurance required by the Loan Documents;
(xi) a certificate in the form of Exhibit M completed as of
December 31, 1995;
(xii) an initial Borrowing Notice, if any, and, if elected by
the Borrower, Interest Rate Selection Notice;
(xiii) evidence that all fees payable by the Borrower on the
Closing Date to the Agent and the Lenders have been paid in full;
and
(xiv) such other documents, instruments, certificates and
opinions as the Agent or any Lender may reasonably request on or
prior to the Closing Date in connection with the consummation of
the transactions contemplated hereby; and
(b) In the good faith judgment of the Agent and the Lenders:
(i) there shall not have occurred or become known to the Agent
or the Lenders any event, condition, situation or status since the
date of the information contained in the financial and business
projections, budgets, pro forma data and forecasts concerning the
Borrower and its Consolidated Entities delivered to the Agent
prior to the Closing Date that has had or could reasonably be
expected to result in a Material Adverse Effect;
(ii) no litigation, action, suit, investigation or other
arbitral, administrative or judicial proceeding shall be pending
or threatened which could reasonably be likely to result in a
Material Adverse Effect; and
(iii) the Borrower and its Consolidated Entities shall have
received all approvals, consents and waivers, and shall have made
or given all necessary filings and notices, as shall be required
to consummate the
58
transactions contemplated hereby without the occurrence of any
default under, conflict with or violation of (A) any applicable
law, rule, regulation, order or decree of any Governmental
Authority or arbitral authority or (B) any agreement, document or
instrument to which any of the Borrower or any Consolidated Entity
is a party or by which any of them or their properties is bound,
except for such approvals, consents, waivers, filings and notices
the receipt, making or giving of which will not have a Material
Adverse Effect.
5.2. Conditions of Loans and Letters of Credit. The obligations of the
Lenders to make any Loans, and the Issuing Bank to issue Letters of Credit,
hereunder on or subsequent to the Closing Date, are subject to the satisfaction
of the following conditions:
(a) the Agent shall have received a Borrowing Notice if required
by Article II;
(b) the representations and warranties of the Borrower and the
Subsidiaries set forth in Article VI and in each of the other Loan
Documents shall be true and correct in all material respects on and as
of the date of such Advance or Letter of Credit issuance or renewal,
with the same effect as though such representations and warranties had
been made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date and
except that the financial statements referred to in Section 6.6(a)
shall be deemed to be those financial statements most recently
delivered to the Agent and the Lenders pursuant to Section 7.1 from the
date financial statements are delivered to the Agent and the Lenders in
accordance with such Section;
(c) in the case of the issuance of a Letter of Credit, the
Borrower shall have executed and delivered to the Issuing Bank an
Application and Agreement for Letter of Credit in form and content
acceptable to the Issuing Bank together with such other instruments and
documents as it shall request;
(d) at the time of (and after giving effect to) each Advance or
the issuance of a Letter of Credit, no Default or Event of Default
shall have occurred and be continuing; and
(e) immediately after giving effect to:
(i) a Revolving Loan, the aggregate principal balance of all
outstanding Revolving Loans of a Lender plus such Lender's
Applicable Commitment Percentage of the aggregate amount of
Letter of Credit Outstandings shall not exceed such Lender's
Revolving Credit Commitment;
59
(ii) a Line of Credit Loan, the aggregate principal balance
of all outstanding Line of Credit Loans for each Lender shall
not exceed such Lender's Line of Credit Commitment;
(iii) a Letter of Credit or renewal thereof, the aggregate
principal balance of all outstanding Participations in
Letters of Credit and Reimbursement Obligations (or in the
case of the Issuing Bank, its remaining interest after
deduction of all Participations in Letters of Credit and
Reimbursement Obligations of other Lenders) for each Lender
and in the aggregate shall not exceed, respectively, (X) such
Lender's Letter of Credit Commitment or (Y) the Total Letter
of Credit Commitment; and
(iv) a Revolving Loan or a Letter of Credit or renewal
thereof, the sum of Letter of Credit Outstandings plus the
aggregate principal amount of Revolving Credit Outstandings
plus outstanding Competitive Bid Loans shall not exceed the
Total Revolving Credit Commitment.
Each borrowing hereunder and each issuance of a Letter of Credit
hereunder shall constitute a representation and warranty by the
Borrower to the effect that the conditions set forth in clauses (b),
(d) and (e) have been satisfied as of the date thereof.
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ARTICLE VI
Representations and Warranties
The Borrower represents and warrants with respect to itself and (to the
extent expressly set forth below) its Consolidated Entities (which
representations and warranties shall survive the delivery of the documents
mentioned herein and the making of Loans and the issuance of a Letter of
Credit), that:
6.1. Organization and Authority.
(a) The Borrower and each Consolidated Entity is a corporation,
partnership or limited liability company duly organized and validly
existing under the laws of the jurisdiction of its formation;
(b) The Borrower and each Consolidated Entity (x) has the
requisite power and authority to own its properties and assets and to
carry on its business as now being conducted and as contemplated in the
Loan Documents, and (y) is qualified to do business in every
jurisdiction in which failure so to qualify would have a Material
Adverse Effect;
(c) The Borrower has the power and authority to execute, deliver
and perform this Agreement and the Notes, and to borrow and obtain other
extensions of credit hereunder, and to execute, deliver and perform each
of the other Loan Documents to which it is a party; and
(d) When executed and delivered, each of the Loan Documents to
which the Borrower is a party will be the legal, valid and binding
obligation or agreement, as the case may be, of the Borrower,
enforceable against the Borrower in accordance with its terms, subject
to the effect of any applicable bankruptcy, moratorium, insolvency,
reorganization or other similar law affecting the enforceability of
creditors' rights generally and to the effect of general principles of
equity (whether considered in a proceeding at law or in equity).
6.2. Loan Documents. The execution, delivery and performance by the
Borrower of each of the Loan Documents and the credit extensions hereunder:
(a) have been duly authorized by all requisite corporate actions
(including any required shareholder approval) of the Borrower required
for the lawful execution, delivery and performance thereof;
(b) do not violate any provisions of (i) applicable law, rule or
regulation, (ii) any judgment, writ, order, determination, decree or
arbitral award of any Governmental
61
Authority or arbitral authority binding on the Borrower or any
Subsidiary or its or any Subsidiary's properties, or (iii) the charter
documents or bylaws of the Borrower;
(c) do not and will not be in conflict with, result in a breach of
or constitute an event of default, or an event which, with notice or
lapse of time or both, would constitute an event of default, under any
contract, indenture, agreement or other instrument or document to which
Borrower or any Consolidated Entity is a party, or by which the
properties or assets of the Borrower or any Consolidated Entity are
bound; and
(d) do not and will not result in the creation or imposition of
any Lien upon any of the properties or assets of Borrower or any
Subsidiary.
6.3. Solvency. The Borrower is Solvent and the Borrower and its
Consolidated Entities taken as a whole are Solvent, in each case after giving
effect to the transactions contemplated by the Loan Documents.
6.4. Subsidiaries. The Borrower has no Subsidiaries other than those
Persons listed as Subsidiaries in Schedule 6.4 and additional Subsidiaries
created or acquired after the Closing Date.
6.5. Ownership Interest. Borrower owns no interest in any Person other
than the Persons listed in Schedule 6.4, equity investments in Persons not
constituting Subsidiaries permitted under Section 8.2 and additional
Subsidiaries created or acquired after the Closing Date.
6.6. Financial Condition.
(a) The Borrower has heretofore furnished to each Lender an
audited consolidated balance sheet of the Borrower and its Consolidated
Entities as at December 31, 1995 and the notes thereto and the related
consolidated statements of income, stockholders' equity and cash flows
for the Fiscal Year then ended as examined and certified by Ernst &
Young LLP. Except as set forth therein, such financial statements
(including the notes thereto) present fairly the financial condition of
the Borrower and its Consolidated Entities as of the end of such Fiscal
Year and results of their operations and the changes in stockholders'
equity for the Fiscal Year then ended, all in conformity with GAAP
applied on a Consistent Basis;
(b) since December 31, 1995 there has been no material adverse
change in the condition, financial or otherwise, of the Borrower and
its Consolidated Entities taken as a whole or in the businesses,
properties, performance, prospects or operations of the Borrower and
Consolidated Entities taken as a whole, nor have such businesses or
properties been
62
materially adversely affected as a result of any fire, explosion,
earthquake, accident, strike, lockout, combination of workers, flood,
embargo or act of God; provided that one-time expenses recognized in
the first quarter of 1996 with respect to the Acquisitions of Surgical
Care Affiliates, Inc. and Advantage Health Corporation shall not be
deemed to constitute material adverse changes; and
(c) neither the Borrower nor any Consolidated Entity has any
material Indebtedness, Guaranteed Obligations or other obligations or
liabilities, direct or contingent, in an aggregate amount in excess of
$300,000 other than (a) the liabilities reflected in such balance sheet
and the notes thereto or (b) liabilities incurred in the ordinary
course of business.
6.7. Title to Properties. The Borrower and each Consolidated Entity has
good and marketable title to all its real and personal properties, subject to no
transfer restrictions or Liens of any kind, except for the transfer restrictions
and Liens permitted by this Agreement.
6.8. Taxes. The Borrower and each Consolidated Entity have filed or
caused to be filed all federal, state and local tax returns which are required
to be filed by it and, except for taxes and assessments being contested in good
faith by appropriate proceedings diligently conducted and against which reserves
reflected in the financial statements described in Section 6.6(a) and
satisfactory to the Borrower's independent certified public accountants have
been established, have paid or caused to be paid all taxes as shown on said
returns or on any assessment received by it, to the extent that such taxes have
become due.
6.9. Other Agreements.
(a) Neither the Borrower nor any Consolidated Entity is a party to
or subject to any judgment, order, decree, agreement, lease or
instrument, or subject to other restrictions, compliance with the terms
of which individually or in the aggregate could reasonably be expected
to have a Material Adverse Effect;
(b) neither the Borrower nor any Consolidated Entity is in
default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in (i) any Medicaid
Provider Agreement, Medicare Provider Agreement or other agreement or
instrument to which the Borrower or any Consolidated Entity is a party,
which default has resulted in, or if not remedied within any applicable
grace period could result in, the revocation, termination, cancellation
or suspension of Medicaid Certification or Medicare Certification of
Borrower or any Consolidated Entity which could have a Material Adverse
Effect or (ii) any other
63
agreement or instrument to which the Borrower or any Consolidated
Entity is a party, which default has, or if not remedied within any
applicable grace period could reasonably be likely to have, a Material
Adverse Effect;
(c) to the knowledge of Borrower's Executive Officers, no
Contract Provider is a party to any judgment, order, decree, agreement
or instrument, or subject to restrictions, compliance with the terms of
which could individually or in the aggregate reasonably be expected to
have a Material Adverse Effect; and
(d) to the knowledge of Borrower's Executive Officers, no
Contract Provider is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions
contained in any Medicaid Provider Agreement, Medicare Provider
Agreement or other agreement or instrument to which such Person is a
party, which default has resulted in, or if not remedied within any
applicable grace period could result in, the revocation, termination,
cancellation or suspension of Medicaid Certification or Medicare
Certification of such Person, which revocation, termination,
cancellation or suspension could reasonably be likely to have a
Material Adverse Effect.
6.10. Litigation. There is no action, suit, investigation or proceeding
at law or in equity or by or before any governmental instrumentality or agency
or arbitral body pending or, to the knowledge of the Borrower, threatened by or
against the Borrower or any Consolidated Entity or, to the knowledge of the
Borrower, pending or threatened by or against any Contract Provider, or
affecting the Borrower or any Consolidated Entity or, to the knowledge of the
Borrower, any Contract Provider or any properties or rights of the Borrower or
any Consolidated Entity or, to the knowledge of the Borrower, any Contract
Provider, which could reasonably be expected (i) to result in the revocation,
termination, cancellation or suspension of Medicaid Certification or Medicare
Certification of such Person, which revocation, termination, cancellation or
suspension could reasonably be likely to have a Material Adverse Effect, or (ii)
to have a Material Adverse Effect.
6.11. The proceeds of the borrowings and other extensions of credit
made hereunder will be used by the Borrower only for the purposes expressly
authorized herein. None of such proceeds will be used, directly or indirectly,
for the purpose of purchasing or carrying any margin stock or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry margin stock or for any other purpose which might constitute any of the
Loans or Letters of Credit under this Agreement a "purpose credit" within the
meaning of Regulation U or Regulation X of the Board. Neither the Borrower nor
any agent acting in its behalf has taken or will take any action which might
64
cause this Agreement or any of the documents or instruments delivered pursuant
hereto to violate any regulation of the Board or to violate the Exchange Act or
the Securities Act of 1933, as amended, or any state securities laws, in each
case as in effect on the date hereof.
6.12. Investment Company. Neither the Borrower nor any Consolidated
Entity is an "investment company," or an "affiliated person" of, or "promoter"
or "principal underwriter" for, an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (15 U.S.C. ss. 80a-1,
et seq.). The application of the proceeds of the Loans and repayment thereof by
the Borrower and the issuance of Letters of Credit and the performance by the
Borrower and any Consolidated Entity of the transactions contemplated by the
Loan Documents will not violate any provision of said Act, or any rule,
regulation or order issued by the Securities and Exchange Commission thereunder,
in each case as in effect on the date hereof.
6.13. The Borrower and each Consolidated Entity owns or has the right
to use, under valid license agreements or otherwise, all material patents,
licenses, franchises, trademarks, trademark rights, trade names, trade name
rights, trade secrets, service marks, service mark rights and copyrights
necessary to or used in the conduct of its businesses as now conducted and as
contemplated by the Loan Documents, without known conflict by, or with, any
patent, license, franchise, trademark, trade secret, trade name, service mark,
copyright or other proprietary right of, any other Person.
6.14. Neither (a) this Agreement nor any other Loan Document or
certificate or document executed and delivered by or on behalf of the Borrower
or any Consolidated Entity in accordance with or pursuant to any Loan Document
nor (b) any statement, representation, or warranty provided to the Agent or any
Lender in connection with the negotiation or preparation of the Loan Documents
contains any misrepresentation or untrue statement of material fact or omits to
state a material fact necessary, in light of the circumstance under which it was
made, in order to make any such warranty, representation or statement contained
therein not misleading.
6.15. Neither the respective businesses or properties of the Borrower
or any Consolidated Entity, nor any relationship between the Borrower or any
Consolidated Entity and any other Person, nor any circumstance in connection
with the execution, delivery and performance of the Loan Documents and the
transactions contemplated thereby, is such as to require a consent, approval or
authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person on the part of the Borrower or any
Consolidated Entity as a condition to the execution, delivery and performance
of, or consummation of the transactions contemplated by, or the validity
65
or enforceability of, the Loan Documents, which, if not obtained or effected,
would be reasonably likely to have a Material Adverse Effect, or if so, such
consent, approval, authorization, filing, registration or qualification has been
duly obtained or effected, as the case may be;
6.16. ERISA Requirement. (i) The execution and delivery of the Loan
Documents will not involve any prohibited transaction within the meaning of
ERISA, (ii) the Borrower and each ERISA Affiliate has fulfilled its obligations
under the minimum funding standards imposed by ERISA and each is in compliance
in all material respects with the applicable provisions of ERISA, and (iii) no
"Reportable Event," as defined in Section 4043(b) of Title IV of ERISA, has
occurred with respect to any plan maintained by the Borrower or any of its ERISA
Affiliate.
6.17. No Default. As of the date hereof, there does not exist any
Default or Event of Default.
6.18. Hazardous Materials. The Borrower and each Consolidated Entity is
in compliance with all applicable Environmental Laws in all material respects.
Neither the Borrower nor any Consolidated Entity has been notified of any
action, suit, proceeding or investigation which, and neither the Borrower nor
any Consolidated Entity is aware of any facts which, (i) calls into question, or
could reasonably be expected to call into question, compliance in all material
respects by the Borrower or any Consolidated Entity with any Environmental Laws,
(ii) which seeks, or could reasonably be expected to form the basis of a
meritorious proceeding, to suspend, revoke or terminate any material license,
permit or approval necessary for the generation, handling, storage, treatment or
disposal of any Hazardous Material, or (iii) seeks to cause, or could reasonably
be expected to form the basis of a meritorious proceeding to cause, any property
of the Borrower or any Consolidated Entity to be subject to any material
restrictions on ownership, use, occupancy or transferability under any
Environmental Law.
6.19. Employment Matters. (a) Except as set forth on Schedule 6.19,
none of the employees of the Borrower or any Consolidated Entity is subject to
any collective bargaining agreement and there are no strikes, work stoppages,
election or decertification petitions or proceedings, unfair labor charges,
equal opportunity proceedings, or other material labor/employee related
controversies or proceedings pending or, to the best knowledge of the Borrower,
threatened against the Borrower or any Consolidated Entity or between the
Borrower or any Consolidated Entity and any of its employees, other than
employee grievances, controversies or proceedings arising in the ordinary course
of business which could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; and
66
(b) Except to the extent a failure to maintain compliance would not
have a Material Adverse Effect, the Borrower and each Consolidated Entity is in
compliance in all respects with all applicable laws, rules and regulations
pertaining to labor or employment matters, including without limitation those
pertaining to wages, hours, occupational safety and taxation and there is
neither pending nor threatened any litigation, administrative proceeding or, to
the knowledge of the Borrower, any investigation, in respect of such matters
which, if decided adversely, could reasonably be likely, individually or in the
aggregate, to have a Material Adverse Effect.
6.20. RICO. Neither the Borrower nor any Consolidated Entity is engaged
in or has engaged in any course of conduct that could subject any of their
respective properties to any Lien, seizure or other forfeiture under any
criminal law, racketeer influenced and corrupt organizations law, civil or
criminal, or other similar laws.
6.21. Reimbursement from Third Party Payors. The accounts receivable of
the Borrower and each Consolidated Entity and each Contract Provider have been
and will continue to be adjusted to reflect reimbursement policies of third
party payors such as Medicare, Medicaid, Blue Cross/Blue Shield, private
insurance companies, health maintenance organizations, preferred provider
organizations, alternative delivery systems, managed care systems, government
contracting agencies and other third party payors. In particular, accounts
receivable relating to such third party payors do not and shall not exceed
amounts any obligee is entitled to receive under any capitation arrangement, fee
schedule, discount formula, cost-based reimbursement or other adjustment or
limitation to its usual charges.
67
ARTICLE VII
Affirmative Covenants
Until the Facility Termination Date and termination of this Agreement
in accordance with the terms hereof, unless the Required Lenders shall otherwise
consent in writing, the Borrower will, and where applicable will cause each
Consolidated Entity to:
7.1. Financial Statements, Reports, Etc. The Borrower shall deliver or
cause to be delivered to the Agent and each Lender:
(a) Not later than 50 days after the end of each of the first
three quarters of each Fiscal Year, a balance sheet and a statement of
revenues and expenses of the Borrower and its Consolidated Entities on
a consolidated basis and a statement of cash flow of the Borrower and
its Consolidated Entities on a consolidated basis for such calendar
quarter and for the period beginning on the first day of such Fiscal
Year and ending on the last day of such quarter (in sufficient detail
to indicate the Borrower's and each Consolidated Entity's compliance
with the financial covenants set forth in Section 8.1), together with
statements in comparative form for the corresponding date or period in
the preceding Fiscal Year as summarized in the Borrower's Form 10-Q for
the corresponding period, and certified as to fairness, accuracy and
completeness by the chief executive officer, chief financial officer or
Treasurer of the Borrower.
(b) Not later than 100 days after the end of each Fiscal Year,
financial statements (including a balance sheet, a statement of
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 basis for such Fiscal Year (in sufficient
detail to indicate the Borrower's and each Consolidated Entity's
compliance with the financial covenants set forth in Section 8.1),
together with statements in comparative form as of the end of and for
the preceding Fiscal Year as summarized in the Borrower's Form 10-K for
the corresponding period, and accompanied by an opinion of certified
public accountants acceptable to the 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.
(c) Together with the financial statements required by paragraphs
(1) and (2) above a compliance certificate duly executed by the chief
executive officer or chief financial
68
officer or Treasurer of the Borrower in the form of Exhibit M
("Compliance Certificate").
(d) Contemporaneously with the distribution thereof to the
Borrower's or any Consolidated Entity's stockholders or partners or the
filing thereof with the Securities and Exchange Commission, as the case
may be, copies of all statements, reports, notices and filings
distributed by the Borrower or any Consolidated Entity to its
stockholders or partners or filed with the Securities and Exchange
Commission (including reports on SEC Forms 10-K, 10-Q and 8-K).
(e) Promptly after the Borrower knows or has reason to know of the
occurrence of any "reportable event" under Section 4043 of ERISA
applicable to the Borrower or any ERISA Affiliate, a certificate of the
president or chief financial officer of the Borrower setting forth the
details as to such "reportable event" and the action that the Borrower
or the ERISA Affiliate has taken or will take with respect thereto, and
promptly after the filing or receiving thereof, copies of all reports
and notices that the Borrower and each Consolidated Entity files under
ERISA with the Internal Revenue Service or the PBGC or the United
States Department of Labor.
(f) Promptly after the Borrower or any of its Consolidated
Entities becomes aware of the commencement thereof, notice of any
investigation, action, suit or proceeding before any Governmental
Authority involving the condemnation or taking under the power of
eminent domain of any of its property or the revocation or suspension
of any permit, license, certificate of need or other governmental
requirement applicable to any Facility.
(g) Within 10 days of the receipt by the Borrower or any of its
Consolidated Entities, copies of all material deficiency notices,
compliance orders or adverse reports issued by any Governmental
Authority or accreditation commission having jurisdiction over
licensing, accreditation or operation of a Facility or by any
Governmental Authority or private insurance company pursuant to a
provider agreement, which, if not promptly complied with or cured,
could result in the suspension or forfeiture of any license,
certification or accreditation necessary in order for such Facility to
carry on its business as then conducted or the termination of any
material insurance or reimbursement program available to such Facility.
(h) Such other information regarding any Facility or the financial
condition or operations of the Borrower or its Consolidated Entities as
the Agent shall reasonably request from time to time or at any time.
69
7.2. Maintain Properties. Maintain all properties necessary to its
operations in good working order and condition, make all needed repairs,
replacements and renewals to such properties, and maintain free from Liens all
trademarks, trade names, service marks, patents, copyrights, trade secrets,
know-how, and other intellectual property and proprietary information (or
adequate licenses thereto), in each case as are reasonably necessary to conduct
its business as currently conducted or as contemplated hereby, all in accordance
with customary and prudent business practices.
7.3. Existence, Qualification, Etc. Except as otherwise expressly
permitted under Section 8.4, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and all material rights
and franchises, and maintain its license or qualification to do business as a
foreign corporation and good standing in each jurisdiction in which its
ownership or lease of property or the nature of its business makes such license
or qualification necessary.
7.4. Regulations and Taxes. Comply in all material respects with or
contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
any other obligation which, if unpaid, would become a Lien against any of its
properties except liabilities being contested in good faith by appropriate
proceedings diligently conducted and against which adequate reserves acceptable
to the Borrower's independent certified public accountants have been established
unless and until any Lien resulting therefrom attaches to any of its property
and becomes enforceable by its creditors.
7.5. Insurance. At all times maintain in force, and pay all premiums
and costs related to, insurance coverages in amounts deemed by the management of
the Borrower to be sufficient in accordance with usual and customary business
practices and any other coverages required under applicable governmental
requirements. The Borrower shall deliver to the Agent annually on or before each
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.
7.6. True Books. Keep true books of record and account in which full,
true and correct entries will be made of all of its dealings and transactions,
and set up on its books such reserves as
70
may be required by GAAP with respect to doubtful accounts and all taxes,
assessments, charges, levies and claims and with respect to its business in
general, and include such reserves in interim as well as year-end financial
statements.
7.7. Right of Inspection. Permit any Person designated by the Agent to
visit and inspect any of the properties, corporate books and financial reports
of the Borrower or any Subsidiary and to discuss its affairs, finances and
accounts with its principal officers and independent certified public
accountants, all at reasonable times, at reasonable intervals and with
reasonable prior notice.
7.8. Observe all Laws. Conform to and duly observe, and cause all
Contract Providers to conform to and duly observe, in all material respects all
laws, rules and regulations and all other valid requirements of any regulatory
authority with respect to the conduct of its business, including without
limitation Titles XVIII and XIX of the Social Security Act, Medicare
Regulations, Medicaid Regulations, and all laws, rules and regulations of
Governmental Authorities pertaining to the licensing of professional and other
health care providers, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
7.9. Governmental Licenses. Obtain and maintain, and use reasonable
effort to cause all Contract Providers to obtain and maintain, all licenses,
permits, certifications and approvals of all applicable Governmental Authorities
as are required for the conduct of its business as currently conducted and
herein contemplated, including without limitation professional licenses,
Medicaid Certifications and Medicare Certifications, except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect.
7.10. Covenants Extending to Other Persons. Cause each of its
Consolidated Entities to do with respect to itself, its business and its assets,
each of the things required of the Borrower in Sections 7.2 through 7.9, 7.15
and 7.16 inclusive.
7.11. Officer's Knowledge of Default. Upon any Executive Officer of the
Borrower obtaining knowledge of any Default or Event of Default or any default
or event of default under any other obligation of the Borrower or any
Consolidated Entity to any Lender, or any event, development or occurrence which
could reasonably be expected to have a Material Adverse Effect, cause such
Executive Officer or an Authorized Representative to promptly notify the Agent
of the nature thereof, the period of existence thereof, and what action the
Borrower or such Consolidated Entity proposes to take with respect thereto. The
Agent shall notify the Lenders of receipt of such notice.
7.12. Suits or Other Proceedings. Upon any Executive Officer of the
Borrower obtaining knowledge of any litigation or
71
other proceedings being instituted (i) against the Borrower or any Subsidiary,
or any attachment, levy, execution or other process being instituted against any
assets of the Borrower or any Subsidiary or Controlled Partnership, which if
adversely determined could reasonably be likely to have a Material Adverse
Effect or (ii) against the Borrower, any Subsidiary or any Contract Provider
(but only with respect to services provided to the Borrower or any Consolidated
Entity) to suspend, revoke or terminate any Medicaid Provider Agreement,
Medicaid Certification, Medicare Provider Agreement or Medicare Certification,
which suspension, revocation or termination could reasonably be likely to have a
Material Adverse Effect, cause such Executive Officer or an Authorized
Representative to promptly deliver to the Agent written notice thereof stating
the nature and status of such litigation, dispute, proceeding, levy, execution
or other process.
7.13. Notice of Discharge of Hazardous Material or Environmental
Complaint. Promptly provide to the Agent true, accurate and complete copies of
any and all notices, complaints, orders, directives, claims, or citations
received by the Borrower or any Consolidated Entity relating to any of the
following which is likely to have a Material Adverse Effect: (a) violation or
alleged violation by the Borrower or any Consolidated Entity of any applicable
Environmental Law; (b) release or threatened release by the Borrower or any
Consolidated Entity, or at any Facility or property owned or leased or operated
by the Borrower or any Consolidated Entity, of any Hazardous Material, except
where occurring legally; or (c) liability or alleged liability of the Borrower
or any Consolidated Entity for the costs of cleaning up, removing, remediating
or responding to a release of Hazardous Materials.
7.14. Environmental Compliance. If the Borrower or any Consolidated
Entity shall receive any letter, notice, complaint, order, directive, claim or
citation from any Governmental Authority alleging that the Borrower or any
Consolidated Entity has violated any Environmental Law or is liable for the
costs of cleaning up, removing, remediating or responding to a release of
Hazardous Materials within the time period permitted by the applicable
Environmental Law or the Governmental Authority responsible for enforcing such
Environmental Law, remove or remedy, or cause the applicable Consolidated Entity
to remove or remedy, such violation or release or satisfy such liability unless
and only during the period that the applicability of such Environmental Law, the
fact of such violation or liability or what is required to remove or remedy such
violation is being contested by the Borrower or the applicable Consolidated
Entity by appropriate proceedings diligently conducted and all reserves with
respect thereto as may be required under GAAP, if any, have been made, and no
Lien in connection therewith shall have attached to any property of the Borrower
or the applicable Consolidated Entity which shall have become enforceable
against creditors of such Person.
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7.15. Continuation of Current Business. Not engage in any business
other than the business now being conducted by the Borrower and other businesses
directly related to such services.
7.16. Management Contracts. Not enter into any agreement whereby the
management, supervision or control of its business or any Facility shall be
delegated to or placed in any persons other than its governing body and
officers, the Borrower or a Consolidated Entity, except that (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 Rehabilitation
Hospital located in Nashville, Tennessee may be managed by an independent body
until such time as such Facility is sold.
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ARTICLE VIII
Negative Covenants
Until the Facility Termination Date and termination of this Agreement
in accordance with the terms hereof, unless the Required Lenders shall otherwise
consent in writing, the Borrower will not, nor (to the extent expressly set
forth below) will it permit any Consolidated Entity to:
8.1. Financial Convenants.
(a) Minimum Net Worth. Permit Consolidated Net Worth to be less
than $917,711,000 plus (A) 50% of Consolidated Net Income (if positive
and including for purposes of this Section 8.1(a) only any
extraordinary gain), on an ongoing basis for each fiscal quarter
beginning with the fiscal quarter ended March 31, 1996, 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-interests basis.
(b) Consolidated EBITDA to Consolidated Interest Expense Ratio.
Permit the ratio of Consolidated EBITDA to Consolidated Interest
Expense at any time to be less than or equal to 2.50 to 1.00.
(c) Consolidated Indebtedness to Consolidated Total Capital.
Permit the ratio of Consolidated Indebtedness to Consolidated Total
Capital at any time to equal or exceed .65 to 1.00.
8.2. Investments and Loans. Purchase or otherwise acquire any stock,
security, obligation or evidence of indebtedness of, make any capital
contribution to, own any equity interest in, or make any loan or advance to, any
other Person; provided, however, that the Borrower and its Consolidated Entities
may (A) continue to hold all stock of and own partnership interests in the
Persons that constitute Consolidated Entities on the Closing Date and Persons
that thereafter become Consolidated Entities as a result of Acquisitions
permitted under Section 8.8; (B) make Permitted Investments; and (C) make
investments in an amount not exceeding 15% of Consolidated Total Assets.
8.3. Indebtedness. Permit to exist Indebtedness, howsoever evidenced,
of Subsidiaries and Controlled Partnerships (exclusive
74
of Indebtedness to the Borrower) in an aggregate amount at any time exceeding
the greater of $70,000,000 or 15% of Consolidated Tangible Net Worth, excluding,
however, Indebtedness of Subsidiaries and Controlled Partnerships existing as of
the date hereof and described on Schedule 8.3.
8.4. Disposition of Assets. Sell, lease, transfer or otherwise dispose
of assets in excess of 15% of Consolidated Total Assets as at the Closing Date
plus an amount equal to 15% of assets acquired following the Closing Date.
8.5. Consolidation or Merger. Merge or consolidate with another Person
unless (i) in the case of a merger or consolidation of the Borrower, the
Borrower is the continuing or surviving entity, (ii) in the case of a merger or
consolidation involving a Consolidated Entity, the continuing or surviving
entity is majority-owned by the Borrower (with such majority ownership
constituting a controlling interest), and (iii) before and after giving effect
to the proposed merger or consolidation, no Default or Event of Default shall
exist.
8.6. Liens. Incur, create, assume or permit to exist any Lien upon any
of its accounts receivable, contract rights, chattel paper, inventory,
equipment, instruments, general intangibles or other personal or real property
of any character, whether now owned or hereafter acquired, other than (i) Liens
that constitute Permitted Encumbrances, and (ii) Liens on assets which at no
time have a book value of greater than 5% of Consolidated Total Assets.
8.7. Dividends and Distributions. Permit any Consolidated Entity to be
or become subject to any restrictions on the ability of such Consolidated Entity
to pay dividends or to make partnership distributions other than as required by
this Agreement or restrictions imposed by applicable law.
8.8. Acquisitions. Enter into any agreement to acquire any Person or
Facility unless (i) the Person or Facility to be acquired is in substantially
the same line of business presently engaged in by the Borrower or its
Consolidated Entities, and (ii) if the Cost of Acquisition exceeds $150,000,000
the Borrower shall have furnished to the Agent (A) pro forma historical
financial statements as of the end of the most recently completed Fiscal Year of
the Borrower and most recent interim fiscal quarter, if applicable, giving
effect to such Acquisition and (B) a Compliance Certificate prepared on an
historical pro forma basis giving effect to such Acquisition, which certificate
shall demonstrate that no Default or Event of Default would exist immediately
after giving effect thereto.
8.9. Restricted Payments. Make any Restricted Payment or apply or set
apart any of their assets therefor or agree to do any of the foregoing;
provided, however, the Borrower may make the Restricted Payments in any Fiscal
Year (on a non-cumulative basis,
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with the effect that amounts not paid in any Fiscal Year may not be carried over
for payment in a subsequent period) if immediately prior and immediately after
giving effect thereto no Default or Event of Default shall exist or occur and be
continuing.
8.10. Compliance with ERISA. With respect to any Pension Plan, Employee
Benefit Plan or Multiemployer Plan:
(a) permit the occurrence of any Termination Event which would
result in a liability on the part of the Borrower or any ERISA
Affiliate to the PBGC which liability would have a Material Adverse
Effect; or
(b) permit the present value of all benefit liabilities under
all Pension Plans to exceed the current value of the assets of such
Pension Plans allocable to such benefit liabilities; or
(c) permit any accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code) with respect to any
Pension Plan, whether or not waived; or
(d) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto; or
(e) engage, or permit any Subsidiary or any ERISA Affiliate to
engage, in any prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code for which a civil penalty pursuant to Section
502(I) of ERISA or a tax pursuant to Section 4975 of the Code may be
imposed; or
(f) permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or establish or amend any
Employee Benefit Plan which establishment or amendment could result in
liability to the Borrower or any ERISA Affiliate or increase the
obligation of the Borrower or any ERISA Affiliate to a Multiemployer
Plan which liability or increase, individually or together with all
similar liabilities and increases, is in excess of $5,000,000; or
(g) fail, or permit any Subsidiary or any ERISA Affiliate to
fail, to establish, maintain and operate each Employee Benefit Plan in
compliance in all material respects with the provisions of ERISA, the
Code, all applicable Foreign Benefit Laws and all other applicable laws
and the regulations and interpretations thereof.
8.11. Fiscal Year. Change its Fiscal Year.
8.12. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily or
involuntarily) or commence or suffer any
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proceedings seeking any such winding up, liquidation or dissolution, except in
connection with a merger or consolidation permitted pursuant to Section 8.5.
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ARTICLE IX
Events of Default Acceleration
9.1 Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Authority), that is to say:
(a) the Borrower shall fail to pay (i) when due any principal
payable under the terms of any Note or any Reimbursement Obligation or
(ii) not later than five Business Days of the date when due any
interest or fees payable under the terms of any Note or any other
amount payable under this Agreement or any other of the other
Obligations or any other amount owed to the Agent or any of the Lenders
under or in connection with the Loan Documents; or
(b) The Borrower or any Material Group shall default in the
performance or observance of any other provision of this Agreement
(other than the provisions of Article VII and Article VIII), except as
covered by clause (a) above, and shall not cure such default within
thirty days after the first to occur of (i) the date the Agent or any
Lender gives written or telephonic notice of such default to the
Borrower or (ii) the date the Borrower otherwise has notice thereof; or
(c) the Borrower or any Material Group shall default in the
observance or performance of any provision in Article VII or Article
VIII; or
(d) the Agent shall reasonably determine that any statement,
certification, representation or warranty contained herein, or in any
of the other Loan Documents or in any report, financial statement,
certificate or other instrument delivered to the Agent or any Lender by
or on behalf of the Borrower or any Consolidated Entity, was misleading
or untrue in any material respect at the time it was made or deemed
made; or
(e) default shall be made (i) in the payment of any
Indebtedness exceeding $5,000,000 (other than the Obligations) of the
Borrower or any Consolidated Entity when due or (ii) in the
performance, observance or fulfillment of any term or covenant
contained in any agreement or instrument under or pursuant to which any
such Indebtedness may have been issued, created, assumed, guaranteed or
secured by Borrower or any Consolidated Entity, if the effect of such
default in the performance, observance or fulfillment is to accelerate
the maturity of such Indebtedness or to permit the holder thereof
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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
$5,000,000; or
(f) the Borrower or any Material Group shall fail to pay or
admit in writing its inability to pay its or their debts generally as
they come due, or a receiver, trustee, liquidator or other custodian
shall be appointed for the Borrower or any Material Group or for any of
the property of the Borrower or any Material Group or a petition in
bankruptcy, or under any insolvency law, shall be filed by or against
the Borrower or any Material Group or the Borrower or any Material
Group shall apply for the benefit of, or take advantage of, any law for
relief of debtors, or enter into an arrangement or composition with, or
make an assignment for the benefit of, creditors; or
(g) final judgment for the payment of money in excess of any
aggregate of $500,000 shall be rendered against the Borrower 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) any of the Notes or LC Account Agreement shall be deemed
unenforceable by a court of competent jurisdiction or shall no longer
be effective; or
(j) the Borrower or any Consolidated Entity shall, other than
in the ordinary course of business (as determined by past practices),
suspend all or any part of its operations material to the conduct of
the business of the Borrower and its Consolidated Entities, taken as a
whole, for a period of more than 60 days;
(k) the Borrower or any Consolidated Entity shall breach any
of the material terms or conditions of any agreement under which any
Rate Hedging Obligations are created and such breach shall continue
beyond any grace period, if any, relating thereto pursuant to the terms
of such agreement, or the Borrower or any Consolidated Entity shall
disaffirm or seek to disaffirm any such agreement or any of its
obligations thereunder;
(l) there shall occur (i) any cancellation, revocation,
suspension or termination of any Medicare Certification, Medicare
Provider Agreement, Medicaid Certification or Medicaid Provider
Agreement affecting the Borrower, any Subsidiary or any Contract
Provider, or (ii) the loss of any other permits, licenses,
authorizations, certifications or approvals from any federal, state or
local Governmental
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Authority or termination of any contract with any such authority, in
either case which cancellation, revocation, suspension, termination or
loss (X) in the case of any suspension or temporary loss only,
continues for a period greater than 60 days and (Y) results in the
suspension or termination of operations of the Borrower or any
Subsidiary or in the failure of the Borrower or any Subsidiaries or any
Contract Provider to be eligible to participate in Medicare or Medicaid
programs or to accept assignments of rights to reimbursement under
Medicaid Regulations or Medicare Regulations, if and only if such
Person, in the ordinary course of business, participates in the
Medicare or Medicare programs or accepts assignments of rights to
reimbursement thereunder; provided that any such events described in
this Section 9.1(l) shall constitute an Event of Default only if such
event shall result either singly or in the aggregate in the
termination, cancellation, suspension or material impairment of
operations or rights to reimbursement which produce 5% or more of the
Borrower's gross revenues (on an annualized basis); or
(m) there shall occur a Change of Control;
then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall then be continuing and shall have not been
waived,
(A) either or both of the following actions may be taken: (i)
the Agent, with the consent of the Required Lenders, may, and at the
direction of the Required Lenders shall, declare any obligation of the
Lenders and the Issuing Bank to make further Loans or to issue
additional Letters of Credit terminated, whereupon the obligation of
each Lender to make further Loans and of the Issuing Bank to issue
additional Letters of Credit hereunder shall terminate immediately, and
(ii) the Agent shall at the direction of the Required Lenders, at their
option, declare by notice to the Borrower any or all of the Obligations
to be immediately due and payable, and the same, including all interest
accrued thereon and all other obligations of the Borrower to the Agent
and the Lenders, shall forthwith become immediately due and payable
without presentment, demand, protest, notice or other formality of any
kind, all of which are hereby expressly waived, anything contained
herein or in any instrument evidencing the Obligations to the contrary
notwithstanding; provided, however, that notwithstanding the above, if
there shall occur an Event of Default under clause (f) above, then the
obligation of the Lenders to make Loans and of the Issuing Bank to
issue Letters of Credit hereunder shall automatically terminate and any
and all of the Obligations shall be immediately due and payable without
the necessity of any action by the Agent or the Required Lenders or
notice to the Agent or the Lenders;
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(B) the Borrower shall, upon demand of the Agent or the
Required Lenders, deposit cash with the Agent in an amount equal to the
aggregate amount remaining undrawn under all outstanding Letters of
Credit, as collateral security for the repayment of any future drawings
or payments under such Letters of Credit, and such amounts shall be
held by the Agent pursuant to the terms of the LC Account Agreement;
and
(C) the Agent and each of the Lenders shall have all of the
rights and remedies available under the Loan Documents or under any
applicable law.
9.2. Agent to Act. In case any one or more Events of Default shall
occur and be continuing and not have been waived, 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.
9.3. Cumulative Rights. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.
9.4. 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 or the
Agent in exercising any rights or remedies under any Loan Document or otherwise
available to it shall operate as a waiver of any rights or remedies and no
single or partial exercise of any rights or remedies shall operate as a waiver
or preclude the exercise of any other rights or remedies hereunder or of the
same right or remedy on a future occasion.
9.5. Allocation of Proceeds. If an Event of Default has occurred and
not been waived, and the maturity of the Notes has been accelerated pursuant to
this Article IX, all payments received by the Agent hereunder, in respect of any
principal of or interest on the Obligations or any other amounts payable by the
Borrower hereunder, shall be applied by the Agent in the following order:
(i) amounts due to the Lenders pursuant to Section 2.11 or
Section 11.6;
(ii) amounts due to the Agent and the Issuing Bank pursuant to
Section 10.11, Section 3.3 and Section 3.4;
(iii) payments of interest, to be applied pro rata based on the
proportion which the principal amount of outstanding
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Loans and Reimbursement Obligations of each Lender bears to the total
of all outstanding Loans and Reimbursement Obligations;
(iv) payments of principal, to be applied pro rata based on the
proportion which the principal amount of outstanding Loans and
Reimbursement Obligations of each Lender bears to the total of all
outstanding Loans and Reimbursement Obligations;
(v) payment of cash amounts to the Agent pursuant to Section 9.1;
(vi) payments of all other amounts due under this Agreement, if
any, to be applied in accordance with each Lender's pro rata share of
all such other amounts due to the Lenders; and
(vii) any surplus remaining after application as provided for
herein, to the Borrower or otherwise as may be required by applicable
law.
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ARTICLE X
The Agent
10.1. Appointment. Each Lender hereby irrevocably designates and
appoints NationsBank as the Agent for 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 and such other Loan
Documents, 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 any other Loan Document or
otherwise exist against the Agent.
10.2. Attorneys-in-fact. The Agent may execute any of its duties under
the Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Agent shall not be responsible for the negligence, gross negligence or
willful misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
10.3. Limitation on Liability. A 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 the Loan Documents 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 or any officer or
representative thereof contained in any Loan Document, 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 any Loan Document, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of any Loan
Document, or for any failure of the Borrower to perform its obligations under
any Loan Document, or for any recitals, statements, representations or
warranties made, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any collateral. 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 any
Loan Document on the part of the Borrower or to inspect the properties, books or
records of the Borrower or its Subsidiaries.
10.4. 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,
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cablegram, telegram, telefacsimile or telex message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
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 the Loan Documents 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 the Loan
Documents in accordance with a request of the Required Lenders or all Lenders as
required in this Agreement, 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.
10.5. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Agent has received notice from a Lender, an Authorized Representative or the
Borrower 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 or all
Lenders as required in this Agreement; 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.
10.6. No Representation. 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 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 each Consolidated Entity 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
84
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
the Loan Documents 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 Subsidiaries. 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 and its Subsidiaries which may come into the possession
of the Agent or any of its affiliates.
10.7 Indemnification. Each of the Lenders agrees to indemnify the Agent
in its capacity as such (to the extent 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 to do so), ratably according to the
respective principal amount of the Notes held by them (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 (excluding any losses suffered by the Agent as a result of
the Borrower's failure to pay any fee owing to the Agent), 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 Notes) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of any Loan Document or
any other document contemplated by or referred to therein or the transactions
contemplated thereby or any action taken or omitted by the Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct. The
agreements in this Section 10.7 shall survive the payment of the Facility
Termination Date.
10.8. 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 Subsidiaries 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.
10.9. Resignation. If the Agent shall resign as Agent under this
Agreement, then the Required Lenders may appoint, with the consent, so long as
there shall not have occurred and be continuing a Default or Event of Default,
of the Borrower, which consent shall
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not be unreasonably withheld, a successor Agent for the Lenders, which successor
Agent 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 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 in any collateral held by the Agent; provided, further, that
if the Required Lenders and, if applicable, the Borrower cannot agree as to a
successor Agent within ninety (90) days after such resignation, the Agent shall
appoint a successor Agent which satisfies the criteria set forth above in this
Section 10.9 for 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 that
in such event all provisions of the Loan Documents, shall remain in full force
and effect. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article X shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
10.10. 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 Obligations (other than pursuant
to Section 2.14 or Article IV) which results in its receiving more than its pro
rata share of the aggregate payments with respect to all of the Obligations
(other than any payment expressly provided hereunder to be distributed on other
than a pro rata basis and payments pursuant to Article IV), then (a) such Lender
shall be deemed to have simultaneously purchased from the other Lenders a share
in their Obligations so that the amount of the 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 10.10 the term
"pro rata" shall be determined with respect to both the Revolving Credit
Commitment and Line of Credit Commitment of each Lender and to the Total
Revolving Credit Commitment and Total Line of Credit Commitment after
subtraction in each case of amounts, if any, by which any such Lender has not
funded its share of the outstanding Loans and 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 10.10 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,
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banker's lien or counterclaim) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
10.11. Fees. The Borrower agrees to pay to the Agent, for its
individual account, in advance a quarterly Agent's fee in such amount as from
time to time agreed to by the Borrower and Agent in writing.
10.12. Independent Agreements. The provisions contained in Sections
10.1 through 10.8 and 10.10 (other than the last sentence thereof) 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 10.9 and 10.11 and
the last sentence of Section 10.10.
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ARTICLE XI
Miscellaneous
11.1. Assignments and Participations. (a) At any time after the Closing
Date each Lender may, with the prior consent of the Agent and (so long as no
Default or Event of Default shall have occurred and be continuing) the Borrower,
which consents shall not be unreasonably withheld, assign to one or more banks
or financial institutions all or a portion of its rights and obligations under
the Loan Documents (including, without limitation, all or a portion of any 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 under the Revolving Credit Facility, Letter of Credit Facility
and the Line of Credit Facility, (ii) for each assignment involving the issuance
and transfer of Notes, the assigning Lender shall execute an Assignment and
Acceptance and the Borrower hereby agrees to execute replacement Notes to give
effect to such 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), (iv) such assignee shall have an office
located in the United States, and (v) no consent of the Borrower or the Agent
shall be required in connection with any assignment by a Lender to an affiliate
of such Lender. 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 any such Notes have been assigned or negotiated
to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and a holder of such Notes and (y) the
assignor thereunder shall, to the extent that rights and obligations hereunder
or under such Note have been assigned or negotiated by it pursuant to such
Assignment and Acceptance, relinquish its rights, other than those set forth in
Section 3.2(g), Article IV, Section 11.6 and Section 11.12 of this Agreement and
be released from its obligations under this Agreement. Except as otherwise
provided herein, any Lender who makes an assignment shall pay to the Agent a
one-time administrative fee of $3,000 which fee shall not be reimbursed by the
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 to such assignor; (ii) such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to (x)
the statements, warranties or representations made
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in or in connection with this Agreement or any other Loan Document or any other
instrument or document furnished pursuant hereto, (y) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any of the other Loan Documents or any other document or instrument furnished
pursuant hereto, or (z) the financial condition of the Borrower or its
Subsidiaries or the performance or observance by the Borrower or any Subsidiary
of any of its obligations under any Loan Document or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements delivered pursuant to Section 6.6(a) or Section 7.1, as the case may
be, 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 any Loan Document; (v) such assignee appoints and authorizes the Agent to
take such action as Agent on its behalf and to exercise such powers under the
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 the Loan Documents are required to be
performed by it as a Lender and a holder of such Notes.
(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) Nothing herein shall prohibit any Lender from pledging or
assigning, without notice to or consent of the Borrower or the Agent and without
the payment of the administrative fee referred to in Section 13.1(a), any Note
to any Federal Reserve Bank in accordance with applicable law.
(f) Each Lender may sell participations at its expense 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 Note issued to it for the
purpose of this Agreement, (iv) such participations shall be in a minimum amount
of $5,000,000 and, if greater, an amount which is an integral multiple of
$1,000,000 and shall include an allocable
89
portion of such Lender's Participations, (v) the 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 any Loan
Document which would (A) extend the maturity of any Note or scheduled payment of
any Obligations, (B) reduce the interest rates, unused fees or letter of credit
facility fees hereunder or (C) increase or extend the termination date of the
Revolving Credit Commitment, Line of Credit Commitment or Letter of Credit
Commitment of the Lender granting the participation, 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.
(g) The Borrower may not assign any rights, powers, duties or
obligations under this Agreement or the other Loan Documents without the prior
written consent of all the Lenders.
11.2. Notices. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which delivered
(including hand delivery by commercial courier service) to such party (against
receipt therefor), (ii) on the date of receipt at such address, telefacsimile
number or telex number as may from time to time be specified by such party in
written notice to the other parties hereto or otherwise received), in the case
of notice by telegram, telefacsimile or telex, respectively (where the receipt
of such message is verified by return), or (iii) on the fifth Business Day after
the day on which mailed, if sent prepaid by certified or registered mail, return
receipt requested, in each case delivered, transmitted or mailed, as the case
may be, to the address, telex number or telefacsimile number, as appropriate,
set forth below or such other address or number as such party shall specify by
notice hereunder:
(a) if to the Borrower:
Two Perimeter Park South
Suite 224W
Birmingham, Alabama 35243
Attention: Richard M. Scrushy
with a copy to:
Chief Financial Officer
HEALTHSOUTH Corporation
Two Perimeter Park South
Suite 224W
Birmingham, Alabama 35243
90
with a copy to:
Treasurer
HEALTHSOUTH Corporation
Two Perimeter Park South
Suite 224W
Birmingham, Alabama 35243
with a copy to:
William W. Horton
HEALTHSOUTH Corporation
Two Perimeter Park South
Birmingham, Alabama 35243
(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 30308-2213
Attention: Corporate Banking
(c) if to NationsBank in its capacity as issuer of the
Letters of Credit:
NationsBank, N.A.
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 and on the signature page of each Assignment
and Acceptance.
11.3. 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.
91
11.4. Setoff. The Borrower agrees that the Agent and each Lender shall
have a lien for all the Obligations of the Borrower upon all deposits or deposit
accounts, of any kind, or any interest in any deposits or deposit accounts
thereof, now or hereafter pledged, mortgaged, transferred or assigned to the
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 and including any balance of any deposit account or of
any credit of the Borrower 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 an Event of Default
with or without prior notice to set off against and apply such balances or any
part thereof to such of the Obligations of the Borrower to the Lenders then past
due and in such amounts as they may elect, and whether or not the collateral or
the responsibility of other 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.
11.5. Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the issuance of the Letters of Credit and the execution and delivery to the
Lenders of this Agreement and the Notes and shall continue in full force and
effect so long as any of Obligations remain outstanding or any Lender has any
commitment hereunder or the Borrower has continuing obligations hereunder unless
otherwise provided herein. Whenever in this Agreement any of the parties hereto
is referred to, such reference shall be deemed to include the successors and
permitted assigns of such party and all covenants, provisions and agreements by
or on behalf of the Borrower which are contained in the Loan Documents shall
inure to the benefit of the successors and permitted assigns of the Lenders or
any of them.
11.6. Expenses. The Borrower agrees (a) to pay or reimburse the 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 and,
after an Event of Default, each Lender for all their reasonable costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, including without limitation, the reasonable fees
and disbursements of their counsel, (c) to pay, indemnify and hold harmless the
Agent and each Lender from any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any failure of Borrower to pay or
delay of Borrower
92
in paying, documentary, stamp, excise, withholding and other similar taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation of any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement, and (d) from and after the occurrence of any Event of Default to pay,
and indemnify and hold harmless the Agent and each Lender from and against, any
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement or in any respect relating to the transactions
contemplated hereby or thereby, (all the foregoing, collectively, the
"indemnified liabilities"); provided, however, that the Borrower shall have no
obligation hereunder with respect to indemnified liabilities arising from (i)
the willful misconduct or negligence of the party seeking indemnification, (ii)
legal proceedings commenced against 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, (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) 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 the
Facility Termination Date.
11.7. Amendments. No amendment, modification or waiver of any provision
of this Agreement or any of the other 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
2.7, Section 2.11, Section 3.3(a), Section 5.1(a), Section 7.11,
Section 10.10, Section 11.1(g), this Section 11.7 or Section 11.15, 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 Obligation, which changes the definition of Required Lenders,
which increases or extends the Commitment of any Lender or which
increases or extends the Revolving Credit Termination Date (including
any extension of the expiry date of a Letter
93
of Credit beyond the Revolving Credit Termination Date) or the Stated
Termination Date or which waives any condition to the making of any
Loan or the issuance of any Letter of Credit 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 9.1(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 9.1(f) as to which all Lenders must waive such Event of
Default);
(ii) 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 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.
11.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
11.9. Waivers by Borrower. In any litigation in any court with respect
to, in connection with, or arising out of this Agreement, the Loans, any of the
Notes, any of the other Loan Documents, the Obligations, or any instrument or
document delivered pursuant to this Agreement, or the validity, protection,
interpretation, collection or enforcement thereof, or any other claim or dispute
howsoever arising between the Borrower and the Lenders or the 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
94
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. 10-2B-15.01 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.
11.10. 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 transactions entered into or rights created or obligations incurred
prior to such termination have been fully disposed of, concluded or liquidated
and the Obligations arising prior to or after such termination have been
irrevocably paid in full. The 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 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 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.
95
11.11. Governing Law. All documents executed pursuant to the
transactions contemplated herein, including, without limitation, this Agreement
and each of the other 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. 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.
11.12. 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
free and harmless the Agent and each Lender and each of their respective
officers, directors, employees, affiliates and agents (collectively, the
"Indemnified Parties") from and against any and all actions, causes of action,
claims, suits, losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to, any of the following:
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan or
supported by any Letter of Credit;
(b) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties;
(c) provided Lenders have no ownership interest in real
property of Borrower, any investigation, litigation or proceeding
related to any environmental cleanup, audit, compliance or other matter
relating to the protection of the environment or the release by the
Borrower or any of its Subsidiaries or Controlled Partnerships of any
hazardous waste material; or
(d) provided Lenders have no ownership interest in real
property of Borrower, the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releases from
any real property owned or operated by the Borrower or any Subsidiary
or Controlled Partnership of any hazardous waste material (including
any losses, liabilities, damages, injuries, costs, expenses or claims
asserted or arising under any environmental laws), regardless of
whether caused by, or within the control of, the Borrower or such
Subsidiary or Controlled Partnerships,
96
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. The agreements in this Section 11.12
shall survive the Facility Termination Date.
11.13. Agreement Controls. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any term of this
Agreement, the terms and provisions of this Agreement shall control.
11.14. Integration. This Agreement and the other Loan Documents
represent the final agreement between the parties as to the subject matter
hereof or thereof and may not be contradicted by evidence of prior,
contemporaneous, or subsequent oral agreements of the parties. There are no oral
agreements between the parties.
11.15. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however, that the Borrower may not assign or transfer its
rights or obligations hereunder without the prior written consent of the Agent
and all Lenders. The Agent and the Lenders may assign or transfer their interest
hereunder but only as provided herein.
11.16. Severability. If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more of
the parties hereto, then such provision shall remain in effect with respect to
all parties, if any, as to whom such provision is neither illegal nor invalid,
and in any event all other provisions hereof shall remain effective and binding
on the parties hereto.
11.17. 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
preceding 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
97
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 canceled 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, as to any Lender, 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.
98
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:
/s/ WILLIAM W. HORTON
- ----------------------------- By: /s/ MICHAEL D. MARTIN
/s/ TERRY L. SCAGGS ------------------------------
- ----------------------------- Name: Michael D. Martin
Title: Senior Vice President and
Treasurer
99
NATIONSBANK N.A.,
as Agent for the Lenders
By: /s/ DOUGLAS E. COLTHARP
-------------------------------
Name: Douglas E. Coltharp
Title: Senior Vice President
COMMITMENT: NATIONSBANK, N.A.
$70,000,000
By: /s/ DOUGLAS E. COLTHARP
Name: Douglas E. Coltharp
Title: Senior Vice President
Lending Office:
100 South Tryon Street
Charlotte, North Carolina 28255
Wire Transfer Instructions:
NationsBank, N.A.
Charlotte, North Carolina
ABA #053000196
Reference: HEALTHSOUTH
Corporation
Attention: Agency Services
100
COMMITMENT: THE BANK OF NOVA SCOTIA
$55,000,000
By: /s/ DANA MALONEY
------------------------------
Name: Dana Maloney
Title: Relationship Manager
Lending Office:
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
101
COMMITMENT: FIRST UNION NATIONAL BANK OF
$55,000,000 NORTH CAROLINA
By: /s/ JOSEPH H. TOWELL
---------------------------------
Name: Joseph H. Towell
Title: Senior Vice President
Lending Office:
One First Union Plaza
Charlotte, North Carolina 28288
Wire Transfer Instructions:
First Union National Bank of
North Carolina
Charlotte, North Carolina
ABA #053000219
Account #465906 0001802
Reference: HEALTHSOUTH
Attention: Sue Patterson
102
COMMITMENT: TORONTO DOMINION (TEXAS), INC.
$55,000,000
By: /s/ LISA ALLISON
--------------------------
Name: Lisa Allison
Title: Vice President
Lending Office:
909 Fannin Street, 17th
Floor
Houston, Texas 77010
Wire Transfer Instructions:
The Toronto Dominion Bank
ABA #0260003243
Favor: TD Houston
Account #2159251
Reference: HEALTHSOUTH
Attention: Lisa Allison
103
COMMITMENT: WACHOVIA BANK OF GEORGIA, N.A.
$55,000,000
By: /s/ LEIF MURPHY
------------------------
Name: Leif Murphy
Title: Banking Officer
Lending Office:
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Wire Transfer Instructions:
Wachovia Bank of Georgia
Atlanta, Georgia
ABA #061000010
Account #18-800-621
Attention: Becky Creel
104
COMMITMENT: AMSOUTH BANK OF ALABAMA
$55,000,000
By: /s/ WILLIAM P. BARNES
-------------------------
Name: William P. Barnes
Title: Vice President
Lending Office:
1900 5th Avenue North
Birmingham, Alabama 35203
Wire Transfer Instructions:
AmSouth Bank of Alabama
Birmingham, Alabama
ABA #062000019
Reference:Account #50214357
HEALTHSOUTH
Attention: Jane Dainas
105
COMMITMENT: BANK OF TOKYO-MITSUBISHI LTD.,
$55,000,000 ATLANTA AGENCY
By: /s/ NATHANIEL W. LEA
------------------------------
Name: Nathaniel W. Lea
Title: Banking Officer
Lending Office:
Atlanta Agency
-------------------------------
Wire Transfer Instructions:
---------------------------------
---------------------------------
ABA #
---------------------
Reference:
-----------------------
Attention:
-----------------------
106
COMMITMENT: DEUTSCHE BANK AG, NEW YORK AND/OR
$55,000,000 CAYMAN ISLANDS BRANCHES
By: /s/ STEPHEN A. WIEDEMANN
------------------------------
Name: Stephen A. Weidemann
Title: Vice President
By: /s/ DAPHNE K. LEE
-----------------------------
Name: Daphne K. Lee
Title: Assistant Vice President
Lending Office:
31 W. 52nd Street
New York, New York 10019
Wire Transfer Instructions:
Deutsche Bank AG
New York, New York 10019
ABA #026003780
Reference: HEALTHSOUTH
Account #0479733
107
COMMITMENT: THE INDUSTRIAL BANK OF JAPAN,
$55,000,000 LIMITED
By: /s/ JUNRI ODA
-----------------------------
Name: Junri Oda
Title: Senior Vice President
and Senior Manager
Lending Office:
New York Branch
245 Park Avenue
New York, New York 10167
Wire Transfer Instructions:
Industrial Bank of Japan, Limited,
New York Branch
ABA #026008345
Reference: HEALTHSOUTH Corporation
Attention: Credit Administration
108
COMMITMENT: PNC BANK, KENTUCKY, INC.
$55,000,000
By: /s/ TODD D. MUNSON
------------------------------
Name: Todd D. Munson
Title: Vice President
Lending Office:
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
109
COMMITMENT: COOPERATIEVE CENTRALE RAIFFEISEN-
$55,000,000 BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH
By: /s/ TERRELL BOYLE
------------------------------
Name: Terrell Boyle
Title: Vice President
By: /s/ W. JEFFREY VOLLACK
------------------------------
Name: W. Jeffrey Vollack
Title: Vice President, Manager
Lending Office:
245 Park Avenue
New York, New York 10167
Attention: Corporate Services
Dept.
Telephone: 212-917-7800
Fax: 212-818-0233
Wire Transfer Instructions:
Bank of New York
New York, New York
ABA #021000018
For the account of RaboBank
Account #8026002533
Reference: HEALTHSOUTH
110
COMMITMENT: CREDIT LYONNAIS, NEW YORK BRANCH
$55,000,000
By: /s/ FARBOUD TAVANGER
------------------------------
Name: Farboud Tavanger
Title: Vice President
Lending Office:
---------------------------------
---------------------------------
Wire Transfer Instructions:
---------------------------------
---------------------------------
ABA #
---------------------
Reference:
-----------------------
Attention:
-----------------------
111
COMMITMENT: MELLON BANK, N.A.
$55,000,000
By: /s/ MICHAEL R. ZAKSHESKE
------------------------------
Name: Michael R. Zaksheske
Title: Vice President
Lending Office:
2 Mellon Bank Center
Room 152-0270
Pittsburgh, Pennsylvania 15259
Wire Transfer Instructions:
Mellon Bank, N.A.
Pittsburgh, Pennsylvania 15259
ABA #0430-0026-1
Account #990873800
Attention: Christine Bissell
Reference: HEALTHSOUTH Corp.
112
COMMITMENT: BANKERS TRUST COMPANY
$55,000,000
By: /s/ ROBERT R. TELESCA
------------------------------
Name: Robert P. Telesca
Title: Assistant Vice President
Lending Office:
1 Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Wire Transfer Instructions:
Bankers Trust Company
New York, New York 10006
ABA #021-001-033
Reference: HEALTHSOUTH
Attention: Commercial Loan
Division
113
COMMITMENT: LTCB TRUST COMPANY
$37,500,000
By: /s/ SATORU OTSUBO
------------------------------
Name: Satoru Otsubo
Title: Executive Vice President
Lending Office:
165 Broadway
New York, New York 10006
Wire Transfer Instructions:
Bankers Trust Company
ABA #021001033
Name of Account: LTCB Trust
Company
Account #04-203-606
114
COMMITMENT: NATIONAL CITY BANK, KENTUCKY
$37,500,000
By: /s/ RODERIC M. BROWN
------------------------------
Name: Roderic M. Brown
Title: Vice President
Lending Office:
101 S. Fifth Street
Louisville, Kentucky 40202
Wire Transfer Instructions:
National City Bank, Kentucky
Louisville, Kentucky
ABA #0830-0005-6
Reference: HEALTHSOUTH
Attention: Sandy Walker
115
COMMITMENT: ABN AMRO BANK N.V., ATLANTA AGENCY
$37,500,000
By: ABN AMRO NORTH AMERICA, INC.,
as Agent
By: /s/ W. PAT FISCHER
------------------------------
Name: W. Pat Fischer
Title: Senior Vice President
and Managing Director
By: /s/ MICHIEL VAN CRANENBURGH
------------------------------
Name: Michiel Van Cranenburgh
Title: Assistant Vice President
Lending Office:
One Ravinia Drive, Suite 1200
Atlanta, Georgia 30346
Wire Transfer Instructions:
Federal Reserve Bank
New York, New York
ABA #0260-09580
Further credit to: ABN AMRO
Bank N.V., Atlanta Branch
Account #651-0-010197-41
Reference: HEALTHSOUTH
116
COMMITMENT: FLEET NATIONAL BANK
$37,500,000
By: /s/ GINGER STOLZENTHALER
------------------------------
Name: Ginger Stolzenthaler
Title: Vice President
Lending Office:
75 State Street
Boston, Massachusetts 02109
Wire Transfer Instructions:
Fleet National Bank
Boston, Massachusetts
ABA #011-000-138
Account #1510351
For credit to Commercial Loan
Services
Attention: Agent Bank
Department
117
COMMITMENT: THE BANK OF NEW YORK
$37,500,000
By: /s/ ALAN F. LYSTER, JR.
------------------------------
Name: Alan F. Lyster, Jr.
Title: Vice President
Lending Office:
One Wall Street, 22nd Floor
New York, New York 10286
Wire Transfer Instructions:
The Bank of New York
Commercial Loan Department
New York, New York
ABA #021000018
CLA #111556
Attention: Lorna O. Alleyne
118
COMMITMENT: THE DAI-ICHI KANGYO BANK, LIMITED,
$37,500,000 ATLANTA AGENCY
By: /s/ TOSHIAKI KURIHARA
---------------------------------
Name: Toshiaki Kurihara
Title: Joint General Manager
Lending Office:
Marquis Two Tower, Suite 2400
285 Peachtree Center Avenue, N.E.
Atlanta, Georgia 30303
Wire Transfer Instructions:
The Dai-Ichi Kangyo Bank, Ltd.
New York, New York
ABA #0260 0430 7
For credit to DKB-Atlanta Agency
Account #H79-740-111250
Reference: HEALTHSOUTH
119
COMMITMENT: UNION BANK OF CALIFORNIA, N.A.
$20,000,000
By: /s/ WILLIAM SWIONTEK
------------------------------
Name: William Swiontek
Title: Vice President
Lending Office:
550 S. Hope Street, 3rd Floor
Los Angeles, California 90071
Wire Transfer Instructions:
The Bank of California
Los Angeles, California 90071
ABA #121000015
Reference: HEALTHSOUTH
Account #001 060 235
Attention: Hisaki Sakamoto
120
COMMITMENT: CREDITANSTALT CORPORATE FINANCE, INC.
$20,000,000
By: /s/ JOE LONGOSZ
------------------------------
Name: Joe Longosz
Title: Vice President
By: /s/ SCOTT KRAY
------------------------------
Name: Scott Kray
Title: Senior Associate
Lending Office:
Two Ravinia Drive, Suite 1680
Atlanta, Georgia 30346
Wire Transfer Instructions:
Chemical Bank
New York, New York
ABA #021000128
Account: Creditanstalt, New York
Account #544-7-73095
121
COMMITMENT: FIRST AMERICAN NATIONAL BANK
$20,000,000
By: /s/ NEDDA M. POLLACK
------------------------------
Name: Nedda M. Pollack
Title: Senior Vice President
Lending Office:
300 Union Street, 2nd Floor
Nashville, Tennessee 37237-0203
Wire Transfer Instructions:
First American National Bank
Nashville, Tennessee 37237-0203
ABA #064000017
Account #0901256
Attention: Betsy Pylkos
122
COMMITMENT: FUJI BANK
$20,000,000
By: /s/ TOSHIHIRO MITSUI
-----------------------------------
Name: Toshihiro Mitsui
Title: Vice President and Manager
Lending Office:
Atlanta Agency
Wire Transfer Instructions:
The Fuji Bank, Limited
New York Agency
ABA #026009700
Account: The Fuji Bank, Ltd., Atlanta
Attention: ____________________
123
COMMITMENT: HIBERNIA NATIONAL BANK
$20,000,000
By: /s/ COLLEEN LACY
------------------------------
Name: Colleen Lacy
Title: Vice President
Lending Office:
313 Carondelet Street
New Orleans, Louisiana 70130
Wire Transfer Instructions:
Hibernia National Bank
New Orleans, Louisiana
ABA #065000090
Account #0520-36615
National Accounts
Reference: HEALTHSOUTH
Attention: ____________________
124
COMMITMENT: THE SANWA BANK LIMITED, ATLANTA
$20,000,000 AGENCY
By: /s/ WILLIAM M. PLOUGH
---------------------------------
Name: William M. Plough
Title: Vice President
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
125
COMMITMENT: THE SUMITOMO BANK, LIMITED
$20,000,000
By: /s/ E. B. BUCHANAN, III
------------------------------
Name: E. B. Buchanan, III
Title: Vice President
Lending Office:
303 Peachtree Street, Suite 4420
Atlanta, Georgia 30308
Wire Transfer Instructions:
The Sumitomo Bank, Ltd.
Chicago, Illinois 60606
ABA #071001850
Reference: HEALTHSOUTH
Attention: Maria Martinez
126
COMMITMENT: KREDIETBANK, N.V.
$20,000,000
By: /s/ ROBERT SHAUFFER
------------------------------
Name: Robert Shauffer
Title: Vice President
Lending Office:
1349 W. Peachtree Street
Suite 1750
Atlanta, Georgia 30309
Wire Transfer Instructions:
Bank of New York
New York, New York
ABA #021-000-018
Account #802 301 5618
Account Name: Kredietbank
New York
Reference: HEALTHSOUTH
Attention: Lynda Resuma,
Loan Administration
127
COMMITMENT: THE SAKURA BANK, LIMITED
$20,000,000 ATLANTA AGENCY
By: /s/ HIROYASU IMANISHI
------------------------------
Name: Hiroyasu Imanishi
Title: Vice President
and Senior Manager
Lending Office:
245 Peachtree Center Ave, N.E.
Suite 2703
Atlanta, Georgia 30303
Wire Transfer Instructions:
Morgan Guaranty Trust Co.
of New York
New York, New York
ABA #021 000 238
Account Name: The Sakura Bank,
Ltd., New York
Account #631-22-624
In favor of MTKB, Atlanta,
A/C 8000100-1
128
COMMITMENT: THE SUMITOMO TRUST AND BANKING CO.,
$20,000,000 LTD.
By: /s/ SURAJ P. BHATIA
------------------------------
Name: Suraj P. Bhatia
Title: Senior Vice President
Lending Office:
527 Madison Avenue
New York, New York 10022
Wire Transfer Instructions:
Chase Manhattan Bank
New York, New York
ABA #021-000-021
Account #920-1-061497
For account of Sumitomo Trust
and Banking Co., Ltd.
129
COMMITMENT: SUNTRUST BANK, NASHVILLE, N.A.
$20,000,000
By: /s/ KAREN COLE AHERN
------------------------------
Name: Karen Cole Ahern
Title: Vice President
Lending Office:
201 4th Avenue, North
Nashville, Tennessee 37219
Wire Transfer Instructions:
SunTrust Bank, Nashville, N.A.
Nashville, Tennessee 37219
ABA #064000046
Reference: HEALTHSOUTH
Account #170730-0998
Attention: Leigh Anne Gregory
130
COMMITMENT: THE TOKAI BANK, LTD., ATLANTA AGENCY
$20,000,000
By: /s/ ELICHI FUJIHIRA
------------------------------
Name: Elichi Fujihira
Title: General Manager
Lending Office:
285 Peachtree Center Avenue, N.E.
Marquis II Tower, Suite 2802
Atlanta, Georgia 30303
Wire Transfer Instructions:
The Tokai Bank, Ltd.
New York, New York
ABA #026-004-747
For account of The Tokai
Bank, Ltd., Atlanta Agency
Account #08961
131
EXHIBIT A
Applicable Commitment Percentages
Lender Revolving Line of Applicable
- ------ Credit Credit Commitment
Commitment Commitment Percentage
---------- ----------------------
NationsBank, National
Association $ 50,400,000 $ 19,600,000 5.60%
The Bank of Nova Scotia 39,600,000 15,400,000 4.40
First Union National
Bank of North Carolina 39,600,000 15,400,000 4.40
Toronto Dominion (Texas),
Inc. 39,600,000 15,400,000 4.40
Wachovia Bank of Georgia,
N.A. 39,600,000 15,400,000 4.40
AmSouth Bank of Alabama 39,600,000 15,400,000 4.40
Bank of Tokyo-Mitsubishi
Ltd., Atlanta Agency 39,600,000 15,400,000 4.40
Deutsche Bank AG, New York
and/or Cayman Islands Branches 39,600,000 15,400,000 4.40
The Industrial Bank of
Japan, Limited 39,600,000 15,400,000 4.40
PNC Bank, Kentucky, 39,600,000 15,400,000 4.40
Inc.
Cooperatieve Centrale
Raiffeisen-Boerenleenbank
B.A., "Rabobank Nederland",
New York Branch 39,600,000 15,400,000 4.40
Credit Lyonnais, New
York Branch 39,600,000 15,400,000 4.40
Mellon Bank, N.A. 39,600,000 15,400,000 4.40
Bankers Trust Company 39,600,000 15,400,000 4.40
LTCB Trust Company 27,000,000 10,500,000 3.00
National City Bank,
Kentucky 27,000,000 10,500,000 3.00
A-1
ABN AMRO Bank, N.V.,
Atlanta Agency 27,000,000 10,500,000 3.00
Fleet National Bank 27,000,000 10,500,000 3.00
The Bank of New York 27,000,000 10,500,000 3.00
The Dai-Ichi Kangyo
Bank, Limited Atlanta
Agency 27,000,000 10,500,000 3.00
Union Bank of California,
N.A. 14,400,000 5,600,000 1.60
Creditanstalt Corporate
Finance, Inc. 14,400,000 5,600,000 1.60
First American National
Bank 14,400,000 5,600,000 1.60
Fuji Bank 14,400,000 5,600,000 1.60
Hibernia National Bank 14,400,000 5,600,000 1.60
The Sanwa Bank Limited,
Atlanta Agency 14,400,000 5,600,000 1.60
The Sumitomo Bank,
Limited 14,400,000 5,600,000 1.60
Kredietbank, N.V. 14,400,000 5,600,000 1.60
The Sakura Bank,
Limited, Atlanta Agency 14,400,000 5,600,000 1.60
The Sumitomo Trust and
Banking Co., Ltd. 14,400,000 5,600,000 1.60
SunTrust Bank, Nashville,
N.A. 14,400,000 5,600,000 1.60
The Tokai Bank, Ltd.,
Atlanta Agency 14,400,000 5,600,000 1.60
-------------- ------------ ------
TOTALS $900,000,000 $350,000,000 100.00%
A-2
EXHIBIT B
Form of Assignment and Acceptance
DATED ,
-------------- -------
Reference is made to the Third Amended and Restated Credit Agreement
dated as of April 18, 1996, as amended (the "Agreement"), among HEALTHSOUTH
Corporation, a Delaware corporation (the "Borrower"), the Lenders (as defined in
the Agreement), and NationsBank, National Association, 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 to the
Assignor, 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 Loans owing to
the Assignor on the Effective Date, and evidenced by the Revolving Note and Line
of Credit Note held by the Assignor and in Participations and the Letter of
Credit Commitment of the Assignor.
2. The Assignor (i) represents and warrants that, as of the date
hereof, (A) the aggregate outstanding principal amounts of the Revolving Loans
owing to it (without giving effect to assignments thereof which have not yet
become effective) is $________ under a Revolving Note dated __________, 19__ in
the principal amount of $_________, (B) the aggregate principal amount of Line
of Credit Loans owing to it (without giving effect to the assignments thereof
which have not yet become effective) is $__________ under a Line of Credit Note
dated ____________, 19__ in the principal amount of $_________ and (C) the
aggregate principal amount of the Participations purchased by it in Letters of
Credit (without giving effect to the assignments thereof which have not yet
become effective) 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 created by it; (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 other Loan Documents or any other instrument or
document furnished pursuant thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Agreement or any of the
other Loan Documents or any
- --------
1 Specify percentage in no more than 8 decimal points.
B-1
other instrument or document furnished pursuant thereto; (iv) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any Subsidiary or the performance or
observance by the Borrower or any Subsidiary of any of its obligations under any
of the Loan Documents or any other instrument or document furnished pursuant
thereto and (v) attaches hereto the Revolving Note and the Line of Credit Note,
as the case may be, referred to in paragraph 1 above and requests that the Agent
exchange such Notes for replacement Notes as follows: a Revolving Note dated
_____________, 19__ in the principal amount of $________________, and a Line of
Credit Note dated __________, 19__ in the principal amount of $__________ and a
Competitive Bid Note dated ____________________, 19__ in the principal amount of
$_______________ each payable to the order of the Assignor, and a Revolving
Note, dated ______________________, 19__, in the principal amount of
$_________________ and a Line of Credit Note dated _________________________,
19___ in the principal amount of $_________________ and a Competitive Bid Note
dated _________________, 19___ in the amount of $____________, each 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 7.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor, or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the
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) will perform all of the obligations which by the terms
of the Agreement are required to be performed by it as a 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 other Loan Documents and (ii) the Assignor shall, to
the extent provided in this Assignment and Acceptance, relinquish its rights,
other than those set forth in Section 3.2(g), Article IV, Section 11.6
B-2
and Section 11.12 of the Agreement and be released from its obligations under
the Agreement and the other Loan Documents.
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, commitment 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.
7. This Assignment and Acceptance shall be governed by and construed in
accordance with, the laws of the State of _________.
[NAME OF ASSIGNOR]
By:_______________________________________
Name:___________________________________
Title:__________________________________
Notice Address:
---------------------------
---------------------------
---------------------------
After the Effective Date
Outstanding Revolving Loans:$_____________
Outstanding Linen of Credit
Loan: $___________
Outstanding LC
Participations: $___________
[NAME OF ASSIGNEE]
By:_______________________________________
Name:___________________________________
Title:__________________________________
Notice Address/Lending Office
---------------------------
---------------------------
---------------------------
Wire transfer Instructions:
---------------------------
---------------------------
---------------------------
After the Effective Date
Outstanding Revolving Loans:$_____________
Outstanding Line of Credit
Loans: $__________
B-3
Outstanding LC
Participations: $___________
Accepted this ______ day of ________, 19__
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent
By:_______________________________________
Name:___________________________________
Title:__________________________________
Consented to:
HEALTHSOUTH Corporation
By:____________________________________
Name:_______________________________
Title:______________________________
B-4
EXHIBIT C
Notice of Appointment (or Revocation) of Authorized
Representative
Reference is hereby made to the Third Amended and Restated Credit
Agreement dated as of April 18, 1996, as amended (the "Agreement"), among
HEALTHSOUTH Corporation, a Delaware corporation (the "Borrower"), the Lenders
(as defined in the Agreement), and NationsBank, National Association, as Agent
for the Lenders ("Agent"). Capitalized terms used but not defined herein shall
have the respective meanings therefor set forth in the Agreement.
The Borrower hereby nominates, constitutes and appoints each individual
named below as an Authorized Representative under the Loan Documents, and hereby
represents and warrants that (i) set forth opposite each such individual's name
is a true and correct statement of such individual's office (to which such
individual has been duly elected or appointed), a genuine specimen signature of
such individual and an address for the giving of notice, and (ii) each such
individual has been duly authorized by the Borrower to act as Authorized
Representative under the Loan Documents:
Name and Address Office Specimen Signature
- ----------------- ------------------- -------------------
- -----------------
- -----------------
- ----------------- ------------------- --------------------
- -----------------
- -----------------
- ----------------- ------------------- --------------------
- -----------------
- -----------------
Borrower hereby revokes (effective upon receipt hereof by the Agent) the prior
appointment of ________________ as an Authorized Representative.
This the ___ day of __________________, 19__.
HEALTHSOUTH Corporation
By:____________________________
Name:__________________________
Title:_________________________
C-1
EXHIBIT D
Form of Borrowing Notice
To: NationsBank, National Association,
as Agent
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704) 386-9923
Reference is hereby made to the Third Amended and Restated Credit
Agreement dated as of April 18, 1996, as amended (the "Agreement"), among
HEALTHSOUTH Corporation (the "Borrower"), the Lenders (as defined in the
Agreement), and NationsBank, National Association, as Agent for the Lenders
("Agent"). Capitalized terms used but not defined herein shall have the
respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives notice
to the Agent that Loans of the Type and amount set forth below be made on the
date indicated:
Class of Loan Type Loan Interest Aggregate
(check one) (check one) Period(1) Amount(2) Date of Loan(3)
- ----------- ----------- --------- --------- ---------------
Revolving Base Rate
Loan ___ ___
Line of Eurodollar
Credit Rate ___
Loan ___
- -----------------------
(1) For any Eurodollar Rate Loan, one, two, three or six months.
(2) Must be $5,000,000 or if greater an integral multiple of $1,000,000.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan;
The Borrower hereby requests that the proceeds of Loans described in
this Borrowing Notice be made available to the Borrower as follows: [insert
-------
transmittal instructions].
- ------------------------
The undersigned hereby certifies that:
1. No Default or Event of Default exists either now or after giving
effect to the borrowing described herein; and
D-1
2. All the representations and warranties set forth in Article VI of
the Agreement and in the other Loan Documents (other than those expressly stated
to refer to a particular date) are true and correct as of the date hereof except
that the reference to the financial statements in Section 6.6(a) of the
Agreement are to those financial statements most recently delivered to you
pursuant to Section 7.1 of the Agreement (it being understood that any financial
statements delivered pursuant to Section 7.1(b) have not been certified by
independent public accountants).
3. All conditions contained in the Agreement to the making of any
Loan requested hereby have been met or satisfied in full .
HEALTHSOUTH CORPORATION
BY: ________________________________________
Authorized Representative
DATE: ______________________________________
D-2
EXHIBIT E
Form of Competitive Bid Note
PROMISSORY NOTE
$_____________1 April 18, 1996
FOR VALUE RECEIVED, HEALTHSOUTH CORPORATION, a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of
____________________________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., One Independence Center, 101 North Tryon
Street, NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place
or places as the Agent may designate in writing) at the times set forth in the
Credit Agreement (as herein defined), 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 Bid 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 Third
Amended and Restated Credit Agreement dated as of April 18, 1996 (as modified
and supplemented from time to time, the "Credit Agreement") among the Borrower,
the Lenders named therein and NationsBank, N.A., 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 Revolving Credit Commitment.
2 Insert name of Lender in capital letters.
E-1
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 11.1 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.
WITNESS: HEALTHSOUTH CORPORATION
____________________________
By:________________________________
____________________________ Name:______________________________
Title:_____________________________
E-2
SCHEDULE OF COMPETITIVE BID LOANS
This Note evidences Competitive Bid 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
- ---- ---- ---- ---- ---- ------- ------ -------
E-3
EXHIBIT F
Form of Interest Rate Selection Notice
To: NationsBank, National Association
(Carolinas), as Agent
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704) 386-9923
Reference is hereby made to the Third Amended and Restated Credit
Agreement dated as of April 18, 1996, as amended (the "Agreement"), among
HEALTHSOUTH Corporation (the "Borrower"), the Lenders (as defined in the
Agreement), and NationsBank, National Association, as Agent for the Lenders
("Agent"). Capitalized terms used but not defined herein shall have the
respective meanings therefor set forth in the Agreement.
The Borrower through its Authorized Representative hereby gives notice
to the Agent of the following selection of a type of Loan [or Segment] and
Interest Period:
Type of Loan Interest Aggregate Date of
(check one) Period(1) Amount(2) Conversion (3)
- ----------- --------- --------- --------------
Revolving Loan
Base Rate Loan ___
Eurodollar Rate
Loan ___
Line of Credit
Loan
Base Rate Loan ___
Eurodollar Rate
Loan ___
- -----------------------
(1) For any Eurodollar Rate Loan one, two, three or six months.
(2) Must be $5,000,000 or if greater an integral multiple of $1,000,000.
(3) At least three (3) Business Days later if a Eurodollar Rate Loan.
HEALTHSOUTH Corporation
BY: ________________________________
Authorized Representative
DATE: ______________________________
F-1
EXHIBIT G
Form of Line of Credit Note
Promissory Note
(Line of Credit Loan)
$--------------
---------, --------------
April 18, 1996
FOR VALUE RECEIVED, HEALTHSOUTH Corporation, a Delaware corporation
having its principal place of business located in Birmingham, Alabama (the
"Borrower"), hereby promises to pay to the order of
_______________________________________________ (the "Lender"), in its
individual capacity, at the office of NATIONSBANK, NATIONAL ASSOCIATION, as
agent for the Lenders (the "Agent"), located at One Independence Center, 101
North Tryon Street, NC1-001-15-04, Charlotte, North Carolina 28255 (or at such
other place or places as the Agent may designate in writing) at the times set
forth in the Third Amended and Restated Credit Agreement dated as of April 18,
1996 among the Borrower, the financial institutions party thereto, as amended
(collectively, the "Lenders") and the Agent (the "Agreement" -- all capitalized
terms not otherwise defined herein shall have the respective meanings set forth
in the Agreement), in lawful money of the United States of America, in
immediately available funds, the principal amount of
________________________________________ DOLLARS ($__________) or, if
less than such principal amount, the aggregate unpaid principal amount of all
Line of Credit Loans made by the Lender to the Borrower pursuant to the
Agreement, and to pay interest from the date hereof on the unpaid principal
amount hereof, in like money, at said office, on the dates and at the rates
provided in Article II of the Agreement. All or any portion of the principal
amount of Line of Credit Loans may be prepaid as provided in the Agreement.
If any amount payable under this Note is not paid when due, the then
remaining principal amount and accrued but unpaid interest shall bear interest
which shall be payable on demand at the rates per annum set forth in the proviso
to Section 2.3(a) of the Agreement. Further, in the event of such acceleration,
this Line of Credit Note shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
waived by the Borrower.
In the event this Line of Credit 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,
G-1
including reasonable attorneys' fees, and interest due hereunder thereon at the
rates set forth above.
Interest hereunder shall be computed as provided in the Agreement.
This Line of Credit Note is one of the Line of Credit Notes referred to
in the Agreement and is issued pursuant to and entitled to the benefits of the
Agreement to which reference is hereby made for a more complete statement of the
terms and conditions upon which the Line of Credit Loans evidenced hereby were
or are made and are to be repaid. This Line of Credit Note is subject to certain
restrictions on transfer or assignment as provided in the Agreement.
All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the full extent permitted by law the benefits of all provisions of law for
stay or delay of execution or sale of property or other satisfaction of judgment
against any of them on account of liability hereon until judgment be obtained
and execution issues against any other of them and returned satisfied or until
it can be shown that the maker or any other party hereto had no property
available for the satisfaction of the debt evidenced by this instrument, or
until any other proceedings can be had against any of them, also their right, if
any, to require the holder hereof to hold as security for this Line of Credit
Note any collateral deposited by any of said Persons as security. Protest,
notice of protest, notice of dishonor, diligence, presentment or any other
formality are hereby waived by all parties bound hereon.
G-2
IN WITNESS WHEREOF, the Borrower has caused this Line of Credit Note to
be made, executed and delivered by its duly authorized representative as of the
date and year first above written, all pursuant to authority duly granted.
HEALTHSOUTH Corporation
WITNESS:
______________________ By: _________________________________
______________________
Name: _______________________________
Title: ______________________________
G-3
EXHIBIT H
Investments
H-1
EXHIBIT I
Form of Revolving Note
Promissory Note
(Revolving Loan)
$------------- ---------, --------------
April 18, 1996
FOR VALUE RECEIVED, HEALTHSOUTH Corporation, a Delaware corporation
having its principal place of business located in Birmingham, Alabama (the
"Borrower"), hereby promises to pay to the order of
_______________________________________________ (the "Lender"), in its
individual capacity, at the office of NATIONSBANK, NATIONAL ASSOCIATION, as
agent for the Lenders (the "Agent"), located at One Independence Center, 101
North Tryon Street, NC1-001-15-04, Charlotte, North Carolina 28255 (or at such
other place or places as the Agent may designate in writing) at the times set
forth in the Third Amended and Restated Credit Agreement dated as of April 18,
1996 among the Borrower, the financial institutions party thereto, as amended
(collectively, the "Lenders") and the Agent (the "Agreement" -- all capitalized
terms not otherwise defined herein shall have the respective meanings set forth
in the Agreement), in lawful money of the United States of America, in
immediately available funds, the principal amount of
________________________________________ DOLLARS ($__________) or, if
less than such principal amount, the aggregate unpaid principal amount of all
Revolving Loans made by the Lender to the Borrower pursuant to the Agreement,
and to pay interest from the date hereof on the unpaid principal amount hereof,
in like money, at said office, on the dates and at the rates provided in Article
II of the Agreement. All or any portion of the principal amount of Revolving
Loans may be prepaid as provided in the Agreement.
If any amount payable under this Note is not paid when due, the then
remaining principal amount and accrued but unpaid interest shall bear interest
which shall be payable on demand at the rates per annum set forth in the proviso
to Section 2.3(a) of the Agreement. Further, in the event of such acceleration,
this Revolving Note shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
waived by the Borrower.
In the event this Revolving Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees, and
interest due hereunder thereon at the rates set forth above.
I-1
Interest hereunder shall be computed as provided in the Agreement.
This Revolving Note is one of the Revolving Notes referred to in the
Agreement and is issued pursuant to and entitled to the benefits of the
Agreement to which reference is hereby made for a more complete statement of the
terms and conditions upon which the Revolving Loans evidenced hereby were or are
made and are to be repaid. This Revolving Note is subject to certain
restrictions on transfer or assignment as provided in the Agreement.
All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the full extent permitted by law the benefits of all provisions of law for
stay or delay of execution or sale of property or other satisfaction of judgment
against any of them on account of liability hereon until judgment be obtained
and execution issues against any other of them and returned satisfied or until
it can be shown that the maker or any other party hereto had no property
available for the satisfaction of the debt evidenced by this instrument, or
until any other proceedings can be had against any of them, also their right, if
any, to require the holder hereof to hold as security for this Revolving Note
any collateral deposited by any of said Persons as security. Protest, notice of
protest, notice of dishonor, diligence, presentment or any other formality are
hereby waived by all parties bound hereon.
I-2
IN WITNESS WHEREOF, the Borrower has caused this Revolving Note to be
made, executed and delivered by its duly authorized representative as of the
date and year first above written, all pursuant to authority duly granted.
HEALTHSOUTH Corporation
WITNESS:
______________________ By: ________________________________
______________________
Name: ______________________________
Title: ____________________________
_
I-3
EXHIBIT J
Form of Competitive Bid Quote Request
[Date]
To: NationsBank, N.A.
From: HEALTHSOUTH Corporation
Re: Competitive Bid Quote Request
Pursuant to Section 2.2 of the Third Amended and Restated Credit
Agreement dated as of April 18, 1996 (as modified and supplemented from time to
time, the "Credit Agreement") among HEALTHSOUTH Corporation, the lenders named
therein and NationsBank, N.A. 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:
- --------
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 integral multiple of
$1,000,000.
3 Insert either "Eurodollar Margin" (in the case of Eurodollar Market
Loans) or "Absolute Rate" (in the case of Absolute Rate Loans).
4 One, two three or six months, in the case of a Eurodollar 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.
J-1
EXHIBIT K
Form of Competitive Bid Quote
To: NationsBank, N.A., as Agent
Attention:
Re: Competitive Bid Quote to HEALTHSOUTH Corporation
(the "Borrower")
This Competitive Bid Quote is given in accordance with Section 2.2(c)
of the Third Amended and Restated Credit Agreement dated as of April 18, 1996
(as modified and supplemented from time to time, the "Credit Agreement") among
HEALTHSOUTH Corporation, the lenders named therein and NationsBank, N.A., 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
K-1
Date Date 1 Amount2 Type3 Period 4 Rate5
---- ---- - ------- ----- ------ - -----
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 2.2(e) of the Credit Agreement).
Very truly yours,
[NAME OF BANK]
By:________________________________
Authorized Officer
Dated: __________, ____
- --------
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 $5,000,000 or a
larger integral multiple of $1,000,000.
3 Indicate "Eurodollar Margin" (in the case of Eurodollar Market Loans)
or "Absolute Rate" (in the case of Absolute Rate Loans).
4 One, two, three or six months, in the case of a Eurodollar 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 Quote Request.
5 For a Eurodollar Market Loan, specify margin over or under the
Interbank Offered Rate adjusted for the Eurodollar Reserve Percentage 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%).
K-2
EXHIBIT L
Form of Opinion of Borrower's Counsel
See attached.
L-1
EXHIBIT M
Compliance Certificate
NationsBank, National Association,
as Agent
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Telefacsimile: (704) 386-9923
NationsBank, National Association,
as Agent
_____________________________________
Attention: __________________________
Telefacsimile: (___) ___-____
Reference is hereby made to the Third Amended and Restated Credit
Agreement dated as of April 18, 1996, as amended (the "Agreement"), among
HEALTHSOUTH Corporation (the "Borrower"), the Lenders (as defined in the
Agreement) and NationsBank, National Association, as Agent for the Lenders
("Agent"). Capitalized terms used but not otherwise defined herein shall have
the respective meanings therefor set forth in the Agreement. The undersigned, a
duly authorized and acting Authorized Representative, hereby certifies to you as
of __________ (the "Determination Date") as follows:
I. Calculations:
1. Consolidated Net Worth
A. Consolidated Net Worth at
Determination Date $___________
B. Consolidated Net Worth Required
a) At Closing Date $917,711,000
b) Consolidated Net Income for
successive fiscal quarters
x 50% ___________
c) Net proceeds of any sale of
Capital Stock ___________
d) Additions resulting from
"pooling of interests" ___________
e) (a) + (b) + (c) + (d) (Required) $___________
M-1
2. Consolidated EBITDA to Consolidated
Interest Expense
A. Consolidated Net Income ___________
B. Consolidated Interest Expense ___________
C. Consolidated Income Tax Expense ___________
D. Consolidated Amortization Expense ___________
E. Consolidated Depreciation Expense ___________
F. Minority Interest in Consolidated
Entities ___________
G. 2A + 2B + 2C + 2D + 2E + 2F ___________
H. Ratio of 2G to 2B ____ to 1.00
Required: Not less than 2.50 to 1.00
3. Consolidated Indebtedness to Consolidated
Total Capital
A. Consolidated Indebtedness ___________
B. Consolidated Total Capital ___________
C. Ratio of 3A to 3B ____ to 1.00
Required: Not to exceed .65 to 1.00
II. No Default
A. Since __________ (the date of the last similar
certification), (a) the Borrower has not defaulted in the
keeping, observance, performance or fulfillment of its
obligations pursuant to any of the Loan Documents; and (b) no
Default or Event of Default has occurred and is continuing.
B. If a Default or Event of Default has occurred
since __________ (the date of the last similar certification),
the Borrower proposes to take the following action with
respect to such Default or Event of Default:__________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
(Note, if no Default or Event of Default has
occurred, insert "Not Applicable").
The Determination Date is the date of the last required financial
statements submitted to the Lenders in accordance with Section 9.1 of the
Agreement.
M-2
IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
__________, 19___.
By:________________________________
Authorized Representative
Name:______________________________
Title:_____________________________
M-3
EXHIBIT N
Executive Officers
N-1
Schedule 6.4
Subsidiaries
S-1
Schedule 6.19
Employment Matters
S-1
Schedule 8.3
Existing Subsidiary Indebtedness
S-2