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CREDIT AGREEMENT
by and among
HEALTHSOUTH CORPORATION,
as Borrower,
NATIONSBANK, NATIONAL ASSOCIATION,
as Administrative Agent and Arranger
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
DEUTSCHE BANK AG and
SCOTIABANC, INC.,
as Syndication Agents and Co-Arrangers
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
June 23, 1998
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Terms
1.1. Definitions..........................................................2
1.2. Rules of Interpretation.............................................26
1.3. Classes and Types of Loans..........................................27
ARTICLE II
The Loans
2.1. Revolving Loans......................................................28
2.2. Competitive Bid Loans................................................30
2.3. Payment of Interest..................................................34
2.4. Payment of Principal.................................................34
2.5. Non-Conforming Payments..............................................35
2.6. Notes................................................................35
2.7. Pro Rata Payments....................................................36
2.8. Reductions...........................................................36
2.9. Conversions and Elections of Subsequent Interest Periods.............37
2.10. Unused Fees..........................................................37
2.11. Deficiency Advances..................................................37
2.12. Use of Proceeds......................................................38
2.13. Increase and Decrease in Amounts.....................................38
ARTICLE III
Letters of Credit
3.1. Letters of Credit....................................................39
3.2. Reimbursement........................................................39
3.3. Letter of Credit Facility Fees.......................................42
3.4. Administrative Fees..................................................43
ARTICLE IV
Change in Circumstances
4.1. Increased Cost and Reduced Return. ..................................44
4.2. Limitation on Types of Loans.........................................45
4.3. Illegality...........................................................45
4.4. Treatment of Affected Loans..........................................46
4.5. Compensation.........................................................46
4.6. Taxes................................................................47
ARTICLE V
Conditions to Making Loans and Issuing Letters of Credit
5.1. Conditions of Initial Advance........................................49
5.2. Conditions of Loans and Letters of Credit............................50
ARTICLE VI
Representations and Warranties
6.1. Organization and Authority...........................................52
6.2. Loan Documents.......................................................52
6.3. Solvency.............................................................53
6.4. Subsidiaries.........................................................53
6.5. Ownership Interests..................................................53
6.6. Financial Condition..................................................53
6.7. Title to Properties..................................................54
6.8. Taxes................................................................54
6.9. Other Agreements.....................................................54
6.10. Litigation...........................................................55
6.11. Margin Stock.........................................................55
6.12. Investment Company...................................................55
6.13. Patents, Etc.........................................................55
6.14. No Untrue Statement..................................................55
6.15. No Consents, Etc.....................................................56
6.16. ERISA Requirement....................................................56
6.17. No Default...........................................................56
6.18. Hazardous Materials..................................................56
6.19. Employment Matters...................................................56
6.20. RICO.................................................................57
6.21. Reimbursement from Third Party Payors................................57
6.22. Year 2000 Compliance.................................................57
ARTICLE VII
Affirmative Covenants
7.1. Financial Statements, Reports, Etc...................................58
7.2. Maintain Properties..................................................59
ii
7.3. Existence, Qualification, Etc........................................59
7.4. Regulations and Taxes................................................60
7.5. Insurance............................................................60
7.6. True Books...........................................................60
7.7. Right of Inspection..................................................60
7.8. Observe all Laws.....................................................60
7.9. Governmental Licenses................................................60
7.10. Covenants Extending to Other Persons.................................61
7.11. Officer's Knowledge of Default.......................................61
7.12. Suits or Other Proceedings...........................................61
7.13. Notice of Discharge of Hazardous Material or Environmental Complaint.61
7.14. Environmental Compliance.............................................61
7.15. Continuation of Current Business.....................................62
7.16. Management Contracts.................................................62
7.17. Year 2000 Compliance.................................................62
ARTICLE VIII
Negative Covenants
8.1. Financial Covenants..................................................63
8.2. Investments and Loans................................................63
8.3. Indebtedness.........................................................63
8.4. Disposition of Assets................................................64
8.5. Consolidation or Merger..............................................64
8.6. Liens................................................................64
8.7. Dividends and Distributions..........................................64
8.8. Acquisitions.........................................................64
8.9. Restricted Payments..................................................64
8.10. Compliance with ERISA................................................64
8.11. Fiscal Year..........................................................65
8.12. Dissolution, etc.....................................................65
8.13. [Reserved]...........................................................65
8.14. Transactions with Affiliates.........................................65
ARTICLE IX
Events of Default and Acceleration
9.1. Events of Default....................................................67
9.2. Agent to Act.........................................................69
9.3. Cumulative Rights....................................................69
9.4. No Waiver............................................................70
9.5. Allocation of Proceeds...............................................70
iii
ARTICLE X
The Agent
10.1. Appointment, Powers, and Immunities..................................71
10.2. Reliance by Agent....................................................71
10.3. Defaults.............................................................71
10.4. Rights as Lender.....................................................72
10.5. Indemnification......................................................72
10.6. Non-Reliance on Agent and Other Lenders..............................72
10.7. Resignation of Agent.................................................73
10.8. Fees.................................................................73
ARTICLE XI
Miscellaneous
11.1. Assignments and Participations.......................................74
11.2. Notices..............................................................75
11.3. No Waiver............................................................76
11.4. Rights of Setoff; Adjustments........................................76
11.5. Survival.............................................................77
11.6. Expenses.............................................................77
11.7. Amendments and Waivers...............................................78
11.8. Counterparts.........................................................78
11.9. Waivers by Borrower..................................................78
11.10. Termination..........................................................79
11.11. Governing Law........................................................79
11.12. Indemnification......................................................79
11.13. Agreement Controls...................................................80
11.14. Integration..........................................................80
11.15. Successors and Assigns...............................................80
11.16. Severability.........................................................80
11.17. Usury Savings Clause.................................................80
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 Interest Rate Selection Notice.............................E-1
EXHIBIT F Form of Note.......................................................F-1
EXHIBIT G Investments........................................................G-1
EXHIBIT H Form of Opinion of Borrower's Counsel..............................H-1
EXHIBIT I Compliance Certificate.............................................I-1
EXHIBIT J Executive Officers.................................................J-1
iv
EXHIBIT K Form of Competitive Bid Quote Request..............................K-1
EXHIBIT L Form of Competitive Bid Quote......................................L-1
EXHIBIT M Form of Competitive Bid Note.......................................M-1
Schedule 1.1 Existing Letters of Credit
Schedule 6.4 Subsidiaries
Schedule 6.13 Patent Issue
Schedule 6.19 Employment Matters
Schedule 8.3 Existing Subsidiary Indebtedness
v
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of June 23, 1998 (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:
The Borrower has heretofore entered into a Third Amended and Restated
Credit Agreement dated April 18, 1996 (the "Prior Agreement") pursuant to which
the lenders party thereto have made loans to the Borrower (the "Prior Loans")
and issued letters of credit for the benefit of the Borrower. The Borrower has
requested that the Lenders make a revolving credit facility of up to
$1,750,000,000, including a $75,000,000 sublimit for the issuance of standby
letters of credit, to the Borrower, the proceeds of which shall be used as set
forth in Section 2.12 and the Lenders have agreed to make such revolving credit
facility available to the Borrower on the following terms and conditions:
ARTICLE I
Definitions and Terms
1.1. Definitions. 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
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 management and policies of a Person,
whether through ownership of voting stock, by contract or otherwise.
"Applicable Commitment Percentage" means, with respect to each Lender,
that portion of the Total Revolving Credit Commitment allocable to such
Lender (a) with respect to Lenders as of the Closing Date, as set forth on
Exhibit A, and (b) with respect to any Person who becomes a Lender
thereafter, as reflected in each Assignment and
2
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 Lending Office" means, for each Lender and for each Type
of Loan, the "Lending Office" of such Lender (or an affiliate of such
Lender) designated for such Type of Loan on the signature pages hereof or
such other office of such Lender (or an affiliate of such Lender) as such
Lender may from time to time specify to the Agent and the Borrower by
written notice in accordance with the terms hereof as the office by which
its Loans of such Type are to be made and maintained.
"Applicable Margin" means that number of basis points per annum set
forth below determined based upon the more favorable to the Borrower of
either (i) the highest Rating of outstanding senior unsecured Indebtedness
of the Borrower from time to time as specified in Table I below (provided
that in the event of a Rating split between Tiers, then the Tier next above
the Tier corresponding to the lower Rating shall apply) or (ii) the ratio
of Consolidated Indebtedness at the date of determination to Consolidated
EBITDA for the Four-Quarter Period most recently ended as specified in
Table II below:
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TABLE I
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Tier Rating Applicable Margin
S&P or ▇▇▇▇▇'▇
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I A- A3 25 b.p.
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II BBB+ Baa1 30
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III BBB Baa2 35
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IV BBB- Baa3 45
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V BB+ Ba1 65
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VI BB Ba2 100
or lower or lower
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TABLE II
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Tier Ratio of Consolidated Indebtedness to Applicable Margin
Consolidated EBITDA
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I Less than 1.50 to 1.00 30 b.p.
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II Equal to or greater than 1.50 to 1.00 35
but less than 2.00 to 1.00
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3
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III Equal to or greater than 2.00 to 1.00 45
but less than 2.50 to 1.00
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IV Equal to or greater than 2.50 to 1.00 65
but less than 3.00 to 1.00
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V Equal to or greater than 3.00 to 1.00 100
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; provided, however, that any time during which the sum of Revolving Credit
Outstandings, outstanding Competitive Bid Loans and Letter of Credit
Outstandings exceed $875,000,000, five (5) basis points shall automatically
be added to the Applicable Margin set forth in Tables I and II above.
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 35 basis
points (subject to the proviso in the first sentence of this definition).
"Applicable Unused Fee" means that number of basis points per annum
set forth below determined based upon the more favorable to the Borrower of
either (i) the highest Rating of outstanding senior unsecured Indebtedness
of the Borrower from time to time as specified in Table III below (provided
that in the event of a Rating split between Tiers, then the Tier next above
the Tier corresponding to the lower Rating shall apply) or (ii) the ratio
of Consolidated Indebtedness at the date of determination to Consolidated
EBITDA for the Four-Quarter Period most recently ended as specified in
Table IV below:
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TABLE III
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Tier Rating Applicable Unused
S&P or ▇▇▇▇▇'▇ Fee
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I A- A3 9.0 b.p.
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II BBB+ Baa1 10.0
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III BBB Baa2 12.5
4
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IV BBB- Baa3 15.0
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V BB+ Ba1 20.0
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VI BB Ba2 25.0
or lower or lower
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TABLE IV
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Tier Ratio of Consolidated Indebtedness to Applicable Unused
Consolidated EBITDA Fee
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I Less than 1.50 to 1.00 10.0 b.p.
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II Equal to or greater than 1.50 to 1.00 12.5
but less than 2.00 to 1.00
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III Equal to or greater than 2.00 to 1.00 15.0
but less than 2.50 to 1.00
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IV Equal to or greater than 2.50 to 1.00 20.0
but less than 3.00 to 1.00
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V Equal to or greater than 3.00 to 1.00 25.0
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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 12.5 basis points.
"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
5
connection with an assignment of a Lender's interest under this Agreement
pursuant to Section 11.1.
"Authorized Representative" means any of the Executive Officers of the
Borrower or, with respect to financial matters, the Treasurer or the Chief
Financial Officer of the Borrower, or any other Person expressly designated
by the Board of Directors of the Borrower (or the appropriate committee
thereof) as an Authorized Representative of the Borrower, as set forth from
time to time in a certificate in the form of Exhibit C.
"Base Rate" means, for any day, the rate per annum equal to the higher
of (i) the Prime Rate for such day or (ii) the Federal Funds Rate for such
day plus one-half of one percent (1/2%). Any change in the Base Rate due to
a change in the Prime Rate or the Federal Funds Rate shall be effective on
the effective date of such change in the Prime Rate or Federal Funds Rate.
"Base Rate Loan" means a Loan for which the rate of interest is
determined by reference to the Base Rate.
"Base Rate Refunding Loan" means an Advance under the Revolving Credit
Facility which bears interest at a Base Rate made to satisfy Reimbursement
Obligations arising from a drawing under a Letter of Credit.
"Board" means the Board of Governors of the Federal Reserve System (or
any successor body).
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving Credit
Facility, in the form of Exhibit D.
"Business Day" means, (i) except in the case of a Eurodollar Rate
Loan, any day which is not a Saturday, Sunday or a day on which banks in
the 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
6
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 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.
"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.
"Competitive Bid Notes" shall mean the promissory notes provided for
by Section 2.6(c) substantially in the form of Exhibit M and all promissory
notes delivered in
7
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 the income of Consolidated Entities for such period, 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.
"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
8
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 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
9
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 Entities as determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis.
"Consolidated Total Capital" means, as of any date on which the amount
thereof is to be determined, the sum of Consolidated Indebtedness plus
Consolidated Stockholders' Equity of the Borrower and its Consolidated
Entities.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 2.9 hereof of a Eurodollar Rate Loan of
one Type as a Eurodollar Rate Loan of the same Type from one Interest
Period to the next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.9 or Article IV of one Type of Loan into another Type
of Loan.
"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
10
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.
"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 Fixed Rate Loan, until
the end of the Interest Period applicable thereto, a rate of two percent
(2%) plus the Fixed Rate applicable to such Loan, 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, 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.
"Eligible Assignee" means (i) a Lender, (ii) an affiliate of a Lender,
and (iii) any other Person approved by the Agent and, unless an Event of
Default has occurred and is continuing at the time any assignment is
effected in accordance with Section 11.1, the
11
Borrower, such approval not to be unreasonably withheld or delayed by the
Borrower or the Agent and such approval to be deemed given by the Borrower
if no objection is received by the assigning Lender and the Agent from the
Borrower within two Business Days after written notice of such proposed
assignment has been provided by the assigning Lender to the Borrower;
provided, however, that neither the Borrower nor an affiliate of the
Borrower shall qualify as an Eligible Assignee.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (i) is maintained for employees of
the Borrower or any of its ERISA Affiliates or is assumed by the Borrower
or any of its ERISA Affiliates in connection with any Acquisition or (ii)
has at any time been maintained for the employees of the Borrower or any
current or former ERISA Affiliate.
"Environmental Laws" means any federal, state or local statute, law,
ordinance, code, rule, regulation, order, decree, permit or license
regulating, relating to, or imposing liability or standards of conduct
concerning any environmental matters or conditions, environmental
protection or conservation, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended;
the Superfund Amendments and Reauthorization Act of 1986, the Resource
Conservation and Recovery Act, as amended; the Toxic Substances Control
Act, as amended; the Clean Air Act, as amended; the Clean Water Act, as
amended; together with all regulations promulgated thereunder, and any
other "Superfund" or "Superlien" law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute and all rules and
regulations promulgated thereunder.
"ERISA Affiliate", as applied to the Borrower, means any Person or
trade or business which is a member of a group which is under common
control with the Borrower, who together with the Borrower, is treated as a
single employer within the meaning of Section 414(b) and (c) of the Code.
"Eurodollar 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 the Interbank Offered Rate
pursuant to a Eurodollar Auction.
"Eurodollar Market Rate" means the interest rate per annum calculated
according to the following formula:
12
Eurodollar = Interbank Offered Rate + Eurodollar
--------------------------- -
Market Rate 1- Reserve Requirement Margin
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
---------------------------
Rate 1- Reserve Requirement Margin
"Eurodollar Rate Loan" means a Loan for which the rate of interest is
determined by reference to the Eurodollar Rate.
"Event of Default" means any of the occurrences set forth as such in
Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the regulations promulgated thereunder.
"Executive Officer" means any Person who from time to time holds the
offices with Borrower listed on Exhibit J.
"Existing Letters of Credit" means those Letters of Credit described
on Schedule 1.1 previously issued by the Issuing Bank under the Prior
Agreement.
"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
Controlled Partnership.
"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.
13
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the
next succeeding Business Day, and (b) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate charged to the Agent (in its individual capacity)
on such day on such transaction as determined by the Agent.
"Fiscal Year" means, with respect to the Borrower, the twelve month
fiscal period of the Borrower commencing on January 1 of each calendar year
and ending on December 31 of each calendar year.
"Fixed Rate" shall mean the Absolute Rate or the Eurodollar Market
Rate or the Eurodollar Rate, 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.
"Four-Quarter Period" means a period of four full consecutive fiscal
quarters of the Borrower and its Subsidiaries, taken together as one
accounting period.
"GAAP" or "Generally Accepted Accounting Principles" means generally
accepted accounting principles, being those principles of accounting set
forth in pronouncements of the Financial Accounting Standards Board or the
American Institute 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, 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.
14
"Hazardous Material" means and includes any pollutant, contaminant, or
hazardous, toxic or dangerous waste, substance or material (including
without limitation petroleum products, asbestos-containing materials, and
lead), the generation, handling, storage, disposal, treatment or emission
of which is subject to any Environmental Law.
"HCFA" means the United States Health Care Financing Administration
and any successor thereto.
"Headquarters Lease" means the 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, supplemented or restated in its entirety from time to time.
"Headquarters Obligations" means all of the Holder Advances and Loans,
as each such term is defined in the 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 or of a limited liability company of
which such Person is a member. The amount of Indebtedness of any Person at
any date shall be the outstanding balance at such date of all unconditional
obligations as described above, the maximum liability of such Person for
any such contingent obligations at such date and, in the case of clause
(vii), the amount of the Indebtedness secured.
"Interbank Offered Rate" means, for any Eurodollar Rate Loan or
Eurodollar Market Loan for the Interest Period applicable thereto, the rate
per annum (rounded upwards, if necessary, to the nearest one-one hundredth
(1/100) of one percent) appearing on Dow ▇▇▇▇▇ Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two
15
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Interbank Offered Rate" shall mean, for any Eurodollar
Rate Loan or Eurodollar Market Loan for the Interest Period applicable
thereto, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period for
a term comparable to such Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if
necessary, to the nearest 1/100 of 1%).
"Interest Period" 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 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, such
Interest Period shall end on the Revolving Credit Termination Date; (iii)
each Interest Period that would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day (or, in the case
of an Interest Period for a 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
16
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 the Conversion
of any Eurodollar Rate Loan into a Base Rate Loan or the Conversion of any
Base Rate Loan into a Eurodollar Rate Loan, in the form of Exhibit E.
"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.
"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, including the Existing Letters of Credit.
"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.
17
"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 (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
18
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 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 ▇▇▇▇▇'▇ 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.
"1997 10-K" means the Borrower's Annual Report on Form 10-K for the
Fiscal Year Ended December 31, 1997;
"Notes" means, collectively, 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, (iii) all liabilities of the Borrower to
any Lender which arise under a Swap Agreement, and (iv)
19
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 Trustee, the Holders identified therein, the Lenders identified therein,
and NationsBank, National Association, as Agent, as such Participation
Agreement may be amended, modified, supplemented or restated in its
entirety from time to time.
"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) mechanic's, materialmen's, contractor's, landlord's or other
similar liens arising in the ordinary course of business, securing
obligations that are not delinquent or that are being contested in
good faith by appropriate proceedings duly pursued;
(3) restrictions, exceptions, reservations, easements,
conditions, limitations and other matters of record that do not
materially adversely affect the value or utility of the affected
property;
(4) Liens on assets securing Indebtedness the proceeds of which
are used to acquire such assets;
20
(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.
(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 which is a Lender or an affiliate of a Lender,
or a bank having its principal place of business in the United States
of America and having equity capital of not less than $250,000,000;
(4) a certificate of deposit issued by, or other interest-bearing
deposits with, any other bank organized under the laws of the United
States of America or any state thereof, provided that such deposit is
either (i) insured by the Federal Deposit Insurance Corporation or
(ii) properly secured by such bank by pledging direct obligations of
the United States of America having a market value not less than the
face amount of such deposits;
(5) the capital stock of and partnership interests in, and loans
made by the Borrower to, Controlled Partnerships and Subsidiaries;
(6) prime commercial paper maturing within 270 days of the
acquisition thereof and, at the time of acquisition, having a rating
of A-1 or higher by S&P, or P-1 or higher by Moody's;
(7) eligible banker's acceptances, repurchase agreements and
tax-exempt municipal bonds having a maturity of less than one year, in
each case having a rating, or that is the full recourse obligation of
a person whose senior debt is rated, A or higher by S&P or A2 or
higher by Moody's;
(8) loans made by the Borrower or a Consolidated Entity in an
aggregate amount of $2,000,000 or less to employees of the Borrower or
of a Consolidated Entity;
21
(9) loans made by the Borrower or a Controlled Partnership in an
aggregate amount of $1,000,000 or less to limited partners (or
potential limited partners) of Controlled Partnerships for the purpose
of enabling such limited partners to acquire limited partnership
interests in Controlled Partnerships, to operate their practices or to
restructure partnership interests;
(10) loans in an aggregate amount of up to $20,000,000 made by
the Borrower to the HEALTHSOUTH Employee Stock Benefit Plan;
(11) scholarship loans made by the Borrower in an aggregate
amount not exceeding $1,000,000 to individuals who meet certain
eligibility requirements as established by the Borrower from time to
time;
(12) up to 100% of the outstanding shares of stock of Caretenders
Healthcorp (formerly known as Senior Services, Inc.) provided that
aggregate costs incurred to purchase such shares shall not exceed
$12,000,000;
(13) other investments of less than $5,000,000 in the aggregate
expressly approved in writing by the 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, 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 G.
"Person" means an individual, partnership, corporation, limited
liability company, trust, unincorporated organization, association, joint
venture or a government or agency or political subdivision thereof.
"Prime Rate" means the per annum rate of interest established from
time to time by NationsBank as its prime rate, which rate may not be the
lowest rate of interest charged by NationsBank to its Customers.
"Principal Office" means the office of the Agent at NationsBank,
National Association, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇-▇▇-▇▇,
Charlotte, North Carolina
22
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 the Borrower or such Consolidated Entity from the
fluctuations of interest rates, exchange rates or forward rates applicable
to such party's assets, liabilities or exchange transactions, including,
but not limited to, Dollar- denominated or cross-currency interest rate
exchange agreements, forward currency exchange agreements, interest rate
cap or collar protection agreements, forward rate currency or interest rate
options, puts, warrants and those commonly known as interest rate "swap"
agreements; and (ii) any and all cancellations, buybacks, reversals,
terminations or assignments of any of the foregoing.
"Rating" means the rating of senior unsecured Indebtedness of the
Borrower in effect at any time which rating is made by either of Moody's or
S&P.
"Regulation D" means Regulation D of the Board as the same may be
amended or supplemented from time to time.
"Reimbursement Obligation" 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 Revolving Credit Commitment plus the amount of such Lender's
Applicable Commitment Percentage of Letter of Credit Outstandings; provided
that, if any Lender shall have failed to pay to the Issuing Bank its
Applicable Commitment Percentage of any drawing under any Letter of Credit
resulting in an outstanding Reimbursement Obligation, such Lender's Credit
Exposure attributable to Letters of Credit and Reimbursement Obligations
shall be deemed to be held by the Issuing Bank for purposes of this
definition.
"Reserve Requirement" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board by member banks of the
Federal Reserve System (or any successor) by member banks of the
23
Federal Reserve System against "Eurocurrency liabilities" (as such term is
used in Regulation D). Without limiting the effect of the foregoing, the
Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to (i) any category of
liabilities which includes deposits by reference to which the Eurodollar
Rate is to be determined, or (ii) any category of extensions of credit or
other assets which include Eurodollar Rate Loans. The Eurodollar Rate shall
be adjusted automatically on and as of the effective date of any change in
the Reserve Requirement.
"Restricted Payment" means (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of
Borrower or any of its Consolidated Entities (other than those payable or
distributable solely to the Borrower) now or hereafter outstanding, except
a dividend payable solely in shares of a class of stock to the holders of
that class; (b) any redemption, conversion, exchange, retirement or similar
payment, purchase or other acquisition for value, direct or indirect, of
any shares of any class of stock of the Borrower or any of its Consolidated
Entities (other than those payable or distributable solely to the Borrower)
now or hereafter outstanding; (c) any payment made to retire, or to obtain
the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of stock of the Borrower or any of its
Consolidated Entities now or hereafter outstanding; 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 Syndicated Loans to the Borrower up to an
aggregate principal amount at any one time outstanding equal to such
Lender's Applicable Commitment Percentage of the Total Revolving Credit
Commitment.
"Revolving Credit Facility" means the facility described in Article II
providing for Loans to the Borrower by the Lenders in the aggregate
principal amount of the Total Revolving Credit Commitment.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Syndicated Loans then
outstanding.
"Revolving Credit Termination Date" means (i) the Stated Termination
Date or (ii) such earlier date of termination of Lenders' Obligations as
may be determined 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 all Letter of
Credit Outstandings and cancellation of all Letters of Credit, together
with all accrued and unpaid interest and fees thereon.
"Revolving Notes" means, collectively, the promissory notes of the
Borrower evidencing Syndicated Loans executed and delivered to the Lenders
as provided in Section
24
2.5, substantially in the form of Exhibit F, with appropriate insertions as
to amounts, dates and names of Lenders.
"S&P" means Standard & Poor's Rating Group, a division of The McGraw
Hill Companies.
"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 June 22, 2003.
"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 any borrowing pursuant to an Advance
provided for by Section 2.1, which may be Base Rate Loans or Eurodollar
Rate Loans.
25
"Termination Event" means: (i) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder (unless the
notice requirement has been waived by applicable regulation); or (ii) the
withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan
during a plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA or was deemed such under Section 4062(e) of
ERISA; or (iii) the termination of a Pension Plan, the filing of a notice
of intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA; or (iv) the
institution of proceedings to terminate a Pension Plan by the PBGC; or (v)
any other event or condition which would constitute grounds under Section
4042(a) of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; or (vi) the partial or complete withdrawal of
the Borrower or any ERISA Affiliate from a Multiemployer Plan; or (vii) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302 of
ERISA; or (viii) any event or condition which results in the reorganization
or insolvency of a Multiemployer Plan under Section 4241 or Section 4245 of
ERISA, respectively; or (ix) any event or condition which results in the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by the PBGC of proceedings to terminate a Multiemployer Plan
under Section 4042 of ERISA.
"Total Letter of Credit Commitment" means an amount not to exceed
$75,000,000.
"Total Revolving Credit Commitment" means a principal amount equal to
$1,750,000,000, as reduced from time to time in accordance with Section
2.1(a) and Section 2.8.
"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 Syndicated 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 ▇▇▇▇▇▇▇▇▇▇ Rehabilitation Hospital,
L.P., the partners of which are the Borrower, Vanderbilt University and
Vanderbilt Health Services.
"Voting Stock" means shares of Capital Stock issued by a corporation,
or equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening of
such a contingency.
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.
26
(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.
(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, each of which constitutes a Class.
The "Type" of a Loan refers to whether
27
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.
28
ARTICLE II
The Loans
2.1. Syndicated Loans.
(a) Commitment. Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make Advances to the Borrower under the
Revolving Credit Facility from time to time from the Closing Date until the
Revolving Credit Termination Date 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
principal amount of Revolving Credit Outstandings plus Letters 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 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 Loan that is a
Eurodollar Rate Loan may, subject to the provisions of Section 2.4, be repaid
only on the last day of the Interest Period with respect thereto unless such
payment is accompanied by the additional payment, if any, required by Section
4.5.
(b) Amounts. The aggregate unpaid principal amount of the Revolving
Credit Outstandings plus Letter of Credit Outstandings plus outstanding
Competitive Bid Loans shall not exceed the Total Revolving Credit Commitment
and, in the event there shall be outstanding any such excess, the Borrower shall
immediately make such payments and prepayments as shall be necessary to comply
with this restriction. Each 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.
(c) Advances. (i) 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(c)(iv)) that is a Base Rate Loan (whether representing an additional
borrowing hereunder or the Conversion of borrowing hereunder from Eurodollar
Rate Loans to Base Rate
29
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, 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.
(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(c) or 2.9, the Borrower shall be deemed to have elected to Convert
such Loan to (or Continue such Loan as) a Base Rate Loan until the Borrower
notifies the 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 Syndicated 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 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
30
the Issuing Bank in respect thereof, then notice of such drawing or payment
shall be provided promptly by the 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(c)(iv), either make a Base Rate
Refunding Loan or fund the purchase of its Participation in the amount of such
Lender's Applicable Commitment Percentage of such drawing or payment and shall
pay such amount to the 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(c)(iv),
either make a Base Rate Refunding Loan or fund the purchase of its Participation
in the amount of such Lender's Applicable Commitment Percentage of such drawing
or payment and shall pay such amount to the 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 periods even if they
are coterminous);
(iii) the aggregate amount of outstanding Competitive Bid Loans
of a Lender shall not exceed at any time an amount equal to such
Lender's Revolving Credit Commitment;
(iv) the aggregate principal amount of all Competitive Bid Loans,
together with the sum of (1) Revolving Credit Outstandings and (2)
Letter of
31
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 K 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 Absolute
Rate Loans, the date on which the Competitive Bid Quotes are to be
submitted if it is before the proposed date of Borrowing (the date on
which such Competitive Bid Quotes are to be submitted is called the
"Quotation Date").
Except as otherwise provided in this Section 2.2(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.
32
(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 Action. 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 L 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;
(C) in the case of a Eurodollar Auction, the margin above or
below the applicable Interbank Offered Rate adjusted for any
Reserve Requirement (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.
33
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 such 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 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 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;
34
(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 of a Lender or Lenders offering the lowest rate
exceeding such Lender's Revolving Credit Commitment and (y) an
increase in the Applicable Unused Fee payable by the Borrower under
Section 2.10.
(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 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 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.
35
(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 September
30, 1998, 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 Revolving Credit Termination
Date. Interest payable at the Default Rate shall be payable on demand.
2.4. Payment of Principal. The principal amount of each Syndicated 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 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 4.5. 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, as the
case may be, or such other amount as necessary to comply with Section 2.1(b) 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, without setoff, deduction or counterclaim 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 the
definition of "Interest Period"; provided that interest shall continue to accrue
during the period of any such extension and
36
provided further, that in no event shall any such due date be extended beyond
the Stated Termination Date.
2.6. Notes. (a) Syndicated 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 Total 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.
(b) 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 (i) the aggregate amount of the
Revolving Credit Commitment of such Lender and (ii) 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 face 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 2.10 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. 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
in an integral multiple of $1,000,000, or the entire remaining Total Revolving
Credit Commitment, and shall permanently reduce the Total Revolving Credit
Commitment. Each reduction of the Total Revolving Credit Commitment shall be
accompanied by payment of Syndicated Loans and Competitive Bid Loans to the
extent that the principal amount of Revolving Credit Outstandings plus Letter of
Credit
37
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. 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 4.5.
2.9. Conversions and Elections of Subsequent Interest Periods. Subject to
the limitations set forth below and in Article IV, the Borrower may:
(a) upon delivery, effective upon receipt, of a properly completed
Interest Rate Selection Notice to the Agent on or before 10:30 A.M. on any
Business Day, Convert all or a part of Eurodollar Rate Loans to Base Rate Loans
on the last day of the Interest Period for such Eurodollar Rate Loans; and
(b) provided that no Default or Event of Default shall have occurred
and be continuing upon delivery, effective upon receipt, of a properly completed
Interest Rate Selection Notice to the 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 to begin on the last day of the then current
Interest Period for such Eurodollar Rate Loans; and
(ii) Convert Base Rate Loans to Eurodollar Rate Loans on any
Business Day.
Each election and Conversion pursuant to this Section 2.9 shall be subject
to the limitations on Eurodollar Rate Loans set forth in the definition of
"Interest Period" herein and in Sections 2.1 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 P.M. on the day such notice of election or Conversion
is received. All such Continuations or Conversions of Loans shall be effected
pro rata based on the Applicable Commitment Percentages of the Lenders.
2.10. Unused Fees.
(a) For the period beginning on the Closing Date and ending on the
Revolving Credit Termination Date, the Borrower agrees to pay to the 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 September 30, 1998 to and on the Revolving Credit
Termination Date.
(b) Notwithstanding the foregoing, so long as any Lender fails to make
available any portion of its Revolving Credit Commitment when requested, such
Lender shall not be entitled to receive payment of its pro rata share of such
fees until such Lender shall make available such
38
portion. All fees payable pursuant to this Section 2.10 shall be calculated on
an Actual/360 Basis.
2.11. Deficiency Advances. No Lender shall be responsible for any default
of any other Lender in respect of such other Lender's obligation to make any
Loan or fund its purchase of any Participation hereunder nor shall the Revolving
Credit Commitment of any Lender hereunder be increased as a result of such
default of any other Lender. Without limiting the generality of the foregoing,
in the event any Lender shall fail to advance funds to the Borrower under the
Revolving Credit Facility as herein provided, the Agent may in its discretion,
but shall not be obligated to, advance under the Note in its favor as a Lender
all or any portion of such amount or amounts (each, a "deficiency advance") and
shall thereafter be entitled to payments of principal of and interest on such
deficiency advance in the same manner and at the same interest rate or rates to
which such other Lender would have been entitled had it made such advance under
its Note; 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.
2.12. Use of Proceeds. The proceeds of the Loans made pursuant to this
Agreement shall be used by the Borrower to repay existing indebtedness and for
general corporate purposes, including working capital needs, capital
expenditures and permitted Acquisitions.
2.13. Increase and Decrease in Amounts. The amount of the Total Revolving
Credit Commitment which shall be available to the Borrower as Advances shall be
reduced by the aggregate amount of Letter of Credit Outstandings.
39
ARTICLE III
Letters of Credit
3.1. Letters of Credit. The Issuing Bank agrees, subject to the terms and
conditions of this Agreement, upon request of the Borrower to issue from time to
time for the account of the Borrower Letters of Credit upon delivery to the
Issuing Bank of an Application and Agreement for Letter of Credit relating
thereto in form and content acceptable to the Issuing Bank; provided, that (i)
the Letter of Credit Outstandings shall not exceed the Total Letter of Credit
Commitment, (ii) no Letter of Credit shall be issued 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(c)) sufficient funds to pay all debts and
liabilities arising in respect of any Letter of Credit. The Issuing Bank agrees
to give the Borrower prompt notice of any request for a draw under a Letter of
Credit. The Issuing Bank may charge any account the Borrower may have with it
for any and all amounts the Issuing Bank pays under a Letter of Credit, plus
charges and reasonable expenses as from time to time agreed to by the Issuing
Bank and the Borrower; provided that to the extent permitted by Section
2.1(c)(iv), amounts shall be paid pursuant to Advances under the Revolving
Credit Facility. The Borrower agrees to pay the Issuing Bank interest on any
Reimbursement Obligations not paid when due hereunder at the Default Rate.
(b) In accordance with the provisions of Section 2.1(c), the Issuing
Bank shall notify the Agent of any drawing under any Letter of Credit promptly
following the receipt by the Issuing Bank of such drawing.
(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
40
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(c)(iv).
(ii) Simultaneously with the making of each payment by a Lender
to the Issuing Bank pursuant to Section 2.1(c)(iv)(B), such Lender
shall, automatically and without any further action on the part of the
Issuing Bank or such Lender, acquire a Participation in an amount
equal to such payment (excluding the portion thereof constituting
interest accrued prior to the date such Lender made its payment) in
the related Reimbursement Obligation of the Borrower. The
Reimbursement Obligations of the Borrower shall be immediately due and
payable whether by Advances made in accordance with Section 2.1(c)(iv)
or otherwise.
(iii) Each Lender's obligation to make payment to the Agent for
the account of the Issuing Bank pursuant to Section 2.1(c)(iv) and
this Section 3.2(c), and the right of the Issuing Bank to receive the
same, shall be absolute and unconditional, shall not be affected by
any circumstance whatsoever and shall be made without any offset,
abatement, withholding or reduction whatsoever. If any Lender is
obligated to pay but does not pay amounts to the Agent for the account
of the Issuing Bank in full upon such request as required by Section
2.1(c)(iv) or this Section 3.2(c), such Lender shall, on demand, pay
to the Agent for the account of the Issuing Bank interest on the
unpaid amount for each day during the period commencing on the date of
notice given to such Lender pursuant to Section 2.1(c) until such
Lender pays such amount to the 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.
(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
the Issuing Bank from the Borrower, the Issuing Bank shall promptly
pay to each Lender an amount equal to its Applicable Commitment
Percentage of such payment from the Borrower.
(d) Promptly following the end of each calendar quarter, the Issuing
Bank shall deliver to the 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
41
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 the Issuing Bank may, in its sole
discretion, accept or pay, as complying with the terms of any Letter of Credit,
any drafts or other documents otherwise in order which may be signed or issued
by an administrator, executor, trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, liquidator, receiver, attorney in fact or
other legal representative of a party who is authorized under such Letter of
Credit to draw or issue any drafts or other documents.
(g) Without limiting the generality of the provisions of Section
11.12, the Borrower hereby agrees to indemnify and hold harmless the Issuing
Bank, each other Lender and the 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
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(c) and the Issuing Bank's and each Lender's right to receive such payment
shall be absolute, unconditional and irrevocable, and such obligations of the
Borrower shall be performed strictly in accordance with the terms of this
Agreement and such Letters of Credit and the related Applications and Agreement
for any Letter of Credit, under all circumstances whatsoever, including the
following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit, the obligation supported by any Letter of Credit or any other
agreement or instrument relating thereto (collectively, the "Related
LC Documents");
42
(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, 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 June
30, 1998. The fees described in this Section 3.3 shall be calculated on an
Actual/360 Basis.
(b) The Borrower acknowledges that the Issuing Bank as issuer of each
Letter of Credit will be required by applicable rules and regulations of the
Board to maintain reserves for its liability to honor draws made pursuant to a
Letter of Credit notwithstanding the obligation of
43
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.
44
ARTICLE IV
Change in Circumstances
4.1. Increased Cost and Reduced Return.
(a) If, after the date hereof, the adoption of any applicable law,
rule, or regulation, or any change in any applicable law, rule, or regulation,
or any change in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such governmental authority, central bank, or
comparable agency:
(i) shall subject such Lender (or its Applicable Lending Office)
to any tax, duty, or other charge with respect to any Fixed Rate
Loans, its Note, or its obligation to make Fixed Rate Loans, or change
the basis of taxation of any amounts payable to such Lender (or its
Applicable Lending Office) under this Agreement or its Note in respect
of any Fixed Rate Loans (other than taxes imposed on the overall net
income of such Lender by the jurisdiction in which such Lender has its
principal office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Fixed Rate)
relating to any extensions of credit or other assets of, or any
deposits with or other liabilities or commitments of, such Lender (or
its Applicable Lending Office), including the Revolving Credit
Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or on the London interbank market any other condition
affecting this Agreement or its Note or any of such extensions of
credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Fixed Rate Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Agreement or its Note
with respect to any Fixed Rate Loans, then the Borrower shall pay to such Lender
on demand such amount or amounts as will compensate such Lender for such
increased cost or reduction; provided that no Lender will be entitled to any
compensation for any such increased cost or reduction if demand for payment
thereof is made by such Lender more than 180 days after the occurrence of the
circumstances giving rise to such claim. If any Lender requests compensation by
the Borrower under this Section 4.1(a), the Borrower may, by notice to such
Lender (with a copy to the Agent), suspend the obligation of such Lender to make
or Continue Loans of the Type with respect to which such compensation is
requested, or to Convert Loans of any other Type into Loans of such Type, until
the event or condition giving rise to such request ceases to be in effect (in
which case the provisions of Section 4.4 shall be
45
applicable); provided that such suspension shall not affect the right of such
Lender to receive the compensation so requested.
(b) If, after the date hereof, any Lender shall have determined that
the adoption of any applicable law, rule, or regulation regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank, or comparable agency, has or
would have the effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender as a consequence of such
Lender's obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(c) Each Lender shall promptly notify the Borrower and the Agent of
any event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section and will designate
a different Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the reasonable
judgment of such Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this Section shall furnish to the Borrower and the Agent a
statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods that such Lender uses for its customers that are similarly
situated to the Borrower.
4.2. Limitation on Types of Loans. If on or prior to the first day of any
Interest Period for any Fixed Rate Loan:
(a) the Agent reasonably determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Fixed Rate
for such Interest Period; or
(b) the Required Lenders reasonably determine (which determination
shall be conclusive) and notify the Agent that the Fixed Rate will not
adequately and fairly reflect the cost to the Lenders of funding Fixed Rate
Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof specifying the
relevant Type of Loans and the relevant amounts or periods, and so long as such
condition remains in effect, the Lenders shall be under no obligation to make
additional Loans of such Type, Continue Loans of such Type, or to Convert Loans
of any other Type into Loans of such Type and the Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Loans of the
affected Type, either prepay such Loans or Convert such Loans into another Type
of Loan in accordance with the terms of this Agreement.
46
4.3. Illegality. Notwithstanding any other provision of this Agreement, in
the event that it becomes unlawful for any Lender or its Applicable Lending
Office to make, maintain, or fund Fixed Rate Loans hereunder, then such Lender
shall promptly notify the Borrower thereof and such Lender's obligation to make
or Continue Fixed Rate Loans and to Convert other Types of Loans into Fixed Rate
Loans shall be suspended until such time as such Lender may again make,
maintain, and fund Fixed Rate Loans (in which case the provisions of Section 4.4
shall be applicable).
4.4. Treatment of Affected Loans. If the obligation of any Lender to make a
Fixed Rate Loan or to Continue, or to Convert Loans of any other Type into,
Loans of a particular Type shall be suspended pursuant to Section 4.1 or 4.3
hereof (Loans of such Type being herein called "Affected Loans" and such Type
being herein called the "Affected Type"), such Lender's Affected Loans shall be
automatically Converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for Affected Loans (or, in the case of a Conversion
required by Section 4.3 hereof, on such earlier date as such Lender may specify
to the Borrower with a copy to the Agent) and, unless and until such Lender
gives notice as provided below that the circumstances specified in Section 4.1
or 4.3 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Affected Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Affected Loans shall be applied instead to its
Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such Lender
as Loans of the Affected Type shall be made or Continued instead as Base
Rate Loans, and all Loans of such Lender that would otherwise be Converted
into Loans of the Affected Type shall be Converted instead into (or shall
remain as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 4.1 or 4.3 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 4.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective Revolving
Credit Commitments.
4.5. Compensation. Upon the request of any Lender, the Borrower shall pay
to such Lender such amount or amounts as shall be sufficient (in the reasonable
opinion of such Lender) to compensate it for any loss, cost, or expense
(including loss of anticipated profits) incurred by it as a result of:
47
(a) any payment, prepayment, or Conversion of a Fixed Rate Loan for
any reason (including, without limitation, the acceleration of the Loans
pursuant to Section 9.1) on a date other than the last day of the Interest
Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Article V
to be satisfied) to borrow, Convert, Continue, or prepay an Fixed Rate Loan
on the date for such borrowing, Conversion, Continuation, or prepayment
specified in the relevant notice of borrowing, prepayment, Continuation, or
Conversion under this Agreement.
4.6. Taxes. (a) Any and all payments by the Borrower to or for the account
of any Lender or the Agent hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any and all present or future
taxes, duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and the
Agent, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Lender (or its Applicable Lending
Office) or the Agent (as the case may be) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable under this Agreement or any other Loan Document
to any Lender or the Agent, (i) the sum payable shall be increased as necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.6) such Lender or the Agent
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law, and (iv) the Borrower
shall furnish to the Agent, at its address referred to in Section 11.2, the
original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or future
stamp or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under this Agreement or any
other Loan Document or from the execution or delivery of, or otherwise with
respect to, this Agreement or any other Loan Document (hereinafter referred to
as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent for the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 4.6) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the Borrower
or the Agent (but only so long as such Lender remains lawfully able to do so),
shall
48
provide the Borrower and the Agent with (i) Internal Revenue Service Form 1001
or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the rate
of withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States, (ii) Internal Revenue Service Form
W-8 or W-9, as appropriate, or any successor form prescribed by the Internal
Revenue Service, and (iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h) and 881(c) of
the Internal Revenue Code), certifying that such Lender is entitled to an
exemption from or a reduced rate of tax on payments pursuant to this Agreement
or any of the other Loan Documents.
(e) For any period with respect to which a Lender has failed to provide the
Borrower and the Agent with the appropriate form pursuant to Section 4.6(d)
(unless such failure is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under Section 4.6(a),
4.6(b), or 4.6(c) with respect to Taxes imposed by the United States; provided,
however, that should a Lender, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes because of its failure
to deliver a form required hereunder, the Borrower shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 4.6, then such Lender will agree
to use reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent the original or a certified copy of a
receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 4.6 shall survive the termination of the Revolving Credit
Commitments and the payment in full of the Notes.
49
ARTICLE V
Conditions to Making Loans and Issuing Letters of Credit
5.1. Conditions of Initial Advance. This Agreement shall not become
effective until the following conditions precedent have been satisfied in the
sole judgment of the Agent:
(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 ▇▇▇▇▇ ▇▇▇▇▇ Mulliss & ▇▇▇▇▇,
L.L.P., special counsel to the Agent, substantially in the form of
Exhibit H;
(iii) resolutions of the board of directors of the Borrower
certified by its secretary or assistant secretary as of the Closing
Date, approving and adopting the Loan Documents to be executed by the
Borrower, and authorizing the execution and delivery and performance
thereof;
(iv) specimen signatures of officers of the Borrower executing
the Loan Documents on behalf of the Borrower, certified by the
secretary or assistant secretary of the Borrower;
(v) the charter documents of the Borrower certified as of a
recent date by the Secretary of State of its state of organization;
(vi) the bylaws of the Borrower certified as of the Closing Date
as true and correct by its secretary or assistant secretary;
(vii) certificates issued as of a recent date by the Secretary of
State of the jurisdiction of formation of the Borrower as to the valid
existence and good standing of the Borrower;
(viii) notice of appointment of the initial Authorized
Representative(s);
(ix) evidence of all insurance required by the Loan Documents;
(x) a certificate in the form of Exhibit I completed as of March
31, 1998;
50
(xi) evidence that all fees payable by the Borrower on the
Closing Date to the Agent and the Lenders have been paid in full;
(xii) termination of the Prior Agreement and payment of the Prior
Loans;
(xiii) 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 December
31, 1997 that has had or could reasonably be expected to result in a
Material Adverse Effect;
(ii) no litigation, action, suit, investigation or other
arbitral, administrative or judicial proceeding shall be pending or
threatened which could reasonably be expected to result in a Material
Adverse Effect; and
(iii) the Borrower and its Consolidated Entities shall have
received all approvals, consents and waivers, and shall have made or
given all necessary filings and notices, as shall be required to
consummate the transactions contemplated hereby without the occurrence
of any default under, conflict with or violation of (A) any applicable
law, rule, regulation, order or decree of any Governmental Authority
or arbitral authority or (B) any agreement, document or instrument to
which any of the Borrower or any Consolidated Entity is a party or by
which any of them or their properties is bound, except for such
approvals, consents, waivers, filings and notices the receipt, making
or giving of which will not have a Material Adverse Effect.
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;
51
(c) in the case of the issuance of a Letter of Credit, the Borrower
shall have executed and delivered to the Issuing Bank an Application and
Agreement for the Letter of Credit in form and content acceptable to the
Issuing Bank together with such other instruments and documents as it shall
request;
(d) at the time of (and after giving effect to) each Advance or the
issuance of a Letter of Credit, no Default or Event of Default shall have
occurred and be continuing; and
(e) immediately after giving effect to:
(i) a Loan, the aggregate principal balance of all outstanding
Loans for each Lender plus such Lender's Applicable Commitment
Percentage of the aggregate amount of Letter of Credit Outstandings
shall not exceed such Lender's Revolving Credit Commitment;
(ii) a Letter of Credit or renewal thereof, the aggregate
principal balance of all outstanding Participations in Letters of
Credit and Reimbursement Obligations (or in the case of the Issuing
Bank, its remaining interest after deduction of all Participations in
Letters of Credit and Reimbursement Obligations of other Lenders) for
each Lender and in the aggregate shall not exceed, respectively, (X)
such Lender's Letter of Credit Commitment or (Y) the Total Letter of
Credit Commitment; and
(iii) a Loan or a Letter of Credit or renewal thereof, the sum of
Letter of Credit Outstandings plus the aggregate principal amount of
Revolving Credit Outstandings 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) and (d) have been satisfied as of
the date of such borrowing.
52
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 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;
53
(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 Interests. Borrower owns no interest in any Person other
than the Persons listed in Schedule 6.4, equity investments in Persons not
constituting Subsidiaries permitted under Section 8.2 and additional
Subsidiaries created or acquired after the Closing Date.
6.6. Financial Condition.
(a) The Borrower has heretofore furnished to the Agent and each Lender
an audited consolidated balance sheet of the Borrower and its Consolidated
Entities as at December 31, 1997 and the notes thereto and the related
consolidated statements of income, stockholders' equity and cash flows for
the Fiscal Year then ended as examined and certified by Ernst & Young LLP.
Except as set forth therein, such financial statements (including the notes
thereto) present fairly the financial condition of the Borrower and its
Consolidated Entities as of the end of such Fiscal Year and results of
their operations and the changes in its stockholders' equity for the Fiscal
Year, all in conformity with GAAP applied on a Consistent Basis, subject
however, in the case of unaudited interim statements to year end audit
adjustments;
(b) since December 31, 1997, there has been no material adverse change
in the condition, financial or otherwise, of the Borrower or any of its
Consolidated Entities, or in the businesses, properties, performance,
prospects or operations of the Borrower or any of its Consolidated
Subsidiaries nor have such businesses or properties been materially
adversely affected as a result of any fire, explosion, earthquake,
accident, strike, lockout, combination of workers, flood, embargo or act of
God; 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, (b) $567,750,000 aggregate principal amount of the Borrower's
3.25% Convertible Subordinated Debentures due 2003, (c)
54
$250,000,000 aggregate principal amount of the Borrower's 6.875% Senior
Notes due 2005 and $250,000,000 aggregate principal amount of the
Borrower's 7.0% Senior Notes due 2005, (d) Obligations arising under this
Agreement, and (e) 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. Except as disclosed in or incorporated by reference
in the 1997 10-K:
(a) neither the Borrower nor any Consolidated Entity is a party to or
subject to any judgment, order, decree, agreement, lease or instrument, or
subject to other restrictions, compliance with the terms of which
individually or in the aggregate could reasonably be likely to have a
Material Adverse Effect;
(b) neither the Borrower nor any Consolidated Entity is in default in
the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (i) any Medicaid Provider Agreement,
Medicare Provider Agreement or other agreement or instrument to which the
Borrower or any Consolidated Entity is a party, which default has resulted
in, or if not remedied within any applicable grace period could result in,
the revocation, termination, cancellation or suspension of Medicaid
Certification or Medicare Certification of Borrower or any Consolidated
Entity which could have a Material Adverse Effect or (ii) any other
agreement or instrument to which the Borrower or any Consolidated Entity is
a party, which default has, or if not remedied within any applicable grace
period could reasonably be likely to have, a Material Adverse Effect;
(c) to the knowledge of Borrower's Executive Officers, no Contract
Provider is a party to any judgment, order, decree, agreement or
instrument, or subject to restrictions, compliance with the terms of which
could individually or in the aggregate reasonably be likely to have a
Material Adverse Effect; and
(d) to the knowledge of Borrower's Executive Officers, no Contract
Provider is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any Medicaid
Provider Agreement, Medicare Provider Agreement or other agreement or
instrument to which such Person is a party, which default has resulted in,
or if not remedied within any applicable grace period could
55
result in, the revocation, termination, cancellation or suspension of
Medicaid Certification or Medicare Certification of such Person, which
revocation, termination, cancellation or suspension could reasonably be
likely to have a Material Adverse Effect.
6.10. Litigation. Except as disclosed in or incorporated by reference in
the 1997 10-K, there is no action, suit, investigation or proceeding at law or
in equity or by or before any governmental instrumentality or agency or arbitral
body pending or, to the knowledge of the Borrower, threatened by or against the
Borrower or any Consolidated Entity or, to the knowledge of the Borrower,
pending or threatened by or against any Contract Provider, or affecting the
Borrower or any Consolidated Entity or, to the knowledge of the Borrower, any
Contract Provider or any properties or rights of the Borrower or any
Consolidated Entity or, to the knowledge of the Borrower, any Contract Provider,
which could reasonably be likley (i) to result in the revocation, termination,
cancellation or suspension of Medicaid Certification or Medicare Certification
of such Person, which revocation, termination, cancellation or suspension could
reasonably be likely to have a Material Adverse Effect, or (ii) to have a
Material Adverse Effect.
6.11. Margin Stock. The proceeds of the borrowings and other extensions of
credit made hereunder will be used by the Borrower only for the purposes
expressly authorized herein. None of such proceeds will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin stock or for
the purpose of reducing or retiring any Indebtedness which was originally
incurred to purchase or carry margin stock or for any other purpose which might
constitute any of the Loans or Letters of Credit under this Agreement a "purpose
credit" within the meaning of Regulation U or Regulation X of the Board. Neither
the Borrower nor any agent acting in its behalf has taken or will take any
action which might cause this Agreement or any of the documents or instruments
delivered pursuant hereto to violate any regulation of the Board or to violate
the Exchange Act or the Securities Act of 1933, as amended, or any state
securities laws, 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. Patents, Etc. Except as set forth on Schedule 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 ▇▇▇▇ 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 ▇▇▇▇, copyright or other proprietary right of, any
other Person.
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6.14. No Untrue Statement. Neither (a) this Agreement nor any other Loan
Document or certificate or document executed and delivered by or on behalf of
the Borrower or any Consolidated Entity in accordance with or pursuant to any
Loan Document nor (b) any statement, representation, or warranty provided to the
Agent or any Lender in connection with the negotiation or preparation of the
Loan Documents contains any misrepresentation or untrue statement of material
fact or omits to state a material fact necessary, in light of the circumstance
under which it was made, in order to make any such warranty, representation or
statement contained therein not misleading.
6.15. No Consents, Etc. Neither the respective businesses or properties of
the Borrower or any Consolidated Entity, nor any relationship between the
Borrower or any Consolidated Entity and any other Person, nor any circumstance
in connection with the execution, delivery and performance of the Loan Documents
and the transactions contemplated thereby, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any
Governmental Authority or any other Person on the part of the Borrower or any
Consolidated Entity as a condition to the execution, delivery and performance
of, or consummation of the transactions contemplated by, or the validity or
enforceability of, the Loan Documents, which, if not obtained or effected, would
be reasonably likely to have a Material Adverse Effect, or if so, such consent,
approval, authorization, filing, registration or qualification has been duly
obtained or effected, as the case may be;
6.16. ERISA Requirement. (i) The execution and delivery of the Loan
Documents will not involve any prohibited transaction within the meaning of
ERISA, (ii) the Borrower and each ERISA Affiliate has fulfilled its obligations
under the minimum funding standards imposed by ERISA and each is in compliance
in all material respects with the applicable provisions of ERISA, and (iii) no
"Reportable Event," as defined in Section 4043(b) of 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 material to the operations of the
Borrower or such Consolidated Entity to be subject to any material restrictions
on ownership, use, occupancy or transferability under any Environmental Law.
57
6.19. Employment Matters. (a) Except as set forth on Schedule 6.19, none of
the employees of the Borrower or any Consolidated Entity is subject to any
collective bargaining agreement and there are no strikes, work stoppages,
election or decertification petitions or proceedings, unfair labor charges,
equal opportunity proceedings, or other material labor/employee related
controversies or proceedings pending or, to the best knowledge of the Borrower,
threatened against the Borrower or any Consolidated Entity or between the
Borrower or any Consolidated Entity and any of its employees, other than
employee grievances, controversies or proceedings arising in the ordinary course
of business which could not reasonably be likely, individually or in the
aggregate, to have a Material Adverse Effect; and
(b) Except to the extent a failure to maintain compliance would not have a
Material Adverse Effect, the Borrower and each Consolidated Entity is in
compliance in all respects with all applicable laws, rules and regulations
pertaining to labor or employment matters, including without limitation those
pertaining to wages, hours, occupational safety and taxation and there is
neither pending nor threatened any litigation, administrative proceeding or, to
the knowledge of the Borrower, any investigation, in respect of such matters
which, if decided adversely, could reasonably be likely, individually or in the
aggregate, to have a Material Adverse Effect.
6.20. RICO. Neither the Borrower nor any Consolidated Entity is engaged in
or has engaged in any course of conduct that could subject any of their
respective properties to any Lien, seizure or other forfeiture under any
criminal law, racketeer influenced and corrupt organizations law, civil or
criminal, or other similar laws.
6.21. Reimbursement from Third Party Payors. The accounts receivable of the
Borrower and each Consolidated Entity and each Contract Provider have been and
will continue to be adjusted to reflect reimbursement policies of third party
payors such as Medicare, Medicaid, Blue Cross/Blue Shield, private insurance
companies, health maintenance organizations, preferred provider organizations,
alternative delivery systems, managed care systems, government contracting
agencies and other third party payors. In particular, accounts receivable
relating to such third party payors do not and shall not exceed amounts any
obligee is entitled to receive under any capitation arrangement, fee schedule,
discount formula, cost-based reimbursement or other adjustment or limitation to
its usual charges.
6.22. Year 2000 Compliance. The Borrower has (i) initiated a review and
assessment of all areas within its and each of its Consolidated Entities'
business and operations (including those affected by suppliers, vendors, and
customers) that could be adversely affected by the "Year 2000 Problem" (that is,
the risk that computer applications used by the Borrower or any of its
Consolidated Entities (or suppliers, vendors and customers) may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999), (ii) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, and (iii) to
date, implemented that plan in accordance with that timetable. Based on the
foregoing, the Borrower believes that all computer applications (including those
of its suppliers, vendors and customers) that are material to its or any of its
Consolidated Entities' business and operations are reasonably expected on a
timely basis to be able to perform proper date-sensitive functions for all dates
before and after January 1, 2000 (that is, be "Year 2000
58
compliant"), except to the extent that a failure to do so could not reasonably
be expected to have a Material Adverse Effect.
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ARTICLE VII
Affirmative Covenants
Until the Revolving Credit 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 income of
the Borrower and its Consolidated Entities on a consolidated basis and a
statement of cash flow of the Borrower and its Consolidated Entities on a
consolidated basis for such calendar quarter and for the period beginning
on the first day of such Fiscal Year and ending on the last day of such
quarter (in sufficient detail to indicate the Borrower's and each
Consolidated Entity's compliance with the financial covenants set forth in
Section 8.1), together with statements in comparative form for the
corresponding date or period in the preceding Fiscal Year as summarized in
the Borrower's Form 10-Q for the corresponding period, and certified as to
fairness, accuracy and completeness by the chief executive officer, chief
financial officer or Treasurer of the Borrower.
(b) Not later than 100 days after the end of each Fiscal Year,
financial statements (including a balance sheet, a statement of income, a
statement of changes in shareholders' equity and a statement of cash flow)
of the Borrower and its Consolidated Entities on a consolidated basis for
such Fiscal Year (in sufficient detail to indicate the Borrower's and each
Consolidated Entity's compliance with the financial covenants set forth in
Section 8.1), together with statements in comparative form as of the end of
and for the preceding Fiscal Year as summarized in the Borrower's Form 10-K
for the corresponding period, and accompanied by an opinion of certified
public accountants acceptable to the 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 subsections (a)
and (b) above a compliance certificate duly executed by the chief executive
officer or chief financial officer or Treasurer of the Borrower in the form
of Exhibit I ("Compliance Certificate").
(d) Contemporaneously with the distribution thereof to the Borrower's
or any Consolidated Entity's stockholders or partners or the filing thereof
with the Securities and Exchange Commission, as the case may be, copies of
all statements, reports, notices and filings distributed by the Borrower or
any Consolidated Entity to its stockholders or
60
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.
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
61
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 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
likely to have a Material Adverse Effect.
7.9. Governmental Licenses. Obtain and maintain, and use reasonable effort
to cause all Contract Providers to obtain and maintain, all licenses, permits,
certifications and approvals of all applicable Governmental Authorities as are
required for the conduct of its
62
business as currently conducted and herein contemplated, including without
limitation professional licenses, Medicaid Certifications and Medicare
Certifications, except where the failure to do so could not reasonably be likely
to have a Material Adverse Effect.
7.10. Covenants Extending to Other Persons. Cause each of its Consolidated
Entities to do with respect to itself, its business and its assets, each of the
things required of the Borrower in Sections 7.2 through 7.9, 7.15 and 7.16
inclusive.
7.11. Officer's Knowledge of Default. Upon any Executive Officer of the
Borrower obtaining knowledge of any Default or Event of Default or any default
or event of default under any other obligation of the Borrower or any
Consolidated Entity to any Lender, or any event, development or occurrence which
could reasonably be expected to have a Material Adverse Effect, cause such
Executive Officer or an Authorized Representative to promptly notify the 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 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
63
or the Governmental Authority responsible for enforcing such Environmental Law,
remove or remedy, or cause the applicable Consolidated Entity to remove or
remedy, such violation or release or satisfy such liability unless and only
during the period that the applicability of such Environmental Law, the fact of
such violation or liability or what is required to remove or remedy such
violation is being contested by the Borrower or the applicable Consolidated
Entity by appropriate proceedings diligently conducted and all reserves with
respect thereto as may be required under GAAP, if any, have been made, and no
Lien in connection therewith shall have attached to any property of the Borrower
or the applicable Consolidated Entity which shall have become enforceable
against creditors of such Person.
7.15. Continuation of Current Business. Not engage in any business other
than the business now being conducted by the Borrower (including its
Consolidated Entities) and other businesses directly related to such services.
7.16. Management Contracts. Not enter into any agreement whereby the
management, supervision or control of its business or any Facility shall be
delegated to or placed in any persons other than its governing body and
officers, the Borrower or a Consolidated Entity, except that management of the
Facility owned by Vanderbilt ▇▇▇▇▇▇▇▇▇▇ Rehabilitation Hospital, L.P. is vested
in part in a Governance Committee and in part in a Subsidiary of the Borrower
pursuant to the applicable limited partnership agreement and a management
agreement.
7.17. Year 2000 Compliance. The Borrower will promptly notify the Agent in
the event the Borrower discovers or determines that any computer application
(including those of its suppliers, vendors, and customers) that is material to
its or any of its Consolidated Entities' business and operations will not be
Year 2000 compliant, except to the extent that such failure could not reasonably
be expected to have a Material Adverse Effect.
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ARTICLE VIII
Negative Covenants
Until the Revolving Credit 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 will it permit any
Consolidated Entity to:
8.1. Financial Covenants.
(a) Minimum Net Worth. Permit Consolidated Net Worth to be less than
$2,750,000,000 plus (A) 50% of Consolidated Net Income (if positive and
including for purposes of this Section 8.1(a) only any extraordinary gain),
on an ongoing basis for each fiscal quarter beginning with the fiscal
quarter ended June 30, 1998, plus (B) the aggregate amount of all
increases, if any, in its capital accounts resulting from the issuance of
Capital Stock or conversion of debt into Capital Stock or other securities
properly classified as equity in accordance with 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 0.65 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 other
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 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.
65
8.4. Disposition of Assets. Sell, lease or otherwise dispose of assets in
excess of 15% of Consolidated Total Assets as at the Closing Date plus an amount
equal to 15% of assets acquired following the Closing Date.
8.5. Consolidation or Merger. Merge or consolidate with another Person
unless (i) in the case of a merger or consolidation of the Borrower, the
Borrower is the continuing or surviving entity, (ii) in the case of a merger or
consolidation involving a Consolidated Entity, the continuing or surviving
entity is majority-owned by the Borrower (with such majority ownership
constituting a controlling interest), and (iii) before and after giving effect
to the proposed merger or consolidation, no Default or Event of Default shall
exist.
8.6. Liens. Incur, create, assume or permit to exist any Lien upon any of
its accounts receivable, contract rights, chattel paper, inventory, equipment,
instruments, general intangibles or other personal or real property of any
character, whether now owned or hereafter acquired, other than (i) Liens that
constitute Permitted Encumbrances, and (ii) Liens on assets which at no time
have a book value of greater than 5% of Consolidated Total Assets.
8.7. Dividends and Distributions. Permit any Consolidated Entity to be or
become subject to any restrictions on the ability of such Consolidated Entity to
pay dividends or to make partnership distributions other than as required by
this Agreement or restrictions imposed by applicable law.
8.8. Acquisitions. 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, 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
66
(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 (other than a change to conform
the fiscal year of a Consolidated Entity to that of the Borrower).
8.12. Dissolution, etc. Wind up, liquidate or dissolve (voluntarily or
involuntarily) or commence or suffer any proceedings seeking any such winding
up, liquidation or dissolution, except in connection with a merger or
consolidation permitted pursuant to Section 8.5 or where the liquidation or
dissolution of a Consolidated Entity occurs in the ordinary course of business
and does not have a Material Adverse Effect.
8.13. Transactions with Affiliates. Other than transactions permitted under
Sections 8.2 and 8.5, enter into any transaction after the Closing Date,
including, without limitation, the purchase, sale, lease or exchange of
property, real or personal, or the rendering of any service, with any Affiliate
of the Borrower, except (a) that such Persons may render services to the
Borrower for compensation at the same rates generally paid by Persons engaged in
the same or similar businesses for the same or similar services, (b) that the
Borrower may render services to such Persons for compensation at the same rates
generally charged by the Borrower and (c) in either case in the ordinary course
of business and pursuant to the reasonable requirements of the
67
Borrower's business consistent with past practice of the Borrower and upon fair
and reasonable terms no less favorable to the Borrower than would be obtained in
a comparable arm's-length transaction with a Person not an Affiliate;
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ARTICLE IX
Events of Default and Acceleration
9.1. Events of Default. If any one or more of the following events (herein
called "Events of Default") shall occur for any reason whatsoever (and whether
such occurrence shall be voluntary or involuntary or come about or be effected
by operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulation of any Governmental
Authority), that is to say:
(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 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,
69
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 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
70
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; and
(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
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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 2.10 or Section
11.6;
(ii) amounts due to the Agent and the Issuing Bank pursuant to Section
10.8, Section 3.3 and Section 3.4;
(iii) payments of interest, to be applied pro rata based on the
proportion which the principal amount of outstanding Loans and
Reimbursement Obligations of each Lender bears to the total of all
outstanding Loans and Reimbursement Obligations;
(iv) payments of principal, to be applied pro rata based on the
proportion which the principal amount of outstanding Loans and
Reimbursement Obligations of each Lender bears to the total of all
outstanding Loans and Reimbursement Obligations;
(v) payment of cash amounts to the Agent pursuant to Section 9.1(B);
(vi) payments of all other amounts due under this Agreement, if any,
to be applied in accordance with each Lender's pro rata share of all such
other amounts due to the Lenders; and
(vii) any surplus remaining after application as provided for herein,
to the Borrower or otherwise as may be required by applicable law.
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ARTICLE X
The Agent
10.1. Appointment, Powers, and Immunities. Each Lender hereby irrevocably
appoints and authorizes the Agent to act as its agent under this Agreement and
the other Loan Documents with such powers and discretion as are specifically
delegated to the Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
The Agent (which term as used in this sentence and in Section 10.5 and the first
sentence of Section 10.6 hereof shall include its affiliates and its own and its
affiliates' officers, directors, employees, and agents): (a) shall not have any
duties or responsibilities except those expressly set forth in this Agreement
and shall not be a trustee or fiduciary for any Lender; (b) shall not be
responsible to the Lenders for any recital, statement, representation, or
warranty (whether written or oral) made in or in connection with any Loan
Document or any certificate or other document referred to or provided for in, or
received by any of them under, any Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any Loan Document,
or any other document referred to or provided for therein or for any failure by
any Person to perform any of its obligations thereunder; (c) shall not be
responsible for or have any duty to ascertain, inquire into, or verify the
performance or observance of any covenants or agreements by any Person or the
satisfaction of any condition or to inspect the property (including the books
and records) of any Person; (d) shall not be required to initiate or conduct any
litigation or collection proceedings under any Loan Document; and (e) shall not
be responsible for any action taken or omitted to be taken by it under or in
connection with any Loan Document, except for its own negligence or willful
misconduct. The Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Co-Arrangers and
Syndication Agents shall have no responsibilities under this Agreement other
than as a Lender.
10.2. Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice, instrument, writing, or other communication (including,
without limitation, any thereof by telephone or telefacsimile) believed by it to
be genuine and correct and to have been signed, sent or made by or on behalf of
the proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants, and other experts selected by the Agent. The Agent may
deem and treat the payee of any Note as the holder thereof for all purposes
hereof unless and until the Agent receives and accepts an Assignment and
Acceptance executed in accordance with Section 11.1 hereof. As to any matters
not expressly provided for by this Agreement, the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding on all of the Lenders; provided, however, that the
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to any Loan Document or applicable law or
unless it shall first be indemnified to its satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason of
taking any such action.
10.3. Defaults. The Agent shall not be deemed to have knowledge or notice
of the occurrence of a Default or Event of Default unless the Agent has received
written notice from
73
a Lender or the Borrower specifying such Default or Event of Default and stating
that such notice is a "Notice of Default". In the event that the Agent receives
such a notice of the occurrence of a Default or Event of Default, the Agent
shall give prompt notice thereof to the Lenders. The Agent shall (subject to
Section 10.2 hereof) take such action with respect to such Default or Event of
Default as shall reasonably be directed by the Required Lenders, provided that,
unless 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 Default or Event of Default as it shall deem
advisable in the best interest of the Lenders.
10.4. Rights as Lender. With respect to its Revolving Credit Commitment and
the Loans made by it, NationsBank (and any successor acting as Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Agent, and the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Agent in its individual capacity. NationsBank
(and any successor acting as Agent) and its affiliates may (without having to
account therefor to any Lender) accept deposits from, lend money to, make
investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with the Borrower or any of its Subsidiaries
or affiliates as if it were not acting as Agent, and NationsBank (and any
successor acting as Agent) and its affiliates may accept fees and other
consideration from the Borrower or any of its Subsidiaries or affiliates for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
10.5. Indemnification. The Lenders agree to indemnify the Agent (to the
extent not reimbursed under Section 11.12 hereof, but without limiting the
obligations of the Borrower under such Section) ratably in accordance with their
respective Revolving Credit Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, reasonable
costs and expenses (including attorneys' fees), or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by or asserted against the
Agent (including by any Lender) in any way relating to or arising out of any
Loan Document or the transactions contemplated thereby or any action taken or
omitted by the Agent under any Loan Document; provided that no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Person to be indemnified. Without
limitation of the foregoing, each Lender agrees to reimburse the Agent promptly
upon demand for its ratable share of any costs or expenses payable by the
Borrower under Section 11.6, to the extent that the Agent is not promptly
reimbursed for such costs and expenses by the Borrower. The agreements contained
in this Section shall survive payment in full of the Loans and all other amounts
payable under this Agreement.
10.6.Non-Reliance on Agent and Other Lenders. Each Lender agrees that it
has, independently and without reliance on the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Borrower and its Subsidiaries and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under the Loan Documents. Except for
notices, reports, and other documents and information expressly required to be
furnished to the
74
Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition, or business of the Borrower or any
of its Subsidiaries or affiliates that may come into the possession of the Agent
or any of its affiliates.
10.7. Resignation of Agent. The Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Agent subject to
the approval of the Borrower so long as no Default or Event of Default shall
have occurred and be continuing, such approval not to be unreasonably withheld.
If no successor Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent which shall be a commercial bank
organized under the laws of the United States of America having combined capital
and surplus of at least $100,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor, such successor shall thereupon succeed to and
become vested with all the rights, powers, discretion, privileges, and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article X shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
10.8. Fees. The Borrower agrees to pay to the Agent, for its individual
account, an annual Administrative Agent's fee as from time to time agreed to by
the Borrower and Agent in writing.
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ARTICLE XI
Miscellaneous
11.1. Assignments and Participations. (a) Each Lender may assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Loans,
its Note, and its Revolving Credit Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this Agreement, any
such partial assignment shall be in an amount at least equal to $5,000,000 or an
integral multiple of $1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a constant, and not
varying, percentage of all of its rights and obligations under this Agreement
and the Note; and
(iv) the parties to such assignment shall execute and deliver to the
Agent for its acceptance an Assignment and Acceptance in the form of Exhibit B
hereto, together with any Note subject to such assignment and a processing fee
of $3,000.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the Agent
and the Borrower shall make appropriate arrangements so that, if required, new
Notes are issued to the assignor and the assignee. If the assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrower and the Agent certification as to exemption
from deduction or withholding of Taxes in accordance with Section 4.6.
(b) The Agent shall maintain at its address referred to in Section 11.2 a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Revolving Credit Commitment of, and principal amount of the Loans owing to, each
Lender from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, the Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form
76
of Exhibit B hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(d) Each Lender may sell participations to one or more Persons in all or a
portion of its rights, obligations or rights and obligations under this
Agreement (including all or a portion of its Revolving Credit Commitment or its
Loans); provided, however, that (i) any such participation in a Revolving Credit
Commitment, but not its Loans, shall be in an amount at least equal to
$5,000,000 or an integral multiple of $1,000,000 in excess thereof, (ii) such
Lender's obligations under this Agreement shall remain unchanged, (iii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iv) the participant shall be entitled to the
benefit of the yield protection provisions contained in Article IV and the right
of set-off contained in Section 11.4, and (v) the Borrower shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender shall retain the
sole right to enforce the obligations of the Borrower relating to its Loans and
its Note and to approve any amendment, modification, or waiver of any provision
of this Agreement (other than amendments, modifications, or waivers decreasing
the amount of principal of or the rate at which interest is payable on such
Loans or Note, extending any scheduled principal payment date or date fixed for
the payment of interest on such Loans or Note, or extending its Revolving Credit
Commitment).
(e) Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time assign and pledge all or any portion of its Loans and its
Note to any Federal Reserve Bank as collateral security pursuant to Regulation A
and any Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning Lender from its obligations hereunder.
(f) Any Lender may furnish any information concerning the Borrower or any
of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants);
provided, however that such Lender shall (a) take reasonable and customary
measures to safeguard the confidentiality of non-public information, (b) advise
such assignees or participants of the confidentiality of such non-public
information and (c) obtain the agreement of such assignees or participants to
maintain the confidentiality thereof.
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:
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(a) if to the Borrower:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice President, Chief
Financial Officer and Treasurer
HEALTHSOUTH Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
HEALTHSOUTH Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(b) if to the Agent at:
One Independence Center, 15th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Reference: HEALTHSOUTH Corporation
(c) 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.
11.4. Rights of Setoff; Adjustments. (a) 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 Person primarily, secondarily or
otherwise liable may be
78
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.
(b) If any Lender (a "benefited Lender") shall at any time receive any
payment of all or part of the Loans owing to it, or interest thereon, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Loans owing to it, or interest thereon, such benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loans owing to it, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such benefitted Lender to share the excess
payment or benefits of such collateral or proceeds ratably with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest. The Borrower agrees that any Lender so
purchasing a participation from a Lender pursuant to this Section 11.4 may, to
the fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Person were the direct creditor of the Borrower in the amount of such
participation.
11.5. Survival. All covenants, agreements, representations and warranties
made herein shall survive the making by the Lenders of the Loans and the
issuance of the Letters of Credit and the execution and delivery to the Lenders
of this Agreement and 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 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
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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 Revolving Credit Termination Date.
11.7. Amendments and Waivers. Any provision of this Agreement or any other
Loan Document may be amended or waived if, but only if, such amendment or waiver
is in writing and is signed by the Borrower and the Required Lenders (and, if
Article X or the rights or duties of the Agent are affected thereby, by the
Agent); provided that no such amendment or waiver shall, unless signed by all
the Lenders, (i) increase the Revolving Credit Commitments or the Letter of
Credit Commitment of the Lenders, (ii) reduce the principal of or rate of
interest on any Loan or any fees or other amounts payable hereunder, (iii)
postpone any date fixed for the payment of any scheduled installment of
principal of or interest on any Loan or any fees or other amounts payable
hereunder or for termination of any Revolving Credit Commitment, (iv) change the
percentage of the Revolving Credit Commitments or of the unpaid principal amount
of the Notes, or the percentage of Lenders that constitute Required Lenders or
(v) amend the definition of "Required Lenders" or amend Section 11.15.
11.8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully- executed counterpart.
11.9. Waivers by Borrower. IN ANY LITIGATION IN ANY COURT WITH RESPECT TO,
IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT, THE LOANS, ANY OF THE
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.
80
The Borrower, the Agent and the Lenders believe that, inasmuch as this
Agreement and the transactions contemplated hereby have been entered into and
consummated outside the State of Alabama, such transactions constitute
transactions in interstate commerce, so that neither the Agent nor any of the
Lenders is required, solely by entering into this Agreement and consummating the
transactions contemplated hereby, to qualify to do business as a foreign
corporation within the State of Alabama. Notwithstanding the foregoing, however,
the Borrower hereby irrevocably waives all rights that it may have to raise, in
any action brought by any of the Lenders or the Agent to enforce the rights of
the Lenders and the Agent hereunder or under any of the other Loan Documents, or
the obligations of the Borrower hereunder or thereunder, any defense which is
based upon the failure of any of the Lenders or the Agent to qualify to do
business as a foreign corporation in the State of Alabama, including, but not
limited to, any defenses based upon ss. 232 of the Alabama Constitution of 1901,
ss. 10-2B-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.
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
81
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 Revolving
Credit 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,
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 Revolving Credit 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.
82
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 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.
83
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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------- Title: Vice President - Finance
Signature Page
NATIONSBANK, NATIONAL ASSOCIATION
as Agent for the Lenders
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
NATIONSBANK, NATIONAL ASSOCIATION
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Applicable Lending Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
NationsBank, N.A.
Charlotte, North Carolina
ABA #▇▇▇▇▇▇▇▇▇
Account #136621-▇▇▇▇▇▇▇
Attention: Corporate Credit Services
Reference: HEALTHSOUTH Corporation
Signature Page
SCOTIABANC INC.
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Relationship Manager
Lending Office:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
The Bank of Nova Scotia - NY
New York, New York
ABA #▇▇▇▇▇▇▇▇▇
F/C - The Bank of Nova Scotia - Atlanta
Account #▇▇▇▇▇▇▇
Attention: ATL/Loan Operations
Reference: HEALTHSOUTH Corporation
Signature Page
DEUTSCHE BANK AG NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Director
Lending Office:
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
Deutsche Bank AG
New York Branch
ABA #▇▇▇▇▇▇▇▇▇
Reference: HEALTHSOUTH Corporation
Signature ▇▇▇▇
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Lending Office:
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Wire Transfer Instructions:
▇▇▇▇▇▇ Guaranty Trust Company of New York
New York, New York
ABA #▇▇▇▇▇▇▇▇▇
For Credit to: Loan Department
A/C #▇▇▇-▇▇-▇▇▇
Attention: Corporate Processing - Mod 23
Reference: HEALTHSOUTH Corporation
Signature Page
WACHOVIA BANK, N.A.
By: /S/ ▇▇▇▇ ▇. COVENTRY
--------------------------------------
Name: ▇▇▇▇ ▇. Coventry
Title: Banking Officer
Lending Office:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
Wachovia Bank, N.A.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ #▇▇▇ 000 010
Account #▇▇-▇▇▇-▇▇▇
Account Name: FW Money Transfer Suspense
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Reference: HEALTHSOUTH Corporation
Signature Page
FIRST UNION NATIONAL BANK
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
Lending Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Wire Transfer Instructions:
First Union National Bank
Charlotte, North Carolina
ABA #▇▇▇▇▇▇▇▇▇
Account #465906 ▇▇▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Reference: HEALTHSOUTH Corporation
Signature Page
THE BANK OF TOKYO-MITSUBISHI LTD.,
NY BRANCH
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
Lending Office:
1251 Avenue of the Americas, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Wire Transfer Instructions:
The Bank of Tokyo-Mitsubishi Ltd., NY Branch
ABA #▇▇▇▇-▇▇▇▇-▇
Short Name: BK Tokyo Mitsubishi Ltd.
Further Credit to: Loan Operations Dept.
CIF #97770191
Reference: HEALTHSOUTH Corporation
Signature Page
PNC BANK, NATIONAL ASSOCIATION
By: /S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Lending Office:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
PNC Bank
Louisville, Kentucky
ABA #083 000 108
Account #3000991434
Attention: Commercial Loan Operations
Reference: HEALTHSOUTH Corporation
Signature Page
MELLON BANK, N.A.
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Lending Office:
One Mellon Bank Center, Room 370
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
Mellon Bank, N.A.
Pittsburgh, Pennsylvania
ABA #▇▇▇▇-▇▇▇▇-▇
Account #____________
Attention: _______________________
Reference: HEALTHSOUTH Corporation
Signature Page
AMSOUTH BANK
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Lending Office:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
AmSouth Bank
Birmingham, Alabama
ABA #▇▇▇▇▇▇▇▇▇
Corporate Clearing Account #0011-0245-0400-100
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Reference: HEALTHSOUTH Corporation
Signature Page
SUNTRUST BANK, NASHVILLE, N.A.
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Lending Office:
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
SunTrust Bank, Nashville, N.A.
Nashville, Tennessee
ABA #▇▇▇▇▇▇▇▇▇
Account #▇▇▇▇▇▇▇▇▇▇
Account Name: Commercial Loan Wire Wash Account
Attention: Leigh ▇▇▇▇ ▇▇▇▇▇▇▇
Reference: HEALTHSOUTH Corporation
Signature Page
FLEET NATIONAL BANK
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
Lending Office:
One Federal Street, MAOFD07B
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
Fleet National Bank
Boston, Massachusetts
ABA #▇▇▇▇▇▇▇▇▇
Account #▇▇▇▇▇▇▇-03156
Account Name: G/L
Reference: HEALTHSOUTH Corporation
Signature Page
NATIONAL CITY BANK OF KENTUCKY
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Lending Office:
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
National City Bank of Kentucky
Louisville, Kentucky
ABA #▇▇▇▇▇▇▇▇▇
Account G/L #151804
Attention: ▇▇▇▇ Boston - CLO Dept.
Reference: HEALTHSOUTH Corporation
Signature Page
THE BANK OF NEW YORK
By: /S/ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Lending Office:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
Bank of New York
New York, New York
ABA #021 000 018
Account #GLA 111556
Attention: Loan Department
Reference: HEALTHSOUTH Corporation
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ - Southern
Signature Page
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK BA "RABOBANK
NEDERLAND" NEW YORK BRANCH
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ /S/ ▇▇▇ ▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Title: Vice President Senior Credit Officer
Lending Office:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
The Bank of New York
for the account of Rabobank Nederland
New York, New York
ABA #▇▇▇-▇▇▇-▇▇▇
Account #▇▇▇-▇▇▇▇-▇▇▇
Account Name: Rabobank Nederland
Attention: Corporate Services Dept.
Reference: HEALTHSOUTH Corporation
Signature Page
FIRST AMERICAN NATIONAL BANK
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
Lending Office:
First American Center, NA-0203
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
First American National Bank
Nashville, Tennessee
ABA #064 000 017
Account #▇▇▇▇▇▇▇
Account Name: WTCA
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Reference: HEALTHSOUTH Corporation
Signature Page
HIBERNIA NATIONAL BANK
By: /S/ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Lending Office:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
Hibernia National Bank
New Orleans, Louisiana
ABA #▇▇▇▇▇▇▇▇▇
Account #36615-0520
Attention: National Accounts
Reference: HEALTHSOUTH Corporation
Signature Page
BANCA COMMERCIALE ITALIANA
NEW YORK BRANCH
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Lending Office:
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
Via Fed Wire:
ABA #▇▇▇▇▇▇▇▇▇
Account: BCA Italiana
Attention: Loan Dept./▇▇▇▇ ▇▇▇▇▇▇
Reference: HEALTHSOUTH Corporation
Signature Page
THE FIRST NATIONAL BANK OF CHICAGO
By: /S/ ▇▇▇▇ ▇. RACK
--------------------------------------
Name: ▇▇▇▇ ▇. Rack
Title: Assistant Vice President
Lending Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇/▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
First National Bank of Chicago
Chicago, Illinois
ABA #▇▇▇▇▇▇▇▇▇
Account #7521 7653
Account Name: DES Income Clearing A/C
Reference: HEALTHSOUTH Corporation
Signature Page
MICHIGAN NATIONAL BANK
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Relationship Manager
Lending Office:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
Michigan National Bank
Farmington Hills, Michigan
ABA #▇▇▇▇▇▇▇▇▇
Account #115710-917000
Account Name: Clearing Account
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Reference: HEALTHSOUTH Corporation
Signature Page
SOUTHTRUST BANK, N.A.
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Group Vice President
Lending Office:
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
SouthTrust Bank, N.A.
Birmingham, Alabama
ABA #▇▇▇▇▇▇▇▇▇
Account #131009
Attention: Commercial Loan Operations Dept.
Reference: HEALTHSOUTH Corporation
Signature Page
SUMMIT BANK
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
Lending Office:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
Summit Bank
ABA #▇▇▇▇▇▇▇▇▇
CL02 AC47902
Attention: Commercial Loan Division
Reference: HEALTHSOUTH Corporation
Signature Page
▇▇▇▇▇ FARGO BANK, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President Assistant Vice President
Lending Office:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
MAC 0101-091
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
▇▇▇▇▇ Fargo Bank, N.A.
San Francisco, California
ABA #▇▇▇-▇▇▇-▇▇▇
Account #271-▇▇▇▇▇▇▇
Credit to: MEMSYN
Reference: HEALTHSOUTH Corporation
Signature Page
FIFTH THIRD BANK
By: /S/ ▇▇▇▇ ▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: National Lending Officer
Lending Office:
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Plaza, Mail Drop 109054
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
Fifth Third Bancorp
ABA #042 000 314
Account #▇▇▇▇▇▇▇▇
Attention: Commercial Loan
Reference: HEALTHSOUTH Corporation
Signature Page
WESTPAC BANKING CORPORATION
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
Lending Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Wire Transfer Instructions:
Chase Manhattan Bank
New York, New York
ABA #▇▇▇-▇▇▇-▇▇▇
Account #▇▇▇-▇-▇▇▇▇▇▇
Account Name: Westpac Bkg Corp.
Grand Cayman Branch
Attention: Loan Services
Reference: HEALTHSOUTH Corporation
Signature Page
EXHIBIT A
Applicable Commitment Percentages
Applicable
Revolving Credit Commitment
Lender Commitment Percentage
------ ---------- ----------
NationsBank, National Association $150,000,000.00 8.571428571%
Scotiabanc Inc. 150,000,000.00 8.571428571%
Deutsche Bank AG New York Branch
and/or Cayman Islands Branch 150,000,000.00 8.571428571%
▇▇▇▇▇▇ Guaranty Trust Company
of New York 150,000,000.00 8.571428571%
Wachovia Bank, N.A. 135,000,000.00 7.714285714%
First Union National Bank 135,000,000.00 7.714285714%
The Bank of Tokyo-Mitsubishi Ltd.,
NY Branch 100,000,000.00 5.714285714%
PNC Bank, National Association 100,000,000.00 5.714285714%
Mellon Bank, N.A. 100,000,000.00 5.714285714%
AmSouth Bank 100,000,000.00 5.714285714%
SunTrust Bank, Nashville, N.A. 75,000,000.00 4.285714285%
Fleet National Bank 50,000,000.00 2.857142857%
National City Bank of Kentucky 50,000,000.00 2.857142857%
The Bank of New York 50,000,000.00 2.857142857%
Cooperatieve Centrale Raiffeisen-
Boerenleenbank BA "Rabobank
Nederland" New York Branch 25,000,000.00 1.428571428%
First American National Bank 25,000,000.00 1.428571428%
A-1
Applicable
Revolving Credit Commitment
Lender Commitment Percentage
------ ---------- ----------
Hibernia National Bank 25,000,000.00 1.428571428%
Banca Commerciale Italiana
New York Branch 25,000,000.00 1.428571428%
The First National Bank of Chicago 25,000,000.00 1.428571428%
Michigan National Bank 25,000,000.00 1.428571428%
SouthTrust Bank, N.A. 25,000,000.00 1.428571428%
Summit Bank 25,000,000.00 1.428571428%
▇▇▇▇▇ Fargo Bank, N.A. 25,000,000.00 1.428571428%
Fifth Third Bank 15,000,000.00 .857142857%
Westpac Banking Corporation 15,000,000.00 .857142857%
------------- ------------
$1,750,000,000.00 100%
A-2
EXHIBIT B
Form of Assignment and Acceptance
Reference is made to the Credit Agreement dated as of June 23, 1998 (the
"Credit Agreement") among HEALTHSOUTH Corporation, a Delaware corporation (the
"Borrower"), the Lenders (as defined in the Credit Agreement) and NationsBank,
National Association, as agent for the Lenders (the "Agent"). Terms defined in
the Credit Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, without recourse
and without representation or warranty except as expressly set forth herein, and
the Assignee hereby purchases and assumes from the Assignor, an interest in and
to the Assignor's rights and obligations under the Credit Agreement and the
other Loan Documents as of the date hereof equal to the percentage interest
specified on Schedule 1 of all outstanding rights and obligations under the
Credit Agreement and the other Loan Documents. After giving effect to such sale
and assignment, the Assignee's Revolving Credit Commitment and the amount of the
Loans owing to the Assignee will be as set forth on Schedule 1.
2. The Assignor (i) 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; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under the
Loan Documents or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Revolving Note and Competitive Bid Note held by the
Assignor and requests that the Agent exchange such Revolving Note and
Competitive Bid Note for new Notes payable to the order of the Assignee in an
amount equal to the Revolving Credit Commitment assumed by the Assignee pursuant
hereto and to the Assignor in an amount equal to the Revolving Credit Commitment
retained by the Assignor, if any, as specified on Schedule 1.
3. The Assignee (i) confirms that it has received a copy of the Credit
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 Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement as are delegated
B-1
to the Agent by the terms thereof, together with such powers and discretion as
are reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender; and (vi) attaches any
U.S. Internal Revenue Service or other forms required under Section 4.6.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and recording by the Agent. The effective
date for this Assignment and Acceptance (the "Effective Date") shall be the date
of acceptance hereof by the Agent, unless otherwise specified on Schedule 1.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit 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 North Carolina.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telefacsimile
shall be effective as delivery of a manually executed counterpart of this
Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to
this Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.
B-2
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
Percentage interest assigned: ________%
Assignee's Revolving Credit Commitment: $_______
Aggregate outstanding principal amount
of Syndicated Loans assigned: $_______
Aggregate Outstanding principal amount
of Competitive Bid loans assigned: $_______
Principal amount of Revolving Note payable
to Assignee: $_______
Principal amount of Competitive Bid Note
payable to Assignee: $_______
Principal amount of Note payable to Assignor: $_______
Principal amount of Competitive Bid Note
payable to Assignor $_______
Effective Date (if other than date
of acceptance by Agent): *_______, 19__
[NAME OF ASSIGNOR], as Assignor
By:
----------------------------
Title:
Dated: _______________, 19 _
[NAME OF ASSIGNEE], as Assignee
By:
Title:
B-3
Applicable Lending Office:
* This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
Accepted [and Approved] **
this ___ day of ___________, 19 _
NATIONSBANK, NATIONAL ASSOCIATION
By:_______________________
Title:
[Approved this ____ day
of ____________, 19__
HEALTHSOUTH Corporation
By:_______________________]**
Title:
**Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of "Eligible Assignee".
B-4
EXHIBIT C
Notice of Appointment (or Revocation) of Authorized
Representative
Reference is hereby made to the Credit Agreement dated as of June 23, 1998,
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 ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Reference is hereby made to the Credit Agreement dated as of June 23, 1998,
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:
Type Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
----------- --------- --------- ---------------
Base Rate
---
Eurodollar
Rate ___
----------
(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
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
D-1
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 Interest Rate Selection Notice
To: NationsBank, National Association
(Carolinas), as Agent
Independence Center, 15th ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Reference is hereby made to the Credit Agreement dated as of June 23, 1998,
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 and Interest Period:
Type Loan Interest Aggregate Date of
(check one) Period(1) Amount(2) Conversion(3)
----------- --------- --------- -------------
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: ______________________
E-1
EXHIBIT F
Form of Revolving Note
Promissory Note
(Syndicated Loan)
$______________ Birmingham, Alabama
June 23, 1998
FOR VALUE RECEIVED, HEALTHSOUTH Corporation, a Delaware corporation having
its principal place of business located in Birmingham, Alabama (the "Borrower"),
hereby promises to pay to the order of
_______________________________________________ (the "Lender"), in its
individual capacity, at the office of NATIONSBANK, NATIONAL ASSOCIATION, as
agent for the Lenders (the "Agent"), located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, NC1-001- 15-04, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or at such
other place or places as the Agent may designate in writing) at the times set
forth in the Credit Agreement dated as of June 23, 1998 among the Borrower, the
financial institutions party thereto, as amended (collectively, the "Lenders")
and the Agent (the "Agreement" -- all capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Agreement), in lawful
money of the United States of America, in immediately available funds, the
principal amount of
________________________________________ DOLLARS ($__________) or, if less
than such principal amount, the aggregate unpaid principal amount of all 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 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 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 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.
Interest hereunder shall be computed as provided in the Agreement.
F-1
This Note is one of the 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 Loans evidenced hereby were or are made and are to be repaid. This 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 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.
IN WITNESS WHEREOF, the Borrower has caused this 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: ________________________________
F-2
EXHIBIT G
Investments
See attached.
G-1
EXHIBIT H
Form of Opinion of Borrower's Counsel
See attached.
H-1
EXHIBIT I
Compliance Certificate
NationsBank, National Association,
as Agent
Independence Center, 15th ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Reference is hereby made to the Credit Agreement dated as of June 23, 1998,
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 $___________
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) $___________
I-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.
I-2
IN WITNESS WHEREOF, I have executed this Certificate this _____ day of
__________, 19___.
By:_____________________________
Authorized Representative
Name:___________________________
Title:__________________________
I-3
EXHIBIT J
Executive Officers
J-1
EXHIBIT K
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 Credit Agreement dated as of June 23, 1998
(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 Amount2 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.
K-1
EXHIBIT L
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 Credit Agreement dated as of June 23, 1998 (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
Date Date 1 Amount 2 Type 3 Period 4 Rate 5
--------- --------- -------- ------ -------- ------
--------
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.
L-1
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: __________, ____
----------
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%).
L-2
EXHIBIT M
Form of Competitive Bid Note
PROMISSORY NOTE
$_____________1 June 23, 1998
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, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇-▇▇▇-▇▇-▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (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 Credit
Agreement dated as of June 23, 1998 (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.
M-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:______________________________
M-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
---- -------- ---- -------- -------- ------- -------- -------
M-3
