EXHIBIT 4.3
CREDIT AGREEMENT
by and among
HEALTH MANAGEMENT ASSOCIATES, INC.
as Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent and as Lender,
FIRST UNION NATIONAL BANK.,
as Syndication Agent and as Lender,
and
THE CHASE MANHATTAN BANK,
as Syndication Agent and as Lender,
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
November 30, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Terms
1.1. Definitions................................................... 2
1.2. Rules of Interpretation....................................... 25
ARTICLE II
The Credit Facilities
2.1. Five Year Revolving Credit Facility........................... 27
2.2. 364 Day Revolving Credit Facility............................. 27
2.3. Amounts....................................................... 27
2.4. Advances............................. ........................ 28
2.5. Repayment of Loans............................................ 29
2.6. Reductions.................................................... 29
2.7. 364 Day Term Loan Option...................................... 30
2.8. Use of Proceeds............................................... 31
2.9. Notes......................................................... 31
2.10. Guaranty...................................................... 31
ARTICLE III
Letters of Credit
3.1. Letters of Credit............................................. 32
3.2. Reimbursement and Participations.............................. 32
ARTICLE IV
Eurodollar Funding, Fees, and Payment Conventions
4.1 Interest Rate Options......................................... 36
4.2 Conversions and Elections of Subsequent Interest Periods...... 36
4.3 Payment of Interest........................................... 37
4.4 Prepayments of Eurodollar Rate Loans.......................... 37
4.5 Manner of Payment............................................. 37
4.6 Fees.......................................................... 38
4.7 Pro Rata Payments............................................. 39
4.8 Computation of Rates and Fees................................. 39
4.9 Deficiency Advances; Failure to Purchase Participations....... 39
4.10 Intraday Funding.............................................. 40
ARTICLE V
Change in Circumstances
5.1. Increased Cost and Reduced Return.............................. 41
5.2. Limitation on Types of Loans................................... 42
5.3. Illegality..................................................... 42
5.4. Treatment of Affected Loans.................................... 43
5.5. Compensation................................................... 43
5.6. Taxes.......................................................... 44
ARTICLE VI
Conditions to Making Loans and Issuing Letters of Credit
6.1. Conditions of Initial Advance.................................. 46
6.2. Conditions of Revolving Loans and Letter of Credit............. 48
ARTICLE VII
Representations and Warranties
7.1. Organization and Authority..................................... 50
7.2. Loan Documents................................................. 50
7.3. Solvency....................................................... 51
7.4. Subsidiaries and Stockholders.................................. 51
7.5. Ownership Interests............................................ 51
7.6. Financial Condition............................................ 51
7.7. Title to Properties............................................ 52
7.8. Taxes.......................................................... 52
7.9. Other Agreements............................................... 52
7.10. Contract Providers. To the best knowledge of the
Borrower, n.................................................... 53
7.11. Litigation..................................................... 53
7.12. Margin Stock................................................... 54
7.13. Investment Company............................................. 54
7.14. Patents, Etc................................................... 54
7.15. No Untrue Statement............................................ 54
7.16. No Consents, Etc............................................... 54
7.17. Employee Benefit Plans......................................... 55
7.18. No Default..................................................... 56
7.19. Environmental Laws............................................. 56
7.20. Employment Matters............................................. 56
7.21. RICO........................................................... 57
7.22. Year 2000 Compliance........................................... 57
7.23. Reimbursement from Third Party Payors.......................... 57
7.24. Fraud and Abuse................................................ 57
7.25. Licensing and Accreditation.................................... 58
ARTICLE VIII
Affirmative Covenants
8.1. Financial Reports, Etc......................................... 59
8.2. Maintain Properties............................................ 60
8.3. Existence, Qualification, Etc.................................. 60
8.4. Regulations and Taxes.......................................... 60
8.5. Insurance...................................................... 61
8.6. True Books..................................................... 61
8.7. Year 2000 Compliance........................................... 61
8.8. Right of Inspection............................................ 61
8.9. Observe all Laws............................................... 61
8.10. Governmental Licenses.......................................... 61
8.11. Covenants Extending to Other Persons........................... 62
8.12. Officer's Knowledge of Default................................. 62
8.13. Suits or Other Proceedings..................................... 62
8.14. Notice of Environmental Complaint or Condition................. 62
8.15. Environmental Compliance....................................... 62
ii
8.16. Indemnification................................................ 63
8.17. Further Assurances............................................. 63
8.18. Employee Benefit Plans......................................... 63
8.19. Continued Operations........................................... 64
8.20. New Subsidiaries............................................... 64
ARTICLE IX
Negative Covenants
9.1. Financial Covenants............................................ 66
9.2. Acquisitions................................................... 66
9.3. Liens.......................................................... 67
9.4. Indebtedness................................................... 68
9.5. Transfer of Assets............................................. 68
9.6. Investments.................................................... 69
9.7. Merger or Consolidation........................................ 69
9.8. Restricted Payments............................................ 69
9.9. Transactions with Affiliates................................... 70
9.10. Compliance with ERISA, the Code and Foreign Benefit Laws....... 70
9.11. Fiscal Year.................................................... 71
9.12. Dissolution, etc............................................... 71
9.13. Limitations on Sales and Leasebacks............................ 71
9.14. Change in Control.............................................. 71
9.15. Rate Hedging Obligations....................................... 71
9.16. Negative Pledge Clauses........................................ 71
9.17. Retirement of Treasury Stock................................... 71
9.18. Capital Expenditures of Restricted Subsidiaries................ 71
ARTICLE X
Events of Default and Acceleration
10.1. Events of Default.............................................. 73
10.2. Agent to Act................................................... 76
10.3. Cumulative Rights.............................................. 76
10.4. No Waiver...................................................... 76
10.5. Allocation of Proceeds......................................... 76
ARTICLE XI
The Agent
11.1. Appointment, Powers, and Immunities............................ 78
11.2. Reliance by Agent.............................................. 78
11.3. Defaults....................................................... 79
11.4. Rights as Lender............................................... 79
11.5. Indemnification................................................ 79
11.6. Non-Reliance on Agent and Other Lenders........................ 80
11.7. Resignation of Agent........................................... 80
iii
ARTICLE XII
Miscellaneous
12.1. Assignments and Participations............................... 81
12.2. Notices...................................................... 83
12.3. Right of Set-off; Adjustments................................ 84
12.4. Survival..................................................... 84
12.5. Expenses..................................................... 84
12.6. Amendments and Waivers....................................... 85
12.7. Counterparts; Facsimile Signatures........................... 85
12.8. Termination.................................................. 85
12.9. Indemnification; Limitation of Liability..................... 86
12.10. Severability.......................................... 87
12.11. Entire Agreement...................................... 87
12.12. Agreement Controls.................................... 87
12.13. Usury Savings Clause.................................. 87
12.14. Payments.............................................. 88
12.15. Governing Law; Waiver of Jury Trial................... 88
iv
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of November 30, 1999 (the "Agreement"), is
made by and among
HEALTH MANAGEMENT ASSOCIATES, INC., a Delaware corporation having its
principal place of business in Naples, Florida (the "Borrower"),
BANK OF AMERICA, N.A., a national banking association organized and
existing under the laws of the United States, in its capacity as a Lender ("Bank
of America"), and each other financial institution executing and delivering a
signature page hereto and each other financial institution which may hereafter
execute and deliver an instrument of assignment with respect to this Agreement
pursuant to Section 12.1 (hereinafter such financial institutions may be
referred to individually as a "Lender" or collectively as the "Lenders"),
BANK OF AMERICA, N.A., a national banking association organized and
existing under the laws of the United States, in its capacity as Administrative
Agent for the Lenders (in such capacity, and together with any successor agent
appointed in accordance with the terms of Section 11.7, the "Agent"),
FIRST UNION NATIONAL BANK, a national banking association organized and
existing under the laws of the United States, in its capacity as a Syndication
Agent, and
THE CHASE MANHATTAN BANK, a state bank chartered under the laws of New
York, in its capacity as a Syndication Agent;
W I T N E S S E T H:
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WHEREAS, the Borrower has requested that the Lenders make available to the
Borrower (a) a 364 day revolving credit facility of up to $150,000,000, and (b)
a five year revolving credit facility of up to $450,000,000, which shall include
a letter of credit facility of up to $15,000,000 for the issuance of standby
letters of credit, the proceeds of which are to be used (i) to refinance
Indebtedness for Money Borrowed owing by the Borrower under the Existing Credit
Agreement and (ii) for general corporate purposes, including permitted
Acquisitions and the repurchase of up to $250,000,000 of the Borrower's capital
stock; and
WHEREAS, the Lenders are willing to make such revolving credit and letter
of credit facilities available to the Borrower upon the terms and conditions set
forth herein;
NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree as
follows:
1
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:
"Acquisition" means the acquisition of (i) a controlling equity
interest in another Person (including the purchase of an option, warrant or
convertible or similar type security to acquire such a controlling interest
at the time it becomes exercisable by the holder thereof), whether by
purchase of such equity interest or upon exercise of an option or warrant
for, or conversion of securities into, such equity interest, or (ii) assets
of another Person which constitute all or substantially all of the assets
of such Person or of a line or lines of business conducted by such Person.
"Advance" means a borrowing under the Five Year Revolving Credit
Facility or the 364 Day Revolving Credit Facility consisting of a Base Rate
Loan or a Eurodollar Rate Loan.
"Affiliate" means any Person (i) which directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under
common control with the Borrower; 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
the Borrower; 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 the Borrower.
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, for each Lender at any time,
with respect to the Five Year Revolving Credit Facility, the 364 Day
Revolving Credit Facility and the Letter of Credit Facility, a fraction,
the numerator of which shall be the sum of such Lender's Five Year
Commitment and 364 Day Commitment and the denominator of which shall be the
sum of the Total Five Year Commitment and Total 364 Day Commitment, which
Applicable Commitment Percentage for each Lender as of the Closing Date is
as set forth in Exhibit A; 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 12.1.
"Applicable Lending Office" means, for each Lender and for each Type
of Loan, the "Lending Office" of such Lender (or of an affiliate of such
Lender) designated for such Type of Loan on the signature pages hereof or
such other office of such Lender (or 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 percent per annum set forth below under
the heading "Applicable Margin for Eurodollar Rate
2
Loans" or "Applicable Margin for Base Rate Loans", as appropriate, as
specified in the table below opposite the applicable Tier determined by the
Ratings as in effect at the time of determination:
Rating
------
Tier S&P ▇▇▇▇▇'▇ Applicable Margin for Applicable Margin for
---- --- ------- --------------------- ---------------------
Eurodollar Rate Loans Base Rate Loans
--------------------- ---------------
I *BBB+ *Baa1 1.000% 0.000%
II BBB Baa2 1.250% 0.250%
III BBB- Baa3 1.500% 0.500%
IV **BB+ **Ba1 1.750% 0.750%
** less than or equal to
* greater than or equal to
provided, however that until May 30, 2000, Tier I shall not be available
and Tier II shall apply in its stead. The Applicable Margin shall be
established from time to time based upon the Ratings in effect from time to
time. Any change in the Applicable Margin due to a change in any Rating
shall be effective on the date of such change in such Rating. In the event
of a split Rating where the Ratings are one level apart, the higher Rating
shall determine the Applicable Margin. In the event of a split Rating where
the Ratings are more than one level apart, the Applicable Margin shall be
determined by the Tier that is one level below the Tier corresponding to
the higher Rating. In the event that the Borrower shall have not have a
Rating from either S&P or ▇▇▇▇▇'▇, the Applicable Margin shall remain at
the last applicable Tier until the earlier of (i) thirty (30) days and (ii)
the date a mutual agreement is reached between the Borrower, the Agent and
the Lenders. If such mutual agreement is not reached within thirty (30)
days, the Applicable Margin shall be Tier IV until such mutual agreement is
reached.
"Applicable Five Year Facility Fee" means that percent per annum set
forth below under the heading "Applicable Five Year Facility Fee" as
specified in the table below opposite the applicable Tier determined by the
Ratings as in effect at the time of determination:
Rating
------
Tier S&P ▇▇▇▇▇'▇ Applicable Five Year
---- --- ------- --------------------
Facility Fee
------------
I **BBB+ *Baa1 0.175%
II BBB Baa2 0.200%
III BBB- Baa3 0.250%
IV * BB+ **Ba1 0.300%
** less than or equal to
* greater than or equal to
The Applicable Five Year Facility Fee shall be established from time to
time based upon the Ratings in effect from time to time; provided that
until May 30, 2000, Tier I shall not be available and Tier II
3
shall apply in its stead. Any change in the Applicable Five Year Facility
Fee due to a change in any Rating shall be effective on the date of such
change in such Rating. In the event of a split Rating where the Ratings are
one level apart, the higher Rating shall determine the Applicable Five Year
Facility Fee. In the event of a split Rating where the Ratings are more
than one level apart, the Applicable Five Year Facility Fee shall be
determined by the Tier that is one level below the Tier corresponding to
the higher Rating. In the event that the Borrower shall have not have a
Rating from either S&P or ▇▇▇▇▇'▇, the Applicable Five Year Facility Fee
shall remain at the last applicable Tier until the earlier of (i) thirty
(30) days and (ii) the date a mutual agreement is reached between the
Borrower, the Agent and the Lenders. If such mutual agreement is not
reached within thirty (30) days, the Applicable Five Year Facility Fee
shall be Tier IV until such mutual agreement is reached.
"Applicable 364 Day Facility Fee" means that percent per annum set
forth below under the heading "Applicable 364 Day Facility Fee" as
specified in the table below opposite the applicable Tier determined by the
Ratings as in effect at the time of determination:
Rating
------
Tier S&P ▇▇▇▇▇'▇ Applicable 364 Day
---- --- ------- ------------------
Facility Fee
------------
I *BBB+ *Baa1 0.150%
II BBB Baa2 0.175%
III BBB- Baa3 0.225%
IV **BB+ **Ba1 0.275%
** less than or equal to
* greater than or equal to
The Applicable 364 Day Facility Fee shall be established from time to time
based upon the Ratings in effect from time to time; provided that until May
30, 2000, Tier I shall not be available and Tier II shall apply in its
stead. Any change in the Applicable 364 Day Facility Fee due to a change
in any Rating shall be effective on the date of such change in such Rating.
In the event of a split Rating where the Ratings are one level apart, the
higher Rating shall determine the Applicable 364 Day Facility Fee. In the
event of a split Rating where the Ratings are more than one level apart,
the Applicable 364 Day Facility Fee shall be determined by the Tier that is
one level below the Tier corresponding to the higher Rating. In the event
that the Borrower shall have not have a Rating from either S&P or ▇▇▇▇▇'▇,
the Applicable 364 Day Facility Fee shall remain at the last applicable
Tier until the earlier of (i) thirty (30) days and (ii) the date a mutual
agreement is reached between the Borrower, the Agent and the Lenders. If
such mutual agreement is not reached within thirty (30) days, the
Applicable 364 Day Facility Fee shall be Tier IV until such mutual
agreement is reached.
"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
4
and delivered to the Issuing Bank to support the issuance of Letters of
Credit.
"Assignment and Acceptance" shall mean an Assignment and Acceptance in
the form of Exhibit B (with blanks appropriately filled in) delivered to
the Agent in connection with an assignment of a Lender's interest under
this Agreement pursuant to Section 12.1.
"Authorized Representative" means any of the President, Executive Vice
President - Finance and Vice President - General Counsel, or Vice
President-Controller of the Borrower or, with respect to financial matters,
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.
"Bank of America" means Bank of America, N.A.
"BAS" means Banc of America Securities LLC and its successors.
"Base Rate" means, for any day, the rate per annum equal to the sum of
(a) the higher of (i) the Federal Funds Rate for such day plus one-half of
one percent (0.5%) and (ii) the Prime Rate for such day plus (b) the
Applicable Margin. 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 or a Segment of the Term Loan for which
the rate of interest is determined by reference to the Base Rate.
"Base Rate Refunding Loan" means a Base Rate Loan made to satisfy
Reimbursement Obligations arising from a drawing under a Letter of Credit.
"Base Rate Segment" means a Segment bearing interest or to bear
interest at the Base Rate.
"Board" means the Board of Governors of the Federal Reserve System (or
any successor body).
"Borrower's Account" means any demand deposit account with the Agent,
which may be maintained at one or more offices of the Agent or an agent of
the Agent.
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Five Year Revolving
Credit Facility or the 364 Day Revolving Credit Facility, in the form of
Exhibit D.
"Business Day" means, (i) except as expressly provided in clause (ii),
any day which is not a Saturday, Sunday or a day on which banks in the
States of New York or North Carolina are authorized or obligated by law,
executive order or governmental decree to be closed and, (ii) with respect
to the selection,
5
funding, interest rate, payment, and Interest Period of 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 Expenditures" means, with respect to the Borrower and its
Subsidiaries, for any period the sum of (without duplication) (i) all
expenditures (whether paid in cash or accrued as liabilities) by the
Borrower or any Subsidiary during such period for items that would be
classified as "property, plant or equipment" or comparable items on the
consolidated balance sheet of the Borrower and its Subsidiaries, including
without limitation all transactional costs incurred in connection with such
expenditures provided the same have been capitalized, excluding, however,
the amount of any Capital Expenditures paid for with proceeds of casualty
insurance as evidenced in writing and submitted to the Agent together with
any compliance certificate delivered pursuant to Section 8.1(a) or (b), and
(ii) with respect to any Capital Lease entered into by the Borrower or its
Subsidiaries during such period, the present value of the lease payments
due under such Capital Lease over the term of such Capital Lease applying a
discount rate equal to the interest rate provided in such lease (or in the
absence of a stated interest rate, that rate used in the preparation of the
financial statements described in Section 8.1(a)), all the foregoing in
accordance with GAAP applied on a Consistent Basis.
"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.
"Change of Control" means, at any time:
(i) an event by which any "person" or "group" (each as used
in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) either (A)
becomes the "beneficial owner" (as defined in Rule 13d-3 of the
Exchange Act), indirectly, of Voting Securities of the Borrower (or
securities convertible into or exchangeable for such Voting
Securities) representing 33-1/3% or more of the combined voting power
of all Voting Securities of the Borrower (on a fully diluted basis) or
(B) otherwise acquires the ability, directly or indirectly, to elect a
majority of the board of directors of the Borrower;
(ii) during any period of up to 12 consecutive months,
commencing on the Closing Date, individuals who at the beginning of
such 12-month 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
6
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 6.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.
"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 as of the Closing Date in
Section 7.6(a).
"Consolidated EBITDA" means, with respect to the Borrower and its
Subsidiaries for any Four-Quarter Period ending on the date of computation
thereof, the sum of, without duplication, (i) Consolidated Net Income less
all non-cash income, (ii) Consolidated Interest Expense, (iii) taxes on
income, (iv) amortization, (v) depreciation, and (vi) non-cash liabilities
otherwise deducted in calculating Consolidated Net Income resulting from
FASB No. 106 Adjustments or FASB No. 121 Adjustments, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent Basis.
"Consolidated Interest Coverage Ratio" means, with respect to the
Borrower and its Subsidiaries for any Four-Quarter Period ending on the
date of computation thereof, the ratio of (i) Consolidated EBITDA for such
period less Capital Expenditures (excluding Costs of Acquisitions) for such
period, to (ii) Consolidated Interest Expense for such period.
"Consolidated Indebtedness" means all Indebtedness for Money Borrowed
of the Borrower and its Subsidiaries, all determined on a consolidated
basis.
"Consolidated Interest Expense" means, with respect to any period of
computation thereof, the gross interest expense of the Borrower and its
Subsidiaries, including without limitation (i) the current amortized
portion of debt discounts to the extent included in gross interest expense,
(ii) the current amortized portion of all fees (including fees payable in
respect of any Rate Hedging Obligation) payable in connection with the
incurrence of Indebtedness to the extent included in gross interest expense
and (iii) the portion of any payments made in connection with Capital
Leases and Synthetic Leases allocable to interest expense, all determined
on a consolidated basis in accordance with GAAP applied on a Consistent
Basis.
"Consolidated Leverage Ratio" means, as of the date of computation
thereof, the ratio of (i) Consolidated Indebtedness (determined as at such
date) to (ii) Consolidated EBITDA (for the Four-Quarter Period ending on
(or most recently ended prior to) such date).
7
"Consolidated Net Income" means, for any period of computation
thereof, the gross revenues from operations of the Borrower and its
Subsidiaries (including payments received by the Borrower and its
Subsidiaries of (i) interest income, and (ii) dividends and distributions
made in the ordinary course of their businesses by Persons in which
investment is permitted pursuant to this Agreement and not related to an
extraordinary event), less all operating and non-operating expenses of the
Borrower and its Subsidiaries including taxes on income, all determined on
a consolidated basis in accordance with GAAP applied on a Consistent Basis;
but excluding as income: (i) net gains on the sale, conversion or other
disposition of capital assets, (ii) net gains on the acquisition,
retirement, sale or other disposition of capital stock and other securities
of the Borrower or its Subsidiaries, (iii) net gains on the collection of
proceeds of life insurance policies, (iv) any write-up of any asset, and
(v) any other net gain or credit of an extraordinary nature as determined
in accordance with GAAP applied on a Consistent Basis; provided that in
making any computation or determining any amount by reference to any item
appearing on the financial statements of the Borrower and its Subsidiaries,
all FASB 133 Adjustments to such computation or amount shall be
disregarded.
"Consolidated Net Worth" means, as of any date on which the amount
thereof is to be determined, Consolidated Shareholders' Equity minus
(without duplication of deductions in respect of items already deducted in
arriving at surplus and retained earnings) 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 all
as determined on a consolidated basis in accordance with GAAP applied on a
Consistent Basis; provided that in making any computation or determining
any amount by reference to any item appearing on the financial statements
of the Borrower and its Subsidiaries, all FASB 133 Adjustments to such
computation or amount shall be disregarded.
"Consolidated Shareholders' Equity" means, as of any date on which the
amount thereof is to be determined, the sum of the following in respect of
the Borrower and its Subsidiaries (determined on a consolidated basis and
excluding any upward adjustment after the Closing Date due to revaluation
of assets): (i) the amount of issued and outstanding share capital, plus
(ii) the amount of additional paid-in capital and retained earnings (or, in
the case of a deficit, minus the amount of such deficit), plus (iii) the
amount of any foreign currency translation adjustment (if positive, or, if
negative, minus the amount of such translation adjustment), minus (iv) the
amount of any treasury stock, all as determined 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 Subsidiaries as determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis.
"Contingent Obligation" means, as to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, guaranty, letter of credit or other obligation (each a "primary
obligation") of another Person (the "primary
8
obligor"), whether or not contingent, (a) to purchase, repurchase or
otherwise acquire any such primary obligation or any property constituting
direct or indirect security therefor, or (b) to advance or provide funds
(i) for the payment or discharge of any such primary obligation, or (ii) to
maintain working capital or equity capital of the primary obligor in
respect of any such primary obligation or otherwise to maintain the net
worth or solvency or any balance sheet item, level of income or financial
condition of such primary obligor, or (c) to purchase property, securities
or services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor thereof to make
payment of such primary obligation, or (d) otherwise to assure or hold
harmless the owner of any such primary obligation against loss or failure
or inability to perform in respect thereof. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 4.2 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.
"Contract Provider" means any Person who provides professional health
care services under or pursuant to any contract with the Borrower or any
Subsidiary.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 4.2 of one Type of Loan into another Type of Loan.
"Cost of Acquisition" means, with respect to any Acquisition, as at
the date of entering into any agreement therefor, the sum of the following
(without duplication): (i) the value of the capital stock, warrants or
options to acquire capital stock of Borrower or any Subsidiary to be
transferred in connection therewith, (ii) the amount of any cash and fair
market value of other property (excluding property described in clause (i)
and the unpaid principal amount of any debt instrument) given as
consideration, (iii) the amount (determined by using the face amount or the
amount payable at maturity, whichever is greater) of any Indebtedness
incurred, assumed or acquired by the Borrower or any Subsidiary 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
Subsidiaries in accordance with GAAP, (v) all amounts paid in respect of
covenants not to compete, consulting agreements that should be recorded on
financial statements of the Borrower and its Subsidiaries in accordance
with GAAP, and other affiliated contracts in connection with such
Acquisition, (vi) the aggregate fair market value of all other
consideration given by the Borrower or any Subsidiary in connection with
such Acquisition, and (vii) out of pocket transaction costs for the
services and expenses of attorneys, accountants and other consultants
incurred in effecting such transaction, and other similar transaction costs
so incurred. For purposes of determining the Cost of Acquisition for any
transaction,
9
(A) the capital stock of the Borrower shall be valued as the last price
reported on the national securities exchange on which it is listed, (B) the
capital stock of any Subsidiary shall be valued as determined by the Board
of Directors of such Subsidiary and, if requested by the Agent, determined
to be a reasonable valuation by the independent public accountants referred
to in Section 8.1(a), and (C) with respect to any Acquisition accomplished
pursuant to the exercise of options or warrants or the conversion of
securities, the Cost of Acquisition shall include both the cost of
acquiring such option, warrant or convertible security as well as the cost
of exercise or conversion.
"Credit Parties" means, collectively, the Borrower and each Guarantor.
"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 hereunder.
"Default Rate" means (i) with respect to each Eurodollar Rate Loan,
until the end of the Interest Period applicable thereto, a rate of two
percent (2%) above the Eurodollar Rate applicable to such Loan, and
thereafter at a rate of interest per annum which shall be two percent (2%)
above the Base Rate, (ii) with respect to Base Rate Loans, Reimbursement
Obligations, fees, and other amounts payable in respect of Obligations or
(except as otherwise expressly provided therein) the obligations of any
other Credit Party under any of the other Loan Documents, a rate of
interest per annum which shall be two percent (2%) above the Base Rate and
(iii) in any case, the maximum rate permitted by applicable law, if lower.
"Dollars" and the symbol "$" means dollars constituting legal tender
for the payment of public and private debts in the United States of
America.
"Domestic Subsidiary" means any Subsidiary of the Borrower organized
under the laws of the United States of America, any state or territory
thereof or the District of Columbia.
"Eligible Assignee" means (i) a Lender, (ii) an affiliate of a
Lender, and (iii) any other commercial bank or financial institution
approved by the Agent, such approval not to be unreasonably withheld or
delayed by the Agent, and, unless a Default or an Event of Default has
occurred and is continuing at the time any assignment is effected in
accordance with Section 12.1, the Borrower, such approval not to be
unreasonably withheld or delayed by the Borrower and such approval to be
deemed given by the Borrower (in the absence of notice to the contrary,
effective upon receipt) within five Business Days after 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.
"Eligible Securities" means the following obligations and any other
obligations previously approved in writing by the Agent:
(a) Government Securities;
10
(b) obligations of any corporation organized under the laws of
any state of the United States of America or under the laws of any
other nation, payable in the United States of America, expressed to
mature not later than 92 days following the date of issuance thereof
and rated in an investment grade rating category by S&P and ▇▇▇▇▇'▇;
(c) interest bearing demand or time deposits issued by any Lender
or certificates of deposit maturing within one year from the date of
issuance thereof and issued by a bank or trust company organized under
the laws of the United States or of any state thereof having capital
surplus and undivided profits aggregating at least $400,000,000 and
being rated "A" or better by S&P or "A" or better by ▇▇▇▇▇'▇;
(d) Repurchase Agreements;
(e) Municipal Obligations;
(f) Pre-Refunded Municipal Obligations;
(g) shares of mutual funds which invest in obligations described
in paragraphs (a) through (f) above, the shares of which mutual funds
are at all times rated "AAA" by S&P;
(h) tax-exempt or taxable adjustable rate preferred stock issued
by a Person having a rating of its long term unsecured debt of "A" or
better by S&P or "A-2" or better by ▇▇▇▇▇'▇; and
(i) asset-backed remarketed certificates of participation
representing a fractional undivided interest in the assets of a trust,
which certificates are rated at least "A-1" by S&P and "P-1" by
▇▇▇▇▇'▇.
"Employee Benefit Plan" means (i) any employee benefit plan, including
any Pension Plan, within the meaning of Section 3(3) of ERISA which (A) is
maintained for employees of the Borrower or any of its ERISA Affiliates, or
any Subsidiary or is assumed by the Borrower or any of its ERISA
Affiliates, or any Subsidiary in connection with any Acquisition or (B) has
at any time been maintained for the employees of the Borrower, any current
or former ERISA Affiliate, or any Subsidiary and (ii) any plan,
arrangement, understanding or scheme maintained by the Borrower or any
Subsidiary that provides retirement, deferred compensation, employee or
retiree medical or life insurance, severance benefits or any other benefit
covering any employee or former employee and which is administered under
any Foreign Benefit Law or regulated by any Governmental Authority other
than the United States of America.
"Environmental Laws" means any foreign, 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, as amended; the
Resource
11
Conservation and Recovery Act, as amended; the Toxic Substances Control
Act, as amended; the Clean Air Act, as amended; the Clean Water Act, as
amended; together with all regulations promulgated thereunder, and any
other "Superfund" or "Superlien" law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute and all rules and
regulations promulgated thereunder.
"ERISA Affiliate", as applied to the Borrower, means any Person or
trade or business which is a member of a group which is under common
control with the Borrower, who together with the Borrower, is treated as a
single employer within the meaning of Section 414(b) and (c) of the Code.
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
Rate _____________________________________ Margin
1- Reserve Requirement
"Eurodollar Rate Loan" means a Loan or Segment of the Term Loan for
which the rate of interest is determined by reference to the Eurodollar
Rate.
"Eurodollar Rate Segment" means a Segment bearing interest or to bear
interest at the Eurodollar Rate.
"Event of Default" means any of the occurrences set forth as such in
Section 10.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the regulations promulgated thereunder.
"Existing Credit Agreement" means that certain Fourth Amended and
Restated Credit and Reimbursement Agreement dated as of December 1, 1994
among the Borrower, Bank of America and the lenders party thereto, as
amended by Amendment Agreement No. 1 to Fourth Amended and Restated
Revolving Credit and Reimbursement Agreement dated as of September 30,
1996.
"Facility Guaranty" means each Guaranty Agreement between one or more
Guarantors and the Agent for the benefit of the Agent and the Lenders, as
the same may be amended, modified or supplemented.
"Facility Termination Date" means such date as all of the following
shall have occurred: (a) the Borrower shall have permanently terminated the
Five Year Revolving Credit Facility and the 364 Day Revolving Credit
Facility by payment in full of all Five Year Outstandings, 364 Day
Outstandings and Letter of Credit Outstandings, together with all accrued
and unpaid interest thereon, except for the undrawn portion of Letters of
Credit as have been fully cash collateralized in a manner consistent with
the terms of Section 10.1(B), (b) all Five Year Commitments, 364 Day
Commitments and Letter of Credit Commitments shall have terminated or
expired, (c) the Borrower shall have permanently terminated the Term Loan
by payment in full of all Term Loan Outstandings, together will all accrued
and unpaid interest thereon and (d) the Borrower shall have
12
fully, finally and irrevocably paid and satisfied in full all Obligations
(other than Obligations consisting of continuing indemnities and other
Contingent Obligations of the Borrower or any Guarantor that may be owing
to the Lenders pursuant to the Loan Documents and which expressly survive
termination of this Agreement).
"FASB No. 106 Adjustments" means adjustments to income (or loss) less
actual cash payments resulting from "retirement benefits other than
pensions" (as defined in the Statement of Financial Accounting Standards
No. 106).
"FASB No. 121 Adjustments" means adjustments charged to income (or
loss) resulting from impairment of long-lived assets (as defined in the
Statement of Financial Accounting Standards No. 121).
"FASB 133 Adjustments" means entries on or adjustments to any balance
sheet or statement of income in respect of derivatives or hedging
instruments as required or permitted by Statement of Financial Accounting
Standards No. 133.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers 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 transactions as determined by the Agent.
"Federal health care offense" has the same meaning as the definition
at subsection (a) of 18 U.S.C. (S) 24, and any statutes succeeding thereto.
"Federal health care program" has the same meaning as the definition
at subsection (f) of 42 U.S.C. (S) 1320a-7b, and any statutes succeeding
thereto.
"Fiscal Year" means the twelve month fiscal period of the Borrower and
its Subsidiaries commencing on October 1 of each calendar year and ending
on September 30 of the next calendar year.
"Five Year Commitment" means, with respect to each Lender, the
obligation of such Lender to make Five Year Loans to the Borrower up to an
aggregate principal amount at any time outstanding equal to such Lender's
Applicable Commitment Percentage of the Total Five Year Commitment.
"Five Year Loans" means, any Advance under the Five Year Revolving
Credit Facility.
"Five Year Notes" means, collectively, the promissory notes of
13
the Borrower evidencing Five Year Loans executed and delivered to the
Lenders as provided in Section 2.9(a) substantially in the form of Exhibit
F-1, with appropriate insertions as to amounts, dates and names of Lenders.
"Five Year Outstandings" means, as of any date of determination, the
aggregate principal amount of all Five Year Loans then outstanding.
"Five Year Revolving Credit Facility" means the facility described in
Section 2.1 hereof providing for Loans to the Borrower by the Lenders in
the aggregate principal amount of up to the Total Five Year Commitment.
"Five Year Stated Termination Date" means November 29, 2004.
"Five Year Termination Date" means (i) the Five Year Stated
Termination Date or (ii) such earlier date of termination of the Lenders'
obligations pursuant to Section 10.1 upon the occurrence of an Event of
Default, or (iii) such earlier date as the Borrower may voluntarily and
permanently terminate the Five Year Revolving Credit Facility by payment in
full of all Five Year Outstandings and all Letter of Credit Outstandings,
together with all accrued and unpaid interest thereon, and the cancellation
of or cash collateralization acceptable to the Issuing Bank of all Letters
of Credit.
"Foreign Benefit Law" means any applicable statute, law, ordinance,
code, rule, regulation, order or decree of any foreign nation or any
province, state, territory, protectorate or other political subdivision
thereof regulating, relating to, or imposing liability or standards of
conduct concerning, any Employee Benefit Plan.
"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, 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.
"Government Securities" means direct obligations of, or obligations
the timely payment of principal and interest on which are fully and
unconditionally guaranteed by, the United States of America.
"Governmental Authority" means any Federal, state, municipal, national
or other governmental department, commission, board, bureau, court, agency
or instrumentality or political subdivision thereof or any entity or
officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court,
in each case whether associated with a state of the United States, the
United States, or a foreign entity or government.
14
"Guarantors" means, at any date, the Subsidiaries who are required to
be parties to a Facility Guaranty at such date.
"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, transportation, disposal,
treatment, release, discharge or emission of which is subject to any
Environmental Law.
"HCFA" means the Health Care Financing Administration of the United
States Department of Health and Human Services, and any successor thereto.
"HHS" means the United States Department of Health and Human Services,
and any successor thereto.
"Hospital Facility" means a general acute care or psychiatric
hospital.
"Indebtedness" means as to any Person, without duplication, (a) all
Indebtedness for Money Borrowed of such Person, (b) all Rate Hedging
Obligations of such Person, (c) all indebtedness secured by any Lien on any
property or asset owned or held by such Person regardless or whether the
indebtedness secured thereby shall have been assumed by such Person or is
non-recourse to the credit of such Person, and (d) all Contingent
Obligations of such Person.
"Indebtedness for Money Borrowed" means with respect to any Person,
without duplication, all indebtedness in respect of money borrowed,
including without limitation, all obligations under Capital Leases and
Synthetic Leases, the deferred purchase price of any property or services,
the aggregate face amount of all surety bonds, letters of credit, and
bankers' acceptances, and (without duplication) all payment and
reimbursement obligations in respect thereof whether or not matured,
evidenced by a promissory note, bond, debenture or similar written
obligation for the payment of money (including reimbursement agreements and
conditional sales or similar title retention agreements).
"Interbank Offered Rate" means, with respect to any Eurodollar Rate
Loan for the Interest Period applicable thereto, the rate per annum
(rounded upwards, if necessary), to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank offered
rate for deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Interbank Offered Rate" shall mean, with respect to
any Eurodollar Rate Loan for the Interest Period applicable thereto, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered rate
for deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period, provided, however; if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to
the nearest
15
1/100 of 1%).
"Interest Period" means, for each Eurodollar Rate Loan, a period
commencing on the date such Eurodollar Rate Loan is made or Converted or
Continued and ending, at the Borrower's option, on the date one, two, three
or six months thereafter as notified to the Agent by the Authorized
Representative in accordance with the terms hereof; provided that,
(i) if an Interest Period for a Eurodollar Rate Loan would
end on a day which is not a Business Day, such Interest Period shall
be extended to the next Business Day (unless such extension would
cause the applicable Interest Period to end in the succeeding calendar
month, in which case such Interest Period shall end on the next
preceding Business Day); and
(ii) any Interest Period which begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month.
"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 Bank of America 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 Agent, 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 hereof for the account of the Borrower
in favor of a Person advancing credit or securing an obligation on behalf
of the Borrower.
"Letter of Credit Commitment" means, with respect to each Lender, the
obligation of such Lender to acquire Participations in respect of Letters
of Credit and Reimbursement Obligations up to an aggregate amount at any
one time outstanding equal to such Lender's Applicable Commitment
Percentage of the Total Letter of Credit Commitment as the same may be
increased or decreased from time to time pursuant to this Agreement.
"Letter of Credit Facility" means the facility described in Article
-------
III hereof 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 the Total Letter of Credit Commitment minus
outstanding Reimbursement Obligations.
"Letter of Credit Outstandings" means, as of any date of
determination, the aggregate amount available to be drawn under all Letters
of Credit plus Reimbursement Obligations then outstanding.
16
"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.
"Loans" means, collectively, the Five Year Loans, the 364 Day Loans
and the Term Loan (including each Segment thereof).
"Loan Documents" means this Agreement, the Notes, the Facility
Guaranties, 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 (including the
Issuing Bank) or the Agent in connection with the Loans made and
transactions contemplated under this Agreement, as the same may be amended,
supplemented or replaced from the time to time.
"Material Adverse Effect" means a material adverse effect on (i) the
business, properties, operations, prospects or condition, financial or
otherwise, of the Borrower and its Subsidiaries, taken as a whole, (ii) the
ability of any Credit Party to pay or perform its respective 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.
"Medicaid Certification" means certification by HCFA or a state agency
or entity under contract with HCFA that health care operations are 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 such entity administering the Medicaid program and
a health care operation under which the health care operation agrees to
provide services for Medicaid beneficiaries 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
17
plans for medical assistance enacted in connection with the statutes and
provisions described in clauses (i) and (ii) above; and (iv) all applicable
provisions of all rules, regulations, manuals and orders of all
Governmental Authorities promulgated pursuant to or in connection with the
statutes described in clause (iii) above and all state administrative,
reimbursement and other guidelines of all Governmental Authorities having
the force of law promulgated pursuant to or in connection with the statutes
described in clause (ii) above, in each case as may be amended,
supplemented or otherwise modified from time to time.
"Medicare Certification" means certification by HCFA or a state agency
or entity under contract with HCFA that the 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 such entity administering the Medicare program and
a health care operation under which the health care operation agrees to
provide services for Medicare beneficiaries 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, 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.
"Municipal Obligations" means general obligations issued by, and
supported by the full taxing authority of, any state of the United States
of America or of any municipal corporation or other public body organized
under the laws of any such state which are rated in the highest investment
rating category by both S&P and Moody's.
"Notes" means, collectively, the Five Year Notes and the 364 Day
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
18
Obligations and otherwise in respect of the Letters of Credit, (iii) all
liabilities of Borrower to any Lender (or any affiliate of any Lender)
which arise under a Swap Agreement, and (iv) the payment and performance of
all other obligations, liabilities and Indebtedness of the Borrower to the
Lenders (including the Issuing Bank), the Agent or BAS hereunder, under any
one or more of the other Loan Documents or with respect to the Loans.
"Operating Documents" means with respect to any corporation, limited
liability company, partnership, limited partnership, limited liability
partnership or other legally authorized incorporated or unincorporated
entity, the bylaws, operating agreement, partnership agreement, limited
partnership agreement or other applicable documents relating to the
operation, governance or management of such entity.
"Organizational Action" means with respect to any corporation, limited
liability company, partnership, limited partnership, limited liability
partnership or other legally authorized incorporated or unincorporated
entity, any corporate, organizational or partnership action (including any
required shareholder, member or partner action), or other similar official
action, as applicable, taken by such entity.
"Organizational Documents" means with respect to any corporation,
limited liability company, partnership, limited partnership, limited
liability partnership or other legally authorized incorporated or
unincorporated entity, the articles of incorporation, certificate of
incorporation, articles of organization, certificate of limited
partnership or other applicable organizational or charter documents
relating to the creation of such entity.
"Outstandings" means, collectively, at any date, the Letter of Credit
Outstandings, the Five Year Outstanding, the 364 Day Outstandings and the
Term Loan Outstandings on such date.
"Participation" means, with respect to any Lender (other than the
Issuing Bank) and a Letter of Credit, the extension of credit represented
by the participation of such Lender hereunder in the liability of the
Issuing Bank in respect of a Letter of Credit issued by the Issuing Bank in
accordance with the terms hereof.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" means any employee pension benefit plan within the
meaning of Section 3(2) of ERISA, other than a Multiemployer Plan, which is
subject to the provisions of Title IV of ERISA or Section 412 of the Code
and which (i) is maintained for employees of the Borrower or any of its
ERISA Affiliates or is assumed by the Borrower or any of its ERISA
Affiliates in connection with any Acquisition or (ii) has at any time been
maintained for the employees of the Borrower or any current or former ERISA
Affiliate.
"Person" means an individual, partnership, corporation, limited
liability company, limited liability partnership, trust, unincorporated
organization, association, joint venture or a government or agency or
political subdivision thereof.
19
"Pre-Refunded Municipal Obligations" means obligations of any state of
the United States of America or of any municipal corporation or other
public body organized under the laws of any such state which are rated,
based on the escrow, in the highest investment rating category by both S&P
and Moody's and which have been irrevocably called for redemption and
advance refunded through the deposit in escrow of Government Securities or
other debt securities which are (i) not callable at the option of the
issuer thereof prior to maturity, (ii) irrevocably pledged solely to the
payment of all principal and interest on such obligations as the same
becomes due and (iii) in a principal amount and bear such rate or rates of
interest as shall be sufficient to pay in full all principal of, interest,
and premium, if any, on such obligations as the same becomes due as
verified by a nationally recognized firm of certified public accountants.
"Prime Rate" means the per annum rate of interest established from
time to time by Bank of America as its prime rate, which rate may not be
the lowest rate of interest charged by Bank of America to its customers.
"Principal Office" means the principal office of Bank of America,
presently located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇-▇▇-▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Agency Services, or such other
office and address as the Agent may from time to time designate.
"Rate Hedging Obligations" means, without duplication, any and all
obligations of the Borrower or any Subsidiary, whether absolute or
contingent and howsoever and whensoever created, arising, evidenced or
acquired (including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto from
the fluctuations of interest rates, exchange rates or forward 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; (ii) all other "derivative instruments" as defined
in FASB 133 and which are subject to the reporting requirements of FASB
133; and (iii) any and all cancellations, buybacks, reversals, terminations
or assignments of any of the foregoing.
"Rating" means the rating of senior, unsecured, non-credit enhanced
Indebtedness for Money Borrowed of the Borrower in effect at any time,
which rating is made by either of S&P or Moody's.
"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 2.4(c)) for amounts theretofore paid by the Issuing Bank
pursuant to a drawing under
20
such Letter of Credit.
"Repurchase Agreement" means a repurchase agreement entered into with
any financial institution whose debt obligations or commercial paper are
rated "A" by either of S&P or Moody's or "A-1" by S&P or "P-1" by Moody's.
"Required Lenders" means, as of any date, Lenders on such date having
Credit Exposures (as defined below) aggregating more than 50% 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 at all times (a) other than following the occurrence
and during the continuance of an Event of Default, to the sum of its Five
Year Commitment plus 364 Day Commitment or Term Loan Outstandings if the
Borrower has converted all 364 Day Loans into the Term Loan in accordance
with Section 2.7, and (b) following the occurrence and during the
continuance of an Event of Default, to the sum of (i) the aggregate
principal amount of such Lender's Applicable Commitment Percentage of Five
Year Outstandings plus (ii) the amount of such Lender's Applicable
Commitment Percentage of 364 Day Outstandings plus (without duplication)
(iii) the amount of such Lender's Applicable Commitment Percentage of the
Term Loan Outstandings plus (iv) the amount of such Lender's Applicable
Commitment Percentage of Letter of Credit Outstandings; provided that, for
the purpose of this definition only, (A) if any Lender shall have failed to
fund its Applicable Commitment Percentage of any Advance, then the Five
Year Commitment or 364 Day Commitment, as the case may be, of such Lender
shall be deemed reduced by the amount it so failed to fund for so long as
such failure shall continue and such Lender's Credit Exposure attributable
to such failure shall be deemed held by any Lender making more than its
Applicable Commitment Percentage of such Advance to the extent it covers
such failure, (B) if any Lender shall have failed to pay to the Issuing
Bank upon demand its Applicable Commitment Percentage of any drawing under
any Letter of Credit resulting in an outstanding Reimbursement Obligation
(whether by funding its Participation therein or otherwise), such Lender's
Credit Exposure attributable to all Letter of Credit Outstandings shall be
deemed to be held by the Issuing Bank until such Lender shall pay such
deficiency amount to the Issuing Bank together with interest thereon as
provided in Section 4.9.
"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 of Governors of the
Federal Reserve System (or any successor) by member banks of the Federal
Reserve System against "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by
such member banks with respect to (i) any category of liabilities which
includes deposits by reference to which the Eurodollar Rate is to be
determined, or (ii) any category of extensions of credit or other assets
which include Eurodollar Rate Loans. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the Reserve
Requirement.
21
"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 Subsidiary Securities of its Subsidiaries (other than those
payable or distributable solely to the Borrower or any Subsidiary) 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 Borrower or any of its Subsidiaries (other than those payable or
distributable solely to the Borrower or any Subsidiary) 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 Borrower or any Subsidiary Securities of its Subsidiaries
now or hereafter outstanding; and (d) any issuance and sale of Subsidiary
Securities of any Subsidiary of the Borrower (or any option, warrant or
right to acquire such stock) other than to the Borrower or any Subsidiary.
"Restricted Subsidiary" means each of River Oaks Medical Office
Building, Inc., River Oaks Hospital, Inc., ROH, Inc. and Paintsville Hospital
Company so long as each such Person is unable to guarantee the Obligations of
the Borrower hereunder.
"S&P" means Standard & Poor's Ratings Group, a division of The ▇▇▇▇▇▇-
▇▇▇▇ Companies, Inc.
"Segment" means a portion of the Term Loan (or all thereof) with
respect to which a particular interest rate is (or is proposed to be)
applicable.
"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.
"Subsidiary" means any corporation or other entity in which more than
50% of its outstanding Voting Securities 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.
"Subsidiary Securities" means the shares of capital stock or the other
equity interests issued by or equity participations in any Subsidiary,
whether or not constituting a "security" under Article 8 of the Uniform
Commercial Code as in effect in any jurisdiction.
"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
22
and such Person and approved by the Required 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 or any affiliate of any Lender.
"Synthetic Lease" means a leveraged leasing arrangement under which
the lease of property is treated as an operating lease under GAAP but is
treated as a financing lease arrangement for legal and tax purposes.
"Term Loan" has the meaning assigned in Section 2.7.
"Term Loan Maturity Date" has the meaning assigned in Section 2.7.
"Term Loan Outstandings" means, as of any date of determination, the
aggregate principal amount of the Term Loan then outstanding.
"Term Loan Termination Date" means (i) the Term Loan Maturity Date or
(ii) such earlier date of termination of Lenders' obligations pursuant to
Section 10.1 upon the occurrence of an Event of Default, or (iii) such date
as the Borrower may voluntarily and permanently terminate the Term Loan by
payment in full of all Obligations incurred in connection with the Term
Loan.
"Term Note" has the meaning assigned in Section 2.7.
"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; or (x) any event or condition with respect to
any Employee Benefit Plan which is regulated by any Foreign Benefit Law
that results in the termination of such Employee Benefit Plan or the
revocation of such Employee Benefit Plan's authority to operate under the
applicable Foreign Benefit Law.
23
"364 Day Commitment" means, with respect to each Lender, the
obligation of such Lender to make 364 Day 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 364 Day Commitment.
"364 Day Loans" means any Advance under the 364 Day Revolving Credit
Facility.
"364 Day Notes" means, collectively, the promissory notes of the
Borrower evidencing 364 Day Loans executed and delivered to the Lenders as
provided in Section 2.9(b) substantially in the form of Exhibit F-2, with
appropriate insertions as to amounts, dates and names of Lenders.
"364 Day Outstandings" means as of any date of determination, the
aggregate principal amount of all 364 Day Loans then outstanding.
"364 Day Revolving Credit Facility" means the facility described in
Section 2.2 hereof providing for Loans to the Borrower by the Lenders in
the aggregate principal amount of up to the Total 364 Day Commitment.
"364 Day Stated Termination Date" means November 27, 2000.
"364 Day Termination Date" means (i) the 364 Day Stated Termination
Date or (ii) such earlier date of termination of the Lenders' obligations
pursuant to Section 10.1 upon the occurrence of an Event of Default, or
(iii) such earlier date as the Borrower may voluntarily and permanently
terminate the 364 Day Revolving Credit Facility by payment in full of all
364 Day Outstandings, together with all accrued and unpaid interest
thereon.
"Total Letter of Credit Commitment" means an amount not to exceed
$15,000,000.
"Total Five Year Commitment" means a principal amount equal to
$450,000,000 as reduced from time to time in accordance with Section 2.6.
"Total 364 Day Commitment" means a principal amount equal to
$150,000,000 as reduced from time to time in accordance with Section 2.6.
"Trigger Date" means the date the Rating is lower than BBB- by S&P or
Baa3 by Moody's.
"Type" shall mean any type of Loan (i.e., a Base Rate Loan or a
Eurodollar Rate Loan).
"Voting Securities" 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.
24
"Year 2000 Compliant" means all computer applications (including those
affected by information received from its suppliers and vendors) that are
material to the Borrower's and its Subsidiaries' business and operations,
taken as a whole, will on a timely basis be able to perform properly date-
sensitive functions involving all dates on and after January 1, 2000.
"Year 2000 Problem" means the risk that computer applications used by
the Borrower or any of its Subsidiaries (including those affected by
information received from its suppliers and vendors) may be unable to
recognize and perform properly date-sensitive functions involving certain
dates on and after January 1, 2000.
1.2. Rules of Interpretation.
-----------------------
(a) All accounting terms not specifically defined herein shall have
the meanings assigned to such terms and shall be interpreted in accordance
with GAAP applied on a Consistent Basis.
(b) Each term defined in Articles 1, 8 or 9 of the Florida Uniform
Commercial Code shall have the meaning given therein unless otherwise
defined herein, except to the extent that the Uniform Commercial Code of
another jurisdiction is controlling, in which case such terms shall have
the meaning given in the Uniform Commercial Code of the applicable
jurisdiction.
(c) 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.
(d) Except as otherwise expressly provided, references in any Loan
Document 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 such Loan
Document.
(e) 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.
(f) 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.
(g) 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.
(h) Except as otherwise expressly provided, all dates and
25
times of day specified herein shall refer to such dates and times at
Charlotte, North Carolina.
(i) Whenever interest rates or fees are established in whole or in
part by reference to a numerical percentage expressed as "___%", such
arithmetic expression shall be interpreted in accordance with the
convention that 1% = 100 basis points.
(j) 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.
(k) 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.
(l) 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.
26
ARTICLE II
The Credit Facilities
---------------------
2.1. Five Year Revolving Credit Facility. Subject to the terms and
-----------------------------------
conditions of this Agreement, each Lender severally agrees to make Advances to
the Borrower under the Five Year Revolving Credit Facility from time to time
from the Closing Date until the Five Year 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 Five
Year 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
Agent has accelerated the maturity of any of the Notes as a result of an Event
of Default; provided further, however, that immediately after giving effect to
each such Advance, the amount of Five Year Outstandings plus Letter of Credit
Outstandings shall not exceed the Total Five Year Commitment. Within such
limits and subject to the other terms and conditions of this Agreement, the
Borrower may borrow, repay and reborrow under the Five Year Revolving Credit
Facility on any Business Day from the Closing Date until, but (as to borrowings
and reborrowings) not including, the Five Year Termination Date.
2.2. 364 Day Revolving Credit Facility. Subject to the terms and
---------------------------------
conditions of this Agreement, each Lender severally agrees to make Advances to
the Borrower under the 364 Day Revolving Credit Facility from time to time from
the Closing Date until the 364 Day 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 364 Day
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
Agent has accelerated the maturity of any of any of the Notes as a result of an
Event of Default; provided further, however, that immediately after giving
effect to each such Advance, the amount of 364 Day Outstandings shall not exceed
the Total 364 Day Commitment. Within such limits and subject to the other terms
and conditions of this Agreement, the Borrower may borrow, repay and reborrow
under the 364 Day Revolving Credit Facility on any Business Day from the Closing
Date until, but (as to borrowings and reborrowings) not including, the 364 Day
Termination Date.
2.3. Amounts. (a) Except as otherwise permitted by the Lenders from time
-------
to time, the amount of Five Year Outstandings plus Letter of Credit Outstandings
shall not exceed at any time the Total Five Year 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 Advance under the Five Year Revolving Credit Facility, other
than Base Rate Refunding Loans, shall be in an amount of at least $10,000,000,
and, if greater than $10,000,000, an integral multiple of $5,000,000.
(b) Except as otherwise permitted by the Lenders from time to time, the
amount of 364 Day Outstandings shall not exceed at any time the Total 364 Day
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
27
Advance under the 364 Day Revolving Credit Facility, 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.
2.4. Advances. (a) An Authorized Representative shall give the Agent
--------
(i) at least three (3) Business Days' irrevocable telephonic notice of each
Eurodollar Rate Loan (whether representing an additional borrowing or the
Continuation of a borrowing hereunder or the Conversion of a borrowing hereunder
from a Base Rate Loan to a Eurodollar Rate Loan) prior to 10:30 A.M. and (ii)
irrevocable telephonic notice of each Base Rate Loan (other than Base Rate
Refunding Loans to the extent the same are effected without notice pursuant to
Section 2.4(d) and whether representing an additional borrowing hereunder or the
Conversion of borrowing hereunder from Eurodollar Rate Loans to Base Rate Loans)
prior to 10:30 A.M. on the day of such proposed Loan. Each such notice shall be
effective upon receipt by the Agent, shall specify the amount of the borrowing,
whether the borrowing is under the Five Year Revolving Credit Facility or the
364 Day Revolving Credit Facility, 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. The Authorized Representative shall
provide the Agent written confirmation of each such telephonic notice in the
form of a Borrowing Notice or Interest Rate Selection Notice (as applicable)
with appropriate insertions but failure to provide such confirmation shall not
affect the validity of such telephonic notice. 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.
(b) Not later than 2:00 P.M. on the date specified for each borrowing
under Section 2.1 or 2.2, each Lender shall, pursuant to the terms and subject
to the conditions of this Agreement, make the amount of the Advance or Advances
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 Five Year Loan(s) or 364 Day Loan(s) 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 to the Borrower's Account or otherwise as shall be directed
in the applicable Borrowing Notice by the Authorized Representative and
reasonably acceptable to the Agent.
(c) Notwithstanding the foregoing, if a drawing is made under any Letter
of Credit, such drawing is honored by the Issuing Bank, and the Borrower shall
not immediately fully reimburse the Issuing Bank in respect of such drawing from
other funds available to the Borrower, (i) provided that the conditions to
making a Five Year 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 to the Agent at its Principal Office by each Lender under the Five Year
Revolving Credit Facility in an amount equal to such Lender's Applicable
Commitment
28
Percentage of such Reimbursement Obligation, and (ii) if the conditions to
making a Five Year 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) at its Principal Office 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 of the
Total Letter of Credit Commitment. If a drawing is presented under any Letter of
Credit in accordance with the terms thereof and the Borrower shall not
immediately reimburse the Issuing Bank in respect thereof, then notice of such
drawing or payment shall be provided promptly by the Issuing Bank to the 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 either make a Base Rate Refunding Loan or fund the purchase of its
Participation as specified above 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
such notice to the Lenders is given by the Agent after 12:00 noon on any
Business Day, each Lender shall either make such Base Rate Refunding Loan or
fund such purchase before 12:00 noon on the next following Business Day.
2.5. Repayment of Loans The principal amount of each Five Year Loan shall
------------------
be due and payable to the Agent for the benefit of each Lender in full on the
Five Year Termination Date, or earlier as specifically provided herein. The
principal amount of each 364 Day Loan shall be due and payable to the Agent for
the benefit of each Lender in full on the 364 Day Termination Date, or earlier
as specifically provided herein. The principal amount of any Loan may be prepaid
in whole or in part on any Business Day, upon (a) at least three (3) Business
Days' irrevocable telephonic notice in the case of each Loan that is a
Eurodollar Rate Loan from an Authorized Representative (effective upon receipt)
to the Agent prior to 10:30 A.M. and (b) irrevocable telephonic notice in the
case of each Loan that is a Base Rate Loan from an Authorized Representative
(effective upon receipt) to the Agent prior to 10:30 A.M. on the day of such
proposed repayment. The Authorized Representative shall provide the Agent
written confirmation of each such telephonic notice but failure to provide such
confirmation shall not effect the validity of such telephonic notice. All
prepayments of Five Year 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 Five Year Outstandings, or such other amount as
necessary to comply with Section 2.3(a). All prepayments of 364 Day 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 364 Day
Outstandings, or such other amount as necessary to comply with Section 2.3(b).
2.6. Reductions. (a) The Borrower shall, by 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 reduce the Total Five Year
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 $5,000,000 or such greater amount which is in an integral multiple of
$1,000,000, or the
29
entire remaining Total Five Year Commitment, and shall permanently reduce the
Total Five Year Commitment. Each reduction of the Total Five Year Commitment
shall be accompanied by payment of the Five Year Loans to the extent that the
principal amount of Five Year Outstandings plus Letter of Credit Outstandings
exceeds the Total Five Year Commitment after giving effect to such reduction,
together with accrued and unpaid interest on the amounts prepaid.
(b) The Borrower shall, by 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 reduce the Total 364 Day 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 $5,000,000
or such greater amount which is in an integral multiple of $1,000,000, or the
entire remaining Total 364 Day Commitment, and shall permanently reduce the
Total 364 Day Commitment. Each reduction of the Total 364 Day Commitment shall
be accompanied by payment of the 364 Day Loans to the extent that the principal
amount of 364 Day Outstandings exceeds the Total 364 Day Commitment after giving
effect to such reduction, together with accrued and unpaid interest on the
amounts prepaid.
2.7. 364 Day Term Loan Option. The Borrower shall have the option, so long
------------------------
as no Default or Event of Default shall have occurred and be continuing, to
convert all or any part of the 364 Day Outstandings as of the 364 Day Stated
Termination Date to a term loan maturing on the date (the "Term Loan Maturity
Date") that is one year after the 364 Day Stated Termination Date. The Borrower
may exercise such option by giving written notice to the Agent at least thirty
(30) days prior to the 364 Day Stated Termination Date. If the Agent does not
receive such notification within the time period specified in the preceding
sentence of this Section 2.7, the principal amount of all 364 Day Loans together
with all accrued interest thereon shall be due and payable on the 364 Day Stated
Termination Date. 364 Day Outstandings converted to a Term Loan at the election
of the Borrower in accordance with this Section 2.7 shall be referred to
collectively as the "Term Loan". The Term Loan may be comprised of Base Rate
Segments and Eurodollar Rate Segments as the Borrower may elect in accordance
with the provisions hereof. Amounts repaid or prepaid on the Term Loan may not
be reborrowed. For purposes of this Agreement, in the event that the Borrower
elects to convert all or any part of 364 Day Outstandings on the 364 Day Stated
Termination Date in accordance herewith, then on and after the 364 Day Stated
Termination Date (a) references herein to the "Total 364 Day Commitment" shall
mean the aggregate principal amount of the Term Loan as of the 364 Day Stated
Termination Date less all principal payments made with respect to the Term Loan
hereunder, whether voluntary or optional prepayment or otherwise, (b)
references herein to "364 Day Commitment" shall mean, with respect to each
Lender, (i) on the 364 Day Stated Termination Date, the obligation of such
Lender to permit such conversion of its 364 Day Loans to a portion of the Term
Loan in a principal amount equal to such Lender's Applicable Commitment
Percentage of the aggregate Term Loan and (ii) thereafter the obligation of such
Lender to maintain the Term Loan up to an aggregate principal amount at any time
outstanding equal to such Lender's Applicable Commitment Percentage of the Total
364 Day Commitment (as such term is modified by clause (a) above), (c)
references herein to the "364 Day Stated Termination Date" shall mean the Term
Loan Maturity Date and (d)
30
the 364 Day Note of each Lender shall be deemed to evidence such Lender's
portion of the Term Loan, and references to "364 Day Notes" shall mean the Term
Notes. All Term Loan Outstandings plus all accrued and unpaid interest thereon
shall be due and payable on the Term Loan Maturity Date. The Borrower may make
optional prepayments of the Term Loan in accordance with Section 2.5. The
Segments of the Term Loan shall bear interest on the same terms in Article IV as
apply to 364 Day Loans prior to the 364 Day Termination Date.
2.8. Use of Proceeds. The proceeds of the Loans made pursuant to the
---------------
Five Year Revolving Credit Facility and 364 Day Revolving Credit Facility
hereunder shall be used by the Borrower (i) to refinance Indebtedness for Money
Borrowed owing by the Borrower under the Existing Credit Agreement and (ii) for
general corporate purposes, including permitted Acquisitions and the repurchase
of up to $250,000,000 of the Borrower's capital stock.
2.9. Notes.
-----
(a) Five Year Notes. Five Year Loans made by each Lender shall be
---------------
evidenced by the Five Year Note payable to the order of such Lender in the
respective amount of its Applicable Commitment Percentage of the Total Five Year
Commitment, which Five Year 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) 364 Day Notes. 364 Day Loans and the Term Loan made by each Lender
-------------
shall be evidenced by the 364 Day Note payable to the order of such Lender in
the respective amount of its Applicable Commitment Percentage of the Total 364
Day Commitment, which 364 Day 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.
2.10. Guaranty. As soon as practicable but in any event no later than
--------
twenty (20) days following the Trigger Date, the Borrower shall cause a Facility
Guaranty and the other documents described in Section 8.20 to be delivered by
each of its Domestic Subsidiaries (other than the Restricted Subsidiaries) in
form and substance reasonably acceptable to the Agent, as guaranteeing the full
and timely payment and performance of the Obligations then existing or
thereafter arising.
31
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 reasonably acceptable to the Issuing Bank; provided,
that (i) the Issuing Bank shall not be obligated to issue (or renew) any Letter
of Credit if it has been notified by the Agent or has actual knowledge that a
Default or Event of Default has occurred and is continuing, (ii) the Letter of
Credit Outstandings shall not exceed the Total Letter of Credit Commitment and
(iii) no Letter of Credit shall be issued (or renewed) if, after giving effect
thereto, Letter of Credit Outstandings plus Five Year Outstandings shall exceed
the Total Five Year 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 earlier to
occur of one year after the date of its issuance or the seventh Business Day
prior to the Five Year Stated Termination Date.
3.2. Reimbursement and Participations.
--------------------------------
(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 Five Year Revolving Credit
Facility if permitted by Section 2.1) sufficient funds to pay all debts and
liabilities arising under 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 2.4(c), amounts shall
be paid pursuant to Advances under the Five Year 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 2.4(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, its Applicable Commitment Percentage of the
liability of the Issuing Bank under such Letter of Credit in the manner and with
the effect provided in
32
Section 2.4(c).
(d) Simultaneously with the making of each payment by a Lender to
the Issuing Bank pursuant to Section 2.4(c)(ii), 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
the Lender made its payment) in the related Reimbursement Obligation of the
Borrower. Each Lender's obligation to make payment to the Agent for the account
of the Issuing Bank pursuant to Section 2.4(c) and 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. In the event the
Lenders have purchased Participations in any Reimbursement Obligation as set
forth 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.
(e) Promptly following the end of each calendar quarter, the Issuing
Bank shall deliver to the Agent a notice describing the aggregate undrawn amount
of all Letters of Credit at the end of such quarter. Upon the request of any
Lender from time to time, the Issuing Bank shall deliver to the Agent, and the
Agent shall deliver to such Lender, any other information reasonably requested
by such Lender with respect to each Letter of Credit outstanding.
(f) The issuance by the Issuing Bank of each Letter of Credit shall,
in addition to the conditions precedent set forth in Article VI, be subject to
the conditions that such Letter of Credit be in such form and contain such terms
as shall be reasonably satisfactory to the Issuing Bank consistent with the then
current practices and procedures of the Issuing Bank with respect to similar
letters of credit, and the Borrower shall have executed and delivered such other
instruments and agreements relating to such Letters of Credit as the Issuing
Bank shall have reasonably requested consistent with such practices and
procedures and shall not be in conflict with any of the express terms herein
contained. All Letters of Credit shall be issued pursuant to and subject to the
Uniform Customs and Practice for Documentary Credits, 1993 revision,
International Chamber of Commerce Publication No. 500 or, if the Issuing Bank
shall elect by express reference in an affected Letter of Credit, the
International Chamber of Commerce International Standby Practices commonly
referred to as "ISP98", or any subsequent amendment or revision of either
thereof.
(g) 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.
(h) Without limiting the generality of the provisions of Section
12.9, the Borrower hereby agrees to indemnify and hold harmless
33
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 gross negligence of the
party to be indemnified or (ii) 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(h) shall
survive repayment of the Obligations, occurrence of the Five Year Termination
Date, the Facility Termination Date and expiration or termination of this
Agreement.
(i) Without limiting Borrower's rights as set forth in Section
3.2(h), the obligation of the Borrower to immediately reimburse the Issuing Bank
for drawings made under Letters of Credit and the Issuing Bank'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 Application
and Agreement for any Letter of Credit, under all circumstances whatsoever,
including the following circumstances:
(i) any lack of validity or enforceability of the Letter of
Credit, the obligation supported by the Letter of Credit or any other
agreement or instrument relating thereto (collectively, the "Related
LC Documents");
(ii) any amendment or waiver of or any consent to or departure
from all or any of the Related LC Documents;
(iii) the existence of any claim, setoff, defense (other than
the defense of payment in accordance with the terms of this Agreement)
or other rights which the Borrower may have at any time against any
beneficiary or any transferee of a Letter of Credit (or any persons or
entities for whom any such beneficiary or any such transferee may be
acting), the Agent, the Lenders or any other Person, whether in
connection with the Loan Documents, the Related LC Documents or any
unrelated transaction;
(iv) any breach of contract or other dispute between the
Borrower and any beneficiary or any transferee of a Letter of Credit
(or any persons or entities for whom such beneficiary or any such
transferee may be acting), the Agent, the Lenders or any other Person;
(v) any draft, statement or any other document presented under
the 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;
34
(vi) any delay, extension of time, renewal, compromise or other
indulgence or modification granted or agreed to by the Agent, 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 contained in this Section 3.2 shall be deemed to
release the Issuing Bank or any Lender of any liability for actual loss arising
as a result of its gross negligence or willful misconduct or out of the wrongful
dishonor by the Issuing Bank of a proper demand for payment made under and
strictly complying with the terms of any Letter of Credit.
35
ARTICLE IV
Eurodollar Funding, Fees, and Payment Conventions
-------------------------------------------------
4.1 Interest Rate Options. Eurodollar Rate Loans and Base Rate Loans
---------------------
may be outstanding at the same time and, so long as no Default or Event of
Default shall have occurred and be continuing, the Borrower shall have the
option to elect the Type of Loan and the duration of the initial and any
subsequent Interest Periods and to Convert Loans in accordance with Sections
2.4(a) and 4.2, as applicable; provided, however, (a) there shall not be
outstanding at any one time Eurodollar Rate Loans (including Eurodollar Rate
Segments) having more than eight (8) different Interest Periods, (b) each
Eurodollar Rate Loan (including each Conversion into and each Continuation as a
Eurodollar Rate Loan) shall be in an amount of $10,000,000 or, if greater than
$10,000,000, an integral multiple of $1,000,000, and (c) no Eurodollar Rate
Loan shall have an Interest Period that extends beyond the Five Year Stated
Termination Date in the case of Five Year Loans, the 364 Day Stated Termination
Date in the case of 364 Day Loans, or the Term Loan Maturity Date in the case of
any Segment. 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 or Segment to or Continuation of a Loan or
Segment as a Eurodollar Rate Loan by the time prescribed by Sections 2.4(a) and
4.2, as applicable, the Borrower shall be deemed to have elected to obtain or
Convert such Loan or Segment to (or Continue such Loan or Segment as) a Base
Rate Loan until the Borrower notifies the Agent in accordance with Section 4.2.
The Borrower shall not be entitled to elect to Continue any Loan or Segment as
or Convert any Loan or Segment into a Eurodollar Rate Loan if a Default or Event
of Default shall have occurred and be continuing.
4.2 Conversions and Elections of Subsequent Interest Periods. Subject
--------------------------------------------------------
to the limitations set forth in the definition of "Interest Period" and in
Section 4.1 and Article V, the Borrower may:
(a) upon delivery of telephonic notice to the Agent (which shall be
irrevocable) on or before 10:30 A.M. on any Business Day, Convert any Eurodollar
Rate Loan to a Base Rate Loan on the last day of the Interest Period for such
Eurodollar Rate Loan; and
(b) provided that no Default or Event of Default shall have occurred and
be continuing, upon delivery of telephonic notice to the Agent (which shall be
irrevocable) on or before 10:30 A.M. three (3) Business Days' prior to the date
of such Conversion or Continuation:
(i) elect a subsequent Interest Period for any Eurodollar Rate Loan
to begin on the last day of the then current Interest Period for such
Eurodollar Rate Loan; or
(ii) Convert any Base Rate Loan to a Eurodollar Rate Loan on any
Business Day.
Each such notice shall be effective upon receipt by the Agent, shall specify the
amount of the Eurodollar Rate Loan affected, and, if a Continuation as or
Conversion into a Eurodollar Rate Loan, the Interest Period to be used in the
computation of interest. The Authorized Representative shall provide the Agent
written confirmation of each such telephonic notice in the form of a Borrowing
Notice or Interest Rate
36
Selection Notice (as applicable) with appropriate insertions but failure to
provide such confirmation shall not affect the validity of such telephonic
notice. Notice of receipt of such Borrowing Notice or Interest Rate Selection
Notice, as the case may be, 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 3:00 P.M. on the
same day as the Agent's receipt of such notice. All such Continuations or
Conversions of Loans shall be effected pro rata based on the Applicable
Commitment Percentages of the Lenders.
4.3 Payment of Interest. The Borrower shall pay interest on the
-------------------
outstanding and unpaid principal amount of each Loan, commencing on the first
date of such Loan until such Loan shall be repaid, at the applicable Base Rate
or Eurodollar Rate as designated by the Borrower in the related Borrowing Notice
or Interest Rate Selection Notice or as otherwise provided hereunder. Interest
on each Loan shall be paid (a) in the case of any Base Rate Loan, quarterly in
arrears on the last Business Day of each March, June, September and December,
commencing on December 31, 1999, until (i) the Five Year Termination Date in the
case of Five Year Loans, (ii) the 364 Day Termination Date in the case of 364
Day Loans, subject to the conversion of any thereof to a Term Loan pursuant to
Section 2.7, and (iii) the Term Loan Maturity Date in the case of Term Loans, at
which date the entire principal amount of and all accrued interest on Loans
shall be paid in full, (b) in the case of any Eurodollar Rate Loan, on last day
of the applicable Interest Period for such Eurodollar Rate Loan and if such
Interest Period extends for more than three (3) months, at intervals of three
(3) months after the first day of such Interest Period, and (c) upon payment in
full of the related Loan; provided, however, that if any Event of Default shall
occur and be continuing, all amounts outstanding hereunder shall bear interest
thereafter until paid in full at the Default Rate.
4.4 Prepayments of Eurodollar Rate Loans. Whenever any payment of
------------------------------------
principal shall be made in respect of any Loan hereunder, whether at maturity,
on acceleration, by optional or mandatory prepayment or as otherwise required or
permitted hereunder, with the effect that any Eurodollar Rate Loan shall be
prepaid in whole or in part prior to the last day of the Interest Period
applicable to such Eurodollar Rate Loan, such payment of principal shall be
accompanied by the additional payment, if any, required by Section 5.5.
4.5 Manner of Payment. (a) Each payment of principal (including any
-----------------
prepayment) and payment of interest and fees, and any other amount required to
be paid by or on behalf of the Borrower to the Lenders, the Issuing Bank, the
Agent, or Bank of America with respect to any Loan, Letter of Credit, or
Reimbursement Obligation, shall be made to the Agent at the Principal Office in
Dollars in immediately available funds without condition or deduction or for any
setoff, recoupment, deduction or counterclaim on or before 12:30 P.M. on the
date such payment is due. The Agent may, but shall not be obligated to, debit
the amount of such payment from any one or more ordinary deposit accounts of the
Borrower with the Agent.
(b) Any payment made by or on behalf of the Borrower that is not made both
in Dollars in immediately available funds and prior to 12:30 P.M. on the date
such payment is to be made shall constitute a non-conforming payment. Any such
non-conforming payment shall not be deemed to be received until the later of (i)
the time such funds become available
37
funds and (ii) the next Business Day. Any non-conforming payment may constitute
or become a Default or Event of Default as otherwise provided herein. Interest
shall continue to accrue at the Default Rate on any principal or fees as to
which no payment or a non-conforming payment is made from the date such amount
was due and payable until the later of (i) the date such funds become available
funds or (ii) the next Business Day.
(c) In the event that any payment hereunder or under any of 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, however, that interest
shall continue to accrue during the period of any such extension; and provided
further, however, that in no event shall any such due date be extended beyond
the Five Year Termination Date in the case of Five Year Loans, the 364 Day
Termination Date in the case of 364 Day Loans and the Term Loan Maturity Date in
the case of Term Loans.
4.6 Fees. (a) Five Year Facility Fee. For the period beginning on the
---- ----------------------
Closing Date and ending on the Five Year Termination Date, the Borrower agrees
to pay to the Agent, for the pro rata benefit of the Lenders based on their
Applicable Commitment Percentages, a facility fee equal to the Applicable Five
Year Facility Fee multiplied by the average daily amount by which the Total Five
Year Commitment exceeds the sum of (i) Five Year Outstandings plus (ii) Letter
of Credit Outstandings. Such fees shall be due in arrears on the last Business
Day of each March, June, September and December commencing December 31, 1999 to
and on the Five Year Termination Date. Notwithstanding the foregoing, so long
as any Lender fails to make available any portion of its Five Year Commitment
when requested, such Lender shall not be entitled to receive payment of its pro
rata share of such fee until such Lender shall make available such portion.
(b) 364 Day Facility Fee. For the period beginning on the Closing Date
--------------------
and ending on the 364 Day Termination Date, the Borrower agrees to pay to the
Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, a facility fee equal to the Applicable 364 Day Facility
Fee multiplied by the average daily amount by which the Total 364 Day Commitment
exceeds the 364 Day Outstandings. Such fees shall be due in arrears on the last
Business Day of each March, June, September and December commencing December 31,
1999 to and on the 364 Day Termination Date. Notwithstanding the foregoing, so
long as any Lender fails to make available any portion of its 364 Day Commitment
when requested, such Lender shall not be entitled to receive payment of its pro
rata share of such fee until such Lender shall make available such portion.
(c) Letter of Credit Facility Fees. 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 for
Eurodollar Rate Loans. Such fees shall be due with respect to each Letter of
Credit quarterly in arrears on the last day of each March, June, September and
December, the first such payment to be made on the first such date occurring
after the date of issuance of a Letter of Credit.
(d) Letter of Credit Fronting and Administrative Fees. The Borrower
-------------------------------------------------
38
shall pay to the Issuing Bank a fronting fee of 0.125 percent per annum (0.125%)
on the aggregate amount available to be drawn on each outstanding Letter of
Credit, such fee to be payable on the date of the issuance or renewal of any
Letter of Credit. The Borrower shall also 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.
(e) Agent Fees. The Borrower agrees to pay to the Agent, for the Agent's
----------
individual account, an annual Agent's fee, such fee to be payable in such
amounts and at such dates as from time to time agreed to by the Borrower and
Agent in writing.
4.7 Pro Rata Payments. Except as otherwise specified herein, (a) each
-----------------
payment on account of the principal of and interest on Loans, the fees described
in Section 4.6(a), (b) and (c), and Reimbursement Obligations as to which the
Lenders have funded their respective Participations which remain outstanding,
shall be made to the Agent for the account of the Lenders pro rata based on
their Applicable Commitment Percentages, and (b) the Agent will promptly
distribute to the Lenders in immediately available funds payments received in
fully collected, immediately available funds from the Borrower.
4.8 Computation of Rates and Fees. Except as may be otherwise expressly
-----------------------------
provided, (a) interest on Base Rate Loans shall be computed on the basis of a
year of 365/366 days and calculated for the actual number of days elapsed and
(b) all other interest rates (including each Eurodollar Rate and the Default
Rate) and fees shall be computed on the basis of a year of 360 days and
calculated for actual days elapsed.
4.9 Deficiency Advances; Failure to Purchase Participations. No Lender
-------------------------------------------------------
shall be responsible for any default of any other Lender in respect to such
other Lender's obligation to make any Loan or Advance hereunder or to fund its
purchase of any Participation hereunder nor shall the Five Year Commitment, 364
Day Commitment or Letter of Credit Commitment of any Lender hereunder be
increased as a result of such default of any other Lender. Without limiting the
generality of the foregoing or the provisions of Section 4.10, in the event any
Lender shall fail to advance funds to the Borrower as herein provided, the Agent
may in its discretion, but shall not be obligated to, advance under the
applicable 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, (i)
such defaulting Lender shall not be entitled to receive payments of principal,
interest or fees with respect to such deficiency advance until such deficiency
advance (together with interest thereon as provided in clause (ii)) shall be
paid by such Lender and (ii) 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 a Borrower on each Loan comprising the deficiency
advance at the Federal Funds Rate, then such payment shall be credited against
the applicable Note of the Agent in full payment of such deficiency advance and
such Borrower shall be deemed to have borrowed the amount of such deficiency
39
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 such Borrower thereon.
In the event any Lender shall fail to fund its purchase of a Participation after
notice from the Issuing Bank, such Lender shall pay to the Issuing Bank, such
amount on demand, together with interest on the amount so due from the date of
such notice at the Federal Funds Rate on the date such purchase price is
received by the Issuing Bank.
4.10 Intraday Funding. Without limiting the provisions of Section 4.9,
----------------
unless the Borrower or any Lender has notified the Agent not later than 12:00
Noon of the Business Day before the date any payment (including in the case of
Lenders any Advance) to be made by it is due, that it does not intend to remit
such payment, the Agent may, in its discretion, assume that Borrower or each
Lender, as the case may be, has timely remitted such payment in the manner
required hereunder and may, in its discretion and in reliance thereon, make
available such payment (or portion thereof) to the Person entitled thereto as
otherwise provided herein. If such payment was not in fact remitted to the
Agent in the manner required hereunder, then:
(i) if Borrower failed to make such payment, each Lender shall
forthwith on demand repay to the Agent the amount of such assumed payment
made available to such Lender, together with interest thereon in respect of
each day from and including the date such amount was made available by the
Agent to such Lender to the date such amount is repaid to the Agent at the
Federal Funds Rate; and
(ii) if any Lender failed to make such payment, the Agent shall be
entitled to recover such corresponding amount forthwith upon the Agent's
demand therefor, the Agent promptly shall notify the Borrower, and the
Borrower shall promptly pay such corresponding amount to the Agent in
immediately available funds upon receipt of such demand. The Agent also
shall be entitled to recover interest on such corresponding amount in
respect of each day from the date such corresponding amount was made
available by the Agent to the Borrower to the date such corresponding
amount is recovered by the Agent, (A) from such Lender at a rate per annum
equal to the daily Federal Funds Rate or (B) from the Borrower, at a rate
per annum equal to the interest rate applicable to the Loan which includes
such corresponding amount. Until the Agent shall recover such
corresponding amount together with interest thereon, such corresponding
amount shall constitute a deficiency advance within the meaning of Section
4.9. Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights
which the Agent or the Borrower may have against any Lender as a result of
any default by such Lender hereunder.
40
ARTICLE V
Change in Circumstances
-----------------------
5.1. Increased Cost and Reduced Return.
---------------------------------
(a) If, after the date hereof, the adoption of any applicable law, rule,
or regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such governmental authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending Office) to
any tax, duty, or other charge with respect to any Eurodollar Rate Loans,
its Note, or its obligation to make Eurodollar Rate Loans, or change the
basis of taxation of any amounts payable to such Lender (or its Applicable
Lending Office) under this Agreement or its Note in respect of any
Eurodollar Rate Loans (other than taxes imposed on the overall net income
of such Lender by the jurisdiction in which such Lender has its principal
office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve, special
deposit, assessment, or similar requirement (other than the Reserve
Requirement utilized in the determination of the Eurodollar Rate) relating
to any extensions of credit or other assets of, or any deposits with or
other liabilities or commitments of, such Lender (or its Applicable Lending
Office), including the Five Year Commitment and 364 Day 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 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 Eurodollar 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. If any Lender requests compensation by the Borrower under
this Section 5.1(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 5.4 shall be 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
41
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 5.1 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 5.1 shall furnish to the
Borrower and the Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder and the basis therefor which shall be
conclusive in the absence of manifest error. In determining such amount, such
Lender may use any reasonable averaging and attribution methods.
5.2. Limitation on Types of Loans. If on or prior to the first day of any
----------------------------
Interest Period for any Eurodollar Rate Loan:
(a) the Agent determines (which determination is on a reasonable
basis and absent manifest error shall be conclusive) that by reason of
circumstances affecting the relevant market, adequate and reasonable means
do not exist for ascertaining the Eurodollar Rate for such Interest Period;
or
(b) the Required Lenders determine (which determination is on a
reasonable basis and absent manifest error shall be conclusive) and notify
the Agent that the Eurodollar Rate will not adequately and fairly reflect
the cost to the Lenders of funding Eurodollar 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.
5.3. Illegality. Notwithstanding any other provision of this Agreement,
----------
in the event that it becomes unlawful for any Lender or its Applicable Lending
Office to make, maintain, or fund Eurodollar Rate Loans hereunder, then such
Lender shall promptly notify the Borrower thereof and such Lender's obligation
to make or Continue Eurodollar Rate Loans and to
42
Convert other Types of Loans into Eurodollar Rate Loans shall be suspended until
such time as such Lender may again make, maintain, and fund Eurodollar Rate
Loans (in which case the provisions of Section 5.4 shall be applicable).
5.4. Treatment of Affected Loans. If the obligation of any Lender to make
---------------------------
a Eurodollar Rate Loan or to Continue, or to Convert Loans of any other Type
into, Loans of a particular Type shall be suspended pursuant to Section 5.1 or
5.3 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 5.3 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 5.1 or 5.3 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 5.1 or 5.3 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 5.4 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 Five Year
Commitments and 364 Day Commitments.
5.5. Compensation. Upon the request of any Lender, the Borrower shall pay
------------
to such Lender such amount or amounts as shall be sufficient (in the reasonable
opinion of such Lender) to compensate it for any loss, cost, or expense
(including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar Rate Loan
for any reason (including, without limitation, the acceleration of the
Loans pursuant to Section 10.1) 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 VI
to be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Rate
Loan on the date for such borrowing,
43
Conversion, Continuation, or prepayment specified in the relevant notice of
borrowing, prepayment, Continuation, or Conversion under this Agreement.
5.6. 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 5.6) 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 12.2, 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 5.6) 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 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
44
by any taxing authority (including any certificate required by Sections 871(h)
and 881(c) of the 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 5.6(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 5.6(a) or
5.6(b) 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 at
no expense to the Borrower.
(f) If the Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 5.6, 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 5.6 shall survive the termination of the Five Year Commitment and
364 Day Commitment and the payment in full of the Notes and the Facility
Termination Date.
45
ARTICLE VI
Conditions to Making Loans and Issuing Letters of Credit
--------------------------------------------------------
6.1. Conditions of Initial Advance. The obligation of the Lenders to
-----------------------------
make the initial Advance under the Five Year Revolving Credit Facility and the
364 Day Revolving Credit Facility, and of the Issuing Bank to issue any Letter
of Credit, is subject to the conditions precedent that:
(a) the Agent shall have received on the Closing Date, in form and
substance satisfactory to the Agent and Lenders, the following:
(i) executed originals of each of this Agreement, the Notes,
the LC Account Agreement, 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 Credit Parties 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 G;
(iii) resolutions of the boards of directors or other
appropriate governing body (or of the appropriate committee thereof)
of each Credit Party certified by its secretary or assistant secretary
as of the Closing Date, approving and adopting the Loan Documents to
be executed by such Person, and authorizing the execution and delivery
thereof;
(iv) specimen signatures of officers or other appropriate
representatives executing the Loan Documents on behalf of each of the
Credit Parties, certified by the secretary or assistant secretary of
such Credit Party;
(v) the Organizational Documents of each of the Credit
Parties certified as of a recent date by the Secretary of State of its
state of organization;
(vi) Operating Documents of each of the Credit Parties
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
Secretaries of State of the respective jurisdictions of formation of
each of the Credit Parties as to the due existence and good standing
of such Person;
(viii) appropriate certificates of qualification to do
business, good standing and, where appropriate, authority to conduct
business under assumed name, issued in respect of each of the Credit
Parties as of a recent date by the Secretary of State or comparable
official of each jurisdiction in which the failure to be qualified to
do business or authorized so to conduct business could have a Material
46
Adverse Effect;
(ix) evidence satisfactory in form and substance to the Agent
of repayment of all amounts due under and termination of the Existing
Credit Agreement;
(x) evidence of appropriate amendments to the credit
facilities providing financing for the Hospital Facilities of the
Borrower or one or more of its Subsidiaries located in Gadsden,
Alabama and Gaffney, South Carolina to permit the incurrence of the
Obligations;
(xi) a certificate of an Authorized Representative as to the
occurrence or truthfulness, as applicable, of the matters set forth in
Section 6.1(b);
(xii) notice of appointment of the initial Authorized
Representative(s);
(xiii) certificate of an Authorized Representative dated the
Closing Date demonstrating compliance with the financial covenants
contained in Sections 9.1(a) through 9.1(c) as of the end of the
fiscal quarter most recently ended prior to the Closing Date,
substantially in the form of Exhibit H;
(xiv) evidence of all insurance required by the Loan Documents;
(xv) an initial Borrowing Notice, if any, and, if elected by
the Borrower, Interest Rate Selection Notice;
(xvi) evidence that all fees payable by the Borrower on the
Closing Date to the Agent, BAS and the Lenders have been paid in full;
(xvii) such other documents, instruments, certificates and
opinions as the Agent or any Lender may reasonably request on or prior
to the Closing Date in connection with the consummation of the
transactions contemplated hereby; and
(b) In the good faith judgment of the Agent and the Lenders:
(i) there shall not have occurred or become known to the
Agent or the Lenders any event, condition, situation or status since
the date of the information contained in the audited and unaudited
financial statements, financial and business projections, budgets, pro
forma data and forecasts concerning the Borrower and its Subsidiaries
delivered to the Agent as of September 23, 1999 that has had or could
reasonably be expected to result in a Material Adverse Effect;
(ii) no litigation, action, suit, investigation or other
arbitral, administrative or judicial proceeding shall be pending or
threatened which could reasonably be likely to result in a Material
Adverse Effect; and
47
(iii) the Borrower 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 its Subsidiaries is a party or by which any of them or
their properties is bound, except where the failure to obtain such
approvals, consents, waivers, filings and notices will not have a
Material Adverse Effect.
6.2. Conditions of Revolving Loans and Letter of Credit. The
--------------------------------------------------
obligations of the Lenders to make any Loans, and the Issuing Bank to issue (or
renew) 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 Credit Parties set
forth in Article VII 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 7.6(a) shall be deemed (solely for the purpose of the
representation and warranty contained in such Section 7.6(a) but not for
the purpose of any cross reference to such Section 7.6(a) or to the
financial statements described therein contained in any other provision of
Section 7.6 or elsewhere in Article VII) to be those financial statements
most recently delivered to the Agent and the Lenders pursuant to Section
8.1 from the date financial statements are delivered to the Agent and the
Lenders in accordance with such Section;
(c) in the case of the issuance of a Letter of Credit, the Borrower
shall have executed and delivered to the Issuing Bank an Application and
Agreement for Letter of Credit in form and content reasonably 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 specified in
Article X shall have occurred and be continuing; and
(e) immediately after giving effect to:
(i) a Five Year Loan, the aggregate principal balance of all
outstanding Five Year Loans for each Lender shall not exceed such
Lender's Five Year Commitment;
48
(ii) a 364 Day Loan, the aggregate principal balance of all
outstanding 364 Day Loans for each Lender shall not exceed such
Lender's 364 Day Commitment;
(iii) a Letter of Credit or renewal thereof, the aggregate
principal balance of all outstanding Participations in Letters of
Credit and Reimbursement Obligations (or in the case of the Issuing
Bank, its remaining interest after deduction of all Participations in
Letters of Credit and Reimbursement Obligations of other Lenders) for
each Lender and in the aggregate shall not exceed, respectively, (X)
such Lender's Letter of Credit Commitment or (Y) the Total Letter of
Credit Commitment;
(iv) a 364 Day Loan, the sum of 364 Day Outstandings shall not
exceed the Total 364 Day Commitment; and
(v) a Five Year Loan or a Letter of Credit or renewal
thereof, the sum of Letter of Credit Outstandings plus Five Year
Outstandings shall not exceed the Total Five Year Commitment.
49
ARTICLE VII
Representations and Warranties
------------------------------
The Borrower represents and warrants with respect to itself and to its
Subsidiaries (which representations and warranties shall survive the delivery of
the documents mentioned herein and the making of Loans), that:
7.1. Organization and Authority.
--------------------------
(a) The Borrower and each Subsidiary is a corporation duly organized
and validly existing under the laws of the jurisdiction of its formation;
(b) The Borrower and each Subsidiary (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 hereunder, and to
execute, deliver and perform each of the other Loan Documents to which it
is a party;
(d) Each Credit Party (other than the Borrower) has the power and
authority to execute, deliver and perform the Facility Guaranty and each of
the other Loan Documents to which it is a party; and
(e) When executed and delivered, each of the Loan Documents to which
any Credit Party is a party will be the legal, valid and binding obligation
or agreement, as the case may be, of such Credit Party, enforceable against
such Credit Party 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).
7.2. Loan Documents. The execution, delivery and performance by each
--------------
Credit Party of each of the Loan Documents to which it is a party:
(a) have been duly authorized by all requisite Organizational Action
of such Credit Party required for the lawful execution, delivery and
performance thereof;
(b) do not violate any provisions of (i) any applicable law, rule or
regulation, (ii) any judgment, writ, order, determination, decree or
arbitral award of any Governmental Authority or arbitral authority binding
on such Credit Party or its properties, or (iii) the Organizational
Documents or Operating Documents of such Credit Party;
(c) does not and will not be in conflict with, result in a breach of
or constitute an event of default, or an event which,
50
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 such Credit Party is a party, or by which the properties or assets of
such Credit Party are bound; and
(d) does not and will not result in the creation or imposition of any
Lien upon any of the properties or assets of such Credit Party or any
Subsidiary.
7.3. Solvency. Each Credit Party is Solvent after giving effect to the
--------
transactions contemplated by the Loan Documents.
7.4. Subsidiaries and Stockholders. The Borrower has no Subsidiaries
-----------------------------
other than those Persons listed as Subsidiaries in Schedule 7.4 and additional
Subsidiaries created or acquired after the Closing Date in compliance with
Section 8.20; Schedule 7.4 states as of the date hereof the organizational form
of each entity, the authorized and issued capitalization of each Subsidiary
listed thereon, the number of shares or other equity interests of each class of
capital stock or interest issued and outstanding of each such Subsidiary and the
number and/or percentage of outstanding shares or other equity interest
(including options, warrants and other rights to acquire any interest) of each
such class of capital stock or other equity interest owned by Borrower or by any
such Subsidiary; the outstanding shares or other equity interests of each such
Subsidiary have been duly authorized and validly issued and are fully paid and
nonassessable; and Borrower and each such Subsidiary owns beneficially and of
record all the shares and other interests it is listed as owning in Schedule
7.4, free and clear of any Lien.
7.5. Ownership Interests. Borrower owns no interest in any Person
-------------------
other than the Persons listed in Schedule 7.4, equity investments in Persons not
constituting Subsidiaries permitted under Section 9.7 and additional
Subsidiaries created or acquired after the Closing Date in compliance with
Section 8.20.
7.6. Financial Condition.
-------------------
(a) The Borrower has heretofore furnished to each Lender an audited
consolidated and related consolidating balance sheet of the Borrower and
its Subsidiaries as at September 30, 1998 and the notes thereto and the
related consolidated and consolidating statements of income, stockholders'
equity and cash flows for the Fiscal Year then ended as examined and
certified by Ernst & Young, LLC. Except as set forth therein, such
financial statements (including the notes thereto) present fairly the
financial condition of the Borrower and its Subsidiaries as of the end of
such Fiscal Year and results of their operations and the changes in its
stockholders' equity for the Fiscal Year then ended, all in conformity with
GAAP applied on a Consistent Basis;
(b) since the later of (i) the date of the audited financial
statements delivered pursuant to Section 7.6(a) hereof or (ii) the date of
the audited financial statements most recently delivered pursuant to
Section 8.1(a) hereof, there has been no material adverse change in the
condition, financial or otherwise, of the Borrower or its Subsidiaries,
taken as a whole,
51
or in the businesses, properties, performance, prospects or operations of
the Borrower and its Subsidiaries, taken as a whole, 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) except as set forth in the financial statements referred to in
Section 7.6(a) or in Schedule 7.6 or permitted by Section 9.4, neither the
Borrower nor any Subsidiary has incurred, other than in the ordinary course
of business, any material Indebtedness, Contingent Obligation or other
commitment or liability which remains outstanding or unsatisfied.
7.7. Title to Properties. The Borrower and each of its Subsidiaries and
-------------------
each other Credit Party 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 described in Schedule 7.7 and
Liens permitted by Section 9.3.
7.8. Taxes. Except as set forth in Schedule 7.8, the Borrower and each of
-----
its Subsidiaries has 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 7.6(a) or Sections 8.1(a) or (b) 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.
7.9. Other Agreements. No Credit Party nor any Subsidiary is
----------------
(a) a party to or subject to any judgment, order, decree, agreement,
lease or instrument, or subject to other restrictions, which individually
or in the aggregate could reasonably be expected to have a Material Adverse
Effect;
(b) in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any agreement or
instrument to which such Credit Party or any Subsidiary 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) convicted of an offense or committed an act or omission which
could reasonably form a basis under 42 U.S.C. (S) 1320a-7 and any statutes
succeeding thereto and any regulations promulgated thereunder for the
Secretary of HHS to exclude the Borrower or any Subsidiary from
participation in a Federal health care program, which exclusion from
participation could reasonably be likely to have a Material Adverse Effect;
(d) 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
52
or any Subsidiary 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 the Borrower or any Subsidiary
which could have a Material Adverse Effect or (ii) any other agreement or
instrument to which the Borrower or any Subsidiary 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;
7.10. Contract Providers. To the best knowledge of the Borrower, no
------------------
Contract Provider is
(a) a party to any judgment, order, decree, agreement or instrument,
or subject to restrictions, which could individually or in the aggregate
reasonably be expected to have a Material Adverse Effect;
(b) in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any Medicaid
Provider Agreement, Medicare Provider Agreement or other agreement or
instrument to which such Person is a party, which default has resulted in,
or if not remedied within any applicable grace period could result in, the
revocation, termination, cancellation or suspension of the Medicaid
Certification or the Medicare Certification of such Person, which
revocation, termination, cancellation or suspension could reasonably be
likely to have a Material Adverse Effect;
(c) has been convicted of an offense or has committed an act or
omission which could reasonably form a basis under 42 U.S.C. (S) 1320a-7
and any statutes succeeding thereto and regulations promulgated thereunder
for the Secretary of HHS to exclude the Contract Provider from
participation in a Federal health care program, which exclusion from
participation could reasonably be likely to have a Material Adverse Effect.
7.11. Litigation. Except as set forth in Schedule 7.11, 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, any
Subsidiary, any other Credit Party or, to the best knowledge of the Borrower,
any Contract Provider, or affecting the Borrower or any Subsidiary or other
Credit Party or, to the best knowledge of the Borrower, any Contract Provider or
any properties or rights of the Borrower or any Subsidiary or other Credit Party
or, to the best knowledge of the Borrower, any Contract Provider, which could
reasonably be expected (i) to result in the revocation, termination,
cancellation or suspension of Medicaid Certification or Medicare Certification
of such Person, which revocation, termination, cancellation or suspension could
reasonably be likely to have a Material Adverse Effect, (ii) to result in the
exclusion of such Person from participation in a Federal health care program,
which exclusion could reasonably be likely to have a Material Adverse Effect, or
(iii) to have a Material Adverse Effect.
53
7.12. Margin Stock. The proceeds of the borrowings 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
under this Agreement a "purpose credit" within the meaning of said Regulation U
or Regulation X (12 C.F.R. Part 221) of the Board; provided, however, the
Borrower may purchase its own stock as permitted by Section 9.8 only so long as
the Loans are not considered "indirectly secured" by such stock pursuant to
Section 221.1(g)(2) of Regulation U. 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 Securities Exchange Act of 1934, as
amended, or the Securities Act of 1933, as amended, or any state securities
laws, in each case as in effect on the date hereof.
7.13. Investment Company. No Credit Party nor any Subsidiary 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. (S) 80a-1, et seq.). The
application of the proceeds of the Loans and repayment thereof by the Borrower
and the performance by the Borrower and the other Credit Parties 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.
7.14. Patents, Etc. The Borrower and each other Credit Party and each
------------
Subsidiary 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 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 with any patent, license,
franchise, trademark, trade secret, trade name, copyright, other proprietary
right of any other Person.
7.15. 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 other Credit Party in accordance with or pursuant to any
Loan Document nor (b) any statement, representation, or warranty provided to the
Agent 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.
7.16. No Consents, Etc. Neither the respective businesses or properties of
----------------
the Credit Parties or any Subsidiary, nor any relationship among the Credit
Parties or any Subsidiary 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,
54
or filing, registration or qualification with, any Governmental Authority or any
other Person on the part of any Credit Party as a condition to the execution,
delivery and performance of, or consummation of the transactions contemplated by
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.
7.17. Employee Benefit Plans.
----------------------
(a) The Borrower and each ERISA Affiliate is in material compliance
with all applicable provisions of ERISA and the regulations and published
interpretations thereunder and in compliance with all Foreign Benefit Laws
with respect to all Employee Benefit Plans except for any required
amendments for which the remedial amendment period as defined in Section
401(b) of the Code has not yet expired. Each Employee Benefit Plan that is
intended to be qualified under Section 401(a) of the Code has been
determined or the Borrower or its Subsidiaries is in the process of
obtaining a determination by the Internal Revenue Service to be so
qualified, and therefore each trust related to such plan is presumed to be
exempt under Section 501(a) of the Code, and each Employee Benefit Plan
subject to any Foreign Benefit Law has received the required approvals by
any Governmental Authority regulating such Employee Benefit Plan. No
material liability has been incurred by the Borrower or any ERISA Affiliate
which remains unsatisfied for any taxes or penalties with respect to any
Employee Benefit Plan or any Multiemployer Plan;
(b) Neither the Borrower nor any ERISA Affiliate has (i) engaged in a
nonexempt prohibited transaction described in Section 4975 of the Code or
Section 406 of ERISA affecting any of the Employee Benefit Plans or the
trusts created thereunder which could subject any such Employee Benefit
Plan or trust to a material tax or penalty on prohibited transactions
imposed under Code Section 4975 or ERISA, (ii) incurred any accumulated
funding deficiency with respect to any Employee Benefit Plan, whether or
not waived, or any other liability to the PBGC which remains outstanding
other than the payment of premiums and there are no premium payments which
are due and unpaid, (iii) failed to make a required contribution or payment
to a Multiemployer Plan, (iv) failed to make a required installment or
other required payment under Section 412 of the Code, Section 302 of ERISA
or the terms of such Employee Benefit Plan, or (v) failed to make a
required contribution or payment, or otherwise failed to operate in
compliance with any Foreign Benefit Law regulating any Employee Benefit
Plan;
(c) No Termination Event has occurred with respect to any Pension
Plan or Multiemployer Plan, and neither the Borrower nor any ERISA
Affiliate has incurred any unpaid withdrawal liability with respect to any
Multiemployer Plan;
(d) The present value of all vested accrued benefits under each
Employee Benefit Plan which is subject to Title IV of ERISA, or the funding
of which is regulated by any Foreign Benefit Law did not, as of the most
recent valuation date for each such plan,
55
exceed the then current value of the assets of such Employee Benefit Plan
allocable to such benefits;
(e) To the best of the Borrower's knowledge, each Employee Benefit
Plan which is subject to Title IV of ERISA or the funding of which is
regulated by any Foreign Benefit Law, maintained by the Borrower or any
ERISA Affiliate, has been administered in accordance with its terms in all
material respects and is in compliance in all material respects with all
applicable requirements of ERISA, applicable Foreign Benefit Law and other
applicable laws, regulations and rules;
(f) The consummation of the Loans and the issuance of the Letters of
Credit provided for herein will not involve any prohibited transaction
under ERISA which is not subject to a statutory or administrative
exemption; and
(g) No material proceeding, claim, lawsuit and/or investigation
exists or, to the best knowledge of the Borrower after due inquiry, is
threatened concerning or involving any Employee Benefit Plan;
7.18. No Default. As of the date hereof, there does not exist any
----------
Default or Event of Default hereunder.
7.19. Environmental Laws. Except as listed on Schedule 7.19, the
------------------
Borrower and each Subsidiary is in material compliance with all applicable
Environmental Laws and has been issued and currently maintains all required
foreign, federal, state and local permits, licenses, certificates and approvals.
Except as listed on Schedule 7.19, neither the Borrower nor any Subsidiary has
been notified of any pending or threatened action, suit, proceeding or
investigation, and neither the Borrower nor any Subsidiary is aware of any
facts, which (a) calls into question, or could reasonably be expected to call
into question, compliance by the Borrower or any Subsidiary with any
Environmental Laws, (b) seeks, or could reasonably be expected to form the basis
of a meritorious proceeding, to suspend, revoke or terminate any license, permit
or approval necessary for the operation of the Borrower's or any Subsidiary's
business or facilities or for the generation, handling, storage, treatment or
disposal of any Hazardous Materials, or (c) 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 Subsidiary or other Credit Party to be subject to any
restrictions on ownership, use, occupancy or transferability under any
Environmental Law, which in each of clauses (a), (b) and (c) could reasonably be
expected to have a Material Adverse Effect.
7.20. Employment Matters. (a) Except as set forth on Schedule 7.20,
------------------
none of the employees of the Borrower or any Subsidiary 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 Subsidiary or between the Borrower or any
Subsidiary and any of its employees, other than employee grievances arising in
the ordinary course of business which could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
56
Effect; and
(b) Except to the extent a failure to maintain compliance would not have a
Material Adverse Effect, the Borrower and each Subsidiary 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 or
threatened any litigation, administrative proceeding nor, 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.
7.21. RICO. Neither the Borrower nor any Subsidiary 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.
7.22. Year 2000 Compliance. The Borrower and its Subsidiaries have
--------------------
(i) initiated a review and assessment of all areas within its and each of its
Subsidiaries' business and operations (including those affected by information
received from suppliers and vendors) that could reasonably be expected to be
adversely affected by the Year 2000 Problem, (ii) developed a plan and timeline
for addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan substantially in accordance with that timetable. The
Borrower reasonably believes that all computer applications (including those
affected by information received from its suppliers and vendors) that are
material to its or any of its Subsidiaries' business and operations will on a
timely basis be Year 2000 Compliant, except to the extent that a failure to do
so could not reasonably be expected to have Material Adverse Effect.
7.23. Reimbursement from Third Party Payors. The accounts receivable
-------------------------------------
of the Borrower and each Subsidiary and, to the best knowledge of the Borrower,
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, except where the failure
to comply could not reasonably be expected to have a Material Adverse Effect.
7.24. Fraud and Abuse. Neither the Borrower nor any Subsidiary nor,
---------------
to the knowledge of Borrower's officers, any of its stockholders, officers or
directors, or any Contract Provider, have engaged in any activities which are
prohibited under federal Medicare and Medicaid statutes, 42 U.S.C. (S)1320a-7b,
or the regulations promulgated pursuant to such statutes or related state or
local statutes or regulations, or which are prohibited by binding rules of
professional conduct, or which are prohibited under any statute which
constitutes as a Federal health care offense, or the regulations
57
promulgated pursuant to such statutes, including but not limited to the
following: (i) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any applications for any
benefit or payment; (ii) knowingly and willfully making or causing to be made
any false statement or representation of a material fact for use in determining
rights to any benefit or payment; (iii) failing to disclose knowledge by a
claimant of the occurrence of any event affecting the initial or continued right
to any benefit or payment on its own behalf or on behalf of another, with intent
to secure such benefit or payment fraudulently; (iv) knowingly and willfully
soliciting or receiving any remuneration (including any kickback, bribe or
rebate), directly or indirectly, overtly or covertly, in cash or in kind or
offering to pay such remuneration (a) in return for referring an individual to a
Person for the furnishing or arranging for the furnishing of any item or service
for which payment may be made in whole or in part by a Federal health care
program or other applicable third party payors, or (b) in return for purchasing,
leasing or ordering or arranging for or recommending the purchasing, leasing or
ordering of any good, facility, service, or item for which payment may be made
in whole or in part by a Federal health care program or other applicable third
party payors; (v) knowingly or willfully offering or paying any remuneration
(including any kickback, bribe, or rebate) directly or indirectly, overtly or
covertly, in cash or in kind to any Person to induce such Person (a) to refer an
individual to a person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part under a
Federal health care program, or (b) to purchase, lease, order, or arrange for or
recommend purchasing, leasing, or ordering any good, facility, service, or item
for which payment may be made in whole or in party under a Federal health care
program.
7.25. Licensing and Accreditation. Each of the Borrower and its
---------------------------
Subsidiaries and, to the knowledge of Borrower's officers, each Contract
Provider, has, to the extent applicable: (i) obtained (or been duly assigned)
and maintains all required certificates of need or determinations of need as
required by the relevant state Governmental Authority for the acquisition,
construction, expansion of, investment in or operation of its businesses as
currently operated; (ii) obtained and maintains in good standing all required
licenses; (iii) to the extent prudent and customary in the industry in which it
is engaged, obtained and maintains accreditation from all generally recognized
accrediting agencies; (iv) obtained and maintains Medicaid Certification and
Medicare Certification; and (v) entered into and maintains in good standing its
Medicare Provider Agreement and its Medicaid Provider Agreement. To the
knowledge of Borrower's officers, each Contract Provider is duly licensed (where
license is required) by each state or state agency or commission, or any other
Governmental Authority having jurisdiction over the provisions of such services
by such Person in the locations in which the Borrower or such Subsidiary conduct
business, required to enable such Person to provide the professional services
provided by such Person and otherwise as is necessary to enable the Borrower or
such Subsidiary to operate as currently operated and as presently contemplated
to be operated. To the knowledge of Borrower's officers, all such required
licenses are in full force and effect on the date hereof and have not been
revoked or suspended or otherwise limited.
58
ARTICLE VIII
Affirmative Covenants
---------------------
Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, the Borrower will, and where applicable will cause
each Subsidiary to:
8.1. Financial Reports, Etc. (a) As soon as practical and in any
----------------------
event within 90 days after the end of each Fiscal Year of the Borrower, deliver
or cause to be delivered to the Agent and each Lender (i) consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as at the end
of such Fiscal Year, and the notes thereto, and the related consolidated and
consolidating statements of income, stockholders' equity and cash flows, and the
respective notes thereto, for such Fiscal Year, setting forth (other than for
consolidating statements) comparative financial statements for the preceding
Fiscal Year, all prepared in accordance with GAAP applied on a Consistent Basis
and containing, with respect to the consolidated financial statements, opinions
of Ernst & Young, LLC, or other such independent certified public accountants
selected by the Borrower and approved by the Agent, which are unqualified as to
the scope of the audit performed and as to the "going concern" status of the
Borrower and without any exception not acceptable to the Lenders, and (ii) a
certificate of an Authorized Representative demonstrating compliance with
Sections 9.1(a) through 9.1(c), which certificate shall be in the form of
Exhibit H;
(b) as soon as practical and in any event within 45 days after the end of
each fiscal quarter (except the last fiscal quarter of the Fiscal Year), deliver
to the Agent and each Lender (i) consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal quarter, and the related
consolidated statements of income, stockholders' equity and cash flows for such
fiscal quarter and for the period from the beginning of the then current Fiscal
Year through the end of such reporting period, and accompanied by a certificate
of an Authorized Representative to the effect that such financial statements
present fairly the financial position of the Borrower and its Subsidiaries as of
the end of such fiscal period and the results of their operations and the
changes in their financial position for such fiscal period, in conformity with
the standards set forth in Section 7.6(a) with respect to interim financial
statements, and (ii) a summary of operations for such quarterly period for (x)
each Hospital Facility operated by the Borrower and (y) each Subsidiary, each
certified by an Authorized Representative to be true and correct, and (iii) a
certificate of an Authorized Representative containing computations for such
quarter comparable to that required pursuant to Section 8.1(a)(ii);
(c) together with each delivery of the financial statements required by
Section 8.1(a)(i), deliver to the Agent and each Lender a letter from the
Borrower's accountants specified in Section 8.1(a)(i) stating that in performing
the audit necessary to render an opinion on the financial statements delivered
under Section 8.1(a)(i), they obtained no knowledge of any Default or Event of
Default by the Borrower in the fulfillment of the terms and provisions of this
Agreement insofar as they relate to financial matters (which at the date of such
statement remains uncured); or if the accountants have obtained knowledge of
such Default or Event of Default, a statement specifying the nature and period
of existence thereof;
(d) not later than the last business day of each Fiscal Year, deliver to
the Agent and each Lender consolidated financial projections
59
for the Borrower and its Subsidiaries for the next Fiscal Year, consisting of a
consolidated balance sheet, income statement and cash flow statement and the key
assumptions utilized in the preparation of such financial projections, and
demonstrating compliance with Section 9.1 hereof;
(e) promptly upon their becoming available to the Borrower, the Borrower
shall deliver to the Agent and each Lender a copy of (i) all regular or special
reports or effective registration statements which Borrower or any Subsidiary
shall file with the Securities and Exchange Commission (or any successor
thereto) or any securities exchange, (ii) any proxy statement distributed by the
Borrower or any Subsidiary to its shareholders, bondholders or the financial
community in general, and (iii) any management letter submitted to the Borrower
or any Subsidiary by independent accountants in connection with any annual audit
of the Borrower; and
(f) promptly, from time to time, deliver or cause to be delivered to the
Agent and each Lender such other information regarding Borrower's and any
Subsidiary's operations, business affairs and financial condition as the Agent
or such Lender may reasonably request;
The Agent and the Lenders are hereby authorized to deliver a copy of any
such financial or other information delivered hereunder to the Lenders (or any
affiliate of any Lender) or to the Agent, to any Governmental Authority having
jurisdiction over the Agent or any of the Lenders pursuant to any written
request therefor or in the ordinary course of examination of loan files, or to
any other Person who shall acquire or consider the assignment of, or acquisition
of any participation interest in, any Obligation permitted by this Agreement.
8.2. 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, 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.
8.3. Existence, Qualification, Etc. Except as otherwise expressly
-----------------------------
permitted under Section 9.7, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and all material rights
and franchises, and maintain its license or qualification to do business as a
foreign corporation and good standing in each jurisdiction in which its
ownership or lease of property or the nature of its business makes such license
or qualification necessary except where the failure to so qualify would not have
a Material Adverse Effect.
8.4. 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 against its creditors.
60
8.5. Insurance. (a) Keep all of its insurable properties adequately
---------
insured at all times with responsible insurance carriers against loss or damage
by fire and other hazards to the extent and in the manner as are customarily
insured against by similar businesses owning such properties similarly situated,
(b) maintain general public liability insurance at all times with responsible
insurance carriers against liability on account of damage to persons and
property and (c) maintain insurance under all applicable workers' compensation
laws (or in the alternative, maintain required reserves if self-insured for
workers' compensation purposes) and against loss by reason of business
interruption such policies of insurance to have such limits, deductibles,
exclusions, co-insurance and other provisions providing no less coverages than
are maintained by similar businesses that are similarly situated, such insurance
policies to be in form reasonably satisfactory to the Agent. Each of the
policies of insurance described in this Section 8.5 shall provide that the
insurer shall give the Agent not less than thirty (30) days' prior written
notice before any such policy shall be terminated, lapse or be altered in any
manner.
8.6. 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.
8.7. Year 2000 Compliance. The Borrower will promptly notify the
--------------------
Agent and the Lenders in the event the Borrower discovers or determines that any
computer application (including those affected by information received from its
suppliers and vendors) that is material to its or any of its Subsidiaries'
business and operations will not be Year 2000 Compliant on a timely basis,
except to the extent that such failure could not reasonably be expected to have
a Material Adverse Effect.
8.8. Right of Inspection. Permit any Person designated by any
-------------------
Lender or 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.
8.9. Observe all Laws. 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.
8.10. Governmental Licenses. Obtain and maintain all licenses, permits,
---------------------
certifications and approvals of all applicable Governmental Authorities as are
required for the conduct of its business as currently conducted and herein
contemplated, including without limitation professional licenses, Medicaid
Certifications and Medicare Certifications.
61
8.11. Covenants Extending to Other Persons. Cause each of its
------------------------------------
Subsidiaries to do with respect to itself, its business and its assets, each of
the things required of the Borrower in Sections 8.2 through 8.10, and 8.19 and
8.20 inclusive.
8.12. Officer's Knowledge of Default. Upon any officer of the Borrower
------------------------------
obtaining knowledge of any Default or Event of Default hereunder or under any
other obligation of the Borrower or any Subsidiary or other Credit Party to any
Lender, or any event, development or occurrence which could reasonably be
expected to have a Material Adverse Effect, cause such officer or an Authorized
Representative to promptly notify the Agent (who shall promptly notify the
Lenders) of the nature thereof, the period of existence thereof, and what action
the Borrower or such Subsidiary or other Credit Party proposes to take with
respect thereto.
8.13. Suits or Other Proceedings. Upon any officer of the Borrower
--------------------------
obtaining knowledge of any litigation or other proceedings being instituted (i)
against the Borrower or any Subsidiary or other Credit Party, or any attachment,
levy, execution or other process being instituted against any assets of the
Borrower or any Subsidiary or other Credit Party, in an aggregate amount greater
than $10,000,000 not otherwise covered by insurance, (ii) against the Borrower,
any Subsidiary or any Contract Provider 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, (iii) against the
Borrower, any Subsidiary or any Contract Provider, to suspend or exclude such
Person from participation in a Federal health care program which suspension or
exclusion could reasonably be likely to have a Material Adverse Effect, or (iv)
against the Borrower, any Subsidiary or any Contract Provider to revoke or
terminate any status of such Person as an entity exempt from taxation under
Section 501(c) of the Code or as a non-private foundation under Section 509(a)
of the Code, which revocation or termination could reasonably be likely to have
a Material Adverse Effect, promptly deliver to the Agent (who shall promptly
notify the Lenders) written notice thereof stating the nature and status of such
litigation, dispute, proceeding, levy, execution or other process.
8.14. Notice of Environmental Complaint or Condition. Promptly
----------------------------------------------
provide to the Agent (who shall promptly notify the Lenders) true, accurate and
complete copies of any and all notices, complaints, orders, directives, claims
or citations received by the Borrower or any Subsidiary relating to any material
(a) violation or alleged violation by the Borrower or any Subsidiary of any
applicable Environmental Law; (b) release or threatened release by the Borrower
or any Subsidiary, or by any Person handling, transporting or disposing of any
Hazardous Material on behalf of the Borrower or any Subsidiary, or at any
facility or property owned or leased or operated by the Borrower or any
Subsidiary, of any Hazardous Material, except where occurring legally pursuant
to a permit or license; or (c) liability or alleged liability of the Borrower or
any Subsidiary for the costs of cleaning up, removing, remediating or responding
to a release of Hazardous Materials.
8.15. Environmental Compliance. If the Borrower or any Subsidiary
------------------------
shall receive any letter, notice, complaint, order, directive, claim or citation
from a Governmental Authority alleging that the Borrower or any Subsidiary has
violated any Environmental Law, has released any Hazardous Material, or is
liable for the costs of cleaning up, removing, remediating or responding to a
release of
62
Hazardous Materials, the Borrower and any Subsidiary shall, within the time
period permitted and to the extent required by the applicable Environmental Law
or the Governmental Authority responsible for enforcing such Environmental Law,
remove or remedy, or cause the applicable Subsidiary to remove or remedy, such
violation or release or satisfy such liability, unless and only during the
period that the applicability of the Environmental Law, the fact of such
violation or liability or the action required to remove or remedy such violation
is being contested by the Borrower or the applicable Subsidiary 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 Subsidiary
which shall have become enforceable against creditors of such Person.
8.16. Indemnification. Without limiting the generality of Section
---------------
12.9, the Borrower hereby agrees to indemnify and hold the Agent and the Lenders
and any affiliate of any Lender party to a Swap Agreement, and their respective
officers, directors, employees and agents, harmless from and against any and all
claims, losses, penalties, liabilities, damages and expenses (including
assessment and cleanup costs and reasonable attorneys', consultants' or other
expert fees, expenses and disbursements) arising directly or indirectly from,
out of or by reason of (a) the violation of any Environmental Law by the
Borrower or any Subsidiary or with respect to any property owned, operated or
leased by the Borrower or any Subsidiary or (b) the handling, storage,
transportation, treatment, emission, release, discharge or disposal of any
Hazardous Materials by or on behalf of the Borrower or any Subsidiary, or on or
with respect to property owned or leased or operated by the Borrower or any
Subsidiary. The provisions of this Section 8.16 shall survive repayment of the
------------
Obligations or the Facility Termination Date and expiration or termination of
this Agreement.
8.17. Further Assurances. At the Borrower's cost and expense, upon
------------------
request of the Agent, duly execute and deliver or cause to be duly executed and
delivered, to the Agent such further instruments, documents, certificates,
financing and continuation statements, and do and cause to be done such further
acts that may be reasonably necessary or advisable in the reasonable opinion of
the Agent to carry out more effectively the provisions and purposes of this
Agreement and the other Loan Documents.
8.18. Employee Benefit Plans.
----------------------
(a) With reasonable promptness, and in any event within thirty (30)
days thereof, give notice to the Agent (who shall promptly notify the
Lenders) of (a) the establishment of any new Pension Plan (which notice
shall include a copy of such plan), (b) the commencement of contributions
to any Employee Benefit Plan to which the Borrower or any of its ERISA
Affiliates was not previously contributing, (c) any material increase in
the benefits of any existing Employee Benefit Plan, (d) each funding waiver
request filed with respect to any Pension Plan and all communications
received or sent by the Borrower or any ERISA Affiliate with respect to
such request and (e) the failure of the Borrower or any ERISA Affiliate to
make a required installment or payment under Section 302 of ERISA or
Section 412 of the Code (in
63
the case of Employee Benefit Plans regulated by the Code or ERISA) or under
any Foreign Benefit Law (in the case of Employee Benefit Plans regulated by
any Foreign Benefit Law) by the due date;
(b) Promptly and in any event within fifteen (15) days of becoming
aware of the occurrence or forthcoming occurrence of any (a) Termination
Event or (b) nonexempt "prohibited transaction," as such term is defined in
Section 406 of ERISA or Section 4975 of the Code, in connection with any
Employee Benefit Plan or any trust created thereunder, deliver to the Agent
(who shall promptly notify the Lenders) a notice specifying the nature
thereof, what action the Borrower or any ERISA Affiliate has taken, is
taking or proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, the Department of
Labor or the PBGC with respect thereto; and
(c) With reasonable promptness, but in any event within fifteen (15)
days, with respect to events described in clauses (a), (b) and (c), deliver
to the Agent (who shall promptly notify the Lenders) copies of (a) any
unfavorable determination letter from the Internal Revenue Service
regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code, (b) all notices received by the Borrower or any ERISA
Affiliate of the PBGC's or any Governmental Authority's intent to terminate
any Pension Plan or to have a trustee appointed to administer any Pension
Plan, (c) each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) filed by the Borrower or any ERISA Affiliate with the
Internal Revenue Service with respect to each Employee Benefit Plan and (d)
all notices received by the Borrower or any ERISA Affiliate from a
Multiemployer Plan sponsor concerning the imposition or amount of
withdrawal liability pursuant to Section 4202 of ERISA. The Borrower will
notify the Agent (who shall promptly notify the Lenders) in writing within
five (5) Business Days of the Borrower or any ERISA Affiliate obtaining
knowledge or reason to know that the Borrower or any ERISA Affiliate has
filed or intends to file a notice of intent to terminate any Pension Plan
under a distress termination within the meaning of Section 4041(c) of
ERISA.
8.19. Continued Operations. Continue at all times to conduct its
--------------------
business and engage principally in the same line or lines of business
substantially as heretofore conducted.
8.20. New Subsidiaries. From and after the Trigger Date,
----------------
simultaneously with the acquisition or creation of any Domestic Subsidiary
(other than a Restricted Subsidiary), cause to be delivered to the Agent each
of the following:
(a) a Facility Guaranty executed by such Subsidiary substantially in
the form of Exhibit I;
(b) an opinion of counsel to the Subsidiary dated as of the date of
delivery of the Facility Guaranty provided for in this Section 8.20 and
addressed to the Agent and the Lenders, in form and substance reasonably
acceptable to the Agent (which opinion may include assumptions and
qualifications of similar
64
effect to those contained in the opinions of counsel delivered pursuant to
Section 6.1(a)), to the effect that:
(i) such Subsidiary is duly organized, validly existing and in
good standing in the jurisdiction of its formation, has the requisite
power and authority to own its properties and conduct its business as
then owned and then conducted and proposed to be conducted and to
execute, deliver and perform the Facility Guaranty described in this
Section 8.20 to which such Subsidiary is a signatory, and is duly
qualified to transact business and is in good standing as a foreign
corporation or partnership in each other jurisdiction in which the
character of the properties owned or leased, or the business carried
on by it, requires such qualification and the failure to be so
qualified would reasonably be likely to result in a Material Adverse
Effect;
(ii) the execution, delivery and performance of the Facility
Guaranty described in this Section 8.20 to which such Subsidiary is a
signatory have been duly authorized by all requisite corporate or
partnership action (including any required shareholder or partner
approval), such agreement has been duly executed and delivered and
constitutes the valid and binding agreement of such Subsidiary,
enforceable against such Subsidiary 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);
(c) current copies of the Organizational Documents and Operating
Documents of such Subsidiary, minutes of duly called and conducted meetings
(or duly effected consent actions) of the Board of Directors, partners, or
appropriate committees thereof (and, if required by such Organizational
Documents, Operating Documents or applicable law, of the shareholders,
members or partners) of such Subsidiary authorizing the actions and the
execution and delivery of documents described in this Section 8.20.
65
ARTICLE IX
Negative Covenants
------------------
Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, the Borrower will not, nor will it permit any
Subsidiary to:
9.1. Financial Covenants.
-------------------
(a) Consolidated Net Worth. Permit Consolidated Net Worth to be less
----------------------
than (i) $801,500,000 from September 30, 1999 until (but excluding) the last day
of the fiscal quarter that includes the Closing Date (the "Closing Date
Quarter"), and (ii) as at the last day of each fiscal quarter of the Borrower
ending after the Closing Date and until (but excluding) the last day of the next
following fiscal quarter of the Borrower, the sum of (A) the amount of
Consolidated Net Worth required to be maintained pursuant to this Section 9.1(a)
as at the end of the immediately preceding fiscal quarter (or, in the case of
the Closing Date Quarter, required to be maintained as of September 30, 1999),
plus (B) 50% of Consolidated Net Income (with no reduction for net losses during
any period) for the fiscal quarter of the Borrower ending on such day, plus (C)
100% of the aggregate amount of all increases in the stated capital and
additional paid-in capital accounts of the Borrower resulting from the issuance
of equity securities or other capital investment, minus (D) the value of the
Borrower's stock repurchased in accordance with the terms hereof.
(b) Consolidated Leverage Ratio. Permit at any time the Consolidated
---------------------------
Leverage Ratio to be greater than 2.50 to 1.00.
(c) Consolidated Interest Coverage Ratio. Permit at any time the
------------------------------------
Consolidated Interest Coverage Ratio to be less than 4.50 to 1.00.
9.2. Acquisitions. Enter into any agreement, contract, binding
------------
commitment or other arrangement providing for any Acquisition, or take any
action to solicit the tender of securities or proxies in respect thereof in
order to effect any Acquisition, unless (i) the Person to be (or whose assets
are to be) acquired does not oppose such Acquisition and the line or lines of
business of the Person to be acquired are substantially the same as one or more
line or lines of business conducted by the Borrower and its Subsidiaries, (ii)
no Default or Event of Default shall have occurred and be continuing either
immediately prior to or immediately after giving effect to such Acquisition and,
(iii) if the Cost of Acquisition is in excess of $75,000,000 or if after giving
effect to such Acquisition, the aggregate Costs of Acquisition incurred in any
Fiscal Year (on a non-cumulative basis, with the effect that amounts not
incurred in any Fiscal Year may not be carried forward to a subsequent period
and determined by the date of incurrence of any Cost of Acquisition and not by
the date of the effectiveness of such Acquisition) shall exceed $125,000,000,
the Borrower shall have furnished to the Agent a certificate in the form of
Exhibit H prepared on a historical pro forma basis as of the most recent date
for which financial statements have been furnished pursuant to Section 7.6(a) or
Section 8.1(a) or (b) giving effect to such Acquisition, which certificate shall
demonstrate that no Default or Event of Default would exist immediately after
giving effect thereto, and (iv) the Person acquired shall be a wholly-owned
Subsidiary, or be
66
merged into the Borrower or a wholly-owned Subsidiary (other than a Restricted
Subsidiary), immediately upon consummation of the Acquisition (or if assets are
being acquired, the acquiror shall be the Borrower or a wholly-owned Subsidiary
(other than a Restricted Subsidiary)).
9.3. Liens. Incur, create or permit to exist any Lien, charge or other
-----
encumbrance of any nature whatsoever with respect to any property or assets now
owned or hereafter acquired by the Borrower or any Subsidiary, other than
(a) Liens existing as of the date hereof as set forth in Schedule
7.7;
(b) Liens imposed by law for taxes, assessments or charges of any
Governmental Authority for claims not yet due or which are being contested
in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP and which Liens are not yet
enforceable against other creditors;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law or
created in the ordinary course of business and in existence less than 90
days from the date of creation thereof for amounts not yet due or which are
being contested in good faith by appropriate proceedings diligently
conducted and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP and which Liens are
not yet enforceable against other creditors;
(d) Liens incurred or deposits made in the ordinary course of
business (including, without limitation, surety bonds and appeal bonds) in
connection with workers' compensation, unemployment insurance and other
types of social security benefits or to secure the performance of tenders,
bids, leases, contracts (other than for the repayment of Indebtedness),
statutory obligations and other similar obligations or arising as a result
of progress payments under government contracts;
(e) easements (including reciprocal easement agreements and utility
agreements), rights-of-way, covenants, consents, reservations,
encroachments, variations and zoning and other restrictions, charges or
encumbrances (whether or not recorded), which do not interfere materially
with the ordinary conduct of the business of the Borrower or any Subsidiary
and which do not materially detract from the value of the property to which
they attach or materially impair the use thereof to the Borrower or any
Subsidiary;
(f) Liens securing Indebtedness owing to the seller of a Hospital
Facility which Indebtedness is incurred to acquire such Hospital Facility;
provided, such Lien extends only to the Hospital Facility acquired with the
proceeds of such Indebtedness;
(g) Liens securing Indebtedness incurred to finance or
67
refinance Indebtedness assumed in connection with the Acquisition of a
single Hospital Facility provided (i) the effective rate of interest
payable with respect to such Indebtedness does not exceed then prevailing
interest rates for a similar financing, (ii) such Indebtedness is secured
only by the Hospital Facility so financed, (iii) the Indebtedness and
interest thereon is amortized and payable on a level basis over a term of
15 years with a maturity of not less than 7 years, and (iv) the
Indebtedness represents not less than 70% of the Value of the Hospital
Facility. The term "Value" means the market value of the Hospital Facility
as determined by a then current appraisal of the facility for use as a
general acute care or psychiatric hospital, such appraiser to be selected
by the financial institution providing such loan; provided, however, any
such financing shall not prohibit the Borrower or its Subsidiary from
granting the Lenders a second mortgage lien on such Hospital Facility as
security for the Obligations;
(h) Liens on Indebtedness permitted by Section 9.4(f).
9.4. Indebtedness. Incur, create, assume or permit to exist any
------------
Indebtedness, howsoever evidenced, except:
(a) Indebtedness existing as of the Closing Date as set forth in
Schedule 7.6; provided, none of the instruments and agreements evidencing
or governing such Indebtedness shall be amended, modified or supplemented
after the Closing Date to change any terms of subordination, repayment or
rights of enforcement, conversion, put, exchange or other rights from such
terms and rights as in effect on the Closing Date;
(b) Indebtedness owing to the Agent or any Lender in connection with
this Agreement, any Note or other Loan Document;
(c) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(d) purchase money Indebtedness of the Borrower described in
Sections 9.3(f), (g) and 9.13 not to exceed an aggregate outstanding
principal amount at any time of $125,000,000;
(e) Indebtedness arising from Rate Hedging Obligations permitted
under Section 9.15; and
(f) additional Indebtedness for Money Borrowed not otherwise
covered by clauses (a) through (e) above, provided that the aggregate
outstanding principal amount of all such other Indebtedness permitted under this
clause (f), together with the Indebtedness permitted under clause (d), shall in
no event exceed $150,000,000 at any time.
9.5. Transfer of Assets. Sell, lease, transfer or otherwise dispose of
------------------
any assets of Borrower or any Subsidiary other than (a) dispositions of
inventory in the ordinary course of business, (b) dispositions of property that
is substantially worn, damaged, obsolete or, in the judgment of the Borrower, no
longer best used or useful in its business or that of any Subsidiary, (c)
transfers of
68
assets necessary to give effect to merger or consolidation transactions
permitted by Section 9.7, (d) the disposition of Eligible Securities in the
ordinary course of management of the investment portfolio of the Borrower and
its Subsidiaries, and (e) dispositions of assets during the term of this
Agreement having an aggregate book value not exceeding 10% of Consolidated Total
Assets.
9.6. Investments. Purchase, own, invest in or otherwise acquire,
-----------
directly or indirectly, any stock or other securities, or make or permit to
exist any interest whatsoever in any other Person or permit to exist any loans
or advances to any Person, except that Borrower may maintain investments or
invest in:
(a) securities of any Person acquired in an Acquisition permitted
hereunder;
(b) Eligible Securities;
(c) investments existing as of the date hereof as set forth in
Schedule 7.4;
(d) accounts receivable arising and trade credit granted in the
ordinary course of business and any securities received in satisfaction or
partial satisfaction thereof in connection with accounts of financially
troubled Persons to the extent reasonably necessary in order to prevent or
limit loss;
(e) investments in Subsidiaries other than Restricted Subsidiaries;
and
(f) investments in Restricted Subsidiaries existing as of the date
hereof.
9.7. Merger or Consolidation. (a) Consolidate with or merge into any
-----------------------
other Person, or (b) permit any other Person to merge into it, or (c) sell,
transfer or lease or otherwise dispose of all or a substantial part of its
assets (other than sales permitted under Section 9.5); provided, however, (i)
any Subsidiary of the Borrower may merge or transfer all or substantially all of
its assets into or consolidate with the Borrower or any wholly-owned Subsidiary
(other than a Restricted Subsidiary) of the Borrower, and (ii) any other Person
may merge into or consolidate with the Borrower or any wholly-owned Subsidiary
and any Subsidiary may merge into or consolidate with any other Person in order
to consummate an Acquisition permitted by Section 9.2, so long as no Default or
Event of Default exists hereunder after giving effect to such merger or
consolidation, provided further, that any resulting or surviving entity shall
execute and deliver such agreements and other documents, including, in the case
of Subsidiaries (other than Restricted Subsidiaries), a Facility Guaranty if the
Trigger Date has occurred, and take such other action as the Agent may require
to evidence or confirm its express assumption of the obligations and liabilities
of its predecessor entities under the Loan Documents.
9.8. 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, so long as no Default or Event of Default exists immediately
prior to and immediately after such payments, the
69
Borrower may (a) pay cash dividends in the ordinary course of business and (b)
purchase its own stock so long as the aggregate purchase price of the stock
repurchased does not at any time exceed $250,000,000 and so long as the Borrower
is in compliance with Section 9.17.
------------
9.9. Transactions with Affiliates. Other than transactions permitted
----------------------------
under Sections 9.6 and 9.7, 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 or its Subsidiaries 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 or any Subsidiary may render services to such
Persons for compensation at the same rates generally charged by the Borrower or
such Subsidiary and (c) in either case in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's (or any Subsidiary's)
business consistent with past practice of the Borrower and its Subsidiaries and
upon fair and reasonable terms no less favorable to the Borrower (or any
Subsidiary) than would be obtained in a comparable arm's-length transaction with
a Person not an Affiliate.
9.10. Compliance with ERISA, the Code and Foreign Benefit Laws. 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 or to any Governmental Authority; or
(b) permit the present value of all benefit liabilities under all
Pension Plans to exceed the current value of the assets of such Pension
Plans allocable to such benefit liabilities unless such event could not
reasonably be expected to result in a Material Adverse Effect; 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 Borrower or any ERISA Affiliate to
engage, in any prohibited transaction under Section 406 of ERISA or
Sections 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; or
(g) fail, or permit the Borrower or any ERISA Affiliate to fail, to
establish, maintain and operate each Employee Benefit Plan in material
compliance with the provisions of ERISA, the
70
Code, all applicable Foreign Benefit Laws and all other applicable laws and
the regulations and interpretations thereof.
9.11. Fiscal Year. Change its Fiscal Year.
-----------
9.12. 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 9.7.
9.13. Limitations on Sales and Leasebacks. Enter into any arrangement
-----------------------------------
or arrangements with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property, whether now owned or hereafter acquired
in a single transaction or series of related transactions, which has been or is
to be sold or transferred by the Borrower or any Subsidiary to such Person or to
any other Person to whom funds have been or are to be advanced by such Person on
the security of such property or rental obligations of the Borrower or any
Subsidiary unless, in such transaction, (a) the net sales price to the Borrower
or Subsidiary is equal to at least 95% of the appraised value of the property
subject to such transaction, (b) the term of the lease is not less than 20
years, and (c) the monthly lease payment shall not be more than 1.2 times a
Similar Loan Payment. "Similar Loan Payment" means the monthly payment with
respect to a loan equal to the actual sales price of and secured by the property
subject to such transaction, amortized over the period of the lease at the
prevailing market rate for a 15 year loan at the date of such transaction.
Should the Borrower or any Subsidiary enter into any lease-back transaction, the
full amount of the sales price of the property subject to such transaction shall
constitute Indebtedness under this Agreement so long as such lease remains in
effect.
9.14. Change in Control. Cause, suffer or permit to exist or occur any
-----------------
Change of Control.
9.15. Rate Hedging Obligations. Incur any Rate Hedging Obligations or
------------------------
enter into any agreements, arrangements, devices or instruments relating to Rate
Hedging Obligations, except pursuant to Swap Agreements.
9.16. Negative Pledge Clauses. Enter into or cause, suffer or permit to
-----------------------
exist any agreement (other than agreements existing as of the date hereof of
certain Subsidiaries relating to Indebtedness of any such Subsidiary and
applying only with respect to the assets of such Subsidiary) with any Person
other than the Agent and the Lenders pursuant to this Agreement or any other
Loan Documents which prohibits or limits the ability of any of the Borrower or
any Subsidiary to create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired,
provided that the Borrower and any Subsidiary may enter into such an agreement
in connection with, and that applies only to, property subject to any Lien
permitted by this Agreement and not released after the date hereof, when such
prohibition or limitation is by its terms effective only against the assets
subject to such Lien.
9.17. Retirement of Treasury Stock. At no time shall the value of
----------------------------
margin stock (as defined in Regulation U (12 C.F.R. Part 221) of the Board)
owned by the Borrower and its Subsidiaries on a consolidated basis exceed twenty
percent (20%) of Consolidated Total Assets. In the event there shall be any
such excess, the Borrower will immediately retire treasury stock as shall be
necessary to comply with
71
this restriction.
9.18. Capital Expenditures of Restricted Subsidiaries. Permit any
-----------------------------------------------
Restricted Subsidiary to make or become committed to make Capital Expenditures
which exceed in any Four-Quarter Period the amount of Consolidated EBITDA
attributable to such Restricted Subsidiary in such Four Quarter Period.
72
ARTICLE X
Events of Default and Acceleration
----------------------------------
10.1. 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) if default shall be made in the due and punctual payment of the
principal of any Loan, Reimbursement Obligation or other Obligation, when
and as the same shall be due and payable whether pursuant to any provision
of Article II or Article III or Article IV, at maturity, by acceleration or
otherwise; or
(b) if default shall be made in the due and punctual payment of any
amount of interest on any Loan, Reimbursement Obligation or other
Obligation or of any fees or other amounts payable to any of the Lenders or
the Agent within three (3) days of the date on which the same shall be due
and payable; or
(c) if default shall be made in the performance or observance of any
covenant set forth in Section 2.10, 8.8, 8.12, 8.13, 8.20 or Article IX;
(d) if a default shall be made in the performance or observance of,
or shall occur under, any covenant, agreement or provision contained in
this Agreement or the Notes (other than as described in clauses (a), (b) or
(c) above) and such default shall continue for thirty (30) or more days
after the earlier of receipt of notice of such default by the Authorized
Representative from the Agent or an officer of the Borrower becomes aware
of such default, or if a default shall be made in the performance or
observance of, or shall occur under, any covenant, agreement or provision
contained in any of the other Loan Documents (beyond any applicable grace
period, if any, contained therein) or in any instrument or document
evidencing or creating any obligation, guaranty, or Lien in favor of the
Agent or any of the Lenders or delivered to the Agent or any of the Lenders
in connection with or pursuant to this Agreement or any of the Obligations,
or if any Loan Document ceases to be in full force and effect (other than
as expressly provided for hereunder or thereunder), or if without the
written consent of the Lenders, this Agreement or any other Loan Document
shall be disaffirmed or shall terminate, be terminable or be terminated or
become void or unenforceable for any reason whatsoever (other than as
expressly provided for hereunder or thereunder); or
(e) if there shall occur (i) a default, which is not waived, in the
payment of any principal, interest, premium or other amount with respect to
any Indebtedness or Rate Hedging Obligation (other than the Loans and other
Obligations) of the Borrower or any Subsidiary in an amount not less than
$5,000,000 in the aggregate outstanding, or (ii) a default, which is not
waived, 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 or Rate Hedging Obligation may have been
issued, created, assumed, guaranteed or secured by the Borrower or any
Subsidiary, or (iii) any other
73
event of default as specified in any agreement or instrument under or
pursuant to which any such Indebtedness or Rate Hedging Obligation may have
been issued, created, assumed, guaranteed or secured by the Borrower or any
Subsidiary, and such default or event of default shall continue for more
than the period of grace, if any, therein specified, or such default or
event of default shall permit the holder of any such Indebtedness (or any
agent or trustee acting on behalf of one or more holders) to accelerate the
maturity thereof; or
(f) if any representation, warranty or other statement of fact
contained in any Loan Document or in any writing, certificate, report or
statement at any time furnished to the Agent or any Lender by or on behalf
of the Borrower or any other Credit Party pursuant to or in connection with
any Loan Document, or otherwise, shall be false or misleading in any
material respect when given; or
(g) if the Borrower or any Subsidiary or other Credit Party shall be
unable to pay its debts generally as they become due; file a petition to
take advantage of any insolvency statute; make an assignment for the
benefit of its creditors; commence a proceeding for the appointment of a
receiver, trustee, liquidator or conservator of itself or of the whole or
any substantial part of its property; file a petition or answer seeking
liquidation, reorganization or arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute; or
(h) if a court of competent jurisdiction shall enter an order,
judgment or decree appointing a custodian, receiver, trustee, liquidator or
conservator of the Borrower or any Subsidiary or other Credit Party or of
the whole or any substantial part of its properties and such order,
judgment or decree continues unstayed and in effect for a period of sixty
(60) days, or approve a petition filed against the Borrower or any
Subsidiary seeking liquidation, reorganization or arrangement or similar
relief under the federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state, which petition is not
dismissed within sixty (60) days; or if, under the provisions of any other
law for the relief or aid of debtors, a court of competent jurisdiction
shall assume custody or control of the Borrower or any Subsidiary or other
Credit Party or of the whole or any substantial part of its properties,
which control is not relinquished within sixty (60) days; or if there is
commenced against the Borrower or any Subsidiary or other Credit Party any
proceeding or petition seeking reorganization, arrangement or similar
relief under the federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state which proceeding or
petition remains undismissed for a period of sixty (60) days; or if the
Borrower or any Subsidiary or other Credit Party takes any action to
indicate its consent to or approval of any such proceeding or petition; or
(i) if (i) one or more judgments or orders where the amount not
covered by insurance (or the amount as to which the insurer denies
liability) is in excess of $5,000,000 is rendered against the Borrower or
any Subsidiary, or (ii) there is any attachment, injunction or execution
against any of the Borrower's or Subsidiaries' properties for any amount in
excess of $5,000,000 in the aggregate; and such judgment, attachment,
injunction or execution remains unpaid, unstayed, undischarged,
74
unbonded or undismissed for a period of thirty (30) days; or
(j) if the Borrower or any Subsidiary 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 or such Subsidiary for a period of more than 60 days; or
(k) if the Borrower or any Subsidiary shall breach any of the
material terms or conditions of any agreement under which any Rate Hedging
Obligation permitted hereby is created and such breach shall continue
beyond any grace period, if any, relating thereto pursuant to the terms of
such agreement, or if the Borrower or any Subsidiary shall disaffirm or
seek to disaffirm any such agreement or any of its obligations thereunder;
or
(l) if there shall occur and not be waived an Event of Default as
defined in any of the other Loan Documents;
(m) (i) 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; provided that any such events described in this
Section 11.1(m)(i) shall result either singly or in the aggregate in the
termination, cancellation, suspension or material impairment of operations
or rights to reimbursement which produce 5% or more of the Borrower's gross
revenues (on an annualized basis);
then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall have not been waived,
(A) either or both of the following actions may be taken: (i)
the Agent may, and at the direction of the Required Lenders shall,
declare any obligation of the Lenders 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 may and shall at the
direction of the Required Lenders, 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
75
notwithstanding the above, if there shall occur an Event of Default
under clause (g) or (h) 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 or the Borrower;
(B) The Borrower shall, immediately upon any Event of Default
under clause (g) or (h) above, and upon demand of the Agent or the
Required Lenders following any other Event of Default, deposit cash
with the Agent in an amount equal to the amount of any Letter of
Credit Outstandings, 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.
10.2. Agent to Act. In case any one or more Events of Default shall
------------
occur 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.
10.3. Cumulative Rights. No right or remedy herein conferred upon the
-----------------
Lenders or the Agent is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.
10.4. 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.
10.5. 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
Article X hereof, 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:
(a) amounts due to the Lenders and the Issuing Bank pursuant to
Sections 4.6(a), 4.6(b), 4.6(c), 4.6(d) and 12.5;
(b) amounts due to the Agent pursuant to Section 4.6(e);
(c) payments of interest on Loans and Reimbursement Obligations, to
be applied for the ratable benefit of the
76
Lenders;
(d) payments of principal of Loans and Reimbursement Obligations, to
be applied for the ratable benefit of the Lenders;
(e) payments of cash amounts to the Agent in respect of outstanding
Letters of Credit pursuant to Section 10.1(B);
(f) amounts due to the Issuing Bank, the Agent and the Lenders
pursuant to Sections 3.2(h), 8.16 and 12.9;
(g) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the Lenders;
(h) amounts due to any of the Lenders or their affiliates in respect
of Obligations consisting of liabilities under any Swap Agreement with any
of the Lenders or their affiliates on a pro rata basis according to the
amounts owed; and
(i) any surplus remaining after application as provided for herein,
to the Borrower or otherwise as may be required by applicable law.
77
ARTICLE XI
The Agent
---------
11.1. 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 11.5 and
the first sentence of Section 11.6 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 Credit Party
or any other 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 Credit Party or the satisfaction of any condition or to
inspect the property (including the books and records) of any Credit Party
or any of its Subsidiaries or affiliates;
(d) shall not be required to initiate or conduct any litigation or
collection proceedings under any Loan Document except as provided in
Section 10.2 at the direction of the Required Lenders; 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 gross 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.
11.2. 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
(including counsel for any Credit Party), 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 12.1 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
78
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.
11.3. 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 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 11.2 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.
11.4. Rights as Lender. With respect to its Five Year Commitment and
----------------
364 Day Commitment and the Loans made by it and Letters of Credit issued by it,
Bank of America (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. Bank of America (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 any Credit Party or any of its Subsidiaries or affiliates as
if it were not acting as Agent, and Bank of America (and any successor acting as
Agent) and its affiliates may accept fees and other consideration from any
Credit Party 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.
11.5. Indemnification. The Lenders agree to indemnify the Agent (to the
---------------
extent not reimbursed under Section 12.9 hereof, but without limiting the
obligations of the Borrower under such Section) ratably in accordance with their
respective Five Year Commitments and 364 Day Commitments, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, 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 12.5, to the extent that the Agent is not promptly
reimbursed for such costs and expenses by the Borrower and the Agent agrees to
79
repay each Lender making such payments to the extent the Agent is subsequently
reimbursed by the Borrower. The agreements contained in this Section 11.5
shall survive payment in full of the Loans and all other amounts payable under
this Agreement.
11.6. 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 Credit Parties and their 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 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 any
Credit Party or any of its Subsidiaries or affiliates that may come into the
possession of the Agent or any of its affiliates.
11.7. 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. 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 $500,000,000. 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 XI 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.
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ARTICLE XII
Miscellaneous
-------------
12.1. 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 Five Year Note, 364 Day Note and its Five Year Commitment and 364 Day
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 $10,000,000 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 both its Five Year Note and 364 Day Note and its Five Year
Commitment and 364 Day Commitment;
(iv) each such assignment by a Lender shall be the same ratable
assignment of such Lender's rights and obligations under both the 364 Day
Revolving Credit Facility and the Five Year Revolving Credit Facility; and
(v) 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 Notes subject to such assignment and a processing fee
of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the 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 5.6.
(b) The Agent shall maintain at its address referred to in Section 12.2 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
Five Year Commitment and 364 Day 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 Notes subject to such
81
assignment and payment of the processing fee, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form of
Exhibit B hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(d) Each Lender may sell participations to one or more Persons in all or a
portion of its rights, obligations or rights and obligations under this
Agreement (including all or a portion of its Five Year Commitment and 364 Day
Commitment or its Loans); provided, however, that (i) such Lender's obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) the participant shall be entitled to the benefit of the
yield protection provisions contained in Article V and the right of set-off
contained in Section 12.3, and (iv) 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 Notes 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
Notes, extending any scheduled principal payment date or date fixed for the
payment of interest on such Loans or Notes, or extending its Five Year
Commitment or 364 Day 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
Notes 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).
(g) 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 Agent, the Lenders, or
any of them. The Borrower may not assign or otherwise transfer to any other
Person any right, power, benefit, or privilege (or any interest therein)
conferred hereunder or under any of the other Loan Documents, or delegate (by
assumption or otherwise) to any other Person any duty, obligation, or liability
arising hereunder or under any of the other Loan Documents, and any such
purported assignment, delegation or other transfer shall be void.
82
12.2. 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 transmission to such party, in the case
of notice by telefacsimile (where the proper transmission of such notice is
either acknowledged by the recipient or electronically confirmed by the
transmitting device), or (iii) on the fifth Business Day after the day on which
mailed to such party, 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 or telefacsimile number, as appropriate, set forth below
or such other address or number as such party shall specify by notice hereunder:
(a) if to the Borrower or any Subsidiary:
Health Management Associates, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Health Management Associates, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Agent:
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, 15th Floor
NC1-001-15-04
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Bank of America, N.A.
Bank of America Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, 17th Floor
NC1-001-17-11
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(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.
83
12.3. Right of Set-off; Adjustments. (a) Upon the occurrence and
-----------------------------
during the continuance of any Event of Default, each Lender (and each of its
affiliates) is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender (or any of its affiliates)
to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
the Notes held by such Lender, irrespective of whether such Lender shall have
made any demand under this Agreement or such Notes and although such obligations
may be unmatured. Each Lender agrees promptly to notify the Borrower after any
such set-off and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 12.3 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
(b) If any Lender (a "benefitted Lender") shall at any time receive any
payment of all or part of the Loans owing to it, or interest thereon, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by set-
off, or otherwise), in a greater 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 12.3 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.
12.4. 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
Five Year Commitment and 364 Day Commitment hereunder or the Borrower has
continuing obligations hereunder unless otherwise provided herein.
12.5. Expenses. The Borrower agrees to pay on demand all costs and
--------
expenses of the Agent in connection with the syndication, preparation,
execution, delivery, administration, modification, and amendment of this
Agreement, the other Loan Documents, and the other documents to be delivered
hereunder, including, without limitation, the reasonable fees and expenses of
counsel for the Agent (including the cost of internal counsel) with respect
thereto and with respect to advising the Agent as to its rights and
responsibilities under the Loan Documents. The Borrower further agrees to pay
on demand all costs and expenses of the Agent and the Lenders, if any
(including, without limitation, reasonable attorneys' fees and expenses and the
cost of
84
internal counsel), in connection with the enforcement (whether through
negotiations, legal proceedings, or otherwise) of the Loan Documents and the
other documents to be delivered hereunder.
12.6. 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 or other applicable Credit
Party party to such Loan Document and either the Required Lenders or (as to Loan
Documents other than the Credit Agreement) the Agent on behalf of the Required
Lenders (and, if Article XI 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 Five Year Commitment or 364 Day
Commitments of the Lenders or the Total Five Year Commitment or 364 Day
Commitment, (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 Five Year
Commitment or 364 Day Commitment, (iv) change the percentage of the Five Year
Commitment or 364 Day Commitment or of the unpaid principal amount of the Notes,
or the number of Lenders, which shall be required for the Lenders or any of them
to take any action under this Section 12.6 or any other provision of this
Agreement or to amend this Section 12.6, (v) from and after the Trigger Date,
release any Guarantor, or (vi) remove Section 2.10.
No notice to or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances, except as otherwise expressly provided herein. No delay or
omission on any Lender's or the Agent's part in exercising any right, remedy or
option shall operate as a waiver of such or any other right, remedy or option or
of any Default or Event of Default.
12.7. Counterparts; Facsimile Signatures. This Agreement may be
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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. Signatures on communications and other documents may be
transmitted by facsimile only with the consent of the Agent in its sole and
absolute discretion in each instance. The effectiveness of any such signatures
accepted by the Agent shall, subject to applicable law, have the same force and
effect as manual signatures and shall be binding on all parties. The Agent may
also require that any such signature be confirmed by a manually-signed hardcopy
thereof. Each party hereto hereby adopts as an original executed signature page
each signature page hereafter furnished by such party to the Agent (or an agent
of the Agent) bearing (with the consent of the Agent) a facsimile signature by
or on behalf of such party. Nothing contained in this Section shall limit the
provisions of Section 11.2.
12.8. 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 under the Loan Documents shall continue in full force and
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effect, notwithstanding the termination of this Agreement, until all of the
Obligations have been paid in full after the termination hereof (other than
Obligations in the nature of continuing indemnities or expense reimbursement
obligations not yet due and payable, which shall continue) or the Borrower has
furnished the Lenders and the Agent with an indemnification satisfactory to the
Agent and each Lender with respect thereto. 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 the Agent or such Lender harmless for, the amount of such payment
surrendered until the Agent or 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 Agent or the Lenders in reliance upon such payment, and any such contrary
action so taken shall be without prejudice to the Agent or the Lenders' rights
under this Agreement and shall be deemed to have been conditioned upon such
payment having become final and irrevocable.
12.9. Indemnification; Limitation of Liability. (a) The Borrower
----------------------------------------
agrees to indemnify and hold harmless the Agent and each Lender and each of
their affiliates and their respective officers, directors, employees, agents,
and advisors (each, an "Indemnified Party") from and against any and all claims,
damages, losses, liabilities, costs, and expenses (including, without
limitation, reasonable attorneys' fees) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection
with any investigation, litigation, or proceeding or preparation of defense in
connection therewith) the Loan Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans, except to the
extent such claim, damage, loss, liability, cost, or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
In the case of an investigation, litigation or other proceeding to which the
indemnity in this Section 12.9 applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by the
Borrower, its directors, shareholders or creditors or an Indemnified Party or
any other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. The
Borrower agrees that no Indemnified Party shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to it, any of its
Subsidiaries, any Guarantor, or any security holders or creditors thereof
arising out of, related to or in connection with the transactions contemplated
herein, except to the extent that such liability is found in a final non-
appealable judgment by a court of competent jurisdiction to have directly
resulted from such Indemnified Party's gross negligence or willful misconduct.
The Borrower agrees not to assert any claim against the Agent, any Lender, any
of their affiliates, or any of their respective directors, officers, employees,
attorneys, agents, and advisers, on any theory of liability, for special,
indirect, consequential, or punitive damages arising out of or otherwise
relating to the Loan Documents, any of the transactions contemplated herein or
the actual or proposed use of the proceeds of the Loans.
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(b) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 12.9 shall survive the payment in full of the Loans and all other
amounts payable under this Agreement.
12.10. 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.
12.11. Entire Agreement. This Agreement, together with the other Loan
----------------
Documents, constitutes the entire agreement among the parties with respect to
the subject matter hereof and supersedes all previous proposals, negotiations,
representations, commitments and other communications between or among the
parties, both oral and written, with respect thereto (except that those
provisions (if any) which by the express terms of the commitment letter dated as
of September 23, 1999, executed by Bank of America and BAS and accepted by the
Borrower, survive the closing of the Five Year Revolving Credit Facility and 364
Day Revolving Credit Facility, Letter of Credit Facility shall survive and
continue in effect).
12.12. Agreement Controls. In the event that any term of any of the
------------------
Loan Documents other than this Agreement conflicts with any express term of this
Agreement, the terms and provisions of this Agreement shall control to the
extent of such conflict.
12.13. 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 applicable 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 interest paid and the amount of interest which would have been paid if
the Highest Lawful Rate had at all times been in effect. Notwithstanding the
foregoing, it is the intention of the Lenders and the Borrower to conform
strictly to any applicable usury laws. Accordingly, if any Lender contracts
for, charges, or receives any consideration which constitutes interest in excess
of the Highest Lawful Rate, then any such excess shall be cancelled
automatically and, if previously paid, shall at such Lender's option be applied
to the outstanding amount of the Loans made hereunder or be refunded to the
Borrower. As used in this paragraph, the term "Highest Lawful Rate" means the
maximum lawful interest rate, if any, that at any time or from time to time may
be contracted for, charged, or received under the laws applicable to such Lender
which are presently in effect or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which
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allow a higher maximum nonusurious interest rate than applicable laws now allow.
12.14. Payments. All principal, interest, and other amounts to be paid
--------
by the Borrower under this Agreement and the other Loan Documents shall be paid
to the Agent at the Principal Office in Dollars and in immediately available
funds, without setoff, recoupment, deduction or counterclaim. Subject to the
definition of "Interest Period" herein, whenever any payment under this
Agreement or any other Loan Document shall be stated to be due on a day that is
not a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time in such case shall be included in the
computation of interest and fees, as applicable, and as the case may be.
12.15. Governing Law; Waiver of Jury Trial.
-----------------------------------
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE,
NOTWITHSTANDING THE EXECUTION OF THIS AGREEMENT OUTSIDE THE STATE OF
FLORIDA.
(b) THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND CONSENTS
THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY
STATE OR FEDERAL COURT SITTING IN THE COUNTY OF ▇▇▇▇▇▇▇, STATE OF FLORIDA,
UNITED STATES OF AMERICA AND, BY THE EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER EXPRESSLY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE IN, OR TO THE EXERCISE OF
JURISDICTION OVER IT AND ITS PROPERTY BY, ANY SUCH COURT IN ANY SUCH SUIT,
ACTION OR PROCEEDING, AND THE BORROWER HEREBY IRREVOCABLY SUBMITS GENERALLY
AND UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT,
ACTION OR PROCEEDING.
(c) THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY REGISTERED OR
CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE BORROWER PROVIDED IN
SECTION 12.2, OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE
APPLICABLE LAWS IN EFFECT IN THE STATE OF FLORIDA.
(d) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE BE
DELIVERED IN CONNECTION THEREWITH, THE BORROWER, THE AGENT AND THE LENDERS
HEREBY AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH
ACTION, SUIT OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY AND HEREBY IRREVOCABLY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT SUCH PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION,
SUIT OR PROCEEDING.
(e) THE BORROWER HEREBY EXPRESSLY WAIVES ANY OBJECTION IT MAY HAVE
THAT ANY COURT TO WHOSE JURISDICTION IT HAS SUBMITTED PURSUANT TO THE TERMS
HEREOF IS AN INCONVENIENT FORUM.
12.16. Special Funding Option.
----------------------
(a) Notwithstanding anything to the contrary contained herein, any
Lender (for purposes of this Section 12.16, a "Granting
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Lender") may grant to a special purpose funding vehicle (for purposes of this
Section 12.16, an "SPC") the option to make, on behalf of such Granting Lender,
all or a portion of the Advances which such Granting Lender is obligated to make
(a "Funding Obligation") under the Five Year Revolving Credit Facility , the 364
Day Revolving Credit Facility and the Letter of Credit Facility, such option to
be exercisable in the sole discretion of the SPC; provided, however, that
notwithstanding the granting of such option to the SPC, or the exercise of such
option by the SPC:
(i) such Granting Lender's obligations under this Agreement and the
Loan Documents shall remain unchanged, including without limitation the
indemnification obligations of the Granting Lender pursuant to Section 11.5
------------
hereof;
(ii) such Granting Lender shall remain solely responsible to the
other parties hereto for the performance of all Funding Obligations;
(iii) the Borrower and the Lenders (other than the Granting Lender)
shall continue to deal solely and directly with such Granting Lender in
connection with such Granting Lender's rights and obligations under this
Agreement, and the Agent shall continue to deal directly with the Granting
Lender as agent for the SPC with respect to distribution of payments of
principal, interest and fees, notices of Conversion and Continuation and all
other matters;
(iv) such Granting Lender shall retain the sole right to (x) enforce
the obligations of the Borrower relating to its Loans, its Notes and its
Participations, and (y) to approve any amendment, modification or waiver of any
provision of this Agreement;
(v) shall not constitute as assignment to or participation of such
SPC of or in the Granting Lender's Commitments and Participations and
Obligations owing thereto;
(vi) such SPC shall not become a Lender hereunder;
(vii) such SPC shall not become obligated or committed to make
Advances; and
(viii) if such SPC elects not to exercise such option or otherwise
fails to make all or any part of an Advance, the Granting Lender shall retain
its Funding Obligation and be obligated to make the entire Advance or any
portion of such Advance not made by such SPC.
[Signatures on following pages]
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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.
HEALTH MANAGEMENT ASSOCIATES, INC.
WITNESS:
____________________ By:_________________________________________
Name:_______________________________________
____________________ Title:______________________________________
BANK OF AMERICA, N.A.,
as Agent for the Lenders
WITNESS:
___________________ By:_________________________________________
Name:_______________________________________
___________________ Title:______________________________________
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BANK OF AMERICA, N.A.
WITNESS:
___________________ By:_________________________________________
Name:_______________________________________
___________________ Title:______________________________________
Lending Office for Base Rate Loans:
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, 15th Floor
NC1-001-15-04
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:_____________________________
Telephone: (704) 386-
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank of America, N.A.
ABA#: ▇▇▇▇▇▇▇▇▇
---------------------------------
Account No.: 1366212250600
--------------------------
Reference: Health Management Associates
----------------------------
Attention: Corporate Credit Services
----------------------------
Lending Office for Eurodollar Rate Loans:
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, 15th Floor
NC1-001-15-04
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:_____________________________
Telephone: (704) 386-
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank of America, N.A.
ABA#___________________________________
Account No.:___________________________
Reference:_____________________________
Attention:_____________________________
91