AMENDED AND RESTATED
CREDIT AGREEMENT
among
HEALTHSOUTH REHABILITATION CORPORATION
and
NATIONSBANK OF NORTH CAROLINA, NATIONAL ASSOCIATION,
as Agent
and
LENDERS AS SIGNATORIES HERETO,
--------
$550,000,000 Revolving Credit and Term Loan Facility
Dated as of June 7, 1994
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
REVOLVING FACILITY TERMS, TERM LOAN AND COLLATERAL
SECTION 2.1 Syndicated Loans............................................. 24
SECTION 2.2 Advances of Syndicated Loans................................. 25
SECTION 2.3 Competitive Bid Loans........................................ 26
SECTION 2.4 Term Loan.................................................... 30
SECTION 2.5 Payments..................................................... 31
SECTION 2.6 Joint and Several Obligations................................ 31
SECTION 2.7 Pledge Agreement............................................. 32
SECTION 2.8 Prepayment................................................... 33
SECTION 2.9 Notes........................................................ 33
SECTION 2.10 Reduction in Revolving Facility.............................. 34
SECTION 2.11 Unused Fee................................................... 34
SECTION 2.12 Lending Offices.............................................. 34
SECTION 2.13 Letter of Credit Borrowings.................................. 34
SECTION 2.14 Pro Rata Payments............................................ 38
SECTION 2.15 Deficiency Advances.......................................... 38
SECTION 2.16 Adjustments by Agent......................................... 39
ARTICLE III
INTEREST ON SYNDICATED LOANS
SECTION 3.1 Applicable Interest Rates.................................... 40
SECTION 3.2 Procedure for Exercising Interest Rate Options............... 40
SECTION 3.3 Base Rate.................................................... 40
SECTION 3.4 Fixed Rate................................................... 41
SECTION 3.5 Changes in Syndicated Margin. .............................. 41
ARTICLE IV
TERMINATION OF LIBOR-BASED RATE AND YIELD PROTECTION
SECTION 4.1 Suspension of Loans.......................................... 42
SECTION 4.2 Compensation................................................. 43
SECTION 4.3 Taxes........................................................ 43
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Organization, Powers, Existence, etc......................... 46
SECTION 5.2 Authorization of Borrowing, etc.............................. 46
SECTION 5.3 Liabilities.................................................. 46
SECTION 5.4 Taxes........................................................ 47
SECTION 5.5 Litigation................................................... 47
SECTION 5.6 Agreements................................................... 47
SECTION 5.7 Use of Proceeds.............................................. 47
SECTION 5.8 ERISA Requirement............................................ 47
SECTION 5.9 Subsidiaries................................................. 47
SECTION 5.10 Principal Place of Business.................................. 48
SECTION 5.11 Environmental Laws........................................... 48
SECTION 5.12 Disclosure................................................... 48
SECTION 5.13 Licenses..................................................... 48
SECTION 5.14 Title to Properties.......................................... 48
ARTICLE VI
GENERAL CONDITIONS OF LENDING
SECTION 6.1 Representations and Warranties............................... 50
SECTION 6.2 No Default................................................... 50
SECTION 6.3 Supporting Documents......................................... 50
ARTICLE VII
GENERAL COVENANTS OF THE BORROWER
SECTION 7.1 Existence, Properties, etc................................... 52
SECTION 7.2 Payment of Indebtedness, Taxes, etc.......................... 52
SECTION 7.3 Financial Statements, Reports, etc........................... 52
SECTION 7.4 Litigation Notice............................................ 54
SECTION 7.5 Default Notice............................................... 55
SECTION 7.6 Further Assurances........................................... 55
SECTION 7.7 Insurance.................................................... 55
SECTION 7.8 Covenants Regarding Financial Condition...................... 55
SECTION 7.9 Continuation of Current Business............................. 61
SECTION 7.10 Management Contracts......................................... 61
SECTION 7.11 Cooperation; Inspection of Properties........................ 61
SECTION 7.12 Use of Proceeds.............................................. 61
SECTION 7.13 Limit on Investment in HEALTHSOUTH of
Birmingham, Inc.............................................. 62
SECTION 7.14 Additional Consolidated Entities............................. 62
SECTION 7.15 ERISA. ..................................................... 62
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.1 Events of Default............................................ 64
SECTION 8.2 Agent to Act................................................. 67
SECTION 8.3 Cumulative Rights............................................ 67
SECTION 8.4 No Waiver.................................................... 67
SECTION 8.5 Default...................................................... 67
SECTION 8.6 Allocation of Proceeds....................................... 68
ARTICLE IX
THE AGENT
SECTION 9.1 Appointment.................................................. 69
SECTION 9.2 Attorneys-in-fact............................................ 69
SECTION 9.3 Limitation on Liability...................................... 69
SECTION 9.4 Reliance..................................................... 69
SECTION 9.5 Notice of Default............................................ 70
SECTION 9.6 No Representations........................................... 70
SECTION 9.7 Indemnification.............................................. 71
SECTION 9.8 Lender....................................................... 71
SECTION 9.9 Resignation.................................................. 71
SECTION 9.10 Sharing of Payments, etc..................................... 72
SECTION 9.11 Fees......................................................... 72
SECTION 9.12 Independent Agreements....................................... 72
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Assignments and Participations.............................. 73
SECTION 10.2 Notices..................................................... 75
SECTION 10.3 No Waiver................................................... 76
SECTION 10.4 Setoff...................................................... 76
SECTION 10.5 Survival.................................................... 76
SECTION 10.6 Expenses.................................................... 77
SECTION 10.7 Amendments.................................................. 78
SECTION 10.8 Counterparts................................................ 78
SECTION 10.9 Waivers by Borrower......................................... 79
SECTION 10.10 Termination................................................. 79
SECTION 10.11 Governing Law............................................... 80
SECTION 10.12 Indemnification............................................. 80
SECTION 10.13 Agreement Controls.......................................... 81
SECTION 10.14 Integration................................................. 81
SECTION 10.15 Successors and Assigns...................................... 81
SECTION 10.16 Severability................................................ 81
Exhibit A - Applicable Commitment Percentage
Exhibit B - Form of Assignment and Acceptance
Exhibit C-1 - Form of Partnership Guaranty Agreement
Exhibit C-2 - Form of Subsidiary Guaranty Agreement
Exhibit D - Form of Request for Advance or Interest Rate
Election
Exhibit E - Form of Competitive Bid Quote Requests
Exhibit F - Form of Competitive Bid Quote
Exhibit G - Subsidiaries and Controlled Partnerships
Exhibit H-1 - Form of Syndicated Note
Exhibit H-2 - Form of Competitive Bid Note
Exhibit H-3 - Form of Term Note
Exhibit I - Form of Compliance Certificate and Schedules
Thereto
Exhibit J - Summary of Insurance
Exhibit K - Outstanding Letters of Credit
Exhibit L - Investments or Equity Interest
Exhibit M - Subsidiaries and Controlled Partnerships
Exhibit N - Existing Liens
Exhibit O - Disposal Properties
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 7, 1994
(this "Agreement") is entered into by and among HEALTHSOUTH REHABILITATION
CORPORATION, a Delaware corporation (the "Borrower"), the Lenders as signatories
hereto (the "Lenders") and NATIONSBANK OF NORTH CAROLINA, NATIONAL ASSOCIATION,
a national banking association (the "Agent").
RECITAL:
Pursuant to a Credit Agreement dated as of November 20, 1992 as amended
by Amendments No. 1 and No. 2 (the "Prior Agreement"), the lenders party thereto
(the "Prior Lenders") have agreed to make loans and cause to be issued letters
of credit all in an aggregate outstanding amount of not to exceed $390,000,000.
Pursuant to the terms of the Prior Agreement all Participating Subsidiaries and
Participating Partnerships (each defined in the Prior Agreement) have guaranteed
payment of all Credit Obligations (as defined in the Prior Agreement). In
addition, the Borrower, and certain of the Participating Subsidiaries have
executed and delivered to the Agent, for the benefit of the Lenders, Pledge
Agreements conveying the property described therein as security for the Credit
Obligations. The Borrower has requested that the Prior Agreement be amended and
restated in its entirety in order to increase the amount of the credit facility,
to change certain of the provisions contained therein and to increase the number
of lenders participating therein. Accordingly, the Borrower, the Lenders and the
Agent agree that the Prior Agreement is hereby amended and restated in its
entirety as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 For the purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
All accounting terms not otherwise defined herein have the
meanings assigned to them, and all computations herein provided for
shall be made, in accordance with generally accepted accounting
principles applied on a consistent basis. All references herein to
"GAAP" refer to such principles as they exist at the date of
application thereof.
All references in this instrument to designated "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections and subdivisions of this instrument as originally executed.
The terms "herein", "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.
The terms "include," "including" and similar terms shall be
construed as if followed by the phrase "without being limited to."
All Article and Section captions herein are used for
reference only and in no way limit or describe the scope or intent of,
or in any way affect, this Agreement.
Words importing the singular number shall mean and include
the plural number and visa versa.
All recitals set forth in this Agreement are hereby
incorporated in the operative provisions of this Agreement.
No inference in favor of or against either party shall be
drawn from the fact that such party or its counsel has drafted any
portion hereof.
The term "person" shall include individual, corporation,
partnership, joint venture, association, trust, unincorporated
organization and any government or any agency or political subdivision
thereof.
Absolute Rate shall have the meaning assigned to such term
in Section 2.3(c)(ii)(D) hereof.
Absolute Rate Auction shall mean a solicitation of
Competitive Bid Quotes setting forth Absolute Rates pursuant
to Section 2.3 hereof.
Absolute Rate Loans shall mean the Competitive Bid Loans the
interest rates on which are determined on the basis of Absolute Rates
set at Absolute Rate Auctions.
Acquisition means the acquisition, whether with cash,
property, stock or promise to pay all or a portion of a person or a
Facility or Facilities of a person, permitted under Sections 7.8(a)(8)
and 7.8(a)(17) hereof; provided (i) such Person or Facilities is in the
same line of business engaged in by Borrower or its Consolidated
Entities, (ii) the person or Facility to be acquired does not oppose
the acquisition, and (iii) at the time of giving effect to such
Acquisition such person or Facility is a Consolidated Entity.
Actual/360 Basis shall mean a method of computing interest
or other charges hereunder on the basis of an assumed year of 360 days
for actual number of days elapsed, meaning that interest or other
charges accrued for each day will be computed by multiplying the rate
applicable on that day by the unpaid principal balance (or other
relevant sum) on that day and dividing the result by 360.
Advance means a borrowing under the Revolving Facility
consisting of the aggregate principal amount of a Syndicated Loan or a
Competitive Bid Loan.
Affiliate of any specified person shall mean any other
person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified person. For
purposes of this definition "control" when used with respect to any
specified person means the power to direct the management and policies
of such person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
Applicable Commitment Percentage means, for each Lender, a
fraction, the numerator of which shall be the then amount of such
Lender's Commitment and the denominator of which shall be the Revolving
Facility, which Applicable Commitment Percentage for each Lender as of
the Closing Date is as set forth in Exhibit A attached hereto and
incorporated herein by reference; provided that the Applicable
Commitment Percentage of each Lender shall be increased or decreased to
reflect any assignments to or by such Lender effected in accordance
with Section 10.1 hereof.
Applicable Lending Office shall mean, for each Lender and
for each Type of Loan, the "Lending Office" of such Lender (or of an
Affiliate of such Lender) designated for such Type of Loan on the
signature pages hereof or such other office of such Lender (or of an
Affiliate of such Lender) as such Lender may from time to time specify
to the Agent and the Borrower as the office by which its Loans of such
Type are to be made and maintained.
Application shall mean the Application and Agreement for
Letter of Credit pursuant to which the Borrower may apply for the
issuance of a Letter of Credit by NationsBank as provided in Section
2.13 hereof.
Asset Sale for any person means the sale, lease conveyance
or other disposition (including, without limitation, by merger or
consolidation, and whether by operation of law or otherwise) of any of
that person's assets (including, without limitation, the sale or other
disposition of Capital Stock of any Subsidiary of such person, whether
by such person or by such Subsidiary), whether owned on the date of
initial issuance of the Senior Subordinated Notes or subsequently
acquired, in one transaction or a series of related transactions, in
which such person and or its Subsidiaries sell, lease, convey or
otherwise dispose of (i) all or substantially all of the Capital Stock
of any of such person's Subsidiaries, (ii) assets which constitute
substantially all of an operating unit or business of such person or
any of its Subsidiaries, or (iii) any health care facility; provided,
however, that the following shall not constitute Asset Sales: (i) a
transaction or series of related transactions that results in a Change
of Control (as such term is defined in the Indenture dated March 24,
1994 relating to the Senior Subordinated Notes), and (ii) transactions
between the Borrower and any of its Wholly Owned Subsidiaries (as such
term is defined in the Indenture dated March 24, 1994 relating to the
Senior Subordinated Notes) or among such Wholly Owned Subsidiaries.
Assignment and Acceptance shall mean an Assignment and
Acceptance in the form of Exhibit B (with blanks appropriately filled
in) delivered in connection with an assignment of a portion of the
Lender's interest under this Agreement pursuant to Section 10.1.
Attributable Indebtedness when used with respect to any Sale
and Leaseback Transaction or an operating lease with respect to a
healthcare facility means, as at the time of determination, the present
value (discounted at a rate equivalent to the interest rate implicit in
the lease, compounded on a semiannual basis) of the total obligations
of the lessee for rental payments, after excluding all amounts required
to be paid on account of maintenance and repairs, insurance, taxes,
utilities and other similar expenses payable by the lessee pursuant to
the terms of the lease, during the remaining term of the lease included
in any such Sale and Leaseback Transaction or such operating lease or
until the earliest date on which the lessee may terminate such lease
without penalty or upon payment of a penalty (in which case the rental
payments shall include such penalty); provided, that the Attributable
Indebtedness with respect to a Sale and Leaseback Transaction shall be
no less than the fair market value of the property subject to such Sale
and Leaseback Transaction.
Base Rate shall mean the higher of the (i) Prime Rate or
(ii) the Federal Funds Effective Rate plus 1/2% per annum.
Base Rate Loans shall mean Syndicated Loans that bear
interest at rates based upon the Base Rate.
Business Day shall mean (a) any day on which commercial
banks are not authorized or required to close in Charlotte, North
Carolina and New York City and (b) if such day relates to the giving of
notices or quotes in connection with a LIBOR Auction or to a borrowing
of, a payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a LIBOR Loan or a
LIBOR Market Loan or a notice by the Borrower with respect to any such
borrowing, payment, prepayment, Conversion or Interest Period, any day
on which dealings in Dollar deposits are carried out in the London
interbank market.
Capital Expenditure shall mean any expenditure or liability
that is properly charged to a capital account or otherwise capitalized
on the consolidated balance sheet in accordance with GAAP.
Capital Stock of any person means any and all shares, rights
to purchase, warrants or options (whether or not currently
exercisable); participation or other equivalents of or interest in
(however designated) the equity (including without limitation common
stock, preferred stock and partnership and joint venture interests) of
such Person (excluding any debt securities that are convertible into,
or exchangeable for, such equity).
Capitalized Lease Obligations of any person means the
obligation of such person to pay rent or other amounts under a lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
Cash Available for Capital Expenditures means the sum of (i)
Consolidated Net Income, (ii) Consolidated Depreciation Expense and
(iii) Consolidated Amortization Expense minus Consolidated Current
Maturities.
Class shall have the meaning assigned to such term in
Section 1.2 hereof.
Closing Date shall mean the date of this Agreement.
Collateral shall mean all property covered by the Pledge
Agreements or that otherwise at any time secures any of the Credit
Obligations.
Commitment shall mean, as to each Lender, the obligation of
such Lender to make Syndicated Loans pursuant to Section 2.1 hereof in
an aggregate amount at any one time outstanding up to but not exceeding
the amount set opposite such Lender's name on the signature pages
hereof under the caption "Commitment" (as the same may be reduced at
any time or from time to time pursuant to Section 2.10 hereof);
provided that the Commitment of each Lender shall be increased or
decreased to reflect any assignments to or by such Lender effected in
accordance with Section 10.1 hereof.
Competitive Bid Borrowing shall have the meaning assigned to
such term in Section 2.3(b) hereof.
Competitive Bid Loans shall mean the Loans provided for by
Section 2.3 hereof.
Competitive Bid Notes shall mean the promissory notes
provided for by Section 2.9(b) hereof and all promissory notes
delivered in substitution or exchange therefor, in each case as the
same shall be modified and supplemented and in effect from time to
time.
Competitive Bid Quote shall mean an offer in accordance with
Section 2.3(c) hereof by a Lender to make a Competitive Bid Loan with
one single specified interest rate.
Competitive Bid Quote Request shall have the meaning
assigned to such term in Section 2.3(b) hereof.
Compliance Certificate shall have the meaning attributed to
that term in Section 7.3(3) below.
Consolidated Adjusted Interest Expense means Consolidated
Interest Expense plus (to the extent not otherwise included within the
definition of Interest Expense as imputed interest) one-third of the
rental expense on Attributable Indebtedness of the Borrower and its
Consolidated Entities for such period determined on a consolidated
basis.
Consolidated Amortization Expense of the Borrower for any
period means the amortization expense of the Borrower and its
Consolidated Entities for such period (to the extent included in the
computation of Consolidated Net Income), determined on a consolidated
basis in accordance with GAAP.
Consolidated Cash Flow means, for Borrower and its
Consolidated Entities for any Four-Quarter Period, Consolidated Net
Income, plus amounts that have been deducted in determining
Consolidated Net Income for such period for (i) Consolidated Income Tax
Expense, (ii) Consolidated Interest Expense, (iii) Consolidated
Depreciation Expense, (iv) Consolidated Amortization Expense and (v)
the minority interests of any person or persons in Consolidated
Entities.
Consolidated Current Assets means cash and all other assets
or resources of the Borrower and its Consolidated Entities which are
expected to be realized in cash, sold in the ordinary course of
business, or consumed within one year, determined on a consolidated
basis in accordance with GAAP.
Consolidated Current Liabilities means the amount of all
liabilities of the Borrower and its Consolidated Entities which by
their terms are payable within one year (including all Indebtedness
payable on demand or maturing not more than one year from the date of
computation) and the current portion of Indebtedness having a maturity
date in excess of one year, determined on a consolidated basis in
accordance with GAAP.
Consolidated Current Maturities means Principal Maturities
of the Borrower and its Consolidated Entities.
Consolidated Depreciation Expense of the Borrower means the
depreciation expense of the Borrower and its Consolidated Entities for
such period (to the extent included in the computation of Consolidated
Net Income of the Borrower), determined on a consolidated basis in
accordance with GAAP.
Consolidated EBITDA of the Borrower means, with respect to
any Four-Quarter Period, Consolidated Net Income before extraordinary
losses and losses realized in connection with sale of assets, plus (i)
Consolidated Income Tax Expense, plus (ii) Consolidated Depreciation
Expense, plus (iii) Consolidated Amortization Expense, plus (iv)
Consolidated Adjusted Interest Expense, plus (v) all other non-cash
items reducing Consolidated Net Income of the Borrower and its
Consolidated Entities, determined on a consolidated basis in accordance
with GAAP, plus (vi) without duplication, for calculation of an EBITDA
Coverage Ratio for periods ending on or before December 31, 1994 the
sum of $31,500,000 (representing expenses related to the Borrower's
acquisition of certain rehabilitation facilities and related assets
from National Medical Enterprises, Inc. effective December 31, 1993,
net of Federal income tax effect), plus (vii) without duplication, any
amount, net of Federal income tax effects, representing expenses
relating to an Acquisition, up to a maximum of 10% of the purchase
price thereof, determined on a consolidated basis in accordance with
GAAP, and less all non-cash items increasing Consolidated Net Income,
determined on a consolidated basis in accordance with GAAP.
Consolidated Entity shall mean any person whose financial
statements are appropriately consolidated with the Borrower's financial
statements under GAAP.
Consolidated Income Tax Expense of the Borrower for any
period means the provision for taxes based on income and profits of the
Borrower and its Consolidated Entities to the extent such income or
profits were included in computing Consolidated Net Income for such
period.
Consolidated Interest Expense of the Borrower for any period
means the Interest Expense of the Borrower and its Consolidated
Entities for such period, determined on a consolidated basis in
accordance with GAAP.
Consolidated Lease Expense means for any period all Lease
Payments paid or accrued during such period under operating leases
(whether or not constituting rental expense) by the Borrower and its
Consolidated Entities determined on a consolidated basis in accordance
with GAAP.
Consolidated Net Income of the Borrower for any period means
the net income (or loss) of the Borrower and its Consolidated Entities
for such period determined on a consolidated basis in accordance with
GAAP, without giving effect to dividends on any series of preferred
stock of any Consolidated Entity, whether or not in cash, to the extent
such consolidated net income was reduced thereby; provided that there
shall be excluded from such net income (for all purposes, other than
compliance with Section 7.8(a)(1)(A), to the extent otherwise included
therein), without duplication; (i) the net income of any person (other
than a Consolidated Entity) to the extent that any such income has not
actually been received by the Borrower or a Consolidated Entity in the
form of dividends or similar distributions during such period; (ii)
except to the extent includable in the consolidated net income of the
Borrower or a Consolidated Entity pursuant to the foregoing clause (i),
the net income of any person that accrued prior to the date that (a)
such Person becomes a Consolidated Entity or is merged into or
consolidated with a Consolidated Entity or (b) the assets of such
person are acquired by the Borrower or a Consolidated Entity; (iii) the
net income of any Consolidated Entity to the extent that the
declaration or payment of dividends or similar distributions by such
Subsidiary of that income is not permitted by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary
during such period; (iv) any gain (or loss), together with any related
provisions for taxes on any such gain, realized during such period by
the Borrower or its Consolidated Entities upon (a) the acquisition of
any securities, or the extinguishment of any Indebtedness, of the
Borrower or its Consolidated Entities or (b) any asset sale by the
referent person or any of its Subsidiaries; (v) any extraordinary gain
(or extraordinary loss), together with any related provision for taxes
or tax benefit resulting from any such extraordinary gain or loss,
realized by the Borrower or its Consolidated Entities during such
period; and (vi) in the case of a successor to such person by
consolidation, merger or transfer of its assets, any earnings of the
successor prior to such merger, consolidation or transfer of assets.
Consolidated Net Worth of the Borrower as of any date means
the Consolidated Stockholders' Equity (including any preferred stock
that is classified as equity under GAAP, other than Disqualified Stock)
of such person and its Subsidiaries (excluding any equity adjustment
for foreign currency translation for any period subsequent to the
Closing Date on a consolidated basis at such date, as determined in
accordance with GAAP, less all write-ups subsequent to the Closing Date
in the book value of any asset owned by such Borrower or any of its
Consolidated Entities; provided, however, that in calculating the
Consolidated Net Worth of the Borrower immediately prior to an
Acquisition by the Borrower of another person, there shall be
subtracted from the Borrower's Consolidated Net Worth immediately prior
to such Acquisition the lesser of (a) such amount, net of Federal
income tax effects, as represents expenses relating to such
Acquisition, or (b) 10% of the purchase price or fair market value of
the consideration paid by the Borrower in connection with such
Acquisition.
Consolidated Stockholders' Equity shall mean at any time as
at which the amount thereof is to be determined, the sum of the
following amounts in respect of the Borrower and the Consolidated
Entities (i) the par or stated value of all Capital Stock of the
Borrower, (ii) retained earnings, (iii) additional paid in capital,
(iv) capital surplus and (v) earned surplus minus treasury stock.
Consolidated Total Capital shall mean the sum of (i)
Consolidated Stockholders' Equity and (ii) Indebtedness of the Borrower
and its Consolidated Entities.
Controlled Partnership shall mean a general partnership of
which the Borrower or a Subsidiary is a general partner (but not
including Alabama World Football), or a limited partnership whose
general partners include the Borrower or a Subsidiary (but not
including Vanderbilt), which partnership, whether general or limited,
has assets with a value in excess of $2,000.00, and with respect to
which partnership the Borrower or a Subsidiary is entitled to receive
not less than 50% of any distributions of cash made to the partners
thereof, other than any preferred cash distribution arrangement
approved by the Required Lenders in writing.
Convert, Conversion and Converted shall refer to a
conversion pursuant to Section 3.2 hereof of one Type of Syndicated
Loan into another Type of Syndicated Loan, which may be accompanied by
the transfer by a Lender (at its sole discretion) of a Loan from one
Applicable Lending Office to another.
Conversion Date means June 1, 1997, the date the Revolving
Facility shall convert to a Term Loan pursuant to Section 2.4 hereof.
Convertible Subordinated Debentures means the 5% Convertible
Subordinated Debentures due 2001 of the Borrower dated as of March 24,
1994 in the aggregate original principal amount of $115,000,000.
Credit Obligations shall mean the Revolving Facility
Obligations, the Letter of Credit Obligations, the Term Loan and all
other obligations and debts owing to the Lenders, and arising under the
terms of this Agreement, the Notes, the Applications and the other Loan
Documents, whether now or hereafter incurred, existing or arising,
including the principal amount of all Advances, all Letter of Credit
Borrowings, Reimbursement Obligations and the Term Loan with respect
thereto, any sums expended by the Agent or the Lenders in exercising
the rights and remedies described in Section 8.1, all accrued interest
on Advances, Letter of Credit Reimbursement Obligations and the Term
Loan, and all costs, fees, charges and expenses incurred and payable in
connection therewith, including fees payable under the terms of, or in
connection with, this Agreement, and all other obligations and debts
owing to the Agent or the Lenders arising in connection with, ancillary
to, or in support of Advances, Letter of Credit Borrowings and the Term
Loan, and all extensions, alterations, modifications, revisions and
renewals of any of the foregoing.
Debt Service Coverage Ratio with respect to any FourQuarter
Period means the ratio of (A) Consolidated Net Income plus amounts that
have been deducted in determining Consolidated Net Income for such
period for (i) Consolidated Depreciation Expense, (ii) Consolidated
Interest Expense, (iii) Consolidated Amortization Expense, (iv)
Consolidated Lease Expense, and (v) the minority interests of any
person or persons to (B) the sum of (i) Consolidated Interest Expense,
(ii) Consolidated Lease Expense and (iii) Consolidated Current
Maturities.
Default shall mean an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.
Disqualified Stock means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder
thereof, in whole or in part, on or prior to the Maturity Date.
Dollars and the symbol $ shall mean dollars constituting
legal tender for the payment of public and private debts in the United
States of America.
EBITDA Coverage Ratio with respect to any period means the
ratio of (i) Consolidated EBITDA to (ii) the aggregate amount of
Consolidated Adjusted Interest Expense for such period; provided,
however, that if any calculation of the EBITDA Coverage Ratio requires
the use of any quarter prior to the date of initial issuance of the
Senior Subordinated Notes, such calculation shall be made on a pro
forma basis, giving effect to the issuance of the Senior Subordinated
Notes and the use of the net proceeds therefrom as if the same had
occurred at the beginning of the Four-Quarter Period used to make such
calculation; and provided further that if any such calculation requires
the use of any quarter prior to the date that any Asset Sale was
consummated, or that any Indebtedness was incurred, or that any
acquisition of a hospital or other healthcare facility or any assets
purchased outside the ordinary course of business was effected, by the
Borrower or any of its Subsidiaries, such calculation shall be made on
a pro forma basis, giving effect to each such Asset Sale, incurrence of
Indebtedness or acquisition, as the case may be, and the use of any
proceeds therefrom, as if the same had occurred at the beginning of the
Four-Quarter Period used to make such calculation.
ERISA shall mean the Employee Retirement Income Security Act
of 1974, as amended.
Event of Default shall have the meaning assigned to such
term in Article VIII hereof.
Facility shall mean an in-patient or out-patient
rehabilitation facility, a certified out-patient rehabilitation
facility, skilled nursing facility, specialty medical center, specialty
orthopedic hospital or acute care hospital, sub-acute in-patient
facility, transitional living center, medical office building,
outpatient surgery center and outpatient diagnostic center with all
buildings and improvements associated therewith, that is owned or
leased, in whole or part, by the Borrower or a Subsidiary or any
partnership controlled directly or indirectly by the Borrower.
Federal Funds Effective Rate shall mean, for any day, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day,
provided that (a) if the day for which such rate is to be determined is
not a Business Day, the Federal Funds Effective Rate for such day shall
be such rate on such transactions on the next preceding Business Day as
so published for any Business Day, and (b) if such rate is not so
published for any Business Day, the Federal Funds Effective Rate for
such Business Day shall be the average rate charged to the Agent on
such Business Day on such transactions as determined by the Agent.
Fiscal Year means the twelve month period of the Borrower
commencing on January 1 of each calendar year and ending December 31 of
each calendar year.
Fixed Rate shall mean the Absolute Rate or the LIBORBased
Rate.
Fixed Rate Segment shall mean a Segment to which a Fixed
Rate is (or is proposed to be) applicable.
Four-Quarter Period means a period of four full consecutive
fiscal quarter periods, taken together as one accounting period;
provided, however, for purposes of Sections 7.8(a)(5), 7.8(a)(6) and
7.8(a)(7) the results of operations for the three, six and nine month
periods of the Fiscal Year ending December 31, 1994 shall be
annualized.
GAAP means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the
United States, as from time to time in effect.
Governmental Authority shall mean any federal, state, county
or municipal agency, authority, department, commission, bureau, board
or court.
Governmental Requirements shall mean all laws, rules,
regulations, requirements, ordinances, judgments, decrees, codes and
orders of any Governmental Authority applicable to the Borrower, any
Consolidated Entity or any Facility.
Guaranteed Obligations of any person shall mean all
guaranties (including guaranties of guaranties and guaranties of
dividends and other monetary obligations), endorsement, assumptions and
other contingent obligations with respect to, or to purchase or to
otherwise pay or acquire, Indebtedness of others; provided, however,
that such term shall not include obligations under leases and other
contracts initially incurred directly by another person and
subsequently directly assumed by the person in question, but such term
shall include obligations that, if the same had been initially incurred
directly by the person in question, would have constituted Guaranteed
Obligations.
Guaranty Agreements shall have the meaning attributed to
that term in Section 2.6(a).
Hedging Obligations of any person means the obligations of
such person pursuant to any interest rate swap agreement, foreign
currency exchange agreement, interest rate collar agreement, option or
futures contract or other similar agreement or arrangement relating to
interest rates or foreign exchange rates.
Indebtedness of any person at any date means, without
duplication: (i) all indebtedness of such person for borrowed money
(whether or not the recourse of the lender is to the whole of the
assets of such person or only to a portion thereof); (ii) all
obligations of such person evidenced by bonds, debentures, notes or
other similar instruments; (iii) all obligations of such person in
respect of letters of credit or other similar instruments (or
reimbursement obligations with respect thereto); (iv) all obligations
of such person with respect to Hedging Obligations (other than those
that fix the interest rate on variable rate indebtedness otherwise
permitted hereunder or that protect the Borrower and or its
Consolidated Entities against changes in foreign exchange rates); (v)
obligations of such person to pay the deferred and unpaid purchase
price of property or services, except trade payables and accrued
expenses incurred in the ordinary course of business; (vi) all
Capitalized Lease Obligations of such person; (vii) all indebtedness of
others secured by a Lien on any assets of such person, whether or not
such indebtedness is assumed by such person; and (viii) all Guaranteed
Obligations. The amount of Indebtedness of any person at any date shall
be the outstanding balance at such date of all unconditional
obligations as described above, the maximum liability of such person
for any such contingent obligations at such date and, in the case of
clause (vii), the amount of the Indebtedness secured.
Interest Expense of any person for any period means the
aggregate amount of interest which, in accordance with GAAP, would be
set opposite the caption "interest expense" or any like caption on an
income statement for such person (including, without limitation or
duplication, imputed interest included in Capitalized Lease
Obligations, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing,
the net costs associated with Hedging Obligations, amortization of
financing fees and expenses, the interest portion of any deferred
payment obligation, amortization of discount and all other non-cash
interest expense other than interest amortized to cost of sales) plus
the aggregate amount, if any, by which such interest expense was
reduced as a result of the amortization of deferred debt restructuring
credits for such period.
Interest Period shall mean:
(a) with respect to any LIBOR Loan, each period commencing
on the date such LIBOR Loan is made or Converted from a Loan of another
Type or the last day of the next preceding Interest Period for such
Loan and ending on the numerically corresponding day in the first,
second or third calendar month thereafter, as the Borrower may select
as provided in Section 3.2 hereof, except that each Interest Period
that commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business
Day of the appropriate subsequent calendar month;
(b) with respect to any Absolute Rate Loan, the period
commencing on the date such Absolute Rate Loan is made and ending on
any Business Day up to 180 days thereafter, as the Borrower may select
as provided in Section 2.3(b) hereof; and
(c) with respect to any LIBOR Market Loan, the period
commencing on the date such LIBOR Market Loan is made and ending on the
numerically corresponding day in the first, second, third or sixth
calendar month thereafter, as the Borrower may select as provided in
Section 2.3(b) hereof, except that each Interest Period that commences
on the last Business Day of a calendar month (or any day for which
there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month.
Notwithstanding the foregoing: (i) if any Interest Period for any
Competitive Bid Loan would otherwise end after the Conversion Date,
such Interest Period shall end on the Conversion Date; (ii) if any
Interest Period for any LIBOR Loan would otherwise end after the
Maturity Date, such Interest Period shall end on the Maturity Date;
(iii) each Interest Period that would otherwise end on a day which is
not a Business Day shall end on the next succeeding Business Day (or,
in the case of an Interest Period for a LIBOR Loan or a LIBOR Market
Loan, if such next succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day); and (iv)
notwithstanding clauses (i), (ii) and (iii) above, no Interest Period
for any Loan (other than an Absolute Rate Loan) shall have a duration
of less than one month (in the case of a LIBOR Loan or a LIBOR Market
Loan) and, if the Interest Period for any LIBOR Loan or LIBOR Market
Loan would otherwise be a shorter period, such Loan shall not be
available hereunder for such period.
LC Account Agreement shall mean the LC Account Agreement
dated as of the date hereof between the Borrower and the Agent, as
amended or modified from time to time.
Lease Payments shall mean all amounts payable under any
lease agreement other than obligations under lease agreements that
constitute Indebtedness.
Letter of Credit Borrowings shall mean as of any date the
maximum aggregate amount that the Agent could be required to pay under
drafts that could properly be drawn in compliance with the terms of all
Letters of Credit outstanding on such date, other than drafts that have
been drawn and paid.
Letter of Credit Commitment shall mean an amount not to
exceed $40,000,000.
Letter of Credit Obligations shall mean (a) the Letter of
Credit Borrowings and (b) the Reimbursement Obligations and other
obligations under this Agreement and the Applications with respect to
drawings made on Letters of Credit, including obligations with respect
to all principal, interest, fees and other charges related thereto.
Letters of Credit shall mean and include all letters of
credit heretofore or hereafter issued by NationsBank for the account of
the Borrower pursuant to this Agreement.
Liabilities of any person shall mean obligations that are
properly classified as liabilities under GAAP.
LIBOR Auction shall mean a solicitation of Competitive Bid
Quotes setting forth LIBOR Margins based on the LIBORBased Rate
pursuant to Section 2.3 hereof.
LIBOR-Based Rate shall mean the rate of interest determined
by the Agent at approximately 11:00 A.M. London time two (2) Business
Days prior to the commencement of the Interest Period, based upon such
factors as the Agent deems relevant, as the Agent's best estimate of
the cost of funds available to the Agent from the purchase on the
London interbank market of funds in the form of time deposits in
Dollars in the approximate amount of the Segment that is to bear
interest at the LIBOR-Based Rate, having a maturity comparable to the
Interest Period during which the LIBOR-Based Rate is to be in effect,
it being expressly understood that (i) the Agent may not actually
purchase any such time deposits and obtain such funds (ii) the
LIBOR-Based Rate will be an estimate, and for a variety of reasons,
including changing market conditions, the actual cost of funds to the
Agent (if the Agent elects to purchase funds in the form of time
deposits on such date) might vary from the Agent's estimate.
LIBOR Loans shall mean Syndicated Loans interest rates on
which are determined on the basis of LIBOR-Based Rates plus the
Syndicated Margin.
LIBOR Margin shall have the meaning assigned to such term in
Section 2.3(c)(ii)(C) hereof.
LIBOR Market Loans shall mean Competitive Bid Loans interest
rates on which are determined on the basis of LIBORBased Rates pursuant
to a LIBOR Auction.
LIBOR Reserve Requirement shall mean the percentage
(expressed as a decimal) prescribed by the Board of Governors of the
Federal Reserve System (or any successor), on the date on which the
LIBOR-Based Rate is determined, for determining the reserve
requirements of the Agent (including any marginal, emergency,
supplemental, special or other reserves) with respect to liabilities
relating to time deposits purchased in the London interbank market
having a maturity equal to the period during which the LIBOR-Based Rate
will be in effect and in an amount equal to the Segment involved,
without any benefit or credit for any proration, exemptions or offsets
under any now or hereafter applicable regulations.
Lien shall mean any mortgage, pledge, assignment, charge,
encumbrance, lien, security interest or financing lease.
Loan Documents shall mean this Agreement, the Notes, the
Applications, the Subsidiary Guaranty Agreements and amendments
thereto, the Partnership Guaranty Agreements and amendments thereto,
the Pledge Agreements, the LC Account Agreement and all other
agreements, instruments and documents executed or delivered at any time
in connection with the Credit Obligations, or to evidence or secure any
of the Credit Obligations.
Loans shall mean the Syndicated Loans, Competitive Bid
Loans, Term Loans, Letter of Credit Borrowings and Reimbursement
Obligations and all extensions and renewals thereof.
Margin Stock shall have the meaning attributed to that term
in Regulation U of the Federal Reserve Board, as amended.
Material Group shall mean, at any time, any group, whether
one or more, or combination of Consolidated Entities (a) whose assets,
in the aggregate, constitute 5% or more of the assets of the Borrower
and the Consolidated Entities on a consolidated basis or (b) whose net
revenues, in the aggregate, constitute 5% or more of the net revenues
of the Borrower and the Consolidated Entities on a consolidated basis.
Maturity Date means November 30, 2000.
Multi-employer Plan means an employee pension benefit plan
covered by Title IV of ERISA and in respect of which the Borrower or
any Consolidated Entity is an "employer" as described in Section
4001(b) of ERISA, which is also a multi-employer plan as defined in
Section 4001(a)(3) of ERISA;
NationsBank means NationsBank of North Carolina, National
Association, as a Lender and as issuer of the Letters of Credit
pursuant to Section 2.13 hereof and any successor thereof.
Notes shall mean the Syndicated Notes, the Competitive Bid
Notes and the Term Notes.
Opinion of Counsel shall mean a favorable written opinion of
an attorney or firm of attorneys duly licensed to practice law in the
jurisdiction the laws of which are applicable to the legal matters in
question and who is not an employee of the Borrower or of an Affiliate
of the Borrower.
Partnership Liability shall mean, with respect to a
Participating Partnership, that part, if any, of an Advance (together
with interest thereon and fees, prepayment premiums and other charges
properly attributable thereto) that is to be received by and used by or
for the benefit of such Participating Partnership, as certified to the
Agent by the Borrower, under Section 2.6, in connection with the
Borrowers' request for such Advance, and Partnership Liabilities shall
mean the aggregate amount of all such parts of Advances that are to be
received by and used by or for the benefit of such Participating
Partnership.
Partnership Guaranty Agreement shall mean a guaranty
agreement of a Participating Partnership in the form attached hereto
and marked Exhibit C-1, as amended and supplemented from time to time.
Participating Partnership shall mean a Controlled
Partnership that has executed and delivered to the Agent a Partnership
Guaranty Agreement and all other documents necessary to assume joint
and several liability as to the Credit Obligations to the extent of its
Partnership Liabilities.
Participating Subsidiary shall mean a Subsidiary that has
executed and delivered to the Agent a Subsidiary Guaranty Agreement and
all other documents necessary to assume joint and several liability as
to the Credit Obligations (in the maximum amount provided for in such
Subsidiary Guaranty Agreement).
Participation shall mean, with respect to any Lender (other
than NationsBank), the extension of credit represented by the
participation of such Lender hereunder in the liability of NationsBank
in respect of a Letter of Credit issued by NationsBank in accordance
with the terms hereof.
Permitted Encumbrances shall mean:
(1) taxes, assessments and other governmental charges that
are not delinquent or that are being contested in good faith
by appropriate proceedings duly pursued;
(2) mechanics', materialmen's, contractor's, landlord's or
other similar liens arising in the ordinary course of
business, securing obligations that are not delinquent or
that are being contested in good faith by appropriate
proceedings duly pursued;
(3) restrictions, exception, reservations, easements,
conditions, limitations and other matters of record other
than Liens that do not adversely affect the value or utility
of the property;
(4) Liens on equipment used in a Facility (a) that secure
Indebtedness that already existed when such equipment was
purchased or acquired, or (b) that were created to secure
loans, the proceeds of which were used in their entirety to
pay the purchase price of such equipment, provided that such
Liens attach only to the equipment so purchased;
(5) Liens in favor of the Agent for the benefit of the
Lenders under this Agreement;
(6) Liens and other matters approved in writing by the
Required Lenders; and
(7) Liens in favor of landlords, the amount secured by which
landlords' Liens, in the aggregate, would not materially
adversely affect the Borrower or a Material Group.
Permitted Investments shall mean:
(1) direct obligations of, or obligations the payment of
which is guaranteed by, the United States of America or an
interest in any trust or fund that invests solely in such
obligations or repurchase agreements, properly secured, with
respect to such obligations.
(2) direct obligations of agencies or instrumentalities of
the United States of America having a rating of A or higher
by Standard & Poor's Corporation or A2 or higher by Moody's
Investors Service, Inc.;
(3) a certificate of deposit issued by, or other
interest-bearing deposits with, a bank having its principal
place of business in the United States of America and having
equity capital of not less than $250,000,000;
(4) a certificate of deposit by, or other interest-bearing
deposits with, any other bank organized under the laws of
the United States of America or any state thereof, provided
that such deposit is either (i) insured by the Federal
Deposit Insurance Corporation or (ii) properly secured by
such bank by pledging direct obligations of the United
States of America having a market value not less than the
face amount of such deposits;
(5) the capital stock of and partnership interests in, and
loans made by the Borrower to, Controlled Partnerships and
Subsidiaries;
(6) prime commercial paper maturing within 270 days of the
acquisition thereof and, at the time of acquisition, having
a rating of A-1 or higher by Standard & Poor's Corporation,
or P-1 or higher by Moody's Investors Service, Inc.;
(7) eligible banker's acceptances, repurchase agreements and
tax-exempt municipal bonds having a maturity of less than
one year, in each case having a rating, or that is the full
recourse obligation of a person whose senior debt is rated,
A or higher by Standard & Poor's Corporation or A2 or higher
by Moody's Investors Service, Inc.;
(8) loans made by the Borrower or a Consolidated Entity in
an aggregate amount of $2,000,000 or less to employees of
the Borrower or of a Consolidated Entity;
(9) loans made by the Borrower or a Controlled Partnership
in an aggregate amount of $1,000,000 or less to limited
partners (or potential limited partners) of Controlled
Partnerships for the purpose of enabling such limited
partners to acquire limited partnership interests in
Controlled Partnerships, to operate their practices or to
restructure partnership interests;
(10) loans in the amount of up to $20,000,000 made by the
Borrower to the HEALTHSOUTH Employee Stock Ownership Plan;
(11) scholarship loans made by the Borrower in an aggregate
amount not exceeding $500,000 to individuals who meet
certain eligibility requirements as established by the
Borrower from time to time;
(12) up to 100% of the outstanding shares of stock of
Caretenders Healthcorp (formerly known as Senior Services,
Inc.) provided that aggregate costs incurred to purchase
such shares shall not exceed $12,000,000;
(13) other investments of less than $5,000,000 in the
aggregate expressly approved in writing by the Agent and
investments of $5,000,000 or greater expressly approved in
writing by the Required Lenders;
(14) any other investment having a rating of A or higher or
A-1 or higher by Standard & Poor's Corporation or A2 or
higher or P-1 or higher by Moody's Investors Service, Inc.;
(15) loans to health care practitioners and other persons
not to exceed in the aggregate $5,000,000; and
(16) investments in Wellmark, HEALTHSMART, MedPartners and
Austin Medical Office Building which in the aggregate do not
exceed $3,500,000.
Pledge Agreement shall have the meaning attributed to that
term in Section 2.7.
Prime Rate shall mean that rate of interest designated by
the Agent from time to time as its "prime rate", it being expressly
understood and agreed that its prime rate is merely an index rate used
by the Agent to establish lending rates and is not necessarily the
Agent's most favorable lending rate, and that changes in the Agent's
prime rate are discretionary with the Agent. Any change in the Prime
Rate shall be effective as of the date of such change.
Principal Maturities shall mean principal maturing or coming
due on Indebtedness during the next succeeding period of 12 calendar
months.
Principal Office shall mean the principal office of the
Agent located at NationsBank Corporate Center, 100 North Tryon
Street, Charlotte, North Carolina 28255.
Reimbursement Obligation shall mean at any time, the
obligation of the Borrower with respect to any Letter of Credit to
reimburse NationsBank and the Lenders to the extent of their respective
Participations (including by the receipt by NationsBank of proceeds of
Loans pursuant to Section 2.1(b) hereof) for amounts theretofore paid
by NationsBank pursuant to a drawing under such Letter of Credit.
Request for Advance or Interest Election shall have the
meaning attributed to that term in Section 2.2.
Required Lenders shall mean Lenders having at least 66- 2/3%
of the aggregate amount of the Commitments or, if the Commitments shall
have terminated, Lenders holding at least 66-2/3% of the aggregate
unpaid principal amount of the Loans, provided that if any Lender shall
have failed to fund its portion of any Syndicated Loan pursuant to
Section 2.1 and the Agent or NationsBank has made such Loan on such
Lender's behalf, NationsBank shall be deemed the holder of such portion
of such Lender's Commitment for purposes of this definition.
Revolving Facility shall mean the credit facility made
available to the Borrower by the Lenders under the terms of Article II
in an aggregate amount of up to $550,000,000 as reduced by Borrower
pursuant to Section 2.10 hereof.
Revolving Facility Obligations shall mean the outstanding
principal amount of all Advances, all interest accrued thereon, all
costs, charges, fees and expenses payable in connection therewith, and
all extensions and renewals thereof.
Sale and Leaseback Transaction means, with respect to any
person, an arrangement with any bank, insurance company or other lender
or investor or to which such lender or investor is a party, providing
for the leasing by such person or any of its Subsidiaries of any
property or asset of such person or any of its Subsidiaries which has
been or is being sold or transferred by such person or such Subsidiary
to such lender or investor or to any person to whom funds have been or
are to be advanced by such lender or investor on the security of such
property or asset.
Segment shall mean a portion of the Advances (or all
thereof) with respect to which a particular interest rate is (or is
proposed to be) applicable.
Senior Indebtedness means the Credit Obligations and that
Indebtedness permitted to be incurred pursuant to Section 7.8(a)(9)(B),
(D), (E) and (F) hereof.
Senior Subordinated Notes means the 9.5% Senior Subordinated
Notes due 2001 of the Borrower in the aggregate original principal
amount of $250,000,000.
Single Employer Plan means any employee pension benefit plan
covered by Title IV of ERISA and in respect of which the Borrower or
any Consolidated Entity is an "employer" as described in Section
4001(b) of ERISA, which is not a Multiemployer Plan;
Subordinated Indebtedness means the Senior Subordinated
Notes, the Convertible Subordinated Debentures and any other
Indebtedness incurred pursuant to Section 7.8(a)(9)(G) hereof to
refinance the Senior Subordinated Notes or the Convertible Subordinated
Debentures.
Subsidiary shall mean any corporation, more than 50% of the
shares of stock of which having general voting power under ordinary
circumstances to elect the board of directors, managers or trustees of
such corporation, irrespective of whether or not at the time stock of
any other class or classes shall have or might have voting power by
reason of the happening of any contingency, which is owned or
controlled directly or indirectly by the Borrower and which has either
assets with a value exceeding $2,000 or positive annual operating
income.
Subsidiary Guaranty Agreement shall mean a guaranty
agreement of a Participating Subsidiary in the form attached hereto and
marked Exhibit C-2, as amended and supplemented from time to time.
Syndicated Loans shall mean the loans provided for by
Section 2.1 or Section 2.4 hereof, which may be Base Rate Loans or
LIBOR Loans.
Syndicated Margin means that percent per annum set forth
below in the case of a LIBOR Loan, which percent shall be the
Syndicated Margin effective on the date of delivery to the Agent of a
Compliance Certificate pursuant to Section 7.3(3) for the fiscal
quarter period as at the end of which the ratio of Indebtedness of the
Borrower and its Consolidated Entities to Consolidated Cash Flow is
greater than or equal to or less than, as the case may be, the ratio
set forth opposite such Syndicated Margin:
Syndicated Margin
-----------------------------
Prior to On or After
Conversion Conversion
Ratio Date Date
------- ----------- ------------
(a) Greater than or equal to 1 5/8% 2 1/8%
5.00 to 1.00
(b) Less than 5.00 to 1.00 but 1 3/8% 1 7/8%
equal to or greater than
4.50 to 1.00
(c) Less than 4.50 to 1.00 but 1 1/8% 1 5/8%
equal to or greater than
3.75 to 1.00
(d) Less than 3.75 to 1.00 but 7/8% 1 3/8%
equal to or greater than
3.00 to 1.00
(e) Less than 3.00 to 1.00 5/8% 1 1/8%
Notwithstanding the foregoing, during the period from the Closing Date
through the date of delivery of a Compliance Certificate for the
quarter period ended September 30, 1994 the Syndicated Margin shall be
1 3/8%
Syndicated Notes shall mean the promissory notes provided
for by Section 2.9 hereof and all promissory notes delivered in
substitution or exchange thereof, in each case as the same shall be
modified and supplemented and in effect from time to time.
Term Loan means the Loan or Loans made by the Lenders on the
Conversion Date to the Borrower pursuant to Section 2.4 hereof.
Term Loan Commitment means the undertaking of the Lenders,
subject to the terms and conditions of this Agreement, to make the Term
Loan to the Borrower hereunder on the Conversion Date.
Term Note and Term Notes means the promissory notes provided
for by Section 2.9 hereof and all promissory notes delivered in
substitution or exchange thereof, in each case as the same shall be
modified and supplemented and in effect from time to time.
Type shall have the meaning assigned to such term in Section
1.2 hereof.
Unused Amount shall mean with respect to each Lender, (a)
the Commitment of such Lender less (b) such Lender's pro rata share of
outstanding Syndicated Loans and Letter of Credit Obligations less (c)
the outstanding principal amount of all Competitive Bid Loans then held
by such Lender.
Unused Margin means that percent per annum set forth below,
which percent shall be the Unused Margin effective upon the date of
delivery to the Agent of a Compliance Certificate pursuant to Section
7.7(3) for the fiscal quarter as at the end of which the ratio of
Indebtedness of the Borrower and its Consolidated Entities to
Consolidated Cash Flow is greater than or equal to or less than, as the
case may be, the ratio set forth opposite such Unused Margin.
Ratio Unused Margin
------- --------------
(a) Greater than or equal to 1/2%
5.00 to 1.00
(b) Less than 5.00 to 1.00 but 3/8%
equal to or greater than
4.50 to 1.00
(c) Less than 4.50 to 1.00 but 3/8%
equal to or greater than
3.75 to 1.00
(d) Less than 3.75 to 1.00 1/4%
Notwithstanding the foregoing, during the period from the Closing Date
through the date of delivery of a Compliance Certificate for the
quarter ended September 30, 1994 the Unused Margin shall be 3/8%.
Vanderbilt shall mean The Vanderbilt Stallworth
Rehabilitation Hospital, L.P., the partners of which are the Borrower,
Vanderbilt University and Vanderbilt Health Services.
SECTION 1.2 Classes and Types of Loans. Loans hereunder are
distinguished by "Class" and by "Type". The "Class" of a Loan refers to whether
such Loan is a Competitive Bid Loan or a Syndicated Loan, each of which
constitutes a Class. The "Type" of a Loan refers to whether such Loan is a Base
Rate Loan, a LIBOR Loan, an Absolute Loan or a LIBOR Market Loan, each of which
constitutes a Type. Loans may be identified by both Class and Type.
ARTICLE II
REVOLVING FACILITY TERMS, TERM LOAN AND COLLATERAL
SECTION 2.1 Syndicated Loans.
(a) From and after the Closing Date to and including the
Conversion Date, on the terms and subject to the conditions set forth in this
Agreement, each Lender severally agrees to lend to the Borrower and the Borrower
may borrow, repay and reborrow, an amount not exceeding the amount of the
Commitment of such Lender in effect from time to time, less the amount of such
Lender's Syndicated Loans and the Reimbursement Obligation and Letter of Credit
Borrowings applicable to such Lender; provided, however, that no more than eight
(8) different Interest Periods for both Syndicated Loans and Competitive Bid
Loans may be outstanding at the same time (for which purpose Interest Periods
described in different lettered clauses of the definition of the term "Interest
Period" shall be deemed to be different Interest Periods even if they are
coterminous). All Advances made by the Lenders to the Borrower under this
Agreement with respect to the Revolving Facility shall be evidenced by a
promissory note for each Lender each dated the date of this Agreement payable to
the order of each Lender, duly executed by the Borrower, and in the aggregate
maximum principal amount of $550,000,000 all as provided in Section 2.9 hereof.
The Advances shall bear interest as provided in Article III below. The unpaid
principal amount of all Loans hereunder shall not exceed the Revolving Facility
and each Syndicated Loan made hereunder shall be allocated pro rata among
Lenders based upon their Applicable Commitment Percentage regardless of amounts
outstanding under Competitive Bid Loans.
(b) If a drawing is made under any Letter of Credit in
accordance with the terms thereof prior to the Conversion Date the drawing shall
be paid by the Agent without the requirement of notice from the Borrower from
immediately available funds which shall be advanced by the Lenders under the
Revolving Facility. If a drawing is presented under any Letter of Credit in
accordance with the terms thereof notice of such drawing shall be provided
promptly by NationsBank to the Agent and the Agent shall provide notice to each
Lender by telephone or telecopy. If notice to the Lenders of a drawing under any
Letter of Credit is given by the Agent at or before 12:00 noon Charlotte, North
Carolina time on any Business Day, each Lender shall, pursuant to the conditions
of this Agreement, make a Base Rate Loan in the amount of such Lender's
Applicable Commitment Percentage of such drawing and shall pay such amount to
the Agent for the account of NationsBank at the Principal Office in Dollars and
in immediately available funds before 2:00 P.M. Charlotte, North Carolina time
on the same Business Day. If notice to the Lenders of a drawing under a Letter
of Credit is given by the Agent after 12:00 noon Charlotte, North Carolina time
on any Business Day, each Lender shall, pursuant to the terms and subject to the
conditions of this Agreement, make a Base Rate Loan in the amount of such
Lender's Applicable Commitment Percentage of such drawing and shall pay such
amount to the Agent for the account of NationsBank at the Principal Office in
Dollars and in immediately available funds before 12:00 noon Charlotte, North
Carolina time on the next following Business Day. Such Base Rate Loan shall be
deemed made for a period ending on the following Business Day, which shall be
extended automatically to the next succeeding Business Day unless and until the
Borrower converts such Base Rate Loan in accordance with the terms of Section
3.2 hereof.
SECTION 2.2 Advances of Syndicated Loans. Advances of Syndicated Loans
shall be made no more frequently than three (3) times in each week. Each Advance
shall be in an amount no less than $5,000,000 and multiples of $1,000,000
thereafter. Each request for an Advance must be in writing (which may be by
facsimile transmission) and must be received by the Agent not later than 10:00
a.m., Charlotte, North Carolina, time, (x) at least three Business Days prior to
the date of any LIBOR Loan and (y) on the day which the Advance is to be made in
the case of a Base Rate Loan. Each request for an Advance shall be in the form
attached hereto as Exhibit D ("Request for Advance or Interest Rate Election")
and shall specify the amount of the Advance requested, the day as of which the
Advance is to be made and the part or parts, if any, of the Advance that are to
be used by or for the benefit of Participating Partnerships, specifying the part
allocable to each Participating Partnership, and shall provide the interest rate
information called for in Section 3.2. The Agent shall promptly (not later than
1:00 P.M. Charlotte, North Carolina time) furnish each Lender by telecopy
transmission a copy of each Request for Advance or Interest Rate Election. Not
later than 2:00 P.M. Charlotte, North Carolina time on the date specified for
each Advance hereunder, each Lender shall make available the amount of the
Syndicated Loan or Loans to be made by it on such date to the Agent at the
Principal Office, in Dollars and in immediately available funds, and the amount
received by the Agent shall be made available to the Borrower by depositing the
proceeds thereof into an account with the Agent in the name of the Borrower.
Subject to Section 2.4, the Lenders' obligation to make Advances shall
terminate, if not sooner terminated pursuant to the provisions of this
Agreement, on the Conversion Date. Each Request for Advance or Interest Rate
Election, whether submitted under this Section 2.2 in connection with a
requested Advance or under Section 3.2 in connection with an interest rate
election, and each Application shall be signed by an officer of the Borrower
designated as authorized to sign and submit Request for Advance or Interest Rate
Election forms and Applications in the documents submitted to the Agent pursuant
to Section 6.3(a) below. The Borrower may, from time to time, by written notice
to the Agent, terminate the authority of any person to submit Request for
Advance or Interest Rate Election forms and Applications and designate new or
additional persons to so act by delivering to the Agent a certificate of the
Secretary of the Borrower certifying the incumbency and specimen signature of
each such person. The Agent shall be entitled to rely conclusively upon the
authority of any person so designated by the Borrower.
SECTION 2.3 Competitive Bid Loans.
(a) In addition to borrowings of Syndicated Loans, at any
time prior to the Conversion Date and so long as the ratio of Indebtedness of
the Borrower and its Consolidated Entities to Consolidated Cash Flow is equal to
or less than 4.50 to 1.00 the Borrower may, as set forth in this Section 2.3,
request the Lenders to make offers to make Competitive Bid Loans to the Borrower
in Dollars. The Lenders may, but shall have no obligation to, make such offers
and the Borrower may, but shall have no obligation to, accept any such offers in
the manner set forth in this Section 2.3. Competitive Bid Loans may be LIBOR
Market Loans or Absolute Rate Loans (each a "Type" of Competitive Bid Loan),
provided that:
(i) the aggregate amount of outstanding Competitive Bid
Loans of all Lenders shall not exceed one half of the
Revolving Facility;
(ii) there may be no more than eight (8) different
Interest Periods for both Syndicated Loans and Competitive
Bid Loans outstanding at the same time (for which purpose
Interest Periods described in different lettered clauses of
the definition of the term "Interest Period" shall be deemed
to be different Interest Periods even if they are
coterminous);
(iii) the aggregate amount of outstanding Competitive
Bid Loans of a Lender shall not exceed at any time an amount
equal to such Lender's Commitment;
(iv) the aggregate principal amount of all Competitive
Bid Loans, together with the sum of (i) the aggregate
principal amount of all outstanding Syndicated Loans, (ii)
then outstanding Letter of Credit Borrowings and (iii)
Reimbursement Obligations shall not exceed the aggregate
amount of the Commitments at such time; and
(v) no Competitive Bid Loan shall have a maturity
date subsequent to the Conversion Date.
(b) When the Borrower wishes to request offers to make
Competitive Bid Loans, it shall give the Agent (which shall promptly notify the
Lenders) notice (a "Competitive Bid Quote Request") to be received no later than
11:00 a.m. Charlotte, North Carolina time on (x) the fourth Business Day prior
to the date of borrowing proposed therein, in the case of a LIBOR Auction or (y)
the Business Day next preceding the date of borrowing proposed therein, in the
case of an Absolute Rate Auction (or, in any such case, such other time and date
as the Borrower and the Agent, with the consent of the Required Lenders, may
agree). The Borrower may request offers to make Competitive Bid Loans for up to
two (2) different Interest Periods in a single notice (for which purpose
Interest Periods in different lettered clauses of the definition of the term
"Interest Period" shall be deemed to be different Interest Periods even if they
are coterminous); provided that the request for each separate Interest Period
shall be deemed to be a separate Competitive Bid Quote Request for a separate
borrowing (a "Competitive Bid Borrowing") and there shall not be outstanding at
any one time more than four (4) Competitive Bid Borrowings. Each such
Competitive Bid Quote Request shall be substantially in the form of Exhibit E
hereto and shall specify as to each Competitive Bid Borrowing:
(i) the proposed date of such borrowing, which shall be
a Business Day;
(ii) the aggregate amount of such Competitive Bid
Borrowing, which shall be at least $10,000,000 (or a larger
multiple of $1,000,000) but shall not cause the limits
specified in Section 2.3(a) hereof to be violated;
(iii) the duration of the Interest Period applicable
thereto;
(iv) whether the Competitive Bid Quotes requested for a
particular Interest Period are seeking quotes for LIBOR
Market Loans or Absolute Rate Loans; and
(v) if the Competitive Bid Quotes requested are seeking
quotes for Absolute Rate Loans, the date on which the
Competitive Bid Quotes are to be submitted if it is before
the proposed date of borrowing (the date on which such
Competitive Bid Quotes are to be submitted is called the
"Quotation Date").
Except as otherwise provided in this Section 2.3(b), no Competitive Bid Quote
Request shall be given within five (5) Business Days (or such other number of
days as the Borrower and the Agent, with the consent of the Required Lenders,
may agree) of any other Competitive Bid Quote Request.
(c) (i) Each Lender may submit one or more Competitive Bid
Quotes, each containing an offer to make a Competitive Bid Loan in response to
any Competitive Bid Quote Request; provided that, if the Borrower's request
under Section 2.3(b) hereof specified more than one Interest Period, such Lender
may make a single submission containing one or more Competitive Bid Quotes for
each such Interest Period. Each Competitive Bid Quote must be submitted to the
Agent not later than (x) 2:00 p.m. Charlotte, North Carolina time on the fourth
Business Day prior to the proposed date of borrowing, in the case of a LIBOR
Auction or (y) 10:00 a.m. Charlotte, North Carolina time on the Quotation Date,
in the case of an Absolute Rate Auction (or, in any such case, such other time
and date as the Borrower and the Agent, with the consent of the Required
Lenders, may agree); provided that any Competitive Bid Quote may be submitted by
NationsBank (or its Applicable Lending Office) only if NationsBank (or such
Applicable Lending Office) notifies the Borrower of the terms of the offer
contained therein not later than (x) 1:00 p.m. Charlotte, North Carolina time on
the fourth Business Day prior to the proposed date of borrowing, in the case of
a LIBOR Auction or (y) 9:45 a.m. Charlotte, North Carolina time on the Quotation
Date, in the case of an Absolute Rate Auction. Subject to Sections 4.2, 4.3 and
Article VI and IX hereof, any Competitive Bid Quote so made shall be irrevocable
except with the consent of the Agent given on the instructions of the Borrower.
(ii) Each Competitive Bid Quote shall be substantially
in the form of Exhibit F hereto and shall specify:
(A) the proposed date of borrowing and the Interest
Period therefor;
(B) the principal amount of the Competitive Bid Loan for
which each such order is being made, which principal amount
shall be at least $2,000,000 (or a larger multiple of
$1,000,000); provided that the aggregate principal amount of
all Competitive Bid Loans for which a Lender submits
Competitive Bid Quotes (x) may not exceed the Commitment of
such Lender and (y) may not exceed the principal amount of
the Competitive Bid Borrowing for a particular Interest
Period for which offers were requested;
(C) in the case of a LIBOR Auction, the margin above or
below the applicable LIBOR-Based Rate (the "LIBOR Margin")
offered for each such Competitive Bid Loan, expressed as a
percentage (rounded upwards, if necessary, to the nearest
1/10,000th of 1%) to be added to or subtracted from the
applicable LIBOR-Based Rate;
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (rounded upwards, if necessary, to the
nearest 1/10,000th of 1%) offered for each such Competitive
Bid Loan (the "Absolute Rate"); and
(E) the identity of the quoting Lender.
Unless otherwise agreed by the Agent and the Borrower, no Competitive Bid Quote
shall contain qualifying, conditional or similar language or propose terms other
than or in addition to those set forth in the applicable Competitive Bid Quote
Request and, in particular, no Competitive Bid Quote may be conditioned upon
acceptance by the Borrower of all (or some specified minimum) of the principal
amount of the Competitive Bid Loan for which such Competitive Bid Quote is being
made.
(d) The Agent shall (x) in the case of a LIBOR Auction, by
4:00 p.m. Charlotte, North Carolina time on the day a Competitive Bid Quote is
submitted or (y) in the case of an Absolute Rate Auction, as promptly as
practicable after the Competitive Bid Quote is submitted (but in any event not
later than 10:30 a.m. Charlotte, North Carolina time on the Quotation Date),
notify the Borrower of the terms (i) of any Competitive Bid Quote submitted by a
Lender that is in accordance with Section 2.3(c) hereof and (ii) of any
Competitive Bid Quote that amends, modifies or is otherwise inconsistent with a
previous Competitive Bid Quote submitted by such Lender with respect to the same
Competitive Bid Quote Request. Any such subsequent Competitive Bid Quote shall
be disregarded by the Agent unless such subsequent Competitive Bid Quote is
submitted solely to correct a manifest error in such former Competitive Bid
Quote. The Agent's notice to the Borrower shall specify (A) the aggregate
principal amount of the Competitive Bid Borrowing for which orders have been
received and (B) the respective principal amounts and LIBOR Margins or Absolute
Rates, as the case may be, so offered by each Lender (identifying the Lender
that made each Competitive Bid Quote).
(e) Not later than 11:00 a.m. Charlotte, North Carolina time
on (x) the third Business Day prior to the proposed date of borrowing, in the
case of a LIBOR Auction or (y) the Quotation Date, in the case of an Absolute
Rate Auction (or, in any such case, such other time and date as the Borrower and
the Agent, with the consent of the Required Lenders, may agree), the Borrower
shall notify the Agent of its acceptance or nonacceptance of the offers so
notified to it pursuant to Section 2.3(d) hereof (and the failure of the
Borrower to give such notice by such time shall constitute nonacceptance) and
the Agent shall promptly notify each affected Lender. In the case of acceptance,
such notice shall specify the aggregate principal amount of offers for each
Interest Period that are accepted. The Borrower may accept any Competitive Bid
Quote in whole or in part (provided that any Competitive Bid Quote accepted in
part shall be at least $2,000,000 or a larger multiple of $1,000,000); provided
that:
(i) the aggregate principal amount of each Competitive
Bid Borrowing may not exceed the applicable amount set forth
in the related Competitive Bid Quote Request;
(ii) the aggregate principal amount of each Competitive
Bid Borrowing shall be at least $10,000,000 (or a larger
multiple of $1,000,000) but shall not cause the limits
specified in Section 2.3(a) hereof to be violated;
(iii) acceptance of offers may be made only in ascending
order of LIBOR Margins or Absolute Rates, as the case may
be, in each case beginning with the lowest rate so offered;
provided, however, that the Borrower, in its sole
discretion, may accept other than the lowest rate where
acceptance of the lowest rate will result in (x) the
outstanding Loans of a Lender or Lenders offering the lowest
rate exceeding such Lender's Commitment and (y) an increase
in the Unused Fee payable by Borrower under Section 2.11
hereof; and
(iv) the Borrower may not accept any offer where the
Agent has correctly advised the Borrower that such offer
fails to comply with Section 2.3(c)(ii) hereof or otherwise
fails to comply with the requirements of this Agreement
(including, without limitation, Section 2.3(a) hereof).
If offers are made by two or more Lenders with the same LIBOR Margins or
Absolute Rates, as the case may be, for a greater aggregate principal amount
than the amount in respect of which offers are accepted for the related Interest
Period after the acceptance of all offers, if any, of all lower LIBOR Margins or
Absolute Rates, as the case may be, offered by any Lender for such related
Interest Period, the principal amount of Competitive Bid Loans in respect of
which such offers are accepted shall be allocated by the Borrower among such
Lenders as nearly as possible (in amounts of at least $2,000,000 or larger
multiples of $1,000,000) in proportion to the aggregate principal amount of such
offers. Determinations by the Borrower of the amounts of Competitive Bid Loans
and the lowest bid after adjustment as provided in Section 2.3(e)(iii) shall be
conclusive in the absence of manifest error.
(f) Any Lender whose offer to make any Competitive Bid Loan
has been accepted shall, not later than 1:00 p.m. Charlotte, North Carolina time
on the date specified for the making of such Loan, make the amount of such Loan
available to the Agent at the Principal Office in Dollars and in immediately
available funds, for account of the Borrower. The amount so received by the
Agent shall, subject to the terms and conditions of this Agreement, be made
available to the Borrower on such date by depositing the same, in Dollars and in
immediately available funds, in an account of the Borrower maintained at the
Principal Office.
SECTION 2.4 Term Loan. (a) On the Conversion Date, on the terms and
subject to the conditions set forth in this Agreement, each Lender severally
agrees to convert all or such portion of its Commitment as the Borrower may
request by written notice to the Agent not later than 10:00 A.M., Charlotte,
North Carolina time, on the third Business Day preceding the Conversion Date to
a Term Loan. Each Lender's portion of the Term Loan Commitment shall be
evidenced by a promissory note of the Borrower dated the Conversion Date payable
to the order of such Lender, duly executed by the Borrower, all as provided in
Section 2.9 hereof and shall be equal to such Lender's Applicable Commitment
Percentage of the total of all outstanding Advances on the Conversion Date which
Borrower has requested be continued as a Term Loan. The Term Loan shall bear
interest as provided in Article III below.
(b) The Borrower shall make fourteen (14) consecutive
quarterly payments of principal on the Term Loans, each payment to be due on the
last day of March, June, September and December commencing June 30, 1997, each
of which shall be in an amount equal to 6.666% of the Term Loan. The Borrower
shall make a fifteenth payment on November 30, 2000 which payment shall be in an
amount sufficient to repay in full the remaining principal amount of the Term
Loan together with accrued interest and unpaid fees, if any. Interest on the
Term Loan will be payable as set forth in Section 2.5 and Article III.
(c) The Borrower shall pay to the Agent for the benefit of
the Lenders on the Conversion Date a fee of 1/4% of each Lender's portion of the
Term Loan.
SECTION 2.5 Payments. All interest accrued on Loans subject to the Base
Rate shall be payable on the last day of each successive March, June, September
and December, commencing on June 30, 1994 and upon payment in full of such
Loans, and all interest accrued on each Fixed Rate Loan, shall be payable at the
earlier of (i) the end of the applicable Interest Period then in effect or (ii)
the end of each ninety (90) day period in the case of an Absolute Rate and each
three (3) month period in the case of a LIBOR Market Rate. The principal amount
of the Advances shall be due on the Conversion Date unless such Advances are
converted to a Term Loan pursuant to Section 2.4. All payments of Credit
Obligations shall be payable to the Agent on or before 11:00 A.M. Charlotte,
North Carolina time on the date when due, at the Principal Office in Dollars and
in immediately available funds free and clear of all rights of set-off or
counterclaim.
SECTION 2.6 Joint and Several Obligations.
(a) Each of the Subsidiaries and Controlled Partnerships
named in Exhibit G attached hereto and made a part hereof shall execute and
deliver to the Agent as of the Closing Date either an Amended and Restated
Subsidiary Guaranty Agreement or Amended and Restated Partnership Guaranty
Agreement or a Subsidiary Guaranty Agreement or Partnership Guaranty Agreement,
and each other Subsidiary and Controlled Partnership that is to become after the
Closing Date a Participating Subsidiary or Participating Partnership, as the
case may be, shall, at the time it is to become a Participating Subsidiary or
Participating Partnership, execute and deliver to the Agent a Subsidiary
Guaranty Agreement or Partnership Guaranty Agreement, as the case may be in the
form attached hereto as Exhibit C-2 and Exhibit C-1, respectively ("collectively
the "Guaranty Agreements").
(b) Although Advances shall be and heretofore have been made
only to the Borrower, all or portions of such Advances may be used by the
Borrower for the benefit of or loaned by the Borrower to a Participating
Subsidiary or Participating Partnership. As a condition to the use of Loans for
the benefit of Participating Subsidiaries and Participating Partnerships, the
Lenders have required that the Participating Subsidiaries and Participating
Partnerships guaranty the payment of the Credit Obligations of Borrower arising
under this Agreement and the other Loan Documents to the extent set forth in the
respective Guaranty Agreements to which they are a party. Each of the
Participating Subsidiaries and Participating Partnerships separately and
severally, hereby appoints and designates the Borrower as each such party's
agent and attorney-in-fact to act on behalf of each such party for all purposes
of the Loan Documents relating to the Credit Obligations. The Borrower shall
have authority to exercise on behalf of each Participating Subsidiary and
Participating Partnership all rights and powers that the Borrower deems
necessary, incidental or convenient in connection with the Loan Documents
relating to the Credit Obligations, including the authority to execute and
deliver certificates, documents, agreements and other instruments referred to in
or contemplated by such Loan Documents, request Advances hereunder for their
benefit, request for the issuance of Letters of Credit for their benefit,
receive all proceeds of Advances, give all notices, approvals and consents
required or requested from time to time by the Agent or Lenders and take any
other actions and steps that a Participating Subsidiary or a Participating
Partnership could take for its own account in connection with the Loan Documents
from time to time, it being the intent of the Participating Subsidiaries and the
Participating Partnerships to grant to the Borrower plenary power to act on
behalf of the Participating Subsidiaries and the Participating Partnerships in
connection with and pursuant to such Loan Documents. The appointment of the
Borrower as agent and attorney-in-fact for the Participating Subsidiaries and
the Participating Partnerships hereunder shall be coupled with an interest and
be irrevocable so long as any Loan Document relating to the Credit Obligations
shall remain in effect. The Agent or Lenders need not obtain any Participating
Subsidiary's or Participating Partnership's consent or approval for any act
taken by the Borrower pursuant to any Loan Document, and all such acts shall
bind and obligate the Borrower, the Participating Subsidiaries and the
Participating Partnerships, jointly and severally. Each Participating Subsidiary
and Participating Partnership forever waives and releases any claim (whether now
or hereafter arising) against the Agent or Lenders based on the Borrower's lack
of authority to act on behalf of any Participating Subsidiary or Participating
Partnership in connection with the Loan Documents relating to the Revolving
Facility.
SECTION 2.7 Pledge Agreement. As security for the Credit Obligations,
the Borrower and certain of the Participating Subsidiaries have, pursuant to the
Prior Agreement, executed and delivered a pledge and security agreement to the
Agent and shall execute and deliver to the Agent amended and restated pledge
agreements on the Closing Date and from time to time after the Closing Date
pursuant to the terms of Section 7.14 hereof or upon request by the Agent,
pledge and security agreements in form acceptable to the Agent and its counsel
(all being collectively called the "Pledge Agreements") granting to the Agent a
first priority security interest in and lien on (i) all shares of stock of all
Subsidiaries owned directly or indirectly by the Borrower, (ii) all right, title
and interest in and to both the ownership interest of Borrower in any
partnership and all distributions payable to the Borrower or any Subsidiary as a
partner of any partnership (including Controlled Partnerships but not including
Vanderbilt), (iii) all notes payable to Borrower by any Subsidiary or Controlled
Partnership evidencing any loan or advance made by Borrower, and (iv) all
accounts receivable due to Borrower by any Subsidiary or Controlled Partnership
arising by reason of any loan or advance made by Borrower, together with all
financing statements, stock certificates and duly executed stock powers
necessary to perfect the Agent's security interest therein, in each case whether
now owned or hereafter acquired.
SECTION 2.8 Prepayment. (a) The Borrower may at any time prior to the
Conversion Date prepay all or any part of the Advances, without premium or
penalty (except as set forth below); provided, however, that no Fixed Rate
Segment may be prepaid during an Interest Period unless the Borrower shall pay
to the Agent the amounts required by Section 4.2 hereof. The Borrower shall pay
all interest accrued to the date of prepayment on any amount prepaid as
permitted under the terms of the next preceding sentence on or prior to the
Conversion Date in connection with the prepayment in full of the Credit
Obligations and the concurrent termination of this Agreement. The Borrower shall
give the Agent notice of its intent to pay any Base Rate Loan not later than
11:00 a.m. on the date of payment. Failure to give such notice shall result in
payment of interest through the next succeeding Business Day on the amount so
paid.
(b) The Borrower from time to time after the Conversion Date
(but not more frequently than quarterly), upon not less than three (3) Business
Days prior written notice to the Agent, may prepay the Term Loan in whole or in
part. The Agent shall give each Lender, within one (1) Business Day thereafter,
telephonic notice (confirmed in writing) of such prepayment. Each such
prepayment shall be in the aggregate amount of $10,000,000 or such greater
amount which is an integral multiple of $1,000,000 or the unpaid balance of all
Credit Obligations. No such prepayment shall result in the payment of a portion
of the Term Loan bearing interest at a Fixed Rate other than on the last day of
the Interest Period of such Loan.
SECTION 2.9 Notes.
(a) Prior to the Conversion Date, the Syndicated Loans made
by each Lender shall be evidenced by a single promissory note of the Borrower
substantially in the form of Exhibit H-1 hereto, dated the date hereof, payable
to such Lender in a principal amount equal to the amount of its Commitment as
originally in effect and otherwise duly completed.
(b) The Competitive Bid Loans made by any Lender shall be
evidenced by a single promissory note of the Borrower substantially in the form
of Exhibit H-2 hereto, dated the date hereof, payable to such Lender and
otherwise duly completed.
(c) The Term Loan made by each Lender on the Conversion Date
shall be evidenced by a single promissory note of the Borrower substantially in
the form of Exhibit H-3 hereto, dated the Conversion Date, payable to such
Lender in a principal amount equal to the amount of its Applicable Commitment
Percentage of the Term Loan Commitment and otherwise duly completed.
(d) The date, amount, Type, interest rate and duration of
Interest Period (if applicable) of each Loan of each Class made by each Lender
to the Borrower, and each payment made on account of the principal thereof,
shall be recorded by such Lender on its books and, prior to any transfer of the
Note evidencing the Loans of such Class held by it, endorsed by such Lender on
the schedule attached to such Note or any continuation thereof; provided that
the failure of such Lender to make, or any error by the Lender in making any
such recordation or endorsement, shall not affect the obligations of the
Borrower to make a payment when due of any amount owing hereunder or under such
Note in respect of the Loans to be evidenced by such Note.
(e) No Lender shall be entitled to have its Notes
subdivided, by exchange for promissory notes of lesser denominations or
otherwise, except in connection with a permitted assignment of all or any
portion of such Lender's Commitment, Loans and Notes pursuant to Section 10.1
hereof.
(f) Each Lender that is a Prior Lender under the Prior
Agreement shall surrender to the Borrower the promissory notes delivered to it
pursuant to the Prior Agreement in exchange for the Notes described in Section
2.9(a) and (b).
SECTION 2.10 Reduction in Revolving Facility. The Borrower shall have
the right from time to time (but not more frequently than once during each
quarterly period), but upon not less than three (3) Business Days written notice
to the Agent to reduce the amount of the Revolving Facility. The Agent shall
give each Lender, within one (1) Business Day thereafter, telephonic notice
(confirmed in writing) of such reduction. Each such reduction shall be in the
aggregate principal amount of $10,000,000 or such greater amount which is an
integral multiple of $1,000,000, and shall permanently reduce the Commitment of
each Lender on a pro rata basis. No such reduction shall result in payment of a
Fixed Rate Loan other than on the last day of the Interest Period of such Loan.
Each reduction of the Revolving Facility shall be accompanied by payment of the
Loans to the extent that the Credit Obligations exceed the Revolving Facility
after giving effect to such reductions together with accrued and unpaid interest
on the amounts prepaid.
SECTION 2.11 Unused Fee. The Borrower shall pay to the Agent for the
benefit of each Lender a fee (the "Unused Fee") computed at a per annum rate of
the then applicable Unused Margin times the daily average Unused Amount of such
Lender. The Unused Fee shall be payable quarterly on the last day of each
successive March, June, September and December in each year for the immediately
preceding quarterly period, commencing on June 30, 1994, and upon the Conversion
Date. The Unused Fee shall be computed on an Actual/360 Basis.
SECTION 2.12 Lending Offices. The Loans of each Type made by each
Lender shall be made and maintained at such Lender's Applicable Lending Office
for Loans of such Type.
SECTION 2.13 Letter of Credit Borrowings.
(a) NationsBank may issue from time to time in accordance
with Section 6.1, in its sole discretion, for the account of the Borrower
Letters of Credit in an aggregate outstanding stated amount up to but not to
exceed the Letter of Credit Commitment. All Letters of Credit issued pursuant to
this Agreement, shall expire on or before the fifth (5th) Business Day next
preceding the Conversion Date. The aggregate Letter of Credit Obligations shall
at no time exceed the Letter of Credit Commitment. In the event that the
Borrower shall pay in full all amounts outstanding under the Revolving Facility
and permanently reduce the Revolving Facility to zero as permitted pursuant to
Section 2.10 hereof, it shall simultaneously cause all obligations of
NationsBank under the Letters of Credit and all obligations of the Lenders with
respect to Participations to be discharged in full, whether by providing
replacement letters of credit therefor or payment in full of the amount
outstanding with respect to the Letter of Credit.
(b) The Borrower hereby unconditionally agrees to pay to
NationsBank on demand at the Principal Office (i) all amounts required to pay
all drafts drawn in accordance with the terms of the Letter of Credit or
purporting to be drawn under the Letters of Credit and (ii) the face amount of
each draft complying with the Letter of Credit accepted by NationsBank on the
maturity date of such draft, or in the event of a Default or Event of Default,
and any and all reasonable expenses of every kind incurred by NationsBank in
connection with the Letters of Credit and in any event and without demand to
place in possession of NationsBank (which shall include Advances under the
Revolving Facility if permitted by Section 2.1 hereof) sufficient funds to pay
all debts and liabilities arising under any Letter of Credit. Subject to the
terms hereof, the Borrower's obligations to pay NationsBank under this Section
2.13, and the right of NationsBank to receive the same, shall be absolute and
unconditional and shall not be affected by any circumstance whatsoever.
NationsBank may charge any account the Borrower may have with it for any and all
amounts NationsBank pays under a Letter of Credit, plus commissions, charges and
expenses as from time to time agreed to by NationsBank and the Borrower;
provided that to the extent permitted by Section 2.1(b), amounts shall be paid
pursuant to Advances under the Revolving Facility. The Borrower agrees that
NationsBank may, in its sole discretion, accept or pay, as complying with the
terms of any Letter of Credit, any drafts or other documents otherwise in order
which may be signed or issued by an administrator, executor, trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
liquidator, receiver, attorney in fact or other legal representative of a party
who is authorized under such Letter of Credit to draw or issue any drafts or
other documents. The Borrower agrees to pay NationsBank interest on any amounts
not paid when due hereunder at the Base Rate plus two percent (2%), or such
lower rate as may be required by law.
(c) In accordance with the provisions of Section 2.1(b)
hereof, NationsBank shall notify the Agent (and shall also notify the Borrower)
of any drawing under any Letter of Credit issued for account of the Borrower as
promptly as practicable following the receipt by NationsBank of such drawing.
(d) Each Lender (other than NationsBank) shall automatically
acquire on the date of issuance thereof, a Participation in the liability of
NationsBank in respect of each Letter of Credit in an amount equal to such
Lender's Applicable Commitment Percentage of such liability, and to the extent
that the Borrower is obligated to pay NationsBank under Section 2.13(a), each
Lender (other than NationsBank) thereby shall absolutely, unconditionally and
irrevocably assume, and shall be unconditionally obligated to pay to NationsBank
as hereinafter described, its Applicable Commitment Percentage of the liability
of NationsBank under such Letter of Credit. On the fifth Business Day prior to
the Conversion Date, each Lender (including NationsBank in its capacity as a
Lender) shall make a Base Rate Loan to the Borrower by paying to the Agent for
the account of NationsBank at the Principal Office in Dollars and in immediately
available funds, an amount equal to its Applicable Commitment Percentage of any
drawing under a Letter of Credit, all as described and pursuant to Section
2.1(b). With respect to drawings under any of the Letters of Credit, each
Lender, upon receipt from the Agent of notice of a drawing in the manner
described in Section 2.1(b), shall promptly pay to the Agent for the account of
NationsBank, prior to the applicable time set forth in Section 2.1(b), its
Applicable Commitment Percentage of such drawing. Simultaneously with the making
of each such payment by a Lender or NationsBank, such Lender shall,
automatically and without any further action on the part of NationsBank or such
Lender, acquire a Participation in an amount equal to such payment (excluding
the portion thereof constituting interest) in the related Reimbursement
Obligation of the Borrower. The Reimbursement Obligations of the Borrower shall
be immediately due and payable whether by Advances made in accordance with
Section 2.1(b) or otherwise. Each Lender's obligation to make payment to the
Agent for the account of NationsBank pursuant to this Section 2.13(d), and the
right of NationsBank to receive the same, shall be absolute and unconditional,
shall not be affected by any circumstance whatsoever and shall be made without
any offset, abatement, withholding or reduction whatsoever. If any Lender is
obligated to pay but does not pay amounts to the Agent for the account of
NationsBank in full upon receipt of such notice of a drawing as required by this
Section 2.13(d), such Lender shall, on demand, pay to the Agent for the account
of NationsBank interest on the unpaid amount for each day during the period
commencing on the date of notice given to such Lender pursuant to Section 2.1(b)
until such Lender pays such amount to the Agent for the account of NationsBank
in full at the interest rate per annum for overnight borrowing by NationsBank
from the Federal Reserve Bank.
(e) Promptly following the end of each calendar quarter,
NationsBank shall deliver to the Agent, and the Agent shall deliver to each
Lender, a notice describing the aggregate undrawn amount of Letters of Credit
and aggregate face amount of all drafts accepted and outstanding at the end of
such quarter. Upon the request of any Lender from time to time, NationsBank
shall deliver to the Agent, and the Agent shall deliver to such Lender, any
other information reasonably requested by such Lender with respect to the Letter
of Credit then outstanding.
(f) The issuance by NationsBank of any Letter of Credit
shall be subject to the conditions that such Letter of Credit be insuch form,
contain such terms and support such transactions or obligations as shall be
reasonably satisfactory to NationsBank consistent with its then current
practices and procedures with respect to similar letters of credit. All Letters
of Credit shall be issued pursuant to and subject to the Uniform Customs and
Practice for Documentary Creditors, 1993 revision, International Chamber of
Commerce Publication No. 500 and all subsequent amendments and revisions
thereto. The Borrower shall have executed and delivered such other instruments
and agreements relating to such Letter of Credit as NationsBank shall have
reasonably requested consistent with such practices and procedures.
(g) Without duplication of Section 10.12 hereof, the
Borrower hereby indemnifies and holds harmless NationsBank, each other Lender
and the Agent from and against any and all claims and damages, losses,
liabilities, costs or expenses which NationsBank, such other Lender or the Agent
may reasonably incur (or which may be claimed against NationsBank, such other
Lender or the Agent) by any person by reason of or in connection with the
issuance or transfer of or payment or failure to pay under any Letter of Credit;
provided that the Borrower shall not be required to indemnify NationsBank, any
other Lender or the Agent for any claims, damages, losses, liabilities, costs or
expenses to the extent, but only to the extent, (i) caused by the willful
misconduct or negligence of the party to be indemnified, (ii) caused by the
failure of NationsBank to pay under any Letter of Credit after the presentation
to it of a request strictly complying with the terms and conditions of such
Letter of Credit, unless such payment is prohibited by any law, regulation,
court order or decree, or (iii) paid or payable by any Lender under Section 2.15
or Section 9.10 hereof and provided, further, Borrower shall not be required to
indemnify any Lender who has failed to perform its obligations hereunder.
(h) Without limiting Borrower's rights as set forth in
Section 2.13(g) above, the obligation of Borrower to immediately reimburse Agent
for drawings made under the Letter of Credit in accordance with the terms
thereof shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement and such Letters of
Credit, under all circumstances whatsoever.
(i) The Borrower agrees to pay to the Agent for the benefit
of the Lenders a per annum Letter of Credit fee equal to the applicable
Syndicated Margin in effect at the time of issuance of each such Letter of
Credit times the amount of outstanding Letter of Credit Borrowings. In addition,
the Borrower agrees to pay to the Agent for its own account an issuance fee
equal to one-eighth of one percent (1/8%) per annum times the amount of
outstanding Letter of Credit Borrowings. Such fees shall be payable quarterly in
arrears on the last day of each March, June, September and December, beginning,
however, on the first such day to occur following the Closing Date.
(j) The Borrower acknowledges that NationsBank as issuer of
the Letter of Credit will be required by applicable rules and regulations of the
Federal Reserve Board to maintain reserves for its liability to honor draws made
pursuant to a Letter of Credit notwithstanding the obligation of the Lenders for
a Participation in such liability. The Borrower agrees to promptly reimburse
NationsBank for all additional costs which it may hereafter incur solely by
reason of its acting as issuer of the Letter of Credit and its being required to
reserve for such liability, it being understood by the Borrower that other
interest and fees payable under this Agreement do not include compensation of
NationsBank for such reserves. NationsBank shall furnish to the Borrower at the
time of its demand for payment of such additional costs, the computation of such
additional cost which shall be conclusive absent manifest error, provided that
such computations are made on a reasonable basis.
(k) The Borrower shall pay to NationsBank administrative and
other fees, if any, in connection with the Letters of Credit in such amounts and
at such times as NationsBank and the Borrower shall agree from time to time.
SECTION 2.14 Pro Rata Payments. Except as otherwise provided herein,
(a) each payment on account of the principal of and interest on the Syndicated
Loans and fees (other than the Agent's fees payable under Section 9.11 hereof,
which shall be retained by the Agent and the fees payable to NationsBank
pursuant to Section 2.13(i) and (k) which shall be retained by NationsBank)
described in this Agreement shall be made to the Agent for the account of the
Lenders pro rata based on their Applicable Commitment Percentages, (b) each
payment on account of principal of and interest on a Competitive Bid Loan shall
be made to the Agent for the account of the Lender making such Competitive Bid
Loan, and the principal amount of Competitive Bid Loans shall be paid on the
last day of the Interest Period for such Competitive Bid Loan, (c) all payments
to be made by the Borrower for the account of each of the Lenders on account of
principal, interest and fees, shall be made without set-off or counterclaim, and
(d) the Agent will promptly (to the extent received by the Agent by 12:00 noon,
Charlotte, North Carolina time within the same Business Day, otherwise the next
Business Day if received after 12:00 noon) distribute payments received to the
Lenders.
SECTION 2.15 Deficiency Advances. No Lender shall be responsible for
any default of any other Lender in respect to such other Lender's obligation to
make any Loan hereunder nor shall the Commitment of any Lender hereunder be
increased as a result of such default of any other Lender. Without limiting the
generality of the foregoing, in the event any Lender (a "failing Lender") shall
fail to advance funds to the Borrower as herein provided, the Agent may in its
discretion, but shall not be obligated to, advance under the Note or Notes in
its favor as a Lender all or any portion of such amount (the "deficiency
advance") and shall thereafter be entitled to payments of principal of and
interest on such deficiency advance in the same manner and at the same interest
rate or rates to which such failing Lender would have been entitled had such
failing Lender made such Advance under its Note or Notes; provided that, upon
payment to the Agent from such failing Lender of the entire outstanding amount
of such deficiency advance, together with interest thereon, from the most recent
date or dates interest was paid to the Agent by the Borrower on each Loan
comprising the deficiency advance at the interest rate per annum for overnight
borrowing by the Agent from the Federal Reserve Bank, then such payment shall be
credited against the Note or Notes of the Agent in full payment of such
deficiency advance and the Borrower shall be deemed to have borrowed the amount
of such deficiency advance from such failing Lender as of the most recent date
or dates, as the case may be, upon which any payments of interest were made by
the Borrower thereon. Acceptance by the Borrower of a deficiency advance from
the Agent shall in no way limit the rights of the Borrower against a failing
Lender.
SECTION 2.16 Adjustments by Agent. Notwithstanding the construction of
"pro rata" to mean based on the Applicable Commitment Percentage and any
provisions contained herein for the advancement of funds or distribution of
payments on a pro rata basis, the Agent may, in its discretion, but shall not be
obligated to, adjust downward or upward (but not in excess of any applicable
Commitment) the principal amount of any Loan to be made by any Lender to the
nearest amount which is evenly divisible by $100, and make appropriate related
adjustment in the distribution of payments of principal and interest on the
Loans.
ARTICLE III
INTEREST ON SYNDICATED LOANS
SECTION 3.1 Applicable Interest Rates. The Borrower shall have the
option to elect to have any Syndicated Loan Segment bear interest at the Base
Rate or the LIBOR-Based Rate plus the applicable Syndicated Margin. For any
period of time and for any Segment with respect to which the Borrower does not
elect another interest rate, such Segment shall bear interest at the Base Rate.
The Borrower's right to elect a LIBOR-Based Rate shall be subject to the
following requirements: (a) each Syndicated Loan Segment shall be in the amount
of $5,000,000 or more and in an integral multiple of $1,000,000 and (b) each
LIBOR-Based Rate Segment shall have a maturity selected by the Borrower of one,
two or three months; provided, however, that no LIBOR-Based Rate Segment shall
have a maturity date later than the Conversion Date.
SECTION 3.2 Procedure for Exercising Interest Rate Options. The
Borrower may elect to have a particular interest rate apply to a Segment of a
Syndicated Loan by notifying the Agent in writing (which may be by facsimile
transmission) not later than 10:00 a.m., Charlotte, North Carolina time, three
(3) Business Days prior to the effective date any LIBOR-Based Rate is to become
applicable or on the same day on which a requested Base Rate is to become
applicable. Any notice of interest rate election hereunder shall be irrevocable
and shall be in the form attached hereto as Exhibit D and shall set forth the
following: (a) the amount of the Segment to which the requested interest rate
will apply, (b) the date on which the selected interest rate will become
applicable, (c) whether the interest rate selected is the Base Rate or a
LIBORBased Rate, and (d) if the interest rate selected is a LIBOR-Based Rate,
the maturity selected for the Interest Period. On the second Business Day
preceding the Business Day that a requested LIBORBased Rate is to become
applicable, the Agent shall use its best efforts to notify the Borrower by
telephone of the Agent's estimate of the applicable LIBOR-Based Rate by 10:00
a.m., Charlotte, North Carolina time, or as early on that day as may be
practical in the circumstances. The Agent shall not be required to provide an
estimate of the LIBOR-Based Rate on any day on which dealings in deposits in
Dollars are not transacted in the London interbank market. If the Borrower does
not immediately accept a LIBOR-Based Rate quoted by the Agent, the Agent may, in
view of changing market conditions, revise the quoted LIBOR-Based Rate at any
time. No LIBOR-Based Rate shall be effective until mutually agreed upon by the
Borrower and the Agent. If the Agent and the Borrower attempt to agree on a
LIBOR-Based Rate but fail so to agree, or if there is any uncertainty as to
whether or not the Agent and the Borrower have agreed upon a LIBOR-Based Rate,
interest shall accrue on the Segment for which a LIBOR-Based Rate has been
selected at the then applicable Base Rate.
SECTION 3.3 Base Rate. Each Segment subject to the Base Rate shall bear
interest from the date the Base Rate becomes applicable thereto until payment in
full, or until a LIBOR-Based Rate is selected by the Borrower and becomes
applicable thereto, on the unpaid principal balance of such Segment on an
Actual/360 Basis. Any change in the Base Rate shall take effect on the effective
date of such change in the Base Rate designated by the Agent, without notice to
the Borrower and without any further action by the Agent.
SECTION 3.4 Fixed Rate. Each LIBOR-Based Rate Segment shall bear
interest from the date the LIBOR-Based Rate becomes applicable thereto until the
end of the applicable Interest Period on the unpaid principal balance of such
LIBOR-Based Rate Segment at the LIBOR-Based Rate on an Actual/360 Basis plus the
applicable Syndicated Margin.
SECTION 3.5 Changes in Syndicated Margin. Any change in the rate of
interest payable with respect to LIBOR Loans because of a change in the
Syndicated Margin shall become effective as of the day of receipt by the Agent
of the financial statement furnished to the Agent pursuant to Section 7.3(1) and
(2) hereof and the Compliance Certificate required by Section 7.3(3) to
accompany such financial statement and the determination by the Agent, based
upon such Compliance Certificate, that as a result of a change in the ratio of
Indebtedness of the Borrower and its Consolidated Entities to Consolidated Cash
Flow there has been a change in the Syndicated Margin.
ARTICLE IV
TERMINATION OF LIBOR-BASED RATE AND YIELD PROTECTION
SECTION 4.1 Suspension of Loans.
(a) If at any time the Agent shall reasonably determine
(which determination, if reasonable, shall be final, conclusive and binding upon
all parties) that:
(i) by reason of any changes arising after the
Closing Date affecting the London interbank market or
affecting the position of any Lender or the Agent in such
markets, adequate and fair means do not exist for ascertaining
the LIBOR-Based Rate with respect to a LIBOR Loan or LIBOR
Market Loan; or
(ii) the continuation by any Lender of any LIBOR
Loans or LIBOR Market Loans or the funding thereof in the
London interbank market would be unlawful by reason of any
law, governmental rule, regulation, guidelines or order; or
(iii) the continuation by any Lender of any LIBOR
Loans or LIBOR Market Loans or the funding thereof in the
London interbank market would be impracticable as a result of
a contingency occurring after the date of this Agreement that
materially and adversely affects the London interbank market;
then, and in any such event, the Agent shall on such date give notice (by
telephone and confirmed in writing) to the Borrower of such determination. The
obligation of any Lender to make or maintain Fixed Rate Segments so affected or
to permit interest to be computed thereon at the LIBOR-Based Rate shall be
terminated, and interest shall thereafter be computed on the affected Segment or
Segments at the then applicable Base Rate.
(b) It is the intention of the parties that the Fixed Rates
shall accurately reflect the cost to the Lender of maintaining any Fixed Rate
Segment during any period in which interest accrues thereon at a Fixed Rate.
Accordingly:
(i) if by reason of any change after the date
hereof in any applicable law or governmental rule, regulation
or order (or any interpretation thereof and including the
introduction of any new law or governmental rule, regulation
or order), including any change in the LIBOR Reserve
Requirement, the cost to the Lender of maintaining any Fixed
Rate Segment or funding the same by means of a London
interbank market time deposit shall increase, the Fixed Rate
applicable to such Fixed Rate Segment shall be adjusted as
necessary to reflect such change in cost to the Lender,
effective as of the date on which such change in any
applicable law, governmental rule, regulation or order becomes
effective.
(ii) If any Lender shall have determined that the
adoption after the date of this Agreement of any law, rule,
regulation or guideline regarding capital adequacy, or any
change in any of the foregoing or in the interpretation or
administration of any of the foregoing by any Governmental
Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Lender (or any lending office of any Lender) or such Lender's
holding company with any request or directive regarding
capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding
company, as a consequence of the Lender's obligations under
this Agreement or the Advances made by such Lender pursuant
hereto to a level below that which such Lender or any such
Lender's holding company could have achieved but for such
adoption, change or compliance (taking into consideration the
Lender's guidelines with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to
time the Borrower shall pay to the Lender such additional
amount or amounts as will compensate the Lender or the
Lender's holding company for any such reduction suffered.
SECTION 4.2 Compensation. The Borrower shall compensate any Lender for
all reasonable losses, expenses and liabilities (including any interest by such
Lender to lenders on funds borrowed by such Lender to make or carry any Fixed
Rate Segment and any loss sustained by the Lender in connection with the
re-employment of such funds), that such Lender may sustain: (a) if for any
reason (other than a default by such Lender) following agreement between the
Borrower and such Lender as to the Fixed Rate applicable to a Fixed Rate Segment
the Borrower fails to accept such Fixed Rate Segment, (b) as a consequence of
any unauthorized action taken or default by the Borrower in the repayment of any
Fixed Rate Segment when required by the terms of this Agreement or (c) with
respect to any loss of income incurred by the Lenders (as determined in a
reasonable manner by the Agent) associated with the payment of principal other
than the last day of an Interest Period with respect to any Fixed Rate Loan. A
certificate as to the amount of any additional amounts payable pursuant to
Section 4.2 (setting forth in reasonable detail the basis for requesting such
amounts) submitted by such Lender to the Borrower shall be conclusive, in the
absence of manifest error. The Borrower shall pay to such Lender the amount
shown as due on any such certificate delivered by such Lender within 30 days
after the Borrower's receipt of the same.
SECTION 4.3 Taxes. All payments by the Borrower of principal of, and
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future excise, stamp
or franchise taxes or other taxes, whatsoever imposed by any taxing authority,
but excluding franchise taxes and taxes imposed on or measured by any Lender's
net income or receipts (such non-excluded items being called "Taxes"). In the
event that any withholding or deduction from any payment to be made by the
Borrower hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then the Borrower will
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the Agent for the account of the Lender such
additional amount or amounts as is necessary to ensure that the net
amount actually received by each Lender will equal the full amount such
Lender would have received had no such withholding or deduction been
required.
Moreover, if any Taxes are directly asserted against the Agent or any Lender
with respect to any payment received by the Agent or such Lender hereunder, the
Agent or such Lender may pay such Taxes and the Borrower will promptly pay such
additional amounts (including any penalties, interest or expenses) as is
necessary in order that the net amount received by the Agent or such Lender
after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount the Agent or such Lender would have received had no such
Taxes been asserted. Upon the request of the Borrower or the Agent, each Lender
and each participant that is organized under the laws of a jurisdiction other
than the United States shall, prior to the due date or any payments under the
Notes, execute and deliver to the Borrower and the Agent, on or about the first
scheduled payment date in each Fiscal Year, one or more (as the Borrower or the
Agent may reasonably request) United States Internal Revenue Service Forms 4224
or Forms 1001 or such other forms or documents (or successor forms or
documents), appropriately completed, as may be applicable (if any are) to
establish the extent, if any, to which a payment to such Lender or participant
is exempt from withholding or deduction of Taxes.
If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Lender, the required amounts, receipts or other required documentary
evidence, the Borrower shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by the Lender as a result of any
such failure. For purposes of this Section 4.3, a distribution hereunder by the
Agent or any Lender to or for the account of any Lenders shall be deemed a
payment by the Borrower.
If Taxes are incorrectly or illegally paid or assessed, and if any
Lender or the Agent contests the assessment of such Taxes, such Lender or the
Agent shall refund, to the extent of any refund made to such Lender or the
Agent, any amounts paid by the Borrower under this Section in respect of such
Taxes.
Without prejudice to the survival of any other agreements of the
Borrower hereunder or any other Loan Document, the agreements of the Borrower
contained in this Section shall survive the payment in full of all its Credit
Obligations and the termination of all Commitments.
To the extent any Lender shall become liable for the payment of any
Taxes hereunder and shall seek reimbursement therefor pursuant to this Section
4.3, the Borrower shall be entitled, upon the giving of five Business Days
notice to the Agent, (i) to replace such Lender with a substitute lender, and
(ii) in connection with such substitution, prepay in full the outstanding
Commitment of the Lender requesting reimbursement without penalty or payment
under Section 4.2 hereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower and each Participating Subsidiary and Participating
Partnership jointly and severally represent and warrant to the Agent and the
Lenders as follows:
SECTION 5.1 Organization, Powers, Existence, etc. (a) The Borrower and
each Consolidated Entity is duly organized or formed, validly existing and in
good standing under the laws of the state in which it is incorporated or formed,
(b) the Borrower and each Consolidated Entity has the power and authority to own
its properties and assets and to carry on its business as now being conducted,
(c) the Borrower and each Consolidated Entity has the power to execute, deliver
and perform the Loan Documents to which it is a party, and (d) the Borrower and
each Consolidated Entity is duly qualified to do business in each state in which
it is required to be so qualified.
SECTION 5.2 Authorization of Borrowing, etc. The execution, delivery
and performance of the Loan Documents (a) have been duly authorized by all
requisite action and (b) will not violate any Governmental Requirement, the
certificate of incorporation, bylaws or partnership agreement of the Borrower or
any Consolidated Entity, or any indenture, agreement or other instrument to
which the Borrower or any Consolidated Entity is a party, or by which the
Borrower or any Consolidated Entity or any of their properties are bound, or be
in conflict with, result in a breach of or constitute (with due notice or lapse
of time or both) a default under, any such indenture, agreement or other
instrument, or result in the creation or imposition of any Lien upon any of the
properties or assets of the Borrower or any Consolidated Entity, except as
required by the terms of this Agreement.
SECTION 5.3 Liabilities. The Borrower has furnished to the Agent and
the Lenders a copy of the audited consolidated balance sheet of the Borrower and
the Consolidated Entities dated as of December 31, 1993 and a statement of
changes in shareholders' equity and the related statements of income and cash
flow as of the end of Fiscal Year 1993 and the unaudited consolidated balance
sheet of the Borrower and the Consolidated Entities dated as of March 31, 1994,
and the related statements of income and cash flow for the fiscal period then
ended. Such financial statements were prepared in conformity with GAAP
consistently applied throughout the period involved, are in accordance with the
books and records of the Borrower and the Consolidated Entities, are correct and
complete and present fairly the financial condition of the Borrower and the
Consolidated Entities as of the date of such financial statements, and, since
the date of such financial statements, no material adverse change in the
financial condition, business or operations of the Borrower or any of the
Consolidated Entities has occurred. Neither the Borrower nor any Consolidated
Entity has any Liabilities, Guaranteed Obligations or other obligations or
liabilities, direct or contingent, in an aggregate amount in excess of $300,000
other than (a) the Liabilities reflected in such balance sheet and the notes
thereto or (b) Liabilities incurred in the ordinary course of business.
SECTION 5.4 Taxes. The Borrower and each Consolidated Entity has filed
or caused to be filed all federal, state and local tax returns that are required
to be filed, and has paid all taxes as shown on said returns or on any
assessment received by the Borrower or any Consolidated Entity to the extent
that such taxes have become due.
SECTION 5.5 Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of the Borrower, threatened against or
affecting the Borrower, any Consolidated Entity or any Facility, by or before
any Governmental Authority that involve any of the transactions contemplated in
this Agreement or the possibility of any judgment or liability that may result
in a material adverse change in the operations or financial condition of the
Borrower and the Consolidated Entities, on a consolidated basis; and neither the
Borrower nor any Consolidated Entity is in default with respect to any material
Governmental Requirement.
SECTION 5.6 Agreements. Neither the Borrower nor any Consolidated
Entity is in default in the performance, observance or fulfillment of any of the
obligations contained in any agreement or instrument to which it is a party,
which default could have a material adverse effect upon the operations or
financial condition of the Borrower and the Consolidated Entities on a
consolidated basis.
SECTION 5.7 Use of Proceeds. Neither the Borrower nor any Participating
Subsidiary or Participating Partnership intends to use any part of the proceeds
of Advances or proceeds of drawings under Letters of Credit for the purpose of
purchasing or carrying any Margin Stock or retiring any debt incurred to
purchase or carry any Margin Stock or for any other purpose that is not
expressly authorized by this Agreement.
SECTION 5.8 ERISA Requirement. (i) The execution and delivery of the
Loan Documents will not involve any prohibited transaction within the meaning of
ERISA, (ii) the Borrower and each Consolidated Entity has fulfilled its
obligations under the minimum funding standards imposed by ERISA and each is in
compliance in all material respects with the applicable provisions of ERISA, and
(iii) no "Reportable Event," as defined in Section 4043(b) of Title IV of ERISA,
has occurred with respect to any plan maintained by the Borrower or any of its
Consolidated Entities.
SECTION 5.9 Subsidiaries. The Borrower has no direct or indirect equity
ownership in any person other than (a) Controlled Partnerships, Subsidiaries and
Consolidated Entities and (b) those ownership interests listed in Exhibit L.
None of the Subsidiaries or Controlled Partnerships has any direct or indirect
equity ownership in any other person except other Consolidated Entities except
as set forth in subparagraph (b) in the preceding sentence. The Borrower's
ownership interest in each Subsidiary and Controlled Partnership is free and
clear of all Liens, warrants, options, rights to purchase and other interests of
any person except for rights of first refusal that apply to certain limited
partnership interests whose value is not material in amount and rights of first
refusal given to certain limited partners of HEALTHSOUTH Rehabilitation Center
of Charlotte Limited Partnership and HEALTHSOUTH Rehabilitation Center of San
Francisco Limited Partnership covering the Borrower's general partnership
interests therein. All capital stock of the Subsidiaries has been duly
authorized and validly issued and is fully paid and non-assessable. There have
been delivered and pledged to the Lender all certificates representing all
capital stock in all Subsidiaries. All now-existing Subsidiaries and Controlled
Partnerships are listed in Exhibit M hereto.
SECTION 5.10 Principal Place of Business. The principal place of
business and chief executive office of the Borrower is at its address shown in
Section 10.2 and will not be changed from such address unless, prior to such
change, the Borrower shall have notified the Agent of the proposed change, and
in no event will the Borrower's principal place of business or chief executive
office be located outside the State of Alabama.
SECTION 5.11 Environmental Laws. The Borrower and each Consolidated
Entity are in material compliance with all applicable federal, state and local
laws and regulations relating to air, water, soil and other environmental
quality and all material laws relating to the handling and disposal of hazardous
waste materials.
SECTION 5.12 Disclosure. No financial statement, document, certificate
or other written communication furnished to the Agent or the Lenders by or on
behalf of the Borrower or any Consolidated Entity or to the extent not a
Consolidated Entity any Participating Subsidiary or Participating Partnership in
connection with any Loan Document contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading. There is no fact known to the
Borrower that materially adversely affects the business or condition of the
Borrower or any Material Group that has not been disclosed herein or in such
financial statements.
SECTION 5.13 Licenses. All material certificates of need, licenses,
permits, accreditations and approvals required by all Governmental Authorities
necessary in order for each Facility to be operated for its intended purpose
have been obtained and are in full force and effect.
SECTION 5.14 Title to Properties. The Borrower has good and marketable
title to all its properties and assets reflected on the balance sheet referred
to in Section 5.3 except for those matters shown on such balance sheet and
except for such properties and assets as have been disposed of since the date of
said balance sheet as no longer used or useful in the conduct of its business or
as have been disposed of in the ordinary course of the business and except that
the property of HEALTHSOUTH Doctors' Hospital, Inc. is held subject to a right
of first refusal benefitting the Dr. John T. Macdonald Foundation. All such
properties and assets are free and clear of all Liens, except as otherwise
permitted or required by the provisions of the Loan Documents.
ARTICLE VI
GENERAL CONDITIONS OF LENDING
The Lenders' obligation to make each Advance hereunder is subject to
the following conditions precedent:
SECTION 6.1 Representations and Warranties. On the date of each Advance
hereunder and on the date the Borrower presents to the Agent a Request for
Advance or Interest Rate Election form or Competitive Bid Quote Request or
Application, and on the Conversion Date the representations and warranties set
forth in this Agreement and in all other Loan Documents shall be true and
correct on and as of such date with the same effect as though such
representations and warranties had been made on the date of the Advance or on
the date the Borrower presents to the Agent a Request for Advance or Interest
Rate Election form or Competitive Bid Quote Request or Application or on the
Conversion Date, as the case may be. Each such warranty and representation shall
be deemed to be continuing in effect so long as this Agreement remains in
effect. The presentation by the Borrower of each Request for Advance or Interest
Rate Election, Competitive Bid Quote Request, Application or Term Note shall
constitute a representation and warranty by the Borrower to the Lender that no
material adverse change in the financial condition of the Borrower and the
Consolidated Entities, on a consolidated basis, as reflected in the financial
statements delivered to the Agent and Lenders pursuant to Section 5.3 has
occurred since the date of such financial statements.
SECTION 6.2 No Default. On the date of each Advance and issuance of a
Letter of Credit hereunder and on the Conversion Date, the Borrower and all
Material Groups shall be in compliance with all the terms and conditions set
forth in this Agreement on its or their part to be observed or performed, and no
Event of Default, nor event that upon notice or lapse of time or both would
constitute an Event of Default, shall have occurred and be continuing.
SECTION 6.3 Supporting Documents.
(a) The Agent, on behalf of the Lenders, shall have also
received on the date of execution of this Agreement (i) a copy of resolutions of
the Board of Directors of the Borrower, certified as in full force and effect on
such date by the Secretary of the Borrower, authorizing the execution, delivery
and performance of the Loan Documents and authorizing designated officers of the
Borrower to execute and deliver the Loan Documents on behalf of the Borrower and
to execute and deliver to the Agent Request for Advance or Interest Rate
Election or Competitive Bid Quote Request forms and Applications; (ii) a
certificate of the Secretary of the Borrower, dated such date, certifying that
(A) an attached copy of the Certificate of Incorporation and bylaws of the
Borrower is true and correct as of such date, (B) that the Certificate of
Incorporation and Bylaws of the Borrower have not been amended since the date of
the last amendment attached thereto and (C) the incumbency and specimen
signatures of the designated officers referred to in clause (i) above; (iii) an
Opinion of Counsel to the Borrower in the form required by the Agent; (iv) duly
executed Pledge Agreements by the Borrower, the Participating Subsidiaries and
the Participating Partnerships to the extent applicable, together with all stock
powers, stock certificates and financing statements related thereto; (v) such
additional supporting documents as the Agent may reasonably request; and (vi)
all fees payable to the Agent and the Lenders.
(b) The Agent, on behalf of the Lenders, shall also have
received on or before the date on which a Subsidiary becomes a Participating
Subsidiary (on or before the Closing Date in the case of each Subsidiary listed
in Exhibit G hereto) (i) a copy of resolutions of the Board of Directors and
shareholders of such Subsidiary (if necessary) certified as in full force and
effect on the date thereof by the Secretary of such Subsidiary, authorizing such
Subsidiary's execution, delivery and performance of, and the assumption of
liability under, the Loan Documents and all other agreements and instruments
that this Agreement contemplates will be executed, delivered and performed by
such Subsidiary; (ii) a copy of the Certificate of Incorporation or Articles of
Incorporation, as the case may be, and Bylaws of such Subsidiary, certified as
true and correct on and as of the date on which Loan Documents are executed and
delivered by the Borrower and such Subsidiary; (iii) an Opinion of Counsel to
such Subsidiary in a form acceptable to the Agent as to the execution and
delivery by such Subsidiary of the Loan Documents and other matters related
thereto; (iv) fully executed copies of all Loan Documents that this Agreement
contemplates will be executed or delivered (or both) by such Subsidiary
(including a fully executed Subsidiary Guaranty Agreement); and (v) such
additional supporting documents as the Agent or its counsel may reasonably
request.
(c) The Agent, on behalf of the Lenders, shall also have
received on or before the date on which a Controlled Partnership becomes a
Participating Partnership (on or before the Closing Date in the case of each
Controlled Partnership listed in Exhibit G hereto) (i) a copy of the partnership
agreement under which such Controlled Partnership was formed, certified as true
and correct on and as of the date of which Loan Documents are executed and
delivered by the Borrower and such Controlled Partnership; (ii) an Opinion of
Counsel to such Controlled Partnership in a form acceptable to the Agent as to
the execution and delivery by such Controlled Partnership of the Loan Documents
and other matters related thereto; (iii) fully executed copies of all Loan
Documents that this Agreement contemplates will be executed or delivered (or
both) by such Controlled Partnership (including a fully executed Partnership
Guaranty Agreement); and (iv) such additional supporting documents as the Agent
or its counsel may reasonably request.
ARTICLE VII
GENERAL COVENANTS OF THE BORROWER
From the date on which this Agreement is delivered until payment in
full of the Credit Obligations and the termination in writing of the Lenders'
obligation to extend credit under this Agreement, the Borrower and each
Participating Subsidiary and Participating Partnership, jointly and severally,
covenant and agree that:
SECTION 7.1 Existence, Properties, etc. The Borrower shall, and shall
cause each Consolidated Entity to, (a) do or cause to be done all things
necessary to preserve and keep in full force and effect its existence, rights
and franchises and comply with all Governmental Requirements applicable to it
and (b) at all times maintain, preserve and protect all franchises and trade
names and preserve all of its property used or useful in the conduct of its
business and keep the same in good repair, working order and condition, and from
time to time make, or cause to be made, all needful and proper repairs and
improvements thereto (normal wear and tear excepted).
SECTION 7.2 Payment of Indebtedness, Taxes, etc. The Borrower shall,
and shall cause each Consolidated Entity to, (a) pay its indebtedness and
obligations in accordance with normal terms and (b) pay and discharge or cause
to be paid and discharged promptly all taxes, assessments and other charges or
levies of Governmental Authorities imposed upon it or upon its income and
profits or upon any of its properties before the same shall become in default;
provided, however, that the Borrower and the Consolidated Entities shall not be
required to pay and discharge or cause to be paid and discharged any such
indebtedness, obligation, tax, assessment, charge, levy or claim so long as the
validity thereof shall be duly pursued and contested in good faith by
appropriate proceedings and the Borrower and the Consolidated Entities shall
maintain adequate reserves for such taxes, indebtedness, obligations,
assessments, charges, levies or claims during such proceedings.
SECTION 7.3 Financial Statements, Reports, etc. It shall deliver or
cause to be delivered to the Agent and each Lender:
(1) Not later than 50 days after the end of each calendar
quarter, a balance sheet and a statement of revenues and expenses of
the Borrower and its Consolidated Entities on a consolidated and on a
consolidating basis (provided Borrower may report the results of
operations of its outpatient centers on an aggregate basis) and a
statement of cash flow of the Borrower and its Consolidated Entities on
a consolidated basis for such calendar quarter and for the period
beginning on the first day of the fiscal year and ending on the last
day of such calendar quarter (in sufficient detail to indicate the
Borrower's and each Consolidated Entity's compliance with the financial
covenants set forth in this Article VII), together with statements in
comparative form for the corresponding periods in the preceding fiscal
year together with calculations supporting the same store performance
as summarized in the Borrower's Form 10-Q for the corresponding period,
and certified by the president or chief financial officer of the
Borrower.
(2) Not later than 100 days after the end of each fiscal year,
financial statements (including a balance sheet, a statement of
revenues and expenses, a statement of changes in shareholders' equity
and a statement of cash flow) of the Borrower and its Consolidated
Entities on a consolidated and on a consolidating basis (provided
Borrower may report the results of operations of its outpatient centers
on an aggregate basis) for such fiscal year (in sufficient detail to
indicate the Borrower's and each Consolidated Entity's compliance with
the financial covenants set forth in this Article VII), together with
statements in comparative form for the preceding fiscal year together
with calculations supporting the same store performance as summarized
in the Borrower's Form 10-K for the corresponding period, and
accompanied by an opinion of certified public accountants acceptable to
the Agent, which opinion shall state in effect that such financial
statements (A) were audited using generally accepted auditing
standards, (B) were prepared in accordance with generally accepted
accounting principles applied on a consistent basis, and (C) present
fairly the financial condition and results of operations of the
Borrower and its Consolidated Entities for the periods covered.
(3) Together with the financial statements required by
paragraphs (1) and (2) above a compliance certificate duly executed by
the chief executive officer or the president or chief financial officer
of the Borrower in the form of Exhibit I attached hereto ("Compliance
Certificate"), accompanied by a contribution report in the form
attached as Schedule I-3 to Exhibit I and an accounts receivable aging
report in the form attached as Schedule I-4 to Exhibit I.
(4) Promptly upon receipt thereof, copies of all reports,
management letters and other documents submitted to the Borrower or any
Consolidated Entity by independent accountants in connection with any
annual or interim audit of the books of the Borrower or any
Consolidated Entity made by such accountants.
(5) Contemporaneously with the distribution thereof to the
Borrower's or any Consolidated Entity's stockholders or partners or the
filing thereof with the Securities and Exchange Commission, as the case
may be, copies of all statements, reports, notices and filings
distributed by the Borrower or any Consolidated Entity to its
stockholders or partners or filed with the Securities and Exchange
Commission (including reports on SEC Forms 10-K, 10-Q and 8-K).
(6) Promptly after the Borrower knows or has reason to know of
the occurrence of any "reportable event" under Section 4043 of ERISA
applicable to the Borrower or any Consolidated Entity, a certificate of
the president or chief financial officer of the Borrower setting forth
the details as to such "reportable event" and the action that the
Borrower or the Consolidated Entity has taken or will take with respect
thereto, and promptly after the filing or receiving thereof, copies of
all reports and notices that the Borrower and each Consolidated Entity
files under ERISA with the Internal Revenue Service or the Pension
Benefit Guaranty Corporation or the United States Department of Labor.
(7) Promptly after the Borrower or any of its Consolidated
Entities becomes aware of the commencement thereof, notice of any
investigation, action, suit or proceeding before any Governmental
Authority involving the condemnation or taking under the power of
eminent domain of any of its property or the revocation or suspension
of any permit, license, certificate of need or other Governmental
Requirement applicable to any Facility.
(8) Within 10 days of the receipt by the Borrower or any of
its Consolidated Entities, copies of all material deficiency notices,
compliance orders or adverse reports issued by any Governmental
Authority or accreditation commission having jurisdiction over
licensing, accreditation or operation of a Facility or by any
Governmental Authority or private insurance company pursuant to a
provider agreement, which, if not promptly complied with or cured,
could result in the suspension or forfeiture of any license,
certification or accreditation necessary in order for the Facility to
carry on its business as then conducted or the termination of any
material insurance or reimbursement program available to the Facility.
(9) No less frequently than once in each calendar year and at
any time the Agent reasonably requests, a certificate of the risk
management director of the Borrower describing all insurance maintained
by the Borrower and its Consolidated Entities, and certifying that such
insurance complies with the requirements of this Agreement and
attaching thereto the certificates of insurance issued by the insurers
for all insurance described in such certificate; provided, however, the
Borrower shall promptly notify the Agent of any material change in the
insurance coverages required by this Agreement or any other Loan
Document.
(10) Such other information regarding any Facility or the
financial condition or operations of the Borrower or its Consolidated
Entities as the Agent shall reasonably request from time to time or at
any time.
SECTION 7.4 Litigation Notice. The Borrower shall, promptly after the
same shall have become known to any officer of the Borrower, notify the Agent in
writing of any action, suit or proceeding at law or in equity or by or before
any Governmental Authority that, if adversely determined, might impair the
ability of the Borrower or any Material Group to perform its obligations under
this Agreement or any other Loan Document or might materially and adversely
affect the business or condition, financial or other, of the Borrower or any
Material Group.
SECTION 7.5 Default Notice. The Borrower shall promptly give notice in
writing to the Agent of the occurrence of any Default or Event of Default.
SECTION 7.6 Further Assurances. The Borrower shall at its cost and
expense, upon the request of the Agent, duly execute and deliver, or cause to be
duly executed and delivered, to the Agent such further instruments and do and
cause to be done such further acts as may be reasonably necessary or proper in
the opinion of the Agent or its counsel to carry out more effectively the
provisions and purposes of the Loan Documents.
SECTION 7.7 Insurance. The Borrower and each Consolidated Entity shall
at all times maintain in force, and pay all premiums and costs related to,
insurance coverages comparable to the coverages reviewed by the Agent prior to
the Closing Date a summary of which coverage is set forth in Exhibit J hereto
and any other coverages required under applicable Governmental Requirements. The
Borrower shall deliver to the Agent annually on or before the anniversary date
of this Agreement, and at such other time or times as the Agent may request (but
not more often than monthly), a certificate of the president or chief financial
officer of the Borrower setting out in such detail as the Agent may reasonably
require a description of all insurance coverages maintained by the Borrower and
each Consolidated Entity. The Agent shall have no obligation to give the
Borrower or any Consolidated Entity notice of any notification received by the
Agent with respect to any insurance policies or take any steps to protect the
Borrower's or any Consolidated Entity's interests under such policies.
SECTION 7.8 Covenants Regarding Financial Condition.
(a) The Borrower covenants and agrees that:
(1) Minimum Net Worth. Consolidated Net Worth shall
not be less than $300,000,000 plus (A) 75% of Consolidated Net
Income (if positive and including for purposes of this Section
7.8(a)(1) only any extraordinary gain), on an ongoing basis
for each fiscal quarter beginning with the fiscal quarter
ending June 30, 1994, plus (B) the aggregate amount of all
increases, if any, in its capital accounts resulting from the
issuance of Capital Stock or conversion of debt into Capital
Stock or other securities properly classified as equity in
accordance with generally accepted accounting principles, or
from the sale or other disposition of treasury shares, from
the date of this Agreement through the date of determination.
(2) Working Capital Ratio. The ratio of Consolidated
Current Assets to Consolidated Current Liabilities shall not
at any time be less than 2.00 to 1.00.
(3) Consolidated Leverage Ratio. The ratio of
Indebtedness of Borrower and its Consolidated Entities to
Consolidated Total Capital shall during the periods set forth
below be equal to or less than the ratio set forth opposite
such period:
Ratio of
Consolidated
Period Indebtedness to Total Capital
Closing Date through .75 1.00
September 30, 1994
October 1, 1994 through .725 1.00
December 31, 1995
January 1, 1996 through .675 1.00
December 31, 1996
January 1, 1997 through .65 1.00
the Conversion Date
Thereafter .55 1.00
(4) Senior Indebtedness to Consolidated Total
Capital. The ratio of Senior Indebtedness to Consolidated
Total Capital shall at all times be equal to or less than .45
to 1.00.
(5) Indebtedness to Consolidated Cash Flow. The ratio
of Indebtedness of the Borrower and its Consolidated Entities
to Consolidated Cash Flow shall at all times during the
periods set forth below be equal to or less than the ratio set
forth opposite such period:
Ratio of
Consolidated
Period Indebtedness to Cash Flow
Closing Date through 5.50 1.00
September 30, 1994
October 1, 1994 through 5.00 1.00
December 31, 1994
January 1, 1995 through 4.75 1.00
June 30, 1995
July 1, 1995 through 4.25 1.00
December 31, 1995
January 1, 1996 through 3.75 1.00
December 31, 1996
January 1, 1997 and 3.50 1.00
Thereafter
(6) Debt Service Coverage Ratio. The Debt Service
Coverage Ratio shall not at any time be less than 1.75 to
1.00.
(7) EBITDA Coverage Ratio. The EBITDA Coverage Ratio
shall not at any time be less than 2.25 to 1.00.
(8) Capital Expenditures. The Borrower and the
Consolidated Entities on a consolidated basis will not (i)
make Capital Expenditures on a non-cumulative basis in an
amount in excess of (a) in Fiscal Year 1994 $135,000,000 plus
up to $40,000,000 to be utilized solely for the purpose of
acquiring Diagnostic Health Corporation and capital
expenditures relating to Diagnostic Health Corporation
subsequent to its acquisition, but in no event shall total
Capital Expenditures exceed $170,000,000 in Fiscal Year 1994,
and (b) in any Fiscal Year thereafter the lesser of
$150,000,000 or 100% of Cash Flow Available for Capital
Expenditures (including Capital Expenditures not to exceed
$20,000,000 related to Diagnostic Health Corporation) and (ii)
make Capital Expenditures exceeding in the aggregate
$20,000,000 during any Fiscal Year with respect to any one
particular Facility. There shall not be included as a Capital
Expenditure the portion of the purchase price of any
Acquisition which is paid for with Capital Stock of the
Borrower; provided, however, that the total of (x) Capital
Expenditures and (y) Acquisitions in which Capital Stock is
used to pay all or a portion of the purchase price may not
exceed $250,000,000 in any Fiscal Year. For purposes of this
Section 7.8(a)(8) the value of a share of Capital Stock of
Borrower shall be the closing price of such Capital Stock on
the New York Stock Exchange on the effective date of such
Acquisition. In addition, the portion of the purchase price of
any Acquisition which represents the acquisition of accounts
receivable shall not be included as a Capital Expenditure for
purposes of determining compliance with this Section 7.8(a)(8)
if (i) such accounts receivable are less than 151 days old and
(ii) the portion of the purchase price represented by accounts
receivable does not exceed 30% of the purchase price of the
Acquisition (any amount by which the accounts receivable
exceed 30% of the purchase price of the Acquisition to be
treated as a Capital Expenditure). All accounts receivable
shall be valued at the lesser of the net amount owed thereon
or their book value.
(9) Indebtedness. The Borrower and Consolidated
Entities on a consolidated basis will not incur, or otherwise
become liable with respect to, any Indebtedness other than (A)
the Credit Obligations; (B) Indebtedness arising under those
Letters of Credit set forth on Exhibit K which Letters of
Credit shall not be modified or amended; (C) the Senior
Subordinated Notes and the Convertible Subordinated
Debentures; (D) up to an aggregate of $10,000,000 of unsecured
Indebtedness incurred prior to the Maturity Date, but no
extension, renewal or replacement thereof; (E) up to
$10,000,000 of Indebtedness incurred to purchase property,
plant or equipment; (F) Guaranteed Obligations permitted under
Section 7.8(a)(10); and (G) Subordinated Indebtedness of the
Borrower, the proceeds of which are used to permanently reduce
the principal portion of the Senior Subordinated Notes or the
Convertible Subordinated Debentures so long as such
Subordinated Indebtedness is (i) unsecured, (ii) bears
interest at a rate of 12% or less per annum, (iii) contains
covenants, restrictions, terms of subordination and redemption
provisions no less favorable to the Lenders than those
contained in Indentures pursuant to which the Senior
Subordinated Notes or Convertible Subordinated Debentures, as
the case may be, were issued, as such Indentures exist on the
Closing Date, (iv) prohibits payment of principal whether by
its terms or by prepayment prior to 100 days next following
the Maturity Date, and (v) does not result in an increase in
the amount of outstanding Indebtedness.
(10) Guarantees. Borrower and the Consolidated
Entities on a consolidated basis will not incur any Guaranteed
Obligations (whether by directly guaranteeing obligations of
another person or by agreement to purchase the indebtedness of
any other person, or entering into an agreement for the
furnishing of funds to any other person through the purchase
of goods, supplies or services or by way of stock purchase,
contribution, advance or loan for the purpose of paying or
discharging the indebtedness of any other person or
otherwise), in an aggregate amount in excess of $30,000,000,
except for (A) the endorsement of negotiable instruments in
the ordinary course of business for collection; (B)
obligations arising by reason of the Borrower's status as a
general partner of a Controlled Partnership; (C) obligations
to advance funds to Subsidiaries and Controlled Partnerships,
but only so long as the note or notes or accounts receivable
evidencing the advance of such funds is assigned to the Agent
as security for the Credit Obligations; (D) the guarantees
arising under the Guaranty Agreements; (E) the guarantee of up
to $22,000,000 of Indebtedness of Vanderbilt, and (F)
guarantees of Indebtedness incurred to pay the principal
amount of the Credit Obligations, provided that, concurrently
with the incurrence of such Guaranteed Obligation, the
Borrower and the Agent agree in writing to reduce the credit
available to the Borrower under this Agreement by an amount
equal to the amount of such Guaranteed Obligations and the
Borrower pays any fee required to be paid in connection with
such reduction.
(11) Lease Payments. Borrower will not, and will not
permit any Consolidated Entity to, incur the obligation to
make Lease Payments in an aggregate amount in excess of
$3,500,000 in any Fiscal Year; and the Borrower and its
Consolidated Entities on a consolidated basis will not incur
the obligation to make Lease Payments in an aggregate amount
in excess of (i) $60,000,000 in the Fiscal Year ended December
31, 1994, (ii) $65,000,000 in the Fiscal Year ended December
31, 1995, (iii) $70,000,000 in the Fiscal Year ended December
31, 1996, and (iv) $75,000,000 in any Fiscal Year thereafter.
(12) Investment and Loans. Borrower and the
Consolidated Entities on a consolidated basis will not,
directly or indirectly, purchase or otherwise acquire any
stock, security, obligation or evidence of indebtedness of,
make any capital contribution to, own any equity interest in,
or make any loan or advance to, any other person; provided,
however, that it may continue to hold (A) all stock of and own
partnership interests in the persons that constitute
Consolidated Entities on the Closing Date; (B) stock of,
partnership interests in, and assets of, new Consolidated
Entities acquired subsequent to the Closing Date (such
purchases to be included as a Capital Expenditure for purposes
of determining compliance with Section 7.8(a)(8) hereof); (C)
Permitted Investments; and (D) investments in an aggregate
amount not exceeding $20,000,000 in corporations, partnerships
or joint ventures who do not constitute Consolidated Entities
(such investments not to be included as a Capital Expenditure
for purposes of determining compliance with Section 7.8(a)(8)
hereof), provided if any single investment exceeds
$15,000,000, Borrower shall provide to the Agent prior to
making such investment, a Compliance Certificate demonstrating
that on a pro forma historical basis giving effect to such
investment as at the beginning of the most recent Four-Quarter
Period covered by such Compliance Certificate no Default or
Event of Default would exist.
(13) Disposition of Assets. Borrower and the
Consolidated Entities on a consolidated basis will not without
the consent of the Required Lenders (which consent shall not
be unreasonably withheld), sell, lease, transfer or otherwise
dispose of in excess of 5% of their total properties and
assets over the term of this Agreement; except (A) the
Borrower may lease its existing skilled nursing facility
located in New Orleans, Louisiana to a third party on terms
fairly reflecting current market conditions at the time of
lease, and (B) the Borrower may sell physician or medical
office buildings or other non-revenue producing properties and
out-patient buildings listed in Exhibit O, other than a
Facility, at a price not less than the book value of such
property at the time of sale.
(14) Consolidation or Merger. Borrower and its
Consolidated Entities may merge or consolidate with another
person only if (i) in the case of a merger or consolidation of
the Borrower, the Borrower is the continuing or surviving
entity, (ii) in the case of a merger or consolidation
involving a Consolidated Entity, the continuing or surviving
entity is majority-owned by the Borrower (with such majority
ownership constituting a controlling interest), and (iii)
before and after giving effect to the proposed merger or
consolidation, no Default or Event of Default shall exist
under this Agreement; provided that in the case of any
consolidation or merger with a person which is not a
Consolidated Entity and the total assets of such person exceed
$15,000,000 the Borrower shall provide to the Agent prior to
such merger or consolidation a Compliance Certificate
demonstrating that on a pro forma historical basis giving
effect to such merger or consolidation as at the beginning of
the most recent Four-Quarter Period covered by such Compliance
Certificate no Default or Event of Default would exist.
(15) Liens. Borrower will not, and will not permit
any Consolidated Entity to, incur, create, assume or permit to
exist any Lien upon any of its accounts receivable, contract
rights, chattel paper, inventory, equipment, instruments,
general intangibles or other personal or real property of any
character, whether now owned or hereafter acquired, other than
(i) Liens that constitute Permitted Encumbrances, (ii) Liens
existing as of the date hereof and described on Exhibit N
hereof and (iii) Liens securing Indebtedness incurred under
Section 7.8(a)(9)(E) so long as the Lien extends only to the
asset acquired with such Indebtedness.
(16) Dividends and Distributions. Borrower will not
permit any Consolidated Entity to be or become subject to any
restrictions on the ability of such Consolidated Entity to pay
dividends or to make partnership distributions.
(17) Acquisitions. Prior to entering into any
agreement to acquire any person or Facility, the Borrower
shall provide to the Agent evidence, (i) that the person or
Facility to be acquired is in the same line of business
presently engaged in by the Borrower or its Consolidated
Entities, (ii) that the person or Facility to be acquired does
not oppose the Acquisition, and (iii) if the cost of the
Acquisition exceeds $15,000,000, prior to consummation of such
Acquisition deliver to the Agent a Compliance Certificate
demonstrating on a pro forma basis, giving effect to such
Acquisition, that no Default or Event of Default will exist
under this Agreement.
(18) Restricted Payments. Borrower will not declare
or pay dividends (other than stock dividends) or make any
other stockholder distributions to the shareholders of the
Borrower or redemptions or purchases of the Capital Stock of
Borrower, or make any principal payments with respect of
Subordinated Indebtedness (collectively "Restricted Payments")
except Borrower may make Restricted Payments in any Fiscal
Year so long as such payments are less than 25% of
Consolidated Net Income for such Fiscal Year and Borrower
shall deliver to the Agent prior to making any such Restricted
Payment a Compliance Certificate demonstrating that on a pro
forma basis after giving effect to such payment no Default or
Event of Default exists.
(b) Except as otherwise expressly provided in this
Section 7.8, (i) the Borrower shall also cause and require each of its
Consolidated Entities to observe and perform each of the covenants and
agreements of this section to be observed and performed by the
Borrower, whether or not a specific reference is made to the
Consolidated Entities in each such covenant (other than the financial
covenants set forth in paragraphs (1) through (7) of subsection (a)
above, which apply to the Borrower and the Consolidated Entities on a
consolidated basis), and (ii) all computations required in connection
with such financial covenants and the limitations set forth in
paragraphs (8) through (18) of subsection (a) above shall be made for
the Borrower and its Consolidated Entities on a combined or
consolidated basis, in accordance with generally accepted accounting
principles, after elimination of intercompany items.
SECTION 7.9 Continuation of Current Business. Neither the Borrower nor
any Consolidated Entity will (i) engage in any business other than the business
now being conducted by it and other businesses directly related to providing
rehabilitation services (including outpatient surgery, diagnostic services and
management of physician practices) or orthopedic surgery related acute care
similar in operation (but not in scope) to the HEALTHSOUTH Medical Center
Facility or (ii) acquire or attempt to acquire any person who is opposed to such
acquisition.
SECTION 7.10 Management Contracts. Neither the Borrower nor any
Consolidated Entity will enter into any agreement whereby the management,
supervision or control of its business or any Facility shall be delegated to or
placed in any persons other than its governing body and officers, the Borrower
or a Consolidated Entity, except that management of the Facility owned by
Vanderbilt Stallworth Rehabilitation Hospital, L.P. is vested in part in a
Governance Committee and in part in a Subsidiary of the Borrower pursuant to the
applicable limited partnership agreement and a management agreement.
SECTION 7.11 Cooperation; Inspection of Properties. The Borrower shall,
and shall cause the Consolidated Entities to, permit the Lenders and their
representatives to inspect the Borrower's and the Consolidated Entities'
properties and assets, and to inspect, review and audit the Borrower's and the
Consolidated Entities' books and records from time to time and at any time.
SECTION 7.12 Use of Proceeds. The Borrower shall use the proceeds of
Advances exclusively to provide funding for the acquisition and development of
Facilities and to provide working capital to the Borrower, the Participating
Subsidiaries and the Participating Partnerships.
SECTION 7.13 Limit on Investment in HEALTHSOUTH of Birmingham, Inc. The
Borrower will not cause or permit its aggregate direct and indirect investment,
whether by stock purchase, capital contribution, advance, loan, guarantee or
otherwise, in HEALTHSOUTH of Birmingham, Inc. to exceed at any time $500,000.
SECTION 7.14 Additional Consolidated Entities. On the last day of each
fiscal quarter of the Borrower (or such earlier time as the Agent may request)
the Borrower will cause each Consolidated Entity that is hereafter acquired or
created to become a Participating Subsidiary or Participating Partnership by
execution of a Guaranty Agreement and all other documents necessary to cause it
to become jointly and severally liable for the Credit Obligations (subject to
the limitations provided in the Guaranty Agreement) and the Borrower or the
Participating Subsidiary or the Participating Partnership, if applicable, shall
execute a Pledge Agreement as more particularly described in Section 2.7 herein
and shall deliver or cause to be delivered all financing statements, stock
certificates and duly executed stock powers necessary to perfect the Agent's
security interest granted under such Pledge Agreement.
SECTION 7.15 ERISA. With respect to all employee pension benefit plans
maintained by the Borrower or any Subsidiary:
(i) terminate any of such employee pension benefit plans so as to
incur any liability to the Pension Benefit Guaranty Corporation
established pursuant to ERISA;
(ii) allow or suffer to exist any prohibited transaction involving
any of such employee pension benefit plans or any trust created
thereunder which would subject the Borrower or a Subsidiary to a tax or
penalty or other liability on prohibited transactions imposed under
Internal Revenue Code Section 4975 or ERISA;
(iii) fail to pay to any such employee pension benefit plan any
contribution which it is obligated to pay under the terms of such plan;
(iv) allow or suffer to exist any accumulated funding deficiency,
whether or not waived, with respect to any such employee pension
benefit plan;
(v) allow or suffer to exist any occurrence of a reportable event
or any other event or condition, which presents a material risk of
termination by the Pension Benefit Guaranty Corporation of any such
employee pension benefit plan that is a Single Employer Plan, which
termination could result in any liability to the Pension Benefit
Guaranty Corporation; or
(vi) incur any withdrawal liability with respect to any
Multi-employer Plan.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.1 Events of Default. The following shall constitute Events of
Default under this Agreement:
(a) the Borrower or any Participating Subsidiary or any
Participating Partnership shall fail to pay within (i) one Business Day of the
date when due any principal payable under the terms of any Note or (ii) three
Business Days of the date when due any interest or fees payable under the terms
of any Note or any amount payable under this Agreement, any Guaranty Agreement
or any other of the Credit Obligations or any other amount owed to the Agent or
Lenders under or in connection with the Loan Documents; or
(b) The Borrower or any Material Group shall default in the
performance or observance of any other provision of this Agreement (other than
the provisions of Article VII hereof), except as covered by clause (a) above,
and shall not cure such default within thirty days after the first to occur of
(i) the date the Agent or Lenders gives written or telephonic notice of the
default to the Borrower or (ii) the date the Borrower otherwise has notice
thereof; or
(c) the Borrower or any Participating Subsidiary or any
Participating Partnership or any Material Group shall default in the observance
or performance of any provision in Article VII hereof; or
(d) the Agent shall determine that any statement,
certification, representation or warranty contained herein, or in any of the
other Loan Documents or in any report, financial statement, certificate or other
instrument delivered to the Agent or any Lender by or on behalf of the Borrower
or any Participating Subsidiary or any Participating Partnership was misleading
or untrue in any material respect at the time it was made; or
(e) default shall be made (i) in the payment of any
Indebtedness (other than the Credit Obligations) of the Borrower or any
Consolidated Entity when due or (ii) in the performance, observance or
fulfillment of any term or covenant contained in any agreement or instrument
under or pursuant to which any such Indebtedness may have been issued, created,
assumed, guaranteed or secured by Borrower or any Consolidated Entity, if the
effect of such default is to accelerate the maturity of such Indebtedness or to
permit the holder thereof to cause such Indebtedness to become due prior to its
stated maturity, and such default shall not be cured within 10 days after the
occurrence of such default, and the amount of the Indebtedness involved exceeds
$3,000,000; or
(f) the Borrower or any Material Group shall fail to pay its
or their debts generally as they come due, or a receiver, trustee, liquidator or
other custodian shall be appointed for the Borrower or any Material Group or for
any of the property of the Borrower or any Material Group or a petition in
bankruptcy, or under any insolvency law, shall be filed by or against the
Borrower or any Material Group or the Borrower or any Material Group shall apply
for the benefit of, or take advantage of, any law for relief of debtors, or
enter into an arrangement or composition with, or make an assignment for the
benefit of, creditors; or
(g) final judgment for the payment of money in excess of any
aggregate of $50,000 shall be rendered against the Borrower or any participating
Subsidiary or any Participating Partnership or any Material Group, and the same
shall remain undischarged for a period of 30 days during which execution shall
not be effectively stayed; or
(h) an event of default, as therein defined, shall occur under
any other Loan Document; or
(i) if any of the Guaranty Agreements, Notes, Pledge
Agreements or LC Agreement shall be deemed unenforceable by a court of competent
jurisdiction or shall no longer be effective; or
(j) if any person or group of persons acting together who are
not as at the Closing Date owners of Capital Stock of the Borrower having voting
rights shall own directly or indirectly fifteen percent (15%) or more of the
Capital Stock of the Borrower having voting rights; or
(k) if (i) the Borrower or any Consolidated Entity shall
engage in any prohibited transaction (as described in Section 7.15(ii) hereof),
which is not subject to a statutory or administrative exemption, involving any
employee pension benefit plan of the Borrower or any Consolidated Entity, (ii)
any accumulated funding deficiency (as referred to in Section 7.15(iv) hereof),
whether or not waived, shall exist with respect to any Single Employer Plan,
(iii) a reportable event (as referred to in Section 7.15(v) hereof) (other than
a reportable event for which the statutory notice requirement to the Pension
Benefit Guaranty Corporation has been waived by regulation) shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed to administer or to terminate, any Single Employer
Plan, which reportable event or institution or proceedings is, in the reasonable
opinion of the Required Lenders, likely to result in the termination of such
Single Employer Plan for purposes of Title IV of ERISA, and in the case of such
a reportable event, the continuance of such reportable event shall be unremedied
for sixty (60) days after notice of such reportable event pursuant to Section
4043(a), (c) or (d) of ERISA is given, as the case may be, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, and such
termination results in a material liability of the Borrower or any Consolidated
Entity to such Single Employer Plan or the Pension Benefit Guaranty Corporation,
(v) the Borrower or any Subsidiary shall withdraw from a Multi-employer Plan for
purposes of Title IV of ERISA, and, as a result of any such withdrawal, the
Borrower or any Consolidated Entity shall incur withdrawal liability to such
Multi-employer Plan, or (vi) any other event or condition shall occur or exist;
and in each case in clauses (i) through (vi) of this Section 8.1(k), such event
or condition, together with all other such events or conditions, if any, could
subject the Borrower or any Consolidated Entity to any tax, penalty or other
liabilities in excess of $100,000, and in each such case the event or condition
is not remedied to the satisfaction of the Required Lenders within ninety (90)
days after the earlier of (i) receipt of notice of such event or condition by
the Authorized Representative from the Agent or (ii) the Borrower becomes aware
of such event or condition; then, and in any such event and at any time
thereafter, if such Event of Default shall then be continuing,
(A) either or both of the following actions may be
taken: (i) the Agent may, and at the direction of the Required
Lenders shall, declare any obligation of the Lenders to make
further Loans or issue Letters of Credit terminated, whereupon
the obligation of each Lender to make further Loans or
NationsBank to issue Letters of Credit, hereunder shall
terminate immediately, and (ii) the Agent shall at the
direction of the Required Lenders, at their option, declare by
notice to the Borrower any or all of the Credit Obligations to
be immediately due and payable, and the same, including all
interest accrued thereon and all other obligations of the
Borrower to the Lenders, shall forthwith become immediately
due and payable without presentment, demand, protest, notice
or other formality of any kind, all of which are hereby
expressly waived, anything contained herein or in any
instrument evidencing the Credit Obligations to the contrary
notwithstanding; provided, however, that notwithstanding the
above, if there shall occur an Event of Default under clause
(f) above, then the obligation of the Lenders to lend
hereunder shall automatically terminate and any and all of the
Credit Obligations shall be immediately due and payable
without the necessity of any action by the Agent or the
Required Lenders or notice to the Agent or the Lenders;
(B) Borrower shall, upon demand of Agent deposit cash
with the Agent in an amount equal to the amount of any Letters
of Credit remaining undrawn or unpaid, as collateral security
for the repayment of any future drawings or payments under
such Letters of Credit, and Borrower shall forthwith deposit
and pay such amounts and such amounts shall be held by Agent
pursuant to the terms of the LC Account Agreement; and
(C) the Agent, on behalf of the Lenders, shall have
all of the following rights and remedies in addition to all of
the rights and remedies of a secured party under the Uniform
Commercial Code in respect of the Collateral and otherwise be
available under the Loan Documents or under any applicable
law: the Agent may at any time and from time to time, with or
without judicial process or the aid and assistance of others
and without incurring any liability to the Borrower, upon ten
(10) days' notice to the Borrower sell or otherwise dispose of
any Collateral, at public or private sale or proceedings or
otherwise, by one or more contracts, in one or more parcels,
at the same or different times, with or without having the
Collateral at the place of sale or other disposition, for cash
and/or credit, and upon any terms, at such place(s) and
time(s) and to such person(s) as the Agent deems best; if any
Collateral is sold by the Agent upon credit or for future
delivery, the Agent shall not be liable for the failure of the
purchaser to pay for same and in such event the Agent may
resell such Collateral in accordance with the provisions
hereof provided the Borrower shall be given credit for
proceeds received by reason of such sale; the Agent or any
Lender may buy any Collateral at any public sale and, the
Agent or any Lender may buy such Collateral at private sale so
long as such sale is made in a commercially reasonable manner
and in each case may make payment therefor by any means.
Except to the extent the Agent shall have failed to take
action required under this Agreement, no Lenders shall be
entitled to enforce the provisions of this subsection (C) of
Section 8.1 independently.
SECTION 8.2 Agent to Act. In case any one or more Events of Default
shall occur and be continuing, the Agent may, and at the direction of the
Required Lenders shall, proceed to protect and enforce their rights or remedies
either by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein or in
any other Loan Document, or to enforce the payment of the Obligations or any
other legal or equitable right or remedy.
SECTION 8.3 Cumulative Rights. No right or remedy herein conferred upon
the Lenders, the Agent and the Borrower is intended to be exclusive of any other
rights or remedies contained herein or in any other Loan Document, and every
such right or remedy shall be cumulative and shall be in addition to every other
such right or remedy contained herein and therein or now or hereafter existing
at law or in equity or by statute, or otherwise.
SECTION 8.4 No Waiver. No course of dealing between the Borrower and
any Lender or the Agent or any failure or delay on the part of any Lender, the
Agent or the Borrower in exercising any rights or remedies hereunder shall
operate as a waiver of any rights or remedies hereunder and no single or partial
exercise of any rights or remedies hereunder shall operate as a waiver or
preclude the exercise of any other rights or remedies hereunder or of the same
right or remedy on a future occasion.
SECTION 8.5 Default. The Agent and the Lenders shall have no right to
accelerate any of the Loans upon, or to institute any action or proceeding
before any court to realize upon Collateral as a result of, the occurrence of
any Default which shall not also constitute an Event of Default; provided,
however, nothing contained in this sentence shall in any respect impair or
adversely affect the right, power and authority of the Agent and the Lenders (i)
to take any action expressly required or permitted to be taken under the Loan
Documents upon the occurrence of any Default (and including any action or
proceeding which the Agent may determine to be necessary or appropriate in
furtherance of any such expressly authorized action) and (ii) to take any action
provided under the Loan Documents or otherwise available by statute, at law or
in equity upon the occurrence of any Default.
SECTION 8.6 Allocation of Proceeds. If an Event of Default has occurred
and is continuing, and the maturity of the Notes has been accelerated pursuant
to this Article VIII, all payments received by the Agent hereunder in respect of
any principal of or interest on the Credit Obligations or any other amounts
payable by the Borrower hereunder shall be applied by the Agent in the following
order:
(i) amounts due to the Lenders pursuant to Sections 2.11
hereof;
(ii) amounts due to the Agent and NationsBank pursuant to
Section 9.11 and Section 2.13(i) and (k) hereof;
(iii) payments of interest, to be applied in accordance with
Section 2.14 hereof;
(iv) payments of principal, to be applied in accordance with
Section 2.14 hereof;
(v) payment of cash amounts to the Agent pursuant to Section
8.1(B) hereof; and
(vi) payments of all other amounts due under this Agreement,
if any, to be applied in accordance with each Lender's pro rata share
of all principal due to the Lenders.
ARTICLE IX
THE AGENT
SECTION 9.1 Appointment. Each Lender (including NationsBank in its
capacity as issuer of the Letters of Credit) hereby irrevocably designates and
appoints NationsBank as the Agent of the Lenders under this Agreement, and each
of the Lenders hereby irrevocably authorizes NationsBank as the Agent for such
Lender, to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers as are expressly
delegated to the Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. The Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any of the Lenders, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Agent.
SECTION 9.2 Attorneys-in-fact. The Agent may execute any of its duties
under this Agreement by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Agent shall not be responsible for the gross negligence or willful
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
SECTION 9.3 Limitation on Liability. Neither the Agent nor any of its
officers, directors, employees, agents or attorneys-in-fact shall be liable to
the Lenders for any action lawfully taken or omitted to be taken by it or them
under or in connection with this Agreement except for its or their own gross
negligence or willful misconduct. Neither the Agent nor any of its affiliates
shall be responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower, any of its
Controlled Entities or Controlled Partnerships, or any officer or partner
thereof contained in this Agreement or in any of the other Loan Documents, or in
any certificate, report, statement or other document referred to or provided for
in or received by the Agent under or in connection with this Agreement or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Agreement or any of the other Loan Documents, or for any failure of the
Borrower to perform its obligations thereunder. The Agent shall not be under any
obligation to any of the Lenders to ascertain or to inquire as to the observance
or performance of any of the terms, covenants or conditions of this Agreement or
any of the other Loan Documents on the part of the Borrower or to inspect the
properties, books or records of the Borrower or its Controlled Entities or
Controlled Partnerships.
SECTION 9.4 Reliance. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, writing, resolution, notice, consent
certificate, affidavit, letter, cablegram, telegram, telecopy or telex message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Agent. The Agent may deem and treat the payee of any Note as the
owner thereof for all purposes unless an Assignment and Acceptance shall have
been filed with and accepted by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive advice or concurrence of the Lenders or the Required Lenders as
provided in this Agreement or it shall first be indemnified to its satisfaction
by the Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action. The Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement in accordance with a request of the Required Lenders, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all present and future holders of the Notes.
SECTION 9.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender, or the Borrower or
any of the Subsidiaries referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Agent receives such a notice, the Agent shall promptly give
notice thereof to the Lenders. The Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default as it
shall deem advisable in the best interests of the Lenders.
SECTION 9.6 No Representations. Each Lender expressly acknowledges that
neither the Agent nor any of its affiliates has made any representations or
warranties to it and that no act by the Agent hereafter taken, including any
review of the affairs of the Borrower or any of its Consolidated Entities, shall
be deemed to constitute any representation or warranty by the Agent to any
Lender. Each Lender represents to the Agent that it has, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the financial condition, creditworthiness, affairs, status
and nature of the Borrower and Controlled Partnerships and made its own decision
to enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and to make such investigation as it
deems necessary to inform itself as to the status and affairs, financial or
otherwise, of the Borrower and its Consolidated Entities and Controlled
Partnerships. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Agent hereunder, the Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the
Borrower or any of its Consolidated Entities and Controlled Partnerships which
may come into the possession of the Agent or any of its affiliates.
SECTION 9.7 Indemnification. The Lenders agree to indemnify the Agent
in its capacity as such (to the extent not reimbursed by the Borrower or any of
its Consolidated Entities and without limiting any obligations of the Borrower
or any of its Consolidated Entities so to do), ratably according to the
respective principal amount of the Notes held by them (or, if no Notes are
outstanding, ratably in accordance with their respective Applicable Commitment
Percentages as then in effect) from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may at any time
(including without limitation at any time following the payment of the Note) be
imposed on, incurred by or asserted against the Agent in any way relating to or
arising out of this Agreement or any other document contemplated by or referred
to herein or the transactions contemplated hereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or willful
misconduct. The agreements in this subsection shall survive the payment of the
Obligations and the termination of this Agreement.
SECTION 9.8 Lender. The Agent and its affiliates may make loans to,
accept deposits from and generally engage in any kind of business with the
Borrower and its Consolidated Entities and Controlled Partnerships as though it
were not the Agent hereunder. With respect to its Loans made or renewed by it
and any Note issued to it, the Agent shall have the same rights and powers under
this Agreement as any Lender and may exercise the same as though it were not the
Agent, and the terms "Lender" and "Lenders" shall, unless the context otherwise
indicates, include the Agent in its individual capacity.
SECTION 9.9 Resignation. If the Agent shall resign as Agent under this
Agreement, then the Required Lenders may appoint a successor Agent for the
Lenders, which successor shall be approved by the Borrower, which approval shall
not be unreasonably withheld, which shall be a commercial bank organized under
the laws of the United States or any state thereof, having a combined surplus
and capital of not less than $500,000,000, whereupon such successor Agent shall
succeed to the rights, powers and duties of the former Agent and the obligations
of the former Agent shall be terminated and canceled, without any other or
further act or deed on the part of such former Agent or any of the parties to
this Agreement; provided, however, that the former Agent's resignation shall not
become effective until such successor Agent has been appointed and has succeeded
of record to all right, title and interest of the former Agent in the
Collateral; provided, further, if the Required Lenders cannot agree as to a
successor Agent within ninety (90) days after such resignation, the Agent shall
appoint a successor Agent and the parties hereto agree to execute whatever
documents are necessary to effect such action under this Agreement or any other
document executed pursuant to this Agreement; provided, however in such event
all provisions of this Agreement and the Loan Documents, shall remain in full
force and effect. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article IX shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
SECTION 9.10 Sharing of Payments, etc. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, set-off, counterclaim
or otherwise, obtain payment with respect to its Credit Obligations (other than
any payment pursuant to Article IV) which results in its receiving more than its
pro rata share of the aggregate payments with respect to all of the Credit
Obligations (other than any payment pursuant to Article IV), then (A) such
Lender shall be deemed to have simultaneously purchased from the other Lenders a
share in their Credit Obligations so that the amount of the Credit Obligations
held by each of the Lenders shall be pro rata and (B) such other adjustments
shall be made from time to time as shall be equitable to insure that the Lenders
share such payments ratably; provided, however, that for purposes of this
Section 9.10 the term "pro rata" shall be determined with respect to both the
Commitment of each Lender and to the Revolving Facility after subtraction in
each case of amounts, if any, by which any such Lender has not funded its share
of the outstanding Loans and Reimbursement Obligations. If all or any portion of
any such excess payment is thereafter recovered from the Lender which received
the same, the purchase provided in this Section 9.10 shall be rescinded to the
extent of such recovery, without interest. The Borrower expressly consents to
the foregoing arrangements and agrees that each Lender so purchasing a portion
of the other Lenders' Obligations may exercise all rights of payment (including,
without limitation, all rights of set-off, banker's lien or counterclaim) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.
SECTION 9.11 Fees. The Borrower agrees to pay to the Agent, for its
individual account, in advance a quarterly Agent's fee in such amount as shall
be agreed to from time to time.
SECTION 9.12 Independent Agreements. The provisions contained in
Sections 9.1 through 9.8 and 9.10 of this Article IX constitute independent
obligations and agreements of the Agent and the Lenders and the Borrower shall
not be deemed a party thereto nor bound thereby. Borrower does acknowledge the
rights of Lenders and Agent under Sections 9.9 and 9.11 hereof.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Assignments and Participations.
(a) At any time after the Closing Date each Lender may, with
the prior consent of the Agent and the Borrower, which consent shall not be
unreasonably withheld, assign to one or more banks or financial institutions all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of the Notes payable to its order);
provided, that (i) each such assignment shall be of a constant, and not a
varying, percentage of all of the assigning Lender's rights and obligations
(including Loans and Participations) under this Agreement (ii) for each
assignment involving the issuance and transfer of Notes, the assigning Lender
shall execute an Assignment and Acceptance and the Borrower hereby consents to
execute replacement Notes to give effect to the assignment, (iii) the minimum
Commitment which shall be assigned is $10,000,000 (together with which the
assigning Lender's applicable portion of Participations and the Letter of Credit
Commitment shall also be assigned) and (iv) such assignee shall have an office
located in the United States. Upon such execution, delivery, approval and
acceptance, from and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder or under such Notes have been
assigned or negotiated to it pursuant to such Assignment and Acceptance have the
rights and obligations of a Lender hereunder (including, in respect of the
Collateral, all the rights and obligations of a Lender, as fully as if such
assignee had been named as a Lender in this Agreement) and a holder of such
Notes and (y) the assignor thereunder shall, to the extent that rights and
obligations hereunder or under such Notes have been assigned or negotiated by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its future obligations under this Agreement. No assignee shall
have the right to further assign its rights and obligations pursuant to this
Section 10.1. Any Lender who makes an assignment shall pay to the Agent a
one-time administrative fee of $2,500.00 which fee shall not be reimbursed by
Borrower.
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) the assignment made
under such Assignment and Acceptance is made under such Assignment and
Acceptance without recourse; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or any Controlled Entity or Controlled Partnership or
the performance or observance by the Borrower or any Controlled Entity or
Controlled Partnership of any of its obligations under any Loan Document or any
other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements delivered pursuant to Section 7.3 and such other Loan
Documents and other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon the
Agent, such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement, the Note and the other
Loan Documents as are delegated to the Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto; and (vi) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender and a holder of such Note.
(c) The Agent shall maintain at its address referred to herein
a copy of each Assignment and Acceptance delivered to and accepted by it.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender, the Agent shall give prompt notice thereof to Borrower.
(e) Each Lender may sell participations to one or more banks
or other entities as to all or a portion of its rights and obligations under
this Agreement; provided, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any Notes issued to it for the
purpose of this Agreement, (iv) such participations shall be in a minimum amount
of $10,000,000 and shall include an allocable portion of such Lender's
Participation, and (v) Borrower, the Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and with regard to any and all
payments to be made under this Agreement; provided, that the participation
agreement between a Lender and its participants may provide that such Lender
will obtain the approval of such participant prior to such Lender's agreeing to
any amendment or waiver of any provisions of this Agreement which would (A)
extend the maturity of the Notes, (B) reduce the interest rate hereunder, (C)
increase the Commitment of the Lender granting the participation or (D) release
all or any substantial part of the Collateral other than in accordance with the
terms of the Loan Documents, and (vi) the sale of any such participations which
require Borrower to file a registration statement with the United States
Securities and Exchange Commission or under the securities regulations or laws
of any state shall not be permitted.
(f) Notwithstanding the provisions of this Section 10.1 to the
contrary, any Lender may assign all or any portion of its interest in Loans to
its Affiliates without approval of the Agent or Borrower upon payment of the
administrative fee described in Section 10.1(a) above, and all or any portion of
its interest in Loans to the Federal Reserve Bank without approval of the Agent
or Borrower and without payment of any fees.
SECTION 10.2 Notices. Any notice shall be conclusively deemed to have
been received by any party hereto and be effective on the day on which delivered
to such party (against receipt therefor) at the address set forth below or such
other address as such party shall specify to the other parties in writing (or,
in the case of telephonic notice or notice by telecopy, telegram or telex (where
the receipt of such message is verified by return) expressly provided for
hereunder, when received at such telephone, telecopy or telex number as may from
time to time be specified in written or verbal notice to the other parties
hereto or otherwise received), or if sent prepaid by certified or registered
mail return receipt requested on the third Business Day after the day on which
mailed, addressed to such party at said address:
(a) if to the Borrower or a Participating Partnership
or a Participating Subsidiary at:
Two Perimeter Park South
Suite 224W
Birmingham, Alabama 35243
Attention: Richard M. Scrushy
with a copy to:
Chief Financial Officer
HealthSouth Rehabilitation Corporation
Suite 224W
Two Perimeter Park South
Birmingham, Alabama 35243
and with a copy to:
Treasurer
HealthSouth Rehabilitation Corporation
Suite 224W
Two Perimeter Park South
Birmingham, Alabama 35243
and with a copy to:
J. Brooke Johnston, Jr.
Haskell Slaughter Young
1200 AmSouth-Harbert Plaza
1901 6th Avenue North
Birmingham, Alabama 35203
(b) if to the Agent at:
NationsBank Corporate Center
100 South Tryon Street
Charlotte, North Carolina 28255
Attention: Agency Services
With a copy to:
600 Peachtree Street, N.E.
21st Floor
Atlanta, Georgia 30308-2212
Attention: Corporate Banking
(c) if to NationsBank in its capacity as issuer of the
Letters of Credit:
NationsBank of North Carolina, N.A.
NationsBank Plaza
Charlotte, North Carolina 28255
Attention: Letter of Credit Department
(d) if to the Lenders:
At the addresses set forth on the signature pages
hereof or on the signature page of each Assignment
and Acceptance.
SECTION 10.3 No Waiver. No failure or delay on the part of the Agent,
any Lender or the Borrower in the exercise of any right, power or privilege
hereunder shall operate as a waiver of any such right, power or privilege nor
shall any such failure or delay preclude any other or further exercise thereof.
The rights and remedies herein provided are cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 10.4 Setoff. The Borrower agrees that the Agent and each Lender
shall have a lien for all the Credit Obligations of the Borrower upon all
deposits or deposit accounts, of any kind, or any interest in any deposits or
deposit accounts thereof, now or hereafter pledged, mortgaged, transferred or
assigned to the Agent or such Lender or otherwise in the possession or control
of the Agent or such Lender (other than for safekeeping) for any purpose for the
account or benefit of the Borrower and including any balance of any deposit
account or of any credit of the Borrower with the Agent or such Lender, whether
now existing or hereafter established, hereby authorizing the Agent and each
Lender at any time or times from and after the occurrence of a Default or Event
of Default with or without prior notice to apply such balances or any part
thereof to such of the Credit Obligations of the Borrower to the Lenders then
past due and in such amounts as they may elect, and whether or not the
collateral or the responsibility of other persons primarily, secondarily or
otherwise liable may be deemed adequate. For the purposes of this paragraph, all
remittances and property shall be deemed to be in the possession of the Agent or
such Lender as soon as the same may be put in transit to it by mail or carrier
or by other bailee.
SECTION 10.5 Survival. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the expiration of the Letters of Credit and the execution and delivery to the
Lenders of this Agreement and the Notes and shall continue in full force and
effect so long as any of the Credit Obligations remain outstanding or any Lender
has any Commitment hereunder. Whenever in this Agreement, any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and permitted assigns of such party and all covenants, provisions and agreements
by or on behalf of the Borrower which are contained in this Agreement and the
Notes shall inure to the benefit of the successors and permitted assigns of the
Lenders or any of them and any rights of the Borrower hereunder shall inure to
the benefit of successors and assigns of Borrower to the extent Lenders may
consent to succession or assignment.
SECTION 10.6 Expenses. The Borrower agrees (a) to pay or reimburse the
Agent for all its reasonable and customary out-of-pocket costs and expenses
incurred in connection with the preparation, negotiation and execution of, and
any amendment, supplement or modification to, this Agreement or any of the other
Loan Documents, and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable and customary fees and
disbursements of counsel to the Agent, (b) to pay or reimburse the Agent for all
its reasonable costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, including without limitation,
the reasonable fees and disbursements of their counsel, (c) to pay, indemnify
and hold the Agent harmless from any and all recording and filing fees and any
and all liabilities with respect to, or resulting from any failure of Borrower
to pay or delay of Borrower in paying, documentary, stamp, excise, withholding
and other similar taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation of any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, this Agreement, and (d) from and after the occurrence of any Event
of Default to pay, indemnify, and hold the Agent harmless from and against any
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement or in any respect relating to the transactions
contemplated hereby or thereby, (all the foregoing, collectively, the
"indemnified liabilities"); provided, however, that the Borrower shall have no
obligation hereunder with respect to indemnified liabilities arising from (i)
the willful misconduct or negligence of the party seeking indemnification, (ii)
legal proceedings commenced against the Agent or any Lender by any security
holder or creditor thereof arising out of and based upon rights afforded any
such security holder or creditor solely in its capacity as such, (iii) any taxes
imposed upon the Agent or any Lender other than the documentary, stamp, excise,
withholding and similar taxes described in clause (c) above or any tax resulting
from any change described in Section 4.1, which tax would be payable to Lenders
by Borrower pursuant to Article IV hereof, (iv) taxes imposed as a result of a
transfer or assignment of any Note, participation or assignment of a portion of
its rights, (v) any taxes imposed upon any transferee of any Note, or (vi) or by
reason of the failure of the Agent or any Lender to perform its or their
obligations under this Agreement. The agreements in this subsection shall
survive repayment of the Notes and all other Credit Obligations hereunder.
SECTION 10.7 Amendments. No amendment, modification or waiver of any
provision of this Agreement or any of the Loan Documents and no consent by the
Lenders to any departure therefrom by the Borrower shall be effective unless
such amendment, modification or waiver shall be in writing and signed by the
Agent and the Borrower, but only upon having received the written consent of the
Required Lenders, and the same shall then be effective only for the period and
on the conditions and for the specific instances and purposes specified in such
writing; provided, however, that, no such amendment, modification or waiver
(i) which changes, extends or waives any provision of Section
2.4(c), Section 2.11, Section 2.13(i), Section 9.10 or this Section
10.7, the amount of or the due date of any scheduled installment of or
the rate of interest payable on any Credit Obligation, changes the
definition of Required Lenders, which increases or extends the
Commitment of any Lender or which increases or extends the Conversion
Date or Maturity Date or which waives any condition to the making of
any Loan shall be effective unless in writing and signed by each of the
Lenders; provided, however, the Required Lenders may in their sole
discretion waive any Default or Event of Default (other than any Event
of Default under Section 8.1(a) as to which only the Lender which is
the payee of a Note may waive the failure to make a payment of
principal or interest due on such Note);
(ii) which permits that Acquisition described in Borrower's
confidential letter to the Agent dated the date of this Agreement shall
be permitted without the consent of each Lender;
(iii) which releases Collateral or any Guarantor (other than
in accordance with the terms of the Loan Documents) shall be effective
unless with the written consent of each of the Lenders; or
(iv) which affects the rights, privileges, immunities or
indemnities of the Agent, shall be effective unless in writing and
signed by the Agent.
Notwithstanding any provision of the other Loan Documents to the contrary, as
between the Agent and the Lenders, execution by the Agent shall not be deemed
conclusive evidence that the Agent has obtained the written consent of the
Required Lenders; however, the Borrower shall be entitled to rely on the
signature of the Agent as evidence of consent. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances, except as provided by law or as
otherwise expressly provided herein. No delay or omission on any Lender's, the
Agent's or the Borrower's part in exercising any right, remedy or option shall
operate as a waiver of such or any other right, remedy or option or of any
Default or Event of Default.
SECTION 10.8 Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.
SECTION 10.9 Waivers by Borrower. In any litigation in any court with
respect to, in connection with, or arising out of this Agreement, the Loans, any
of the Notes, any of the other Loan Documents, the Collateral, the Credit
Obligations, or any instrument or document delivered pursuant to this Agreement,
or the validity, protection, interpretation, collection or enforcement thereof,
or any other claim or dispute howsoever arising between the Borrower and the
Lenders or the Agent, the Borrower and each Lender and the Agent hereby waive,
to the extent permitted by law, trial by jury in connection with any such
litigation.
The Borrower, the Agent and the Lenders believe that, inasmuch as this
Agreement and the transactions contemplated hereby have been entered into and
consummated outside the State of Alabama, such transactions constitute
transactions in interstate commerce, so that neither the Agent nor any of the
Lenders is required, solely by entering into this Agreement and consummating the
transactions contemplated hereby, to qualify to do business as a foreign
corporation within the State of Alabama. Notwithstanding the foregoing, however,
the Borrower hereby irrevocably waives all rights that it may have to raise, in
any action brought by any of the Lenders or the Agent to enforce the rights of
the Lenders and the Agent hereunder or under any of the other Loan Documents, or
the obligations of the Borrower hereunder or thereunder, any defense which is
based upon the failure of any of the Lenders or the Agent to qualify to do
business as a foreign corporation in the State of Alabama, including, but not
limited to, any defenses based upon ss. 232 of the Alabama Constitution of 1901,
ss. 10-2A-247 of the Code of Alabama (1975) or ss. 40-14-4 of the Code of
Alabama (1975), or any successor provision to any thereof. The foregoing waiver
is made knowingly and voluntarily and is a material inducement for the Agent and
the Lenders to enter into the transactions contemplated by this Agreement or any
of the other Loan Documents.
SECTION 10.10 Termination. The termination of this Agreement shall not
affect any rights of the Borrower, the Lenders or the Agent or any obligation of
the Borrower, the Lenders or the Agent, arising prior to the effective date of
such termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into or rights created or obligations incurred
prior to such termination have been fully disposed of, concluded or liquidated
and the Credit Obligations arising prior to or after such termination have been
irrevocably paid in full. The security interests, liens and rights granted to
the Agent for the benefit of the Lenders hereunder and under the other Loan
Documents shall continue in full force and effect, notwithstanding the
termination of this Agreement, until all of the Credit Obligations have been
paid in full after the termination hereof or the Borrower has furnished the
Lenders and the Agent with an indemnification satisfactory to the Agent and each
Lender with respect thereto. All representations, warranties, covenants, waivers
and agreements contained herein shall survive termination hereof until payment
in full of the Credit Obligations unless otherwise provided herein.
Notwithstanding the foregoing, if after receipt of any payment of all or any
part of the Obligations, any Lender is for any reason compelled to surrender
such payment to any Person because such payment is determined to be void or
voidable as a preference, impermissible setoff, a diversion of trust funds or
for any other reason, this Agreement shall continue in full force and the
Borrower shall be liable to, and shall indemnify and hold such Lender harmless
for, the amount of such payment surrendered until such Lender shall have been
finally and irrevocably paid in full. The provisions of the foregoing sentence
shall be and remain effective notwithstanding any contrary action which may have
been taken by the Lenders in reliance upon such payment, and any such contrary
action so taken shall be without prejudice to the Lenders' rights under this
Agreement and shall be deemed to have been conditioned upon such payment having
become final and irrevocable.
SECTION 10.11 Governing Law. All documents executed pursuant to the
transactions contemplated herein, including, without limitation, this Agreement
and each of the Loan Documents shall be deemed to be contracts made under, and
for all purposes shall be construed in accordance with, the internal laws and
judicial decisions of the State of North Carolina; provided that this Section
10.11 shall not affect the applicability of, and interpretation or construction
of appropriate terms and provisions under the Uniform Commercial Code of any
jurisdiction which govern the security interests in any of the Collateral. The
Borrower hereby submits to the jurisdiction and venue of the state and federal
courts of North Carolina for the purposes of resolving disputes hereunder or
arising out of the transaction contemplated hereby or for the purposes of
collection.
SECTION 10.12 Indemnification. In consideration of the execution and
delivery of this Agreement by the Agent and each Lender and the extension of the
Commitments, and so long as the Agent and Lenders have fulfilled their
obligations hereunder, the Borrower hereby indemnifies, exonerates and holds the
Agent and each Lender and each of their respective officers, directors,
employees and agents (collectively, the "Indemnified Parties") free and harmless
from and against any and all actions, causes of action, claims, suits, losses,
costs, liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action for
which indemnification hereunder is sought), including reasonable attorneys' fees
and disbursements (collectively, the "Indemnified Liabilities"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to any of the following:
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan or
supported by any Letter of Credit;
(b) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties;
(c) provided Lenders have no ownership interest in real
property of Borrower, any investigation, litigation or proceeding
related to any environmental cleanup, audit, compliance or other matter
relating to the protection of the environment or the release by the
Borrower or any of its Participating Subsidiaries or Participating
Partnerships of any hazardous waste material; or
(d) provided Lenders have no ownership interest in real
property of Borrower, the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releases from,
any real property owned or operated by the Borrower or any Subsidiary
or Controlled Partnership thereof of any hazardous waste material
(including any losses, liabilities, damages, injuries, costs, expenses
or claims asserted or arising under any environmental laws), regardless
of whether caused by, or within the control of, the Borrower or such
Participating Subsidiary or Participating Partnerships,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's
negligence or willful misconduct, and if and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.
SECTION 10.13 Agreement Controls. In the event that any term of any of
the Loan Documents other than this Agreement conflicts with any term of this
Agreement, the terms and provisions of this Agreement shall control.
SECTION 10.14 Integration. This Agreement and the Loan Documents
represent the final agreement between the parties and may not be contradicted by
evidence of prior, contemporaneous, or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the parties.
SECTION 10.15 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that the Borrower may not assign or
transfer its rights or obligations hereunder without the prior written consent
of the Agent and all Lenders. The Agent and the Lenders may assign or transfer
their interest hereunder but only as provided herein.
SECTION 10.16 Severability. If any provision of this agreement or the
other Loan Documents shall be determined to be illegal or invalid as to one or
more of the parties hereto, then such provision shall remain in effect with
respect to all parties, if any, as to whom such provision is neither illegal nor
invalid, and in any event all other provisions hereof shall remain effective and
binding on the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
HEALTHSOUTH REHABILITATION
CORPORATION
ATTEST:
By: /s/ Stacy H. Pulliam By: /s/ C. Drew Demaray
____________________ _______________________________
Stacy H. Pulliam C. Drew Demaray
Assistant Secretary Vice President
NATIONSBANK OF NORTH CAROLINA,
NATIONAL ASSOCIATION, as Agent
for the Lenders
By: /s/ Douglas E. Coltharp
________________________________
Name: Douglas E. Coltharp
Title: Senior Vice President
COMMITMENT: NATIONSBANK OF NORTH CAROLINA,
$75,000,000 NATIONAL ASSOCIATION
By: /s/ Douglas E. Coltharp
________________________________
Name: Douglas E. Coltharp
Title: Senior Vice President
Lending Office:
100 South Tryon Street
Charlotte, North Carolina 28255
Wire Transfer Instructions:
NationsBank of North Carolina,
National Association
Charlotte, North Carolina
ABA #053000196
Reference: HEALTHSOUTH
Rehabilitation Corporation
Attention: Agency Services
Margaret Lydon
COMMITMENT: THE BANK OF NOVA SCOTIA
$50,000,000
By:________________________________
Title: Representative
Lending Office:
The Bank of Nova Scotia
Atlanta Agency
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Wire Transfer Instructions:
The Bank of Nova Scotia
The Bank of Nova Scotia,
New York Agency
ABA # 026002532
For Further Credit to Account
0606634 Atlanta Agency
Attention: HEALTHSOUTH
COMMITMENT: AMSOUTH BANK, N.A.
$15,000,000
By:________________________________
Title: Senior Vice President
Lending Office:
AmSouth Bank, N.A.
1900 5th Avenue
Birmingham, Alabama
Wire Transfer Instructions:
AmSouth Bank, N.A.
Birmingham, Alabama
ABA #062000019
Reference: Acct # 50214327
HEALTHSOUTH
Attention: Lisa Mann
COMMITMENT: NATIONAL CITY BANK, KENTUCKY
$40,000,000
By:________________________________
Title: Senior Vice President
Lending Office:
101 S. Fifth Street, 8th Floor
Louisville, Kentucky 40202
Wire Transfer Instructions:
National City Bank, Kentucky
Louisville, Kentucky
ABA # 0830-0005-6
Reference: HEALTHSOUTH
Attention: Sandy Walker
COMMITMENT: FIRST UNION NATIONAL BANK OF
$50,000,000 NORTH CAROLINA
By:________________________________
Title: Vice President
Lending Office:
One First Union Plaza
Charlotte, North Carolina 28288-0735
Wire Transfer Instructions:
First National Union Bank of
North Carolina
Charlotte, North Carolina
ABA # 053000219
Acct # 465906 0001802
Reference: HEALTHSOUTH
Attention: Sue Patterson
COMMITMENT: WACHOVIA BANK OF GEORGIA, N.A.
$45,000,000
By:________________________________
Title: Vice President
Lending Office:
Wachovia Bank of Georgia
Atlanta, Georgia
Wire Transfer Instructions:
Wachovia Bank of Georgia, N.A.
Atlanta, Georgia
ABA #061000010
Acct # 18-800-621
Reference: HealthSouth
Attention: Claudia Lamie
COMMITMENT: PNC BANK, KENTUCKY, INC.
$40,000,000
By:________________________________
Title:_____________________________
Lending Office:
PNC Bank, Kentucky, Inc.
Louisville, Kentucky
Wire Transfer Instructions:
PNC Bank, Kentucky, Inc.
Louisville, Kentucky
ABA #083-000-108
Reference: HEALTHSOUTH
Attention: Patricia Jarvis
COMMITMENT: THE DAIWA BANK, LIMITED
$20,000,000
By:________________________________
Title:_____________________________
By:________________________________
Title:_____________________________
Lending Office:
Daiwa Bank, Chicago Branch
Chicago, Illinois
Wire Transfer Instructions:
The Daiwa Bank, Limited
Chicago Branch
Chicago, Illinois
ABA #071006075
Reference: HealthSouth
Attention: Maria Martinez
COMMITMENT: THE BANK OF TOKYO, LTD.,
$20,000,000 Atlanta Agency
By:________________________________
Title:_____________________________
Lending Office:
The Bank of Tokyo, Ltd.
New York, New York
Wire Transfer Instructions:
The Bank of Tokyo, Ltd.
New York, New York
ABA #0260-0963-2
Reference: Payment for
HEALTHSOUTH
Attention: Jan Gilbreath/
Glynnis Slaten
COMMITMENT: MELLON BANK, N.A.
$45,000,000
By:________________________________
Title:_____________________________
Lending Office:
Mellon Bank
Pittsburgh, Pennsylvania 15259
Wire Transfer Instructions:
Mellon Bank, N.A.
Pittsburgh, Pennsylvania 15259
ABA #0430 00261-990873800
Acct # 990873800
Reference: HEALTHSOUTH
Attention: Elaine Washburn
COMMITMENT: HIBERNIA NATIONAL BANK
$20,000,000
By:________________________________
Title:_____________________________
Lending Office:
New Orleans, Louisiana
Wire Transfer Instructions:
Hibernia National Bank
New Orleans, Louisiana
ABA # 065000090
Acct # 0520-36615
National Accounts
Reference: HEALTHSOUTH
Attention: Hal Hopson
COMMITMENT: THE BANK OF CALIFORNIA, N.A.
$20,000,000
By:________________________________
Title:_____________________________
Lending Office:
Los Angeles, California 90071
Wire Transfer Instructions:
The Bank of California, N.A.
San Francisco, California
ABA # 121000015
Acct # 001-060-235
Reference: HEALTHSOUTH
Attention: Hisako Sakamoto
COMMITMENT: COOPERATIVE CENTRALE RAIFFEISEN-
$35,000,000 BOERENLEENBANK, B.A.
"RaboBank Nederland, New York Branch"
By:________________________________
Title:_____________________________
Lending Office:
New York, New York 10167
Wire Transfer Instructions:
Bank of New York
New York, New York
ABA # 021000018
For the Account of RaboBank
Acct # 8026002533
Reference: HEALTHSOUTH
Attention: Corporate Services
COMMITMENT: SHAWMUT BANK CONNECTICUT, N.A.
$20,000,000
By:________________________________
Title:_____________________________
Lending Office:
Hartford, Connecticut
Wire Transfer Instructions:
Shawmut Bank Connecticut, N.A.
Hartford, Connecticut
ABA # 011900445
Acct # 00-6612-7761
Reference: HEALTHSOUTH
Attention: Sandy Sousa
COMMITMENT: THIRD NATIONAL BANK
$15,000,000
By:______________________________
Title:___________________________
Lending Office:
201 4th Avenue N.
Nashville, Tennessee
Wire Transfer Instructions:
ABA # 064000046
Acct # 680040009990348
Reference: HEALTHSOUTH
Attention: Leigh Ann Gregory
COMMITMENT: TORONTO DOMINION BANK
$40,000,000
By:______________________________
Title:___________________________
Lending Office:
31 West 52nd Street
New York, New York
Wire Transfer Instructions:
Morgan Guaranty Trust Co.
New York, New York
ABA # 021000238
Credit: Toronto Dominion Bank,
New York Branch
Acct # 630-00-271
Favor: TD Houston
Acct # 2159251
Reference: HEALTHSOUTH
Attention: Jano Mott
Amended and Restated
Credit Agreement
Among
HEALTHSOUTH Rehabilitation Corporation
and
Nationsbank of North Carolina
National Association
A. Lenders and Commitment Percentages
B. Form of Assignment and Acceptance
C-1. Partnership Guaranty Agreement
C-2. Subsidiary Guaranty Agreement
D. Form of Request for Advance on Interest Rate Election
E. Form of Competitive Bid Quete Request
F. Form of Competitive Bid Quete
G. Participating Subsidiaries and Participating Partnership
H-1. Form of Syndicated Note
H-2. Form of Competitive Bid Note
I. Form of Compliance Certificate
J. Summary of Insurance
K. Outstanding Letters of Credit
L. Permitted Investors
M. Subsidiaries
N. Existing Liens
O. Disposal Properties