\nSECTION 2.1 Syndicated Loans………………………………………………………………………. 24
\nSECTION 2.2 Advances of Syndicated Loans……………………………………………………………. 25
\nSECTION 2.3 Competitive Bid Loans………………………………………………………………….. 26
\nSECTION 2.4 Payments……………………………………………………………………………… 30
\nSECTION 2.5 Joint and Several Obligations…………………………………………………………… 30
\nSECTION 2.6 Pledge Agreement………………………………………………………………………. 32
\nSECTION 2.7 Prepayment……………………………………………………………………………. 32
\nSECTION 2.8 Notes………………………………………………………………………………… 33
\nSECTION 2.9 Reduction in Revolving Facility…………………………………………………………. 33
\nSECTION 2.10 Unused Fee……………………………………………………………………………. 34
\nSECTION 2.11 Lending Offices……………………………………………………………………….. 34
\nSECTION 2.12 Letter of Credit Borrowings…………………………………………………………….. 34
\nSECTION 2.13 Pro Rata Payments……………………………………………………………………… 38
\nSECTION 2.14 Deficiency Advances……………………………………………………………………. 38
\nSECTION 2.15 Extension of Termination Date…………………………………………………………… 39<\/p>\n ARTICLE III<\/p>\n
INTEREST ON SYNDICATED LOANS<\/p>\n
SECTION 3.1 Applicable Interest Rates………………………………………………………………. 40
\nSECTION 3.2 Procedure for Exercising Interest Rate Options……………………………………………. 40
\nSECTION 3.3 Base Rate…………………………………………………………………………….. 40
\nSECTION 3.4 Fixed Rate……………………………………………………………………………. 41
\nSECTION 3.5 Changes in Syndicated Margin. …………………………………………………………. 41<\/p>\n
ARTICLE IV<\/p>\n
TERMINATION OF LIBOR-BASED RATE AND YIELD PROTECTION<\/p>\n
SECTION 4.1 Suspension of Loans……………………………………………………………………. 42
\nSECTION 4.2 Compensation………………………………………………………………………….. 43
\nSECTION 4.3 Taxes………………………………………………………………………………… 43<\/p>\n
ARTICLE V<\/p>\n
REPRESENTATIONS AND WARRANTIES<\/p>\n
SECTION 5.1 Organization, Powers, Existence, etc…………………………………………………….. 46
\nSECTION 5.2 Authorization of Borrowing, etc…………………………………………………………. 46
\nSECTION 5.3 Liabilities…………………………………………………………………………… 46
\nSECTION 5.4 Taxes………………………………………………………………………………… 47<\/p>\n
i<\/p>\n
SECTION 5.5 Litigation……………………………………………………………………………. 47
\nSECTION 5.6 Agreements……………………………………………………………………………. 47
\nSECTION 5.7 Use of Proceeds……………………………………………………………………….. 47
\nSECTION 5.8 ERISA Requirement……………………………………………………………………… 47
\nSECTION 5.9 Subsidiaries………………………………………………………………………….. 47
\nSECTION 5.10 Principal Place of Business…………………………………………………………….. 48
\nSECTION 5.11 Environmental Laws…………………………………………………………………….. 48
\nSECTION 5.12 Disclosure……………………………………………………………………………. 48
\nSECTION 5.13 Licenses……………………………………………………………………………… 48
\nSECTION 5.14 Title to Properties……………………………………………………………………. 48
\nSECTION 5.15 Status of Loans……………………………………………………………………….. 49<\/p>\n
ARTICLE VI<\/p>\n
GENERAL CONDITIONS OF LENDING<\/p>\n
SECTION 6.1 Representations and Warranties………………………………………………………….. 50
\nSECTION 6.2 No Default……………………………………………………………………………. 50
\nSECTION 6.3 Supporting Documents…………………………………………………………………… 50
\nSECTION 6.4 No Adverse Change……………………………………………………………………… 52
\nSECTION 6.5 Effective Date………………………………………………………………………… 52<\/p>\n
ARTICLE VII<\/p>\n
GENERAL COVENANTS OF THE BORROWER<\/p>\n
SECTION 7.1 Existence, Properties, etc……………………………………………………………… 53
\nSECTION 7.2 Payment of Indebtedness, Taxes, etc……………………………………………………… 53
\nSECTION 7.3 Financial Statements, Reports, etc………………………………………………………. 53
\nSECTION 7.4 Litigation Notice……………………………………………………………………… 55
\nSECTION 7.5 Default Notice………………………………………………………………………… 56
\nSECTION 7.6 Further Assurances…………………………………………………………………….. 56
\nSECTION 7.7 Insurance…………………………………………………………………………….. 56
\nSECTION 7.8 Covenants Regarding Financial Condition………………………………………………….. 56
\nSECTION 7.9 Continuation of Current Business………………………………………………………… 60
\nSECTION 7.10 Management Contracts…………………………………………………………………… 60
\nSECTION 7.11 Cooperation; Inspection of Properties……………………………………………………. 60
\nSECTION 7.12 Use of Proceeds……………………………………………………………………….. 61
\nSECTION 7.13 Limit on Investment in HEALTHSOUTH of
\n Birmingham, Inc……………………………………………………………………….. 61
\nSECTION 7.14 Additional Consolidated Entities………………………………………………………… 61
\nSECTION 7.15 ERISA. ……………………………………………………………………………… 61
\nSECTION 7.16 Priority……………………………………………………………………………… 62<\/p>\n
ARTICLE VIII<\/p>\n
EVENTS OF DEFAULT AND REMEDIES<\/p>\n
SECTION 8.1 Events of Default……………………………………………………………………… 63
\nSECTION 8.2 Agent to Act………………………………………………………………………….. 66
\nSECTION 8.3 Cumulative Rights……………………………………………………………………… 66
\nSECTION 8.4 No Waiver…………………………………………………………………………….. 66
\nSECTION 8.5 Default………………………………………………………………………………. 66<\/p>\n
ii<\/p>\n
SECTION 8.6 Allocation of Proceeds…………………………………………………………………. 67<\/p>\n
ARTICLE IX<\/p>\n
THE AGENT<\/p>\n
SECTION 9.1 Appointment…………………………………………………………………………… 68
\nSECTION 9.2 Attorneys-in-fact……………………………………………………………………… 68
\nSECTION 9.3 Limitation on Liability………………………………………………………………… 68
\nSECTION 9.4 Reliance……………………………………………………………………………… 68
\nSECTION 9.5 Notice of Default……………………………………………………………………… 69
\nSECTION 9.6 No Representations…………………………………………………………………….. 69
\nSECTION 9.7 Indemnification……………………………………………………………………….. 70
\nSECTION 9.8 Lender……………………………………………………………………………….. 70
\nSECTION 9.9 Resignation…………………………………………………………………………… 70
\nSECTION 9.10 Sharing of Payments, etc……………………………………………………………….. 71
\nSECTION 9.11 Fees…………………………………………………………………………………. 71
\nSECTION 9.12 Independent Agreements…………………………………………………………………. 71<\/p>\n
ARTICLE X<\/p>\n
MISCELLANEOUS<\/p>\n
SECTION 10.1 Assignments and Participations…………………………………………………………. 72
\nSECTION 10.2 Notices……………………………………………………………………………… 74
\nSECTION 10.3 No Waiver……………………………………………………………………………. 75
\nSECTION 10.4 Setoff………………………………………………………………………………. 75
\nSECTION 10.5 Survival…………………………………………………………………………….. 76
\nSECTION 10.6 Expenses…………………………………………………………………………….. 76
\nSECTION 10.7 Amendments…………………………………………………………………………… 77
\nSECTION 10.8 Counterparts…………………………………………………………………………. 78
\nSECTION 10.9 Waivers by Borrower…………………………………………………………………… 78
\nSECTION 10.10 Termination………………………………………………………………………….. 78
\nSECTION 10.11 Governing Law………………………………………………………………………… 79
\nSECTION 10.12 Indemnification………………………………………………………………………. 79
\nSECTION 10.13 Agreement Controls……………………………………………………………………. 80
\nSECTION 10.14 Integration………………………………………………………………………….. 80
\nSECTION 10.15 Successors and Assigns………………………………………………………………… 80
\nSECTION 10.16 Severability…………………………………………………………………………. 81
\nSECTION 10.17 Usury Savings Clause………………………………………………………………….. 81<\/p>\n
Exhibit A – Applicable Commitment Percentage
\nExhibit B – Form of Assignment and Acceptance
\nExhibit C-1 – Form of Partnership Guaranty Agreement
\nExhibit C-2 – Form of Subsidiary Guaranty Agreement
\nExhibit D – Form of Request for Advance or Interest Rate
\n Election
\nExhibit E – Form of Competitive Bid Quote Request
\nExhibit F – Form of Competitive Bid Quote
\nExhibit G – Subsidiaries and Controlled Partnerships
\nExhibit H-1 – Form of Syndicated Note
\nExhibit H-2 – Form of Competitive Bid Note<\/p>\n
iii<\/p>\n
Exhibit I – Form of Compliance Certificate and Schedules
\n Thereto
\nExhibit J – Summary of Insurance
\nExhibit K – Outstanding Letters of Credit
\nExhibit L – Investments or Equity Interest
\nExhibit M – Subsidiaries and Controlled Partnerships
\nExhibit N – Existing Liens
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
iv<\/p>\n
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
\n ——————————————–<\/p>\n
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 11,
\n1995 (this “Agreement”) is entered into by and among HEALTHSOUTH CORPORATION
\n(formerly named HEALTHSOUTH Rehabilitation Corporation), a Delaware corporation
\n(the “Borrower”), the Lenders as signatories hereto (the “Lenders”) and
\nNATIONSBANK, N.A. (CAROLINAS) (formerly named NationsBank of North Carolina,
\nNational Association), a national banking association (the “Agent”).<\/p>\n
RECITAL:
\n ——–<\/p>\n
Pursuant to a Credit Agreement dated as of November 20, 1992 as amended
\nby Amendments No. 1 and No. 2 (the “Original Agreement”), the lenders party
\nthereto (the “Original Lenders”) have agreed to make loans and cause to be
\nissued letters of credit all in an aggregate outstanding amount of not to exceed
\n$390,000,000. Pursuant to the terms of the Original Agreement all Participating
\nSubsidiaries and Participating Partnerships (each defined in the Original
\nAgreement) have guaranteed payment of all Credit Obligations (as defined in the
\nOriginal Agreement). In addition, the Borrower, and certain of the Participating
\nSubsidiaries have executed and delivered to the Agent, for the benefit of the
\nLenders, Pledge Agreements conveying the property described therein as security
\nfor the Credit Obligations. At the request of the Borrower, by Amended and
\nRestated Credit Agreement dated June 7, 1994 (the “First Restated Agreement”)
\nthe Borrower, the Agent and certain of the Original Lenders together with
\nadditional lenders (collectively the “Existing Lenders”) amended and restated
\nthe Original Agreement thereby increasing the amount of the credit facility to
\n$550,000,000, changing certain provisions of the Original Agreement and
\nresulting in the addition of certain Participating Subsidiaries. The Borrower
\nhas requested that the First Restated Agreement be further amended and restated
\nin its entirety in order to increase the amount of the credit facility, to
\nfurther change certain of the provisions contained therein and to increase the
\nnumber of lenders participating therein. Accordingly, the Borrower, the Lenders
\nand the Agent agree that the First Restated Agreement is hereby amended and
\nrestated in its entirety as follows, effective as of the Effective Date:<\/p>\n
ARTICLE I
\n ———<\/p>\n
DEFINITIONS
\n ———–<\/p>\n
SECTION 1.1 For the purposes of this Agreement, except as otherwise
\nexpressly provided or unless the context otherwise requires:<\/p>\n
All accounting terms not otherwise defined herein have the
\n meanings assigned to them, and all computations herein provided for
\n shall be made, in accordance with generally accepted accounting
\n principles applied on a consistent basis. All references herein to
\n “GAAP” refer to such principles as they exist at the date of
\n application thereof.<\/p>\n
All references in this instrument to designated “Articles”,
\n “Sections” and other subdivisions are to the designated Articles,
\n Sections and subdivisions of this instrument as originally executed.<\/p>\n
The terms “herein”, “hereof” and “hereunder” and other words
\n of similar import refer to this Agreement as a whole and not to any
\n particular Article, Section or other subdivision.<\/p>\n
The terms “include,” “including” and similar terms shall be
\n construed as if followed by the phrase “without being limited to.”<\/p>\n
All Article and Section captions herein are used for
\n reference only and in no way limit or describe the scope or intent of,
\n or in any way affect, this Agreement.<\/p>\n
Words importing the singular number shall mean and include
\n the plural number and visa versa.<\/p>\n
All recitals set forth in this Agreement are hereby
\n incorporated in the operative provisions of this Agreement.<\/p>\n
No inference in favor of or against either party shall be
\n drawn from the fact that such party or its counsel has drafted any
\n portion hereof.<\/p>\n
The term “person” shall include individual, corporation,
\n partnership, limited liability company, joint venture, association,
\n trust, unincorporated organization and any government or any agency or
\n political subdivision thereof.<\/p>\n
Absolute Rate shall have the meaning assigned to such term
\n in Section 2.3(c)(ii)(D) hereof.<\/p>\n
Absolute Rate Auction shall mean a solicitation of
\n Competitive Bid Quotes setting forth Absolute Rates pursuant
\n to Section 2.3 hereof.<\/p>\n
2<\/p>\n
Absolute Rate Loans shall mean the Competitive Bid Loans the
\n interest rates on which are determined on the basis of Absolute Rates
\n set at Absolute Rate Auctions.<\/p>\n
Acquisition means the acquisition, whether with cash,
\n property, stock or promise to pay all or a portion of a person or a
\n Facility or Facilities of a person, permitted under Section 7.8(a)(12)
\n hereof; provided (i) such Person or Facilities is in the same line of
\n business engaged in by Borrower or its Consolidated Entities, (ii) the
\n person or Facility to be acquired does not oppose the acquisition, and
\n (iii) at the time of giving effect to such Acquisition such person or
\n Facility is a Consolidated Entity.<\/p>\n
Actual\/360 Basis shall mean a method of computing interest
\n or other charges hereunder on the basis of an assumed year of 360 days
\n for actual number of days elapsed, meaning that interest or other
\n charges accrued for each day will be computed by multiplying the rate
\n applicable on that day by the unpaid principal balance (or other
\n relevant sum) on that day and dividing the result by 360.<\/p>\n
Advance means a borrowing under the Revolving Facility
\n consisting of the aggregate principal amount of a Syndicated Loan or a
\n Competitive Bid Loan.<\/p>\n
Affiliate of any specified person shall mean any other
\n person directly or indirectly controlling or controlled by or under
\n direct or indirect common control with such specified person. For
\n purposes of this definition “control” when used with respect to any
\n specified person means the power to direct the management and policies
\n of such person, directly or indirectly, whether through the ownership
\n of voting securities, by contract or otherwise; and the terms
\n “controlling” and “controlled” have meanings correlative to the
\n foregoing.<\/p>\n
Applicable Commitment Percentage means, for each Lender, a
\n fraction, the numerator of which shall be the then amount of such
\n Lender’s Commitment and the denominator of which shall be the Revolving
\n Facility, which Applicable Commitment Percentage for each Lender as of
\n the Closing Date is as set forth in Exhibit A attached hereto and
\n incorporated herein by reference; provided that the Applicable
\n Commitment Percentage of each Lender shall be increased or decreased to
\n reflect any assignments to or by such Lender effected in accordance
\n with Section 10.1 hereof.<\/p>\n
Applicable Lending Office shall mean, for each Lender and
\n for each Type of Loan, the “Lending Office” of such Lender (or of an
\n Affiliate of such Lender) designated for such Type of Loan on the
\n signature pages hereof or such other office of such Lender (or of an
\n Affiliate of such Lender) as such Lender may from time to time specify
\n to the Agent and the Borrower as the office by which its Loans of such
\n Type are to be made and maintained.<\/p>\n
3<\/p>\n
Application shall mean the Application and Agreement for
\n Letter of Credit pursuant to which the Borrower may apply for the
\n issuance of a Letter of Credit by NationsBank as provided in Section
\n 2.12 hereof.<\/p>\n
Assignment and Acceptance shall mean an Assignment and
\n Acceptance in the form of Exhibit B (with blanks appropriately filled
\n in) delivered in connection with an assignment of a portion of the
\n Lender’s interest under this Agreement pursuant to Section 10.1.<\/p>\n
Base Rate shall mean the higher of (i) the Prime Rate or
\n (ii) the Federal Funds Effective Rate plus 1\/2% per annum.<\/p>\n
Base Rate Loans shall mean Syndicated Loans that bear
\n interest at rates based upon the Base Rate.<\/p>\n
Business Day shall mean (a) any day on which commercial
\n banks are not authorized or required to close in Charlotte, North
\n Carolina and New York City and (b) if such day relates to the giving of
\n notices or quotes in connection with a LIBOR Auction or to a borrowing
\n of, a payment or prepayment of principal of or interest on, a
\n Conversion of or into, or an Interest Period for, a LIBOR Loan or a
\n LIBOR Market Loan or a notice by the Borrower with respect to any such
\n borrowing, payment, prepayment, Conversion or Interest Period, any day
\n on which dealings in Dollar deposits are carried out in the London
\n interbank market.<\/p>\n
Capital Expenditure shall mean any expenditure or liability
\n that is properly charged to a capital account or otherwise capitalized
\n on the consolidated balance sheet in accordance with GAAP and Cost of
\n Acquisition. There shall not be included as a Capital Expenditure the
\n portion of the purchase price of any Acquisition which is paid for with
\n Capital Stock of the Borrower.<\/p>\n
Capital Stock of any person means any and all shares, rights
\n to purchase, warrants or options (whether or not currently
\n exercisable); participation or other equivalents of or interest in
\n (however designated) the equity (including without limitation common
\n stock, preferred stock and partnership and joint venture interests) of
\n such Person (excluding any debt securities that are convertible into,
\n or exchangeable for, such equity).<\/p>\n
Capitalized Lease Obligations of any person means the
\n obligation of such person to pay rent or other amounts under a lease
\n that is required to be capitalized for financial reporting purposes in
\n accordance with GAAP, and the amount of such obligation shall be the
\n capitalized amount thereof determined in accordance with GAAP.<\/p>\n
Class shall have the meaning assigned to such term in
\n Section 1.2 hereof.<\/p>\n
4<\/p>\n
Closing Date shall mean the date of this Agreement.<\/p>\n
Collateral shall mean all property covered by the Pledge
\n Agreements or that otherwise at any time secures any of the Credit
\n Obligations.<\/p>\n
Commitment shall mean, as to each Lender, the obligation of
\n such Lender to make Syndicated Loans pursuant to Section 2.1 hereof in
\n an aggregate amount at any one time outstanding up to but not exceeding
\n the amount set opposite such Lender’s name on the signature pages
\n hereof under the caption “Commitment” (as the same may be limited or
\n reduced at any time or from time to time pursuant to Section 2.5(a) and
\n Section 2.9 hereof); provided that the Commitment of each Lender shall
\n be increased or decreased to reflect any assignments to or by such
\n Lender effected in accordance with Section 10.1 hereof.<\/p>\n
Common Stock means the common stock, par value $.01 per
\n share, of the Borrower.<\/p>\n
Competitive Bid Borrowing shall have the meaning assigned to
\n such term in Section 2.3(b) hereof.<\/p>\n
Competitive Bid Loans shall mean the Loans provided for by
\n Section 2.3 hereof.<\/p>\n
Competitive Bid Notes shall mean the promissory notes
\n provided for by Section 2.8(b) hereof and all promissory notes
\n delivered in substitution or exchange therefor, in each case as the
\n same shall be modified and supplemented and in effect from time to
\n time.<\/p>\n
Competitive Bid Quote shall mean an offer in accordance with
\n Section 2.3(c) hereof by a Lender to make a Competitive Bid Loan with
\n one single specified interest rate.<\/p>\n
Competitive Bid Quote Request shall have the meaning
\n assigned to such term in Section 2.3(b) hereof.<\/p>\n
Compliance Certificate shall have the meaning attributed to
\n that term in Section 7.3(3) below.<\/p>\n
Consolidated Amortization Expense of the Borrower for any
\n period means the amortization expense of the Borrower and its
\n Consolidated Entities for such period (to the extent included in the
\n computation of Consolidated Net Income), determined on a consolidated
\n basis in accordance with GAAP.<\/p>\n
Consolidated Cash Flow means, for Borrower and its
\n Consolidated Entities for any Four-Quarter Period, Consolidated Net
\n Income, plus amounts that have been deducted in determining
\n Consolidated Net Income for such period for (i) Consolidated Income Tax
\n Expense, (ii) Consolidated Interest Expense, (iii) Consolidated
\n Depreciation Expense, (iv) Consolidated Amortization Expense, (v) the
\n minority interests<\/p>\n
5<\/p>\n
of any person or persons in Consolidated Entities and (vi) for periods
\n ending (a) on or before June 30, 1995 the lesser of the sum of up to
\n $45,000,000 (representing expenses related to Borrower’s acquisition of
\n certain rehabilitation facilities and related assets of NovaCare
\n Rehabilitation Hospital Division and the acquisition of Surgical Health
\n Corporation) or the actual amount of such expenses and (b) after June
\n 30, 1995, without duplication, any amounts, net of Federal income tax
\n effects, representing expenses relating to an Acquisition, up to a
\n maximum of 10% of the Cost of Acquisition thereof, determined on a
\n consolidated basis in accordance with GAAP.<\/p>\n
Consolidated Current Maturities means Principal Maturities
\n of the Borrower and its Consolidated Entities.<\/p>\n
Consolidated Depreciation Expense of the Borrower means the
\n depreciation expense of the Borrower and its Consolidated Entities for
\n such period (to the extent included in the computation of Consolidated
\n Net Income of the Borrower), determined on a consolidated basis in
\n accordance with GAAP.<\/p>\n
Consolidated Entity shall mean any person whose financial
\n statements are appropriately consolidated with the Borrower’s financial
\n statements under GAAP.<\/p>\n
Consolidated Fixed Charge Coverage Ratio means with respect
\n to any Four-Quarter Period the ratio of (A) Consolidated Net Income
\n plus amounts that have been deducted in determining Consolidated Net
\n Income for such period for (i) Consolidated Interest Expense, (ii)
\n Consolidated Depreciation Expense, (iii) Consolidated Lease Expense,
\n (iv) Consolidated Income Tax Expense, (v) Consolidated Amortization
\n Expense, and (vi) for periods ending (a) on or before June 30, 1995 the
\n lesser of the sum of up to $45,000,000 (representing expenses related
\n to Borrower’s acquisition of certain rehabilitation facilities and
\n related assets of NovaCare Rehabilitation Hospital Division and the
\n acquisition of Surgical Health Corporation) or the actual amount of
\n such expenses and (b) after June 30, 1995, without duplication, any
\n amounts, net of Federal income tax effects, representing expenses
\n relating to an Acquisition, up to a maximum of 10% of the Cost of
\n Acquisition thereof, determined on a consolidated basis in accordance
\n with GAAP, less Capital Expenditures to (B) the sum of (i) Consolidated
\n Interest Expense, (ii) Consolidated Lease Expense, (iii) Consolidated
\n Current Maturities, and (iv) Restricted Payments; provided, however,
\n that (x) for the first quarter period calculations of Fiscal Year 1995,
\n Capital Expenditures for the Four-Quarter Period shall be assumed to be
\n $150,000,000, (y) for the second and third quarter period calculations
\n of Fiscal Year 1995, Capital Expenditures for the Four-Quarter Period
\n shall be assumed to be $185,000,000, and (z) the actual 1995 Fiscal
\n Year Capital Expenditures (excluding the Cost of Acquisition of
\n Surgical Health Corporation and NovaCare Rehabilitation Hospital
\n Division) shall be utilized for calculations at the end of the fourth
\n quarter of Fiscal Year 1995. After December 31, 1995, for the<\/p>\n
6<\/p>\n
first three quarters of each Fiscal Year, Capital Expenditures will be
\n assumed to equal the greater of the prior Fiscal Year Capital
\n Expenditures or $185,000,000, with the actual Fiscal Year Capital
\n Expenditures shall be utilized for calculations at the end of the
\n fourth quarter of such Fiscal Year.<\/p>\n
Consolidated Income Tax Expense of the Borrower for any
\n period means the provision for taxes based on income and profits of the
\n Borrower and its Consolidated Entities to the extent such income or
\n profits were included in computing Consolidated Net Income for such
\n period.<\/p>\n
Consolidated Interest Expense of the Borrower for any period
\n means the Interest Expense of the Borrower and its Consolidated
\n Entities for such period, determined on a consolidated basis in
\n accordance with GAAP, but including as Interest Expense lease payments,
\n other than the Headquarters Obligations, made pursuant to the
\n Headquarters Lease.<\/p>\n
Consolidated Lease Expense means for any period all Lease
\n Payments paid or accrued during such period under operating leases
\n (whether or not constituting rental expense) by the Borrower and its
\n Consolidated Entities determined on a consolidated basis in accordance
\n with GAAP, but excluding as Lease Payments lease payments made pursuant
\n to the Headquarters Lease.<\/p>\n
Consolidated Net Income of the Borrower for any period means
\n the net income (or loss) of the Borrower and its Consolidated Entities
\n for such period determined on a consolidated basis in accordance with
\n GAAP, without giving effect to dividends on any series of preferred
\n stock of any Consolidated Entity, whether or not in cash, to the extent
\n such consolidated net income was reduced thereby; provided that there
\n shall be excluded from such net income (for all purposes, other than
\n compliance with Section 7.8(a)(1)(A), to the extent otherwise included
\n therein), without duplication, (i) the net income of any person (other
\n than a Consolidated Entity) to the extent that any such income has not
\n actually been received by the Borrower or a Consolidated Entity in the
\n form of dividends or similar distributions during such period; (ii)
\n except to the extent includable in the consolidated net income of the
\n Borrower or a Consolidated Entity pursuant to the foregoing clause (i),
\n the net income of any person that accrued prior to the date that (a)
\n such Person becomes a Consolidated Entity or is merged into or
\n consolidated with a Consolidated Entity or (b) the assets of such
\n person are acquired by the Borrower or a Consolidated Entity; (iii) the
\n net income of any Consolidated Entity to the extent that the
\n declaration or payment of dividends or similar distributions by such
\n Subsidiary of that income is not permitted by operation of the terms of
\n its charter or any agreement, instrument, judgment, decree, order,
\n statute, rule or governmental regulation applicable to that Subsidiary
\n during such period; (iv) any gain (or loss), together with any related
\n provisions for taxes on any such gain, realized during<\/p>\n
7<\/p>\n
such period by the Borrower or its Consolidated Entities upon (a) the
\n acquisition of any securities, or the extinguishment of any
\n Indebtedness, of the Borrower or its Consolidated Entities or (b) any
\n asset sale by the referent person or any of its Subsidiaries; (v) any
\n extraordinary gain (or extraordinary loss), together with any related
\n provision for taxes or tax benefit resulting from any such
\n extraordinary gain or loss, realized by the Borrower or its
\n Consolidated Entities during such period; and (vi) in the case of a
\n successor to such person by consolidation, merger or transfer of its
\n assets, any earnings of the successor prior to such merger,
\n consolidation or transfer of assets.<\/p>\n
Consolidated Net Worth of the Borrower as of any date means
\n the Consolidated Stockholders’ Equity (including any preferred stock
\n that is classified as equity under GAAP, other than Disqualified Stock)
\n of such person and its Consolidated Entities (excluding any equity
\n adjustment for foreign currency translation for any period subsequent
\n to the Closing Date) on a consolidated basis at such date, as
\n determined in accordance with GAAP, less all write-ups subsequent to
\n the Closing Date in the book value of any asset owned by such Borrower
\n or any of its Consolidated Entities.<\/p>\n
Consolidated Stockholders’ Equity shall mean at any time as
\n at which the amount thereof is to be determined, the sum of the
\n following amounts in respect of the Borrower and the Consolidated
\n Entities (i) the par or stated value of all Capital Stock of the
\n Borrower, (ii) retained earnings, (iii) additional paid in capital,
\n (iv) capital surplus and (v) earned surplus minus treasury stock.<\/p>\n
Consolidated Total Capital shall mean the sum of (i)
\n Consolidated Stockholders’ Equity and (ii) Indebtedness of the Borrower
\n and its Consolidated Entities.<\/p>\n
Controlled Partnership shall mean a general partnership of
\n which the Borrower or a Subsidiary is a general partner (but not
\n including Alabama World Football), or a limited partnership whose
\n general partners include the Borrower or a Subsidiary (but not
\n including Vanderbilt), which partnership, whether general or limited,
\n has assets with a value in excess of $2,000.00, and with respect to
\n which partnership the Borrower or a Subsidiary is entitled to receive
\n not less than 50% of any distributions of cash made to the partners
\n thereof, other than any preferred cash distribution arrangement
\n approved by the Required Lenders in writing.<\/p>\n
Convert, Conversion and Converted shall refer to a
\n conversion pursuant to Section 3.2 hereof of one Type of Syndicated
\n Loan into another Type of Syndicated Loan, which may be accompanied by
\n the transfer by a Lender (at its sole discretion) of a Loan from one
\n Applicable Lending Office to another.<\/p>\n
8<\/p>\n
Convertible Subordinated Debentures means the 5% Convertible
\n Subordinated Debentures due 2001 of the Borrower dated as of March 27,
\n 24, 1994 in the aggregate original principal amount of $115,000,000.<\/p>\n
Costs of Acquisition means the sum of (i) the amount of cash
\n paid by the Borrower and its Consolidated Entities in connection with
\n such Acquisition, (ii) the Fair Market Value of all capital stock or
\n other ownership interests of the Borrower or any Consolidated Entity
\n issued or given in connection with such Acquisition, (iii) the amount
\n (determined by using the face amount or the amount payable at maturity,
\n whichever is greater) of all Indebtedness incurred, assumed or acquired
\n in connection with such Acquisition, (iv) all additional purchase price
\n amounts in the form of earnouts and other contingent obligations that
\n should be recorded on the financial statements of the Borrower and its
\n Consolidated Entities in connection with Generally Accepted Accounting
\n Principles, (v) all amounts paid in respect of covenants not to
\n compete, consulting agreements and other affiliated contracts in
\n connection with such Acquisition and (vi) the aggregate fair market
\n value of all other consideration given by the Borrower and its
\n Consolidated Entities in connection with such Acquisition.<\/p>\n
Credit Obligations shall mean the Revolving Facility
\n Obligations, the Letter of Credit Obligations and all other obligations
\n and debts owing to the Lenders, and arising under the terms of this
\n Agreement, the Notes, the Applications and the other Loan Documents,
\n whether now or hereafter incurred, existing or arising, including the
\n principal amount of all Advances, all Letter of Credit Borrowings and
\n Reimbursement Obligations with respect thereto, any sums expended by
\n the Agent or the Lenders in exercising the rights and remedies
\n described in Section 8.1, all accrued interest on Advances and Letter
\n of Credit Reimbursement Obligations, and all costs, fees, charges and
\n expenses incurred and payable in connection therewith, including fees
\n payable under the terms of, or in connection with, this Agreement, and
\n all other obligations and debts owing to the Agent or the Lenders
\n arising in connection with, ancillary to, or in support of Advances and
\n Letter of Credit Borrowings and all extensions, alterations,
\n modifications, revisions and renewals of any of the foregoing.<\/p>\n
Default shall mean an Event of Default or an event that with
\n notice or lapse of time or both would become an Event of Default.<\/p>\n
Disqualified Stock means any Capital Stock that, by its
\n terms (or by the terms of any security into which it is convertible or
\n for which it is exchangeable), or upon the happening of any event,
\n matures or is mandatorily redeemable, pursuant to a sinking fund
\n obligation or otherwise, or is redeemable at the option of the holder
\n thereof, in whole or in part, on or prior to the Maturity Date.<\/p>\n
9<\/p>\n
Dollars and the symbol $ shall mean dollars constituting
\n legal tender for the payment of public and private debts in the United
\n States of America.<\/p>\n
Effective Date means the date on which (i) the Agent shall
\n receive from the Borrower the fees payable pursuant to the letter dated
\n April 6, 1995 from the Agent to the Borrower and (ii) each Lender shall
\n have received the amount of such fees due it.<\/p>\n
ERISA shall mean the Employee Retirement Income Security Act
\n of 1974, as amended.<\/p>\n
Event of Default shall have the meaning assigned to such
\n term in Article VIII hereof.<\/p>\n
Facility shall mean an in-patient or out-patient
\n rehabilitation facility, a certified out-patient rehabilitation
\n facility, skilled nursing facility, specialty medical center, specialty
\n orthopedic hospital or acute care hospital, sub-acute in-patient
\n facility, transitional living center, medical office building,
\n outpatient surgery center and outpatient diagnostic center with all
\n buildings and improvements associated therewith, that is owned or
\n leased, in whole or part, by the Borrower or a Subsidiary or any
\n partnership controlled directly or indirectly by the Borrower.<\/p>\n
Fair Market Value shall mean, with respect to any capital
\n stock or other ownership interests issued or given by the Borrower or
\n any Consolidated Entity in connection with an Acquisition, (i) in the
\n case of capital stock that is Common Stock and such Common Stock is
\n then designated as a national market system security by the National
\n Association of Securities Dealers, Inc. (“NASDAQ”) or is listed on a
\n national securities exchange, the average of the last reported bid and
\n ask quotations or prices reported thereon for Common Stock or such
\n other value as may be ascribed to the Common Stock in a definitive
\n merger or acquisition agreement provided such value is determined
\n according to customary methods for like transactions and is approved
\n (to the extent required by Borrower’s charter or bylaws) by the
\n Borrower’s Board of Directors or (ii) in the case of capital stock that
\n is not Common Stock or in the event that Common Stock is not so
\n designated on NASDAQ or listed on such national exchange, or in the
\n case of any other ownership interests, the determination of the fair
\n market value thereof in good faith by a majority of disinterested
\n members of the board of directors of the Borrower or such Consolidated
\n Entity, in each case effective as of the close of business on the
\n Business Day immediately preceding the closing date of such
\n Acquisition.<\/p>\n
Federal Funds Effective Rate shall mean, for any day, the
\n rate per annum (rounded upwards, if necessary, to the nearest 1\/100 of
\n 1%) equal to the weighted average of the rates on overnight Federal
\n funds transactions with members of the Federal Reserve System arranged
\n by Federal funds brokers<\/p>\n
10<\/p>\n
on such day, as published by the Federal Reserve Bank of New York on
\n the Business Day next succeeding such day, provided that (a) if the day
\n for which such rate is to be determined is not a Business Day, the
\n Federal Funds Effective Rate for such day shall be such rate on such
\n transactions on the next preceding Business Day as so published for any
\n Business Day, and (b) if such rate is not so published for any Business
\n Day, the Federal Funds Effective Rate for such Business Day shall be
\n the average rate charged to the Agent on such Business Day on such
\n transactions as determined by the Agent.<\/p>\n
Fiscal Year means the twelve month period of the Borrower
\n commencing on January 1 of each calendar year and ending December 31 of
\n each calendar year.<\/p>\n
Fixed Rate shall mean the Absolute Rate or the LIBOR- Based
\n Rate.<\/p>\n
Fixed Rate Segment shall mean a Segment to which a Fixed
\n Rate is (or is proposed to be) applicable.<\/p>\n
Four-Quarter Period means a period of four full consecutive
\n fiscal quarter periods, taken together as one accounting period;
\n provided, however, for purposes of Section 7.8(a)(2) and 7.8(a)(4) for
\n periods prior to December 31, 1995 the results of operations shall be
\n determined for the four-quarter period ending on the last day of (i)
\n the first quarter of Fiscal Year 1995 by multiplying the results of
\n operation for the first quarter by four (4), (ii) the second quarter of
\n Fiscal Year 1995 by multiplying the results of operations for the
\n second quarter by four (4), (iii) the third quarter of Fiscal Year 1995
\n by multiplying the results of the second and third quarters by two (2),
\n and (iv) for the fourth quarter of Fiscal Year 1995 by multiplying the
\n results of operations of the sum of the second, third and fourth
\n quarters by four- thirds (4\/3’s).<\/p>\n
GAAP means generally accepted accounting principles set
\n forth in the opinions and pronouncements of the Accounting Principles
\n Board of the American Institute of Certified Public Accountants and
\n statements and pronouncements of the Financial Accounting Standards
\n Board or in such other statements by such other entity as may be
\n approved by a significant segment of the accounting profession of the
\n United States, as from time to time in effect.<\/p>\n
Governmental Authority shall mean any federal, state, county
\n or municipal agency, authority, department, commission, bureau, board
\n or court.<\/p>\n
Governmental Requirements shall mean all laws, rules,
\n regulations, requirements, ordinances, judgments, decrees, codes and
\n orders of any Governmental Authority applicable to the Borrower, any
\n Consolidated Entity or any Facility.<\/p>\n
11<\/p>\n
Guaranteed Obligations of any person shall mean all
\n guaranties (including guaranties of guaranties and guaranties of
\n dividends and other monetary obligations), endorsement, assumptions and
\n other contingent obligations with respect to, or to purchase or to
\n otherwise pay or acquire, Indebtedness of others; provided, however,
\n that such term shall not include obligations under leases and other
\n contracts initially incurred directly by another person and
\n subsequently directly assumed by the person in question, but such term
\n shall include obligations that, if the same had been initially incurred
\n directly by the person in question, would have constituted Guaranteed
\n Obligations.<\/p>\n
Guaranty Agreements shall have the meaning attributed to
\n that term in Section 2.5(a).<\/p>\n
Headquarters Lease means the Lease Agreement between
\n HEALTHSOUTH Holdings, Inc., as Lessee, and First Security Bank of Utah,
\n N.A., as Lessor, dated as of November 16, 1995 providing for the lease
\n to HEALTHSOUTH Holdings, Inc. of the land and improvements thereon
\n located on the property
\n described on Exhibit O.<\/p>\n
Headquarters Obligations means all of the Holder Advances
\n and Loans, as each such term is defined in the Participation Agreement.<\/p>\n
Hedging Obligations of any person means the obligations of
\n such person pursuant to any interest rate swap agreement, foreign
\n currency exchange agreement, interest rate collar agreement, option or
\n futures contract or other similar agreement or arrangement relating to
\n interest rates or foreign exchange rates.<\/p>\n
Indebtedness of any person at any date means, without
\n duplication: (i) all indebtedness of such person for borrowed money
\n (whether or not the recourse of the lender is to the whole of the
\n assets of such person or only to a portion thereof); (ii) all
\n obligations of such person evidenced by bonds, debentures, notes or
\n other similar instruments; (iii) all obligations of such person in
\n respect of letters of credit or other similar instruments (or
\n reimbursement obligations with respect thereto); (iv) all obligations
\n of such person with respect to Hedging Obligations (other than those
\n that fix the interest rate on variable rate indebtedness otherwise
\n permitted hereunder or that protect the Borrower and or its
\n Consolidated Entities against changes in foreign exchange rates); (v)
\n obligations of such person to pay the deferred and unpaid purchase
\n price of property or services, except trade payables and accrued
\n expenses incurred in the ordinary course of business; (vi) all
\n Capitalized Lease Obligations of such person; (vii) all indebtedness of
\n others secured by a Lien on any assets of such person, whether or not
\n such indebtedness is assumed by such person; (viii) all Guaranteed
\n Obligations; and (ix) the Headquarters Obligations. The amount of
\n Indebtedness of any person at any date shall be the outstanding balance
\n at<\/p>\n
12<\/p>\n
such date of all unconditional obligations as described above, the
\n maximum liability of such person for any such contingent obligations at
\n such date and, in the case of clause (vii), the amount of the
\n Indebtedness secured.<\/p>\n
Interest Expense of any person for any period means the
\n aggregate amount of interest which, in accordance with GAAP, would be
\n set opposite the caption “interest expense” or any like caption on an
\n income statement for such person (including, without limitation or
\n duplication, imputed interest included in Capitalized Lease
\n Obligations, all commissions, discounts and other fees and charges owed
\n with respect to letters of credit and bankers’ acceptance financing,
\n the net costs associated with Hedging Obligations, amortization of
\n financing fees and expenses, the interest portion of any deferred
\n payment obligation, amortization of discount and all other non-cash
\n interest expense other than interest amortized to cost of sales) plus
\n the aggregate amount, if any, by which such interest expense was
\n reduced as a result of the amortization of deferred debt restructuring
\n credits for such period.<\/p>\n
Interest Period shall mean:<\/p>\n
(a) with respect to any LIBOR Loan, each period commencing
\n on the date such LIBOR Loan is made or Converted from a Loan of another
\n Type or the last day of the next preceding Interest Period for such
\n Loan and ending on the numerically corresponding day in the first,
\n second or third calendar month thereafter, as the Borrower may select
\n as provided in Section 3.2 hereof, except that each Interest Period
\n that commences on the last Business Day of a calendar month (or on any
\n day for which there is no numerically corresponding day in the
\n appropriate subsequent calendar month) shall end on the last Business
\n Day of the appropriate subsequent calendar month;<\/p>\n
(b) with respect to any Absolute Rate Loan, the period
\n commencing on the date such Absolute Rate Loan is made and ending on
\n any Business Day up to 180 days thereafter, as the Borrower may select
\n as provided in Section 2.3(b) hereof; and<\/p>\n
(c) with respect to any LIBOR Market Loan, the period
\n commencing on the date such LIBOR Market Loan is made and ending on the
\n numerically corresponding day in the first, second, third or sixth
\n calendar month thereafter, as the Borrower may select as provided in
\n Section 2.3(b) hereof, except that each Interest Period that commences
\n on the last Business Day of a calendar month (or any day for which
\n there is no numerically corresponding day in the appropriate subsequent
\n calendar month) shall end on the last Business Day of the appropriate
\n subsequent calendar month.<\/p>\n
Notwithstanding the foregoing: (i) if any Interest Period for any
\n Competitive Bid Loan would otherwise end after the Termination Date,
\n such Interest Period shall end on the<\/p>\n
13<\/p>\n
Termination Date; (ii) if any Interest Period for any LIBOR Loan would
\n otherwise end after the Termination Date, such Interest Period shall
\n end on the Termination Date; (iii) each Interest Period that would
\n otherwise end on a day which is not a Business Day shall end on the
\n next succeeding Business Day (or, in the case of an Interest Period for
\n a LIBOR Loan or a LIBOR Market Loan, if such next succeeding Business
\n Day falls in the next succeeding calendar month, on the next preceding
\n Business Day); and (iv) notwithstanding clauses (i), (ii) and (iii)
\n above, no Interest Period for any Loan (other than an Absolute Rate
\n Loan) shall have a duration of less than one month (in the case of a
\n LIBOR Loan or a LIBOR Market Loan) and, if the Interest Period for any
\n LIBOR Loan or LIBOR Market Loan would otherwise be a shorter period,
\n such Loan shall not be available hereunder for such period.<\/p>\n
LC Account Agreement shall mean the LC Account Agreement
\n dated as of the date hereof between the Borrower and the Agent, as
\n amended or modified from time to time.<\/p>\n
Lease Payments shall mean all amounts payable under any
\n lease agreement other than obligations under lease agreements that
\n constitute Indebtedness.<\/p>\n
Letter of Credit Borrowings shall mean as of any date the
\n maximum aggregate amount that the Agent could be required to pay under
\n drafts that could properly be drawn in compliance with the terms of all
\n Letters of Credit outstanding on such date, other than drafts that have
\n been drawn and paid and not reimbursed.<\/p>\n
Letter of Credit Commitment shall mean an amount not to
\n exceed $50,000,000.<\/p>\n
Letter of Credit Obligations shall mean (a) the Letter of
\n Credit Borrowings and (b) the Reimbursement Obligations and other
\n obligations under this Agreement and the Applications with respect to
\n drawings made on Letters of Credit, including obligations with respect
\n to all principal, interest, fees and other charges related thereto.<\/p>\n
Letters of Credit shall mean and include all letters of
\n credit heretofore or hereafter issued by NationsBank for the account of
\n the Borrower pursuant to this Agreement.<\/p>\n
Liabilities of any person shall mean obligations that are
\n properly classified as liabilities under GAAP.<\/p>\n
LIBOR Auction shall mean a solicitation of Competitive Bid
\n Quotes setting forth LIBOR Margins based on the LIBOR- Based Rate
\n pursuant to Section 2.3 hereof.<\/p>\n
LIBOR-Based Rate shall mean the rate of interest determined
\n by the Agent at approximately 11:00 A.M. New York time two (2) Business
\n Days prior to the commencement of the Interest Period, based upon such
\n factors as the Agent deems<\/p>\n
14<\/p>\n
relevant, as the Agent’s best estimate of the cost of funds available
\n to the Agent from the purchase on the London interbank market of funds
\n in the form of time deposits in Dollars in the approximate amount of
\n the Segment that is to bear interest at the LIBOR-Based Rate, having a
\n maturity comparable to the Interest Period during which the LIBOR-Based
\n Rate is to be in effect, it being expressly understood that (i) the
\n Agent may not actually purchase any such time deposits and obtain such
\n funds and (ii) the LIBOR-Based Rate will be an estimate, and for a
\n variety of reasons, including changing market conditions, the actual
\n cost of funds to the Agent (if the Agent elects to purchase funds in
\n the form of time deposits on such date) might vary from the Agent’s
\n estimate.<\/p>\n
LIBOR Loans shall mean Syndicated Loans on which interest
\n rates are determined on the basis of LIBOR-Based Rates plus the
\n Syndicated Margin.<\/p>\n
LIBOR Margin shall have the meaning assigned to such term in
\n Section 2.3(c)(ii)(C) hereof.<\/p>\n
LIBOR Market Loans shall mean Competitive Bid Loans interest
\n rates on which are determined on the basis of LIBOR- Based Rates
\n pursuant to a LIBOR Auction.<\/p>\n
LIBOR Reserve Requirement shall mean the percentage
\n (expressed as a decimal) prescribed by the Board of Governors of the
\n Federal Reserve System (or any successor), on the date on which the
\n LIBOR-Based Rate is determined, for determining the reserve
\n requirements of the Agent (including any marginal, emergency,
\n supplemental, special or other reserves) with respect to liabilities
\n relating to time deposits purchased in the London interbank market
\n having a maturity equal to the period during which the LIBOR-Based Rate
\n will be in effect and in an amount equal to the Segment involved,
\n without any benefit or credit for any proration, exemptions or offsets
\n under any now or hereafter applicable regulations.<\/p>\n
Lien shall mean any mortgage, pledge, assignment, charge,
\n encumbrance, lien, security interest or financing lease.<\/p>\n
Loan Documents shall mean this Agreement, the Notes, the
\n Applications, the Subsidiary Guaranty Agreements and amendments
\n thereto, the Partnership Guaranty Agreements and amendments thereto,
\n the Pledge Agreements, the LC Account Agreement and all other
\n agreements, instruments and documents executed or delivered at any time
\n in connection with the Credit Obligations, or to evidence or secure any
\n of the Credit Obligations.<\/p>\n
Loans shall mean the Syndicated Loans, Competitive Bid
\n Loans, Letter of Credit Borrowings and Reimbursement Obligations and
\n all extensions and renewals thereof.<\/p>\n
15<\/p>\n
Margin Stock shall have the meaning attributed to that term
\n in Regulation U of the Federal Reserve Board, as amended.<\/p>\n
Material Group shall mean, at any time, any group, whether
\n one or more, or combination of Consolidated Entities (a) whose assets,
\n in the aggregate, constitute 5% or more of the assets of the Borrower
\n and the Consolidated Entities on a consolidated basis or (b) whose net
\n revenues, in the aggregate, constitute 5% or more of the net revenues
\n of the Borrower and the Consolidated Entities on a consolidated basis.<\/p>\n
Multi-employer Plan means an employee pension benefit plan
\n covered by Title IV of ERISA and in respect of which the Borrower or
\n any Consolidated Entity is an “employer” as described in Section
\n 4001(b) of ERISA, which is also a multi-employer plan as defined in
\n Section 4001(a)(3) of ERISA;<\/p>\n
NationsBank means NationsBank, N.A. (Carolinas), as a Lender
\n and as issuer of the Letters of Credit pursuant to Section 2.13 hereof
\n and any successor thereof.<\/p>\n
Notes shall mean the Syndicated Notes and the Competitive
\n Bid Notes.<\/p>\n
Opinion of Counsel shall mean a favorable written opinion of
\n an attorney or firm of attorneys duly licensed to practice law in the
\n jurisdiction the laws of which are applicable to the legal matters in
\n question and who is not an employee of the Borrower or of an Affiliate
\n of the Borrower.<\/p>\n
Participating Partnership shall mean a Controlled
\n Partnership that (i) all or a portion of an Advance may be used by the
\n Borrower for the benefit of or loaned by the Borrower to such
\n Controlled Partnership and (ii) has executed and delivered to the Agent
\n a Partnership Guaranty Agreement and all other documents necessary to
\n assume joint and several liability as to the Credit Obligations to the
\n extent of its Partnership Liabilities.<\/p>\n
Participating Subsidiary shall mean a Subsidiary that (i)
\n all or a portion of an Advance may be used by the Borrower for the
\n benefit of or loaned by the Borrower to such Subsidiary and (ii) has
\n executed and delivered to the Agent a Subsidiary Guaranty Agreement and
\n all other documents necessary to assume joint and several liability as
\n to the Credit Obligations (in the maximum amount provided for in such
\n Subsidiary Guaranty Agreement).<\/p>\n
Participation shall mean, with respect to any Lender (other
\n than NationsBank), the extension of credit represented by the
\n participation of such Lender hereunder in the liability of NationsBank
\n in respect of a Letter of Credit issued by NationsBank in accordance
\n with the terms hereof.<\/p>\n
16<\/p>\n
Participation Agreement means the Participation Agreement
\n dated November 16, 1995 among HEALTHSOUTH Corporation, as Construction
\n Agent, HEALTHSOUTH Holdings, Inc., as Lessee, First Security Bank of
\n Utah, N.A., as Trustee, the Holders identified therein, the Lenders
\n identified therein, and NationsBank, National Association, as Agent.<\/p>\n
Partnership Liability shall mean, with respect to a
\n Participating Partnership, that part, if any, of an Advance (together
\n with interest thereon and fees, prepayment premiums and other charges
\n properly attributable thereto) that is to be received by and used by or
\n for the benefit of such Participating Partnership, as certified to the
\n Agent by the Borrower, under Section 2.5, in connection with the
\n Borrowers’ request for such Advance, and Partnership Liabilities shall
\n mean the aggregate amount of all such parts of Advances that are to be
\n received by and used by or for the benefit of such Participating
\n Partnership.<\/p>\n
Partnership Guaranty Agreement shall mean a guaranty
\n agreement of a Participating Partnership in the form attached hereto
\n and marked Exhibit C-1, as amended and supplemented from time to time.<\/p>\n
Permitted Encumbrances shall mean:<\/p>\n
(1) taxes, assessments and other governmental charges that
\n are not delinquent or that are being contested in good faith
\n by appropriate proceedings duly pursued;<\/p>\n
(2) mechanics’, materialmen’s, contractor’s, landlord’s or
\n other similar liens arising in the ordinary course of
\n business, securing obligations that are not delinquent or
\n that are being contested in good faith by appropriate
\n proceedings duly pursued;<\/p>\n
(3) restrictions, exceptions, reservations, easements,
\n conditions, limitations and other matters of record other
\n than Liens that do not adversely affect the value or utility
\n of the property;<\/p>\n
(4) Liens in favor of the Agent for the benefit of the
\n Lenders under this Agreement;<\/p>\n
(5) Liens and other matters approved in writing by the
\n Required Lenders; and<\/p>\n
(6) Liens in favor of landlords, the amount secured by which
\n landlords’ Liens, in the aggregate, would not materially
\n adversely affect the Borrower or a Material Group.<\/p>\n
Permitted Investments shall mean:<\/p>\n
17<\/p>\n
(1) direct obligations of, or obligations the payment of
\n which is guaranteed by, the United States of America or an
\n interest in any trust or fund that invests solely in such
\n obligations or repurchase agreements, properly secured, with
\n respect to such obligations.<\/p>\n
(2) direct obligations of agencies or instrumentalities of
\n the United States of America having a rating of A or higher
\n by Standard & Poor’s Corporation or A2 or higher by Moody’s
\n Investors Service, Inc.;<\/p>\n
(3) a certificate of deposit issued by, or other
\n interest-bearing deposits with, a bank having its principal
\n place of business in the United States of America and having
\n equity capital of not less than $250,000,000;<\/p>\n
(4) a certificate of deposit by, or other interest-bearing
\n deposits with, any other bank organized under the laws of
\n the United States of America or any state thereof, provided
\n that such deposit is either (i) insured by the Federal
\n Deposit Insurance Corporation or (ii) properly secured by
\n such bank by pledging direct obligations of the United
\n States of America having a market value not less than the
\n face amount of such deposits;<\/p>\n
(5) the capital stock of and partnership interests in, and
\n loans made by the Borrower to, Controlled Partnerships and
\n Subsidiaries;<\/p>\n
(6) prime commercial paper maturing within 270 days of the
\n acquisition thereof and, at the time of acquisition, having
\n a rating of A-1 or higher by Standard & Poor’s Corporation,
\n or P-1 or higher by Moody’s Investors Service, Inc.;<\/p>\n
(7) eligible banker’s acceptances, repurchase agreements and
\n tax-exempt municipal bonds having a maturity of less than
\n one year, in each case having a rating, or that is the full
\n recourse obligation of a person whose senior debt is rated,
\n A or higher by Standard & Poor’s Corporation or A2 or higher
\n by Moody’s Investors Service, Inc.;<\/p>\n
(8) loans made by the Borrower or a Consolidated Entity in
\n an aggregate amount of $2,000,000 or less to employees of
\n the Borrower or of a Consolidated Entity;<\/p>\n
(9) loans made by the Borrower or a Controlled Partnership
\n in an aggregate amount of $1,000,000 or less to limited
\n partners (or potential limited partners) of Controlled
\n Partnerships for the purpose of enabling such limited
\n partners to acquire limited partnership interests in
\n Controlled Partnerships, to operate their practices or to
\n restructure partnership interests;<\/p>\n
18<\/p>\n
(10) loans in the amount of up to $20,000,000 made by the
\n Borrower to the HEALTHSOUTH Employee Stock Ownership Plan;<\/p>\n
(11) scholarship loans made by the Borrower in an aggregate
\n amount not exceeding $500,000 to individuals who meet
\n certain eligibility requirements as established by the
\n Borrower from time to time;<\/p>\n
(12) up to 100% of the outstanding shares of stock of
\n Caretenders Healthcorp (formerly known as Senior Services,
\n Inc.) provided that aggregate costs incurred to purchase
\n such shares shall not exceed $12,000,000;<\/p>\n
(13) other investments of less than $5,000,000 in the
\n aggregate expressly approved in writing by the Agent and
\n investments of $5,000,000 or greater expressly approved in
\n writing by the Required Lenders;<\/p>\n
(14) any other investment having a rating of A or higher or
\n A-1 or higher by Standard & Poor’s Corporation or A2 or
\n higher or P-1 or higher by Moody’s Investors Service, Inc.;<\/p>\n
(15) loans to health care practitioners and other persons
\n not to exceed in the aggregate $5,000,000;<\/p>\n
(16) investments in Wellmark, HEALTHSMART, MedPartners and
\n Austin Medical Office Building which in the aggregate do not
\n exceed $3,500,000; and<\/p>\n
(17) additional investments existing on the Closing Date and
\n described in Exhibit L.<\/p>\n
Pledge Agreement shall have the meaning attributed to that
\n term in Section 2.6.<\/p>\n
Prime Rate shall mean that rate of interest designated by
\n the Agent from time to time as its “prime rate”, it being expressly
\n understood and agreed that its prime rate is merely an index rate used
\n by the Agent to establish lending rates and is not necessarily the
\n Agent’s most favorable lending rate, and that changes in the Agent’s
\n prime rate are discretionary with the Agent. Any change in the Prime
\n Rate shall be effective as of the date of such change.<\/p>\n
Principal Maturities shall mean principal maturing or coming
\n due on Indebtedness during the next succeeding period of 12 calendar
\n months.<\/p>\n
Principal Office shall mean the principal office of the
\n Agent located at One Independence Center, 101 North Tryon Street,
\n Charlotte, North Carolina 28255.<\/p>\n
Reimbursement Obligation shall mean at any time, the
\n obligation of the Borrower with respect to any Letter of<\/p>\n
19<\/p>\n
Credit to reimburse NationsBank and the Lenders to the extent of their
\n respective Participations (including by the receipt by NationsBank of
\n proceeds of Loans pursuant to Section 2.1(b) hereof) for amounts
\n theretofore paid by NationsBank pursuant to a drawing under such Letter
\n of Credit.<\/p>\n
Request for Advance or Interest Election shall have the
\n meaning attributed to that term in Section 2.2.<\/p>\n
Required Lenders shall mean Lenders having at least 51% of
\n the aggregate amount of the Commitments or, if the Commitments shall
\n have terminated, Lenders holding at least 51% of the aggregate unpaid
\n principal amount of the Loans, provided that if any Lender shall have
\n failed to fund its portion of any Syndicated Loan pursuant to Section
\n 2.1 and the Agent or NationsBank has made such Loan on such Lender’s
\n behalf, NationsBank shall be deemed the holder of such portion of such
\n Lender’s Commitment for purposes of this definition.<\/p>\n
Restricted Payments means dividends (other than dividends
\n payable exclusively in the form of capital stock) or any other
\n stockholder distributions to the shareholders of the Borrower or
\n redemptions or purchases of the common or preferred stock of Borrower
\n or any principal payments of Subordinated Indebtedness.<\/p>\n
Revolving Facility shall mean the credit facility made
\n available to the Borrower by the Lenders under the terms of Article II
\n in an aggregate amount of up to $1,000,000,000 as limited pursuant to
\n Section 2.5(a) and as reduced by Borrower pursuant to Section 2.9
\n hereof.<\/p>\n
Revolving Facility Obligations shall mean the outstanding
\n principal amount of all Advances, all interest accrued thereon, all
\n costs, charges, fees and expenses payable in connection therewith, and
\n all extensions and renewals thereof.<\/p>\n
Sale and Leaseback Transaction means, with respect to any
\n person, an arrangement with any bank, insurance company or other lender
\n or investor or to which such lender or investor is a party, providing
\n for the leasing by such person or any of its Subsidiaries of any
\n property or asset of such person or any of its Subsidiaries which has
\n been or is being sold or transferred by such person or such Subsidiary
\n to such lender or investor or to any person to whom funds have been or
\n are to be advanced by such lender or investor on the security of such
\n property or asset.<\/p>\n
Segment shall mean a portion of the Advances (or all
\n thereof) with respect to which a particular interest rate is (or is
\n proposed to be) applicable.<\/p>\n
Senior Indebtedness means the Credit Obligations and that
\n Indebtedness permitted to be incurred pursuant to Section 7.8(a)(5)(B),
\n (D), (E) and (H) hereof.<\/p>\n
20<\/p>\n
Senior Subordinated Notes means the 9.5% Senior Subordinated
\n Notes due 2001 of the Borrower in the aggregate original principal
\n amount of $250,000,000.<\/p>\n
Single Employer Plan means any employee pension benefit plan
\n covered by Title IV of ERISA and in respect of which the Borrower or
\n any Consolidated Entity is an “employer” as described in Section
\n 4001(b) of ERISA, which is not a Multi- employer Plan;<\/p>\n
Subordinated Indebtedness means the Senior Subordinated
\n Notes, the Convertible Subordinated Debentures and any other
\n Indebtedness incurred pursuant to Section 7.8(a)(5)(F) hereof to
\n refinance the Senior Subordinated Notes or the Convertible Subordinated
\n Debentures.<\/p>\n
Subsidiary shall mean any corporation, more than 50% of the
\n shares of stock of which having general voting power under ordinary
\n circumstances to elect the board of directors, managers or trustees of
\n such corporation, irrespective of whether or not at the time stock of
\n any other class or classes shall have or might have voting power by
\n reason of the happening of any contingency, which is owned or
\n controlled directly or indirectly by the Borrower and which has either
\n assets with a value exceeding $2,000 or positive annual operating
\n income.<\/p>\n
Subsidiary Guaranty Agreement shall mean a guaranty
\n agreement of a Participating Subsidiary in the form attached hereto and
\n marked Exhibit C-2, as amended and supplemented from time to time.<\/p>\n
Surgical Health means Surgical Health Corporation, a
\n Delaware corporation, its Subsidiaries and its Controlled Partnerships.<\/p>\n
Surgical Health Subordinated Indebtedness means the 11.5%
\n Senior Subordinated Notes due July 15, 2004 in the original principal
\n amount of $75,000,000 issued by Surgical
\n Health.<\/p>\n
Syndicated Loans shall mean the loans provided for by
\n Section 2.1 hereof, which may be Base Rate Loans or LIBOR Loans.<\/p>\n
Syndicated Margin means that percent per annum set forth
\n below in the case of a LIBOR Loan, which percent shall be the
\n Syndicated Margin effective on the date of delivery to the Agent of a
\n Compliance Certificate pursuant to Section 7.3(3) for the fiscal
\n quarter period as at the end of which the ratio of Indebtedness of the
\n Borrower and its Consolidated Entities to Consolidated Cash Flow is
\n greater than or equal to or less than, as the case may be, the ratio
\n set forth opposite such Syndicated Margin:<\/p>\n
21<\/p>\n
Syndicated Margin
\n —————–
\n Ratio Rate
\n —– —-<\/p>\n
(a) Greater than or equal to 1 3\/8%
\n 4.25 to 1.00<\/p>\n
(b) Less than 4.25 to 1.00 but 1 1\/8%
\n equal to or greater than
\n 3.75 to 1.00<\/p>\n
(c) Less than 3.75 to 1.00 but 7\/8%
\n equal to or greater than
\n 3.00 to 1.00<\/p>\n
(d) Less than 3.00 to 1.00 but 5\/8%
\n equal to or greater than
\n 2.00 to 1.00<\/p>\n
(e) Less than 2.00 to 1.00 but 1\/2%
\n equal to or greater than
\n 1.50 to 1.00<\/p>\n
(f) Less than 1.50 to 1.00 3\/8%<\/p>\n
Notwithstanding the foregoing, during the period from the Closing Date
\n through the date of delivery of a Compliance Certificate for the
\n quarter period ended June 30, 1995 the Syndicated Margin shall be 1
\n 1\/4%. For the purpose of calculating the amount of Indebtedness at
\n September 30, 1995, the actual amount of outstanding Indebtedness at
\n September 30, 1995 shall be reduced by $319,000,000.<\/p>\n
Syndicated Notes shall mean the promissory notes provided
\n for by Section 2.8 hereof and all promissory notes delivered in
\n substitution or exchange thereof, in each case as the same shall be
\n modified and supplemented and in effect from time to time.<\/p>\n
Termination Date means (a) the earlier of (i) October 1,
\n 2000, or (ii) such date as the Borrower may voluntarily terminate the
\n Revolving Facility by payment in full all Credit Obligations and the
\n termination of all Commitments, or (iii) the occurrence of an Event of
\n Default.<\/p>\n
Type shall have the meaning assigned to such term in Section
\n 1.2 hereof.<\/p>\n
Unused Amount shall mean with respect to each Lender, (a)
\n the Commitment of such Lender less (b) such Lender’s pro rata share of
\n outstanding Syndicated Loans and Letter of Credit Obligations less (c)
\n the outstanding principal amount of all Competitive Bid Loans then held
\n by such Lender.<\/p>\n
Unused Margin means that percent per annum set forth below,
\n which percent shall be the Unused Margin effective upon<\/p>\n
22<\/p>\n
the date of delivery to the Agent of a Compliance Certificate pursuant
\n to Section 7.7(3) for the fiscal quarter as at the end of which the
\n ratio of Indebtedness of the Borrower and its Consolidated Entities to
\n Consolidated Cash Flow is greater than or equal to or less than, as the
\n case may be, the ratio
\n set forth opposite such Unused Margin.<\/p>\n
Ratio Unused Margin
\n —– ————-<\/p>\n
(a) Greater than or equal to 3\/8%
\n 4.25 to 1.00<\/p>\n
(b) Less than 4.25 to 1.00 but 3\/8%
\n equal to or greater than
\n 3.75 to 1.00<\/p>\n
(c) Less than 3.75 to 1.00 but 1\/4%
\n equal to or greater than
\n 3.00 to 1.00<\/p>\n
(d) Less than 3.00 to 1.00 but 1\/4%
\n equal to or greater than
\n 2.00 to 1.00<\/p>\n
(d) Less than 2.00 to 1.00 but 3\/16%
\n equal to or greater than
\n 1.50 to 1.00<\/p>\n
(f) Less than 1.50 to 1.00 1\/8%<\/p>\n
Notwithstanding the foregoing, during the period from the Closing Date
\n through the date of delivery of a Compliance Certificate for the
\n quarter ended June 30, 1995 the Unused Margin shall be 3\/8%. For the
\n purpose of calculating the amount of Indebtedness at September 30,
\n 1995, the actual amount of outstanding Indebtedness at September 30,
\n 1995 shall be reduced by $319,000,000.<\/p>\n
Vanderbilt shall mean The Vanderbilt Stallworth
\n Rehabilitation Hospital, L.P., the partners of which are the Borrower,
\n Vanderbilt University and Vanderbilt Health Services.<\/p>\n
SECTION 1.2 Classes and Types of Loans. Loans hereunder are
\ndistinguished by “Class” and by “Type”. The “Class” of a Loan refers to whether
\nsuch Loan is a Competitive Bid Loan or a Syndicated Loan, each of which
\nconstitutes a Class. The “Type” of a Loan refers to whether such Loan is a Base
\nRate Loan, a LIBOR Loan, an Absolute Loan or a LIBOR Market Loan, each of which
\nconstitutes a Type. Loans may be identified by both Class and Type.<\/p>\n
23<\/p>\n
ARTICLE II
\n ———-<\/p>\n
REVOLVING FACILITY TERMS AND COLLATERAL
\n —————————————<\/p>\n
SECTION 2.1 Syndicated Loans.<\/p>\n
(a) From and after the Closing Date to and including the
\nTermination Date, on the terms and subject to the conditions set forth in this
\nAgreement, each Lender severally agrees to lend to the Borrower and the Borrower
\nmay borrow, repay and reborrow, an amount not exceeding the amount of the
\nCommitment of such Lender in effect from time to time, less the amount of such
\nLender’s Syndicated Loans and the Reimbursement Obligation and Letter of Credit
\nBorrowings applicable to such Lender; provided, however, that no more than eight
\n(8) different Interest Periods for both Syndicated Loans and Competitive Bid
\nLoans may be outstanding at the same time (for which purpose Interest Periods
\ndescribed in different lettered clauses of the definition of the term “Interest
\nPeriod” shall be deemed to be different Interest Periods even if they are
\ncoterminous). All Advances made by the Lenders to the Borrower under this
\nAgreement with respect to the Revolving Facility shall be evidenced by a
\npromissory note for each Lender each dated the date of this Agreement payable to
\nthe order of each Lender, duly executed by the Borrower, and in the aggregate
\nmaximum principal amount of $1,000,000,000 all as provided in Section 2.8
\nhereof. The Advances shall bear interest as provided in Article III below. The
\nunpaid principal amount of all Loans hereunder shall not exceed the Revolving
\nFacility and each Syndicated Loan made hereunder shall be allocated pro rata
\namong Lenders based upon their Applicable Commitment Percentage regardless of
\namounts outstanding under Competitive Bid Loans.<\/p>\n
(b) If a drawing is made under any Letter of Credit in
\naccordance with the terms thereof prior to the Termination Date the drawing
\nshall be paid by the Agent without the requirement of notice from the Borrower
\nfrom immediately available funds which shall be advanced by the Lenders under
\nthe Revolving Facility. If a drawing is presented under any Letter of Credit in
\naccordance with the terms thereof notice of such drawing shall be provided
\npromptly by NationsBank to the Agent and the Agent shall provide notice to each
\nLender by telephone or telecopy. If notice to the Lenders of a drawing under any
\nLetter of Credit is given by the Agent at or before 12:00 noon Charlotte, North
\nCarolina time on any Business Day, each Lender shall, pursuant to the conditions
\nof this Agreement, make a Base Rate Loan in the amount of such Lender’s
\nApplicable Commitment Percentage of such drawing and shall pay such amount to
\nthe Agent for the account of NationsBank at the Principal Office in Dollars and
\nin immediately available funds before 2:00 P.M. Charlotte, North Carolina time
\non the same Business Day. If notice to the Lenders of a drawing under a Letter
\nof Credit is given by the Agent after 12:00 noon Charlotte, North Carolina time
\non any Business Day, each Lender shall, pursuant to the terms and subject to the
\nconditions of this Agreement, make a Base Rate Loan in the amount of such
\nLender’s Applicable Commitment Percentage of such drawing and shall pay such
\namount to the Agent for the account of NationsBank at the Principal Office in
\nDollars and in<\/p>\n
24<\/p>\n
immediately available funds before 12:00 noon Charlotte, North Carolina time on
\nthe next following Business Day. Such Base Rate Loan shall be deemed made for a
\nperiod ending on the following Business Day, which shall be extended
\nautomatically to the next succeeding Business Day unless and until the Borrower
\nconverts such Base Rate Loan in accordance with the terms of Section 3.2 hereof.<\/p>\n
SECTION 2.2 Advances of Syndicated Loans. Advances of Syndicated Loans
\nshall be made no more frequently than three (3) times in each week. Each Advance
\nshall be in an amount no less than $5,000,000 and multiples of $1,000,000
\nthereafter. Each request for an Advance must be in writing (which may be by
\nfacsimile transmission) and must be received by the Agent not later than 10:00
\na.m., Charlotte, North Carolina, time, (x) at least three Business Days prior to
\nthe date of any LIBOR Loan and (y) on the day which the Advance is to be made in
\nthe case of a Base Rate Loan. Each request for an Advance shall be in the form
\nattached hereto as Exhibit D (“Request for Advance or Interest Rate Election”)
\nand shall specify the amount of the Advance requested, the day as of which the
\nAdvance is to be made and the part or parts, if any, of the Advance that are to
\nbe used by or for the benefit of Participating Partnerships, specifying the part
\nallocable to each Participating Partnership, and shall provide the interest rate
\ninformation called for in Section 3.2. The Agent shall promptly (not later than
\n1:00 P.M. Charlotte, North Carolina time) furnish each Lender by telecopy
\ntransmission a copy of each Request for Advance or Interest Rate Election
\ntogether with the amount of such Lender’s portion of the Advance. Not later than
\n2:00 P.M. Charlotte, North Carolina time on the date specified for each Advance
\nhereunder, each Lender shall make available the amount of the Syndicated Loan or
\nLoans to be made by it on such date to the Agent at the Principal Office, in
\nDollars and in immediately available funds, and the amount received by the Agent
\nshall be made available to the Borrower by depositing the proceeds thereof into
\nan account with the Agent in the name of the Borrower. The Lenders’ obligation
\nto make Advances shall terminate, if not sooner terminated pursuant to the
\nprovisions of this Agreement, on the Termination Date. Each Request for Advance
\nor Interest Rate Election, whether submitted under this Section 2.2 in
\nconnection with a requested Advance or under Section 3.2 in connection with an
\ninterest rate election, and each Application shall be signed by an officer of
\nthe Borrower designated as authorized to sign and submit Request for Advance or
\nInterest Rate Election forms and Applications in the documents submitted to the
\nAgent pursuant to Section 6.3(a) below. The Borrower may, from time to time, by
\nwritten notice to the Agent, terminate the authority of any person to submit
\nRequest for Advance or Interest Rate Election forms and Applications and
\ndesignate new or additional persons to so act by delivering to the Agent a
\ncertificate of the Secretary of the Borrower certifying the incumbency and
\nspecimen signature of each such person. The Agent shall be entitled to rely
\nconclusively upon the authority of any person so designated by the Borrower.<\/p>\n
25<\/p>\n
SECTION 2.3 Competitive Bid Loans.<\/p>\n
(a) In addition to borrowings of Syndicated Loans, at any
\ntime prior to the Termination Date the Borrower may, as set forth in this
\nSection 2.3, request the Lenders to make offers to make Competitive Bid Loans to
\nthe Borrower in Dollars. The Lenders may, but shall have no obligation to, make
\nsuch offers and the Borrower may, but shall have no obligation to, accept any
\nsuch offers in the manner set forth in this Section 2.3. Competitive Bid Loans
\nmay be LIBOR Market Loans or Absolute Rate Loans (each a “Type” of Competitive
\nBid Loan), provided that:<\/p>\n
(i) the aggregate amount of outstanding Competitive Bid
\n Loans of all Lenders shall not exceed one half of the
\n Revolving Facility;<\/p>\n
(ii) there may be no more than eight (8) different
\n Interest Periods for both Syndicated Loans and Competitive
\n Bid Loans outstanding at the same time (for which purpose
\n Interest Periods described in different lettered clauses of
\n the definition of the term “Interest Period” shall be deemed
\n to be different Interest Periods even if they are
\n coterminous);<\/p>\n
(iii) the aggregate amount of outstanding Competitive
\n Bid Loans of a Lender shall not exceed at any time an amount
\n equal to such Lender’s Commitment;<\/p>\n
(iv) the aggregate principal amount of all Competitive
\n Bid Loans, together with the sum of (i) the aggregate
\n principal amount of all outstanding Syndicated Loans, (ii)
\n then outstanding Letter of Credit Borrowings and (iii)
\n Reimbursement Obligations shall not exceed the aggregate
\n amount of the Commitments at such time; and<\/p>\n
(v) no Competitive Bid Loan shall have a maturity date
\n subsequent to the Termination Date.<\/p>\n
(b) When the Borrower wishes to request offers to make
\nCompetitive Bid Loans, it shall give the Agent (which shall promptly notify the
\nLenders) notice (a “Competitive Bid Quote Request”) to be received no later than
\n11:00 a.m. Charlotte, North Carolina time on (x) the fourth Business Day prior
\nto the date of borrowing proposed therein, in the case of a LIBOR Auction or (y)
\nthe Business Day next preceding the date of borrowing proposed therein, in the
\ncase of an Absolute Rate Auction (or, in any such case, such other time and date
\nas the Borrower and the Agent, with the consent of the Required Lenders, may
\nagree). The Borrower may request offers to make Competitive Bid Loans for up to
\ntwo (2) different Interest Periods in a single notice (for which purpose
\nInterest Periods in different lettered clauses of the definition of the term
\n“Interest Period” shall be deemed to be different Interest Periods even if they
\nare coterminous); provided that the request for each separate Interest Period
\nshall be deemed to be a separate Competitive Bid Quote Request for a separate
\nborrowing (a “Competitive Bid Borrowing”) and there shall not be outstanding at<\/p>\n
26<\/p>\n
any one time more than four (4) Competitive Bid Borrowings. Each such
\nCompetitive Bid Quote Request shall be substantially in the form of Exhibit E
\nhereto and shall specify as to each Competitive Bid Borrowing:<\/p>\n
(i) the proposed date of such borrowing, which shall be
\n a Business Day;<\/p>\n
(ii) the aggregate amount of such Competitive Bid
\n Borrowing, which shall be at least $10,000,000 (or a larger
\n multiple of $1,000,000) but shall not cause the limits
\n specified in Section 2.3(a) hereof to be violated;<\/p>\n
(iii) the duration of the Interest Period applicable
\n thereto;<\/p>\n
(iv) whether the Competitive Bid Quotes requested for a
\n particular Interest Period are seeking quotes for LIBOR
\n Market Loans or Absolute Rate Loans; and<\/p>\n
(v) if the Competitive Bid Quotes requested are seeking
\n quotes for Absolute Rate Loans, the date on which the
\n Competitive Bid Quotes are to be submitted if it is before
\n the proposed date of borrowing (the date on which such
\n Competitive Bid Quotes are to be submitted is called the
\n “Quotation Date”).<\/p>\n
Except as otherwise provided in this Section 2.3(b), no Competitive Bid Quote
\nRequest shall be given within five (5) Business Days (or such other number of
\ndays as the Borrower and the Agent, with the consent of the Required Lenders,
\nmay agree) of any other Competitive Bid Quote Request.<\/p>\n
(c) (i) Each Lender may submit one or more Competitive Bid
\nQuotes, each containing an offer to make a Competitive Bid Loan in response to
\nany Competitive Bid Quote Request; provided that, if the Borrower’s request
\nunder Section 2.3(b) hereof specified more than one Interest Period, such Lender
\nmay make a single submission containing one or more Competitive Bid Quotes for
\neach such Interest Period. Each Competitive Bid Quote must be submitted to the
\nAgent not later than (x) 2:00 p.m. Charlotte, North Carolina time on the fourth
\nBusiness Day prior to the proposed date of borrowing, in the case of a LIBOR
\nAuction or (y) 10:00 a.m. Charlotte, North Carolina time on the Quotation Date,
\nin the case of an Absolute Rate Auction (or, in any such case, such other time
\nand date as the Borrower and the Agent, with the consent of the Required
\nLenders, may agree); provided that any Competitive Bid Quote may be submitted by
\nNationsBank (or its Applicable Lending Office) only if NationsBank (or such
\nApplicable Lending Office) notifies the Borrower of the terms of the offer
\ncontained therein not later than (x) 1:00 p.m. Charlotte, North Carolina time on
\nthe fourth Business Day prior to the proposed date of borrowing, in the case of
\na LIBOR Auction or (y) 9:45 a.m. Charlotte, North Carolina time on the Quotation
\nDate, in the case of an Absolute Rate Auction. Subject to Article IV, Article VI
\nand IX hereof, any<\/p>\n
27<\/p>\n
Competitive Bid Quote so made shall be irrevocable except with the consent of
\nthe Agent given on the instructions of the Borrower.<\/p>\n
(ii) Each Competitive Bid Quote shall be
\nsubstantially in the form of Exhibit F hereto and shall specify:<\/p>\n
(A) the proposed date of borrowing and the
\n Interest Period therefor;<\/p>\n
(B) the principal amount of the Competitive
\n Bid Loan for which each such order is being made,
\n which principal amount shall be at least $2,000,000
\n (or a larger multiple of $1,000,000); provided that
\n the aggregate principal amount of all Competitive
\n Bid Loans for which a Lender submits Competitive
\n Bid Quotes (x) may not exceed the Commitment of
\n such Lender and (y) may not exceed the principal
\n amount of the Competitive Bid Borrowing for a
\n particular Interest Period for which offers were
\n requested;<\/p>\n
(C) in the case of a LIBOR Auction, the
\n margin above or below the applicable LIBOR-Based
\n Rate (the “LIBOR Margin”) offered for each such
\n Competitive Bid Loan, expressed as a percentage
\n (rounded upwards, if necessary, to the nearest
\n 1\/10,000th of 1%) to be added to or subtracted from
\n the applicable LIBOR-Based Rate;<\/p>\n
(D) in the case of an Absolute Rate Auction,
\n the rate of interest per annum (rounded upwards, if
\n necessary, to the nearest 1\/10,000th of 1%) offered
\n for each such Competitive Bid Loan (the “Absolute
\n Rate”); and<\/p>\n
(E) the identity of the quoting Lender.<\/p>\n
Unless otherwise agreed by the Agent and the Borrower, no Competitive Bid Quote
\nshall contain qualifying, conditional or similar language or propose terms other
\nthan or in addition to those set forth in the applicable Competitive Bid Quote
\nRequest and, in particular, no Competitive Bid Quote may be conditioned upon
\nacceptance by the Borrower of all (or some specified minimum) of the principal
\namount of the Competitive Bid Loan for which such Competitive Bid Quote is being
\nmade.<\/p>\n
(d) The Agent shall (x) in the case of a LIBOR Auction, by
\n4:00 p.m. Charlotte, North Carolina time on the day a Competitive Bid Quote is
\nsubmitted or (y) in the case of an Absolute Rate Auction, as promptly as
\npracticable after the Competitive Bid Quote is submitted (but in any event not
\nlater than 10:30 a.m. Charlotte, North Carolina time on the Quotation Date),
\nnotify the Borrower of the terms (i) of any Competitive Bid Quote submitted by a
\nLender that is in accordance with Section 2.3(c) hereof and (ii) of any
\nCompetitive Bid Quote that amends, modifies or is otherwise inconsistent with a
\nprevious Competitive Bid Quote<\/p>\n
28<\/p>\n
submitted by such Lender with respect to the same Competitive Bid Quote Request.
\nAny such subsequent Competitive Bid Quote shall be disregarded by the Agent
\nunless such subsequent Competitive Bid Quote is submitted solely to correct a
\nmanifest error in such former Competitive Bid Quote. The Agent’s notice to the
\nBorrower shall specify (A) the aggregate principal amount of the Competitive Bid
\nBorrowing for which orders have been received and (B) the respective principal
\namounts and LIBOR Margins or Absolute Rates, as the case may be, so offered by
\neach Lender (identifying the Lender that made each Competitive Bid Quote).<\/p>\n
(e) Not later than 11:00 a.m. Charlotte, North Carolina time
\non (x) the third Business Day prior to the proposed date of borrowing, in the
\ncase of a LIBOR Auction or (y) the Quotation Date, in the case of an Absolute
\nRate Auction (or, in any such case, such other time and date as the Borrower and
\nthe Agent, with the consent of the Required Lenders, may agree), the Borrower
\nshall notify the Agent of its acceptance or nonacceptance of the offers so
\nnotified to it pursuant to Section 2.3(d) hereof (and the failure of the
\nBorrower to give such notice by such time shall constitute nonacceptance) and
\nthe Agent shall promptly notify each affected Lender. In the case of acceptance,
\nsuch notice shall specify the aggregate principal amount of offers for each
\nInterest Period that are accepted. The Borrower may accept any Competitive Bid
\nQuote in whole or in part (provided that any Competitive Bid Quote accepted in
\npart shall be at least $2,000,000 or a larger multiple of $1,000,000); provided
\nthat:<\/p>\n
(i) the aggregate principal amount of each Competitive
\n Bid Borrowing may not exceed the applicable amount set forth
\n in the related Competitive Bid Quote Request;<\/p>\n
(ii) the aggregate principal amount of each Competitive
\n Bid Borrowing shall be at least $10,000,000 (or a larger
\n multiple of $1,000,000) but shall not cause the limits
\n specified in Section 2.3(a) hereof to be violated;<\/p>\n
(iii) acceptance of offers may be made only in ascending
\n order of LIBOR Margins or Absolute Rates, as the case may
\n be, in each case beginning with the lowest rate so offered;
\n provided, however, that the Borrower, in its sole
\n discretion, may accept other than the lowest rate where
\n acceptance of the lowest rate will result in (x) the
\n outstanding Loans of a Lender or Lenders offering the lowest
\n rate exceeding such Lender’s Commitment and (y) an increase
\n in the Unused Fee payable by Borrower under Section 2.10
\n hereof; and<\/p>\n
(iv) the Borrower may not accept any offer where the
\n Agent has correctly advised the Borrower that such offer
\n fails to comply with Section 2.3(c)(ii) hereof or otherwise
\n fails to comply with the requirements of this Agreement
\n (including, without limitation, Section 2.3(a) hereof).<\/p>\n
29<\/p>\n
If offers are made by two or more Lenders with the same LIBOR Margins or
\nAbsolute Rates, as the case may be, for a greater aggregate principal amount
\nthan the amount in respect of which offers are accepted for the related Interest
\nPeriod after the acceptance of all offers, if any, of all lower LIBOR Margins or
\nAbsolute Rates, as the case may be, offered by any Lender for such related
\nInterest Period, the principal amount of Competitive Bid Loans in respect of
\nwhich such offers are accepted shall be allocated by the Borrower among such
\nLenders as nearly as possible (in amounts of at least $2,000,000 or larger
\nmultiples of $1,000,000) in proportion to the aggregate principal amount of such
\noffers. Determinations by the Borrower of the amounts of Competitive Bid Loans
\nand the lowest bid after adjustment as provided in Section 2.3(e)(iii) shall be
\nconclusive in the absence of manifest error.<\/p>\n
(f) Any Lender whose offer to make any Competitive Bid Loan
\nhas been accepted shall, not later than 1:00 p.m. Charlotte, North Carolina time
\non the date specified for the making of such Loan, make the amount of such Loan
\navailable to the Agent at the Principal Office in Dollars and in immediately
\navailable funds, for account of the Borrower. The amount so received by the
\nAgent shall, subject to the terms and conditions of this Agreement, be made
\navailable to the Borrower on such date by depositing the same, in Dollars and in
\nimmediately available funds, in an account of the Borrower maintained at the
\nPrincipal Office.<\/p>\n
SECTION 2.4 Payments. All interest accrued on Loans subject to the Base
\nRate shall be payable on the last day of each successive March 27,, June, Septe
\nmber and December, commencing on June 30, 1995 and upon payment in full of such
\nLoans, and all interest accrued on each Fixed Rate Loan, shall be payable at the
\nearlier of (i) the end of the applicable Interest Period then in effect or (ii)
\nthe end of each ninety (90) day period in the case of an Absolute Rate and each
\nthree (3) month period in the case of a LIBOR Market Rate. The principal amount
\nof the Advances shall be due on the Termination Date. All payments of Credit
\nObligations shall be payable to the Agent on or before 11:00 A.M. Charlotte,
\nNorth Carolina time on the date when due, at the Principal Office in Dollars and
\nin immediately available funds free and clear of all rights of set-off or
\ncounterclaim.<\/p>\n
SECTION 2.5 Joint and Several Obligations.<\/p>\n
(a) Each of the Subsidiaries and Controlled Partnerships
\nnamed in Exhibit G attached hereto and made a part hereof shall execute and
\ndeliver to the Agent as of the Closing Date either an Amended and Restated
\nSubsidiary Guaranty Agreement or Amended and Restated Partnership Guaranty
\nAgreement or a Subsidiary Guaranty Agreement or Partnership Guaranty Agreement,
\nand each other Subsidiary and Controlled Partnership that is to become after the
\nClosing Date a Participating Subsidiary or Participating Partnership, as the
\ncase may be, shall, at the time it is to become a Participating Subsidiary or
\nParticipating Partnership, execute and deliver to the Agent a Subsidiary
\nGuaranty Agreement or Partnership Guaranty Agreement, as the case may be in<\/p>\n
30<\/p>\n
the form attached hereto as Exhibit C-2 and Exhibit C-1, respectively
\n(“collectively the “Guaranty Agreements”). Notwithstanding the foregoing, in the
\nevent of the Acquisition of Surgical Health and until the obtaining of the
\nconsent to amendments to the Indenture dated June 15, 1994 relating to the
\nSurgical Health Subordinated Indebtedness in order to permit Surgical Health to
\ndeliver its Guaranty Agreement (the “Necessary Consent”), Surgical Health shall
\nnot be deemed a Participating Subsidiary, provided the amount of loans and
\ninvestments by Borrower and its Participating Subsidiaries in Surgical Health do
\nnot exceed the sum of (i) the amount set forth in Section 7.8(a)(7)(F) and (ii)
\n$50,000,000. Promptly upon the Acquisition of Surgical Health the Borrower shall
\nuse its best efforts to cause the Necessary Consent to be obtained and shall
\ncause each Participating Subsidiary acquiring Surgical Health Subordinated
\nIndebtedness to immediately give its consent to the amendments. The Borrower
\nshall cause Surgical Health to deliver to the Agent its Guaranty Agreement not
\nlater than fifteen (15) days after obtaining the Necessary Consent. Until there
\nshall have been delivered to the Agent the Guaranty Agreement of Surgical Health
\nthe amount of the Revolving Facility available to the Borrower shall be reduced
\nby a sum equal to the product of 1.15 times the outstanding principal amount of
\nSurgical Health Subordinated Indebtedness not owned by Borrower or a
\nParticipating Subsidiary. Notwithstanding any other provision of this Agreement,
\nuntil such time as Surgical Health shall have delivered its Guaranty Agreement,
\nall loans by the Borrower to Surgical Health shall be evidenced by a note or
\nnotes, which note or notes shall be promptly delivered to the Agent as required
\nby the Pledge Agreement. Upon the acquisition by Borrower or a Participating
\nSubsidiary of any Surgical Health Subordinated Indebtedness it shall immediately
\npledge, assign and deliver to the Agent the notes evidencing such Indebtedness,
\nsuch notes to constitute security for payment of Credit Obligations.<\/p>\n
(b) Although Advances shall be and heretofore have been made
\nonly to the Borrower, all or portions of such Advances may be used by the
\nBorrower for the benefit of or loaned by the Borrower to a Participating
\nSubsidiary or Participating Partnership. As a condition to the use of Loans for
\nthe benefit of Participating Subsidiaries and Participating Partnerships, the
\nLenders have required that the Participating Subsidiaries and Participating
\nPartnerships guaranty the payment of the Credit Obligations of Borrower arising
\nunder this Agreement and the other Loan Documents to the extent set forth in the
\nrespective Guaranty Agreements to which they are a party. Each of the
\nParticipating Subsidiaries and Participating Partnerships separately and
\nseverally, hereby appoints and designates the Borrower as each such party’s
\nagent and attorney-in-fact to act on behalf of each such party for all purposes
\nof the Loan Documents relating to the Credit Obligations. The Borrower shall
\nhave authority to exercise on behalf of each Participating Subsidiary and
\nParticipating Partnership all rights and powers that the Borrower deems
\nnecessary, incidental or convenient in connection with the Loan Documents
\nrelating to the Credit Obligations, including the authority to execute and
\ndeliver certificates, documents, agreements and other instruments referred to in
\nor contemplated by such Loan Documents, request Advances hereunder for their
\nbenefit, request for the issuance of Letters of Credit for their benefit,
\nreceive all proceeds of Advances, give all notices, approvals and consents
\nrequired or requested from time to time by the Agent or Lenders and take any
\nother actions and steps that a Participating Subsidiary or a Participating
\nPartnership could take for its own account in connection with the Loan Documents
\nfrom time to time, it being the intent of the Participating Subsidiaries and the
\nParticipating Partnerships to<\/p>\n
31<\/p>\n
grant to the Borrower plenary power to act on behalf of the Participating
\nSubsidiaries and the Participating Partnerships in connection with and pursuant
\nto such Loan Documents. The appointment of the Borrower as agent and
\nattorney-in-fact for the Participating Subsidiaries and the Participating
\nPartnerships hereunder shall be coupled with an interest and be irrevocable so
\nlong as any Loan Document relating to the Credit Obligations shall remain in
\neffect. The Agent or Lenders need not obtain any Participating Subsidiary’s or
\nParticipating Partnership’s consent or approval for any act taken by the
\nBorrower pursuant to any Loan Document, and all such acts shall bind and
\nobligate the Borrower, the Participating Subsidiaries and the Participating
\nPartnerships, jointly and severally. Each Participating Subsidiary and
\nParticipating Partnership forever waives and releases any claim (whether now or
\nhereafter arising) against the Agent or Lenders based on the Borrower’s lack of
\nauthority to act on behalf of any Participating Subsidiary or Participating
\nPartnership in connection with the Loan Documents relating to the Revolving
\nFacility.<\/p>\n
SECTION 2.6 Pledge Agreement. As security for the Credit Obligations,
\nthe Borrower and certain of the Participating Subsidiaries have, pursuant to the
\nPrior Agreement, executed and delivered a pledge and security agreement to the
\nAgent and shall execute and deliver to the Agent amended and restated pledge
\nagreements on the Closing Date and from time to time after the Closing Date
\npursuant to the terms of Section 7.14 hereof or upon request by the Agent,
\npledge and security agreements in form acceptable to the Agent and its counsel
\n(all being collectively called the “Pledge Agreements”) granting to the Agent a
\nfirst priority security interest in and lien on (i) all shares of stock of all
\nSubsidiaries owned directly or indirectly by the Borrower, (ii) all right, title
\nand interest in and to both the ownership interest of Borrower in any
\npartnership and all distributions payable to the Borrower or any Subsidiary as a
\npartner of any partnership (including Controlled Partnerships but not including
\nVanderbilt), (iii) all notes payable to Borrower by any Subsidiary or Controlled
\nPartnership evidencing any loan or advance made by Borrower, and (iv) all
\naccounts receivable due to Borrower by any Subsidiary or Controlled Partnership
\narising by reason of any loan or advance made by Borrower, together with all
\nfinancing statements, stock certificates and duly executed stock powers
\nnecessary to perfect the Agent’s security interest therein, in each case whether
\nnow owned or hereafter acquired.<\/p>\n
SECTION 2.7 Prepayment. The Borrower may at any time prior to the
\nTermination Date prepay all or any part of the Advances, without premium or
\npenalty (except as set forth below); provided, however, that no Fixed Rate
\nSegment may be prepaid during an Interest Period unless the Borrower shall pay
\nto the Agent the amounts required by Section 4.2 hereof. The Borrower shall pay
\nall interest accrued to the date of prepayment on any amount prepaid as
\npermitted under the terms of the next preceding sentence on or prior to the
\nTermination Date in connection with the prepayment in<\/p>\n
32<\/p>\n
full of the Credit Obligations and the concurrent termination of this Agreement.
\nThe Borrower shall give the Agent notice of its intent to pay any Base Rate Loan
\nnot later than 11:00 a.m. on the date of payment. Failure to give such notice
\nshall result in payment of interest through the next succeeding Business Day on
\nthe amount so paid. Each such prepayment shall be in the aggregate amount of
\n$10,000,000 or such greater amount which is an integral multiple of $1,000,000
\nor the unpaid balance of all Credit Obligations.<\/p>\n
SECTION 2.8 Notes.<\/p>\n
(a) The Syndicated Loans made by each Lender shall be
\nevidenced by a single promissory note of the Borrower substantially in the form
\nof Exhibit H-1 hereto, dated the date hereof, payable to such Lender in a
\nprincipal amount equal to the amount of its Commitment as originally in effect
\nand otherwise duly completed.<\/p>\n
(b) The Competitive Bid Loans made by any Lender shall be
\nevidenced by a single promissory note of the Borrower substantially in the form
\nof Exhibit H-2 hereto, dated the date hereof, payable to such Lender and
\notherwise duly completed.<\/p>\n
(c) The date, amount, Type, interest rate and duration of
\nInterest Period (if applicable) of each Loan of each Class made by each Lender
\nto the Borrower, and each payment made on account of the principal thereof,
\nshall be recorded by such Lender on its books and, prior to any transfer of the
\nNote evidencing the Loans of such Class held by it, endorsed by such Lender on
\nthe schedule attached to such Note or any continuation thereof; provided that
\nthe failure of such Lender to make, or any error by the Lender in making any
\nsuch recordation or endorsement, shall not affect the obligations of the
\nBorrower to make a payment when due of any amount owing hereunder or under such
\nNote in respect of the Loans to be evidenced by such Note.<\/p>\n
(d) No Lender shall be entitled to have its Notes
\nsubdivided, by exchange for promissory notes of lesser denominations or
\notherwise, except in connection with a permitted assignment of all or any
\nportion of such Lender’s Commitment, Loans and Notes pursuant to Section 10.1
\nhereof.<\/p>\n
(e) Each Lender that is an Existing Lender under the First
\nRestated Agreement shall surrender to the Borrower the promissory notes
\ndelivered to it pursuant to the First Restated Agreement in exchange for the
\nNotes described in Section 2.8(a) and (b).<\/p>\n
SECTION 2.9 Reduction in Revolving Facility. The Borrower shall have
\nthe right from time to time (but not more frequently than once during each
\nquarterly period), but upon not less than three (3) Business Days written notice
\nto the Agent to reduce the amount of the Revolving Facility. The Agent shall
\ngive each<\/p>\n
33<\/p>\n
Lender, within one (1) Business Day thereafter, telephonic notice (confirmed in
\nwriting) of such reduction. Each such reduction shall be in the aggregate
\nprincipal amount of $10,000,000 or such greater amount which is an integral
\nmultiple of $1,000,000, and shall permanently reduce the Commitment of each
\nLender on a pro rata basis. No such reduction shall result in payment of a Fixed
\nRate Loan other than on the last day of the Interest Period of such Loan. Each
\nreduction of the Revolving Facility shall be accompanied by payment of the Loans
\nto the extent that the Credit Obligations exceed the Revolving Facility after
\ngiving effect to such reductions together with accrued and unpaid interest on
\nthe amounts prepaid.<\/p>\n
SECTION 2.10 Unused Fee. From and after the Effective Date, the
\nBorrower shall pay to the Agent for the benefit of each Lender a fee (the
\n“Unused Fee”) computed at a per annum rate of the then applicable Unused Margin
\ntimes the daily average Unused Amount of such Lender. The Unused Fee shall be
\npayable quarterly on the last day of each successive March 27,, June, September
\nand December in each year for the immediately preceding quarterly period,
\ncommencing on June 30, 1995, and upon the Termination Date. The Unused Fee shall
\nbe computed on an Actual\/360 Basis.<\/p>\n
SECTION 2.11 Lending Offices. The Loans of each Type made by each
\nLender shall be made and maintained at such Lender’s Applicable Lending Office
\nfor Loans of such Type.<\/p>\n
SECTION 2.12 Letter of Credit Borrowings.<\/p>\n
(a) NationsBank may issue from time to time in accordance
\nwith Section 6.1, in its sole discretion, for the account of the Borrower
\nLetters of Credit in an aggregate outstanding stated amount up to but not to
\nexceed the Letter of Credit Commitment. All Letters of Credit issued pursuant to
\nthis Agreement, shall expire on or before the fifth (5th) Business Day next
\npreceding the Termination Date. The aggregate Letter of Credit Obligations shall
\nat no time exceed the Letter of Credit Commitment. In the event that the
\nBorrower shall pay in full all amounts outstanding under the Revolving Facility
\nand permanently reduce the Revolving Facility to zero as permitted pursuant to
\nSection 2.9 hereof, it shall simultaneously cause all obligations of NationsBank
\nunder the Letters of Credit and all obligations of the Lenders with respect to
\nParticipations to be discharged in full, whether by providing replacement
\nletters of credit therefor or payment in full of the amount outstanding with
\nrespect to the Letter of Credit or the deposit of cash in the amount of
\noutstanding Letters of Credit with the Agent pursuant to the LC Account
\nAgreement.<\/p>\n
(b) The Borrower hereby unconditionally agrees to pay to
\nNationsBank on demand at the Principal Office (i) all amounts required to pay
\nall drafts drawn in accordance with the terms of any Letter of Credit or
\npurporting to be drawn under the Letters of<\/p>\n
34<\/p>\n
Credit and (ii) the face amount of each draft complying with any Letter of
\nCredit accepted by NationsBank on the maturity date of such draft, or in the
\nevent of a Default or Event of Default, and any and all reasonable expenses of
\nevery kind incurred by NationsBank in connection with the Letters of Credit and
\nin any event and without demand to place in possession of NationsBank (which
\nshall include Advances under the Revolving Facility if permitted by Section 2.1
\nhereof) sufficient funds to pay all debts and liabilities arising under any
\nLetter of Credit. Subject to the terms hereof, the Borrower’s obligations to pay
\nNationsBank under this Section 2.12, and the right of NationsBank to receive the
\nsame, shall be absolute and unconditional and shall not be affected by any
\ncircumstance whatsoever. NationsBank may charge any account the Borrower may
\nhave with it for any and all amounts NationsBank pays under a Letter of Credit,
\nplus commissions, charges and expenses as from time to time agreed to by
\nNationsBank and the Borrower; provided that to the extent permitted by Section
\n2.1(b), amounts shall be paid pursuant to Advances under the Revolving Facility.
\nThe Borrower agrees that NationsBank may, in its sole discretion, accept or pay,
\nas complying with the terms of any Letter of Credit, any drafts or other
\ndocuments otherwise in order which may be signed or issued by an administrator,
\nexecutor, trustee in bankruptcy, debtor in possession, assignee for the benefit
\nof creditors, liquidator, receiver, attorney in fact or other legal
\nrepresentative of a party who is authorized under such Letter of Credit to draw
\nor issue any drafts or other documents. The Borrower agrees to pay NationsBank
\ninterest on any amounts not paid when due hereunder at the Base Rate plus two
\npercent (2%), or such lower rate as may be required by law.<\/p>\n
(c) In accordance with the provisions of Section 2.1(b)
\nhereof, NationsBank shall notify the Agent (and shall also notify the Borrower)
\nof any drawing under any Letter of Credit issued for account of the Borrower as
\npromptly as practicable following the receipt by NationsBank of such drawing.<\/p>\n
(d) Each Lender (other than NationsBank) shall automatically
\nacquire on the date of issuance thereof, a Participation in the liability of
\nNationsBank in respect of each Letter of Credit in an amount equal to such
\nLender’s Applicable Commitment Percentage of such liability, and to the extent
\nthat the Borrower is obligated to pay NationsBank under Section 2.12(a), each
\nLender (other than NationsBank) thereby shall absolutely, unconditionally and
\nirrevocably assume, and shall be unconditionally obligated to pay to NationsBank
\nas hereinafter described, its Applicable Commitment Percentage of the liability
\nof NationsBank under such Letter of Credit. On the fifth Business Day prior to
\nthe Termination Date, each Lender (including NationsBank in its capacity as a
\nLender) shall make a Base Rate Loan to the Borrower by paying to the Agent for
\nthe account of NationsBank at the Principal Office in Dollars and in immediately
\navailable funds, an amount equal to its Applicable Commitment Percentage of any
\ndrawing under a Letter of Credit, all as described and pursuant to<\/p>\n
35<\/p>\n
Section 2.1(b), but only to the extent any Lender has not previously paid to the
\nAgent for the account of NationsBank such amount. With respect to drawings under
\nany of the Letters of Credit, each Lender, upon receipt from the Agent of notice
\nof a drawing in the manner described in Section 2.1(b), shall promptly pay to
\nthe Agent for the account of NationsBank, prior to the applicable time set forth
\nin Section 2.1(b), its Applicable Commitment Percentage of such drawing.
\nSimultaneously with the making of each such payment by a Lender or NationsBank,
\nsuch Lender shall, automatically and without any further action on the part of
\nNationsBank or such Lender, acquire a Participation in an amount equal to such
\npayment (excluding the portion thereof constituting interest) in the related
\nReimbursement Obligation of the Borrower. The Reimbursement Obligations of the
\nBorrower shall be immediately due and payable whether by Advances made in
\naccordance with Section 2.1(b) or otherwise. Each Lender’s obligation to make
\npayment to the Agent for the account of NationsBank pursuant to this Section
\n2.12(d), and the right of NationsBank to receive the same, shall be absolute and
\nunconditional, shall not be affected by any circumstance whatsoever and shall be
\nmade without any offset, abatement, withholding or reduction whatsoever. If any
\nLender is obligated to pay but does not pay amounts to the Agent for the account
\nof NationsBank in full upon receipt of such notice of a drawing as required by
\nthis Section 2.12(d), such Lender shall, on demand, pay to the Agent for the
\naccount of NationsBank interest on the unpaid amount for each day during the
\nperiod commencing on the date of notice given to such Lender pursuant to Section
\n2.1(b) until such Lender pays such amount to the Agent for the account of
\nNationsBank in full at the interest rate per annum for overnight borrowing by
\nNationsBank from the Federal Reserve Bank.<\/p>\n
(e) Promptly following the end of each calendar quarter,
\nNationsBank shall deliver to the Agent, and the Agent shall deliver to each
\nLender, a notice describing the aggregate undrawn amount of Letters of Credit
\nand aggregate face amount of all drafts accepted and outstanding at the end of
\nsuch quarter. Upon the request of any Lender from time to time, NationsBank
\nshall deliver to the Agent, and the Agent shall deliver to such Lender, any
\nother information reasonably requested by such Lender with respect to the Letter
\nof Credit then outstanding.<\/p>\n
(f) The issuance by NationsBank of any Letter of Credit
\nshall be subject to the conditions that such Letter of Credit be in such form,
\ncontain such terms and support such transactions or obligations as shall be
\nreasonably satisfactory to NationsBank consistent with its then current
\npractices and procedures with respect to similar letters of credit. All Letters
\nof Credit shall be issued pursuant to and subject to the Uniform Customs and
\nPractice for Documentary Creditors, 1993 revision, International Chamber of
\nCommerce Publication No. 500 and all subsequent amendments and revisions
\nthereto. The Borrower shall have executed and delivered such other instruments
\nand agreements relating to<\/p>\n
36<\/p>\n
such Letter of Credit as NationsBank shall have reasonably requested consistent
\nwith such practices and procedures.<\/p>\n
(g) Without duplication of Section 10.12 hereof, the
\nBorrower hereby indemnifies and holds harmless NationsBank, each other Lender
\nand the Agent from and against any and all claims and damages, losses,
\nliabilities, costs or expenses which NationsBank, such other Lender or the Agent
\nmay reasonably incur (or which may be claimed against NationsBank, such other
\nLender or the Agent) by any person by reason of or in connection with the
\nissuance or transfer of or payment or failure to pay under any Letter of Credit;
\nprovided that the Borrower shall not be required to indemnify NationsBank, any
\nother Lender or the Agent for any claims, damages, losses, liabilities, costs or
\nexpenses to the extent, but only to the extent, (i) caused by the willful
\nmisconduct or negligence of the party to be indemnified, (ii) caused by the
\nfailure of NationsBank to pay under any Letter of Credit after the presentation
\nto it of a request strictly complying with the terms and conditions of such
\nLetter of Credit, unless such payment is prohibited by any law, regulation,
\ncourt order or decree, or (iii) paid or payable by any Lender under Section 2.14
\nor Section 9.10 hereof and provided, further, Borrower shall not be required to
\nindemnify any Lender from and against any such claims, damages, losses,
\nliabilities, costs or expenses to the extent attributable to such Lender’s
\nfailure to perform its obligations hereunder.<\/p>\n
(h) Without limiting Borrower’s rights as set forth in
\nSection 2.12(g) above, the obligation of Borrower to immediately reimburse Agent
\nfor drawings made under the Letter of Credit in accordance with the terms
\nthereof shall be absolute, unconditional and irrevocable, and shall be performed
\nstrictly in accordance with the terms of this Agreement and the Applications for
\nsuch Letters of Credit, under all circumstances whatsoever.<\/p>\n
(i) The Borrower agrees to pay to the Agent for the benefit
\nof the Lenders a per annum Letter of Credit fee equal to the applicable
\nSyndicated Margin in effect at the time of issuance of each such Letter of
\nCredit times the amount of outstanding Letter of Credit Borrowings. In addition,
\nthe Borrower agrees to pay to the Agent for its own account an issuance fee
\nequal to one-eighth of one percent (1\/8%) per annum times the amount of
\noutstanding Letter of Credit Borrowings. Such fees shall be payable quarterly in
\narrears on the last day of each March 27,, June, September and December,
\nbeginning, however, on the first such day to occur following the Closing Date.<\/p>\n
(j) The Borrower acknowledges that NationsBank as issuer of
\nthe Letter of Credit will be required by applicable rules and regulations of the
\nFederal Reserve Board to maintain reserves for its liability to honor draws made
\npursuant to a Letter of Credit notwithstanding the obligation of the Lenders for
\na Participation in such liability. The Borrower agrees to promptly<\/p>\n
37<\/p>\n
reimburse NationsBank for all additional costs which it may hereafter incur
\nsolely by reason of its acting as issuer of the Letter of Credit and its being
\nrequired to reserve for such liability, it being understood by the Borrower that
\nother interest and fees payable under this Agreement do not include compensation
\nof NationsBank for such reserves. NationsBank shall furnish to the Borrower at
\nthe time of its demand for payment of such additional costs, the computation of
\nsuch additional cost which shall be conclusive absent manifest error, provided
\nthat such computations are made on a reasonable basis.<\/p>\n
(k) The Borrower shall pay to NationsBank administrative and
\nother fees, if any, in connection with the Letters of Credit in such amounts and
\nat such times as NationsBank and the Borrower shall agree from time to time.<\/p>\n
SECTION 2.13 Pro Rata Payments. Except as otherwise provided herein,
\n(a) each payment on account of the principal of and interest on the Syndicated
\nLoans and fees (other than the Agent’s fees payable under Section 9.11 hereof,
\nwhich shall be retained by the Agent and the fees payable to the Agent for its
\nown account pursuant to Section 2.12(i) and to NationsBank pursuant to Section
\n2.12(k) which shall be retained by the Agent or NationsBank, as the case may be)
\ndescribed in this Agreement shall be made to the Agent for the account of the
\nLenders pro rata based on their Applicable Commitment Percentages, (b) each
\npayment on account of principal of and interest on a Competitive Bid Loan shall
\nbe made to the Agent for the account of the Lender making such Competitive Bid
\nLoan, and the principal amount of Competitive Bid Loans shall be paid on the
\nlast day of the Interest Period for such Competitive Bid Loan, (c) all payments
\nto be made by the Borrower for the account of each of the Lenders on account of
\nprincipal, interest and fees, shall be made without set-off or counterclaim, and
\n(d) the Agent will promptly (to the extent received by the Agent by 12:00 noon,
\nCharlotte, North Carolina time within the same Business Day, otherwise the next
\nBusiness Day if received after 12:00 noon) distribute payments received to the
\nLenders.<\/p>\n
SECTION 2.14 Deficiency Advances. No Lender shall be responsible for
\nany default of any other Lender in respect to such other Lender’s obligation to
\nmake any Loan hereunder nor shall the Commitment of any Lender hereunder be
\nincreased as a result of such default of any other Lender. Without limiting the
\ngenerality of the foregoing, in the event any Lender (a “failing Lender”) shall
\nfail to advance funds to the Borrower as herein provided, the Agent may in its
\ndiscretion, but shall not be obligated to, advance under the Note or Notes in
\nits favor as a Lender all or any portion of such amount (the “deficiency
\nadvance”) and shall thereafter be entitled to payments of principal of and
\ninterest on such deficiency advance in the same manner and at the same interest
\nrate or rates to which such failing Lender would have been entitled had such
\nfailing Lender made such Advance under its Note or Notes; provided that, upon
\npayment to the Agent from such failing Lender<\/p>\n
38<\/p>\n
of the entire outstanding amount of such deficiency advance, together with
\ninterest thereon, from the most recent date or dates interest was paid to the
\nAgent by the Borrower on each Loan comprising the deficiency advance at the
\ninterest rate per annum for overnight borrowing by the Agent from the Federal
\nReserve Bank, then such payment shall be credited against the Note or Notes of
\nthe Agent in full payment of such deficiency advance and the Borrower shall be
\ndeemed to have borrowed the amount of such deficiency advance from such failing
\nLender as of the most recent date or dates, as the case may be, upon which any
\npayments of interest were made by the Borrower thereon. Acceptance by the
\nBorrower of a deficiency advance from the Agent shall in no way limit the rights
\nof the Borrower against a failing Lender.<\/p>\n
39<\/p>\n
ARTICLE III
\n ———–<\/p>\n
INTEREST ON SYNDICATED LOANS
\n —————————-<\/p>\n
SECTION 3.1 Applicable Interest Rates. The Borrower shall have the
\noption to elect to have any Syndicated Loan Segment bear interest at the Base
\nRate or the LIBOR-Based Rate plus the applicable Syndicated Margin. For any
\nperiod of time and for any Segment with respect to which the Borrower does not
\nelect another interest rate, such Segment shall bear interest at the Base Rate.
\nThe Borrower’s right to elect a LIBOR-Based Rate shall be subject to the
\nfollowing requirements: (a) each Syndicated Loan Segment shall be in the amount
\nof $5,000,000 or more and in an integral multiple of $1,000,000 and (b) each
\nLIBOR-Based Rate Segment shall have a maturity selected by the Borrower of one,
\ntwo or three months; provided, however, that no LIBOR-Based Rate Segment shall
\nhave a maturity date later than the Termination Date.<\/p>\n
SECTION 3.2 Procedure for Exercising Interest Rate Options. The
\nBorrower may elect to have a particular interest rate apply to a Segment of a
\nSyndicated Loan by notifying the Agent in writing (which may be by facsimile
\ntransmission) not later than 10:00 a.m., Charlotte, North Carolina time, three
\n(3) Business Days prior to the effective date any LIBOR-Based Rate is to become
\napplicable or on the same day on which a requested Base Rate is to become
\napplicable. Any notice of interest rate election hereunder shall be irrevocable
\nand shall be in the form attached hereto as Exhibit D and shall set forth the
\nfollowing: (a) the amount of the Segment to which the requested interest rate
\nwill apply, (b) the date on which the selected interest rate will become
\napplicable, (c) whether the interest rate selected is the Base Rate or a LIBOR-
\nBased Rate, and (d) if the interest rate selected is a LIBOR-Based Rate, the
\nmaturity selected for the Interest Period. On the second Business Day preceding
\nthe Business Day that a requested LIBOR- Based Rate is to become applicable, the
\nAgent shall use its best efforts to notify the Borrower by telephone of the
\nAgent’s estimate of the applicable LIBOR-Based Rate by 10:00 a.m., Charlotte,
\nNorth Carolina time, or as early on that day as may be practical in the
\ncircumstances. The Agent shall not be required to provide an estimate of the
\nLIBOR-Based Rate on any day on which dealings in deposits in Dollars are not
\ntransacted in the London interbank market. If the Borrower does not immediately
\naccept a LIBOR-Based Rate quoted by the Agent, the Agent may, in view of
\nchanging market conditions, revise the quoted LIBOR-Based Rate at any time. No
\nLIBOR-Based Rate shall be effective until mutually agreed upon by the Borrower
\nand the Agent. If the Agent and the Borrower attempt to agree on a LIBOR-Based
\nRate but fail so to agree, or if there is any uncertainty as to whether or not
\nthe Agent and the Borrower have agreed upon a LIBOR-Based Rate, interest shall
\naccrue on the Segment for which a LIBOR-Based Rate has been selected at the then
\napplicable Base Rate.<\/p>\n
SECTION 3.3 Base Rate. Each Segment subject to the Base Rate shall bear
\ninterest from the date the Base Rate becomes applicable thereto until payment in
\nfull, or until a LIBOR-Based Rate is selected by the Borrower and becomes
\napplicable thereto, on the<\/p>\n
40<\/p>\n
unpaid principal balance of such Segment on an Actual\/360 Basis. Any change in
\nthe Base Rate shall take effect on the effective date of such change in the Base
\nRate designated by the Agent, without notice to the Borrower and without any
\nfurther action by the Agent.<\/p>\n
SECTION 3.4 Fixed Rate. Each LIBOR-Based Rate Segment shall bear
\ninterest from the date the LIBOR-Based Rate becomes applicable thereto until the
\nend of the applicable Interest Period on the unpaid principal balance of such
\nLIBOR-Based Rate Segment at the LIBOR-Based Rate on an Actual\/360 Basis plus the
\napplicable Syndicated Margin.<\/p>\n
SECTION 3.5 Changes in Syndicated Margin. Any change in the rate of
\ninterest payable with respect to LIBOR Loans because of a change in the
\nSyndicated Margin shall become effective as of the day of receipt by the Agent
\nof the financial statement furnished to the Agent pursuant to Section 7.3(1) and
\n(2) hereof and the Compliance Certificate required by Section 7.3(3) to
\naccompany such financial statement and the determination by the Agent, based
\nupon such Compliance Certificate, that as a result of a change in the ratio of
\nIndebtedness of the Borrower and its Consolidated Entities to Consolidated Cash
\nFlow there has been a change in the Syndicated Margin.<\/p>\n
41<\/p>\n
ARTICLE IV
\n ———-<\/p>\n
TERMINATION OF LIBOR-BASED RATE AND YIELD PROTECTION
\n —————————————————-<\/p>\n
SECTION 4.1 Suspension of Loans.<\/p>\n
(a) If at any time the Agent shall reasonably determine
\n(which determination, if reasonable, shall be final, conclusive and binding upon
\nall parties) that:<\/p>\n
(i) by reason of any changes arising after the
\n Closing Date affecting the London interbank market or
\n affecting the position of any Lender or the Agent in such
\n markets, adequate and fair means do not exist for ascertaining
\n the LIBOR-Based Rate with respect to a LIBOR Loan or LIBOR
\n Market Loan; or<\/p>\n
(ii) the continuation by any Lender of any LIBOR
\n Loans or LIBOR Market Loans or the funding thereof in the
\n London interbank market would be unlawful by reason of any
\n law, governmental rule, regulation, guidelines or order; or<\/p>\n
(iii) the continuation by any Lender of any LIBOR
\n Loans or LIBOR Market Loans or the funding thereof in the
\n London interbank market would be impracticable as a result of
\n a contingency occurring after the date of this Agreement that
\n materially and adversely affects the London interbank market;<\/p>\n
then, and in any such event, the Agent shall on such date give notice (by
\ntelephone and confirmed in writing) to the Borrower of such determination. The
\nobligation of any Lender to make or maintain Fixed Rate Segments so affected or
\nto permit interest to be computed thereon at the LIBOR-Based Rate shall be
\nterminated, and interest shall thereafter be computed on the affected Segment or
\nSegments at the then applicable Base Rate.<\/p>\n
(b) It is the intention of the parties that the Fixed Rates
\nshall accurately reflect the cost to the Lender of maintaining any Fixed Rate
\nSegment during any period in which interest accrues thereon at a Fixed Rate.
\nAccordingly:<\/p>\n
(i) if by reason of any change after the date
\n hereof in any applicable law or governmental rule, regulation
\n or order (or any interpretation thereof and including the
\n introduction of any new law or governmental rule, regulation
\n or order), including any change in the LIBOR Reserve
\n Requirement, the cost to the Lender of maintaining any Fixed
\n Rate Segment or funding the same by means of a London
\n interbank market time deposit shall increase, the Fixed Rate
\n applicable to such Fixed Rate Segment shall be adjusted as
\n necessary to reflect such change in cost to the Lender,
\n effective as of the date on which such change in any
\n applicable law, governmental rule, regulation or order becomes
\n effective.<\/p>\n
42<\/p>\n
(ii) If any Lender shall have determined that the
\n adoption after the date of this Agreement of any law, rule,
\n regulation or guideline regarding capital adequacy, or any
\n change in any of the foregoing or in the interpretation or
\n administration of any of the foregoing by any Governmental
\n Authority, central bank or comparable agency charged with the
\n interpretation or administration thereof, or compliance by any
\n Lender (or any lending office of any Lender) or such Lender’s
\n holding company with any request or directive regarding
\n capital adequacy (whether or not having the force of law) of
\n any such authority, central bank or comparable agency, has or
\n would have the effect of reducing the rate of return on such
\n Lender’s capital or on the capital of such Lender’s holding
\n company, as a consequence of the Lender’s obligations under
\n this Agreement or the Advances made by such Lender pursuant
\n hereto to a level below that which such Lender or any such
\n Lender’s holding company could have achieved but for such
\n adoption, change or compliance (taking into consideration the
\n Lender’s guidelines with respect to capital adequacy) by an
\n amount deemed by such Lender to be material, then from time to
\n time the Borrower shall pay to the Lender such additional
\n amount or amounts as will compensate the Lender or the
\n Lender’s holding company for any such reduction suffered.<\/p>\n
SECTION 4.2 Compensation. The Borrower shall compensate any Lender for
\nall reasonable losses, expenses and liabilities (including any interest owed by
\nsuch Lender to lenders on funds borrowed by such Lender to make or carry any
\nFixed Rate Segment and any loss sustained by the Lender in connection with the
\nre-employment of such funds), that such Lender may sustain: (a) if for any
\nreason (other than a default by such Lender) following agreement between the
\nBorrower and the Agent or the Borrower and such Lender, as the case may be, as
\nto the Fixed Rate applicable to a Fixed Rate Segment the Borrower fails to
\naccept such Fixed Rate Segment, (b) as a consequence of any unauthorized action
\ntaken or default by the Borrower in the repayment of any Fixed Rate Segment when
\nrequired by the terms of this Agreement or (c) with respect to any loss of
\nincome incurred by a Lender (as determined in a reasonable manner by such
\nLender) associated with the payment of principal other than the last day of an
\nInterest Period with respect to any Fixed Rate Loan. A certificate as to the
\namount of any additional amounts payable pursuant to Section 4.2 (setting forth
\nin reasonable detail the basis for requesting such amounts) submitted by such
\nLender to the Borrower shall be conclusive, in the absence of manifest error.
\nThe Borrower shall pay to such Lender the amount shown as due on any such
\ncertificate delivered by such Lender within 30 days after the Borrower’s receipt
\nof the same.<\/p>\n
SECTION 4.3 Taxes. All payments by the Borrower of principal of, and
\ninterest on, the Loans and all other amounts payable hereunder shall be made
\nfree and clear of and without deduction for any present or future excise, stamp
\nor franchise taxes or other taxes, whatsoever imposed by any taxing authority,
\nbut excluding<\/p>\n
43<\/p>\n
franchise taxes and taxes imposed on or measured by any Lender’s net income or
\nreceipts (such non-excluded items being called “Taxes”). In the event that any
\nwithholding or deduction from any payment to be made by the Borrower hereunder
\nis required in respect of any Taxes pursuant to any applicable law, rule or
\nregulation, then the Borrower will<\/p>\n
(a) pay directly to the relevant authority the full amount
\n required to be so withheld or deducted;<\/p>\n
(b) promptly forward to the Agent an official receipt or other
\n documentation satisfactory to the Agent evidencing such payment to such
\n authority; and<\/p>\n
(c) pay to the Agent for the account of the Lender such
\n additional amount or amounts as is necessary to ensure that the net
\n amount actually received by each Lender will equal the full amount such
\n Lender would have received had no such withholding or deduction been
\n required.<\/p>\n
Moreover, if any Taxes are directly asserted against the Agent or any Lender
\nwith respect to any payment received by the Agent or such Lender hereunder, the
\nAgent or such Lender may pay such Taxes and the Borrower will promptly pay such
\nadditional amounts (including any penalties, interest or expenses) as is
\nnecessary in order that the net amount received by the Agent or such Lender
\nafter the payment of such Taxes (including any Taxes on such additional amount)
\nshall equal the amount the Agent or such Lender would have received had no such
\nTaxes been asserted. Upon the request of the Borrower or the Agent, each Lender
\nand each participant that is organized under the laws of a jurisdiction other
\nthan the United States shall, prior to the due date of any payments hereunder or
\nunder the Notes, execute and deliver to the Borrower and the Agent, one or more
\n(as the Borrower or the Agent may reasonably request) United States Internal
\nRevenue Service Forms 4224 or Forms 1001 or such other forms or documents (or
\nsuccessor forms or documents), appropriately completed, as may be applicable (if
\nany are) to establish the extent, if any, to which a payment to such Lender or
\nparticipant is exempt from withholding or deduction of Taxes.<\/p>\n
If the Borrower fails to pay any Taxes when due to the appropriate
\ntaxing authority or fails to remit to the Agent, for the account of the
\nrespective Lender, the required amounts, receipts or other required documentary
\nevidence, the Borrower shall indemnify the Lenders for any incremental Taxes,
\ninterest or penalties that may become payable by the Lender as a result of any
\nsuch failure. For purposes of this Section 4.3, a distribution hereunder by the
\nAgent or any Lender to or for the account of any Lenders shall be deemed a
\npayment by the Borrower.<\/p>\n
If Taxes are incorrectly or illegally paid or assessed, and if any
\nLender or the Agent contests the assessment of such Taxes, such Lender or the
\nAgent shall refund, to the extent of any refund made to such Lender or the
\nAgent, any amounts paid by the Borrower under this Section in respect of such
\nTaxes.<\/p>\n
44<\/p>\n
Without prejudice to the survival of any other agreements of the
\nBorrower hereunder or any other Loan Document, the agreements of the Borrower
\ncontained in this Section shall survive the payment in full of all its Credit
\nObligations and the termination of all Commitments.<\/p>\n
To the extent any Lender shall become liable for the payment of any
\nTaxes hereunder and shall seek reimbursement therefor pursuant to this Section
\n4.3, the Borrower shall be entitled, upon the giving of five Business Days
\nnotice to the Agent and such Lender, (i) to replace such Lender with a
\nsubstitute lender, and (ii) in connection with such substitution, prepay in full
\nthe outstanding Credit Obligation of the Lender requesting reimbursement without
\npenalty or payment other than under Section 4.2 hereof.<\/p>\n
45<\/p>\n
ARTICLE V
\n ———<\/p>\n
REPRESENTATIONS AND WARRANTIES
\n ——————————<\/p>\n
The Borrower and each Participating Subsidiary and Participating
\nPartnership jointly and severally represent and warrant to the Agent and the
\nLenders as follows:<\/p>\n
SECTION 5.1 Organization, Powers, Existence, etc. (a) The Borrower and
\neach Consolidated Entity is duly organized or formed, validly existing and in
\ngood standing under the laws of the state in which it is incorporated or formed,
\n(b) the Borrower and each Consolidated Entity has the power and authority to own
\nits properties and assets and to carry on its business as now being conducted,
\n(c) the Borrower and each Consolidated Entity has the power to execute, deliver
\nand perform the Loan Documents to which it is a party, and (d) the Borrower and
\neach Consolidated Entity is duly qualified to do business in each state in which
\nit is required to be so qualified.<\/p>\n
SECTION 5.2 Authorization of Borrowing, etc. The execution, delivery
\nand performance of the Loan Documents (a) have been duly authorized by all
\nrequisite action and (b) will not violate any Governmental Requirement, the
\ncertificate of incorporation, bylaws or partnership agreement of the Borrower or
\nany Consolidated Entity, or any indenture, agreement or other instrument to
\nwhich the Borrower or any Consolidated Entity is a party, or by which the
\nBorrower or any Consolidated Entity or any of their properties are bound, or be
\nin conflict with, result in a breach of or constitute (with due notice or lapse
\nof time or both) a default under, any such indenture, agreement or other
\ninstrument, or result in the creation or imposition of any Lien upon any of the
\nproperties or assets of the Borrower or any Consolidated Entity, except as
\nrequired by the terms of this Agreement.<\/p>\n
SECTION 5.3 Liabilities. The Borrower has furnished to the Agent and
\nthe Lenders a copy of the audited consolidated balance sheet of the Borrower and
\nthe Consolidated Entities dated as of December 31, 1994 and a statement of
\nchanges in shareholders’ equity and the related statements of income and cash
\nflow as of the end of Fiscal Year 1994. Such financial statements were prepared
\nin conformity with GAAP consistently applied throughout the period involved, are
\nin accordance with the books and records of the Borrower and the Consolidated
\nEntities, are correct and complete and present fairly the financial condition of
\nthe Borrower and the Consolidated Entities as of the date of such financial
\nstatements, and, since the date of such financial statements, no material
\nadverse change in the financial condition, business or operations of the
\nBorrower or any of the Consolidated Entities has occurred. Neither the Borrower
\nnor any Consolidated Entity has any Liabilities, Guaranteed Obligations or other
\nobligations or liabilities, direct or contingent, in an aggregate amount in
\nexcess of $300,000 other than (a) the Liabilities reflected in such balance
\nsheet and the notes thereto or (b) Liabilities incurred in the ordinary course
\nof business.<\/p>\n
46<\/p>\n
SECTION 5.4 Taxes. The Borrower and each Consolidated Entity has filed
\nor caused to be filed all federal, state and local tax returns that are required
\nto be filed, and has paid all taxes as shown on said returns or on any
\nassessment received by the Borrower or any Consolidated Entity to the extent
\nthat such taxes have become due.<\/p>\n
SECTION 5.5 Litigation. There are no actions, suits or proceedings
\npending or, to the best knowledge of the Borrower, threatened against or
\naffecting the Borrower, any Consolidated Entity or any Facility, by or before
\nany Governmental Authority that involve any of the transactions contemplated in
\nthis Agreement or the possibility of any judgment or liability that may result
\nin a material adverse change in the operations or financial condition of the
\nBorrower and the Consolidated Entities, on a consolidated basis; and neither the
\nBorrower nor any Consolidated Entity is in default with respect to any material
\nGovernmental Requirement.<\/p>\n
SECTION 5.6 Agreements. Neither the Borrower nor any Consolidated
\nEntity is in default in the performance, observance or fulfillment of any of the
\nobligations contained in any agreement or instrument to which it is a party,
\nwhich default could have a material adverse effect upon the operations or
\nfinancial condition of the Borrower and the Consolidated Entities on a
\nconsolidated basis.<\/p>\n
SECTION 5.7 Use of Proceeds. Neither the Borrower nor any Participating
\nSubsidiary or Participating Partnership intends to use any part of the proceeds
\nof Advances or proceeds of drawings under Letters of Credit for the purpose of
\npurchasing or carrying any Margin Stock or retiring any debt incurred to
\npurchase or carry any Margin Stock or for any other purpose that is not
\nexpressly authorized by this Agreement.<\/p>\n
SECTION 5.8 ERISA Requirement. (i) The execution and delivery of the
\nLoan Documents will not involve any prohibited transaction within the meaning of
\nERISA, (ii) the Borrower and each Consolidated Entity has fulfilled its
\nobligations under the minimum funding standards imposed by ERISA and each is in
\ncompliance in all material respects with the applicable provisions of ERISA, and
\n(iii) no “Reportable Event,” as defined in Section 4043(b) of Title IV of ERISA,
\nhas occurred with respect to any plan maintained by the Borrower or any of its
\nConsolidated Entities.<\/p>\n
SECTION 5.9 Subsidiaries. The Borrower has no direct or indirect equity
\nownership in any person other than (a) Controlled Partnerships, Subsidiaries and
\nConsolidated Entities and (b) those ownership interests listed in Exhibit L.
\nNone of the Subsidiaries or Controlled Partnerships has any direct or indirect
\nequity ownership in any other person except other Consolidated Entities except
\nas set forth in subparagraph (b) in the preceding sentence. The Borrower’s
\nownership interest in each Subsidiary and Controlled Partnership is free and
\nclear of all Liens, warrants, options, rights to purchase and other interests of
\nany person except for rights of first refusal that apply to certain limited
\npartnership interests whose value is not material in amount and rights of first<\/p>\n
47<\/p>\n
refusal given to certain limited partners of HEALTHSOUTH Rehabilitation Center
\nof Charlotte Limited Partnership and HEALTHSOUTH Rehabilitation Center of San
\nFrancisco Limited Partnership covering the Borrower’s general partnership
\ninterests therein. All capital stock of the Subsidiaries has been duly
\nauthorized and validly issued and is fully paid and non-assessable. There have
\nbeen delivered and pledged to the Lender all certificates representing all
\ncapital stock in all Subsidiaries. All now-existing Subsidiaries and Controlled
\nPartnerships are listed in Exhibit M hereto.<\/p>\n
SECTION 5.10 Principal Place of Business. The principal place of
\nbusiness and chief executive office of the Borrower is at its address shown in
\nSection 10.2 and will not be changed from such address unless, prior to such
\nchange, the Borrower shall have notified the Agent of the proposed change, and
\nin no event will the Borrower’s principal place of business or chief executive
\noffice be located outside the State of Alabama.<\/p>\n
SECTION 5.11 Environmental Laws. The Borrower and each Consolidated
\nEntity are in material compliance with all applicable federal, state and local
\nlaws and regulations relating to air, water, soil and other environmental
\nquality and all material laws relating to the handling and disposal of hazardous
\nwaste materials.<\/p>\n
SECTION 5.12 Disclosure. No financial statement, document, certificate
\nor other written communication furnished to the Agent or the Lenders by or on
\nbehalf of the Borrower or any Consolidated Entity or to the extent not a
\nConsolidated Entity any Participating Subsidiary or Participating Partnership in
\nconnection with any Loan Document contains any untrue statement of a material
\nfact or omits to state a material fact necessary to make the statements
\ncontained herein or therein not misleading. There is no fact known to the
\nBorrower that materially adversely affects the business or condition of the
\nBorrower or any Material Group that has not been disclosed herein or in such
\nfinancial statements.<\/p>\n
SECTION 5.13 Licenses. All material certificates of need, licenses,
\npermits, accreditations and approvals required by all Governmental Authorities
\nnecessary in order for each Facility to be operated for its intended purpose
\nhave been obtained and are in full force and effect.<\/p>\n
SECTION 5.14 Title to Properties. The Borrower has good and marketable
\ntitle to all its properties and assets reflected on the balance sheet referred
\nto in Section 5.3 except for those matters shown on such balance sheet and
\nexcept for such properties and assets as have been disposed of since the date of
\nsaid balance sheet as no longer used or useful in the conduct of its business or
\nas have been disposed of in the ordinary course of the business and except that
\nthe property of HEALTHSOUTH Doctors’ Hospital, Inc. is held subject to a right
\nof first refusal benefitting the Dr. John T. Macdonald Foundation. All such
\nproperties and assets are free and clear of all Liens, except as otherwise
\npermitted or required by the provisions of the Loan Documents.<\/p>\n
48<\/p>\n
SECTION 5.15 Status of Loans. The Credit Obligations constitute Senior
\nIndebtedness under the indentures pursuant to which the Subordinated
\nIndebtedness has been issued and are senior in right of payment and security to
\nall other Indebtedness of Borrower and its Consolidated Entities other than (x)
\nIndebtedness described in Section 7.8(5)(B)(D), (E) and (H) as to which
\nIndebtedness, other than that which is secured which may rank senior in right of
\nsecurity with respect to the applicable security therefor, the Credit
\nObligations are pari passu in right of payment and (y) the Surgical Health
\nSubordinated Indebtedness until such time as Surgical Health shall deliver its
\nGuaranty. The Pledge Agreements and the delivery of the Collateral to the Agent
\nwill create for the benefit of the Lenders a valid first priority perfected
\nsecurity interest in the Collateral.<\/p>\n
49<\/p>\n
ARTICLE VI<\/p>\n
GENERAL CONDITIONS OF LENDING
\n —————————–<\/p>\n
Each Lender’s obligation to make, continue or convert each Advance or
\nissue additional Letters of Credit hereunder is subject to the following
\nconditions precedent:<\/p>\n
SECTION 6.1 Representations and Warranties. On the date of each Advance
\nhereunder and on the date the Borrower presents to the Agent a Request for
\nAdvance or Interest Rate Election form or Competitive Bid Quote Request or
\nApplication, the representations and warranties set forth in this Agreement and
\nin all other Loan Documents shall be true and correct on and as of such date
\nwith the same effect as though such representations and warranties had been made
\non the date of the Advance or on the date the Borrower presents to the Agent a
\nRequest for Advance or Interest Rate Election form or Competitive Bid Quote
\nRequest or Application, as the case may be. Each such warranty and
\nrepresentation shall be deemed to be continuing in effect so long as this
\nAgreement remains in effect. The presentation by the Borrower of each Request
\nfor Advance or Interest Rate Election, Competitive Bid Quote Request or
\nApplication shall constitute a representation and warranty by the Borrower to
\nthe Lender that no material adverse change in the financial condition of the
\nBorrower and the Consolidated Entities, on a consolidated basis, as reflected in
\nthe financial statements delivered to the Agent and Lenders pursuant to Section
\n5.3 has occurred since the date of such financial statements.<\/p>\n
SECTION 6.2 No Default. On the date of each Advance and issuance of a
\nLetter of Credit hereunder, the Borrower and all Material Groups shall be in
\ncompliance with all the terms and conditions set forth in this Agreement on its
\nor their part to be observed or performed, and no Event of Default, or event
\nthat upon notice or lapse of time or both would constitute an Event of Default,
\nshall have occurred and be continuing.<\/p>\n
SECTION 6.3 Supporting Documents.<\/p>\n
(a) The Agent, on behalf of the Lenders, shall have also
\nreceived on the date of execution of this Agreement (i) a copy of resolutions of
\nthe Board of Directors of the Borrower, certified as in full force and effect on
\nsuch date by the Secretary of the Borrower, authorizing the execution, delivery
\nand performance of the Loan Documents and authorizing designated officers of the
\nBorrower to execute and deliver the Loan Documents on behalf of the Borrower and
\nto execute and deliver to the Agent Request for Advance or Interest Rate
\nElection or Competitive Bid Quote Request forms and Applications; (ii) a
\ncertificate of the Secretary of the Borrower, dated such date, certifying that
\n(A) an attached copy of the Certificate of Incorporation and bylaws of the
\nBorrower is true and correct as of such date, (B) that the Certificate of
\nIncorporation and Bylaws of the Borrower have not been amended since the date of
\nthe last amendment attached thereto and (C) the incumbency and specimen
\nsignatures of the designated officers referred to in clause (i) above; (iii) an
\nOpinion of Counsel to the<\/p>\n
50<\/p>\n
Borrower in the form required by the Agent; (iv) duly executed Pledge Agreements
\nby the Borrower, the Participating Subsidiaries and the Participating
\nPartnerships to the extent applicable, together with all stock powers, stock
\ncertificates and financing statements related thereto; (v) evidence satisfactory
\nto the Agent of the receipt of all necessary approvals for the acquisition of
\nNovaCare Rehabilitation Hospital Division (provided, however, that so long as
\nBorrower or one of its Consolidated Entities shall have entered into a binding
\nagreement to manage a Facility acquired from NovaCare Rehabilitation Hospital
\nDivision, Borrower shall have a period of up to 180 days to obtain all
\ngovernmental approvals for transfer of such Facility), (vi) such additional
\nsupporting documents as the Agent may reasonably request; and (vii) all fees
\npayable to the Agent and the Lenders.<\/p>\n
(b) The Agent, on behalf of the Lenders, shall also have
\nreceived on or before the date on which a Subsidiary becomes a Participating
\nSubsidiary (on or before the Closing Date in the case of each Subsidiary listed
\nin Exhibit G hereto) (i) a copy of resolutions of the Board of Directors and
\nshareholders of such Subsidiary (if necessary) certified as in full force and
\neffect on the date thereof by the Secretary of such Subsidiary, authorizing such
\nSubsidiary’s execution, delivery and performance of, and the assumption of
\nliability under, the Loan Documents and all other agreements and instruments
\nthat this Agreement contemplates will be executed, delivered and performed by
\nsuch Subsidiary; (ii) a copy of the Certificate of Incorporation or Articles of
\nIncorporation, as the case may be, and Bylaws of such Subsidiary, certified as
\ntrue and correct on and as of the date on which Loan Documents are executed and
\ndelivered by the Borrower and such Subsidiary; (iii) an Opinion of Counsel to
\nsuch Subsidiary in a form acceptable to the Agent as to the execution and
\ndelivery by such Subsidiary of the Loan Documents and other matters related
\nthereto; (iv) fully executed copies of all Loan Documents that this Agreement
\ncontemplates will be executed or delivered (or both) by such Subsidiary
\n(including a fully executed Subsidiary Guaranty Agreement); and (v) such
\nadditional supporting documents as the Agent or its counsel may reasonably
\nrequest.<\/p>\n
(c) The Agent, on behalf of the Lenders, shall also have
\nreceived on or before the date on which a Controlled Partnership becomes a
\nParticipating Partnership (on or before the Closing Date in the case of each
\nControlled Partnership listed in Exhibit G hereto) (i) a copy of the partnership
\nagreement under which such Controlled Partnership was formed, certified as true
\nand correct on and as of the date of which Loan Documents are executed and
\ndelivered by the Borrower and such Controlled Partnership; (ii) an Opinion of
\nCounsel to such Controlled Partnership in a form acceptable to the Agent as to
\nthe execution and delivery by such Controlled Partnership of the Loan Documents
\nand other matters related thereto; (iii) fully executed copies of all Loan
\nDocuments that this Agreement contemplates will be executed or delivered (or
\nboth) by such Controlled Partnership (including a fully executed Partnership
\nGuaranty Agreement); and (iv) such additional supporting documents as the Agent
\nor its counsel may reasonably request.<\/p>\n
51<\/p>\n
(d) The Agent, on behalf of the Lenders, shall also have received on or
\nprior to the date of the initial Advance under this Agreement, (i) evidence
\nsatisfactory to the Agent of the Acquisition by the Borrower or its
\nParticipating Subsidiaries, or both, of the NovaCare Rehabilitation Hospital
\nDivision, (ii) stock certificates representing all of the issued and outstanding
\ncapital stock of each Subsidiary organized to acquire any portion of the assets
\nof NovaCare Rehabilitation Hospital Division, (iii) a Guaranty of each such
\nSubsidiary, and (iv) such other documentation, including but not limited to,
\nopinions, resolutions and certificates, as the Agent shall request.<\/p>\n
SECTION 6.4 No Adverse Change. A further condition to both the
\nexecution of this Agreement and any further Advance hereunder is that there has
\nbeen no material adverse change in the condition, business or prospects of the
\nBorrower or any of the Consolidated Entities since December 31, 1994, the
\nabsence of an order or injunction restraining either the acquisition of NovaCare
\nRehabilitation Hospital Division or Surgical Health Corporation and the absence
\nof any pending or threatened litigation which would have a materially adverse
\neffect on the ability of the Borrower and the Consolidated Entities to perform
\nits obligations under this Agreement or any other Loan Document.<\/p>\n
SECTION 6.5 Effective Date. Neither the Agent nor any Lender shall be
\nobligated to make any Advance under this Agreement until the Effective Date nor
\nshall this Agreement be deemed effective until the Effective Date. Furthermore,
\nall obligations of the Agent and the Lenders under this Agreement shall
\nterminate on June 1, 1995 if either (i) the Agent has not received those items
\ndescribed in Section 6.3 or (ii) the Effective Date has not occurred. The First
\nRestated Agreement shall continue in full force and effect until the Effective
\nDate.<\/p>\n
52<\/p>\n
ARTICLE VII<\/p>\n
GENERAL COVENANTS OF THE BORROWER
\n ———————————<\/p>\n
From the date on which this Agreement is delivered until payment in
\nfull of the Credit Obligations and the termination in writing of the Lenders’
\nobligation to extend credit under this Agreement, the Borrower and each
\nParticipating Subsidiary and Participating Partnership, jointly and severally,
\ncovenant and agree that:<\/p>\n
SECTION 7.1 Existence, Properties, etc. The Borrower shall, and shall
\ncause each Consolidated Entity to, (a) do or cause to be done all things
\nnecessary to preserve and keep in full force and effect its existence, rights
\nand franchises and comply with all Governmental Requirements applicable to it
\nand (b) at all times maintain, preserve and protect all franchises and trade
\nnames and preserve all of its property used or useful in the conduct of its
\nbusiness and keep the same in good repair, working order and condition, and from
\ntime to time make, or cause to be made, all needful and proper repairs and
\nimprovements thereto (normal wear and tear excepted).<\/p>\n
SECTION 7.2 Payment of Indebtedness, Taxes, etc. The Borrower shall,
\nand shall cause each Consolidated Entity to, (a) pay its indebtedness and
\nobligations in accordance with normal terms and (b) pay and discharge or cause
\nto be paid and discharged promptly all taxes, assessments and other charges or
\nlevies of Governmental Authorities imposed upon it or upon its income and
\nprofits or upon any of its properties before the same shall become in default;
\nprovided, however, that the Borrower and the Consolidated Entities shall not be
\nrequired to pay and discharge or cause to be paid and discharged any such
\nindebtedness, obligation, tax, assessment, charge, levy or claim so long as the
\nvalidity thereof shall be duly pursued and contested in good faith by
\nappropriate proceedings and the Borrower and the Consolidated Entities shall
\nmaintain adequate reserves for such taxes, indebtedness, obligations,
\nassessments, charges, levies or claims during such proceedings.<\/p>\n
SECTION 7.3 Financial Statements, Reports, etc. The Borrower shall
\ndeliver or cause to be delivered to the Agent and each Lender:<\/p>\n
(1) Not later than 50 days after the end of each calendar
\n quarter, a balance sheet and a statement of revenues and expenses of
\n the Borrower and its Consolidated Entities on a consolidated and on a
\n consolidating basis (provided Borrower shall report the results of
\n operations for each specialty medical center on a separate basis and
\n the results of operations for each of the following business segments
\n on a separate aggregate basis: outpatient rehabilitation centers,
\n inpatient rehabilitation hospitals, outpatient surgery centers and
\n others (to include but not limited to diagnostic centers)) and a
\n statement of cash flow of the Borrower and its Consolidated Entities on
\n a consolidated basis for such<\/p>\n
53<\/p>\n
calendar quarter and for the period beginning on the first day of the
\n fiscal year and ending on the last day of such calendar quarter (in
\n sufficient detail to indicate the Borrower’s and each Consolidated
\n Entity’s compliance with the financial covenants set forth in this
\n Article VII), together with statements in comparative form for the
\n corresponding periods in the preceding fiscal year together with
\n calculations supporting the same store performance as summarized in the
\n Borrower’s Form 10-Q for the corresponding period, and certified by the
\n president or chief financial officer of the Borrower.<\/p>\n
(2) Not later than 100 days after the end of each fiscal year,
\n financial statements (including a balance sheet, a statement of
\n revenues and expenses, a statement of changes in shareholders’ equity
\n and a statement of cash flow) of the Borrower and its Consolidated
\n Entities on a consolidated and on a consolidating basis (provided
\n Borrower shall report the results of operations for each specialty
\n medical center on a separate basis and the results of operations for
\n each of the following business segments on a separate aggregate basis:
\n outpatient rehabilitation centers, inpatient rehabilitation hospitals,
\n outpatient surgery centers and others (to include but not limited to
\n diagnostic centers)) for such fiscal year (in sufficient detail to
\n indicate the Borrower’s and each Consolidated Entity’s compliance with
\n the financial covenants set forth in this Article VII), together with
\n statements in comparative form for the preceding fiscal year together
\n with calculations supporting the same store performance as summarized
\n in the Borrower’s Form 10-K for the corresponding period, and
\n accompanied by an opinion of certified public accountants acceptable to
\n the Agent, which opinion shall state in effect that such financial
\n statements (A) were audited using generally accepted auditing
\n standards, (B) were prepared in accordance with generally accepted
\n accounting principles applied on a consistent basis, and (C) present
\n fairly the financial condition and results of operations of the
\n Borrower and its Consolidated Entities for the periods covered.<\/p>\n
(3) Together with the financial statements required by
\n paragraphs (1) and (2) above a compliance certificate duly executed by
\n the chief executive officer or the president or chief financial officer
\n of the Borrower in the form of Exhibit I attached hereto (“Compliance
\n Certificate”).<\/p>\n
(4) Promptly upon receipt thereof, copies of all reports,
\n management letters and other documents submitted to the Borrower or any
\n Consolidated Entity by independent accountants in connection with any
\n annual or interim audit of the books of the Borrower or any
\n Consolidated Entity made by such accountants.<\/p>\n
(5) Contemporaneously with the distribution thereof to the
\n Borrower’s or any Consolidated Entity’s stockholders or partners or the
\n filing thereof with the Securities and Exchange Commission, as the case
\n may be, copies of all<\/p>\n
54<\/p>\n
statements, reports, notices and filings distributed by the Borrower or
\n any Consolidated Entity to its stockholders or partners or filed with
\n the Securities and Exchange Commission (including reports on SEC Forms
\n 10-K, 10-Q and 8-K).<\/p>\n
(6) Promptly after the Borrower knows or has reason to know of
\n the occurrence of any “reportable event” under Section 4043 of ERISA
\n applicable to the Borrower or any Consolidated Entity, a certificate of
\n the president or chief financial officer of the Borrower setting forth
\n the details as to such “reportable event” and the action that the
\n Borrower or the Consolidated Entity has taken or will take with respect
\n thereto, and promptly after the filing or receiving thereof, copies of
\n all reports and notices that the Borrower and each Consolidated Entity
\n files under ERISA with the Internal Revenue Service or the Pension
\n Benefit Guaranty Corporation or the United States Department of Labor.<\/p>\n
(7) Promptly after the Borrower or any of its Consolidated
\n Entities becomes aware of the commencement thereof, notice of any
\n investigation, action, suit or proceeding before any Governmental
\n Authority involving the condemnation or taking under the power of
\n eminent domain of any of its property or the revocation or suspension
\n of any permit, license, certificate of need or other Governmental
\n Requirement applicable to any Facility.<\/p>\n
(8) Within 10 days of the receipt by the Borrower or any of
\n its Consolidated Entities, copies of all material deficiency notices,
\n compliance orders or adverse reports issued by any Governmental
\n Authority or accreditation commission having jurisdiction over
\n licensing, accreditation or operation of a Facility or by any
\n Governmental Authority or private insurance company pursuant to a
\n provider agreement, which, if not promptly complied with or cured,
\n could result in the suspension or forfeiture of any license,
\n certification or accreditation necessary in order for the Facility to
\n carry on its business as then conducted or the termination of any
\n material insurance or reimbursement program available to the Facility.<\/p>\n
(9) Such other information regarding any Facility or the
\n financial condition or operations of the Borrower or its Consolidated
\n Entities as the Agent shall reasonably request from time to time or at
\n any time.<\/p>\n
SECTION 7.4 Litigation Notice. The Borrower shall, promptly after the
\nsame shall have become known to any officer of the Borrower, notify the Agent in
\nwriting of any action, suit or proceeding at law or in equity or by or before
\nany Governmental Authority that, if adversely determined, might impair the
\nability of the Borrower or any Material Group to perform its obligations under
\nthis Agreement or any other Loan Document or might materially and adversely
\naffect the business or condition, financial or otherwise, of the Borrower or any
\nMaterial Group.<\/p>\n
55<\/p>\n
SECTION 7.5 Default Notice. The Borrower shall promptly give notice in
\nwriting to the Agent of the occurrence of any Default or Event of Default.<\/p>\n
SECTION 7.6 Further Assurances. The Borrower shall at its cost and
\nexpense, upon the request of the Agent, duly execute and deliver, or cause to be
\nduly executed and delivered, to the Agent such further instruments and do and
\ncause to be done such further acts as may be reasonably necessary or proper in
\nthe opinion of the Agent or its counsel to carry out more effectively the
\nprovisions and purposes of the Loan Documents.<\/p>\n
SECTION 7.7 Insurance. The Borrower and each Consolidated Entity shall
\nat all times maintain in force, and pay all premiums and costs related to,
\ninsurance coverages comparable to the coverages reviewed by the Agent prior to
\nthe Closing Date a summary of which coverage is set forth in Exhibit J hereto
\nand any other coverages required under applicable Governmental Requirements. The
\nBorrower shall deliver to the Agent annually on or before the anniversary date
\nof this Agreement, and at such other time or times as the Agent may request (but
\nnot more often than monthly), a certificate of the president or chief financial
\nofficer of the Borrower setting out in such detail as the Agent may reasonably
\nrequire a description of all insurance coverages maintained by the Borrower and
\neach Consolidated Entity. The Agent shall have no obligation to give the
\nBorrower or any Consolidated Entity notice of any notification received by the
\nAgent with respect to any insurance policies or take any steps to protect the
\nBorrower’s or any Consolidated Entity’s interests under such policies.<\/p>\n
SECTION 7.8 Covenants Regarding Financial Condition.<\/p>\n
(a) The Borrower covenants and agrees that:<\/p>\n
(1) Minimum Net Worth. Consolidated Net Worth shall
\n not be less than $416,000,000 plus (A) 75% of Consolidated Net
\n Income (if positive and including for purposes of this Section
\n 7.8(a)(1) only any extraordinary gain), on an ongoing basis
\n for each fiscal quarter beginning with the fiscal quarter
\n ending March 27, 31, 1995, plus (B) the aggregate amount of
\n all increases, if any, in its capital accounts resulting from
\n the issuance of Capital Stock or conversion of debt into
\n Capital Stock or other securities properly classified as
\n equity in accordance with generally accepted accounting
\n principles, or from the sale or other disposition of treasury
\n shares, from the date of this Agreement through the date of
\n determination plus (c), without duplication, any addition to
\n Consolidated Stockholders’ Equity resulting from an
\n Acquisition after the Closing Date which shall be accounted
\n for on a pooling-of-interest basis.<\/p>\n
(2) Fixed Charge Coverage Ratio. The Consolidated
\n Fixed Charge Coverage Ratio shall not at any time be less than
\n 1.10 to 1.00.<\/p>\n
56<\/p>\n
(3) Senior Indebtedness to Consolidated Total
\n Capital. The ratio of Senior Indebtedness to Consolidated
\n Total Capital shall be at all times prior to January 1, 1996
\n less than .55 to 1.00, from January 1, 1996 through December
\n 31, 1996 less than .50 to 1.00 and at all times on and after
\n January 1, 1997 less than .45 to 1.00.<\/p>\n
(4) Indebtedness to Consolidated Cash Flow. The ratio
\n of Indebtedness of the Borrower and its Consolidated Entities
\n to Consolidated Cash Flow shall at all times during the
\n periods set forth below be less than the ratio set forth
\n opposite such period:<\/p>\n
Ratio of
\n ——————————
\n Consolidated
\n Period Indebtedness to Cash Flow
\n —— ———— ————<\/p>\n
Closing Date through 4.50 1.00
\n December 31, 1995
\n January 1, 1996 through 4.00 1.00
\n December 31, 1996
\n January 1, 1997 and 3.50 1.00
\n Thereafter<\/p>\n
(5) Indebtedness. The Borrower and Consolidated
\n Entities on a consolidated basis will not incur, or otherwise
\n become liable with respect to, any Indebtedness other than (A)
\n the Credit Obligations; (B) Indebtedness described in Exhibit
\n K which Indebtedness shall not be modified or amended; (C) the
\n Senior Subordinated Notes and the Convertible Subordinated
\n Debentures; (D) up to $50,000,000 of Indebtedness, including
\n Indebtedness incurred to purchase property, plant or
\n equipment; (E) Guaranteed Obligations permitted under Section
\n 7.8(a)(6); (F) Subordinated Indebtedness of the Borrower, the
\n proceeds of which are used to permanently reduce the principal
\n portion of the Senior Subordinated Notes or the Convertible
\n Subordinated Debentures so long as such Subordinated
\n Indebtedness is (i) unsecured, (ii) bears interest at a rate
\n of 15% or less per annum, (iii) contains covenants,
\n restrictions, terms of subordination and redemption provisions
\n no less favorable to the Lenders than those contained in
\n Indentures pursuant to which the Senior Subordinated Notes or
\n Convertible Subordinated Debentures, as the case may be, were
\n issued, as such Indentures exist on the Closing Date, (iv)
\n prohibits payment of principal whether by its terms or by
\n prepayment prior to the earlier of 100 days next following the
\n Termination Date or November 1, 2000, and (v) does not result
\n in an increase in the amount of outstanding Indebtedness, (G)
\n upon the acquisition of Surgical Health Corporation, the
\n Surgical Health Subordinated Indebtedness and (H) the
\n Headquarters Obligations.<\/p>\n
57<\/p>\n
(6) Guarantees. Borrower and the Consolidated
\n Entities on a consolidated basis will not incur any Guaranteed
\n Obligations (whether by directly guaranteeing obligations of
\n another person or by agreement to purchase the indebtedness of
\n any other person, or entering into an agreement for the
\n furnishing of funds to any other person through the purchase
\n of goods, supplies or services or by way of stock purchase,
\n contribution, advance or loan for the purpose of paying or
\n discharging the indebtedness of any other person or
\n otherwise), in an aggregate amount in excess of $50,000,000,
\n except for (A) the endorsement of negotiable instruments in
\n the ordinary course of business for collection; (B)
\n obligations arising by reason of the Borrower’s status as a
\n general partner of a Controlled Partnership; (C) obligations
\n to advance funds to Subsidiaries and Controlled Partnerships,
\n but only so long as the note or notes or accounts receivable
\n evidencing the advance of such funds is assigned to the Agent
\n as security for the Credit Obligations; (D) the guarantees
\n arising under the Guaranty Agreements; (E) the guarantee of up
\n to $22,000,000 of Indebtedness of Vanderbilt, (F) guarantees
\n of Indebtedness incurred to pay the principal amount of the
\n Credit Obligations, provided that, concurrently with the
\n incurrence of such Guaranteed Obligation, the Borrower and the
\n Agent agree in writing to reduce the credit available to the
\n Borrower under this Agreement by an amount equal to the amount
\n of such Guaranteed Obligations and the Borrower pays any fee
\n required to be paid in connection with such reduction and (G)
\n guarantees of the Headquarters Obligations.<\/p>\n
(7) Investments and Loans. Borrower will not and will
\n not permit any Consolidated Entity, directly or indirectly, to
\n purchase or otherwise acquire any stock, security, obligation
\n or evidence of indebtedness of, make any capital contribution
\n to, own any equity interest in, or make any loan or advance
\n to, any other person; provided, however, that the Borrower and
\n such Consolidated Entities may (A) continue to hold all stock
\n of and own partnership interests in the persons that
\n constitute Consolidated Entities on the Closing Date; (B)
\n acquire stock or partnership interests in, and assets of, any
\n new Consolidated Entity acquired at a Cost of Acquisition of
\n up to $50,000,000; (C) make Permitted Investments; (D) make
\n investments in an aggregate amount during the term of this
\n Agreement not exceeding $50,000,000 in corporations,
\n partnerships or joint ventures who do not constitute
\n Consolidated Entities, (E) subject to continuing compliance
\n with all of the other covenants and conditions contained in
\n this Agreement, make any Acquisition of a person who shall
\n become a Consolidated Entity the primary form of consideration
\n of which is the Common Stock of Borrower with the Cost of
\n Acquisition not to exceed $150,000,000, and such acquisition
\n to be accounted for as a pooling of interests, (F) acquire
\n Surgical Health Corporation for a<\/p>\n
58<\/p>\n
Cost of Acquisition of approximately $240,000,000 and (G)
\n acquire Surgical Care Affiliates, Inc. for a Cost of
\n Acquisition of approximately $1,400,000,000 provided (i) such
\n acquisition is accounted for as a pooling of interests, (ii)
\n there shall be delivered to the Agent all of the outstanding
\n capital stock of Surgical Care Affiliates, Inc., and (iii)
\n Surgical Care Affiliates, Inc. or its successor shall become a
\n Participating Subsidiary and shall have furnished the Agent a
\n Guaranty Agreement pursuant to Section 2.5(a).<\/p>\n
(8) Disposition of Assets. Borrower and the
\n Consolidated Entities on a consolidated basis will not without
\n the consent of the Required Lenders (which consent shall not
\n be unreasonably withheld), sell, lease, transfer or otherwise
\n dispose of in excess of 10% of their total properties and
\n assets over the term of this Agreement.<\/p>\n
(9) Consolidation or Merger. Borrower and its
\n Consolidated Entities may merge or consolidate with another
\n person only if (i) in the case of a merger or consolidation of
\n the Borrower, the Borrower is the continuing or surviving
\n entity, (ii) in the case of a merger or consolidation
\n involving a Consolidated Entity, the continuing or surviving
\n entity is majority-owned by the Borrower (with such majority
\n ownership constituting a controlling interest), and (iii)
\n before and after giving effect to the proposed merger or
\n consolidation, no Default or Event of Default shall exist
\n under this Agreement; provided that in the case of any
\n consolidation or merger with a person which (x) is not a
\n Consolidated Entity either before or after giving effect to
\n such merger or consolidation and (y) the total assets of such
\n person exceed $50,000,000, the Required Lenders shall have
\n consented thereto.<\/p>\n
(10) Liens. Borrower will not, and will not permit
\n any Consolidated Entity to, incur, create, assume or permit to
\n exist any Lien upon any of its accounts receivable, contract
\n rights, chattel paper, inventory, equipment, instruments,
\n general intangibles or other personal or real property of any
\n character, whether now owned or hereafter acquired, other than
\n (i) Liens that constitute Permitted Encumbrances, (ii) Liens
\n existing as of the date hereof and described on Exhibit N
\n hereof and (iii) Liens securing Indebtedness incurred under
\n Section 7.8(a)(5)(D) so long as the Lien extends only to the
\n asset acquired with such Indebtedness.<\/p>\n
(11) Dividends and Distributions. Borrower will not
\n permit any Consolidated Entity to be or become subject to any
\n restrictions on the ability of such Consolidated Entity to pay
\n dividends or to make partnership distributions.<\/p>\n
59<\/p>\n
(12) Acquisitions. Prior to entering into any
\n agreement to acquire any person or Facility the estimated Cost
\n of Acquisition of which exceeds $50,000,000, the Borrower
\n shall provide to the Agent evidence satisfactory to the Agent,
\n (i) that the person or Facility to be acquired is in the same
\n line of business presently engaged in by the Borrower or its
\n Consolidated Entities, (ii) that the person or Facility to be
\n acquired does not oppose the Acquisition, and (iii) if the
\n Cost of Acquisition exceeds $50,000,000 (other than an
\n Acquisition under Section 7.8(a)(7)(E)), the Required Lenders
\n shall have consented thereto.<\/p>\n
(13) Restricted Payments. Borrower will not make
\n Restricted Payments except Borrower may (i) redeem the
\n Surgical Subordinated Indebtedness, (ii) repay up to
\n $10,000,000 of Subordinated Indebtedness in any Fiscal Year,
\n and (iii) make other Restricted Payments in any Fiscal Year so
\n long as Borrower shall deliver to the Agent prior to making
\n any other such Restricted Payment a Compliance Certificate
\n demonstrating that on a pro forma basis after giving effect to
\n such payment no Default or Event of Default exists.<\/p>\n
(b) Except as otherwise expressly provided in this
\n Section 7.8, (i) the Borrower shall also cause and require each of its
\n Consolidated Entities to observe and perform each of the covenants and
\n agreements of this section to be observed and performed by the
\n Borrower, whether or not a specific reference is made to the
\n Consolidated Entities in each such covenant (other than the financial
\n covenants set forth in paragraphs (1) through (4) of subsection (a)
\n above, which apply to the Borrower and the Consolidated Entities on a
\n consolidated basis), and (ii) all computations required in connection
\n with such financial covenants and the limitations set forth in
\n paragraphs (5) through (11) of subsection (a) above shall be made for
\n the Borrower and its Consolidated Entities on a combined or
\n consolidated basis, in accordance with generally accepted accounting
\n principles, after elimination of intercompany items.<\/p>\n
SECTION 7.9 Continuation of Current Business. Neither the Borrower nor
\nany Consolidated Entity will (i) engage in any business other than the business
\nnow being conducted by it and other businesses directly related to providing
\nrehabilitation services (including outpatient surgery, diagnostic services and
\nmanagement of physician practices) or orthopedic surgery related acute care
\nsimilar in operation (but not in scope) to the HEALTHSOUTH Medical Center
\nFacility or (ii) acquire or attempt to acquire any person who is opposed to such
\nacquisition.<\/p>\n
SECTION 7.10 Management Contracts. Neither the Borrower nor any
\nConsolidated Entity will enter into any agreement whereby the management,
\nsupervision or control of its business or any Facility shall be delegated to or
\nplaced in any persons other than its governing body and officers, the Borrower
\nor a Consolidated Entity,<\/p>\n
60<\/p>\n
except that (i) management of the Facility owned by Vanderbilt Stallworth
\nRehabilitation Hospital, L.P. is vested in part in a Governance Committee and in
\npart in a Subsidiary of the Borrower pursuant to the applicable limited
\npartnership agreement and a management agreement and (ii) the Facility known as
\nNashville REHAB HOSPITAL located in Nashville, Tennessee may be managed by an
\nindependent body until such time as such Facility is sold.<\/p>\n
SECTION 7.11 Cooperation; Inspection of Properties. The Borrower shall,
\nand shall cause the Consolidated Entities to, permit the Lenders and their
\nrepresentatives to inspect the Borrower’s and the Consolidated Entities’
\nproperties and assets, and to inspect, review and audit the Borrower’s and the
\nConsolidated Entities’ books and records from time to time and at any time.<\/p>\n
SECTION 7.12 Use of Proceeds. The Borrower shall use the proceeds of
\nAdvances exclusively to repay short-term Indebtedness to NationsBank, to
\npurchase the equity and assume the net working capital obligation of NovaCare
\nRehabilitation Hospital Division for a total Cost of Acquisition not to exceed
\n$235,000,000, to refinance the 11.5% Senior Subordinated Notes due 2004 of
\nSurgical Health Corporation, to provide funding for the acquisition and
\ndevelopment of Facilities and to provide working capital to the Borrower, the
\nParticipating Subsidiaries and the Participating Partnerships.<\/p>\n
SECTION 7.13 Limit on Investment in HEALTHSOUTH of Birmingham, Inc. The
\nBorrower will not cause or permit its aggregate direct and indirect investment,
\nwhether by stock purchase, capital contribution, advance, loan, guarantee or
\notherwise, in HEALTHSOUTH of Birmingham, Inc. to exceed at any time $500,000.<\/p>\n
SECTION 7.14 Additional Consolidated Entities. On the last day of each
\nfiscal quarter of the Borrower (or such earlier time as the Agent may request)
\nthe Borrower will cause each Consolidated Entity that is hereafter acquired or
\ncreated to become a Participating Subsidiary or Participating Partnership by
\nexecution of a Guaranty Agreement and all other documents necessary to cause it
\nto become jointly and severally liable for the Credit Obligations (subject to
\nthe limitations provided in the Guaranty Agreement) and the Borrower or the
\nParticipating Subsidiary or the Participating Partnership, if applicable, shall
\nexecute a Pledge Agreement as more particularly described in Section 2.6 herein
\nand shall deliver or cause to be delivered all financing statements, stock
\ncertificates and duly executed stock powers necessary to perfect the Agent’s
\nsecurity interest granted under such Pledge Agreement.<\/p>\n
SECTION 7.15 ERISA. With respect to all employee pension benefit plans
\nmaintained by the Borrower or any Subsidiary, the Borrower shall not:<\/p>\n
61<\/p>\n
(i) terminate any of such employee pension benefit plans so as to
\n incur any liability to the Pension Benefit Guaranty Corporation
\n established pursuant to ERISA;<\/p>\n
(ii) allow or suffer to exist any prohibited transaction involving
\n any of such employee pension benefit plans or any trust created
\n thereunder which would subject the Borrower or a Subsidiary to a tax or
\n penalty or other liability on prohibited transactions imposed under
\n Internal Revenue Code Section 4975 or ERISA;<\/p>\n
(iii) fail to pay to any such employee pension benefit plan any
\n contribution which it is obligated to pay under the terms of such plan;<\/p>\n
(iv) allow or suffer to exist any accumulated funding deficiency,
\n whether or not waived, with respect to any such employee pension
\n benefit plan;<\/p>\n
(v) allow or suffer to exist any occurrence of a reportable event
\n or any other event or condition, which presents a material risk of
\n termination by the Pension Benefit Guaranty Corporation of any such
\n employee pension benefit plan that is a Single Employer Plan, which
\n termination could result in any liability to the Pension Benefit
\n Guaranty Corporation; or<\/p>\n
(vi) incur any withdrawal liability with respect to any
\n Multi-employer Plan.<\/p>\n
SECTION 7.16 Priority. The Borrower and its Subsidiaries will at all
\ntimes (i) cause the Agent to have a duly perfected first priority security
\ninterest in the Collateral and (ii) cause the Credit Obligations to be senior in
\nright of payment to all other Indebtedness of the Borrower, and its Consolidated
\nEntities, except as otherwise described in Section 5.15 hereof.<\/p>\n
62<\/p>\n
ARTICLE VIII<\/p>\n
EVENTS OF DEFAULT AND REMEDIES
\n ——————————<\/p>\n
SECTION 8.1 Events of Default. The following shall constitute Events of
\nDefault under this Agreement:<\/p>\n
(a) the Borrower or any Participating Subsidiary or any
\nParticipating Partnership shall fail to pay when due any principal payable under
\nthe terms of any Note or any Reimbursement Obligation or (ii) three Business
\nDays of the date when due any interest or fees payable under the terms of any
\nNote or any amount payable under this Agreement, any Guaranty Agreement or any
\nother of the other Credit Obligations or any other amount owed to the Agent or
\nLenders under or in connection with the Loan Documents; or<\/p>\n
(b) The Borrower or any Material Group shall default in the
\nperformance or observance of any other provision of this Agreement (other than
\nthe provisions of Article VII hereof), except as covered by clause (a) above,
\nand shall not cure such default within thirty days after the first to occur of
\n(i) the date the Agent or Lenders gives written or telephonic notice of the
\ndefault to the Borrower or (ii) the date the Borrower otherwise has notice
\nthereof; or<\/p>\n
(c) the Borrower or any Participating Subsidiary or any
\nParticipating Partnership or any Material Group shall default in the observance
\nor performance of any provision in Article VII hereof; or<\/p>\n
(d) the Agent shall determine that any statement,
\ncertification, representation or warranty contained herein, or in any of the
\nother Loan Documents or in any report, financial statement, certificate or other
\ninstrument delivered to the Agent or any Lender by or on behalf of the Borrower
\nor any Participating Subsidiary or any Participating Partnership was misleading
\nor untrue in any material respect at the time it was made; or<\/p>\n
(e) default shall be made (i) in the payment of any
\nIndebtedness (other than the Credit Obligations) of the Borrower or any
\nConsolidated Entity when due or (ii) in the performance, observance or
\nfulfillment of any term or covenant contained in any agreement or instrument
\nunder or pursuant to which any such Indebtedness may have been issued, created,
\nassumed, guaranteed or secured by Borrower or any Consolidated Entity, if the
\neffect of such default is to accelerate the maturity of such Indebtedness or to
\npermit the holder thereof to cause such Indebtedness to become due prior to its
\nstated maturity, and such default shall not be cured within 10 days after the
\noccurrence of such default, and the amount of the Indebtedness involved exceeds
\n$3,000,000; or<\/p>\n
(f) the Borrower or any Material Group shall fail to pay its
\nor their debts generally as they come due, or a receiver, trustee, liquidator or
\nother custodian shall be appointed for the Borrower or any Material Group or for
\nany of the property of the Borrower or any Material Group or a petition in
\nbankruptcy, or<\/p>\n
63<\/p>\n
under any insolvency law, shall be filed by or against the Borrower or any
\nMaterial Group or the Borrower or any Material Group shall apply for the benefit
\nof, or take advantage of, any law for relief of debtors, or enter into an
\narrangement or composition with, or make an assignment for the benefit of,
\ncreditors; or<\/p>\n
(g) final judgment for the payment of money in excess of any
\naggregate of $50,000 shall be rendered against the Borrower or any Participating
\nSubsidiary or any Participating Partnership or any Material Group, and the same
\nshall remain undischarged for a period of 30 days during which execution shall
\nnot be effectively stayed; or<\/p>\n
(h) an event of default, as therein defined, shall occur under
\nany other Loan Document; or<\/p>\n
(i) if any of the Guaranty Agreements, Notes, Pledge
\nAgreements or LC Account Agreement shall be deemed unenforceable by a court of
\ncompetent jurisdiction or shall no longer be effective; or<\/p>\n
(j) if any person or group of persons acting together who are
\nnot as at the Closing Date owners of one percent (1%) or more of the Capital
\nStock of the Borrower having voting rights shall own directly or indirectly
\nfifteen percent (15%) or more of the Capital Stock of the Borrower having voting
\nrights; or<\/p>\n
(k) if (i) the Borrower or any Consolidated Entity shall
\nengage in any prohibited transaction (as described in Section 7.15(ii) hereof),
\nwhich is not subject to a statutory or administrative exemption, involving any
\nemployee pension benefit plan of the Borrower or any Consolidated Entity, (ii)
\nany accumulated funding deficiency (as referred to in Section 7.15(iv) hereof),
\nwhether or not waived, shall exist with respect to any Single Employer Plan,
\n(iii) a reportable event (as referred to in Section 7.15(v) hereof) (other than
\na reportable event for which the statutory notice requirement to the Pension
\nBenefit Guaranty Corporation has been waived by regulation) shall occur with
\nrespect to, or proceedings shall commence to have a trustee appointed, or a
\ntrustee shall be appointed to administer or to terminate, any Single Employer
\nPlan, which reportable event or institution or proceedings is, in the reasonable
\nopinion of the Required Lenders, likely to result in the termination of such
\nSingle Employer Plan for purposes of Title IV of ERISA, and in the case of such
\na reportable event, the continuance of such reportable event shall be unremedied
\nfor sixty (60) days after notice of such reportable event pursuant to Section
\n4043(a), (c) or (d) of ERISA is given, as the case may be, (iv) any Single
\nEmployer Plan shall terminate for purposes of Title IV of ERISA, and such
\ntermination results in a material liability of the Borrower or any Consolidated
\nEntity to such Single Employer Plan or the Pension Benefit Guaranty Corporation,
\n(v) the Borrower or any Subsidiary shall withdraw from a Multi-employer Plan for
\npurposes of Title IV of ERISA, and, as a result of any such withdrawal, the
\nBorrower or any Consolidated Entity shall incur withdrawal liability to such
\nMulti-employer Plan, or (vi) any other event or condition shall occur or exist;<\/p>\n
64<\/p>\n
and in each case in clauses (i) through (vi) of this Section 8.1(k), such event
\nor condition, together with all other such events or conditions, if any, could
\nsubject the Borrower or any Consolidated Entity to any tax, penalty or other
\nliabilities in excess of $100,000, and in each such case the event or condition
\nis not remedied to the satisfaction of the Required Lenders within ninety (90)
\ndays after the earlier of (i) receipt of notice of such event or condition by
\nthe Authorized Representative from the Agent or (ii) the date the Borrower
\nbecomes aware of such event or condition;<\/p>\n
then, and in any such event and at any time thereafter, if such Event of Default
\nshall then be continuing,<\/p>\n
(A) either or both of the following actions may be
\n taken: (i) the Agent may, and at the direction of the Required
\n Lenders shall, declare any obligation of the Lenders to make
\n further Loans or issue Letters of Credit terminated, whereupon
\n the obligation of each Lender to make further Loans or
\n NationsBank to issue Letters of Credit, hereunder shall
\n terminate immediately, and (ii) the Agent shall at the
\n direction of the Required Lenders, at their option, declare by
\n notice to the Borrower any or all of the Credit Obligations to
\n be immediately due and payable, and the same, including all
\n interest accrued thereon and all other obligations of the
\n Borrower to the Lenders, shall forthwith become immediately
\n due and payable without presentment, demand, protest, notice
\n or other formality of any kind, all of which are hereby
\n expressly waived, anything contained herein or in any
\n instrument evidencing the Credit Obligations to the contrary
\n notwithstanding; provided, however, that notwithstanding the
\n above, if there shall occur an Event of Default under clause
\n (f) above, then the obligation of the Lenders to lend
\n hereunder shall automatically terminate and any and all of the
\n Credit Obligations shall be immediately due and payable
\n without the necessity of any action by the Agent or the
\n Required Lenders or notice to the Agent or the Lenders;<\/p>\n
(B) Borrower shall immediately deposit cash with the
\n Agent in an amount equal to the amount of any Letters of
\n Credit remaining undrawn or unpaid, as collateral security for
\n the repayment of any future drawings or payments under such
\n Letters of Credit, and Borrower shall forthwith deposit and
\n pay such amounts and such amounts shall be held by Agent
\n pursuant to the terms of the LC Account Agreement; and<\/p>\n
(C) the Agent, on behalf of the Lenders, shall have
\n all of the following rights and remedies in addition to all of
\n the rights and remedies of a secured party under the Uniform
\n Commercial Code in respect of the Collateral and otherwise be
\n available under the Loan Documents or under any applicable
\n law: the Agent may at any time and from time to time, with or
\n without judicial process or<\/p>\n
65<\/p>\n
the aid and assistance of others and without incurring any
\n liability to the Borrower, upon ten (10) days’ notice to the
\n Borrower sell or otherwise dispose of any Collateral, at
\n public or private sale or proceedings or otherwise, by one or
\n more contracts, in one or more parcels, at the same or
\n different times, with or without having the Collateral at the
\n place of sale or other disposition, for cash and\/or credit,
\n and upon any terms, at such place(s) and time(s) and to such
\n person(s) as the Agent deems best; if any Collateral is sold
\n by the Agent upon credit or for future delivery, the Agent
\n shall not be liable for the failure of the purchaser to pay
\n for same and in such event the Agent may resell such
\n Collateral in accordance with the provisions hereof provided
\n the Borrower shall be given credit for proceeds received by
\n reason of such sale; the Agent or any Lender may buy any
\n Collateral at any public sale and, the Agent or any Lender may
\n buy such Collateral at private sale so long as such sale is
\n made in a commercially reasonable manner and in each case may
\n make payment therefor by any means. Except to the extent the
\n Agent shall have failed to take action required under this
\n Agreement, no Lenders shall be entitled to enforce the
\n provisions of this subsection (C) of Section 8.1
\n independently.<\/p>\n
SECTION 8.2 Agent to Act. In case any one or more Events of Default
\nshall occur and be continuing, the Agent may, and at the direction of the
\nRequired Lenders shall, proceed to protect and enforce their rights or remedies
\neither by suit in equity or by action at law, or both, whether for the specific
\nperformance of any covenant, agreement or other provision contained herein or in
\nany other Loan Document, or to enforce the payment of the Obligations or any
\nother legal or equitable right or remedy.<\/p>\n
SECTION 8.3 Cumulative Rights. No right or remedy herein conferred upon
\nthe Lenders, the Agent and the Borrower is intended to be exclusive of any other
\nrights or remedies contained herein or in any other Loan Document, and every
\nsuch right or remedy shall be cumulative and shall be in addition to every other
\nsuch right or remedy contained herein and therein or now or hereafter existing
\nat law or in equity or by statute, or otherwise.<\/p>\n
SECTION 8.4 No Waiver. No course of dealing between the Borrower and
\nany Lender or the Agent or any failure or delay on the part of any Lender, the
\nAgent or the Borrower in exercising any rights or remedies hereunder shall
\noperate as a waiver of any rights or remedies hereunder and no single or partial
\nexercise of any rights or remedies hereunder shall operate as a waiver or
\npreclude the exercise of any other rights or remedies hereunder or of the same
\nright or remedy on a future occasion.<\/p>\n
SECTION 8.5 Default. The Agent and the Lenders shall have no right to
\naccelerate any of the Loans upon, or to institute any action or proceeding
\nbefore any court to realize upon Collateral as a result of, the occurrence of
\nany Default which shall not also constitute an Event of Default; provided,
\nhowever, nothing<\/p>\n
66<\/p>\n
contained in this sentence shall in any respect impair or adversely affect the
\nright, power and authority of the Agent and the Lenders (i) to take any action
\nexpressly required or permitted to be taken under the Loan Documents upon the
\noccurrence of any Default (and including any action or proceeding which the
\nAgent may determine to be necessary or appropriate in furtherance of any such
\nexpressly authorized action) and (ii) to take any action provided under the Loan
\nDocuments or otherwise available by statute, at law or in equity upon the
\noccurrence of any Default.<\/p>\n
SECTION 8.6 Allocation of Proceeds. If an Event of Default has occurred
\nand is continuing, and the maturity of the Notes has been accelerated pursuant
\nto this Article VIII, all payments received by the Agent hereunder in respect of
\nany principal of or interest on the Credit Obligations or any other amounts
\npayable by the Borrower hereunder shall be applied by the Agent in the following
\norder:<\/p>\n
(i) amounts due to the Lenders pursuant to Sections 2.10
\n hereof;<\/p>\n
(ii) amounts due to the Agent and NationsBank pursuant to
\n Section 9.11 and Section 2.12(i) and (k) hereof;<\/p>\n
(iii) payments of interest, to be applied in accordance with
\n Section 2.13 hereof;<\/p>\n
(iv) payments of principal, to be applied in accordance with
\n Section 2.13 hereof;<\/p>\n
(v) payment of cash amounts to the Agent pursuant to Section
\n 8.1(B) hereof; and<\/p>\n
(vi) payments of all other amounts due under this Agreement,
\n if any, to be applied in accordance with each Lender’s pro rata share
\n of all principal due to the Lenders.<\/p>\n
67<\/p>\n
ARTICLE IX<\/p>\n
THE AGENT
\n ———<\/p>\n
SECTION 9.1 Appointment. Each Lender (including NationsBank in its
\ncapacity as issuer of the Letters of Credit) hereby irrevocably designates and
\nappoints NationsBank as the Agent of the Lenders under this Agreement, and each
\nof the Lenders hereby irrevocably authorizes NationsBank as the Agent for such
\nLender, to take such action on its behalf under the provisions of this Agreement
\nand the other Loan Documents and to exercise such powers as are expressly
\ndelegated to the Agent by the terms of this Agreement, together with such other
\npowers as are reasonably incidental thereto. The Agent shall not have any duties
\nor responsibilities, except those expressly set forth herein, or any fiduciary
\nrelationship with any of the Lenders, and no implied covenants, functions,
\nresponsibilities, duties, obligations or liabilities shall be read into this
\nAgreement or otherwise exist against the Agent.<\/p>\n
SECTION 9.2 Attorneys-in-fact. The Agent may execute any of its duties
\nunder this Agreement by or through agents or attorneys-in-fact and shall be
\nentitled to advice of counsel concerning all matters pertaining to such duties.
\nThe Agent shall not be responsible for the gross negligence or willful
\nmisconduct of any agents or attorneys-in-fact selected by it with reasonable
\ncare.<\/p>\n
SECTION 9.3 Limitation on Liability. Neither the Agent nor any of its
\nofficers, directors, employees, agents or attorneys-in-fact shall be liable to
\nthe Lenders for any action lawfully taken or omitted to be taken by it or them
\nunder or in connection with this Agreement except for its or their own gross
\nnegligence or willful misconduct. Neither the Agent nor any of its affiliates
\nshall be responsible in any manner to any of the Lenders for any recitals,
\nstatements, representations or warranties made by the Borrower, any of its
\nControlled Entities or Controlled Partnerships, or any officer or partner
\nthereof contained in this Agreement or in any of the other Loan Documents, or in
\nany certificate, report, statement or other document referred to or provided for
\nin or received by the Agent under or in connection with this Agreement or for
\nthe value, validity, effectiveness, genuineness, enforceability or sufficiency
\nof this Agreement or any of the other Loan Documents, or for any failure of the
\nBorrower to perform its obligations thereunder. The Agent shall not be under any
\nobligation to any of the Lenders to ascertain or to inquire as to the observance
\nor performance of any of the terms, covenants or conditions of this Agreement or
\nany of the other Loan Documents on the part of the Borrower or to inspect the
\nproperties, books or records of the Borrower or its Controlled Entities or
\nControlled Partnerships.<\/p>\n
SECTION 9.4 Reliance. The Agent shall be entitled to rely, and shall be
\nfully protected in relying, upon any Note, writing, resolution, notice, consent
\ncertificate, affidavit, letter, cablegram, telegram, telecopy or telex message,
\nstatement, order or<\/p>\n
68<\/p>\n
other document or conversation believed by it to be genuine and correct and to
\nhave been signed, sent or made by the proper person or Persons and upon advice
\nand statements of legal counsel (including, without limitation, counsel to the
\nBorrower), independent accountants and other experts selected by the Agent. The
\nAgent may deem and treat the payee of any Note as the owner thereof for all
\npurposes unless an Assignment and Acceptance shall have been filed with and
\naccepted by the Agent. The Agent shall be fully justified in failing or refusing
\nto take any action under this Agreement unless it shall first receive advice or
\nconcurrence of the Lenders or the Required Lenders as provided in this Agreement
\nor it shall first be indemnified to its satisfaction by the Lenders against any
\nand all liability and expense which may be incurred by it by reason of taking or
\ncontinuing to take any such action. The Agent shall in all cases be fully
\nprotected in acting, or in refraining from acting, under this Agreement in
\naccordance with a request of the Required Lenders, and such request and any
\naction taken or failure to act pursuant thereto shall be binding upon all the
\nLenders and all present and future holders of the Notes.<\/p>\n
SECTION 9.5 Notice of Default. The Agent shall not be deemed to have
\nknowledge or notice of the occurrence of any Default or Event of Default
\nhereunder unless the Agent has received notice from a Lender, or the Borrower or
\nany of the Subsidiaries referring to this Agreement, describing such Default or
\nEvent of Default and stating that such notice is a “notice of default”. In the
\nevent that the Agent receives such a notice, the Agent shall promptly give
\nnotice thereof to the Lenders. The Agent shall take such action with respect to
\nsuch Default or Event of Default as shall be reasonably directed by the Required
\nLenders; provided that, unless and until the Agent shall have received such
\ndirections, the Agent may (but shall not be obligated to) take such action, or
\nrefrain from taking such action, with respect to such Event of Default as it
\nshall deem advisable in the best interests of the Lenders.<\/p>\n
SECTION 9.6 No Representations. Each Lender expressly acknowledges that
\nneither the Agent nor any of its affiliates has made any representations or
\nwarranties to it and that no act by the Agent hereafter taken, including any
\nreview of the affairs of the Borrower or any of its Consolidated Entities, shall
\nbe deemed to constitute any representation or warranty by the Agent to any
\nLender. Each Lender represents to the Agent that it has, independently and
\nwithout reliance upon the Agent or any other Lender, and based on such documents
\nand information as it has deemed appropriate, made its own appraisal of and
\ninvestigation into the financial condition, creditworthiness, affairs, status
\nand nature of the Borrower and Controlled Partnerships and made its own decision
\nto enter into this Agreement. Each Lender also represents that it will,
\nindependently and without reliance upon the Agent or any other Lender, and based
\non such documents and information as it shall deem appropriate at the time,
\ncontinue to make its own credit analysis, appraisals and decisions in taking or
\nnot taking action under this Agreement and to make such investigation as it
\ndeems necessary to inform itself as to the status and affairs, financial or
\notherwise, of the Borrower and its Consolidated Entities and<\/p>\n
69<\/p>\n
Controlled Partnerships. Except for notices, reports and other documents
\nexpressly required to be furnished to the Lenders by the Agent hereunder, the
\nAgent shall not have any duty or responsibility to provide any Lender with any
\ncredit or other information concerning the affairs, financial condition or
\nbusiness of the Borrower or any of its Consolidated Entities and Controlled
\nPartnerships which may come into the possession of the Agent or any of its
\naffiliates.<\/p>\n
SECTION 9.7 Indemnification. The Lenders agree to indemnify the Agent
\nin its capacity as such (to the extent required to be reimbursed but not
\nreimbursed by the Borrower or any of its Consolidated Entities and without
\nlimiting any obligations of the Borrower or any of its Consolidated Entities so
\nto do), ratably according to the respective principal amount of the Notes held
\nby them at the time of the event with respect to which indemnity is sought (or,
\nif no Notes are outstanding, ratably in accordance with their respective
\nApplicable Commitment Percentages as then in effect) from and against any and
\nall liabilities, obligations, losses, damages, penalties, actions, judgments,
\nsuits, costs, expenses or disbursements of any kind or nature whatsoever which
\nmay at any time (including without limitation at any time following the payment
\nof the Note) be imposed on, incurred by or asserted against the Agent in any way
\nrelating to or arising out of this Agreement or any other document contemplated
\nby or referred to herein or the transactions contemplated hereby or any action
\ntaken or omitted by the Agent under or in connection with any of the foregoing;
\nprovided that no Lender shall be liable for the payment of any portion of such
\nliabilities, obligations, losses, damages, penalties, actions, judgments, suits,
\ncosts, expenses or disbursements resulting from the Agent’s gross negligence or
\nwillful misconduct. The agreements in this subsection shall survive the payment
\nof the Obligations and the termination of this Agreement.<\/p>\n
SECTION 9.8 Lender. The Agent and its affiliates may make loans to,
\naccept deposits from and generally engage in any kind of business with the
\nBorrower and its Consolidated Entities and Controlled Partnerships as though it
\nwere not the Agent hereunder. With respect to its Loans made or renewed by it
\nand any Note issued to it, the Agent shall have the same rights and powers under
\nthis Agreement as any Lender and may exercise the same as though it were not the
\nAgent, and the terms “Lender” and “Lenders” shall, unless the context otherwise
\nindicates, include the Agent in its individual capacity.<\/p>\n
SECTION 9.9 Resignation. If the Agent shall resign as Agent under this
\nAgreement, then the Required Lenders may appoint a successor Agent for the
\nLenders, which successor shall be approved by the Borrower, which approval shall
\nnot be unreasonably withheld, which shall be a commercial bank organized under
\nthe laws of the United States or any state thereof, having a combined surplus
\nand capital of not less than $500,000,000, whereupon such successor Agent shall
\nsucceed to the rights, powers and duties of the former Agent and the obligations
\nof the former Agent shall be terminated and canceled, without any other or
\nfurther act or deed on the part<\/p>\n
70<\/p>\n
of such former Agent or any of the parties to this Agreement; provided, however,
\nthat the former Agent’s resignation shall not become effective until such
\nsuccessor Agent has been appointed and has succeeded of record to all right,
\ntitle and interest of the former Agent in the Collateral; provided, further, if
\nthe Required Lenders cannot agree as to a successor Agent within ninety (90)
\ndays after such resignation, the Agent shall appoint a successor Agent and the
\nparties hereto agree to execute whatever documents are necessary to effect such
\naction under this Agreement or any other document executed pursuant to this
\nAgreement; provided, however in such event all provisions of this Agreement and
\nthe Loan Documents, shall remain in full force and effect. After any retiring
\nAgent’s resignation hereunder as Agent, the provisions of this Article IX shall
\ninure to its benefit as to any actions taken or omitted to be taken by it while
\nit was Agent under this Agreement.<\/p>\n
SECTION 9.10 Sharing of Payments, etc. Each Lender agrees that if it
\nshall, through the exercise of a right of banker’s lien, set-off, counterclaim
\nor otherwise, obtain payment with respect to its Credit Obligations (other than
\nany payment pursuant to Article IV) which results in its receiving more than its
\npro rata share of the aggregate payments with respect to all of the Credit
\nObligations (other than any payment pursuant to Article IV), then (A) such
\nLender shall be deemed to have simultaneously purchased from the other Lenders a
\nshare in their Credit Obligations so that the amount of the Credit Obligations
\nheld by each of the Lenders shall be pro rata and (B) such other adjustments
\nshall be made from time to time as shall be equitable to insure that the Lenders
\nshare such payments ratably; provided, however, that for purposes of this
\nSection 9.10 the term “pro rata” shall be determined with respect to both the
\nCommitment of each Lender and to the Revolving Facility after subtraction in
\neach case of amounts, if any, by which any such Lender has not funded its share
\nof the outstanding Loans and Reimbursement Obligations. If all or any portion of
\nany such excess payment is thereafter recovered from the Lender which received
\nthe same, the purchase provided in this Section 9.10 shall be rescinded to the
\nextent of such recovery, without interest. The Borrower expressly consents to
\nthe foregoing arrangements and agrees that each Lender so purchasing a portion
\nof the other Lenders’ Obligations may exercise all rights of payment (including,
\nwithout limitation, all rights of set-off, banker’s lien or counterclaim) with
\nrespect to such portion as fully as if such Lender were the direct holder of
\nsuch portion.<\/p>\n
SECTION 9.11 Fees. The Borrower agrees to pay to the Agent, for its
\nindividual account, in advance a quarterly Agent’s fee in such amount as shall
\nbe agreed to from time to time.<\/p>\n
SECTION 9.12 Independent Agreements. The provisions contained in
\nSections 9.1 through 9.8 and 9.10 (other than the last sentence thereof) of this
\nArticle IX constitute independent obligations and agreements of the Agent and
\nthe Lenders and the Borrower shall not be deemed a party thereto nor bound
\nthereby. Borrower does acknowledge the rights of Lenders and Agent under
\nSections 9.9, 9.11 and the last sentence of Section 9.10 hereof.<\/p>\n
71<\/p>\n
ARTICLE X<\/p>\n
MISCELLANEOUS
\n ————-<\/p>\n
SECTION 10.1 Assignments and Participations.<\/p>\n
(a) At any time after the Closing Date each Lender may, with
\nthe prior consent of the Agent and the Borrower, which consent shall not be
\nunreasonably withheld, assign to one or more banks or financial institutions all
\nor a portion of its rights and obligations under this Agreement (including,
\nwithout limitation, all or a portion of the Notes payable to its order);
\nprovided, that (i) each such assignment shall be of a constant, and not a
\nvarying, percentage of all of the assigning Lender’s rights and obligations
\n(including Loans and Participations) under this Agreement (ii) for each
\nassignment involving the issuance and transfer of Notes, the assigning Lender
\nshall execute an Assignment and Acceptance and the Borrower hereby consents to
\nexecute replacement Notes to give effect to the assignment, (iii) the minimum
\nCommitment which shall be assigned is (x) $5,000,000, in the case of an
\nassignment by one existing Lender to another existing Lender, and (y)
\n$10,000,000 in all other cases, and in multiples of $1,000,000 in excess
\nthereof, (together with which the assigning Lender’s applicable portion of
\nParticipations and the Letter of Credit Commitment shall also be assigned) and
\n(iv) such assignee shall have an office located in the United States. Upon such
\nexecution, delivery, approval and acceptance, from and after the effective date
\nspecified in each Assignment and Acceptance, (x) the assignee thereunder shall
\nbe a party hereto and, to the extent that rights and obligations hereunder or
\nunder such Notes have been assigned or negotiated to it pursuant to such
\nAssignment and Acceptance have the rights and obligations of a Lender hereunder
\n(including, in respect of the Collateral, all the rights and obligations of a
\nLender, as fully as if such assignee had been named as a Lender in this
\nAgreement) and a holder of such Notes and (y) the assignor thereunder shall, to
\nthe extent that rights and obligations hereunder or under such Notes have been
\nassigned or negotiated by it pursuant to such Assignment and Acceptance,
\nrelinquish its rights and be released from its future obligations under this
\nAgreement. No assignee shall have the right to further assign its rights and
\nobligations pursuant to this Section 10.1. Any Lender who makes an assignment
\nshall pay to the Agent a one-time administrative fee of $3,000.00 which fee
\nshall not be reimbursed by Borrower.<\/p>\n
(b) By executing and delivering an Assignment and Acceptance,
\nthe Lender assignor thereunder and the assignee thereunder confirm to and agree
\nwith each other and the other parties hereto as follows: (i) the assignment made
\nunder such Assignment and Acceptance is made under such Assignment and
\nAcceptance without recourse; (ii) such assigning Lender makes no representation
\nor warranty and assumes no responsibility with respect to the financial
\ncondition of the Borrower or any Controlled Entity or Controlled Partnership or
\nthe performance or observance by the Borrower or any Controlled Entity or
\nControlled Partnership of any of its obligations under any Loan Document or any
\nother instrument or document furnished pursuant hereto;<\/p>\n
72<\/p>\n
(iii) such assignee confirms that it has received a copy of this Agreement,
\ntogether with copies of the financial statements delivered pursuant to Section
\n7.3 and such other Loan Documents and other documents and information as it has
\ndeemed appropriate to make its own credit analysis and decision to enter into
\nsuch Assignment and Acceptance; (iv) such assignee will, independently and
\nwithout reliance upon the Agent, such assigning Lender or any other Lender and
\nbased on such documents and information as it shall deem appropriate at the
\ntime, continue to make its own credit decisions in taking or not taking action
\nunder this Agreement; (v) such assignee appoints and authorizes the Agent to
\ntake such action as agent on its behalf and to exercise such powers under this
\nAgreement, the Note and the other Loan Documents as are delegated to the Agent
\nby the terms hereof and thereof, together with such powers as are reasonably
\nincidental thereto; and (vi) such assignee agrees that it will perform in
\naccordance with their terms all of the obligations which by the terms of this
\nAgreement are required to be performed by it as a Lender and a holder of such
\nNote.<\/p>\n
(c) The Agent shall maintain at its address referred to herein
\na copy of each Assignment and Acceptance delivered to and accepted by it.<\/p>\n
(d) Upon its receipt of an Assignment and Acceptance executed
\nby an assigning Lender, the Agent shall give prompt notice thereof to Borrower.<\/p>\n
(e) Each Lender may sell participations to one or more banks
\nor other entities as to all or a portion of its rights and obligations under
\nthis Agreement; provided, that (i) such Lender’s obligations under this
\nAgreement shall remain unchanged, (ii) such Lender shall remain solely
\nresponsible to the other parties hereto for the performance of such obligations,
\n(iii) such Lender shall remain the holder of any Notes issued to it for the
\npurpose of this Agreement, (iv) such participations shall be in a minimum amount
\nof $5,000,000 and in multiples of $1,000,000 in excess thereof, and shall
\ninclude an allocable portion of such Lender’s Participation, and (v) Borrower,
\nthe Agent and the other Lenders shall continue to deal solely and directly with
\nsuch Lender in connection with such Lender’s rights and obligations under this
\nAgreement and with regard to any and all payments to be made under this
\nAgreement; provided, that the participation agreement between a Lender and its
\nparticipants may provide that such Lender will obtain the approval of such
\nparticipant prior to such Lender’s agreeing to any amendment or waiver of any
\nprovisions of this Agreement which would (A) extend the maturity of the Notes,
\n(B) reduce the interest rate hereunder, (C) increase the Commitment of the
\nLender granting the participation or (D) release all or any substantial part of
\nthe Collateral other than in accordance with the terms of the Loan Documents,
\nand (vi) the sale of any such participations which require Borrower to file a
\nregistration statement with the United States Securities and Exchange Commission
\nor under the securities regulations or laws of any state shall not be permitted.<\/p>\n
(f) Notwithstanding the provisions of this Section 10.1 to the
\ncontrary, any Lender may assign all or any portion of its<\/p>\n
73<\/p>\n
interest in Loans to its Affiliates without approval of the Agent or Borrower
\nupon payment of the administrative fee described in Section 10.1(a) above, and
\nall or any portion of its interest in Loans to the Federal Reserve Bank without
\napproval of the Agent or Borrower and without payment of any fees.<\/p>\n
SECTION 10.2 Notices. Any notice shall be conclusively deemed to have
\nbeen received by any party hereto and be effective on the day on which delivered
\nto such party (against receipt therefor) at the address set forth below or such
\nother address as such party shall specify to the other parties in writing (or,
\nin the case of telephonic notice or notice by telecopy, telegram or telex (where
\nthe receipt of such message is verified by return) expressly provided for
\nhereunder, when received at such telephone, telecopy or telex number as may from
\ntime to time be specified in written or verbal notice to the other parties
\nhereto or otherwise received), or if sent prepaid by certified or registered
\nmail return receipt requested on the third Business Day after the day on which
\nmailed, addressed to such party at said address:<\/p>\n
(a) if to the Borrower or a Participating Partnership or
\n a Participating Subsidiary at:<\/p>\n
Two Perimeter Park South
\n Suite 224W
\n Birmingham, Alabama 35243
\n Attention: Richard M. Scrushy<\/p>\n
with a copy to:<\/p>\n
Chief Financial Officer
\n HealthSouth Corporation
\n Suite 224W
\n Two Perimeter Park South
\n Birmingham, Alabama 35243<\/p>\n
and with a copy to:<\/p>\n
Treasurer
\n HealthSouth Corporation
\n Suite 224W
\n Two Perimeter Park South
\n Birmingham, Alabama 35243<\/p>\n
and with a copy to:<\/p>\n
J. Brooke Johnston, Jr.
\n Haskell Slaughter Young
\n 1200 AmSouth-Harbert Plaza
\n 1901 6th Avenue North
\n Birmingham, Alabama 35203<\/p>\n
74<\/p>\n
(b) if to the Agent at:<\/p>\n
One Independence Center
\n 15th Floor
\n 101 North Tryon Street
\n Charlotte, North Carolina 28255
\n Attention: Agency Services<\/p>\n
With a copy to:<\/p>\n
600 Peachtree Street, N.E.
\n 21st Floor
\n Atlanta, Georgia 30308-2212
\n Attention: Corporate Banking<\/p>\n
(c) if to NationsBank in its capacity as issuer of the
\n Letters of Credit:<\/p>\n
NationsBank, N.A. (Carolinas)
\n One Independence Center, 15th Floor
\n 101 North Tryon Street
\n Charlotte, North Carolina 28255
\n Attention: Letter of Credit Department<\/p>\n
(d) if to the Lenders:<\/p>\n
At the addresses set forth on the signature pages
\n hereof or on the signature page of each Assignment
\n and Acceptance.<\/p>\n
SECTION 10.3 No Waiver. No failure or delay on the part of the Agent,
\nany Lender or the Borrower in the exercise of any right, power or privilege
\nhereunder shall operate as a waiver of any such right, power or privilege nor
\nshall any such failure or delay preclude any other or further exercise thereof.
\nThe rights and remedies herein provided are cumulative and not exclusive of any
\nrights or remedies provided by law.<\/p>\n
SECTION 10.4 Setoff. The Borrower, each Participating Subsidiary and
\neach Participating Partnership, agrees that the Agent and each Lender shall have
\na lien for all the Credit Obligations of the Borrower upon all deposits or
\ndeposit accounts, of any kind, or any interest in any deposits or deposit
\naccounts thereof, now or hereafter pledged, mortgaged, transferred or assigned
\nto the Agent or such Lender or otherwise in the possession or control of the
\nAgent or such Lender (other than for safekeeping) for any purpose for the
\naccount or benefit of the Borrower, each Participating Subsidiary and each
\nParticipating Partnership, and including any balance of any deposit account or
\nof any credit of the Borrower, each Participating Subsidiary and each
\nParticipating Partnership, with the Agent or such Lender, whether now existing
\nor hereafter established, hereby authorizing the Agent and each Lender at any
\ntime or times from and after the occurrence of a Default or Event of Default
\nwith or without prior notice to apply such balances or any part thereof to such
\nof the Credit Obligations of the Borrower to the Lenders then past due and in
\nsuch amounts as<\/p>\n
75<\/p>\n
they may elect, and whether or not the collateral or the responsibility of other
\npersons primarily, secondarily or otherwise liable may be deemed adequate. For
\nthe purposes of this paragraph, all remittances and property shall be deemed to
\nbe in the possession of the Agent or such Lender as soon as the same may be put
\nin transit to it by mail or carrier or by other bailee.<\/p>\n
SECTION 10.5 Survival. All covenants, agreements, representations and
\nwarranties made herein shall survive the making by the Lenders of the Loans and
\nthe expiration of the Letters of Credit and the execution and delivery to the
\nLenders of this Agreement and the Notes and shall continue in full force and
\neffect so long as any of the Credit Obligations remain outstanding or any Lender
\nhas any Commitment hereunder. Whenever in this Agreement, any of the parties
\nhereto is referred to, such reference shall be deemed to include the successors
\nand permitted assigns of such party and all covenants, provisions and agreements
\nby or on behalf of the Borrower which are contained in this Agreement and the
\nNotes shall inure to the benefit of the successors and permitted assigns of the
\nLenders or any of them and any rights of the Borrower hereunder shall inure to
\nthe benefit of successors and assigns of Borrower to the extent Lenders may
\nconsent to succession or assignment.<\/p>\n
SECTION 10.6 Expenses. The Borrower agrees (a) to pay or reimburse the
\nAgent for all its reasonable and customary out-of-pocket costs and expenses
\nincurred in connection with the preparation, negotiation and execution of, and
\nany amendment, supplement or modification to, this Agreement or any of the other
\nLoan Documents, and the consummation of the transactions contemplated hereby and
\nthereby, including, without limitation, the reasonable and customary fees and
\ndisbursements of counsel to the Agent, (b) to pay or reimburse the Agent for all
\nits reasonable costs and expenses incurred in connection with the enforcement or
\npreservation of any rights under this Agreement, including without limitation,
\nthe reasonable fees and disbursements of their counsel, (c) to pay, indemnify
\nand hold the Agent harmless from any and all recording and filing fees and any
\nand all liabilities with respect to, or resulting from any failure of Borrower
\nto pay or delay of Borrower in paying, documentary, stamp, excise, withholding
\nand other similar taxes, if any, which may be payable or determined to be
\npayable in connection with the execution and delivery of, or consummation of any
\namendment, supplement or modification of, or any waiver or consent under or in
\nrespect of, this Agreement, and (d) from and after the occurrence of any Event
\nof Default to pay, indemnify, and hold the Agent harmless from and against any
\nand all other liabilities, obligations, losses, damages, penalties, actions,
\njudgments, suits, costs, expenses or disbursements of any kind or nature
\nwhatsoever with respect to the execution, delivery, enforcement, performance and
\nadministration of this Agreement or in any respect relating to the transactions
\ncontemplated hereby or thereby, (all the foregoing, collectively, the
\n“indemnified liabilities”); provided, however, that the Borrower shall have no
\nobligation hereunder with respect to indemnified liabilities arising from (i)
\nthe willful misconduct or negligence of the party seeking indemnification, (ii)
\nlegal proceedings commenced against<\/p>\n
76<\/p>\n
the Agent or any Lender by any security holder or creditor thereof arising out
\nof and based upon rights afforded any such security holder or creditor solely in
\nits capacity as such, (iii) any taxes imposed upon the Agent or any Lender other
\nthan the documentary, stamp, excise, withholding and similar taxes described in
\nclause (c) above or any tax resulting from any change described in Section 4.1,
\nwhich tax would be payable to Lenders by Borrower pursuant to Article IV hereof,
\n(iv) taxes imposed as a result of a transfer or assignment of any Note,
\nparticipation or assignment of a portion of its rights, (v) any taxes imposed
\nupon any transferee of any Note, or (vi) or by reason of the failure of the
\nAgent or any Lender to perform its or their obligations under this Agreement.
\nThe agreements in this subsection shall survive repayment of the Notes and all
\nother Credit Obligations hereunder.<\/p>\n
SECTION 10.7 Amendments. No amendment, modification or waiver of any
\nprovision of this Agreement or any of the Loan Documents and no consent by the
\nLenders to any departure therefrom by the Borrower shall be effective unless
\nsuch amendment, modification or waiver shall be in writing and signed by the
\nAgent and the Borrower, but only upon having received the written consent of the
\nRequired Lenders, and the same shall then be effective only for the period and
\non the conditions and for the specific instances and purposes specified in such
\nwriting; provided, however, that, no such amendment, modification or waiver<\/p>\n
(i) which changes, extends or waives any provision of Section
\n 2.10, Section 2.12(i), Section 9.10, this Section 10.7 or Section
\n 10.15, the amount of or the due date of any scheduled installment or
\n other payment of or the rate of interest or other amounts payable on or
\n with respect to any Credit Obligation, changes the definition of
\n Required Lenders, which increases or extends the Commitment of any
\n Lender or which increases or extends the Termination Date or which
\n waives any condition to the making of any Loan shall be effective
\n unless in writing and signed by each of the Lenders; provided, however,
\n the Required Lenders may in their sole discretion waive any Default or
\n Event of Default (other than any Event of Default under Section 8.1(a)
\n as to which only the Lender which is the payee of a Note may waive the
\n failure to make a payment of principal or interest due on such Note and
\n Section 8.1(f) as to which all Lenders must waive such Event of
\n Default);<\/p>\n
(ii) which releases Collateral or any Guarantor (other than in
\n accordance with the terms of the Loan Documents) shall be effective
\n unless with the written consent of each of the Lenders; or<\/p>\n
(iii) which affects the rights, privileges, immunities or
\n indemnities of the Agent, shall be effective unless in writing and
\n signed by the Agent.<\/p>\n
Notwithstanding any provision of the other Loan Documents to the contrary, as
\nbetween the Agent and the Lenders, execution by the Agent shall not be deemed
\nconclusive evidence that the Agent has<\/p>\n
77<\/p>\n
obtained the written consent of the Required Lenders; however, the Borrower
\nshall be entitled to rely on the signature of the Agent as evidence of consent.
\nNo notice to or demand on the Borrower in any case shall entitle the Borrower to
\nany other or further notice or demand in similar or other circumstances, except
\nas provided by law or as otherwise expressly provided herein. No delay or
\nomission on any Lender’s, the Agent’s or the Borrower’s part in exercising any
\nright, remedy or option shall operate as a waiver of such or any other right,
\nremedy or option or of any Default or Event of Default.<\/p>\n
SECTION 10.8 Counterparts. This Agreement may be executed in any number
\nof counterparts, each of which when so executed and delivered shall be deemed an
\noriginal, and it shall not be necessary in making proof of this Agreement to
\nproduce or account for more than one such fully-executed counterpart.<\/p>\n
SECTION 10.9 Waivers by Borrower. In any litigation in any court with
\nrespect to, in connection with, or arising out of this Agreement, the Loans, any
\nof the Notes, any of the other Loan Documents, the Collateral, the Credit
\nObligations, or any instrument or document delivered pursuant to this Agreement,
\nor the validity, protection, interpretation, collection or enforcement thereof,
\nor any other claim or dispute howsoever arising between the Borrower and the
\nLenders or the Agent, the Borrower and each Lender and the Agent hereby waive,
\nto the extent permitted by law, trial by jury in connection with any such
\nlitigation.<\/p>\n
The Borrower, the Agent and the Lenders believe that, inasmuch as this
\nAgreement and the transactions contemplated hereby have been entered into and
\nconsummated outside the State of Alabama, such transactions constitute
\ntransactions in interstate commerce, so that neither the Agent nor any of the
\nLenders is required, solely by entering into this Agreement and consummating the
\ntransactions contemplated hereby, to qualify to do business as a foreign
\ncorporation within the State of Alabama. Notwithstanding the foregoing, however,
\nthe Borrower hereby irrevocably waives all rights that it may have to raise, in
\nany action brought by any of the Lenders or the Agent to enforce the rights of
\nthe Lenders and the Agent hereunder or under any of the other Loan Documents, or
\nthe obligations of the Borrower hereunder or thereunder, any defense which is
\nbased upon the failure of any of the Lenders or the Agent to qualify to do
\nbusiness as a foreign corporation in the State of Alabama, including, but not
\nlimited to, any defenses based upon ss. 232 of the Alabama Constitution of 1901,
\nss. 10-2A-247 of the Code of Alabama (1975) or ss. 40-14-4 of the Code of
\nAlabama (1975), or any successor provision to any thereof. The foregoing waiver
\nis made knowingly and voluntarily and is a material inducement for the Agent and
\nthe Lenders to enter into the transactions contemplated by this Agreement or any
\nof the other Loan Documents.<\/p>\n
SECTION 10.10 Termination. The termination of this Agreement shall not
\naffect any rights of the Borrower, the Lenders or the Agent or any obligation of
\nthe Borrower, the Lenders or the Agent, arising prior to the effective date of
\nsuch termination, and the provisions hereof shall continue to be fully operative
\nuntil all<\/p>\n
78<\/p>\n
transactions entered into or rights created or obligations incurred prior to
\nsuch termination have been fully disposed of, concluded or liquidated and the
\nCredit Obligations arising prior to or after such termination have been
\nirrevocably paid in full. The security interests, liens and rights granted to
\nthe Agent for the benefit of the Lenders hereunder and under the other Loan
\nDocuments shall continue in full force and effect, notwithstanding the
\ntermination of this Agreement, until all of the Credit Obligations have been
\npaid in full after the termination hereof or the Borrower has furnished the
\nLenders and the Agent with an indemnification satisfactory to the Agent and each
\nLender with respect thereto. All representations, warranties, covenants, waivers
\nand agreements contained herein shall survive termination hereof until payment
\nin full of the Credit Obligations unless otherwise provided herein.
\nNotwithstanding the foregoing, if after receipt of any payment of all or any
\npart of the Obligations, any Lender is for any reason compelled to surrender
\nsuch payment to any Person because such payment is determined to be void or
\nvoidable as a preference, impermissible setoff, a diversion of trust funds or
\nfor any other reason, this Agreement shall continue in full force and the
\nBorrower shall be liable to, and shall indemnify and hold such Lender harmless
\nfor, the amount of such payment surrendered until such Lender shall have been
\nfinally and irrevocably paid in full. The provisions of the foregoing sentence
\nshall be and remain effective notwithstanding any contrary action which may have
\nbeen taken by the Lenders in reliance upon such payment, and any such contrary
\naction so taken shall be without prejudice to the Lenders’ rights under this
\nAgreement and shall be deemed to have been conditioned upon such payment having
\nbecome final and irrevocable.<\/p>\n
SECTION 10.11 Governing Law. All documents executed pursuant to the
\ntransactions contemplated herein, including, without limitation, this Agreement
\nand each of the Loan Documents shall be deemed to be contracts made under, and
\nfor all purposes shall be construed in accordance with, the internal laws and
\njudicial decisions of the State of North Carolina; provided that this Section
\n10.11 shall not affect the applicability of, and interpretation or construction
\nof appropriate terms and provisions under the Uniform Commercial Code of any
\njurisdiction which govern the security interests in any of the Collateral. The
\nBorrower hereby submits to the jurisdiction and venue of the state and federal
\ncourts of North Carolina for the purposes of resolving disputes hereunder or
\narising out of the transaction contemplated hereby or for the purposes of
\ncollection.<\/p>\n
SECTION 10.12 Indemnification. In consideration of the execution and
\ndelivery of this Agreement by the Agent and each Lender and the extension of the
\nCommitments, and so long as the Agent and Lenders have fulfilled their
\nobligations hereunder, the Borrower hereby indemnifies, exonerates and holds the
\nAgent and each Lender and each of their respective officers, directors,
\nemployees and agents (collectively, the “Indemnified Parties”) free and harmless
\nfrom and against any and all actions, causes of action, claims, suits, losses,
\ncosts, liabilities and damages, and expenses incurred in connection therewith
\n(irrespective of whether any such Indemnified Party is a party to the action for
\nwhich<\/p>\n
79<\/p>\n
indemnification hereunder is sought), including reasonable attorneys’ fees and
\ndisbursements (collectively, the “Indemnified Liabilities”), incurred by the
\nIndemnified Parties or any of them as a result of, or arising out of, or
\nrelating to any of the following:<\/p>\n
(a) any transaction financed or to be financed in whole or in
\n part, directly or indirectly, with the proceeds of any Loan or
\n supported by any Letter of Credit;<\/p>\n
(b) the entering into and performance of this Agreement and
\n any other Loan Document by any of the Indemnified Parties;<\/p>\n
(c) provided Lenders have no ownership interest in real
\n property of Borrower, any investigation, litigation or proceeding
\n related to any environmental cleanup, audit, compliance or other matter
\n relating to the protection of the environment or the release by the
\n Borrower or any of its Participating Subsidiaries or Participating
\n Partnerships of any hazardous waste material; or<\/p>\n
(d) provided Lenders have no ownership interest in real
\n property of Borrower, the presence on or under, or the escape, seepage,
\n leakage, spillage, discharge, emission, discharging or releases from,
\n any real property owned or operated by the Borrower or any Subsidiary
\n or Controlled Partnership thereof of any hazardous waste material
\n (including any losses, liabilities, damages, injuries, costs, expenses
\n or claims asserted or arising under any environmental laws), regardless
\n of whether caused by, or within the control of, the Borrower or such
\n Participating Subsidiary or Participating Partnerships,<\/p>\n
except for any such Indemnified Liabilities arising for the account of a
\nparticular Indemnified Party by reason of the relevant Indemnified Party’s
\nnegligence or willful misconduct, and if and to the extent that the foregoing
\nundertaking may be unenforceable for any reason, the Borrower hereby agrees to
\nmake the maximum contribution to the payment and satisfaction of each of the
\nIndemnified Liabilities which is permissible under applicable law.<\/p>\n
SECTION 10.13 Agreement Controls. In the event that any term of any of
\nthe Loan Documents other than this Agreement conflicts with any term of this
\nAgreement, the terms and provisions of this Agreement shall control.<\/p>\n
SECTION 10.14 Integration. This Agreement and the Loan Documents
\nrepresent the final agreement between the parties and may not be contradicted by
\nevidence of prior, contemporaneous, or subsequent oral agreements of the
\nparties. There are no unwritten oral agreements between the parties.<\/p>\n
SECTION 10.15 Successors and Assigns. This Agreement shall be binding
\nupon and shall inure to the benefit of the parties hereto and their respective
\nsuccessors and assigns; provided, however, that the Borrower may not assign or
\ntransfer its rights or<\/p>\n
80<\/p>\n
obligations hereunder without the prior written consent of the Agent and all
\nLenders. The Agent and the Lenders may assign or transfer their interest
\nhereunder but only as provided herein.<\/p>\n
SECTION 10.16 Severability. If any provision of this agreement or the
\nother Loan Documents shall be determined to be illegal or invalid as to one or
\nmore of the parties hereto, then such provision shall remain in effect with
\nrespect to all parties, if any, as to whom such provision is neither illegal nor
\ninvalid, and in any event all other provisions hereof shall remain effective and
\nbinding on the parties hereto.<\/p>\n
SECTION 10.17 Usury Savings Clause. Notwithstanding any other provision
\nherein, the aggregate interest rate charged under any of the Notes, including
\nall charges or fees in connection therewith deemed in the nature of interest
\nunder North Carolina law, shall not exceed the Highest Lawful Rate (as such term
\nis defined below). If the rate of interest (determined without regard to the
\npreceeding sentence) under this Agreement at any time exceeds the Highest Lawful
\nRate (as defined below), the outstanding amount of the Loans made hereunder
\nshall bear interest at the Highest Lawful Rate until the total amount of
\ninterest due hereunder equals the amount of interest which would have been due
\nhereunder if the stated rates of interest set forth in this Agreement had at all
\ntimes been in effect. In addition, if when the Loans made hereunder are repaid
\nin full the total interest due hereunder (taking into account the increase
\nprovided for above) is less than the total amount of interest which would have
\nbeen due hereunder if the stated rates of interest set forth in this Agreement
\nhad at all times been in effect, then to the extent permitted by law, the
\nBorrower shall pay to the Agent an amount equal to the difference between the
\namount of the interest paid and the amount of interest which would have been
\npaid if the Highest Lawful Rate had at all times been in effect. Notwithstanding
\nthe foregoing, it is the intention of the Lenders and the Borrower to conform
\nstrictly to any applicable usury laws. Accordingly, if any Lender contracts for,
\ncharges, or receives any consideration which constitutes interest in excess of
\nthe Highest Lawful Rate, then any such excess shall be cancelled automatically
\nand, if previously paid, shall at such Lender’s option be applied to the
\noutstanding amount of the Loans made hereunder or be refunded to the Borrower.
\nAs used in this paragraph, the term “Highest Lawful Rate” means the maximum
\nlawful interest rate, if any, that at any time or from time to time may be
\ncontracted for, charged, or received under the laws applicable to such Lender
\nwhich are presently in effect or, to the extent allowed by law, under such
\napplicable laws which may hereafter be in effect and which allow a higher
\nmaximum nonusurious interest rate than applicable laws now allow.<\/p>\n
81<\/p>\n
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
\nbe made, executed and delivered by their duly authorized officers as of the day
\nand year first above written.<\/p>\n
HEALTHSOUTH CORPORATION
\nWITNESS:<\/p>\n
– ———————–
\n By:_______________________________
\n_______________________ Name: Michael D. Martin
\n Title: Senior Vice President and
\n Treasurer<\/p>\n
82<\/p>\n
NATIONSBANK N.A. (CAROLINAS),
\n as Agent for the Lenders<\/p>\n
By:________________________________
\n Name: Douglas E. Coltharp
\n Title: Senior Vice President<\/p>\n
COMMITMENT: NATIONSBANK, N.A. (CAROLINAS)
\n$80,000,000<\/p>\n
By:________________________________
\n Name: Douglas E. Coltharp
\n Title: Senior Vice President<\/p>\n
Lending Office:
\n 100 South Tryon Street
\n Charlotte, North Carolina 28255<\/p>\n
Wire Transfer Instructions:
\n NationsBank, N.A. (Carolinas)
\n Charlotte, North Carolina
\n ABA #053000196
\n Reference: HEALTHSOUTH Corporation
\n Attention: Agency Services<\/p>\n
83<\/p>\n
COMMITMENT: THE BANK OF NOVA SCOTIA
\n$70,000,000<\/p>\n
By:________________________________
\n Name:______________________________
\n Title:_____________________________<\/p>\n
Lending Office:
\n The Bank of Nova Scotia
\n Atlanta Agency
\n 600 Peachtree Street, N.E.
\n Suite 2700
\n Atlanta, Georgia 30308<\/p>\n
Wire Transfer Instructions:
\n The Bank of Nova Scotia
\n New York Agency, for further
\n credit to BNS-Atlanta Agency
\n New York, New York
\n ABA # 026002532
\n Account # 0606634
\n Attention: Houston-Atlanta Team
\n Reference: HEALTHSOUTH<\/p>\n
84<\/p>\n
COMMITMENT: AMSOUTH BANK, N.A.
\n$20,000,000<\/p>\n
By:________________________________
\n Name:______________________________
\n Title: Senior Vice President<\/p>\n
Lending Office:
\n AmSouth Bank, N.A.
\n 1900 5th Avenue
\n Birmingham, Alabama<\/p>\n
Wire Transfer Instructions:
\n AmSouth Bank, N.A.
\n Birmingham, Alabama
\n ABA #062000019
\n Reference: Acct # 50214327
\n HEALTHSOUTH
\n Attention: Lisa Mann<\/p>\n
85<\/p>\n
COMMITMENT: NATIONAL CITY BANK, KENTUCKY
\n$40,000,000<\/p>\n
By:________________________________
\n Name:______________________________
\n Title: Senior Vice President<\/p>\n
Lending Office:
\n 101 S. Fifth Street, 8th Floor
\n Louisville, Kentucky 40202<\/p>\n
Wire Transfer Instructions:
\n National City Bank, Kentucky
\n Louisville, Kentucky
\n ABA # 0830-0005-6
\n Reference: HEALTHSOUTH
\n Attention: Sandy Walker<\/p>\n
86<\/p>\n
COMMITMENT: FIRST UNION NATIONAL BANK OF
\n$70,000,000 NORTH CAROLINA<\/p>\n
By:________________________________
\n Name:______________________________
\n Title: Vice President<\/p>\n
Lending Office:
\n One First Union Plaza
\n Charlotte, North Carolina 28288-0735<\/p>\n
Wire Transfer Instructions:
\n First National Union Bank of
\n North Carolina
\n Charlotte, North Carolina
\n ABA # 053000219
\n Acct # 465906 0001802
\n Reference: HEALTHSOUTH
\n Attention: Sue Patterson<\/p>\n
87<\/p>\n
COMMITMENT: WACHOVIA BANK OF GEORGIA, N.A.
\n$70,000,000<\/p>\n
By:________________________________
\n Name:______________________________
\n Title: Vice President<\/p>\n
Lending Office:
\n Wachovia Bank of Georgia
\n 191 Peachtree Street, N.E.
\n Atlanta, Georgia 30303<\/p>\n
Wire Transfer Instructions:
\n Wachovia Bank of Georgia
\n Atlanta, Georgia
\n ABA #061000010
\n Acct # 18-800-621
\n Attention: Becky Creel<\/p>\n
88<\/p>\n
COMMITMENT: PNC BANK, KENTUCKY, INC.
\n$40,000,000<\/p>\n
By:________________________________
\n Name:______________________________
\n Title:_____________________________<\/p>\n
Lending Office:
\n PNC Bank, Kentucky, Inc.
\n 500 West Jefferson Street
\n Louisville, Kentucky 40202<\/p>\n
Wire Transfer Instructions:
\n PNC Bank, Kentucky, Inc.
\n Louisville, Kentucky
\n ABA #083-000-108
\n Account #3000990597
\n Reference: HEALTHSOUTH
\n Attention: Margie Pate<\/p>\n
89<\/p>\n
COMMITMENT: THE DAIWA BANK, LIMITED
\n$20,000,000<\/p>\n
By:________________________________
\n Name:______________________________
\n Title:_____________________________<\/p>\n
By:________________________________
\n Name:______________________________
\n Title:_____________________________
\n Lending Office:
\n Daiwa Bank, Chicago Branch
\n Chicago, Illinois<\/p>\n
Wire Transfer Instructions:
\n The Daiwa Bank, Limited
\n Chicago Branch
\n Chicago, Illinois
\n ABA #071006075
\n Reference: HealthSouth
\n Attention: Maria Martinez<\/p>\n
90<\/p>\n
COMMITMENT: THE BANK OF TOKYO, LTD.,
\n$40,000,000 Atlanta Agency<\/p>\n
By:________________________________
\n Name: Rodney J. Carson
\n Title: Vice President & Manager<\/p>\n
Lending Office:
\n The Bank of Tokyo, Ltd.
\n New York, New York<\/p>\n
Wire Transfer Instructions:
\n The Bank of Tokyo, Ltd.
\n New York, New York
\n ABA #0260-0963-2
\n For further credit:
\n AC 30001680
\n The Bank of Tokyo, Ltd.
\n Atlanta Agency
\n Attention: Glynnis Slaten<\/p>\n
91<\/p>\n
COMMITMENT: MELLON BANK, N.A.
\n$40,000,000<\/p>\n
By:________________________________
\n Name:______________________________
\n Title:_____________________________<\/p>\n
Lending Office:
\n Mellon Bank, N.A.
\n Two Mellon Bank Center
\n Pittsburgh, Pennsylvania 15259<\/p>\n
Wire Transfer Instructions:
\n Mellon Bank, N.A.
\n Pittsburgh, Pennsylvania 15259
\n ABA # 043000261
\n Acct # 990873800
\n Reference: HEALTHSOUTH
\n Attention: Loan Administrator
\n Terpsie Katsafanas<\/p>\n
92<\/p>\n
COMMITMENT: HIBERNIA NATIONAL BANK
\n$20,000,000<\/p>\n
By:________________________________
\n Title:_____________________________<\/p>\n
Lending Office:
\n 313 Carondelet Street
\n New Orleans, Louisiana 70130<\/p>\n
Wire Transfer Instructions:
\n Hibernia National Bank
\n P. O. Box 61540
\n New Orleans, Louisiana 70161
\n ABA # 065000090
\n Acct # 0520-36615
\n National Accounts
\n Reference: HEALTHSOUTH
\n Attention: Hal Hopson<\/p>\n
93<\/p>\n
COMMITMENT: THE BANK OF CALIFORNIA, N.A.
\n$20,000,000<\/p>\n
By:________________________________
\n Name:______________________________
\n Title:_____________________________<\/p>\n
Lending Office:
\n Los Angeles, California 90071<\/p>\n
Wire Transfer Instructions:
\n The Bank of California, N.A.
\n San Francisco, California
\n ABA # 121000015
\n Acct # 001-060-235
\n Reference: HEALTHSOUTH
\n Attention: Hisako Sakamoto<\/p>\n
94<\/p>\n
COMMITMENT: COOPERATIVE CENTRALE RAIFFEISEN-
\n$40,000,000 BOERENLEENBANK, B.A.
\n “RaboBank Nederland, New York Branch”<\/p>\n
By:________________________________
\n Name:______________________________
\n Title:_____________________________<\/p>\n
Lending Office:
\n New York, New York 10167<\/p>\n
Wire Transfer Instructions:
\n Bank of New York
\n New York, New York
\n ABA # 021000018
\n For the Account of RaboBank
\n Acct # 8026002533
\n Reference: HEALTHSOUTH
\n Attention: Corporate Services<\/p>\n
95<\/p>\n
COMMITMENT: SHAWMUT BANK CONNECTICUT, N.A.
\n$20,000,000<\/p>\n
By:________________________________
\n Name:______________________________
\n Title:_____________________________<\/p>\n
Lending Office:
\n Shawmut Bank Connecticut, N.A.
\n Hartford, Connecticut<\/p>\n
Wire Transfer Instructions:
\n Shawmut Bank Connecticut, N.A.
\n Hartford, Connecticut
\n ABA # 011900445
\n Acct # 00-6612-7761
\n Reference: HEALTHSOUTH
\n Attention: Sandy Sousa<\/p>\n
96<\/p>\n
COMMITMENT: TORONTO DOMINION (TEXAS), INC.
\n$70,000,000
\n By:______________________________
\n Name:____________________________
\n Title:___________________________<\/p>\n
Lending Office:
\n The Toronto-Dominion Bank
\n 909 Fannin Street, 17th Floor
\n Houston, Texas 77010<\/p>\n
Wire Transfer Instructions:
\n The Toronto-Dominion Bank
\n ABA # 0260003243
\n Favor: TD Houston
\n Acct # 2159251
\n Reference: HEALTHSOUTH
\n Attention: Lisa Allison<\/p>\n
97<\/p>\n
COMMITMENT: WELLS FARGO BANK, N.A.
\n$40,000,000
\n By:______________________________
\n Name:____________________________
\n Title:___________________________<\/p>\n
Lending Office:
\n 420 Montgomery Street, 9th Floor
\n San Francisco, California 94163<\/p>\n
Wire Transfer Instructions:
\n Wells Fargo Bank, N.A.
\n San Francisco, California<\/p>\n
ABA # 121000248
\n BNF = Corporate Loan Operations
\n OBI = HEALTHSOUTH Corporation<\/p>\n
98<\/p>\n
COMMITMENT: FIRST AMERICAN NATIONAL BANK
\n$20,000,000
\n By:_____________________________
\n Name:___________________________
\n Title:__________________________<\/p>\n
Lending Office:
\n 300 Union Street, 2nd Floor
\n Nashville, Tennessee 37237-0203<\/p>\n
Wire Transfer Instructions:
\n First American National Bank
\n 300 Union Street, 2nd Floor
\n Nashville, Tennessee 37237-0203<\/p>\n
ABA # 064-000-017
\n Wire Transfer Clearing Account
\n # 090-125-6
\n Attention: Frenisa D. Joy
\n Commercial Loan Operations<\/p>\n
99<\/p>\n
COMMITMENT: FLEET BANK OF MASSACHUSETTS, N.A.
\n$20,000,000
\n By:_____________________________
\n Name:___________________________
\n Title:__________________________<\/p>\n
Lending Office:
\n 75 State Street
\n Boston, Massachusetts 02109<\/p>\n
Wire Transfer Instructions:
\n Fleet Bank of Massachusetts, N.A.<\/p>\n
ABA # 011-000-138
\n Account # 1510351
\n For credit to: Commercial Loan Services
\n Attention: Agent Bank
\n Department<\/p>\n
100<\/p>\n
COMMITMENT: ABN AMRO BANK N.V.
\n$20,000,000
\n By:_____________________________
\n Name:___________________________
\n Title:__________________________<\/p>\n
Lending Office:
\n One Ravinia Drive, Suite 1200
\n Atlanta, Georgia 30346<\/p>\n
Wire Transfer Instructions:
\n Federal Reserve Bank, NY, NY
\n Favor of: ABN*AMRO New York<\/p>\n
ABA # 0260-09580
\n Further credit to: ABN*AMRO Atlanta
\n Account # 651-0-010197-41<\/p>\n
101<\/p>\n
COMMITMENT: DEUTSCHE BANK AG, New York Branch
\n$20,000,000 and\/or Cayman Islands Branch<\/p>\n
By:_____________________________
\n Name:___________________________
\n Title:__________________________<\/p>\n
By:_____________________________
\n Name:___________________________
\n Title:__________________________<\/p>\n
Lending Office:
\n 31 West 52nd Street
\n New York, New York 10019<\/p>\n
Wire Transfer Instructions:
\n Deutsche Bank AG
\n New York, New York 10019
\n ABA # 026003780
\n Favor: Deutsche Bank AG,
\n New York Branch
\n Attention: Noble Samuel – CF-OPS<\/p>\n
102<\/p>\n
COMMITMENT: LTCB TRUST COMPANY
\n$40,000,000
\n By:_____________________________
\n Name:___________________________
\n Title:__________________________<\/p>\n
Lending Office:
\n 165 Broadway
\n New York, New York 10006<\/p>\n
Wire Transfer Instructions:
\n Funds transferred to:
\n Bankers Trust Company<\/p>\n
ABA # 021001033
\n Name of Account: LTCB Trust Company
\n Account # 04-203-606<\/p>\n
103<\/p>\n
COMMITMENT: THE BOATMENS NATIONAL BANK OF
\n$20,000,000 ST. LOUIS<\/p>\n
By:_____________________________
\n Name:___________________________
\n Title:__________________________<\/p>\n
Lending Office:
\n P. O. Box 236
\n St. Louis, Missouri 63166<\/p>\n
Wire Transfer Instructions:
\n The Boatman’s National Bank of
\n St. Louis
\n St. Louis, Missouri 63166
\n ABA # 081000032
\n Account # 101409997409
\n Attention: Commercial Loan Service<\/p>\n
104<\/p>\n
COMMITMENT: THE SANWA BANK LIMITED, ATLANTA
\n$20,000,000 AGENCY<\/p>\n
By:_____________________________
\n Name:___________________________
\n Title:__________________________<\/p>\n
Lending Office:
\n 133 Peachtree Street, N.E.
\n Suite 4750
\n Atlanta, Georgia 30303<\/p>\n
Wire Transfer Instructions:
\n The Sanwa Bank Limited
\n New York, New York<\/p>\n
ABA # 026009823
\n Account # 999669
\n For the Account of Atlanta
\n Reference: HEALTHSOUTH<\/p>\n
105<\/p>\n
COMMITMENT: CREDITANSTALT CORPORATE FINANCE, INC.
\n$20,000,000<\/p>\n
By:_____________________________
\n Name:___________________________
\n Title:__________________________<\/p>\n
By:_____________________________
\n Name:___________________________
\n Title:__________________________<\/p>\n
Lending Office:
\n 245 Park Avenue
\n New York, New York 10167<\/p>\n
Wire Transfer Instructions:
\n Chemical Bank
\n New York, New York
\n Account: Critanstalt New York
\n ABA # 021000128
\n Account # 544-7-73095
\n Attention: HEALTHSOUTH Corporation<\/p>\n
106<\/p>\n
COMMITMENT: DRESDNER BANK AG, NEW YORK BRANCH
\n$20,000,000 AND GRAND CAYMAN BRANCH<\/p>\n
By:_____________________________
\n Name:___________________________
\n Title:__________________________<\/p>\n
Lending Office:
\n 75 Wall Street
\n New York, New York 10005<\/p>\n
Wire Transfer Instructions:
\n Chase Manhattan Bank
\n (Favor of Dresdner Bank AG)
\n ABA # 021000021
\n Account # 920-1-059079
\n Reference: HEALTHSOUTH<\/p>\n
107<\/p>\n
COMMITMENT: FUJI BANK
\n$20,000,000<\/p>\n
By:_____________________________
\n Name:___________________________
\n Title:__________________________<\/p>\n
Lending Office:
\n ________________________
\n ________________________<\/p>\n
Wire Transfer Instructions:
\n ________________________
\n ________________________
\n ________________________
\n ABA # _________________
\n Account # ________________
\n Attention: ___________________<\/p>\n
108<\/p>\n
COMMITMENT: NIPPON CREDIT BANK
\n$20,000,000
\n By:_____________________________
\n Name: Bernardo E. Correa-Henschke
\n Title:__________________________<\/p>\n
Lending Office:
\n 550 S. Hope Street, Suite 2500
\n Los Angeles, California 90071<\/p>\n
Wire Transfer Instructions:
\n Bank of America, San Francisco
\n 1850 Gateway Boulevard, 8th Floor
\n Concord, California 94520<\/p>\n
ABA # 1210-0035-8
\n Account # 62908-31126
\n Account Name: The Nippon Credit Bank,
\n Ltd., Los Angeles<\/p>\n
Attention: Loan Administration<\/p>\n
109<\/p>\n
COMMITMENT: THE INDUSTRIAL BANK OF JAPAN, LIMITED
\n$40,000,000<\/p>\n
By:_____________________________
\n Name:___________________________
\n Title:__________________________<\/p>\n
Lending Office:
\n New York Branch
\n 245 Park Avenue
\n New York, New York 10169<\/p>\n
Wire Transfer Instructions:
\n Fed Wire Industrial Bank of
\n Japan Limited New York Branch
\n ABA # 026008345
\n Reference: HEALTHSOUTH Corporation
\n Attention: Credit Administration<\/p>\n
110<\/p>\n
COMMITMENT: THE SUMITOMO BANK, LIMITED
\n$20,000,000<\/p>\n
By:_____________________________
\n Name:___________________________
\n Title:__________________________<\/p>\n
Lending Office:
\n ________________________
\n ________________________<\/p>\n
Wire Transfer Instructions:
\n ________________________
\n ________________________
\n ________________________
\n ABA # _________________
\n Account # ________________
\n Attention: ___________________<\/p>\n
111<\/p>\n
\n\n EXHIBIT A<\/p>\n
Applicable
\n Lender Commitment Percentage
\n —— ———————<\/p>\n
\nNationsBank, N.A. (Carolinas) 8%<\/p>\nThe Bank of Nova Scotia 7<\/p>\n
First Union National Bank 7
\n of North Carolina<\/p>\n
Mellon Bank, N.A. 4<\/p>\n
National City Bank, Kentucky 4<\/p>\n
PNC Bank, Kentucky, Inc. 4<\/p>\n
Wachovia Bank of Georgia, N.A. 7<\/p>\n
Toronto Dominion (Texas), Inc. 7<\/p>\n
AmSouth Bank of Alabama 2<\/p>\n
The Bank of California, N.A. 2<\/p>\n
The Bank of Tokyo, Ltd., Atlanta Agency 4<\/p>\n
The Daiwa Bank, Limited 2<\/p>\n
Hibernia National Bank 2<\/p>\n
Cooperative Centrale Raiffeisen- 4
\n Boerenleenbank, B.A.
\n “RaboBank Nederland, New York Branch”<\/p>\n
Shawmut Bank Connecticut, N.A. 2<\/p>\n
Wells Fargo Bank, N.A. 4<\/p>\n
First American National Bank 2<\/p>\n
Fleet Bank of Massachusetts, N.A. 2<\/p>\n
ABN AMRO Bank N.V. 2<\/p>\n
Deutsche Bank AG, New York Branch and\/or<\/p>\n
Cayman Islands Branch 2<\/p>\n
LTCB Trust Company 4<\/p>\n
The Boatmens National Bank of St. Louis 2<\/p>\n
112<\/p>\n
Applicable
\nLender Commitment Percentage
\n– —— ———————-<\/p>\n
The Sanwa Bank Limited, Atlanta Agency 2%<\/p>\n
Creditanstalt Corporate Finance, Inc. 2<\/p>\n
Fuji Bank 2<\/p>\n
Nippon Credit Bank, Ltd., 2
\n Los Angeles Agency<\/p>\n
Dresdner Bank AG, New York Branch
\n and Grand Cayman Branch 2<\/p>\n
The Sumitomo Bank, Limited 2<\/p>\n
The Industrial Bank of Japan, Limited 4
\n —<\/p>\n
100%
\n<\/c><\/s><\/caption>\n<\/table>\n
113<\/p>\n
EXHIBIT B<\/p>\n
FORM OF ASSIGNMENT AND ACCEPTANCE<\/p>\n
DATED _________________, 19______<\/p>\n
Reference is made to the Amended and Restated Credit Agreement dated as
\nof April 11, 1995 (the “Agreement”) among HEALTHSOUTH CORPORATION, a Delaware
\ncorporation (“Borrower”), the Lenders (as defined in the Agreement) and
\nNATIONSBANK, N.A. (CAROLINAS) as Agent for the Lenders (“Agent”). Unless
\notherwise defined herein, terms defined in the Agreement are used herein with
\nthe same meanings.<\/p>\n
___________________________________________________________________(the
\n“Assignor”) and ________________________ (the “Assignee”) agree as follows:<\/p>\n
1. The Assignor hereby sells and assigns to the Assignee, and the
\nAssignee hereby purchases and assumes from the Assignor, WITHOUT RECOURSE, a
\n_______%1 interest in and to all of the Assignor’s rights and obligations under
\nthe Agreement as of the Effective Date (as defined below), including, without
\nlimitation, such percentage interest in the Loan owing to, and Participations
\nheld by, the Assignor on the Effective Date, and the Notes held by the Assignor.<\/p>\n
2. The Assignor (i) represents and warrants that, as of the date
\nhereof, the aggregate outstanding principal amount of the Loans owing to it
\n(without giving effect to assignments thereof which have not yet become
\neffective) is $________ and the aggregate principal amount of Letters of Credit
\nin which it is deemed to have a Participation under the Agreement is $________;
\n(ii) represents and warrants that it is the legal and beneficial owner of the
\ninterest being assigned by it hereunder and that such interest is free and clear
\nof any adverse claim; (iii) makes no representation or warranty and assumes no
\nresponsibility with respect to any statements, warranties or representations
\nmade in or in connection with the Agreement or any of the Loan Documents or the
\nexecution, legality, validity, enforceability, genuineness, sufficiency or value
\nof the Agreement or any of the Loan Documents or any other instrument or
\ndocument furnished pursuant thereto; (iv) makes no representation or warranty
\nand assumes no responsibility with respect to the financial condition of
\nBorrower or the performance or observance by Borrower of any of its obligations
\nunder the Agreement or any of the Loan Documents or any other instrument or
\ndocument furnished pursuant thereto and (v) attaches the Notes referred to in
\nparagraph 1 above and requests that the Agent exchange such Note for new Note(s)
\nas follows: A Syndicated Note, dated _____________, 19__ in the principal amount
\nof $________________, and Competitive Bid Note, dated __________, 19__ ——–
\n1 Specify percentage in no more than 8 decimal points.<\/p>\n
114<\/p>\n
in the principal amount of $__________ payable to the order of the Assignor, and
\na Syndicated Note, dated ____________________________ 19__, in the principal
\namount of $_________________ and Competitive Bid Note, dated __________, 19__ in
\nthe principal amount of $__________ payable to the order of the Assignee.<\/p>\n
3. The Assignee (i) confirms that it has received a copy of the
\nAgreement, together with copies of the financial statements referred to in
\nSection 7.3 thereof and such other documents and information as it has deemed
\nappropriate to make its own credit analysis and decision to enter into this
\nAssignment and Acceptance; (ii) agrees that it will, independently and without
\nreliance upon the Agent, the Assignor, or any other Lender and based on such
\ndocuments and information as it shall deem appropriate at the time, continue to
\nmake its own credit decisions in taking or not taking action under the
\nAgreement; (iii) appoints and authorizes the Agent to take such actions on its
\nbehalf and to exercise such powers under the Loan Documents as are delegated to
\nthe Agent by the terms thereof, together with such powers as are reasonably
\nincidental thereto; (iv) agrees that it will perform in accordance with their
\nterms all of the obligations which by the terms of the Agreement are required to
\nbe performed by the Lender; and (v) specifies as its address for notices the
\noffice set forth beneath its name on the signature pages hereof.<\/p>\n
4. The effective date for this Assignment and Acceptance shall be
\n_____________________________ (the “Effective Date”). Following the execution of
\nthis Assignment and Acceptance, it will be delivered to the Agent for acceptance
\nand recording by the Agent.<\/p>\n
5. Upon such acceptance and recording, as of the Effective Date, (i)
\nthe Assignee shall be a party to the Agreement and, to the extent provided in
\nthis Assignment and Acceptance, have the rights and obligations of a Lender
\nthereunder and under the Loan Documents and (ii) the Assignor shall, to the
\nextent provided in this Assignment and Acceptance, relinquish its rights and be
\nreleased from its obligations under the Agreement.<\/p>\n
6. Upon such acceptance and recording, from and after the Effective
\nDate, the Agent shall make all payments under the Agreement and Notes in respect
\nof the interest assigned hereby (including, without limitation, all payments of
\nprincipal, interest, unused fees and letter of credit fees with respect thereto)
\nto the Assignee. The Assignor and Assignee shall make all appropriate
\nadjustments in payments under the Agreement and the Notes for periods prior to
\nthe Effective Date directly between themselves.<\/p>\n
115<\/p>\n
7. This Assignment and Acceptance shall be governed by and construed in
\naccordance with, the laws of the State of North Carolina.<\/p>\n
[NAME OF ASSIGNOR]<\/p>\n
By:____________________________________________
\n Name:
\n Title:<\/p>\n
Notice Address:________________________________
\n ________________________________
\n ________________________________<\/p>\n
After the Effective Date
\n Outstanding Revolving Loans:$__________________<\/p>\n
[NAME OF ASSIGNEE]<\/p>\n
By:____________________________________________
\n Name:
\n Title:<\/p>\n
Notice Address:________________________________
\n ________________________________
\n ________________________________<\/p>\n
After the Effective Date
\n Outstanding Revolving Loans:$__________________<\/p>\n
Accepted this __________ day of ___________, 19_______<\/p>\n
NATIONSBANK, N.A. (CAROLINAS)<\/p>\n
By:___________________________________________________
\n Name:
\n Title:<\/p>\n
Consented to:<\/p>\n
HEALTHSOUTH CORPORATION<\/p>\n
By:____________________________
\n Name:
\n Title:<\/p>\n
116<\/p>\n
EXHIBIT C-1<\/p>\n
PARTNERSHIP GUARANTY AGREEMENT
\n ——————————<\/p>\n
THIS PARTNERSHIP GUARANTY AGREEMENT (this “Agreement”) is entered into
\nby and between NATIONSBANK, N.A. (CAROLINAS) , a national banking association,
\nas Agent (the “Agent”), and the other undersigned entity (the “Guarantor”) as of
\nApril 11, 1995.<\/p>\n
Recitals
\n ——–<\/p>\n
A. HEALTHSOUTH Corporation (formerly named HEALTHSOUTH Rehabilitation
\nCorporation), a Delaware corporation (the “Borrower”), the Agent and the other
\nlenders party thereto (the “Original Lenders”) entered into a Credit Agreement
\ndated as of November 20, 1992 (such credit agreement as amended by Amendment No.
\n1 dated August 13, 1993 and Amendment No. 2 dated December 30, 1993, being
\nreferred to as the “Original Agreement”) pursuant to which the Original Lenders
\nagreed to make loans and cause to be issued letters of credit all in an
\naggregate outstanding amount not to exceed $390,000,000.<\/p>\n
B. At the request of the Borrower, by Amended and Restated Credit
\nAgreement dated June 7, 1994 (the “First Restated Agreement”) the Borrower, the
\nAgent and certain of the Original Lenders together with additional lenders
\n(collectively the “Existing Lenders”) amended and restated the Original
\nAgreement, thereby increasing the amount of the credit facility to $550,000,000
\nand changing certain provisions of the Original Agreement and resulting in the
\naddition of certain Participating Subsidiaries.<\/p>\n
C. The Borrower has requested that the First Restated Agreement be
\namended and restated in its entirety in order to increase the amount of the
\ncredit facility, to change certain of the provisions contained therein and to
\nincrease the number of lenders participating therein, and the Agent and the
\nrespective lenders are willing to make such changes by amending and restating
\nthe First Restated Agreement as set forth in the Second Amended and Restated
\nCredit Agreement of even date herewith, among the Borrower, the Agent and the
\nlenders party thereto (the “Lenders”) (such Second Amended and Restated Credit
\nAgreement, as amended, modified or supplemented from time to time, being
\nreferred to as the “Credit Agreement”). Capitalized terms used in this
\nAgreement, unless otherwise defined herein, have the meanings assigned to them
\nin the Credit Agreement.<\/p>\n
D. The Borrower is either directly or through one of its Subsidiaries
\nthe General Partner of the Guarantor, and proceeds of Loans made under the
\nCredit Agreement have been advanced to and used by the Guarantor.<\/p>\n
117<\/p>\n
E. The Guarantor will materially benefit from the Loans to be made to
\nthe Borrower and Participating Subsidiaries and Participating Partnerships
\npursuant to the Credit Agreement.<\/p>\n
F. The Guarantor desires, pursuant to Section 2.5 of the Credit
\nAgreement, to guarantee, jointly and severally, with the other Participating
\nSubsidiaries and Participating Partnerships, the Credit Agreement, the Notes and
\nthe other Credit Obligations and to take all other action necessary to become a
\nParticipating Partnership, as defined in the Credit Agreement.<\/p>\n
Agreement
\n ———<\/p>\n
NOW, THEREFORE, in consideration of the foregoing recitals and the
\nmutual agreements herein set forth, and to induce the Lenders to continue the
\ncredit extended under the First Restated Agreement and to extend additional
\ncredit under the Credit Agreement, and in further consideration of the
\nsubstantial material benefit to accrue to the Guarantor from credit extended and
\nto be extended by the Lenders under the Credit Agreement, the parties hereto
\nagree as follows:<\/p>\n
1. The Guarantor does hereby, absolutely and unconditionally, jointly
\nand severally, for the benefit of the Agent and each of the Lenders, guarantee
\nand become surety for the full and timely payment when due (whether by
\nacceleration or otherwise) (including amounts which, but for the operation of
\nthe automatic stay under Section 362(a) of the Bankruptcy Code (or any successor
\nstatute) would become due) for each of the Credit Obligations, whether direct or
\nindirect, joint or several, absolute or contingent, liquidated or unliquidated,
\nnow or hereafter existing, extended, renewed, replaced, refinanced or
\nrestructured, whether or not from time to time decreased or extinguished and
\nlater increased, created or incurred; provided, however, that the Guarantor’s
\nliability with respect to the Credit Obligations shall be limited to an amount
\nequal to its Partnership Liabilities.<\/p>\n
2. This is a guaranty of payment and not merely of collection. In the
\nevent of any default by the Borrower or any other obligor in payment or
\notherwise on any of the Credit Obligations, the Guarantor will pay all or any
\nportion of the Credit Obligations due or thereafter becoming due, whether by
\nacceleration or otherwise, without offset of any kind whatsoever, without the
\nAgent or any Lender first being required to make demand upon the Borrower or any
\nother obligor or pursue any of its rights against the Borrower or any other
\nobligor, or against any other person, including other Participating
\nSubsidiaries, Participating Partnerships and guarantors; and without being
\nrequired to liquidate or realize on any collateral security. In any right of
\naction accruing to the Agent or any Lender, the Agent or such Lender (as the
\ncase may be) may elect to proceed against (a) the Guarantor together with the
\nBorrower or any other obligor, Participating Subsidiary, Participating
\nPartnership or guarantor;<\/p>\n
118<\/p>\n
(b) the Guarantor and the Borrower or any other obligor, Participating
\nSubsidiary, Participating Partnership or guarantor individually; or (c) the
\nGuarantor only without having first commenced any action against the Borrower or
\nany other obligor, Participating Subsidiary, Participating Partnership or
\nguarantor.<\/p>\n
3. The Guarantor hereby unconditionally waives with respect to this
\nAgreement: (a) notice of acceptance of this Agreement by the Agent or any Lender
\nand any notice of the incurring by the Borrower or any other obligor,
\nParticipating Subsidiary, Participating Partnership or guarantor of any Credit
\nObligation; (b) presentment for payment, notice of nonpayment, demand, protest,
\nnotice of protest and notice of dishonor or default to any party including the
\nBorrower, the Guarantor or any other obligor, Participating Subsidiary,
\nParticipating Partnership or guarantor; (c) all other notices to which the
\nBorrower, the Guarantor or any other obligor, Participating Subsidiary,
\nParticipating Partnership or guarantor may be entitled but which may legally be
\nwaived; (d) demand for payments as a condition of liability under this
\nAgreement; (e) any disability of the Borrower or any other obligor or any
\ndefense available to the Borrower or any other obligor, including absence or
\ncessation of the Borrower’s or any other obligor’s liability for any reason
\nwhatsoever; (f) any defense or circumstances which might otherwise constitute a
\nlegal or equitable discharge of a guarantor or surety; and (g) all rights under
\nany state or federal statute dealing with or affecting the rights of creditors.<\/p>\n
4. The Guarantor acknowledges that it has had full and complete access
\nto the underlying papers relating to the Credit Obligations and all other papers
\nexecuted by any person in connection with the Credit Obligations, has reviewed
\nthem and is fully aware of the meaning and effect of their contents. The
\nGuarantor is fully informed of all circumstances that bear upon the risks of
\nexecuting this Agreement and which a diligent inquiry would reveal. The
\nGuarantor has adequate means to obtain from the Borrower on a continuing basis
\ninformation concerning the Borrower’s financial condition and is not depending
\non the Agent or Lenders to provide such information, now or in the future. The
\nGuarantor agrees that neither the Agent nor the Lenders shall have any
\nobligation to advise or notify the Guarantor or to provide the Guarantor with
\nany data or information. The execution and delivery of this Agreement is not a
\ncondition precedent (and the Agent and the Lenders have not in any way implied
\nthat the execution of this Agreement is a condition precedent) to the Lenders’
\nmaking, extending or modifying any loan or any other financial accommodation to
\nor for the Guarantor otherwise than under the Credit Agreement.<\/p>\n
5. The Guarantor hereby specifically acknowledges and agrees, without
\nlimiting the generality of the other provisions of this Agreement, to be bound
\nby the terms and conditions specified in Section 2.5(b) of the Credit Agreement.<\/p>\n
119<\/p>\n
6. The Guarantor hereby agrees that its guaranty of the Credit
\nObligations is joint and several, continuing, absolute and unconditional
\n(subject to the proviso of Section 1 above). Without limiting the generality of
\nthe foregoing, the Guarantor’s obligations and liability hereunder and its
\nguaranty of the Notes and any other Loan Document shall not be released,
\ndischarged, impaired, modified or in any way affected by (a) the invalidity or
\nunenforceability of any Loan Document, (b) the failure of the Agent or the
\nLenders to give the Guarantor a copy of any notice given to the Borrower or any
\nother obligor, Participating Subsidiary, Participating Partnership or guarantor,
\n(c) any modification, amendment or supplement of any obligation, covenant or
\nagreement contained in any Loan Document, (d) any compromise, settlement,
\nrelease or termination of any obligation, covenant or agreement in any Loan
\nDocument, (e) any waiver of payment, performance or observance by or in favor of
\nthe Borrower or any other obligor, Participating Subsidiary, Participating
\nPartnership or guarantor of any obligation, covenant or agreement under any Loan
\nDocument, (f) any consent, extension, indulgence or other action or inaction, or
\nany exercise or non-exercise of any right, remedy or privilege with respect to
\nany Loan Document, (g) the extension of time for payment or performance of any
\nCredit Obligations, (h) the release or discharge of the Lenders’ claims against
\nany collateral now or at any time hereafter securing any of the Credit
\nObligations, the Borrower or any other Participating Subsidiary or Participating
\nPartnership by operation of law or otherwise or (i) any other matter that might
\notherwise be raised in avoidance of, or in defense against an action to enforce,
\nthe obligations of the Guarantor under this Agreement or its guaranty of any
\nCredit Obligations.<\/p>\n
7. The Guarantor hereby repeats and reaffirms each of the
\nrepresentations and warranties contained in Article V of the Credit Agreement,
\nto the extent they are applicable to a Participating Partnership; and the
\nGuarantor hereby represents and warrants to the Agent and the Lenders that all
\nsuch representations and warranties are true with respect to the Guarantor.<\/p>\n
8. The Guarantor covenants and agrees with the Agent and each Lender as
\nfollows:<\/p>\n
(a) The Guarantor will comply with all of the obligations,
\n requirements and restrictions in the covenants contained in Article VII
\n of the Credit Agreement, to the extent they are applicable to a
\n Participating Partnership.<\/p>\n
(b) The Guarantor hereby irrevocably waives with respect to
\n this Agreement any legal or equitable right to recover from the
\n Borrower or any other obligor, Participating Subsidiary or
\n Participating Partnership or guarantor, including without limitation,
\n any right of subrogation, indemnity, reimbursement or contribution or
\n any other right of the Guarantor as a<\/p>\n
120<\/p>\n
creditor of the Borrower or any other obligor, Participating
\n Subsidiary, Participating Partnership or guarantor.<\/p>\n
(c) The Guarantor further waives any rights that might
\n otherwise be available to Guarantor pursuant to ss. 26-4 through ss.
\n 26-7 of the North Carolina General Statutes.<\/p>\n
9. The Guarantor irrevocably (a) acknowledges that this Agreement will
\nbe accepted by the Agent and Lenders and performed by the Guarantor in the State
\nof North Carolina (which is the state in which the Agent’s main office is
\nlocated); (b) submits to the jurisdiction of each state or federal court sitting
\nin North Carolina (collectively, the “Courts”) over any suit, action or
\nproceeding arising out of or relating to this Agreement (individually, an
\n“Agreement Action”); (c) waives, to the fullest extent permitted by law, any
\nobligation or defense that the Guarantor may now or hereafter have based on
\nimproper venue, lack of personal jurisdiction, inconvenience of forum or any
\nsimilar matter in any Agreement Action brought in any of the Courts; (d) agrees
\nthat final judgment in any Agreement Action brought in any of the Courts shall
\nbe conclusive and binding upon the Guarantor and may be enforced in any other
\ncourt to the jurisdiction of which the Guarantor is subject, by a suit upon such
\njudgment; (e) designates Michael D. Martin, or any successor Treasurer of
\nHEALTHSOUTH Corporation, whose address is HEALTHSOUTH Corporation, Two Perimeter
\nPark South, Suite 224W, Birmingham, Alabama 35243, as the Guarantor’s authorized
\nagent to accept and acknowledge on the Guarantor’s behalf service of any and all
\nprocess that may be served in any Agreement Action in any of the Courts; (f)
\nagrees, if such agent shall cease so to act, irrevocably to designate and
\nappoint without delay another such agent in the State of North Carolina
\nsatisfactory to the Agent; (g) consents to the service of process on the
\nGuarantor in any Agreement Action by the mailing of a copy thereof by registered
\nor certified mail, postage prepaid, to (i) the Guarantor at the Guarantor’s
\naddress designated in or pursuant to Section 10.2 of the Credit Agreement or
\n(ii) the agent for service of process appointed by the Guarantor under this
\nSection 9; (h) agrees that service in either manner specified in clause (g) next
\nabove shall in every respect be effective and binding on the Guarantor to the
\nsame extent as though such service of process were served on the Guarantor in
\nperson by a person duly authorized to serve such process; and (i) AGREES THAT
\nTHE PROVISIONS OF THIS SECTION, EVEN IF FOUND NOT TO BE STRICTLY ENFORCEABLE BY
\nANY COURT, SHALL CONSTITUTE “FAIR WARNING” TO THE GUARANTOR THAT THE EXECUTION
\nOF THIS AGREEMENT MAY SUBJECT THE GUARANTOR TO THE JURISDICTION OF THE COURTS OF
\nTHE STATE OF NORTH CAROLINA WITH RESPECT TO ANY AGREEMENT ACTIONS, AND THAT IT
\nIS FORESEEABLE BY THE GUARANTOR THAT THE GUARANTOR MAY BE SUBJECTED TO THE
\nJURISDICTION OF THE COURTS OF THE STATE OF NORTH CAROLINA AND MAY BE SUED IN
\nTHAT STATE IN ANY AGREEMENT ACTIONS. Nothing in this Section 9 shall limit or
\nrestrict the Agent’s or any Lender’s right to serve process or bring Agreement
\nActions in manners and in courts otherwise as herein provided.<\/p>\n
121<\/p>\n
10. The Guarantor agrees that it is, and for all purposes of the
\nCredit Agreement and the Note shall be, a Participating Partnership.<\/p>\n
11. (a) THE GUARANTY PURSUANT TO THIS AGREEMENT IS A CONTINUING
\nGUARANTY AND SHALL CONTINUE IN FULL FORCE AND EFFECT UNTIL SUCH TIME AS ALL
\nOBLIGATIONS SHALL HAVE BEEN PAID IN FULL AND THE AGENT AND EACH LENDER SHALL BE
\nUNDER NO FURTHER OBLIGATION TO LEND OR ADVANCE FUNDS TO THE BORROWER OR ANY
\nOTHER PERSON CONSTITUTING CREDIT OBLIGATIONS OR TO ISSUE LETTERS OF CREDIT.<\/p>\n
(b) If claim is ever made upon the Agent or any Lender for repayment or
\nrecovery of any amount or amounts received in payment or on account of any of
\nthe Credit Obligations (including without limitation any claim that such payment
\nconstitutes or constituted a preference or preferential transfer under
\nbankruptcy or other law or a fraudulent conveyance, or any other claim under
\nbankruptcy or other law) and the Agent or such Lender repays all or part of said
\namount by reason of (a) any judgment, decree or order of any court or
\nadministrative body having jurisdiction over such payee or any of its property,
\nor (b) any settlement or compromise of any such claim effected by the Agent or
\nany Lender with any such claimant (including the original obligor), then and in
\nsuch event the Guarantor agrees that any such judgment, decree, order,
\nsettlement or compromise shall be binding upon it, notwithstanding any
\nrevocation hereof or the cancellation of any Note or other instrument evidencing
\nany Credit Obligation or any security therefor, and the Guarantor shall be and
\nremain liable to the Agent and the Lenders for the amount so repaid or recovered
\nto the same extent as if such amount had never originally been received by the
\nAgent or any Lender. Nothing contained in this Section 11(b) shall be deemed to
\nrequire any Participating Partnership to pay more than an amount equal to its
\nPartnership Liabilities.<\/p>\n
(c) When taking action under this Agreement, the Agent will have the
\nsame level of responsibility and the same protections as set forth in the Credit
\nAgreement for the Agent’s actions thereunder.<\/p>\n
12. This Agreement shall bind the Guarantor’s successors and assigns
\nand shall inure to the benefit of, and be enforceable by, the Agent and each of
\nthe Lenders and their respective successors and assigns. This Agreement may only
\nbe waived, modified or amended by a written instrument signed by the Agent and
\nthe party against which the enforcement thereof is sought. THIS AGREEMENT SHALL
\nIN ALL RESPECTS BE GOVERNED BY, AND CONSTRUCTED IN ACCORDANCE WITH, THE LAWS OF
\nTHE STATE OF NORTH CAROLINA. If any term of this Agreement shall be invalid or
\nunenforceable, the remainder of this Agreement shall remain in force and effect.
\nThis Agreement may be executed in counterparts, each of which shall be deemed an
\noriginal, but all of which shall constitute one agreement. This Agreement and
\nthe other Loan Documents constitute the entire agreement of the parties with
\nrespect to the subject matter hereof<\/p>\n
122<\/p>\n
and supersede any inconsistent agreement with respect to the subject matter
\nhereof and thereof.<\/p>\n
13. TO THE EXTENT PERMITTED BY LAW, THE GUARANTOR HEREBY KNOWINGLY,
\nVOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
\nWITH RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
\nCONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
\nCONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
\nTHE AGENT, ANY LENDER OR THE GUARANTOR. THIS PROVISION IS A MATERIAL INDUCEMENT
\nTO THE AGENT AND EACH LENDER MAKING THE LOANS AVAILABLE TO THE BORROWER AND
\nPARTICIPATING PARTNERSHIPS AND PARTICIPATING SUBSIDIARIES.<\/p>\n
14. Additional Waiver. The Guarantor and the Agent believe that,
\ninasmuch as this Agreement and the transactions contemplated hereby have been
\nentered into and consummated outside the State of Alabama, such transactions
\nconstitute transactions in interstate commerce, so that neither the Agent nor
\nany of the Lenders is required, solely by entering into this Agreement and
\nconsummating the transactions contemplated hereby, to qualify to do business as
\na foreign corporation within the State of Alabama. Notwithstanding the
\nforegoing, however, the Guarantor hereby irrevocably waives all rights that it
\nmay have to raise, in any action brought by any of the Lenders or the Agent to
\nenforce the rights of the Lenders and the Agent hereunder, or the obligations of
\nthe Guarantor hereunder, any defense which is based upon the failure of any of
\nthe Lenders or the Agent to qualify to do business as a foreign corporation in
\nthe State of Alabama, including, but not limited to, any defenses based upon ss.
\n232 of the Alabama Constitution of 1901, ss. 10-2A-247 of the Code of Alabama
\n(1975) or ss. 40-14-4 of the Code of Alabama (1975), or any successor provision
\nto any thereof. The foregoing waiver is made knowingly and voluntarily and is a
\nmaterial inducement for the Agent and the Lenders to enter into the transactions
\ncontemplated by this Agreement.<\/p>\n
IN WITNESS WHEREOF, this Agreement has been executed by the Guarantor
\non the date first written above.<\/p>\n
[NAME OF PARTNERSHIP]
\nATTEST:<\/p>\n
By:______________________ By:___________________________
\nName:____________________ Name:_________________________
\nTitle:___________________ Title:________________________<\/p>\n
NATIONSBANK, N.A. (CAROLINAS)<\/p>\n
By:______________________
\n Name:____________________
\n Title:___________________<\/p>\n
123<\/p>\n
EXHIBIT C-2<\/p>\n
SUBSIDIARY GUARANTY AGREEMENT
\n —————————–<\/p>\n
THIS SUBSIDIARY GUARANTY AGREEMENT (this “Agreement”) is entered into
\nby and between NATIONSBANK, N.A. (CAROLINAS), a national banking association, as
\nAgent (the “Agent”), and the other undersigned entity (the “Guarantor”) as of
\n______________________ , 1995.<\/p>\n
Recitals
\n ——–<\/p>\n
A. HEALTHSOUTH Corporation (formerly named HEALTHSOUTH Rehabilitation
\nCorporation), a Delaware corporation (the “Borrower”), the Agent and the other
\nlenders party thereto (the “Original Lenders) entered into a Credit Agreement
\ndated as of November 20, 1992 (such credit agreement as amended or supplemented
\nby Amendment No. 1 dated August 13, 1993, and Amendment No. 2 dated December 30,
\n1993, being referred to as the “Original Agreement”) pursuant to which the
\nOriginal Lenders agreed to make loans and cause to be issued letters of credit
\nall in an aggregate outstanding amount not to exceed $390,000,000.<\/p>\n
B. At the request of the Borrower, by Amended and Restated Credit
\nAgreement dated June 7, 1994 (The “First Restated Agreement”) the Borrower, the
\nAgent and certain of the Original Lenders together with additional lenders
\n(collectively the “Existing Lenders”) amended and restated the Original
\nAgreement, thereby increasing the amount of the credit facility to $550,000,000
\nand changing certain provisions of the Original Agreement and resulting in the
\naddition of certain Participating Subsidiaries.<\/p>\n
C. The Borrower has requested that the First Restated Agreement be
\namended and restated in its entirety in order to increase the amount of the
\ncredit facility, to change certain of the provisions contained therein and to
\nincrease the number of lenders participating therein, and the Agent and the
\nrespective lenders are willing to make such changes by amending and restating
\nthe First Restated Agreement as set forth in the Second Amended and Restated
\nCredit Agreement of even date herewith, among the Borrower, the Agent and the
\nlenders party thereto (the “Lenders”) (such Second Amended and Restated Credit
\nAgreement, as amended, modified or supplemented from time to time, being
\nreferred to as the “Credit Agreement”). Capitalized terms used in this
\nAgreement, unless otherwise defined herein, have the meanings assigned to them
\nin the Credit Agreement.<\/p>\n
D. The Guarantor is a Subsidiary of the Borrower, and proceeds of
\nLoans made under the Credit Agreement have been advanced to and used by the
\nGuarantor.<\/p>\n
124<\/p>\n
E. The Guarantor will materially benefit from the Loans to be made to
\nthe Borrower and Participating Subsidiaries and Participating Partnerships
\npursuant to the Credit Agreement.<\/p>\n
F. The Guarantor desires, pursuant to Section [2.5] of the Credit
\nAgreement, to guarantee, jointly and severally, with the other Participating
\nSubsidiaries and Participating Partnerships, the Credit Agreement, the Notes and
\nthe other Credit Obligations and to take all other action necessary to become a
\nParticipating Subsidiary, as defined in the Credit Agreement.<\/p>\n
Agreement
\n ———<\/p>\n
NOW, THEREFORE, in consideration of the foregoing recitals and the
\nmutual agreements herein set forth, and to induce the Lenders to continue the
\ncredit extended under the First Restated Agreement and to extend credit under
\nthe Credit Agreement and in further consideration of the substantial material
\nbenefit to accrue to the Guarantor from credit extended and to be extended by
\nthe Lenders under the Credit Agreement, the parties hereto agree as follows:<\/p>\n
1. The Guarantor does hereby, absolutely and unconditionally, jointly
\nand severally, for the benefit of the Agent and each of the Lenders, guarantee
\nand become surety for the full and timely payment when due (whether by
\nacceleration or otherwise) (including amounts which, but for the operation of
\nthe automatic stay under Section 362(a) of the Bankruptcy Code (or any successor
\nstatute) would become due) for each of the Credit Obligations, whether direct or
\nindirect, joint or several, absolute or contingent, liquidated or unliquidated,
\nnow or hereafter existing, extended, renewed, replaced, refinanced or
\nrestructured, whether or not from time to time decreased or extinguished and
\nlater increased, created or incurred; provided, however, that the Guarantor’s
\nliability with respect to the Credit Obligations shall be limited to an amount
\nequal to the greater of (i) 95% of the Guarantor’s Net Worth (as hereinafter
\ndefined) from time to time; or (ii) the amount that in a legal proceeding
\nbrought within the applicable limitations period is determined by the final,
\nnon-appealable order of a court having jurisdiction over the issue and the
\napplicable parties to be the amount of value given by the Lenders, or received
\nby the Guarantor, in exchange for the obligations of the Guarantor under this
\nAgreement. As used in this Section 1, “Net Worth” shall mean (x) the fair value
\nof the property of the Guarantor from time to time (taking into consideration
\nthe value, if any, of rights of subrogation, contribution and indemnity), minus
\n(y) the total liabilities of the Guarantor (including contingent liabilities
\n[discounted in appropriate instances], but excluding liabilities of the
\nGuarantor under this Agreement) from time to time.<\/p>\n
2. This is a guaranty of payment and not merely of collection. In the
\nevent of any default by the Borrower or any other obligor in payment or
\notherwise on any of the Credit<\/p>\n
125<\/p>\n
Obligations, the Guarantor will pay all or any portion of the Credit Obligations
\ndue or thereafter becoming due, whether by acceleration or otherwise, without
\noffset of any kind whatsoever, without the Agent or any Lender first being
\nrequired to make demand upon the Borrower or any other obligor or pursue any of
\nits rights against the Borrower or any other obligor, or against any other
\nPerson, including other Participating Subsidiaries, Participating Partnerships
\nand guarantors; and without being required to liquidate or realize on any
\ncollateral security. In any right of action accruing to the Agent or any Lender,
\nthe Agent or such Lender (as the case may be) may elect to proceed against (a)
\nthe Guarantor together with the Borrower or any other obligor, Participating
\nSubsidiary, Participating Partnership or guarantor; (b) the Guarantor and the
\nBorrower or any other obligor, Participating Subsidiary, Participating
\nPartnership or guarantor individually; or (c) the Guarantor only without having
\nfirst commenced any action against the Borrower or any other obligor,
\nParticipating Subsidiary, Participating Partnership or guarantor.<\/p>\n
3. The Guarantor hereby unconditionally waives with respect to this
\nAgreement: (a) notice of acceptance of this Agreement by the Agent or any Lender
\nand any notice of the incurring by the Borrower or any other obligor,
\nParticipating Subsidiary, Participating Partnership or guarantor of any Credit
\nObligation; (b) presentment for payment, notice of nonpayment, demand, protest,
\nnotice of protest and notice of dishonor or default to any party including the
\nBorrower, the Guarantor or any other obligor, Participating Subsidiary,
\nParticipating Partnership or guarantor; (c) all other notices to which the
\nBorrower, the Guarantor or any other obligor, Participating Subsidiary,
\nParticipating Partnership or guarantor may be entitled but which may legally be
\nwaived; (d) demand for payments as a condition of liability under this
\nAgreement; (e) any disability of the Borrower or any other obligor or any
\ndefense available to the Borrower or any other obligor, including absence or
\ncessation of the Borrower’s or any other obligor’s liability for any reason
\nwhatsoever; (f) any defense or circumstances which might otherwise constitute a
\nlegal or equitable discharge of a guarantor or surety; and (g) all rights under
\nany state or federal statute dealing with or affecting the rights of creditors.<\/p>\n
4. The Guarantor acknowledges that it has had full and complete access
\nto the underlying papers relating to the Credit Obligations and all other papers
\nexecuted by any person in connection with the Credit Obligations, has reviewed
\nthem and is fully aware of the meaning and effect of their contents. The
\nGuarantor is fully informed of all circumstances that bear upon the risks of
\nexecuting this Agreement and which a diligent inquiry would reveal. The
\nGuarantor has adequate means to obtain from the Borrower on a continuing basis
\ninformation concerning the Borrower’s financial condition and is not depending
\non the Agent or Lenders to provide such information, now or in the future. The
\nGuarantor agrees that neither the Agent nor the Lenders shall have<\/p>\n
126<\/p>\n
any obligation to advise or notify the Guarantor or to provide the Guarantor
\nwith any data or information. The execution and delivery of this Agreement is
\nnot a condition precedent (and the Agent and the Lenders have not in any way
\nimplied that the execution of this Agreement is a condition precedent) to the
\nLenders’ making, extending or modifying any loan or any other financial
\naccommodation to or for the Guarantor otherwise than under the Credit Agreement.<\/p>\n
5. The Guarantor hereby specifically acknowledges and agrees, without
\nlimiting the generality of the other provisions of this Agreement, to be bound
\nby the terms and conditions specified in Section 2.5(b) of the Credit Agreement.<\/p>\n
6. The Guarantor hereby agrees that its guaranty of the Credit
\nObligations is joint and several, continuing, absolute and unconditional
\n(subject to the proviso of Section 1 above). Without limiting the generality of
\nthe foregoing, the Guarantor’s obligations and liability hereunder and its
\nguaranty of the Notes and any other Loan Document shall not be released,
\ndischarged, impaired, modified or in any way affected by (a) the invalidity or
\nunenforceability of any Loan Document , (b) the failure of the Agent or the
\nLenders to give the Guarantor a copy of any notice given to the Borrower or any
\nother obligor, Participating Subsidiary, Participating Partnership or guarantor,
\n(c) any modification, amendment or supplement of any obligation, covenant or
\nagreement contained in any Loan Document , (d) any compromise, settlement,
\nrelease or termination of any obligation, covenant or agreement in any Loan
\nDocument , (e) any waiver of payment, performance or observance by or in favor
\nof the Borrower or any other obligor, Participating Subsidiary , Participating
\nPartnership or guarantor of any obligation, covenant or agreement under any Loan
\nDocument , (f) any consent, extension, indulgence or other action or inaction,
\nor any exercise or non-exercise of any right, remedy or privilege with respect
\nto any Loan Document , (g) the extension of time for payment or performance of
\nany Credit Obligations, (h) the release or discharge of the Lenders’ claims
\nagainst any collateral now or at any time hereafter securing any of the Credit
\nObligations, the Borrower or any other Participating Subsidiary or Participating
\nPartnership by operation of law or otherwise or (i) any other matter that might
\notherwise be raised in avoidance of, or in defense against an action to enforce,
\nthe obligations of the Guarantor under this Agreement or its guaranty of any
\nCredit Obligations .<\/p>\n
7. The Guarantor hereby repeats and reaffirms each of the
\nrepresentations and warranties contained in Article V of the Credit Agreement,
\nto the extent they are applicable to a Participating Partnership; and the
\nGuarantor hereby represents and warrants to the Agent and the Lenders that all
\nsuch representations and warranties are true with respect to the Guarantor.<\/p>\n
127<\/p>\n
8. The Guarantor covenants and agrees with the Agent and each Lender as
\nfollows:<\/p>\n
(a) The Guarantor will comply with all of the obligations,
\n requirements and restrictions in the covenants contained in the Credit
\n Agreement, including Article VII and Section 10.4, to the extent they
\n are applicable to a Participating Subsidiary.<\/p>\n
(b) The Guarantor hereby irrevocably waives with respect to
\n this Agreement any legal or equitable right to recover from the
\n Borrower or any other obligor, Participating Subsidiary, Participating
\n Partnership or guarantor, including without limitation, any right of
\n subrogation, indemnity, reimbursement or contribution or any other
\n rights of the Guarantor as a creditor of the Borrower or any other
\n obligor, Participating Subsidiary, Participating Partnership or
\n guarantor.<\/p>\n
(c) The Guarantor further waives any rights that might
\n otherwise be available to Guarantor pursuant to ss. 26-4 through ss.
\n 26-7 of the North Carolina General Statutes.<\/p>\n
9. The Guarantor irrevocably (a) acknowledges that this Agreement will
\nbe accepted by the Agent and Lenders and performed by the Guarantor in the State
\nof North Carolina (which is the state in which the Agent’s main office is
\nlocated); (b) submits to the jurisdiction of each state or federal court sitting
\nin North Carolina (collectively, the “Courts”) over any suit, action or
\nproceeding arising out of or relating to this Agreement (individually, an
\n“Agreement Action”); (c) waives, to the fullest extent permitted by law, any
\nobligation or defense that the Guarantor may now or hereafter have based on
\nimproper venue, lack of personal jurisdiction, inconvenience of forum or any
\nsimilar matter in any Agreement Action brought in any of the Courts; (d) agrees
\nthat final judgment in any Agreement Action brought in any of the Courts shall
\nbe conclusive and binding upon the Guarantor and may be enforced in any other
\ncourt to the jurisdiction of which the Guarantor is subject, by a suit upon such
\njudgment; (e) designates Michael D. Martin, or any successor Treasurer of
\nHEALTHSOUTH Corporation whose address is HEALTHSOUTH Corporation, Two Perimeter
\nPark South, Suite 224W, Birmingham, Alabama 35243, as the Guarantor’s authorized
\nagent to accept and acknowledge on the Guarantor’s behalf service of any and all
\nprocess that may be served in any Agreement Action in any of the Courts; (f)
\nagrees, if such agent shall cease so to act, irrevocably to designate and
\nappoint without delay another such agent in the State of North Carolina
\nsatisfactory to the Agent; (g) consents to the service of process on the
\nGuarantor in any Agreement Action by the mailing of a copy thereof by registered
\nor certified mail, postage prepaid, to (i) the Guarantor at the Guarantor’s
\naddress designated in or pursuant to Section 10.2 of the Credit Agreement or
\n(ii) the agent for service of process appointed by the Guarantor under this
\nSection 9; (h) agrees that service in either manner specified in<\/p>\n
128<\/p>\n
clause (g) next above shall in every respect be effective and binding on the
\nGuarantor to the same extent as though such service of process were served on
\nthe Guarantor in person by a person duly authorized to serve such process; and
\n(i) AGREES THAT THE PROVISIONS OF THIS SECTION, EVEN IF FOUND NOT TO BE STRICTLY
\nENFORCEABLE BY ANY COURT, SHALL CONSTITUTE “FAIR WARNING” TO THE GUARANTOR THAT
\nTHE EXECUTION OF THIS AGREEMENT MAY SUBJECT THE GUARANTOR TO THE JURISDICTION OF
\nTHE COURTS OF THE STATE OF NORTH CAROLINA WITH RESPECT TO ANY AGREEMENT ACTIONS,
\nAND THAT IT IS FORESEEABLE BY THE GUARANTOR THAT THE GUARANTOR MAY BE SUBJECTED
\nTO THE JURISDICTION OF THE COURTS OF THE STATE OF NORTH CAROLINA AND MAY BE SUED
\nIN THAT STATE IN ANY AGREEMENT ACTIONS. Nothing in this Section 9 shall limit or
\nrestrict the Agent’s or any Lender’s right to serve process or bring Agreement
\nActions in manners and in courts otherwise as herein provided.<\/p>\n
10. The Guarantor agrees that it is, and for all purposes of the Credit
\nAgreement and the Note shall be, a Participating Subsidiary.<\/p>\n
11. (a) THE GUARANTY PURSUANT TO THIS AGREEMENT IS A CONTINUING
\nGUARANTY AND SHALL CONTINUE IN FULL FORCE AND EFFECT UNTIL SUCH TIME AS ALL
\nOBLIGATIONS SHALL HAVE BEEN PAID IN FULL AND THE AGENT AND EACH LENDER SHALL BE
\nUNDER NO FURTHER OBLIGATION TO LEND OR ADVANCE FUNDS TO THE BORROWER OR ANY
\nOTHER PERSON CONSTITUTING CREDIT OBLIGATIONS.<\/p>\n
(b) If claim is ever made upon the Agent or any Lender for
\nrepayment or recovery of any amount or amounts received in payment or on account
\nof any of the Credit Obligations (including without limitation any claim that
\nsuch payment constitutes or constituted a preference or preferential transfer
\nunder bankruptcy or other law or a fraudulent conveyance, or any other claim
\nunder bankruptcy or other law) and the Agent or such Lender repays all or part
\nof said amount by reason of (a) any judgment, decree or order of any court or
\nadministrative body having jurisdiction over such payee or any of its property,
\nor (b) any settlement or compromise of any such claim effected by the Agent or
\nany Lender with any such claimant (including the original obligor), then and in
\nsuch event each Guarantor agrees that any such judgment, decree, order,
\nsettlement or compromise shall be binding upon it, notwithstanding any
\nrevocation hereof or the cancellation of any Note or other instrument evidencing
\nany Credit Obligation or any security therefor, and each Guarantor shall be and
\nremain liable to the Agent and the Lenders for the amount so repaid or recovered
\nto the same extent as if such amount had never originally been received by the
\nAgent or any Lender.<\/p>\n
(c) When taking action under this Agreement, the Agent will
\nhave the same level of responsibility and the same protections as set forth in
\nthe Credit Agreement for the Agent’s actions thereunder.<\/p>\n
129<\/p>\n
12. This Agreement shall bind the Guarantor’s successors and assigns
\nand shall inure to the benefit of, and be enforceable by, the Agent and each of
\nthe Lenders and their respective successors and assigns. This Agreement may only
\nbe waived, modified or amended by a written instrument signed by the Agent and
\nthe party against which the enforcement thereof is sought. THIS AGREEMENT SHALL
\nIN ALL RESPECTS BE GOVERNED BY, AND CONSTRUCTED IN ACCORDANCE WITH, THE LAWS OF
\nTHE STATE OF NORTH CAROLINA. If any term of this Agreement shall be invalid or
\nunenforceable, the remainder of this Agreement shall remain in force and effect.
\nThis Agreement may be executed in counterparts, each of which shall be deemed an
\noriginal, but all of which shall constitute one agreement. This Agreement and
\nthe other Loan Documents constitute the entire agreement of the parties with
\nrespect to the subject matter hereof and supersede any inconsistent agreement
\nwith respect to the subject matter hereof and thereof.<\/p>\n
13. TO THE EXTENT PERMITTED BY LAW, THE GUARANTOR HEREBY KNOWINGLY,
\nVOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
\nWITH RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
\nCONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
\nCONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
\nTHE AGENT, ANY LENDER OR THE GUARANTOR. THIS PROVISION IS A MATERIAL INDUCEMENT
\nTO THE AGENT AND EACH LENDER MAKING THE LOANS AVAILABLE TO THE BORROWER AND
\nPARTICIPATING PARTNERSHIPS AND PARTICIPATING SUBSIDIARIES.<\/p>\n
14. Additional Waiver. The Guarantor and the Agent believe that,
\ninasmuch as this Agreement and the transactions contemplated hereby have been
\nentered into and consummated outside the State of Alabama, such transactions
\nconstitute transactions in interstate commerce, so that neither the Agent nor
\nany of the Lenders is required, solely by entering into this Agreement and
\nconsummating the transactions contemplated hereby, to qualify to do business as
\na foreign corporation within the State of Alabama. Notwithstanding the
\nforegoing, however, the Guarantor hereby irrevocably waives all rights that it
\nmay have to raise, in any action brought by any of the Lenders or the Agent to
\nenforce the rights of the Lenders and the Agent hereunder, or the obligations of
\nthe Guarantor hereunder, any defense which is based upon the failure of any of
\nthe Lenders or the Agent to qualify to do business as a foreign corporation in
\nthe State of Alabama, including, but not limited to, any defenses based upon ss.
\n232 of the Alabama Constitution of 1901, ss. 10-2A-247 of the Code of Alabama
\n(1975) or ss. 40-14-4 of the Code of Alabama (1975), or any successor provision
\nto any thereof. The foregoing waiver is made knowingly and voluntarily and is a
\nmaterial inducement for the Agent and the Lenders to enter into the transactions
\ncontemplated by this Agreement.<\/p>\n
[Reminder of page intentionally left blank.]<\/p>\n
130<\/p>\n
IN WITNESS WHEREOF, this Agreement has been executed by the Guarantor
\non the date first written above.<\/p>\n
[NAME OF PARTNERSHIP]
\nATTEST:<\/p>\n
By:______________________ By:___________________________
\nName:____________________ Name:_________________________
\nTitle:______________Secretary Title:________________________<\/p>\n
NATIONSBANK, N.A. (CAROLINAS)<\/p>\n
By:______________________
\n Name:____________________
\n Title:___________________ <\/p>\n
131<\/p>\n
EXHIBIT D
\n ———<\/p>\n
HEALTHSOUTH CORPORATION<\/p>\n
REQUEST FOR ADVANCE OR INTEREST RATE ELECTION
\n ———————————————<\/p>\n
Under the Second Amended and Restated Credit Agreement dated as of
\nApril 11, 1995 (the “Credit Agreement”) entered into by HEALTHSOUTH CORPORATION,
\na Delaware corporation (the “Borrower”), and NATIONSBANK, N.A. (CAROLINAS), a
\nnational banking association (the “Agent”), and the Lenders party thereto:<\/p>\n
Request for Advance
\n ——————-<\/p>\n
Pursuant to Section 2.2 of the Credit Agreement, the Borrower hereby
\nrequests an Advance as follows:<\/p>\n
(a) Amount of Advance – $__________.<\/p>\n
(b) Date as of which the Advance is to be made –
\n ___________.<\/p>\n
(c) Part or parts, if any, of the Advance that are to be
\n used by or for the benefit of Participating
\n Partnerships:<\/p>\n
Part Allocable
\n Name of to such
\n Participating Participating
\n Partnership Partnership
\n ———– ———–<\/p>\n
(d) The following interest rate information is provided
\n by respect to the Segment represented by the Advance:<\/p>\n
(i) the interest rate shall be [the Base Rate] [the
\n LIBOR-Based Rate] (circle one).<\/p>\n
(ii) If a LIBOR-Based Rate is selected, the maturity
\n selected for the Interest Period is [one month] [two
\n months] [three months] for a LIBOR-Based Rate (circle
\n one, if applicable).<\/p>\n
Interest Rate Election
\n ———————-<\/p>\n
Pursuant to Section 3.2 of the Credit Agreement, the Borrower makes the
\nfollowing interest rate election with respect to the Segment in the principal
\namount of $__________ that matures on ____________.<\/p>\n
132<\/p>\n
(a) The amount of the Segment to which the requested
\n interest rate will apply – $________.<\/p>\n
(b) The date on which the selected interest rate will
\n become applicable – __________.<\/p>\n
(c) The interest rate selected is [the Base Rate] [the
\n LIBOR-Based Rate] (circle one).<\/p>\n
(d) If a LIBOR-Based Rate is selected, the maturity
\n selected for the Interest Period is [one month] [two
\n months] [three months] for a LIBOR-Based Rate (circle
\n one, if applicable).<\/p>\n
In accordance with Section 6.1 of the Credit Agreement, the
\npresentation by the Borrower of this Request for Advance or Interest Rate
\nElection constitutes a representation and warranty by the Borrower to the Agent
\nand the Lenders that no material adverse change in the financial condition of
\nthe Borrower and the Consolidated Entities, on a consolidated basis, as
\nreflected in the financial statements referred to in Section 5.3 of the Credit
\nAgreement, has occurred since the date of such financial statements and that the
\nrepresentations and warranties of Borrower contained in the Credit Agreement
\ncontinue to be true and correct (except the financial statements referred to in
\nSection 5.3 shall be deemed those most recently delivered to the Agent pursuant
\nto Section 7.3).<\/p>\n
Dated __________.<\/p>\n
HEALTHSOUTH CORPORATION<\/p>\n
By:________________________________
\n Its___________________________<\/p>\n
133<\/p>\n
EXHIBIT E<\/p>\n
FORM OF COMPETITIVE BID QUOTE REQUEST
\n ————————————-<\/p>\n
[Date]<\/p>\n
To: NationsBank, N.A. (Carolinas)<\/p>\n
From: HEALTHSOUTH Corporation<\/p>\n
Re: Competitive Bid Quote Request<\/p>\n
Pursuant to Section 2.3 of the Second Amended and Restated Credit
\nAgreement dated as of April 11, 1995 (as modified and supplemented from time to
\ntime, the “Credit Agreement”) among HEALTHSOUTH Corporation, the lenders named
\ntherein and NationsBank, N.A. (Carolinas) as agent, we hereby give notice that
\nwe request Competitive Bid Quotes for the following proposed Competitive Bid
\nBorrowing(s):<\/p>\n
\n\n
\n Borrowing Quotation Interest
\n Date Date 1 Amount 2 Type 3 Period 4
\n– —————- —————- —————– ————– ————– <\/p>\n Terms used herein have the meanings assigned to them in the Credit
\nAgreement.<\/p>\n
HEALTHSOUTH CORPORATION<\/p>\n
By:________________________________
\n Title:
\n– ————–
\n<\/p>\n 1 For use if an Absolute Rate in an Absolute Rate Auction is requested to
\nbe submitted before the Borrowing Date.<\/p>\n
2 Each amount must be $10,000,000 or a larger multiple of $1,000,000.<\/p>\n
3 Insert either “LIBOR Margin” (in the case of LIBOR Market Loans) or
\n“Absolute Rate” (in the case of Absolute Rate Loans).<\/p>\n
4 One, two three or six months, in the case of a LIBOR Market Loan or, in
\nthe case of an Absolute Rate Loan, a period of up to 180 days after the making
\nof such Absolute Rate Loan and ending on a Business Day.
\n<\/fn>
\n<\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
134<\/p>\n
EXHIBIT F<\/p>\n
FORM OF COMPETITIVE BID QUOTE
\n —————————–<\/p>\n
To: NationsBank, N.A. (Carolinas), as Agent<\/p>\n
Attention:<\/p>\n
Re: Competitive Bid Quote to HEALTHSOUTH Rehabilitation
\n Corporation (the “Borrower”)<\/p>\n
The Competitive Bid Quote is given in accordance with Section 2.3(c) of
\nthe Second Amended and Restated Credit Agreement dated as of April 11, 1995 (as
\nmodified and supplemented from time to time, the “Credit Agreement”) among
\nHEALTHSOUTH Corporation, the lenders named therein and NationsBank, N.A.
\n(Carolinas), as agent. Terms defined in the Credit Agreement are used herein as
\ndefined therein.<\/p>\n
In response to the Borrower’s invitation dated __________, 199_, we
\nhereby make the following Competitive Bid Quote(s) on the following terms:<\/p>\n
1. Quoting Bank:<\/p>\n
2. Person to contact at Quoting Bank:<\/p>\n
3. We hereby offer to make Competitive Bid Loan(s) in
\n the following principal amount[s], for the following Interest Period(s)
\n and at the following rate(s):<\/p>\n
\n\n
\n Borrowing Quotation Interest
\n Date Date 1 Amount2 Type3 Period 4 Rate5<\/p>\n– —————- —————- —— —- ————– —- <\/p>\n
– ——————-
\n
\n 1 As specified in the related Competitive Bid Quote Request.<\/p>\n 2 The principal amount bid for each Interest Period may not exceed the
\nprincipal amount requested. Bids must be made for at least $2,000,000 or a
\nlarger multiple of $1,000,000.<\/p>\n
3 Indicate “LIBOR Margin” (in the case of LIBOR Market Loans) or “Absolute
\nRate” (in the case of Absolute Rate Loans).<\/p>\n
4 One, two, three or six months, in the case of a LIBOR Market Loan or, in
\nthe case of an Absolute Rate Loan, a period of up to 180 days after the making
\nof such Absolute Rate Loan and ending on a Business Day, as specified in the
\nrelated Competitive Bid Market Quote Request.<\/p>\n
<\/fn>
\n<\/c><\/c><\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
135<\/p>\n
We understand and agree that the offer(s) set forth above, subject to
\nthe satisfaction of the applicable conditions set forth in the Credit Agreement,
\nirrevocably obligate[s] us to make the Competitive Bid Loan(s) for which any
\noffer(s) (is\/are) accepted, in whole or in part (subject to the third sentence
\nof Section 2.3(e) of the Credit Agreement).<\/p>\n
Very truly yours,<\/p>\n
[NAME OF BANK]<\/p>\n
By:________________________________
\n Authorized Officer<\/p>\n
Dated: __________, ____<\/p>\n
_____________________<\/p>\n
5(…continued)
\n 5 For a LIBOR Market Loan, specify margin over or under the London
\ninterbank offered rate determined for the applicable Interest Period. Specify
\npercentage (rounded to the nearest 1\/10,000 of 1%) and specify whether “PLUS” or
\n“MINUS”. For an Absolute Rate Loan, specify rate of interest per annum (rounded
\nto the nearest 1\/10,000 of 1%).<\/p>\n
136<\/p>\n
EXHIBIT G<\/p>\n
HEALTHSOUTH Rehabilitation Corporation<\/p>\n
PARTICIPATING SUBSIDIARIES
\n ————————–<\/p>\n
PARTICIPATING PARTNERSHIPS
\n ————————–<\/p>\n
137<\/p>\n
138<\/p>\n
EXHIBIT H-1<\/p>\n
[Form of Syndicated Note]<\/p>\n
PROMISSORY NOTE<\/p>\n
$_____________1 ____________, 199_<\/p>\n
FOR VALUE RECEIVED, HEALTHSOUTH CORPORATION, a Delaware corporation
\n(the “Borrower”), hereby promises to pay to ____________________________2 (the
\n“Lender”), for account of its Applicable Lending Office provided for by the
\nCredit Agreement referred to below, at the principal office of NationsBank, N.A.
\n(Carolinas) at One Independence Center, 101 North Tryon Street, Charlotte, North
\nCarolina 28255, the principal sum of ______________3 Dollars (or such lesser
\namount as shall equal the aggregate unpaid principal under the Credit
\nAgreement), in lawful money of the United States of America and in immediately
\navailable funds, on the dates and in the principal amounts provided in the
\nCredit Agreement, and to pay interest on the unpaid principal amount of each
\nsuch Syndicated Loan, at such office, in like money and funds, for the period
\ncommencing on the date of such Syndicated Loan until such Syndicated Loan shall
\nbe paid in full, at the rates per annum and on the dates provided in the Credit
\nAgreement.<\/p>\n
The date, amount, Type, interest rate and duration of Interest Period
\n(if applicable) of each Syndicated Loan made by the Lender to the Borrower, and
\neach payment made on account of the principal thereof, shall be recorded by the
\nLender on its books and, prior to any transfer of this Note, endorsed by the
\nLender on the schedule attached hereto or any continuation thereof, provided
\nthat the failure of the Lender to make any such recordation or endorsement shall
\nnot affect the obligations of the Borrower to make a payment when due of any
\namount owing under the Credit Agreement or hereunder in respect of the
\nSyndicated Loans made by the Lender.<\/p>\n
This Note is one of the Syndicated Notes referred to in the Second
\nAmended and Restated Credit Agreement dated as of April 11, 1995 (as modified
\nand supplemented from time to time, the “Credit Agreement”) among the Borrower,
\nthe Lenders named therein and NationsBank, N.A. (Carolinas), as Agent, and
\nevidences Syndicated Loans made by the Lender thereunder. Terms used but not
\ndefined in this Note have the respective meanings assigned to them in the Credit
\nAgreement.<\/p>\n
___________________
\n1 Insert the amount of Lender’s Commitment.
\n2 Insert name of Lender in capital letters.
\n3 Insert Lender’s Commitment in words.<\/p>\n
139<\/p>\n
The Credit Agreement provides for the acceleration of the maturity of
\nthis Note upon the occurrence of certain events and for prepayments of Loans
\nupon the terms and conditions specified therein. In the event this Note is not
\npaid when due at any stated or accelerated maturity, the Borrower agrees to pay,
\nin addition to the principal and interest, all costs of collection, including
\nreasonable attorney’s fees.<\/p>\n
Except as permitted by Section 10.1(a) of the Credit Agreement, this
\nNote may not be assigned by the Lender to any other Person.<\/p>\n
This Note shall be governed by, and construed in accordance with, the
\nlaw of the State of North Carolina.<\/p>\n
HEALTHSOUTH CORPORATION<\/p>\n
ATTEST:
\n By:
\n ____________________________
\nBy:______________________ Vice President
\n Assistant Secretary<\/p>\n
[CORPORATE SEAL]<\/p>\n
140<\/p>\n
SCHEDULE OF SYNDICATED LOANS<\/p>\n
This Note evidences Syndicated Loans made, continued or converted under
\nthe within-described Credit Agreement to the Borrower, on the dates, in the
\nprincipal amounts, of the Types, bearing interest at the rates and having
\nInterest Periods (if applicable) of the continuations, conversions and
\nprepayments of principal set forth below:<\/p>\n
Principal
\nDate Amount Type Maturity Amount Unpaid
\n of of of Interest Date of Paid or Principal Notation
\nLoan Loan Loan Rate Loan Prepaid Amount Made by
\n– —– —– —- —— —— ——- ——- ——-<\/p>\n
141<\/p>\n
EXHIBIT H-2<\/p>\n
[Form of Competitive Bid Note]<\/p>\n
PROMISSORY NOTE<\/p>\n
$_____________1 ____________, 1994<\/p>\n
FOR VALUE RECEIVED, HEALTHSOUTH CORPORATION, a Delaware corporation
\n(the “Borrower”), hereby promises to pay to ____________________________2 (the
\n“Lender”), for account of its Applicable Lending Office provided for by the
\nCredit Agreement referred to below, at the principal office of NationsBank, N.A.
\n(Carolinas), Independence Center, 101 North Tryon Street, Charlotte, North
\nCarolina 28255, the aggregate unpaid principal amount of the Competitive Bid
\nLoans made by the Lender to the Borrower under the Credit Agreement, in lawful
\nmoney of the United States of America and in immediately available funds, on the
\ndates and in the principal amounts provided in the Credit Agreement, and to pay
\ninterest on the unpaid principal amount of each such Competitive Bid Loan, at
\nsuch office, in like money and funds, for the period commencing on the date of
\nsuch Competitive Bid Loan until such Competitive Bid Loan shall be paid in full,
\nat the rates per annum and on the dates provided in the Credit Agreement.<\/p>\n
The date, amount, Type, interest rate and maturity date of each
\nCompetitive Loan made by the Lender to the Borrower, and each payment made on
\naccount of the principal thereof, shall be recorded by the Borrower on its books
\nand, prior to any transfer of this Note, endorsed by the Borrower on the
\nschedule attached hereto or any continuation thereof, provided that the failure
\nof the Lender to make any such recordation or endorsement shall not affect the
\nobligations of the Borrower to make a payment when due of any amount owing under
\nthe Credit Agreement or hereunder in respect of the Competitive Bid Loans made
\nby the Lender.<\/p>\n
This Note is one of the Competitive Bid Notes referred to in the Second
\nAmended and Restated Credit Agreement dated as of April 11, 1995 (as modified
\nand supplemented from time to time, the “Credit Agreement”) among the Borrower,
\nthe Lenders named therein and NationsBank, N.A. (Carolinas), as Agent, and
\nevidences Competitive Bid Loans made by the Lender thereunder. Terms used but
\nnot defined in this Note have the respective meanings assigned to them in the
\nCredit Agreement.<\/p>\n
_________________
\n1 Insert the amount of Lender’s Commitment.
\n2 Insert name of Lender in capital letters.<\/p>\n
142<\/p>\n
The Credit Agreement provides for the acceleration of the maturity of
\nthis Note upon the occurrence of certain events and for prepayments of
\nCompetitive Bid Loans upon the terms and conditions specified therein. In the
\nevent this Note is not paid when due at any stated or accelerated maturity, the
\nBorrower agrees to pay, in addition to the principal and interest, all costs of
\ncollection, including reasonable attorney’s fees.<\/p>\n
Except as permitted by Section 10.1(a) of the Credit Agreement, this
\nNote may not be assigned by the Lender to any other Person.<\/p>\n
This Note shall be governed by, and construed in accordance with, the
\nlaw of the State of North Carolina.<\/p>\n
HEALTHSOUTH CORPORATION<\/p>\n
ATTEST:
\n By:
\n ______________________________
\nBy:______________________ Vice President
\n Assistant Secretary<\/p>\n
[CORPORATE SEAL]<\/p>\n
143<\/p>\n
SCHEDULE OF COMPETITIVE BID LOANS<\/p>\n
This Note evidences Loans made under the within-described Credit
\nAgreement to the Borrower, on the dates, in the principal amounts, of the Types,
\nbearing interest at the rates and maturing on the dates set forth below, subject
\nto the payments and prepayments of principal set forth below:<\/p>\n
Principal
\nDate Amount Type Maturity Amount Unpaid
\n of of of Interest Date of Paid or Principal Notation
\nLoan Loan Loan Rate Loan Prepaid Amount Made by
\n– —- —— —- —– —— ——- ——- ——-<\/p>\n
144<\/p>\n
EXHIBIT I
\n ———<\/p>\n
FORM OF
\n COMPLIANCE CERTIFICATE
\n ———————-<\/p>\n
Reference is made to that certain Second Amended and Restated Credit
\nAgreement between HEALTHSOUTH Corporation, a Delaware corporation (the
\n“Borrower”), NationsBank, N.A. (Carolinas), a national banking association (the
\n“Agent”), and the Lenders party thereto, dated as of April 11, 1995 (the “Credit
\nAgreement”). Capitalized terms used in this certificate and the Schedule
\nattached hereto, unless otherwise defined herein, have the meanings assigned to
\nthem in the Credit Agreement.<\/p>\n
The undersigned does hereby certify to the Agent as follows:<\/p>\n
1. He is the duly elected and serving [chief financial office or chief
\nexecutive officer] of the Borrower.<\/p>\n
2. He has reviewed the terms of the Credit Agreement and the other Loan
\nDocuments and has made, or has caused to be made under his supervision, a review
\nof the transactions and conditions of the Borrower and its Consolidated Entities
\nthrough the date on which this certificate is delivered to the Agent. No Event
\nof Default or event that upon notice or lapse of time or both would constitute
\nan Event of Default under the Credit Agreement has occurred and is continuing as
\nof the date this certificate is delivered to the Lender, except as
\nfollows:________________________________________________________________________
\n________________________________________________________________________________
\n[Give detailed description or insert “none” if appropriate].<\/p>\n
3. The computations relating to the Borrower’s financial conditions set
\nforth on Schedule I-1 attached hereto were true and correct as of __________,
\n19__ (such date being the last day of the most recently ended fiscal calendar
\nquarter) and there has been no material adverse change in such amounts upon
\nwhich such computations are based through the date on which this certificate is
\ndelivered to the Lender.<\/p>\n
4. The principal amount of the Partnership Liabilities of each
\nParticipating Partnership as the date hereof is set forth on Schedule I-2
\nattached hereto.<\/p>\n
___________________________________
\n ________ of HEALTHSOUTH CORPORATION<\/p>\n
__________, 19__<\/p>\n
145<\/p>\n
SCHEDULE I-1
\n ————<\/p>\n
Financial Covenant Compliance
\n —————————–<\/p>\n
The following financial covenant calculations are made as of
\n_______________ (the “Determination Date”).<\/p>\n
1. Consolidated Net Worth<\/p>\n
A. Consolidated Net Worth at ___________
\n Determination Date<\/p>\n
B. Consolidated Net Worth ___________
\n Required (calculated below)<\/p>\n
a) Greater of (i) Consolidated
\n net worth at 3\/31\/95 minus
\n $10,000,000 or (ii)
\n $416,000,000 ___________
\n b) Consolidated Net Income for
\n successive fiscal quarters
\n x 75% ___________
\n c) Net proceeds of any sale of
\n Capital Stock ___________
\n d) (a) + (b) + (c) (Required) ___________<\/p>\n
2. Consolidated Fixed Charge Coverage<\/p>\n
A. Consolidated Net Income ___________
\n B. Consolidated Interest Expense ___________
\n C. Consolidated Depreciation Expense ___________
\n D. Consolidated Lease Expense ___________
\n E. Consolidated Income Tax Expense ___________
\n F. Consolidated Amortization Expense ___________
\n G. Allowable acquisition expense ___________
\n H. 2A + 2B + 2C + 2D + 2E + 2F + 2G ___________
\n I. Capital Expenditures ___________
\n J. 2H – 2I ___________
\n K. Consolidated Interest Expense ___________
\n L. Consolidated Lease Expense ___________
\n M. Consolidated Current Maturities ___________
\n N. Restricted Payments ___________
\n O. 2K + 2L + 2M + 2N ___________
\n P. J\/O ___________<\/p>\n
Required: Not less than 1.10 to 1.00
\n Actual Capital Expenditures for the period ___________<\/p>\n
3. Senior Leverage Ratio<\/p>\n
A. Senior Indebtedness ___________
\n B. Consolidated Total Capital ___________
\n C. A.\/B. ___________<\/p>\n
146<\/p>\n
Required: Less than 0.55 to 1.00 prior to January 1, 1996, less
\n than 0.50 to 1.00 from January 1, 1996 through
\n December 31, 1996, and less than 0.45 to 1.00 on and
\n after January 1, 1997.<\/p>\n
4. Consolidated Indebtedness\/Consolidated Cash Flow<\/p>\n
A. Indebtedness ___________
\n B. Consolidated Cash Flow ___________
\n C. A.\/B. ____ to 1.00
\n D. Required ____ to 1.00<\/p>\n
Required: Not more than the levels established for certain
\n periods as described in section 7.8(a)(4) of the
\n Credit Agreement<\/p>\n
147<\/p>\n
SCHEDULE I-2
\n ————<\/p>\n
Partnership Liabilities
\n ———————–<\/p>\n
Name of Partnership Partnership Liabilities
\n– ——————- ———————–<\/p>\n
148<\/p>\n
EXHIBIT J
\n ———<\/p>\n
SUMMARY OF INSURANCE
\n ——————–<\/p>\n
See Attached.<\/p>\n
149<\/p>\n
EXHIBIT K
\n ———-<\/p>\n
EXISTING INDEBTEDNESS AND
\n OUTSTANDING LETTERS OF CREDIT
\n —————————–<\/p>\n
150<\/p>\n
151<\/p>\n
EXHIBIT L<\/p>\n
HEALTHSOUTH Rehabilitation Corporation<\/p>\n
Investments of Equity Interests<\/p>\n
Maximum
\n Name Investment
\n —- ———-<\/p>\n
Austin Surgery Center (MOB) $1,920,600
\nKinetikos Medical (Stock) 100,000
\nCapstone (REIT) 99,000
\nODEA (MOB) 127,361
\nCumberland Health Associates (Rehab Facility
\n Building & Loan) 4,895,000
\nAllegheny Rehab Associates (Rehab Facility
\n Buiding & Loan) 6,230,000
\nRIOSA (Rehab Facility Building) 1,370,000
\nMed Partners (Stock) 2,110,646
\nHealthSmart (Stock and Debt) 150,000
\nWellmark (Stock) 1,000,000
\nPRI (PT Partnership) 600,000
\nCaretenders Healthcorp (Stock) 7,369,806
\nNational Bank Injury Network (Stock) 3,000,000
\nSportsMed LLC (Debentures and Notes) 2,000,000
\nFountainhead Holding, Inc. (Stock) -0-
\nSpecialty Alliance (HPO) 75,000
\nNME (Variance Loan) 185,000
\nBlair Health (Loan) 3,101,000
\nFt. Smith (Loan) 5,000
\nMontgomery (Loan) 299,968
\nCapital Region (Loan) 212,968
\nOcean Health (Loan) 1,142,387
\nArizona Spine Care (Loan) 50,000
\nMary Shields Hospital (Mortgage Loan) 195,424
\nNortheast Hospital (Loan) 1,725,000<\/p>\n
152<\/p>\n
EXHIBIT M<\/p>\n
SUBSIDIARIES AND CONTROLLED PARTNERSHIPS<\/p>\n
153<\/p>\n
154<\/p>\n
155<\/p>\n
156<\/p>\n
157<\/p>\n
158<\/p>\n
EXHIBIT N
\n ———<\/p>\n
EXISTING LIENS
\n —————<\/p>\n
159<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6550,6694,6846,7545,7751,7772,8182,8287,8542,9083,9279,9312],"corporate_contracts_industries":[9415,9438],"corporate_contracts_types":[9561,9560],"class_list":["post-40965","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-abn-amro-holding-nv","corporate_contracts_companies-amsouth-bancorporation","corporate_contracts_companies-bank-of-america-corp","corporate_contracts_companies-fleetboston-financial-corp","corporate_contracts_companies-healthsouth-corp","corporate_contracts_companies-hibernia-corp","corporate_contracts_companies-mellon-financial-corp","corporate_contracts_companies-national-city-corp","corporate_contracts_companies-pnc-financial-services-group-inc","corporate_contracts_companies-toronto-dominion-bank","corporate_contracts_companies-wachovia-corp","corporate_contracts_companies-wells-fargo---co","corporate_contracts_industries-financial__banks","corporate_contracts_industries-health__misc","corporate_contracts_types-finance__credit","corporate_contracts_types-finance"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/40965","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=40965"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=40965"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=40965"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=40965"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}