\n I BBB+ Baa1 0.250%
\n or higher or higher
\n ———————————————————————————————————-
\n II BBB Baa2 0.375%
\n ———————————————————————————————————-
\n III BBB- Baa3 0.375%
\n ———————————————————————————————————-
\n IV BB+ Ba1 0.500%
\n ———————————————————————————————————-
\n V Less than Less than 0.500%
\n BB+ Ba1
\n ———————————————————————————————————-
\n<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n The Applicable Unused Fee shall be established from time to
\n time based upon the Ratings then in effect. Any change in the
\n Applicable Unused Fee due to a change in any Rating shall be effective
\n on the date of such change in such Rating. In the event (i) of split
\n Ratings where the Ratings are more than one Tier apart, then the Tier
\n next above the Tier corresponding to the lower Rating shall apply and,
\n (ii) either Rating is Tier IV or below (or unrated), then (A) the
\n Applicable Unused Fee shall be Tier IV if either Rating is Tier IV or
\n higher and (B) Tier V otherwise. In the event that the Borrower shall
\n not have a Rating by either S&P or Moody’s, the Applicable Unused Fee
\n shall be mutually agreed to by the Borrower, the Administrative Agent
\n and the Lenders and shall be Tier IV until such mutual agreement is
\n reached.<\/p>\n
3<\/p>\n
“Applications and Agreements for Letters of Credit” means,
\n collectively, the Applications and Agreements for Letters of Credit, or
\n similar documentation, executed by the Borrower from time to time and
\n delivered to the Issuing Bank to support the issuance of Letters of
\n Credit and which terms shall state that the requested Letter of Credit
\n is to be issued under this Agreement.<\/p>\n
“Assignment and Acceptance” means an Assignment and Acceptance
\n in the form of Exhibit B (with blanks appropriately filled in) (or in
\n such other form as shall be approved by the Administrative Agent)
\n delivered to the Administrative Agent in connection with an assignment
\n of a Lender’s interest under this Agreement pursuant to Section 11. 1.<\/p>\n
“Authorized Representative” means any of the Executive
\n Officers of the Borrower or, with respect to financial matters, the
\n Treasurer or the Chief Financial Officer of the Borrower, or any other
\n Person expressly designated by the board of directors of the Borrower
\n (or the appropriate committee thereof) as an Authorized Representative
\n of the Borrower, as set forth from time to time in a certificate in the
\n form of Exhibit C.<\/p>\n
“Base Rate” means, for any day, the rate per annum equal to
\n the higher of (i) the Prime Rate for such day or (ii) the Federal Funds
\n Rate for such day plus one-half of one percent (1\/2%). Any change in
\n the Base Rate due to a change in the Prime Rate or the Federal Funds
\n Rate shall be effective on the effective date of such change in the
\n Prime Rate or Federal Funds Rate.<\/p>\n
“Base Rate Loan” means a Loan for which the rate of interest
\n is determined by reference to the Base Rate.<\/p>\n
“Base Rate Refunding Loan” means an Advance under the
\n Revolving Credit Facility which bears interest at a Base Rate made to
\n satisfy Reimbursement Obligations arising from a drawing under a Letter
\n of Credit.<\/p>\n
“Board” means the Board of Governors of the Federal Reserve
\n System (or any successor body).<\/p>\n
“Borrowing Notice” means the notice delivered by an Authorized
\n Representative in connection with an Advance under the Revolving Credit
\n Facility, in the form of Exhibit D.<\/p>\n
“Business Day” means, (i) except in the case of a Eurodollar
\n Rate Loan, any day which is not a Saturday, Sunday or a day on which
\n banks in the State of New York are authorized or obligated by law,
\n executive order or governmental decree to be closed and, (ii) with
\n respect to any Eurodollar Rate Loan, any day which is a Business Day,
\n as described above, and on which the relevant international financial
\n markets are open for the transaction of business contemplated by this
\n Agreement in London, England, and New York, New York.<\/p>\n
4<\/p>\n
“Capital Expenditures” means, for any period, with respect to
\n any Person, the aggregate of all expenditures by such Person and its
\n Subsidiaries for the acquisition or leasing (pursuant to a Capital
\n Lease) of fixed or capital assets or additions to equipment (including
\n replacements, capitalized repairs and improvements during such period)
\n which should be capitalized under GAAP on a consolidated balance sheet
\n of such Person and its Subsidiaries, but for the avoidance of
\n duplication, excluding any amounts included in Cost of Acquisition with
\n respect to any Acquisition.<\/p>\n
“Capital Leases” means all leases which have been or should be
\n capitalized in accordance with GAAP as in effect from time to time
\n including Statement No. 13 of the Financial Accounting Standards Board
\n or any successor thereof.<\/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
“Change of Control” means, at any time:<\/p>\n
(i) all or substantially all of the Borrower’s assets are sold
\n as an entirety to any Person or related group of Persons;<\/p>\n
(ii) there shall be consummated any consolidation or merger of
\n the Borrower (A) in which the Borrower is not the continuing or
\n surviving corporation (other than a consolidation or merger with a
\n wholly owned Subsidiary of the Borrower in which all shares of the
\n Borrower’s Common Stock outstanding immediately prior to the
\n effectiveness thereof are changed into or exchanged for the same
\n consideration) or (B) pursuant to which the Borrower’s Common Stock
\n would be converted into cash, securities or other property, in each
\n case other than a consolidation or merger of the Borrower in which the
\n holders of the Borrower’s Common Stock immediately prior to the
\n consolidation or merger have, directly or indirectly, at least a
\n majority of the total Voting Stock of the continuing or surviving
\n corporation immediately after such consolidation or merger in
\n substantially the same proportion as their ownership of the Borrower’s
\n Common Stock immediately before such transaction;<\/p>\n
(iii) any “person” or “group” (each as used in Sections
\n 13(d)(3) and 14(d)(2) of the Exchange Act), who are not as of the
\n Closing Date owners of one percent (1%) or more of the Voting Stock of
\n the Borrower, either (A) becomes the “beneficial owner” (as defined in
\n Rule 13d-3 of the Exchange Act), directly or indirectly, of Voting
\n Stock of the Borrower (or securities convertible into or exchangeable
\n for such Voting Stock) representing 15% or more of the combined voting
\n power of all Voting Stock of the Borrower (on a fully diluted basis) or
\n (B) otherwise has the ability, directly or indirectly, to elect a
\n majority of the board of directors of the Borrower;<\/p>\n
(iv) during any period of up to 24 consecutive months,
\n commencing on the Closing Date, individuals who at the beginning of
\n such period were directors of the<\/p>\n
5<\/p>\n
Borrower shall cease for any reason (other than the death, disability
\n or retirement of an officer of the Borrower that is serving as a
\n director at such time so long as another officer of the Borrower
\n replaces such Person as a director) to constitute a majority of the
\n board of directors of the Borrower;<\/p>\n
(v) any Person or two or more Persons acting in concert shall
\n have acquired by contract or otherwise, or shall have entered into a
\n contract or arrangement that, upon consummation thereof, will result in
\n its or their acquisition, of the power to exercise, directly or
\n indirectly, a controlling influence on the management or policies of
\n the Borrower, or<\/p>\n
(vi) the Borrower is liquidated or dissolved or adopts a plan
\n of liquidation or dissolution.<\/p>\n
“Closing Date” means the date as of which this Agreement is
\n executed by the Borrower, the Lenders and the Administrative Agent and
\n on which the conditions set forth in Section 5.1 have been satisfied.<\/p>\n
“Code” means the Internal Revenue Code of 1986, as amended,
\n and any regulations promulgated thereunder.<\/p>\n
“Common Stock” means the common stock, par value $.01 per
\n share, of the Borrower.<\/p>\n
“Consistent Basis” in reference to the application of GAAP
\n means the accounting principles observed in the period referred to are
\n comparable in all material respects to those applied in the preparation
\n of the audited financial statements of the Borrower referred to in
\n Section 6.6(a).<\/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 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 EBITDA” means, with respect to the Borrower and
\n its Consolidated Entities for any Four-Quarter Period ending on the
\n date of computation thereof, the sum of, without duplication, (i)
\n Consolidated Net Income, (ii) Consolidated Interest Expense, (iii)
\n Consolidated Income Tax Expense, (iv) Consolidated Amortization
\n Expense, (v) Consolidated Depreciation Expense, (vi) the minority
\n interest of any Person or Persons in the income of Consolidated
\n Entities for such period, (vii) the non-recurring, non-cash expenses
\n and cash transaction costs relating to professional fees arising in
\n conjunction with an Acquisition provided such expenses do not exceed
\n 10% of the Cost of Acquisition and (viii) as applicable, the
\n non-recurring, non-cash expenses incurred by<\/p>\n
6<\/p>\n
the Borrower and its Consolidated Entities during the three month
\n period ended September 30, 1999 and the three month period ended
\n December 31, 1999; all determined on a consolidated basis in accordance
\n with GAAP applied on a Consistent Basis.<\/p>\n
“Consolidated Entity” means any Person whose financial
\n statements are appropriately consolidated with the Borrower’s financial
\n statements under GAAP.<\/p>\n
“Consolidated Indebtedness” means all Indebtedness of the
\n Borrower and its Consolidated Entities, all determined on a
\n consolidated basis.<\/p>\n
“Consolidated Interest Expense” means, with respect to any
\n Four-Quarter Period ending on the date of computation thereof, the
\n gross interest expense of the Borrower and its Consolidated Entities,
\n including without limitation (i) the current amortized portion of debt
\n discounts to the extent included in gross interest expense, (ii) the
\n current amortized portion of all fees (including fees payable in
\n respect of any Rate Hedging Obligation) payable in connection with the
\n incurrence of Indebtedness to the extent included in gross interest
\n expense, (iii) the portion of any payments made in connection with
\n Capital Leases allocable to interest expense, and (iv) lease payments,
\n other than the Headquarters Obligations and Hospitals Obligations, made
\n pursuant to the Headquarters Lease and Hospitals Lease, respectively,
\n all determined on a consolidated basis in accordance with GAAP applied
\n on a Consistent Basis.<\/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 8.1(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, but
\n including, in any event, net income of any Person who becomes a
\n Consolidated Entity whose Acquisition is accounted for on a “pooling of
\n interests” basis; (ii) except to the extent includable in the
\n consolidated net income of the Borrower or a Consolidated Entity
\n pursuant to the foregoing clause (i), the net income of any Person that
\n accrued prior to the date that (a) such Person becomes a Consolidated
\n Entity or is merged into or consolidated with a Consolidated Entity or
\n (b) the assets of such Person are acquired by the Borrower or a
\n Consolidated Entity; (iii)the net income of any Consolidated Entity to
\n the extent that the declaration or payment of dividends or similar
\n distributions by such Consolidated Entity of that income is not
\n permitted by operation of the terms of its charter or any agreement,
\n instrument, judgment, decree, order, statute, rule or governmental
\n regulation applicable to that Consolidated Entity during such period;
\n (iv) any gain (or loss), together with any related provisions for taxes
\n on any such gain, realized during such period by the Borrower or its
\n Consolidated Entities upon (a) the acquisition of any securities, or
\n the extinguishment of any Indebtedness, of the Borrower or its
\n Consolidated Entities or (b) any asset sale by the<\/p>\n
7<\/p>\n
referent Person or any of its Subsidiaries; (v) any extraordinary gain
\n (or extraordinary loss), together with any related provision for taxes
\n or tax benefit resulting from any such extraordinary gain or loss,
\n realized by the Borrower or its Consolidated Entities during such
\n period; and (vi) in the case of a successor to any Person by
\n consolidation, merger or transfer of its assets, any earnings of the
\n successor prior to such merger, 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 the Borrower 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 the Borrower
\n or any of its Consolidated Entities.<\/p>\n
“Consolidated Stockholders’ Equity” means at any time as at
\n which the amount thereof is to be determined, the sum of the following
\n amounts in respect of the Borrower and the Consolidated Entities: (i)
\n the par or stated value of all Capital Stock of the Borrower, (ii)
\n retained earnings, (iii) additional paid in capital, (iv) capital
\n surplus and (v) earned surplus minus treasury stock.<\/p>\n
“Consolidated Tangible Net Assets” means, as of any date on
\n which the amount thereof is determined, Consolidated Total Assets minus
\n (without duplication of deductions in respect of items already deducted
\n in arriving at surplus and retained earnings) (i) all reserves (other
\n than contingency reserves not allocated to any particular purpose),
\n including without limitation reserves for depreciation, depletion,
\n amortization, obsolescence, deferred income taxes, insurance and
\n inventory valuation, and (ii) the net book value of all assets which
\n would be treated as intangible assets, such as (without limitation)
\n goodwill (whether representing the excess of cost over book value of
\n assets acquired or otherwise), capitalized expenses, unamortized debt
\n discount and expense, consignment inventory rights, patents,
\n trademarks, trade names, copyrights, franchises and licenses, all as
\n determined on a consolidated basis in accordance with GAAP applied on a
\n Consistent Basis.<\/p>\n
“Consolidated Tangible Net Worth” means, as of any date on
\n which the amount thereof is to be determined, Consolidated
\n Stockholders’ Equity minus (without duplication of deductions in
\n respect of items already deducted in arriving at surplus and retained
\n earnings) (i) all reserves (other than contingency reserves not
\n allocated to any particular purpose), including without limitation
\n reserves for depreciation, depletion, amortization, obsolescence,
\n deferred income taxes, insurance and inventory valuation, and (ii) the
\n net book value of all assets which would be treated as intangible
\n assets, such as (without limitation) goodwill (whether representing the
\n excess of cost over book value of assets acquired or otherwise),
\n capitalized expenses, unamortized debt discount and expense,
\n consignment inventory rights, patents, trademarks, trade names,
\n copyrights, franchises and licenses, all as determined on a
\n consolidated basis in accordance with GAAP applied on a Consistent
\n Basis.<\/p>\n
8<\/p>\n
“Consolidated Total Assets” means, as of any date on which the
\n amount thereof is to be determined, the net book value of all assets of
\n the Borrower and its Consolidated Entities as determined on a
\n consolidated basis in accordance with GAAP applied on a Consistent
\n Basis.<\/p>\n
“Consolidated Total Capital” means, as of any date on which
\n the amount thereof is to be determined, the sum of Consolidated
\n Indebtedness plus Consolidated Stockholders’ Equity of the Borrower and
\n its Consolidated Entities.<\/p>\n
“Continue”, “Continuation”, and “Continued” shall refer to the
\n continuation pursuant to Section 2.9 hereof of a Eurodollar Rate Loan
\n as a Eurodollar Rate Loan from one Interest Period to the next Interest
\n Period.<\/p>\n
“Contract Provider” means any Person who provides professional
\n health care services under or pursuant to any contract with the
\n Borrower or any Subsidiary.<\/p>\n
“Controlled Investment Affiliate” of any specified Person,
\n means any other Person that (i) directly or indirectly through one or
\n more intermediaries is in control of, is controlled by, or is under
\n common control with, such specified Person and (ii) is organized by
\n such specified Person primarily for the purpose of making equity or
\n debt investments in one or more companies. For purposes of this
\n definition, “control” of a Person means the power, directly or
\n indirectly, to direct or cause the direction of the management and
\n policies of such Person, whether through ownership of Voting Stock, by
\n contract or otherwise.<\/p>\n
“Controlled Partnership” means a general partnership of which
\n the Borrower or a Subsidiary is a general partner, or a limited
\n partnership whose general partners include the Borrower or a Subsidiary
\n (but not including Vanderbilt), or a limited liability company whose
\n members include the Borrower or a Subsidiary or another Controlled
\n Partnership, which partnership, whether general or limited, or limited
\n liability company has assets with a value in excess of $2,000.00, and
\n with respect to which partnership or limited liability company the
\n Borrower or a Subsidiary is entitled to receive not less than 50% of
\n any distributions of cash made to the partners or members thereof,
\n other than any preferred cash distribution arrangement in existence at
\n the Closing Date as set forth on Schedule 1.1(a) hereto, or approved by
\n the Required Lenders in writing, or which is otherwise a Consolidated
\n Entity.<\/p>\n
“Convert”, “Conversion” and “Converted” refers to a conversion
\n pursuant to Section 2.9 or Article IV of one Type of Loan into another
\n Type of Loan.<\/p>\n
“Convertible Subordinated Debentures” means the 3.25%
\n Convertible Subordinated Debentures due 2003 issued by the Borrower, as
\n the same may be amended, supplemented, waived or otherwise modified
\n from time to time.<\/p>\n
“Cost of Acquisition” means in respect of any Acquisition, the
\n sum of (i) the amount of cash paid by the Borrower and its Consolidated
\n Entities in connection with such Acquisition, (ii) the Fair Market
\n Value of all Capital Stock or other ownership <\/p>\n
9<\/p>\n
interests of the Borrower or any Consolidated Entity issued or given in
\n connection with such Acquisition, (iii) the amount (determined by using
\n the face amount or the amount payable at maturity, whichever is
\n greater) of all Indebtedness incurred, assumed or acquired in
\n 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
“Default” means any event or condition which, with the giving
\n or receipt of notice or lapse of time or both, would constitute an
\n Event of Default.<\/p>\n
“Default Rate” means (i) with respect to each Eurodollar Rate
\n Loan, until the end of the Interest Period applicable thereto, a rate
\n of two percent (2%) above the Eurodollar Rate applicable to such Loan
\n plus the Applicable Margin applicable to Eurodollar Loans, and
\n thereafter at a rate of interest per annum which shall be two percent
\n (2%) above the Base Rate plus the Applicable Margin applicable to Base
\n Rate Loans, (ii) with respect to Base Rate Loans, at a rate of interest
\n per annum which shall be two percent (2%) above the Base Rate plus the
\n Applicable Margin applicable to Base Rate Loans and (iii) in any case,
\n the maximum rate permitted by applicable law, if lower.<\/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 Revolving Credit
\n Termination Date or the Facility Extension Loan Termination Date, if
\n applicable.<\/p>\n
“Dollars” and the symbol “$” mean dollars constituting legal
\n tender for the payment of public and private debts in the United States
\n of America.<\/p>\n
“Eligible Assignee” means (i) a Lender, (ii) an affiliate of a
\n Lender, (iii) any Controlled Investment Affiliate of a Lender, and (iv)
\n any other Person approved by the Administrative Agent and, unless an
\n Event of Default has occurred and is continuing at the time any
\n assignment is effected in accordance with Section 11.1, the Borrower,
\n such approval not to be unreasonably withheld or delayed by the
\n Borrower or the Administrative Agent and such approval to be deemed
\n given by the Borrower if no objection is received by the assigning
\n Lender and the Administrative Agent from the Borrower within two
\n Business Days after written notice of such proposed assignment has been
\n provided by the assigning Lender to the Borrower; provided, however,
\n that neither the Borrower nor an affiliate of the Borrower shall
\n qualify as an Eligible Assignee.<\/p>\n
“Employee Benefit Plan” means any employee benefit plan within
\n the meaning of Section 3(3) of ERISA which (i) is maintained for
\n employees of the Borrower or any of its ERISA Affiliates or is assumed
\n by the Borrower or any of its ERISA Affiliates in<\/p>\n
10<\/p>\n
connection with any Acquisition or (ii) has at any time been maintained
\n for the employees of the Borrower or any current or former ERISA
\n Affiliate.<\/p>\n
“Environmental Laws” means any federal, state or local
\n statute, law, ordinance, code, rule, regulation, order, decree, permit
\n or license regulating, relating to, or imposing liability or standards
\n of conduct concerning any environmental matters or conditions,
\n environmental protection or conservation, including without limitation,
\n the Comprehensive Environmental Response, Compensation and Liability
\n Act of 1980, as amended; the Superfund Amendments and Reauthorization
\n Act of 1986, the Resource Conservation and Recovery Act, as amended;
\n the Toxic Substances Control Act, as amended; the Clean Air Act, as
\n amended; the Clean Water Act, as amended; together with all regulations
\n promulgated thereunder, and any other “Superfund” or “Superlien” law.<\/p>\n
“ERISA” means the Employee Retirement Income Security Act of
\n 1974, as amended from time to time, and any successor statute and all
\n rules and regulations promulgated thereunder.<\/p>\n
“ERISA Affiliate”, as applied to the Borrower, means any
\n Person or trade or business which is a member of a group which is under
\n common control with the Borrower, who together with the Borrower, is
\n treated as a single employer within the meaning of Section 414(b) and
\n (c) of the Code.<\/p>\n
“Eurodollar Rate” means the interest rate per annum calculated
\n according to the following formula:<\/p>\n
Eurodollar Rate = Interbank Offered Rate
\n ———————-
\n (1- Reserve Requirement)<\/p>\n
“Eurodollar Rate Loan” means a Loan for which the rate of
\n interest is determined by reference to the Eurodollar Rate.<\/p>\n
“Event of Default” means any of the occurrences set forth as
\n such in Section 9. 1.<\/p>\n
“Exchange Act” means the Securities Exchange Act of 1934, as
\n amended, and the regulations promulgated thereunder.<\/p>\n
“Executive Officer” means any Person who from time to time
\n holds the offices with Borrower listed on Exhibit J.<\/p>\n
“Facility” means an inpatient or outpatient rehabilitation
\n facility, certified outpatient rehabilitation facility, skilled nursing
\n facility, specialty medical center, specialty orthopedic hospital or
\n acute care hospital, subacute inpatient facility, transitional living
\n center, medical office building, outpatient surgery center or
\n outpatient diagnostic center with all buildings and improvements
\n associated therewith, that is owned or leased or acquired (as permitted
\n under Section 8.8), in whole or part, by the Borrower or a Subsidiary
\n or any Controlled Partnership.<\/p>\n
11<\/p>\n
“Facility Extension Loan Termination Date” means the Facility
\n Extension Maturity Date or such earlier date of termination of Lenders’
\n obligations hereunder as may be determined pursuant to Section 9.1 upon
\n the occurrence of an Event of Default, or such date on which the
\n Borrower may voluntarily and permanently terminate the Revolving Credit
\n Facility by payment in full of all outstanding amounts under the
\n Facility Extension Loans with all accrued and unpaid interest and fees
\n thereon.<\/p>\n
“Fair Market Value” means, with respect to any capital stock
\n or other ownership interests issued or given by the Borrower or any
\n Consolidated Entity in connection with an Acquisition, (i) in the case
\n of capital stock that is Common Stock and such Common Stock is then
\n designated as a national market system security by the National
\n Association of Securities Dealers, Inc. (“NASD”) 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 by NASD or listed on such national exchange, or in the case
\n of any other ownership interests, the determination of the fair market
\n value thereof in good faith by a majority of disinterested members of
\n the board of directors of the Borrower or such Consolidated Entity, in
\n each case effective as of the close of business on the Business Day
\n immediately preceding the closing date of such Acquisition.<\/p>\n
“Federal Funds Rate” means, for any day, the rate per annum
\n (rounded upwards, if necessary, to the nearest 1\/100th of 1%) equal to
\n the weighted average of the rates on overnight Federal funds
\n transactions with members of the Federal Reserve System arranged by
\n Federal funds brokers on such day, as published by the Federal Reserve
\n Bank of New York on the Business Day next succeeding such day, provided
\n that (a) if such day is not a Business Day, the Federal Funds Rate for
\n such day shall be such rate on such transactions on the next preceding
\n Business Day as so published on the next succeeding Business Day, and
\n (b) if no such rate is so published on such next succeeding Business
\n Day, the Federal Funds Rate for such day shall be the average rate
\n charged to the Administrative Agent (in its individual capacity) on
\n such day on such transaction as shall be determined by the
\n Administrative Agent.<\/p>\n
“Fiscal Year” means, with respect to the Borrower, the twelve
\n month fiscal period of the Borrower commencing on January 1 of each
\n calendar year and ending on December 31 of each calendar year.<\/p>\n
“Four-Quarter Period” means a period of four full consecutive
\n fiscal quarters of the Borrower and its Subsidiaries, taken together as
\n one accounting period.<\/p>\n
“GAAP” or “Generally Accepted Accounting Principles” means
\n generally accepted accounting principles, being those principles of
\n accounting set forth in pronouncements of the Financial Accounting
\n Standards Board or the American Institute<\/p>\n
12<\/p>\n
of Certified Public Accountants or which have other substantial
\n authoritative support and are applicable in the circumstances as of the
\n date of a report.<\/p>\n
“Governmental Authority” means any Federal, state, municipal,
\n national or other governmental department, commission, board, bureau,
\n court, agency or instrumentality or political subdivision thereof or
\n any entity or officer exercising executive, legislative, judicial,
\n regulatory or administrative functions of or pertaining to any
\n government or any court, in each case whether associated with a state
\n of the United States, the United States, or a foreign entity or
\n government.<\/p>\n
“Guarantee” means the guarantee, substantially in the form of
\n Exhibit K, to which each Guarantor shall become a party.<\/p>\n
“Guaranteed Obligations” of any Person means all guaranties
\n (including guaranties of guaranties and guaranties of dividends and
\n other monetary obligations), endorsements, assumptions and other
\n contingent obligations with respect to, or to purchase or to otherwise
\n pay or acquire, Indebtedness of others; provided, however, that such
\n term shall not include obligations under leases and other contracts
\n initially incurred directly by another Person and subsequently directly
\n assumed by the Person in question, but such term shall include
\n obligations that, if the same had been initially incurred directly by
\n the Person in question, would have constituted Guaranteed Obligations.<\/p>\n
“Guarantor” means any Subsidiary of the Borrower that directly
\n or indirectly guarantees any Indebtedness of the Borrower and becomes a
\n party to the Guarantee.<\/p>\n
“Hazardous Material” means and includes any pollutant,
\n contaminant, or hazardous, toxic or dangerous waste, substance or
\n material (including without limitation petroleum products,
\n asbestos-containing materials, and lead), the generation, handling,
\n storage, disposal, treatment or emission of which is subject to any
\n Environmental Law.<\/p>\n
“HCFA” means the United States Health Care Financing
\n Administration and any successor thereto.<\/p>\n
“Headquarters Lease” means the Amended and Restated Lease
\n Agreement dated as of October 31, 2000, between First Security Bank,
\n National Association, a national banking association, not individually,
\n but solely as Owner Trustee under the HEALTHSOUTH Corporation Trust
\n 1995-1, as Lessor and HEALTHSOUTH Holdings, Inc., a Delaware
\n corporation, as Lessee, as such Lease Agreement may be amended,
\n modified, supplemented or restated in its entirety from time to time.<\/p>\n
“Headquarters Obligations” means all of the Holder Advances
\n and Loans, as each such term is defined in the Headquarters
\n Participation Agreement.<\/p>\n
“Headquarters Participation Agreement” means the Amended and
\n Restated Participation Agreement dated as of October 31, 2000 by and
\n among HEALTHSOUTH HOLDINGS, INC., as Lessee, FIRST SECURITY BANK,
\n NATIONAL ASSOCIATION, a national banking association, not individually,
\n except as expressly stated herein, but solely as Owner Trustee under
\n the HEALTHSOUTH Corporation Trust<\/p>\n
13<\/p>\n
1995-1, THE CHASE MANHATTAN BANK, as Documentation Agent; UBS WARBURG
\n LLC and DEUTSCHE BANK SECURITIES, INC., as Joint Lead Arrangers;
\n DEUTSCHE BANK AG NEW YORK BRANCH, as Syndication Agent; UBS AG,
\n Stamford Branch, as Administrative Agent for the Lenders and the
\n Holders; UBS AG, Stamford Branch, and the various other banks and
\n lending institutions which are parties thereto from time to time as
\n Holders, and UBS AG, Stamford Branch and the various other banks and
\n lending institutions which are parties thereto from time to time as
\n Lenders, as such Headquarters Participation Agreement may be amended,
\n modified, supplemented or restated in its entirety from time to time.<\/p>\n
“Hospitals Lease” means the Lease Agreement dated as of
\n October 31, 2000, between First Security Bank, a national banking
\n association, not individually, but solely as Owner Trustee under the
\n HEALTHSOUTH Corporation Trust 2000-1, as Lessor, and HEALTHSOUTH
\n Corporation, a Delaware corporation, as Lessee, as such Lease Agreement
\n may be amended, modified, supplemented or restated in its entirety from
\n time to time.<\/p>\n
“Hospitals Obligations” means all of the Holder Advances and
\n Loans, as each such term is defined in the Hospitals Participation
\n Agreement.<\/p>\n
“Hospitals Participation Agreement” means the Participation
\n Agreement dated as of October 31, 2000 by and among HEALTHSOUTH
\n Corporation., as Lessee, FIRST SECURITY BANK, NATIONAL ASSOCIATION, a
\n national banking association, not individually, except as expressly
\n stated therein, but solely as Owner Trustee under the HEALTHSOUTH
\n Corporation Trust 2000-1, THE CHASE MANHATTAN BANK, as Documentation
\n Agent; UBS WARBURG LLC and DEUTSCHE BANK SECURITIES, INC., as Joint
\n Lead Arrangers; DEUTSCHE BANK AG NEW YORK BRANCH, as Syndication Agent;
\n UBS AG, Stamford Branch, as Administrative Agent for the Lenders and
\n the Holders; UBS AG, Stamford Branch, and the various other banks and
\n lending institutions which are parties thereto from time to time as
\n Holders, and UBS AG, Stamford Branch and the various other banks and
\n lending institutions which are parties thereto from time to time as
\n Lenders, as such Hospitals Participation Agreement may be amended,
\n modified, supplemented or restated in its entirety from time to time.<\/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 (contingent or
\n otherwise) of such Person in respect of letters of credit or other
\n similar instruments (or reimbursement obligations with respect
\n thereto); (iv) all obligations of such Person with respect to Rate
\n Hedging Obligations (excluding, for all purposes of this Agreement
\n other than Section 9.1(e), those that fix the interest rate on variable
\n rate indebtedness otherwise permitted hereunder or that protect the
\n Borrower and or its Consolidated Entities against changes in foreign
\n exchange rates); (v) obligations of such Person to pay the deferred and
\n unpaid purchase price of property or services, except trade payables
\n and accrued expenses incurred in the ordinary course of business; (vi)
\n all Capitalized Lease Obligations of such Person; (vii) all
\n indebtedness of <\/p>\n
14<\/p>\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; (ix) the Headquarters Obligations and the Hospitals
\n Obligations; and (x) all obligations of a like nature to those
\n described in clauses (i) through (ix) above of a partnership of which
\n such Person is a general partner or of a limited liability company of
\n which such Person is a member. The amount of Indebtedness of any Person
\n at any date shall be the outstanding balance at such date of all
\n unconditional obligations as described above, the maximum liability of
\n such Person for any such contingent obligations at such date and, in
\n the case of clause (vii), the amount of the Indebtedness secured.<\/p>\n
“Interbank Offered Rate” means, for any Eurodollar Rate Loan
\n for the Interest Period applicable thereto, the rate per annum (rounded
\n upwards, if necessary, to the nearest one-one hundredth (1\/100) of one
\n percent) appearing on Dow Jones Telerate Page 3750 (or any successor
\n page) as the London interbank offered rate for deposits in Dollars at
\n approximately 11:00 a.m. (London time) two Business Days prior to the
\n first day of such Interest Period for a term comparable to such
\n Interest Period. If for any reason, as determined by the Administrative
\n Agent, such rate is not available, the term “Interbank Offered Rate”
\n means, for any Eurodollar Rate Loan for the Interest Period applicable
\n thereto, the rate per annum (rounded upwards, if necessary, to the
\n nearest 1 \/100 of 1 %) appearing on Reuters Screen LIBO Page as the
\n London interbank offered rate for deposits in Dollars at approximately
\n 11:00 a.m. (London time) two Business Days prior to the first day of
\n such Interest Period for a term comparable to such Interest Period;
\n provided, however, if more than one rate is specified on Reuters Screen
\n LIBO Page, the applicable rate shall be the arithmetic mean of all such
\n rates (rounded upwards, if necessary, to the nearest 1\/100 of 1%).<\/p>\n
“Interest Period” means, with respect to any Eurodollar Rate
\n Loan, each period commencing on the date such Eurodollar Rate Loan is
\n made or Converted from a Loan of another Type or the last day of the
\n next preceding Interest Period for such Loan 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, except that each Interest Period that commences on the
\n last Business Day of a calendar month (or on any day for which there is
\n no numerically corresponding day in the appropriate subsequent calendar
\n month) shall end on the last Business Day of the appropriate subsequent
\n calendar month. Notwithstanding the foregoing: (i) if any Interest
\n Period for any Eurodollar Rate Loan would otherwise end after the
\n Revolving Credit Termination Date (with respect to Revolving Credit
\n Loans) or the Facility Extension Loan Termination Date (with respect to
\n Facility Extension Loans), such Interest Period shall end on the
\n Revolving Credit Termination Date or the Facility Extension Loan
\n Termination Date, as applicable; (ii) 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 Eurodollar Rate Loan, if such next succeeding Business Day falls in
\n the next succeeding calendar month, on the next preceding Business
\n Day); and (iii) notwithstanding clauses (i) and (ii) above, no Interest
\n Period for any Loan shall have a duration of less than one month (in
\n the case of a Eurodollar Rate Loan) and, if the Interest Period for any
\n Eurodollar Rate Loan would otherwise be a shorter period, such Loan
\n shall not be available hereunder for such period.<\/p>\n
15<\/p>\n
“Interest Rate Selection Notice” means the written notice
\n delivered by an Authorized Representative in connection with the
\n election of a subsequent Interest Period for any Eurodollar Rate Loan
\n or the Conversion of any Eurodollar Rate Loan into a Base Rate Loan or
\n the Conversion of any Base Rate Loan into a Eurodollar Rate Loan,
\n substantially in the form of Exhibit E.<\/p>\n
“Issuing Bank” means UBS AG, Stamford Branch, as issuer of
\n Letters of Credit under Article III.<\/p>\n
“LC Account Agreement” means the LC Account Agreement dated as
\n of the date hereof among the Borrower, the Administrative Agent and the
\n Lenders, as amended, modified or supplemented from time to time.<\/p>\n
“Lender Addendum” means, with respect to any initial Lender, a
\n Lender Addendum, substantially in the form of Exhibit A, to be executed
\n and delivered by such Lender on the Closing Date as provided in Section
\n 11.17.<\/p>\n
“Letter of Credit” means a standby letter of credit issued by
\n the Issuing Bank pursuant to Article III for the account of the
\n Borrower in favor of a Person advancing credit or securing an
\n obligation on behalf of the Borrower.<\/p>\n
“Letter of Credit Commitment” means, with respect to each
\n Lender, the obligation of such Lender to acquire Participations in
\n respect of Letters of Credit and Reimbursement Obligations up to an
\n aggregate amount at any one time outstanding equal to such Lender’s
\n Applicable Commitment Percentage of the Total Letter of Credit
\n Commitment as the same may be increased or decreased from time to time
\n pursuant to this Agreement.<\/p>\n
“Letter of Credit Facility” means, the facility described in
\n Article III providing for the issuance by the Issuing Bank for the
\n account of the Borrower of Letters of Credit in an aggregate stated
\n amount at any time outstanding not exceeding, together with all
\n Reimbursement Obligations, the Total Letter of Credit Commitment.<\/p>\n
“Letter of Credit Outstandings” means, as of any date of
\n determination, the aggregate amount remaining undrawn under all Letters
\n of Credit plus Reimbursement Obligations then outstanding.<\/p>\n
“Lien” means any interest in property securing any obligation
\n owed to, or a claim by, a Person other than the owner of the property,
\n whether such interest is based on the common law, statute or contract,
\n and including but not limited to the lien or security interest arising
\n from a mortgage, encumbrance, pledge, security agreement, conditional
\n sale or trust receipt or a lease, consignment or bailment for security
\n purposes. For the purposes of this Agreement, the Borrower and any
\n Subsidiary shall be deemed to be the owner of any property which it has
\n acquired or holds subject to a conditional sale agreement, financing
\n lease, or other arrangement pursuant to which title to the property has
\n been retained by or vested in some other Person for security purposes.<\/p>\n
16<\/p>\n
“Loan” or “Loans” means any Revolving Credit Loans,
\n Reimbursement Obligations and Letter of Credit Outstandings and all
\n extensions and renewals thereof, including, if applicable and without
\n limitation, any Facility Extension Loans.<\/p>\n
“Loan Documents” means this Agreement, the Notes, the LC
\n Account Agreement, the Applications and Agreements for Letter of Credit
\n and all other instruments and documents heretofore or hereafter
\n executed or delivered to or in favor of any Lender or the
\n Administrative Agent in connection with the Loans made, Letters of
\n Credit issued and transactions contemplated under this Agreement, as
\n the same may be amended, supplemented or replaced from time to time.<\/p>\n
“Material Adverse Effect” means a material adverse effect on
\n (i) the business, properties, operations, condition or prospects,
\n financial or otherwise, of the Borrower and its Consolidated Entities,
\n taken as a whole, (ii) the ability of the Borrower to pay or perform
\n its obligations, liabilities and indebtedness under the Loan Documents
\n as such payment or performance becomes due in accordance with the terms
\n thereof, or (iii) the rights, powers and remedies of the Administrative
\n Agent or any Lender under any Loan Document or the validity, legality
\n or enforceability thereof (including for purposes of clauses (ii) and
\n (iii) the imposition of burdensome conditions thereon).<\/p>\n
“Material Group” means, at any time, any group, whether one or
\n more, or combination of Consolidated Entities (a) whose assets, in the
\n aggregate, constitute 5% or more of the assets of the Borrower and the
\n 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
“Medicaid Certification” means certification by HCFA or a
\n state agency or entity under contract with HCFA that a health care
\n operation is in compliance with all the conditions of participation set
\n forth in the Medicaid Regulations.<\/p>\n
“Medicaid Provider Agreement” means an agreement entered into
\n between a state agency or other entity administering the Medicaid
\n program and a health care operation under which the health care
\n operation agrees to provide services for Medicaid patients in
\n accordance with the terms of the agreement and Medicaid Regulations.<\/p>\n
“Medicaid Regulations” means, collectively, (i) all federal
\n statutes (whether set forth in Title XIX of the Social Security Act or
\n elsewhere) affecting the medical assistance program established by
\n Title XIX of the Social Security Act and any statutes succeeding
\n thereto; (ii) all applicable provisions of all federal rules,
\n regulations, manuals and orders of all Governmental Authorities
\n promulgated pursuant to or in connection with the statutes described in
\n clause (i) above and all federal administrative, reimbursement and
\n other guidelines of all Governmental Authorities having the force of
\n law promulgated pursuant to or in connection with the statutes
\n described in clause (i) above; (iii) all state statutes and plans for
\n medical assistance enacted in connection with the statutes and
\n provisions described in clauses (i) and (ii) above; and (iv) all
\n applicable provisions of all rules, regulations, manuals and orders of
\n all Governmental Authorities promulgated pursuant to or in connection
\n with the statutes described in clause (iii) above<\/p>\n
17<\/p>\n
and all state administrative, reimbursement and other guidelines of all
\n Governmental Authorities having the force of law promulgated pursuant
\n to or in connection with the statutes described in clause (ii) above,
\n in each case as may be amended, supplemented or otherwise modified from
\n time to time.<\/p>\n
“Medicare Certification” means certification by HCFA or a
\n state agency or entity under contract with HCFA that a health care
\n operation is in compliance with all the conditions of participation set
\n forth in the Medicare Regulations.<\/p>\n
“Medicare Provider Agreement” means an agreement entered into
\n between a state agency or other entity administering the Medicare
\n program and a health care operation under which the health care
\n operation agrees to provide services for Medicare patients in
\n accordance with the terms of the agreement and Medicare Regulations.<\/p>\n
“Medicare Regulations” means, collectively, all federal
\n statutes (whether set forth in Title XVIII of the Social Security Act
\n or elsewhere) affecting the health insurance program for the aged and
\n disabled established by Title XVIII of the Social Security Act and any
\n statutes succeeding thereto; together with all applicable provisions of
\n all rules, regulations, manuals and orders and administrative,
\n reimbursement and other guidelines having the force of law of all
\n Governmental Authorities (including without limitation, Health and
\n Human Services (“HHS”), HCFA, the Office of the Inspector General for
\n HHS, or any Person succeeding to the functions of any of the foregoing)
\n promulgated pursuant to or in connection with any of the foregoing
\n having the force of law, as each may be amended, supplemented or
\n otherwise modified from time to time.<\/p>\n
“Moody’s” means Moody’s Investors Service, Inc.<\/p>\n
“Multiemployer Plan” means a “multiemployer plan” as defined
\n in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
\n Affiliate is making, or is accruing an obligation to make,
\n contributions or has made, or been obligated to make, contributions
\n within the preceding six (6) Fiscal Years.<\/p>\n
“1999 10-K” means the Borrower’s Annual Report on Form 10-K
\n for the Fiscal Year Ended December 31, 1999<\/p>\n
“Notes” means, the promissory notes of the Borrower evidencing
\n the Loans executed and delivered to the Lenders as provided in Section
\n 2.6, substantially in the form of Exhibit F, with appropriate
\n insertions as to amounts, dates and names of Lenders.<\/p>\n
“Obligations” means the obligations, liabilities and
\n Indebtedness of the Borrower with respect to (i) the principal and
\n interest on the Loans, (ii) the Reimbursement Obligations and otherwise
\n in respect of the Letters of Credit, (iii) all liabilities of the
\n Borrower to any Lender which arise under a Swap Agreement, and (iv) the
\n payment and performance of all other obligations, liabilities and
\n Indebtedness of the Borrower to the Lenders or the Administrative Agent
\n hereunder, under any one or more of the other Loan Documents or with
\n respect to the Loans.<\/p>\n
18<\/p>\n
“Participation” means, with respect to any Lender (other than
\n the Issuing Bank) and a Letter of Credit, the extension of credit
\n represented by the participation of such Lender hereunder in the
\n liability of the Issuing Bank in respect of a Letter of Credit issued
\n by the Issuing Bank in accordance with the terms hereof.<\/p>\n
“PBGC” means the Pension Benefit Guaranty Corporation and any
\n successor thereto.<\/p>\n
“Pension Plan” means any employee pension benefit plan within
\n the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan,
\n which is subject to the provisions of Title IV of ERISA or Section 412
\n of the Code and which (i) is maintained for employees of the Borrower
\n or any of its ERISA Affiliates or is assumed by the Borrower or any of
\n its ERISA Affiliates in connection with any Acquisition or (ii) has at
\n any time been maintained for the employees of the Borrower or any
\n current or former ERISA Affiliate.<\/p>\n
“Permitted Encumbrances” means:<\/p>\n
(1) liens for taxes, assessments and other governmental
\n charges that are not delinquent or that are being contested in good
\n faith by appropriate proceedings duly pursued;<\/p>\n
(2) mechanic’s, materialmen’s, contractor’s, landlord’s or
\n other similar liens arising in the ordinary course of business,
\n securing obligations that are not delinquent or that are being
\n contested in good faith by appropriate proceedings duly pursued;<\/p>\n
(3) restrictions, exceptions, reservations, easements,
\n conditions, limitations and other matters of record that do not
\n materially adversely affect the value or utility of the affected
\n property;<\/p>\n
(4) Liens on assets securing Indebtedness the proceeds of
\n which are used to acquire such
\n assets;<\/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 adversely
\n affect the Borrower or a Material Group.<\/p>\n
“Permitted Investments” means:<\/p>\n
(1) direct obligations of, or obligations the payment of which
\n is guaranteed by, the United States of America or an interest in any
\n trust or fund that invests solely in such obligations or repurchase
\n agreements, properly secured, with respect to such obligations.<\/p>\n
(2) direct obligations of agencies or instrumentalities of the
\n United States of America having a rating of A or higher by S&P or A2 or
\n higher by Moody’s;<\/p>\n
19<\/p>\n
(3) a certificate of deposit issued by, or other
\n interest-bearing deposits with, a bank which is a Lender or an
\n affiliate of a Lender, or a bank having its principal place of business
\n in the United States of America and having equity capital of not less
\n than $250,000,000;<\/p>\n
(4) a certificate of deposit issued by, or other
\n interest-bearing deposits with, any other bank organized under the laws
\n of the United States of America or any state thereof, provided that
\n such deposit is either (i) insured by the Federal Deposit Insurance
\n Corporation or (ii) properly secured by such bank by pledging direct
\n obligations of the United States of America having a market value not
\n less than the 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 a rating of
\n A-1 or higher by S&P, or P-1 or higher by Moody’s;<\/p>\n
(7) eligible banker’s acceptances, repurchase agreements and
\n tax-exempt municipal bonds having a maturity of less than one year, in
\n each case having a rating, or that is the full recourse obligation of a
\n person whose senior debt is rated, A or higher by S&P or A2 or higher
\n by Moody’s;<\/p>\n
(8) loans made by the Borrower or a Consolidated Entity in an
\n aggregate amount of $2,000,000 or less to employees of the Borrower or
\n of a Consolidated Entity;<\/p>\n
(9) loans made by the Borrower or a Controlled Partnership in
\n an aggregate amount of $1,000,000 or less to limited partners (or
\n potential limited partners) of Controlled Partnerships for the purpose
\n of enabling such limited partners to acquire limited partnership
\n interests in Controlled Partnerships, to operate their practices or to
\n restructure partnership interests;<\/p>\n
(10) loans in an aggregate amount of up to $20,000,000 made by
\n the Borrower to the HEALTHSOUTH Employee Stock Benefit Plan;<\/p>\n
(11) scholarship loans made by the Borrower in an aggregate
\n amount not exceeding $1,000,000 to individuals who meet certain
\n eligibility requirements as established by the Borrower from time to
\n time;<\/p>\n
(12) up to 100% of the outstanding shares of stock of
\n Caretenders Healthcorp (formerly known as Senior Services, Inc.)
\n provided that aggregate costs incurred to purchase such shares shall
\n 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 Administrative Agent and
\n investments of $5,000,000 or greater expressly approved in writing by
\n the Required Lenders;<\/p>\n
20<\/p>\n
(14) any other investment having a rating of A or higher or
\n A-1 or higher by S&P or A2 or higher or P-1 or higher by Moody’s;<\/p>\n
(15) loans to health care practitioners and other persons not
\n to exceed in the aggregate $5,000,000;<\/p>\n
(16) investments in Acacia Venture Partners, HEALTHSMART,
\n Caremark Rx, Inc. and Austin Medical Office Building which in the
\n aggregate do not exceed $5,000,000; and<\/p>\n
(17) additional investments existing on the Closing Date and
\n described in Exhibit G.<\/p>\n
“Person” means an individual, partnership, corporation,
\n limited liability company, trust, unincorporated organization,
\n association, joint venture or a government or agency or political
\n subdivision thereof.<\/p>\n
“Prime Rate” means the per annum rate of interest established
\n from time to time by the Administrative Agent as its prime rate, which
\n rate may not be the lowest rate of interest charged by the
\n Administrative Agent to its customers.<\/p>\n
“Principal Office” means the office of the Administrative
\n Agent at 677 Washington Boulevard, Stamford, Connecticut 06901,
\n Attention: Jennifer Poccia, or such other office and address as the
\n Administrative Agent may from time to time designate.<\/p>\n
“Rate Hedging Obligations” means any and all obligations of
\n the Borrower or any Consolidated Entity, whether absolute or contingent
\n and howsoever and whensoever created, arising, evidenced or acquired
\n (including all renewals, extensions and modifications thereof and
\n substitutions therefor), under (i) any and all agreements, devices or
\n arrangements designed to protect the Borrower or such Consolidated
\n Entity from the fluctuations of interest rates, exchange rates or
\n forward rates applicable to such party’s assets, liabilities or
\n exchange transactions, including, but not limited to,
\n Dollar-denominated or cross-currency interest rate exchange agreements,
\n forward currency exchange agreements, interest rate cap or collar
\n protection agreements, forward rate currency or interest rate options,
\n puts, warrants and those commonly known as interest rate “swap”
\n agreements; and (ii) any and all cancellations, buybacks, reversals,
\n terminations or assignments of any of the foregoing.<\/p>\n
“Rating” means the rating of senior unsecured Indebtedness of
\n the Borrower in effect at any time which rating is made by either of
\n Moody’s or S&P.<\/p>\n
“Regulation D” means Regulation D of the Board as the same may
\n be amended or supplemented from time to time.<\/p>\n
“Reimbursement Obligation” means, at any time, the obligation
\n of the Borrower with respect to any Letter of Credit to reimburse the
\n Issuing Bank and the Lenders to the extent of their respective
\n Participations (including by the receipt by the Issuing Bank of<\/p>\n
21<\/p>\n
proceeds of Loans pursuant to Section 3.2) for amounts theretofore paid
\n by the Issuing Bank pursuant to a drawing under such Letter of Credit.<\/p>\n
“Required Lenders” means, as of any date, Lenders on such date
\n having Credit Exposures (as defined below) aggregating at least 51% of
\n the aggregate Credit Exposures of all the Lenders on such date. For
\n purposes of the preceding sentence, the amount of the “Credit Exposure”
\n of each Lender shall be equal to the aggregate principal amount of the
\n Loans, so long as there exists no Event of Default, owing to such
\n Lender plus the aggregate unutilized amounts of such Lender’s Revolving
\n Credit Commitment plus the amount of such Lender’s Applicable
\n Commitment Percentage of Letter of Credit Outstandings; provided that,
\n if any Lender shall have failed to pay to the Issuing Bank its
\n Applicable Commitment Percentage of any drawing under any Letter of
\n Credit resulting in an outstanding Reimbursement Obligation, such
\n Lender’s Credit Exposure attributable to Letters of Credit and
\n Reimbursement Obligations shall be deemed to be held by the Issuing
\n Bank for purposes of this definition.<\/p>\n
“Reserve Requirement” means, at any time, the maximum rate at
\n which reserves (including, without limitation, any marginal, special,
\n supplemental, or emergency reserves) are required to be maintained
\n under regulations issued from time to time by the Board by member banks
\n of the Federal Reserve System (or any successor) by member banks of the
\n Federal Reserve System against “Eurocurrency liabilities” (as such term
\n is used in Regulation D). Without limiting the effect of the foregoing,
\n the Reserve Requirement shall reflect any other reserves required to be
\n maintained by such member banks with respect to (i) any category of
\n liabilities which includes deposits by reference to which the
\n Eurodollar Rate is to be determined, or (ii) any category of extensions
\n of credit or other assets which include Eurodollar Rate Loans. The
\n Eurodollar Rate shall be adjusted automatically on and as of the
\n effective date of any change in the Reserve Requirement.<\/p>\n
“Restricted Payment” means (a) any dividend or other
\n distribution, direct or indirect, on account of any shares of any class
\n of stock of Borrower or any of its Consolidated Entities (other than
\n those payable or distributable solely to the Borrower) now or hereafter
\n outstanding, except a dividend payable solely in shares of a class of
\n stock to the holders of that class; (b) any redemption, conversion,
\n exchange, retirement or similar payment, purchase or other acquisition
\n for value, direct or indirect, of any shares of any class of stock of
\n the Borrower or any of its Consolidated Entities (other than those
\n payable or distributable solely to the Borrower) now or hereafter
\n outstanding; (c) any payment made to retire, or to obtain the surrender
\n of, any outstanding warrants, options or other rights to acquire shares
\n of any class of stock of the Borrower or any of its Consolidated
\n Entities now or hereafter outstanding; (d) any issuance and sale of
\n capital stock of any Consolidated Entity of the Borrower (or any
\n option, warrant or right to acquire such stock) other than to the
\n Borrower; and (e) any optional or voluntary payment, prepayment,
\n repurchase or redemption of, or otherwise voluntary or optional
\n defeasance of any Subordinated Debt, including, without limitation, the
\n New Senior Subordinated Notes and the Convertible Subordinated
\n Debentures, or the segregation of funds for any such payment,
\n prepayment, repurchase, redemption or defeasance.<\/p>\n
22<\/p>\n
“Revolving Credit Commitment” means, with respect to each
\n Lender, the obligation of such Lender to make Revolving Credit Loans to
\n the Borrower up to an aggregate principal amount at any one time
\n outstanding equal to such Lender’s Applicable Commitment Percentage of
\n the Total Revolving Credit Commitment.<\/p>\n
“Revolving Credit Facility” means the facility described in
\n Article II providing for Loans to the Borrower by the Lenders in the
\n aggregate principal amount of the Total Revolving Credit Commitment.<\/p>\n
“Revolving Credit Loan” means any borrowing pursuant to an
\n Advance provided for by Section 2.1, which may be Base Rate Loans or
\n Eurodollar Rate Loans.<\/p>\n
“Revolving Credit Outstandings” means, as of any date of
\n determination, the aggregate principal amount of all Revolving Credit
\n Loans then outstanding.<\/p>\n
“Revolving Credit Termination Date” means (i) the Stated
\n Termination Date or (ii) such earlier date of termination of Lenders’
\n obligations hereunder as may be determined pursuant to Section 9.1 upon
\n the occurrence of an Event of Default, or (iii) such date on which the
\n Borrower may voluntarily and permanently terminate the Revolving Credit
\n Facility by payment in full of all Revolving Credit Outstandings and
\n all Letter of Credit Outstandings and cancellation of all Letters of
\n Credit, together with all accrued and unpaid interest and fees thereon.<\/p>\n
“S&P” means Standard & Poor’s Rating Group, a division of The
\n McGraw Hill Companies.<\/p>\n
“Senior Debt” means (i) the Obligations and (ii) all
\n obligations of the Borrower and its Subsidiaries, now or hereafter
\n existing under the Credit Agreement dated as of June 23, 1998 by and
\n among the Borrower, as borrower, Nationsbank National Association, as
\n Administrative Agent and Arranger, J.P. Morgan Securities Inc.,
\n Deutsche Bank AG and Scotiabanc, Inc., as Syndication Agents and
\n Co-Arrangers, and the other lenders party thereto from time to time, as
\n amended and in effect from time to time.<\/p>\n
“Single Employer Plan” means any employee pension benefit plan
\n covered by Title IV of ERISA in respect of which the Borrower or any
\n Subsidiary is an “employer” as described in Section 4001(b) of ERISA
\n and which is not a Multiemployer Plan.<\/p>\n
“Solvent” means, when used with respect to any Person, that at
\n the time of determination:<\/p>\n
(i) the fair value of its assets (both at fair valuation and
\n at present fair saleable value on an orderly basis) is in excess of the
\n total amount of its liabilities, including contingent obligations; and<\/p>\n
(ii) it is then able and expects to be able to pay its debts
\n as they mature; and<\/p>\n
23<\/p>\n
(iii) it has capital sufficient to carry on its business as
\n conducted and as proposed to be conducted.<\/p>\n
“Stated Termination Date” means October 30, 2001.<\/p>\n
“Subordinated Debt” means any unsecured Indebtedness of the
\n Borrower or any Consolidated Entity (other than inter-company
\n Indebtedness) which is subordinated in right of payment in all respects
\n to the Senior Debt in a manner reasonably acceptable to the
\n Administrative Agent.<\/p>\n
“Subsidiary” means any corporation or other entity in which
\n more than 50% of its outstanding Voting Stock or more than 50% of all
\n equity interests is owned directly or indirectly by the Borrower and\/or
\n by one or more of the Borrower’s Subsidiaries.<\/p>\n
“Swap Agreement” means one or more agreements between the
\n Borrower and any Person with respect to any Indebtedness under the Loan
\n Documents, on terms mutually acceptable to Borrower and such Person and
\n approved by each of the Lenders, which agreements create Rate Hedging
\n Obligations; provided, however, that no such approval of the Lenders
\n shall be required to the extent such agreements are entered into
\n between the Borrower and any Lender.<\/p>\n
“Termination Event” means: (i) a “Reportable Event” described
\n in Section 4043 of ERISA and the regulations issued thereunder (unless
\n the notice requirement has been waived by applicable regulation); or
\n (ii) the withdrawal of the Borrower or any ERISA Affiliate from a
\n Pension Plan during a plan year in which it was a “substantial
\n employer” as defined in Section 4001 (a)(2) of ERISA or was deemed such
\n under Section 4062(e) of ERISA; or (iii) the termination of a Pension
\n Plan, the filing of a notice of intent to terminate a Pension Plan or
\n the treatment of a Pension Plan amendment as a termination under
\n Section 4041 of ERISA; or (iv) the institution of proceedings to
\n terminate a Pension Plan by the PBGC; or (v) any other event or
\n condition which would constitute grounds under Section 4042(a) of ERISA
\n for the termination of, or the appointment of a trustee to administer,
\n any Pension Plan; or (vi) the partial or complete withdrawal of the
\n Borrower or any ERISA Affiliate from a Multiemployer Plan; or (vii) the
\n imposition of a Lien pursuant to Section 412 of the Code or Section 302
\n of ERISA; or (viii) any event or condition which results in the
\n reorganization or insolvency of a Multiemployer Plan under Section 4241
\n or Section 4245 of ERISA, respectively; or (ix) any event or condition
\n which results in the termination of a Multiemployer Plan under Section
\n 4041A of ERISA or the institution by the PBGC of proceedings to
\n terminate a Multiemployer Plan under Section 4042 of ERISA.<\/p>\n
“Total Letter of Credit Commitment” means an amount not to
\n exceed $20,000,000.<\/p>\n
“Total Revolving Credit Commitment” means a principal amount
\n equal to $400,000,000, as reduced from time to time in accordance with
\n Section 2.1(a) and Section 2.8.<\/p>\n
24<\/p>\n
“Unused Amount” means with respect to each Lender, (a) the
\n Revolving Credit Commitment of such Lender less (b) such Lender’s pro
\n rata share of outstanding Revolving Credit Loans and Letter of Credit
\n Outstandings; provided that in no event shall such amount be a negative
\n number.<\/p>\n
“Vanderbilt” means Vanderbilt Stallworth Rehabilitation
\n Hospital, L.P., the partners of which are the Borrower, Vanderbilt
\n University and Vanderbilt Health Services.<\/p>\n
“Voting Stock” means shares of Capital Stock issued by a
\n corporation, or equivalent interests in any other Person, the holders
\n of which are ordinarily, in the absence of contingencies, entitled to
\n vote for the election of directors (or persons performing similar
\n functions) of such Person, even if the right so to vote has been
\n suspended by the happening of such a contingency.<\/p>\n
(b) Other Defined Terms. The following terms shall have the
\n meanings defined for such terms in the Sections set forth
\n below:<\/p>\n
Term Section
\n —– ——-<\/p>\n
Administrative Agent Preamble
\n Affected Loans 4.4
\n Affected Type 4.4
\n Compliance Certificate 7.1(c)
\n Contractual Obligation 6.2(c)
\n Eurodollar Margin 2.2(c)(ii)(C)
\n Event of Default 9.1
\n Facility Extension Loan 2.2(b)
\n Facility Extension Loan Maturity Date 2.2(b)
\n Facility Extension Notice 2.2(a)
\n Indemnified Parties 11.12
\n Indemnified Liabilities 11.12
\n New Senior Subordinated Notes 5.1(c)
\n Notice of Default 10.3
\n Other Taxes 4.6(b)
\n Pro Forma Financial Statements 6.6(d)
\n Refinancing 5.1(c)
\n Register 11.1(b)
\n Related LC Documents 3.2(i)
\n Requirement of Law 6.2(b)
\n Taxes 4.6(a)<\/p>\n
1.2. Rules of Interpretation.<\/p>\n
(a) All accounting terms not specifically defined herein shall
\nhave the meanings assigned to such terms and shall be interpreted in accordance
\nwith GAAP applied on a Consistent Basis.<\/p>\n
25<\/p>\n
(b) The headings, subheadings and table of contents used
\nherein or in any other Loan Document are solely for convenience of reference and
\nshall not constitute a part of any such document or affect the meaning,
\nconstruction or effect of any provision thereof.<\/p>\n
(c) Except as otherwise expressly provided, references herein
\nto articles, sections, paragraphs, clauses, annexes, appendices, exhibits and
\nschedules are references to articles, sections, paragraphs, clauses, annexes,
\nappendices, exhibits and schedules in or to this Agreement.<\/p>\n
(d) All definitions set forth herein or in any other Loan
\nDocument shall apply to the singular as well as the plural form of such defined
\nterm, and all references to the masculine gender shall include reference to the
\nfeminine or neuter gender, and vice versa, as the context may require.<\/p>\n
(e) When used herein or in any other Loan Document, words such
\nas “hereunder”, “hereto”, “hereof” and “herein” and other words of like import
\nshall, unless the context clearly indicates to the contrary, refer to the whole
\nof the applicable document and not to any particular article, section,
\nsubsection, paragraph or clause thereof.<\/p>\n
(f) References to “including” means including without limiting
\nthe generality of any description preceding such term, and for purposes hereof
\nthe rule of ejusdem generis shall not be applicable to limit a general
\nstatement, followed by or referable to an enumeration of specific matters, to
\nmatters similar to those specifically mentioned.<\/p>\n
(g) All dates and times of day specified herein shall refer to
\nsuch dates and times at New York, New York.<\/p>\n
(h) Each of the parties to the Loan Documents and their
\ncounsel have reviewed and revised, or requested (or had the opportunity to
\nrequest) revisions to, the Loan Documents, and any rule of construction that
\nambiguities are to be resolved against the drafting party shall be inapplicable
\nin the construing and interpretation of the Loan Documents and all exhibits,
\nschedules and appendices thereto.<\/p>\n
(i) Any reference to an officer of the Borrower or any other
\nPerson by reference to the title of such officer shall be deemed to refer to
\neach other officer of such Person, however titled, exercising the same or
\nsubstantially similar functions.<\/p>\n
(j) All references to any agreement or document as amended,
\nmodified or supplemented, or words of similar effect, shall mean such document
\nor agreement, as the case may be, as amended, modified or supplemented from time
\nto time only as and to the extent permitted therein and in the Loan Documents.<\/p>\n
1.3. Classes and Types of Loans. Loans hereunder are
\ndistinguished by Class and Type. The Class of a Loan refers to whether such Loan
\nis a Revolving Credit Loan or a Facility Extension Loan. The “Type” of a Loan
\nrefers to whether such Loan is a Base Rate Loan or a Eurodollar Rate Loan, each
\nof which constitutes a Type. Loans may be identified by both Class and Type.<\/p>\n
26<\/p>\n
ARTICLE II<\/p>\n
The Loans<\/p>\n
2.1. Revolving Credit Loans. (a) Commitment. Subject to the
\nterms and conditions of this Agreement, each Lender severally agrees to make
\nAdvances to the Borrower under the Revolving Credit Facility from time to time
\nfrom the Closing Date until the Revolving Credit Termination Date (such Advance
\nby each Lender being made on a pro rata basis as to the total borrowing
\nrequested by the Borrower on any day determined by such Lender’s Applicable
\nCommitment Percentage), in an aggregate principal amount for each Lender up to
\nbut not exceeding the Revolving Credit Commitment of such Lender, provided,
\nhowever, that (i) the Lenders will not be required and shall have no obligation
\nto make any such Advance if the applicable conditions precedent thereto set
\nforth in Article V have not been satisfied and (ii) immediately after giving
\neffect to each such Advance, the principal amount of Revolving Credit
\nOutstandings plus Letter of Credit Outstandings shall not exceed the Total
\nRevolving Credit Commitment. Within such limits, the Borrower may borrow, repay
\nand reborrow under the Revolving Credit Facility on any Business Day from the
\nClosing Date until, but (as to borrowings and reborrowings) not including, the
\nRevolving Credit Termination Date; provided, however, that (y) no Revolving
\nCredit Loan that is a Eurodollar Rate Loan shall be made which has an Interest
\nPeriod that extends beyond the Revolving Credit Termination Date and (z) each
\nRevolving Credit Loan that is a Eurodollar Rate Loan may, subject to the
\nprovisions of Section 2.4, be repaid only on the last day of the Interest Period
\nwith respect thereto unless such payment is accompanied by the additional
\npayment, if any, required by Section 4.5.<\/p>\n
(b) Amounts. The aggregate unpaid principal amount of the
\nRevolving Credit Outstandings plus Letter of Credit Outstandings shall not
\nexceed the Total Revolving Credit Commitment and, in the event there shall be
\noutstanding any such excess, the Borrower shall immediately make such payments
\nand prepayments as shall be necessary to comply with this restriction. Each
\nRevolving Credit Loan hereunder, other than Base Rate Refunding Loans, and each
\nConversion under Section 2.9, shall be in an amount of at least $2,000,000, and,
\nif greater than $2,000,000, an integral multiple of $500,000 with respect to
\nEurodollar Rate Loans and $100,000 with respect to Base Rate Loans.<\/p>\n
(c) Advances. (i) An Authorized Representative shall give the
\nAdministrative Agent (1) at least three (3) Business Days’ irrevocable written
\nnotice by telefacsimile transmission of a Borrowing Notice or Interest Rate
\nSelection Notice (as applicable) with appropriate insertions, effective upon
\nreceipt, of each Revolving Credit Loan that is a Eurodollar Rate Loan (whether
\nrepresenting an additional borrowing hereunder or the Conversion of a borrowing
\nhereunder from Base Rate Loans to Eurodollar Rate Loans) prior to 10:30 A.M. and
\n(2) irrevocable written notice by telefacsimile transmission of a Borrowing
\nNotice or Interest Rate Selection Notice (as applicable) with appropriate
\ninsertions, effective upon receipt, of each Revolving Credit Loan (other than
\nBase Rate Refunding Loans to the extent the same are effected without notice
\npursuant to Section 2.1(c)(iv)) that is a Base Rate Loan (whether representing
\nan additional borrowing hereunder or the Conversion of borrowing hereunder from
\nEurodollar Rate Loans to Base Rate Loans) prior to 10:30 A.M. on the day of such
\nproposed Revolving Credit Loan. Each such notice shall specify the amount of the
\nborrowing, the Type of Loan (Base Rate or Eurodollar Rate), the date of
\nborrowing and if a <\/p>\n
27<\/p>\n
Eurodollar Rate Loan the Interest Period to be used in the computation of
\ninterest. Notice of receipt of such Borrowing Notice or Interest Rate Selection
\nNotice, as the case may be, together with the amount of each Lender’s portion of
\nan Advance requested thereunder, shall be provided by the Administrative Agent
\nto each Lender by telefacsimile transmission with reasonable promptness, but
\n(provided the Administrative Agent shall have received such notice by 10:30
\nA.M.) not later than 1:00 P.M. on the same day as the Administrative Agent’s
\nreceipt of such notice.<\/p>\n
(ii) Not later than 2:00 P.M. on the date specified for each
\nborrowing under this Section 2.1, each Lender shall, pursuant to the terms and
\nsubject to the conditions of this Agreement, make the amount of the Loan or
\nLoans to be made by it on such day available by wire transfer to the
\nAdministrative Agent in the amount of its pro rata share determined according to
\nsuch Lender’s Applicable Commitment Percentage of the Revolving Credit Loans to
\nbe made on such day. Such wire transfer shall be directed to the Administrative
\nAgent at the Principal Office and shall be in the form of Dollars constituting
\nimmediately available funds. The amount so received by the Administrative Agent
\nshall, subject to the terms and conditions of this Agreement, be made available
\nto the Borrower by delivery of the proceeds thereof as shall be directed in the
\napplicable Borrowing Notice by the Authorized Representative and reasonably
\nacceptable to the Administrative Agent.<\/p>\n
(iii) The Borrower shall have the option to elect the duration
\nof the initial and any subsequent Interest Periods and to Convert the Revolving
\nCredit Loans in accordance with Section 2.9. Eurodollar Rate Loans and Base Rate
\nLoans may be outstanding at the same time; provided, however, there shall not be
\noutstanding at any one time Revolving Credit Loans having more than eight (8)
\ndifferent Interest Periods. If the Administrative Agent does not receive a
\nBorrowing Notice or an Interest Rate Selection Notice giving notice of election
\nof the duration of an Interest Period or of Conversion of any Loan to or
\nContinuation of a Loan as a Eurodollar Rate Loan by the time prescribed by
\nSection 2.1(c) or 2.9, the Borrower shall be deemed to have elected to Convert
\nsuch Loan to (or Continue such Loan as) a Base Rate Loan until the Borrower
\nnotifies the Administrative Agent in accordance with Section 2.9.<\/p>\n
(iv) Notwithstanding the foregoing, if a drawing is made under
\nany Letter of Credit, such drawing is honored by the Issuing Bank prior to the
\nRevolving Credit Termination Date, and the Borrower shall not immediately fully
\nreimburse the Issuing Bank in respect of such drawing, (A) provided that the
\nconditions to making a Revolving Credit Loan as herein provided shall then be
\nsatisfied, the Reimbursement Obligation arising from such drawing shall be paid
\nto the Issuing Bank by the Administrative Agent without the requirement of
\nnotice to or from the Borrower from immediately available funds which shall be
\nadvanced as a Base Rate Refunding Loan by each Lender under the Revolving Credit
\nFacility in an amount equal to such Lender’s Applicable Commitment Percentage of
\nsuch Reimbursement Obligation, and (B) if the conditions to making a Loan as
\nherein provided shall not then be satisfied, each of the Lenders shall fund by
\npayment to the Administrative Agent (for the benefit of the Issuing Bank) in
\nimmediately available funds the purchase from the Issuing Bank of their
\nrespective Participations in the related Reimbursement Obligation based on their
\nrespective Applicable Commitment Percentages. If a drawing is presented under
\nany Letter of Credit in accordance with the terms thereof and the Borrower shall
\nnot immediately reimburse the Issuing Bank in respect thereof, then notice of
\nsuch drawing or payment shall be provided promptly by the Issuing Bank to the<\/p>\n
28<\/p>\n
Administrative Agent and the Administrative Agent shall provide notice to each
\nLender by telephone or telefacsimile transmission. If notice to the Lenders of a
\ndrawing under any Letter of Credit is given by the Administrative Agent at or
\nbefore 12:00 noon on any Business Day, each Lender shall, pursuant to the
\nconditions specified in this Section 2.1(c)(iv), either make a Base Rate
\nRefunding Loan or fund the purchase of its Participation in the amount of such
\nLender’s Applicable Commitment Percentage of such drawing or payment and shall
\npay such amount to the Administrative Agent for the account of the Issuing Bank
\nat the Principal Office in Dollars and in immediately available funds before
\n2:30 P.M. on the same Business Day. If notice to the Lenders of a drawing under
\na Letter of Credit is given by the Administrative Agent after 12:00 noon on any
\nBusiness Day, each Lender shall, pursuant to the conditions specified in this
\nSection 2.1(c)(iv), either make a Base Rate Refunding Loan or fund the purchase
\nof its Participation in the amount of such Lender’s Applicable Commitment
\nPercentage of such drawing or payment and shall pay such amount to the
\nAdministrative Agent for the account of the Issuing Bank at the Principal Office
\nin Dollars and in immediately available funds before 12:00 noon on the next
\nfollowing Business Day. Any such Base Rate Refunding Loan shall be deemed to be
\nadvanced as a Base Rate Loan as of the date the relevant drawing is honored by
\nthe Issuing Bank, and shall Continue as a Base Rate Loan unless and until the
\nBorrower Converts such Base Rate Loan in accordance with the terms of Section
\n2.9.<\/p>\n
2.2. Facility Extension Loans. (a) The Borrower may, by
\nwritten irrevocable notice to the Administrative Agent (such notice being a
\n“Facility Extension Notice”) given no later than sixty days prior to the Stated
\nTermination Date, convert the Revolving Credit Outstandings on the Stated
\nTermination Date into term loans on the terms and conditions set forth in this
\nSection 2.2; provided, however, that the Lenders will not be required and shall
\nhave no obligation to convert any Revolving Credit Outstandings pursuant to the
\nterms in this Section 2.2 if the applicable conditions precedent thereto set
\nforth in Article V have not been satisfied. No Facility Extension Loan that is a
\nEurodollar Rate Loan shall be made which has an Interest Period that extends
\nbeyond the Facility Extension Loan Termination Date and each Facility Extension
\nLoan that is a Eurodollar Rate Loan may, subject to the provisions of Section
\n2.4, be repaid only on the last day of the Interest Period with respect thereto
\nunless such payment is accompanied by the additional payment, if any, required
\nby Section 4.5. The Administrative Agent shall promptly transmit any Facility
\nExtension Notice to each Lender.<\/p>\n
(b) If the Borrower delivers a Facility Extension Notice, each
\nLender severally agrees that the Revolving Credit Outstandings owing to such
\nLender on the Stated Termination Date shall be converted into a term loan (a
\n“Facility Extension Loan”) with a maturity date of June 22, 2003 (the “Facility
\nExtension Loan Maturity Date”). The Facility Extension Loans may from time to
\ntime be Base Rate Loans or Eurodollar Loans, as determined by the Borrower and
\nnotified to the Administrative Agent in accordance with Sections 2.2(c) and 2.9.<\/p>\n
(c) In the event that a Facility Extension Notice has been
\ndelivered, an Authorized Representative shall give the Administrative Agent at
\nleast three (3) Business Days’ prior to the Stated Termination Date an
\nirrevocable written notice by telefacsimile transmission stating if all or any
\nportion of the Facility Extension Loans are to be Eurodollar Rate Loans, and the
\nlength of the initial Interest Period applicable thereto.<\/p>\n
29<\/p>\n
(d) On the date on which the Borrower provides the Facility
\nExtension Notice according to Section 2.2(a) above, the Borrower agrees to pay
\nto the Administrative Agent, for the benefit of each Lender, an extension fee
\nequal to .25% of the amount of the Facility Extension Loan to be made by such
\nLender.<\/p>\n
2.3. Payment of Interest. (a) The Borrower shall pay interest
\nto the Administrative Agent for the account of each Lender on the outstanding
\nand unpaid principal amount of each Loan made by such Lender for the period
\ncommencing on the date of such Loan until such Loan shall be due at the then
\napplicable Base Rate for Base Rate Loans or applicable Eurodollar Rate for
\nEurodollar Rate Loans as designated by the Authorized Representative pursuant to
\nSection 2.1 or 2.2 plus, in each case, the Applicable Margin applicable to such
\nLoans; provided, however, that if any amount payable under this Agreement shall
\nnot be paid when due (at maturity, by acceleration or otherwise, subject to the
\nprovisions of Section 9.1(a)), all amounts outstanding hereunder shall bear
\ninterest thereafter until such overdue amount shall be paid in full at the
\nDefault Rate.<\/p>\n
(b) Interest on each Loan shall be computed on an Actual\/360
\nBasis. Interest on each Loan shall be paid (i) quarterly in arrears on the last
\nBusiness Day of each March, June, September and December, commencing December
\n31, 2000, for each Base Rate Loan. (ii) on the last day of the applicable
\nInterest Period for each Eurodollar Rate Loan and, if such Interest Period
\nextends for more than three (3) months, at intervals of three (3) months after
\nthe first day of such Interest Period, and (iii) upon the Revolving Credit
\nTermination Date and the Facility Extension Loan Termination Date. Interest
\npayable at the Default Rate shall be payable on demand.<\/p>\n
2.4. Payment of Principal (a) Unless converted to a Facility
\nExtension Loan pursuant to Section 2.2, the principal amount of each Revolving
\nCredit Loan shall be due and payable to the Administrative Agent for the benefit
\nof each Lender in full on the Stated Termination Date, or earlier as
\nspecifically provided herein. The Facility Extension Loan of each Lender shall
\nmature in 8 equal quarterly installments, the first 7 such installments payable
\non the last Business Day of the following months: September, 2001; December,
\n2001; March, 2002; June, 2002; September, 2002; December, 2002; March, 2003; and
\nthe last installment payable on the Facility Extension Loan Maturity Date<\/p>\n
(b) From time to time, the Borrower may prepay the Loans, in
\nwhole or in part, without premium or penalty, upon at least four (4) Business
\nDays’ irrevocable written notice to the Administrative Agent, specifying the
\ndate and amount of prepayment and whether the prepayment is of Eurodollar Loans,
\nBase Rate Loans or a combination thereof, and if a combination thereof, the
\namount allocable to each. If any notice of prepayment is given, the amount
\nspecified in such notice shall be due and payable on the date specified therein,
\ntogether with accrued interest to the payment date on the amount prepaid. Upon
\nreceipt of any notice of prepayment, the Administrative Agent shall promptly
\nnotify each Lender thereof. Notwithstanding anything to the contrary herein, the
\nprincipal amount of any Eurodollar Rate Loan may be prepaid only at the end of
\nthe applicable Interest Period unless the Borrower shall pay to the
\nAdministrative Agent for the account of the Lenders the additional amount, if
\nany, required under Section 4.5. All prepayments of Revolving Credit Loans and,
\nwhere applicable, Facility Extension Loans made by the Borrower shall be in the
\namount of $5,000,000 or such<\/p>\n
30<\/p>\n
greater amount which is an integral multiple of $1,000,000, or the amount equal
\nto all Revolving Credit Outstandings or, where applicable, outstanding amounts
\nunder the Facility Extension Loans, as the case may be, or such other amount as
\nnecessary to comply with Section 2.1(b) or Section 2.9. Partial prepayments of
\nthe Facility Extension Loans shall be applied to the installments of principal
\nunder the Facility Extension Loans in the inverse order of their scheduled
\nmaturities. Amounts prepaid on account of the Facility Extension Loans may not
\nbe reborrowed.<\/p>\n
2.5. Non-Conforming Payments. (a) Each payment of principal
\n(including any prepayment) and payment of interest and fees, and any other
\namount required to be paid to the Lenders with respect to the Loans, shall be
\nmade to the Administrative Agent at the Principal Office, for the account of
\neach Lender, in Dollars and in immediately available funds, without setoff,
\ndeduction or counterclaim before 10:00 A.M. on the date such payment is due. The
\nAdministrative Agent may, but shall not be obligated to, debit the amount of any
\nsuch payment which is not made by such time to any ordinary deposit account, if
\nany, of the Borrower with the Administrative Agent. The Administrative Agent
\nshall promptly notify the Borrower of any such debit; however, failure to give
\nsuch notice shall not affect the validity of such debit.<\/p>\n
(b) The Administrative Agent shall deem any payment made by or
\non behalf of the Borrower hereunder that is not made both in Dollars and in
\nimmediately available funds and prior to 10:00 A.M. to be a non-conforming
\npayment. Any such payment shall not be deemed to be received by the
\nAdministrative Agent until the later of (i) the time such funds become available
\nfunds and (ii) the next Business Day. Any non-conforming payment may constitute
\nor become a Default or Event of Default. Interest shall continue to accrue on
\nany principal as to which a non-conforming payment is made until the later of
\n(x) the date such funds become available funds or (y) the next Business Day at
\nthe Default Rate from the date such amount was due and payable.<\/p>\n
(c) In the event that any payment hereunder becomes due and
\npayable on a day other than a Business Day, then such due date shall be extended
\nto the next succeeding Business Day unless provided otherwise under the
\ndefinition of “Interest Period”; provided that interest shall continue to accrue
\nduring the period of any such extension and provided further, that in no event
\nshall any such due date be extended beyond the Stated Termination Date or the
\nFacility Extension Termination Date, as the case may be.<\/p>\n
2.6. Notes(a) . The Loans of each Lender shall be evidenced by
\nthe Register (as defined in Section 11.1(b)) and by a loan account maintained by
\nsuch Lender. The Borrower hereby agrees that, upon request to the Administrative
\nAgent by any Lender, the Borrower will execute and deliver to the requesting
\nLender a promissory note of the Borrower evidencing the Loans of such Lender,
\nsubstantially in the form of Exhibit F, with appropriate insertions.<\/p>\n
2.7. Pro Rata Payments. Except as otherwise provided herein,
\n(a) each payment on account of the principal of and interest on the Revolving
\nCredit Loans, the Facility Extension Loans and the fees described in Section
\n2.2(d), Section 2.10 and the first sentence of Section 3.3(a) shall be made to
\nthe Administrative Agent for the account of the Lenders pro rata based on their
\nApplicable Commitment Percentages with respect to the Revolving Credit Loans and
\nthe Applicable Extension Percentages, with respect to the Facility Extension
\nLoans, (b) all<\/p>\n
31<\/p>\n
payments to be made by the Borrower for the account of each of the Lenders on
\naccount of principal, interest and fees, shall be made without diminution,
\nsetoff, recoupment or counterclaim, and (c) the Administrative Agent will
\npromptly distribute to the Lenders in immediately available funds payments
\nreceived in fully collected, immediately available funds from the Borrower.<\/p>\n
2.8. Reductions. The Borrower shall, by irrevocable notice
\nfrom an Authorized Representative, have the right from time to time but not more
\nfrequently than once each calendar month, upon not less than three (3) Business
\nDays’ written notice to the Administrative Agent, effective upon receipt, to
\npermanently reduce the Total Revolving Credit Commitment. The Administrative
\nAgent shall give each Lender, within one (1) Business Day of receipt of such
\nnotice, telefacsimile notice, or telephonic notice (confirmed in writing), of
\nsuch reduction. Each such reduction shall be in the aggregate amount of
\n$10,000,000 or such greater amount which is in an integral multiple of
\n$1,000,000, or the entire remaining Total Revolving Credit Commitment, and shall
\npermanently reduce the Total Revolving Credit Commitment. Each reduction of the
\nTotal Revolving Credit Commitment shall be accompanied by payment of Revolving
\nCredit Loans to the extent that the principal amount of Revolving Credit
\nOutstandings plus Letter of Credit Outstandings exceeds the Total Revolving
\nCredit Commitment after giving effect to such reduction, together with accrued
\nand unpaid interest on the amounts prepaid. If any such reduction shall result
\nin the payment of any Eurodollar Rate Loan other than on the last day of the
\nInterest Period of such Eurodollar Rate Loan such prepayment shall be
\naccompanied by amounts due, if any, under Section 4.5.<\/p>\n
2.9. Conversions and Elections of Subsequent Interest Periods.
\nSubject to the limitations set forth below and in Article IV, the Borrower may:<\/p>\n
(a) upon delivery, effective upon receipt, of a properly
\ncompleted Interest Rate Selection Notice to the Administrative Agent at or
\nbefore 10:30 A.M. on any Business Day, Convert all or a part of Eurodollar Rate
\nLoans to Base Rate Loans on the last day of the Interest Period for such
\nEurodollar Rate Loans; and<\/p>\n
(b) provided that no Default or Event of Default shall have
\noccurred and be continuing, upon delivery, effective upon receipt, of a properly
\ncompleted Interest Rate Selection Notice to the Administrative Agent at or
\nbefore 10:30 A.M. three (3)) Business Days prior to the date of such election or
\nConversion:<\/p>\n
(i) subject to Section 2.2(c), elect a subsequent Interest
\n Period for all or a portion of Eurodollar Rate Loans to begin on the
\n last day of the then current Interest Period for such Eurodollar Rate
\n Loans; and<\/p>\n
(ii) Convert Base Rate Loans to Eurodollar Rate Loans on any
\n Business Day.<\/p>\n
Each election and Conversion pursuant to this Section 2.9
\nshall be subject to the limitations on Eurodollar Rate Loans set forth in the
\ndefinition of “Interest Period” herein and in Sections 2.1, 2.2, 2.4 and Article
\nIV. The Administrative Agent shall give written notice to each Lender of such
\nnotice of<\/p>\n
32<\/p>\n
election or Conversion prior to 3:00 P.M. on the day such notice of election or
\nConversion is received. All such Continuations or Conversions of Loans shall be
\neffected pro rata based on the Applicable Commitment Percentages of the Lenders.<\/p>\n
2.10. Unused Fees.<\/p>\n
(a) For the period beginning on the Closing Date and ending on
\nthe Revolving Credit Termination Date, the Borrower agrees to pay to the
\nAdministrative Agent, for the benefit of each Lender, an unused fee equal to the
\nApplicable Unused Fee multiplied by the average daily Unused Amount of such
\nLender. Such fees shall be due in arrears on the last Business Day of each
\nMarch, June, September and December commencing on the last business day of
\nDecember, 2000 to and on the Revolving Credit Termination Date.<\/p>\n
(b) Notwithstanding the foregoing, so long as any Lender fails
\nto make available any portion of its Revolving Credit Commitment when requested,
\nsuch Lender shall not be entitled to receive payment of its pro rata share of
\nsuch fees until such Lender shall make available such portion. All fees payable
\npursuant to this Section 2.10 shall be calculated on an Actual\/360 Basis.<\/p>\n
2.11. Deficiency Advances. No Lender shall be responsible for
\nany default of any other Lender in respect of such other Lender’s obligation to
\nmake any Loan or fund its purchase of any Participation hereunder nor shall the
\nRevolving Credit Commitment of any Lender hereunder be increased as a result of
\nsuch default of any other Lender. Without limiting the generality of the
\nforegoing, in the event any Lender shall fail to advance funds to the Borrower
\nunder the Revolving Credit Facility as herein provided, the Administrative Agent
\nmay in its discretion, but shall not be obligated to, advance under the
\nRevolving Credit Commitment of the Administrative Agent, as a Lender, all or any
\nportion of such amount or amounts (each, a “deficiency advance”) and shall
\nthereafter be entitled to payments of principal of and interest on such
\ndeficiency advance in the same manner and at the same interest rate or rates to
\nwhich such other Lender would have been entitled had it made such advance under
\nits Revolving Credit Commitment; provided that, upon payment to the
\nAdministrative Agent from such other Lender of the entire outstanding amount of
\neach such deficiency advance, together with accrued and unpaid interest thereon,
\nfrom the most recent date or dates interest was paid to the Administrative Agent
\nby the Borrower on each Loan comprising such deficiency advance at the Federal
\nFunds Rate, then such payment shall be credited against the Revolving Credit
\nCommitment of the Administrative Agent in full payment of such deficiency
\nadvance and the Borrower shall be deemed to have borrowed the amount of such
\ndeficiency advance from such other Lender as of the most recent date or dates,
\nas the case may be, upon which any payments of interest were made by the
\nBorrower thereon.<\/p>\n
2.12. Use of Proceeds. The proceeds of the Loans made pursuant
\nto this Agreement shall be used by the Borrower to repay existing indebtedness
\nand for general corporate purposes, including working capital needs, capital
\nexpenditures and permitted Acquisitions.<\/p>\n
2.13. Increase and Decrease in Amounts. The amount of the
\nTotal Revolving Credit Commitment which shall be available to the Borrower as
\nAdvances shall be reduced by the aggregate amount of Letter of Credit
\nOutstandings.<\/p>\n
33<\/p>\n
ARTICLE III<\/p>\n
Letters of Credit<\/p>\n
3.1. Letters of Credit. The Issuing Bank agrees, subject to
\nthe terms and conditions of this Agreement, upon request of the Borrower to
\nissue from time to time for the account of the Borrower Letters of Credit, upon
\ndelivery to the Issuing Bank of an Application and Agreement for Letter of
\nCredit relating thereto in form and content acceptable to the Issuing Bank;
\nprovided, that (i) the Letter of Credit Outstandings shall not exceed the Total
\nLetter of Credit Commitment, (ii) no Letter of Credit shall be issued if the
\napplicable conditions set forth in Article V shall not have been satisfied, and
\n(iii) no Letter of Credit shall be issued if, after giving effect thereto,
\nLetter of Credit Outstandings plus the aggregate principal amount of Revolving
\nCredit Outstandings shall exceed the Total Revolving Credit Commitment. No
\nLetter of Credit shall have an expiry date (including all rights of the Borrower
\nor any beneficiary named in such Letter of Credit to require renewal) or payment
\ndate occurring later than the fifth Business Day prior to the Revolving Credit
\nTermination Date. All Letters of Credit shall be denominated in Dollars.<\/p>\n
3.2. Reimbursement. (a) The Borrower hereby unconditionally
\nagrees to pay to the Issuing Bank immediately on demand at the Principal Office
\nall amounts required to pay all drafts drawn or purporting to be drawn under the
\nLetters of Credit and all reasonable expenses incurred by the Issuing Bank in
\nconnection with the Letters of Credit, and in any event and without demand to
\nplace in possession of the Issuing Bank (which shall include Advances under the
\nRevolving Credit Facility if permitted by Section 2.1(c)) sufficient funds to
\npay all debts and liabilities arising in respect of any Letter of Credit. The
\nIssuing Bank agrees to give the Borrower prompt notice of any request for a draw
\nunder a Letter of Credit. The Issuing Bank may charge any account the Borrower
\nmay have with it for any and all amounts the Issuing Bank pays under a Letter of
\nCredit, plus charges and reasonable expenses as from time to time agreed to by
\nthe Issuing Bank and the Borrower; provided that to the extent permitted by
\nSection 2.1(c)(iv), amounts shall be paid pursuant to Advances under the
\nRevolving Credit Facility. The Borrower agrees to pay the Issuing Bank interest
\non any Reimbursement Obligations not paid when due hereunder at the Default
\nRate.<\/p>\n
(b) In accordance with the provisions of Section 2.1(c), the
\nIssuing Bank shall notify the Administrative Agent of any drawing under any
\nLetter of Credit promptly following the receipt by the Issuing Bank of such
\ndrawing.<\/p>\n
(c) (i) Each Lender (other than the Issuing Bank) shall
\nautomatically acquire on the date of issuance thereof a Participation in the
\nliability of the Issuing Bank in respect of each Letter of Credit in an amount
\nequal to such Lender’s Applicable Commitment Percentage of such liability, and
\nto the extent that the Borrower is obligated to pay the Issuing Bank under
\nSection 3.2(a), each Lender (other than the Issuing Bank) thereby shall
\nabsolutely, unconditionally and irrevocably assume, and shall be unconditionally
\nobligated to pay to the Issuing Bank as hereinafter described, its Applicable
\nCommitment Percentage of the liability of the Issuing Bank under such Letter of
\nCredit.<\/p>\n
34<\/p>\n
(ii) Each Lender (including the Issuing Bank in its capacity
\nas a Lender) shall, subject to the terms and conditions of Article II, pay to
\nthe Administrative Agent for the account of the Issuing Bank at the Principal
\nOffice in Dollars and in immediately available funds, an amount equal to its
\nApplicable Commitment Percentage of any drawing under a Letter of Credit, such
\nfunds to be provided in the manner described in Section 2.1(c)(iv) plus interest
\nat the Federal Funds Rate for the period from and including the date the drawing
\nunder a Letter of Credit is made to the date of such payment.<\/p>\n
(iii) Simultaneously with the making of each payment by a
\nLender to the Issuing Bank pursuant to Section 2.1(c)(iv)(B), such Lender shall,
\nautomatically and without any further action on the part of the Issuing Bank or
\nsuch Lender, acquire a Participation in an amount equal to such payment
\n(excluding the portion thereof constituting interest accrued prior to the date
\nsuch Lender made its payment) in the related Reimbursement Obligation of the
\nBorrower. The Reimbursement Obligations of the Borrower shall be immediately due
\nand payable whether by Advances made in accordance with Section 2.1(c)(iv) or
\notherwise.<\/p>\n
(iv) Each Lender’s obligation to make payment to the
\nAdministrative Agent for the account of the Issuing Bank pursuant to Section
\n2.1(c)(iv) and this Section 3.2(c), and the right of the Issuing Bank to receive
\nthe same, shall be absolute and unconditional, shall not be affected by any
\ncircumstance whatsoever and shall be made without any offset, abatement,
\nwithholding or reduction whatsoever. If any Lender is obligated to pay but does
\nnot pay amounts to the Administrative Agent for the account of the Issuing Bank
\nin full upon such request as required by Section 2.1(c)(iv) or this Section
\n3.2(c), such Lender shall, on demand, pay to the Administrative Agent for the
\naccount of the Issuing Bank interest on the unpaid amount for each day during
\nthe period commencing on the date of notice given to such Lender pursuant to
\nSection 2.1(c) until such Lender pays such amount to the Administrative Agent
\nfor the account of the Issuing Bank in full at the Federal Funds Rate.<\/p>\n
(v) In the event the Lenders have purchased Participations in
\nany Reimbursement Obligation as set forth in clause (ii) above, then at any time
\npayment (in fully collected, immediately available funds) of such Reimbursement
\nObligation, in whole or in part, is received by the Issuing Bank from the
\nBorrower, the Issuing Bank shall promptly pay to each Lender an amount equal to
\nits Applicable Commitment Percentage of such payment from the Borrower.<\/p>\n
(d) Promptly following the end of each calendar quarter, the
\nIssuing Bank shall deliver to the Administrative Agent and the Administrative
\nAgent shall deliver to each Lender a notice describing the aggregate undrawn
\namount of all Letters of Credit at the end of such quarter. The Administrative
\nAgent shall promptly notify each Lender of the issuance of a Letter of Credit.<\/p>\n
(e) The issuance by the Issuing Bank of each Letter of Credit
\nshall, in addition to the conditions precedent set forth in Article V, be
\nsubject to the conditions that such Letter of Credit be in such form and contain
\nsuch terms as shall be reasonably satisfactory to the Issuing Bank consistent
\nwith the then current practices and procedures of the Issuing Bank with respect
\nto similar letters of credit, and the Borrower shall have executed and delivered
\nsuch other instruments and agreements relating to such Letters of Credit as the
\nIssuing Bank shall have <\/p>\n
35<\/p>\n
reasonably requested consistent with such practices and procedures and shall not
\nbe in conflict with any of the express terms herein contained.<\/p>\n
(f) The Borrower agrees that the Issuing Bank may, in its sole
\ndiscretion, accept or pay, as complying with the terms of any Letter of Credit,
\nany drafts or other documents otherwise in order which may be signed or issued
\nby an administrator, executor, trustee in bankruptcy, debtor in possession,
\nassignee for the benefit of creditors, liquidator, receiver, attorney in fact or
\nother legal representative of a party who is authorized under such Letter of
\nCredit to draw or issue any drafts or other documents.<\/p>\n
(g) Without limiting the generality of the provisions of
\nSection 11.12, the Borrower hereby agrees to indemnify and hold harmless the
\nIssuing Bank, each other Lender and the Administrative Agent from and against
\nany and all claims and damages, losses, liabilities, reasonable costs and
\nexpenses which the Issuing Bank, such other Lender or the Administrative Agent
\nmay incur (or which may be claimed against the Issuing Bank, such other Lender
\nor the Administrative Agent) by any Person by reason of or in connection with
\nthe issuance or transfer of or payment or failure to pay under any Letter of
\nCredit; provided that the Borrower shall not be required to indemnify the
\nIssuing Bank, any other Lender or the Administrative Agent for any claims,
\ndamages, losses, liabilities, costs or expenses to the extent, but only to the
\nextent, (i) determined by a final judgment of a court of competent jurisdiction
\nto have been incurred by reason of the gross negligence or willful misconduct of
\nsuch Person to be indemnified or (ii) in the case of the Issuing Bank, caused by
\nthe failure of the Issuing Bank to pay under any Letter of Credit after the
\npresentation to it of a request for payment strictly complying with the terms
\nand conditions of such Letter of Credit, unless such payment is prohibited by
\nany law, regulation, court order or decree. The indemnification and hold
\nharmless provisions of this Section 3.2(g) shall survive repayment of the
\nObligations, occurrence of the Revolving Credit Termination Date or the Facility
\nExtension Loan Termination Date, as the case may be, and expiration or
\ntermination of this Agreement.<\/p>\n
(h) Without limiting the Borrower’s rights as set forth in
\nSection 3.2(g), the obligation of the Borrower to immediately reimburse the
\nIssuing Bank for drawings made under Letters of Credit and to repay Loans made
\nunder Section 2.1(c) and the Issuing Bank’s and each Lender’s right to receive
\nsuch payment shall be absolute, unconditional and irrevocable, and such
\nobligations of the Borrower shall be performed strictly in accordance with the
\nterms of this Agreement and such Letters of Credit and the related Applications
\nand Agreement for any Letter of Credit, under all circumstances whatsoever,
\nincluding the following circumstances:<\/p>\n
(i) any lack of validity or enforceability of any Letter of
\n Credit, the obligation supported by any Letter of Credit or any other
\n agreement or instrument relating thereto (collectively, the “Related LC
\n Documents”);<\/p>\n
(ii) any amendment or waiver of or any consent to or departure
\n from all or any of the Related LC Documents;<\/p>\n
(iii) the existence of any claim, setoff, defense (other than
\n the defense of payment in accordance with the terms of this Agreement)
\n or other rights which the Borrower may have at any time against any
\n beneficiary or any transferee of a Letter of Credit (or any <\/p>\n
36<\/p>\n
persons or entities for whom any such beneficiary or any such
\n transferee may be acting), the Administrative Agent, the Lenders or any
\n other Person, whether in connection with the Loan Documents, the
\n Related LC Documents or any unrelated transaction;<\/p>\n
(iv) any breach of contract or other dispute between the
\n Borrower and any beneficiary or any transferee of a Letter of Credit
\n (or any persons or entities for whom such beneficiary or any such
\n transferee may be acting), the Administrative Agent, the Lenders or any
\n other Person;<\/p>\n
(v) any draft, statement or any other document presented under
\n any Letter of Credit proving to be forged, fraudulent, invalid or
\n insufficient in any respect or any statement therein being untrue or
\n inaccurate in any respect whatsoever;<\/p>\n
(vi) any delay, extension of time, renewal, compromise or
\n other indulgence or modification granted or agreed to by the
\n Administrative Agent or the requisite number of Lenders, with or
\n without notice to or approval by the Borrower in respect of any of
\n Borrower’s Obligations under this Agreement; or<\/p>\n
(vii) any other circumstance or happening whatsoever, whether
\n or not similar to any of the foregoing;<\/p>\n
provided, however, that nothing in this Section 3.2(h) shall give the Issuing
\nBank any right to reimbursement for drawings made under a Letter of Credit
\notherwise than pursuant to a request for payment strictly complying with the
\nterms and conditions of such Letter of Credit unless the Borrower has
\nspecifically waived such strict compliance in writing.<\/p>\n
3.3. Letter of Credit Facility Fees. (a) The Borrower shall
\npay to the Administrative Agent, for the pro rata benefit of the Lenders based
\non their Applicable Commitment Percentages, a fee on the aggregate amount
\navailable to be drawn on each outstanding Letter of Credit at a rate equal to
\nthe Applicable Margin for Eurodollar Rate Loans as set forth in the definition
\nof “Applicable Margin”. In addition, the Borrower agrees to pay to the
\nAdministrative Agent for the benefit of the Issuing Bank an issuance fee equal
\nto one-eighth of one percent (1\/8%) per annum times the amount of outstanding
\nLetters of Credit. Such fees shall be due with respect to each Letter of Credit
\nquarterly in arrears on the last Business Day of each March, June, September and
\nDecember, the first such payment to be made on the last business day of
\nDecember, 2000. The fees described in this Section 3.3 shall be calculated on an
\nActual\/360 Basis.<\/p>\n
(b) The Borrower acknowledges that the Issuing Bank as issuer
\nof each Letter of Credit will be required by applicable rules and regulations of
\nthe Board to maintain reserves for its liability to honor draws made pursuant to
\na Letter of Credit notwithstanding the obligation of the Lenders for a
\nParticipation in such liability. The Borrower agrees to promptly reimburse the
\nIssuing Bank for all additional costs which it may hereafter incur solely by
\nreason of its acting as issuer of the Letters of Credit and its being required
\nto reserve for such liability, it being understood by the Borrower that other
\ninterest and fees payable under this Agreement do not include compensation of
\nthe Issuing Bank for such reserves. The Issuing Bank shall furnish to the
\nBorrower at the time of its demand for payment of such additional costs, the
\ncomputation<\/p>\n
37<\/p>\n
of such additional cost which shall be conclusive absent manifest error,
\nprovided that such computations are made on a reasonable basis.<\/p>\n
3.4. Administrative Fees. The Borrower shall pay to the
\nIssuing Bank such administrative fee and other fees, if any, in connection with
\nthe Letters of Credit in such amounts and at such times as the Issuing Bank and
\nthe Borrower shall agree from time to time.<\/p>\n
3.5. Applications. To the extent that any provision of any
\nApplication and Agreement for Letters of Credit is inconsistent with the
\nprovisions of this Article III, the provisions of this Article III shall apply.<\/p>\n
ARTICLE IV<\/p>\n
Change in Circumstances<\/p>\n
4.1. Increased Cost and Reduced Return. (a) If, after the date
\nhereof, the adoption of any applicable law, rule, or regulation, or any change
\nin any applicable law, rule, or regulation, or any change in the interpretation
\nor administration thereof by any governmental authority, central bank, or
\ncomparable agency charged with the interpretation or administration thereof, or
\ncompliance by any Lender (or its Applicable Lending Office) with any request or
\ndirective (whether or not having the force of law) of any such governmental
\nauthority, central bank, or comparable agency:<\/p>\n
(i) shall subject such Lender (or its Applicable Lending
\n Office) to any tax, duty, or other charge with respect to any
\n Eurodollar Rate Loans, or its obligation to make Eurodollar Rate Loans,
\n or change the basis of taxation of any amounts payable to such Lender
\n (or its Applicable Lending Office) under this Agreement in respect of
\n any Eurodollar Rate Loans (other than taxes imposed on the overall net
\n income of such Lender by the jurisdiction in which such Lender has its
\n principal office or such Applicable Lending Office);<\/p>\n
(ii) shall impose, modify, or deem applicable any reserve,
\n special deposit, assessment, or similar requirement (other than the
\n Reserve Requirement utilized in the determination of the Eurodollar
\n Rate) relating to any extensions of credit or other assets of, or any
\n deposits with or other liabilities or commitments of, such Lender (or
\n its Applicable Lending Office), including the Revolving Credit
\n Commitment of such Lender hereunder; or<\/p>\n
(iii) shall impose on such Lender (or its Applicable Lending
\n Office) or on the London interbank market any other condition affecting
\n this Agreement or any extensions of credit or liabilities or
\n commitments hereunder;<\/p>\n
and the result of any of the foregoing is to increase the cost to such Lender
\n(or its Applicable Lending Office) of making, Converting into, Continuing, or
\nmaintaining any Eurodollar Rate Loans or to reduce any sum received or
\nreceivable by such Lender (or its Applicable Lending Office) under this
\nAgreement with respect to any Eurodollar Rate Loans, then the Borrower shall<\/p>\n
38<\/p>\n
pay to such Lender on demand such amount or amounts as will compensate such
\nLender for such increased cost or reduction; provided that no Lender will be
\nentitled to any compensation for any such increased cost or reduction if demand
\nfor payment thereof is made by such Lender more than 180 days after the
\noccurrence of the circumstances giving rise to such claim. If any Lender
\nrequests compensation by the Borrower under this Section 4.1(a), the Borrower
\nmay, by notice to such Lender (with a copy to the Administrative Agent), suspend
\nthe obligation of such Lender to make or Continue Loans of the Type with respect
\nto which such compensation is requested, or to Convert Loans of any other Type
\ninto Loans of such Type, until the event or condition giving rise to such
\nrequest ceases to be in effect (in which case the provisions of Section 4.4
\nshall be applicable); provided that such suspension shall not affect the right
\nof such Lender to receive the compensation so requested.<\/p>\n
If, after the date hereof, any Lender shall have determined
\n that the adoption of any applicable law, rule, or regulation regarding
\n capital adequacy or any change therein or in the interpretation or
\n administration thereof by any governmental authority, central bank, or
\n comparable agency charged with the interpretation or administration
\n thereof, or any request or directive regarding capital adequacy
\n (whether or not having the force of law) of any such governmental
\n authority, central bank, or comparable agency, has or would have the
\n effect of reducing the rate of return on the capital of such Lender or
\n any corporation controlling such Lender as a consequence of such
\n Lender’s obligations hereunder to a level below that which such Lender
\n or such corporation could have achieved but for such adoption, change,
\n request, or directive (taking into consideration its policies with
\n respect to capital adequacy), then from time to time upon demand the
\n Borrower shall pay to such Lender such additional amount or amounts as
\n will compensate such Lender for such reduction.<\/p>\n
(b) Each Lender shall promptly notify the Borrower and the
\nAdministrative Agent of any event of which it has knowledge, occurring after the
\ndate hereof, which will entitle such Lender to compensation pursuant to this
\nSection and will designate a different Applicable Lending Office if such
\ndesignation will avoid the need for, or reduce the amount of, such compensation
\nand will not, in the reasonable judgment of such Lender, be otherwise
\ndisadvantageous to it. Any Lender claiming compensation under this Section shall
\nfurnish to the Borrower and the Administrative Agent a statement setting forth
\nthe additional amount or amounts to be paid to it hereunder which shall be
\nconclusive in the absence of manifest error. In determining such amount, such
\nLender may use any reasonable averaging and attribution methods that such Lender
\nuses for its customers that are similarly situated to the Borrower.<\/p>\n
4.2. Limitation on Types of Loans. If on or prior to the first
\nday of any Interest Period for any Eurodollar Rate Loan:<\/p>\n
(a) the Administrative Agent reasonably determines (which
\n determination shall be conclusive) that by reason of circumstances
\n affecting the relevant market, adequate and reasonable means do not
\n exist for ascertaining the Eurodollar Rate for such Interest Period; or<\/p>\n
(b) the Required Lenders reasonably determine (which
\n determination shall be conclusive) and notify the Administrative Agent
\n that the Eurodollar Rate will not <\/p>\n
39<\/p>\n
adequately and fairly reflect the cost to the Lenders of funding
\n Eurodollar Rate Loans for such Interest Period;<\/p>\n
then the Administrative Agent shall give the Borrower prompt notice thereof
\nspecifying the relevant Type of Loans and the relevant amounts or periods, and
\nso long as such condition remains in effect, the Lenders shall be under no
\nobligation to make additional Loans of such Type, Continue Loans of such Type,
\nor to Convert Loans of any other Type into Loans of such Type and the Borrower
\nshall, on the last day(s) of the then current Interest Period(s) for the
\noutstanding Loans of the affected Type, either prepay such Loans or Convert such
\nLoans into another Type of Loan in accordance with the terms of this Agreement.<\/p>\n
4.3. Illegality. Notwithstanding any other provision of this
\nAgreement, in the event that it becomes unlawful for any Lender or its
\nApplicable Lending Office to make, maintain, or fund Eurodollar Rate Loans
\nhereunder, then such Lender shall promptly notify the Borrower thereof and such
\nLender’s obligation to make or Continue Eurodollar Rate Loans and to Convert
\nother Types of Loans into Eurodollar Rate Loans shall be suspended until such
\ntime as such Lender may again make, maintain, and fund Eurodollar Rate Loans (in
\nwhich case the provisions of Section 4.4 shall be applicable).<\/p>\n
4.4. Treatment of Affected Loans. If the obligation of any
\nLender to make a Eurodollar Rate Loan or to Continue, or to Convert Loans of any
\nother Type into, Loans of a particular Type shall be suspended pursuant to
\nSection 4.1 or 4.3 hereof (Loans of such Type being herein called “Affected
\nLoans” and such Type being herein called the “Affected Type”), such Lender’s
\nAffected Loans shall be automatically Converted into Base Rate Loans on the last
\nday(s) of the then current Interest Period(s) for Affected Loans (or, in the
\ncase of a Conversion required by Section 4.3 hereof, on such earlier date as
\nsuch Lender may specify to the Borrower with a copy to the Administrative Agent)
\nand, unless and until such Lender gives notice as provided below that the
\ncircumstances specified in Section 4.1 or 4.3 hereof that gave rise to such
\nConversion no longer exist:<\/p>\n
(a) to the extent that such Lender’s Affected Loans have been
\n so Converted, all payments and prepayments of principal that would
\n otherwise be applied to such Lender’s Affected Loans shall be applied
\n instead to its Base Rate Loans; and<\/p>\n
(b) all Loans that would otherwise be made or Continued by
\n such Lender as Loans of the Affected Type shall be made or Continued
\n instead as Base Rate Loans, and all Loans of such Lender that would
\n otherwise be Converted into Loans of the Affected Type shall be
\n Converted instead into (or shall remain as) Base Rate Loans.<\/p>\n
If such Lender gives notice to the Borrower (with a copy to the Administrative
\nAgent) that the circumstances specified in Section 4.1 or 4.3 hereof that gave
\nrise to the Conversion of such Lender’s Affected Loans pursuant to this Section
\n4.4 no longer exist (which such Lender agrees to do promptly upon such
\ncircumstances ceasing to exist) at a time when Loans of the Affected Type made
\nby other Lenders are outstanding, such Lender’s Base Rate Loans shall be
\nautomatically Converted, on the first day(s) of the next succeeding Interest
\nPeriod(s) for such outstanding Loans of the Affected Type, to the extent
\nnecessary so that, after giving effect thereto, all Loans held by the Lenders
\nholding Loans of the Affected Type and by such Lender<\/p>\n
40<\/p>\n
are held pro rata (as to principal amounts, Types, and Interest Periods) in
\naccordance with their respective Revolving Credit Commitments.<\/p>\n
4.5. Compensation. Upon the request of any Lender, the
\nBorrower shall pay to such Lender such amount or amounts as shall be sufficient
\n(in the reasonable opinion of such Lender) to compensate it for any loss, cost,
\nor expense (including loss of anticipated profits) incurred by it as a result
\nof:<\/p>\n
(a) any payment, prepayment, or Conversion of a Eurodollar
\n Rate Loan for any reason (including, without limitation, the
\n acceleration of the Loans pursuant to Section 9.1) on a date other than
\n the last day of the Interest Period for such Loan; or<\/p>\n
(b) any failure by the Borrower for any reason (including,
\n without limitation, the failure of any condition precedent specified in
\n Article V to be satisfied) to borrow, Convert, Continue, or prepay a
\n Eurodollar Rate Loan on the date for such borrowing, Conversion,
\n Continuation, or prepayment specified in the relevant notice of
\n borrowing, prepayment, Continuation, or Conversion under this
\n Agreement.<\/p>\n
4.6. Taxes. (a) Any and all payments by the Borrower to or for
\nthe account of any Lender or the Administrative Agent hereunder or under any
\nother Loan Document shall be made free and clear of and without deduction for
\nany and all present or future taxes, duties, levies, imposts, deductions,
\ncharges or withholdings, and all liabilities with respect thereto, excluding, in
\nthe case of each Lender and the Administrative Agent, taxes imposed on its
\nincome, and franchise taxes imposed on it, by the jurisdiction under the laws of
\nwhich such Lender (or its Applicable Lending Office) or the Administrative Agent
\n(as the case may be) is organized or any political subdivision thereof (all such
\nnon-excluded taxes, duties, levies, imposts, deductions, charges, withholdings,
\nand liabilities being hereinafter referred to as “Taxes”). If the Borrower shall
\nbe required by law to deduct any Taxes from or in respect of any sum payable
\nunder this Agreement or any other Loan Document to any Lender or the
\nAdministrative Agent, (i) the sum payable shall be increased as necessary so
\nthat after making all required deductions (including deductions applicable to
\nadditional sums payable under this Section 4.6) such Lender or the
\nAdministrative Agent receives an amount equal to the sum it would have received
\nhad no such deductions been made, (ii) the Borrower shall make such deductions,
\n(iii) the Borrower shall pay the full amount deducted to the relevant taxation
\nauthority or other authority in accordance with applicable law, and (iv) the
\nBorrower shall furnish to the Administrative Agent, at its address referred to
\nin Section 11.2, the original or a certified copy of a receipt evidencing
\npayment thereof.<\/p>\n
(b) In addition, the Borrower agrees to pay any and all
\npresent or future stamp or documentary taxes and any other excise or property
\ntaxes or charges or similar levies which arise from any payment made under this
\nAgreement or any other Loan Document or from the execution or delivery of, or
\notherwise with respect to, this Agreement or any other Loan Document
\n(hereinafter referred to as “Other Taxes”).<\/p>\n
(c) The Borrower agrees to indemnify each Lender and the
\nAdministrative Agent for the full amount of Taxes and Other Taxes (including,
\nwithout limitation, any Taxes or Other Taxes imposed or asserted by any
\njurisdiction on amounts payable under this Section 4.6)<\/p>\n
41<\/p>\n
paid by such Lender or the Administrative Agent (as the case may be) and any
\nliability (including penalties, interest, and expenses) arising therefrom or
\nwith respect thereto.<\/p>\n
(d) Each Lender organized under the laws of a jurisdiction
\noutside the United States, on or prior to the date of its execution and delivery
\nof this Agreement in the case of each Lender listed on the signature pages
\nhereof and on or prior to the date on which it becomes a Lender in the case of
\neach other Lender, and from time to time thereafter if requested in writing by
\nthe Borrower or the Administrative Agent (but only so long as such Lender
\nremains lawfully able to do so), shall provide the Borrower and the
\nAdministrative Agent with two copies of (i) Internal Revenue Service Form W-8BEN
\nor W-8-ECI, as appropriate, or any successor form prescribed by the Internal
\nRevenue Service, certifying that such Lender is entitled to benefits under an
\nincome tax treaty to which the United States is a party which reduces the rate
\nof withholding tax on payments of interest or certifying that the income
\nreceivable pursuant to this Agreement is effectively connected with the conduct
\nof a trade or business in the United States and (ii) any other form or
\ncertificate required by any taxing authority (including any certificate required
\nby Sections 871(h) and 881(c) of the Internal Revenue Code), certifying that
\nsuch Lender is entitled to an exemption from or a reduced rate of tax on
\npayments pursuant to this Agreement or any of the other Loan Documents.
\nContemporaneously with the delivery of the appropriate Internal Revenue Service
\nform, each Lender which is not a “bank” within the meaning of Section
\n881(c)(5)(A) of the Code and intends to claim the “portfolio interest” exemption
\ndescribed above shall provide the Borrower and the Administrative Agent (but
\nonly so long as such Lender remains lawfully able to do so) a certificate
\nrepresenting that such Lender is not a bank for purposes of Section 881(c) of
\nthe Code, is not a 10-percent shareholder (within the meaning of Section
\n871(h)(3)(B) of the Code) of the Borrower and is not a controlled foreign
\ncorporation related to the Borrower (within the meaning of Section 864(d)(4) of
\nthe Code).<\/p>\n
(e) For any period with respect to which a Lender has failed
\nto provide the Borrower and the Administrative Agent with the appropriate form
\npursuant to Section 4.6(d) (unless such failure is due to a change in treaty,
\nlaw, or regulation occurring subsequent to the date on which a form originally
\nwas required to be provided), such Lender shall not be entitled to
\nindemnification under Section 4.6(a), 4.6(b), or 4.6(c) with respect to Taxes
\nimposed by the United States; provided, however, that should a Lender, which is
\notherwise exempt from or subject to a reduced rate of withholding tax, become
\nsubject to Taxes because of its failure to deliver a form required hereunder,
\nthe Borrower shall take such steps as such Lender shall reasonably request to
\nassist such Lender to recover such Taxes.<\/p>\n
(f) If the Borrower is required to pay additional amounts to
\nor for the account of any Lender pursuant to this Section 4.6, then such Lender
\nwill agree to use reasonable efforts to change the jurisdiction of its
\nApplicable Lending Office so as to eliminate or reduce any such additional
\npayment which may thereafter accrue if such change, in the judgment of such
\nLender, is not otherwise disadvantageous to such Lender.<\/p>\n
(g) Within thirty (30) days after the date of any payment of
\nTaxes, the Borrower shall furnish to the Administrative Agent the original or a
\ncertified copy of a receipt evidencing such payment.<\/p>\n
42<\/p>\n
(h) Without prejudice to the survival of any other agreement
\nof the Borrower hereunder, the agreements and obligations of the Borrower
\ncontained in this Section 4.6 shall survive the termination of the Revolving
\nCredit Termination Date, the Facility Extension Loan Termination Date, if
\napplicable, and the repayment of the Loans.<\/p>\n
ARTICLE V<\/p>\n
Conditions to Making Loans and Issuing Letters of Credit<\/p>\n
5.1. Conditions of Initial Advance. The occurrence of the
\nClosing Date, and the obligation of the Lenders to make the initial Revolving
\nCredit Loans on the Closing Date, shall be conditioned upon the satisfaction of
\nthe following conditions precedent in the sole judgment of the Administrative
\nAgent:<\/p>\n
(a) the Administrative Agent shall have received on the
\nClosing Date, in form and substance satisfactory to the Administrative Agent,
\nthe following:<\/p>\n
(i) executed originals of each of this Agreement, the LC
\n Account Agreement and the other Loan Documents, together with all
\n schedules and exhibits thereto;<\/p>\n
(ii) the favorable written opinion or opinions with respect to
\n the Loan Documents and the transactions contemplated thereby of counsel
\n to the Borrower dated the Closing Date, addressed to the Administrative
\n Agent and the Lenders and satisfactory to Simpson Thacher & Bartlett,
\n special counsel to the Administrative Agent, substantially in the form
\n of Exhibit H;<\/p>\n
(iii) resolutions of the board of directors of the Borrower
\n certified by its secretary or assistant secretary as of the Closing
\n Date, approving and adopting the Loan Documents to be executed by the
\n Borrower, and authorizing the execution and delivery and performance
\n thereof;<\/p>\n
(iv) specimen signatures of officers of the Borrower executing
\n the Loan Documents on behalf of the Borrower, certified by the
\n secretary or assistant secretary of the Borrower;<\/p>\n
(v) the charter documents of the Borrower certified as of a
\n recent date by the Secretary of State of its state of organization;<\/p>\n
(vi) the bylaws of the Borrower certified as of the Closing
\n Date as true and correct by its secretary or assistant secretary;<\/p>\n
(vii) certificates issued as of a recent date by the Secretary
\n of State of the jurisdiction of formation of the Borrower as to the
\n valid existence and good standing of the Borrower;<\/p>\n
(viii) notice of appointment of the initial Authorized
\n Representative(s);<\/p>\n
43<\/p>\n
(ix) evidence of all insurance required by the Loan Documents;<\/p>\n
(x) a certificate substantially in the form of Exhibit I
\n completed as of June 30, 2000;<\/p>\n
(xi) evidence that all fees, costs and expenses payable by the
\n Borrower on the Closing Date to the Administrative Agent and the
\n Lenders have been paid in full;<\/p>\n
(xii) such other documents, instruments, certificates and
\n opinions as the Administrative Agent or any Lender may reasonably
\n request on or prior to the Closing Date in connection with the
\n consummation of the transactions contemplated hereby.<\/p>\n
(b) In the good faith judgment of the Administrative Agent and
\nthe Lenders:<\/p>\n
(i) there shall not have occurred or become known to the
\n Administrative Agent or the Lenders any event, condition, situation or
\n status since December 31, 1999 that has had or could reasonably be
\n expected to result in a Material Adverse Effect;<\/p>\n
(ii) no litigation, action, suit, investigation or other
\n arbitral, administrative or judicial proceeding shall be pending or
\n threatened which could reasonably be expected to result in a Material
\n Adverse Effect; and<\/p>\n
(iii) the Borrower and its Consolidated Entities shall have
\n received all approvals, consents and waivers, and shall have made or
\n given all necessary filings and notices, as shall be required to
\n consummate the transactions contemplated hereby without the occurrence
\n of any default under, conflict with or violation of (A) any applicable
\n law, rule, regulation, order or decree of any Governmental Authority or
\n arbitral authority or (B) any agreement, document or instrument to
\n which any of the Borrower or any Consolidated Entity is a party or by
\n which any of them or their properties is bound, except for such
\n approvals, consents, waivers, filings and notices the receipt, making
\n or giving of which will not have a Material Adverse Effect.<\/p>\n
(c) The following refinancing (the “Refinancing”) shall have
\noccurred or shall occur simultaneously with the occurrence of the Closing Date:<\/p>\n
(i) The Borrower shall have issued and sold not less than
\n $350,000,000 of senior subordinated notes having terms and conditions
\n acceptable to the Administrative Agent (the “New Senior Subordinated
\n Notes”);<\/p>\n
(ii) The Closing Date under (and as defined in) the
\n Headquarters Participation Agreement shall have occurred, and the
\n refinancing of the notes and equity issued by HEALTHSOUTH Corporation
\n Trust 1995-1 shall have occurred;<\/p>\n
(iii) The Closing Date under (and as defined in) the Hospitals
\n Participation Agreement shall have occurred, and the refinancing of the
\n notes and equity issued by HEALTHSOUTH Corporation Trust 2000-1 shall
\n have occurred;<\/p>\n
44<\/p>\n
(iv) All amounts outstanding under the Borrower’s Short Term
\n Credit Agreement, dated as of December 15, 1999 shall have been repaid
\n in full, and all commitments to extend credit thereunder shall have
\n been terminated.<\/p>\n
(d) The Borrower shall have made available to the Lenders the
\npro forma consolidated balance sheets of the Borrower as of December 31, 1999
\nand June 30, 2000.<\/p>\n
(e) No litigation by any entity (private or governmental)
\nshall be pending or threatened with respect to any of the transactions
\ncontemplated hereby or any other documentation executed in connection herewith
\nor therewith or the transactions contemplated hereby (including, without
\nlimitation, the Refinancing).<\/p>\n
5.2. Conditions of Loans and Letters of Credit. The
\nobligations of the Lenders to make any Loans including, without limitation, the
\nconversion of any Revolving Credit Loans to Facility Extension Loans, and the
\nIssuing Bank to issue Letters of Credit, hereunder on or subsequent to the
\nClosing Date, are subject to the satisfaction of the following conditions:<\/p>\n
(a) the Administrative Agent shall have received a Borrowing
\n Notice or Facility Extension Notice, as applicable, if required by
\n Article II;<\/p>\n
(b) the representations and warranties of the Borrower and the
\n Subsidiaries set forth in Article VI and in each of the other Loan
\n Documents shall be true and correct in all material respects on and as
\n of the date of such Advance, Letter of Credit issuance or renewal or
\n Facility Extension Loan, with the same effect as though such
\n representations and warranties had been made on and as of such date,
\n except to the extent that such representations and warranties expressly
\n relate to an earlier date and except that the financial statements
\n referred to in Section 6.6(a) shall be deemed to be those financial
\n statements most recently delivered to the Administrative Agent and the
\n Lenders pursuant to Section 7.1 from the date financial statements are
\n delivered to the Administrative Agent and the Lenders in accordance
\n with such Section;<\/p>\n
(c) in the case of the issuance of a Letter of Credit, the
\n Borrower shall have executed and delivered to the Issuing Bank an
\n Application and Agreement for the Letter of Credit in form and content
\n acceptable to the Issuing Bank together with such other instruments and
\n documents as it shall request;<\/p>\n
(d) at the time of (and after giving effect to) each Advance,
\n conversion to Facility Extension Loan or the issuance of a Letter of
\n Credit, no Default or Event of Default shall have occurred and be
\n continuing; and<\/p>\n
(e) immediately after giving effect to:<\/p>\n
(i) a Loan, the aggregate principal balance of all
\n outstanding Loans for each Lender plus such Lender’s
\n Applicable Commitment Percentage of the aggregate amount of
\n Letter of Credit Outstandings shall not exceed such Lender’s
\n Revolving Credit Commitment;<\/p>\n
45<\/p>\n
(ii) a Letter of Credit or renewal thereof, the
\n aggregate principal balance of all outstanding Participations
\n in Letters of Credit and Reimbursement Obligations (or in the
\n case of the Issuing Bank, its remaining interest after
\n deduction of all Participations in Letters of Credit and
\n Reimbursement Obligations of other Lenders) for each Lender
\n and in the aggregate shall not exceed, respectively, (X) such
\n Lender’s Letter of Credit Commitment or (Y) the Total Letter
\n of Credit Commitment; and<\/p>\n
(iii) a Loan or a Letter of Credit or renewal
\n thereof, the sum of Letter of Credit Outstandings plus the
\n aggregate principal amount of Revolving Credit Outstandings
\n shall not exceed the Total Revolving Credit Commitment.<\/p>\n
Each borrowing of a Revolving Credit Loan or conversion to a Facility
\nExtension Loan hereunder and each issuance of a Letter of Credit hereunder shall
\nconstitute a representation and warranty by the Borrower to the effect that the
\nconditions set forth in clauses (b) and (d) have been satisfied as of the date
\nof such borrowing.<\/p>\n
ARTICLE VI<\/p>\n
Representations and Warranties<\/p>\n
The Borrower represents and warrants with respect to itself
\nand (to the extent expressly set forth below) its Consolidated Entities (which
\nrepresentations and warranties shall survive the delivery of the documents
\nmentioned herein and the making of Loans and the issuance of a Letter of
\nCredit), that:<\/p>\n
6.1. Organization and Authority. (a) The Borrower and each
\nConsolidated Entity is a corporation, partnership or limited liability company
\nduly organized and validly existing under the laws of the jurisdiction of its
\nformation;<\/p>\n
(b) The Borrower and each Consolidated Entity (x) has the
\nrequisite power and authority to own its properties and assets and to carry on
\nits business as now being conducted and as contemplated in the Loan Documents,
\nand (y) is qualified to do business in every jurisdiction in which failure so to
\nqualify would have a Material Adverse Effect;<\/p>\n
(c) The Borrower has the power and authority to execute,
\ndeliver and perform this Agreement, and to borrow and obtain other extensions of
\ncredit hereunder, and to execute, deliver and perform each of the other Loan
\nDocuments to which it is a party; and<\/p>\n
(d) When executed and delivered, each of the Loan Documents to
\nwhich the Borrower is a party will be the legal, valid and binding obligation or
\nagreement, as the case may be, of the Borrower, enforceable against the Borrower
\nin accordance with its terms, subject to the effect of any applicable
\nbankruptcy, moratorium, insolvency, reorganization or other similar law
\naffecting the enforceability of creditors’ rights generally and to the effect of
\ngeneral principles of equity (whether considered in a proceeding at law or in
\nequity).<\/p>\n
46<\/p>\n
6.2. Loan Documents. The execution, delivery and performance
\nby the Borrower of each of the Loan Documents and the credit extensions
\nhereunder:<\/p>\n
(a) have been duly authorized by all requisite corporate
\n actions (including any required shareholder approval) of the Borrower
\n required for the lawful execution, delivery and performance thereof;<\/p>\n
(b) do not violate any provisions of (i) applicable law, rule
\n or regulation, (ii) any judgment, writ, order, determination, decree or
\n arbitral award of any Governmental Authority or arbitral authority
\n binding on the Borrower or any Subsidiary or its or any Subsidiary’s
\n properties, or (iii) the charter documents or bylaws of the Borrower
\n (each instance of (i), (ii) or (iii), a “Requirement of Law”);<\/p>\n
(c) do not and will not conflict with, result in a breach of
\n or constitute an event of default, or an event which, with notice or
\n lapse of time or both, would constitute an event of default, under any
\n contract, indenture, agreement or other instrument or document to which
\n Borrower or any Consolidated Entity is a party, or by which the
\n properties or assets of the Borrower or any Consolidated Entity are
\n bound (each, a “Contractual Obligation”); and<\/p>\n
(d) do not and will not result in the creation or imposition
\n of any Lien upon any of the properties or assets of Borrower or any
\n Subsidiary.<\/p>\n
6.3. Solvency. The Borrower is Solvent and the Borrower and
\nits Consolidated Entities taken as a whole are Solvent, in each case after
\ngiving effect to the transactions contemplated by the Loan Documents.<\/p>\n
6.4. Subsidiaries and Subsidiaries’ Guarantees. The Borrower
\nhas no Subsidiaries other than those Persons listed as Subsidiaries in Schedule
\n6.4 and additional Subsidiaries created or acquired after the Closing Date. As
\nof the Closing Date, no Subsidiary has directly or indirectly guaranteed any
\nIndebtedness of the Borrower.<\/p>\n
6.5. Ownership Interests. The Borrower owns no interest in any
\nPerson other than the Persons listed in Schedule 6.4, equity investments in
\nPersons not constituting Subsidiaries permitted under Section 8.2 and additional
\nSubsidiaries created or acquired after the Closing Date.<\/p>\n
6.6. Financial Condition. (a) The Borrower has heretofore
\nfurnished to the Administrative Agent and each Lender an audited consolidated
\nbalance sheet of the Borrower and its Consolidated Entities as at December 31,
\n1999 and the notes thereto and the related consolidated statements of income,
\nstockholders’ equity and cash flows for the Fiscal Year then ended as examined
\nand certified by Ernst & Young LLP. Except as set forth therein, such financial
\nstatements (including the notes thereto) present fairly the financial condition
\nof the Borrower and its Consolidated Entities as of the end of such Fiscal Year
\nand results of their operations and the changes in its stockholders’ equity for
\nthe Fiscal Year, all in conformity with GAAP applied on a Consistent Basis,
\nsubject however, in the case of unaudited interim statements to year end audit
\nadjustments.<\/p>\n
47<\/p>\n
(b) Since December 31, 1999, there has been no material
\nadverse change in the condition, financial or otherwise, of the Borrower or any
\nof its Consolidated Entities, or in the businesses, properties, performance,
\nprospects or operations of the Borrower or any of its Consolidated Entities nor
\nhave such businesses or properties been materially adversely affected as a
\nresult of any fire, explosion, earthquake, accident, strike, lockout,
\ncombination of workers, flood, embargo or act of God.<\/p>\n
(c) Neither the Borrower nor any Consolidated Entity has any
\nmaterial Indebtedness, Guaranteed Obligations or other obligations or
\nliabilities, direct or contingent, in an aggregate amount in excess of $300,000
\nother than (i) the liabilities reflected in such balance sheet and the notes
\nthereto, (ii) obligations arising under this Agreement, (iii) the New Senior
\nSubordinated Notes and (iv) liabilities incurred in the ordinary course of
\nbusiness.<\/p>\n
(d) The unaudited pro forma balance sheets of Borrower and the
\nConsolidated Entities as at December 31, 1999 and June 30, 2000, (including the
\nnotes thereto (the “Pro Forma Financial Statements”), copies of which have been
\nfurnished to the Administrative Agent, have been prepared giving effect to the
\nfinancings and refinancings contemplated by this Agreement as if such
\ntransactions had occurred on the dates of such pro forma balance sheets. The Pro
\nForma Financial Statements have been prepared based on the best information
\navailable to the Borrower on the date of delivery thereof, and present fairly on
\na pro forma basis the estimated financial position and results of operations of
\nthe Borrower, based upon the assumptions described in the preceding sentence.<\/p>\n
6.7. Title to Properties. The Borrower and each Consolidated
\nEntity has good and marketable title to all its real and personal properties,
\nsubject to no transfer restrictions or Liens of any kind, except for the
\ntransfer restrictions and Liens permitted by this Agreement.<\/p>\n
6.8. Taxes. The Borrower and each Consolidated Entity have
\nfiled or caused to be filed all federal, state and local tax returns which are
\nrequired to be filed by it and, except for taxes and assessments being contested
\nin good faith by appropriate proceedings diligently conducted and against which
\nreserves reflected in the financial statements described in Section 6.6(a) and
\nsatisfactory to the Borrower’s independent certified public accountants have
\nbeen established, have paid or caused to be paid all taxes as shown on said
\nreturns or on any assessment received by it, to the extent that such taxes have
\nbecome due.<\/p>\n
6.9. Other Agreements. Except as disclosed in or incorporated
\nby reference in the 1999 10-K:<\/p>\n
(a) neither the Borrower nor any Consolidated Entity is a
\n party to or subject to any judgment, order, decree, agreement, lease or
\n instrument, or subject to other restrictions, compliance with the terms
\n of which individually or in the aggregate could reasonably be likely to
\n have a Material Adverse Effect;<\/p>\n
(b) neither the Borrower nor any Consolidated Entity is in
\n default in the performance, observance or fulfillment of any of the
\n obligations, covenants or conditions contained in (i) any Medicaid
\n Provider Agreement, Medicare Provider Agreement or other agreement or
\n instrument to which the Borrower or any Consolidated Entity <\/p>\n
48<\/p>\n
is a party, which default has resulted in, or if not remedied within
\n any applicable grace period could result in, the revocation,
\n termination, cancellation or suspension of Medicaid Certification or
\n Medicare Certification of Borrower or any Consolidated Entity which
\n could have a Material Adverse Effect or (ii) any other agreement or
\n instrument to which the Borrower or any Consolidated Entity is a party,
\n which default has, or if not remedied within any applicable grace
\n period could reasonably be likely to have, a Material Adverse Effect;<\/p>\n
(c) to the knowledge of Borrower’s Executive Officers, no
\n Contract Provider is a party to any judgment, order, decree, agreement
\n or instrument, or subject to restrictions, compliance with the terms of
\n which could individually or in the aggregate reasonably be likely to
\n have a Material Adverse Effect; and<\/p>\n
(d) to the knowledge of Borrower’s Executive Officers, no
\n Contract Provider is in default in the performance, observance or
\n fulfillment of any of the obligations, covenants or conditions
\n contained in any Medicaid Provider Agreement, Medicare Provider
\n Agreement or other agreement or instrument to which such Person is a
\n party, which default has resulted in, or if not remedied within any
\n applicable grace period could result in, the revocation, termination,
\n cancellation or suspension of Medicaid Certification or Medicare
\n Certification of such Person, which revocation; termination,
\n cancellation or suspension could reasonably be likely to have a
\n Material Adverse Effect.<\/p>\n
6.10. Litigation. Except as disclosed in or incorporated by
\nreference in the 1999 10-K, there is no action, suit, investigation or
\nproceeding at law or in equity or by or before any governmental instrumentality
\nor agency or arbitral body pending or, to the knowledge of the Borrower,
\nthreatened by or against the Borrower or any Consolidated Entity or, to the
\nknowledge of the Borrower, pending or threatened by or against any Contract
\nProvider, or affecting the Borrower or any Consolidated Entity or, to the
\nknowledge of the Borrower, any Contract Provider or any properties or rights of
\nthe Borrower or any Consolidated Entity or, to the knowledge of the Borrower,
\nany Contract Provider, which could reasonably be likely (i) to result in the
\nrevocation, termination, cancellation or suspension of Medicaid Certification or
\nMedicare Certification of such Person, which revocation, termination,
\ncancellation or suspension could reasonably be likely to have a Material Adverse
\nEffect, or (ii) to have a Material Adverse Effect.<\/p>\n
6.11. Margin Stock. The proceeds of the borrowings and other
\nextensions of credit made hereunder will be used by the Borrower only for the
\npurposes expressly authorized herein. None of such proceeds will be used,
\ndirectly or indirectly, for the purpose of purchasing or carrying any margin
\nstock or for the purpose of reducing or retiring any Indebtedness which was
\noriginally incurred to purchase or carry margin stock or for any other purpose
\nwhich might constitute any of the Loans or Letters of Credit under this
\nAgreement a “purpose credit” within the meaning of Regulation U or Regulation X
\nof the Board. Neither the Borrower nor any Administrative Agent acting in its
\nbehalf has taken or will take any action which might cause this Agreement or any
\nof the documents or instruments delivered pursuant hereto to violate any
\nregulation of the Board or to violate the Exchange Act or the Securities Act of
\n1933, as amended, or any state securities laws.<\/p>\n
49<\/p>\n
6.12. Investment Company. Neither the Borrower nor any
\nConsolidated Entity is an “investment company,” or an “affiliated person” of, or
\n“promoter” or “principal underwriter” for, an “investment company”, as such
\nterms are defined in the Investment Company Act of 1940, as amended (15 U.S.C.
\nss. 80a-1, et seq.). The application of the proceeds of the Loans and repayment
\nthereof by the Borrower and the issuance of Letters of Credit and the
\nperformance by the Borrower and any Consolidated Entity of the transactions
\ncontemplated by the Loan Documents will not violate any provision of said Act,
\nor any rule, regulation or order issued by the Securities and Exchange
\nCommission thereunder.<\/p>\n
6.13. Patents, Etc. The Borrower and each Consolidated Entity
\nowns or has the right to use, under valid license agreements or otherwise, all
\nmaterial patents, licenses, franchises, trademarks, trademark rights, trade
\nnames, trade name rights, trade secrets, service marks, service mark rights and
\ncopyrights necessary to or used in the conduct of its businesses as now
\nconducted and as contemplated by the Loan Documents, without known conflict by,
\nor with, any patent, license, franchise, trademark, trade secret, trade name,
\nservice mark, copyright or other proprietary right of, any other Person.<\/p>\n
6.14. No Untrue Statement. Neither (a) this Agreement nor any
\nother Loan Document or certificate or document executed and delivered by or on
\nbehalf of the Borrower or any Consolidated Entity in accordance with or pursuant
\nto any Loan Document nor (b) any statement, representation, or warranty provided
\nto the Administrative Agent or any Lender in connection with the negotiation or
\npreparation of the Loan Documents contains any misrepresentation or untrue
\nstatement of material fact or omits to state a material fact necessary, in light
\nof the circumstance under which it was made, in order to make any such warranty,
\nrepresentation or statement contained therein not misleading.<\/p>\n
6.15. No Consents, Etc. Neither the respective businesses or
\nproperties of the Borrower or any Consolidated Entity, nor any relationship
\nbetween the Borrower or any Consolidated Entity and any other Person, nor any
\ncircumstance in connection with the execution, delivery and performance of the
\nLoan Documents and the transactions contemplated thereby, is such as to require
\na consent, approval or authorization of, or filing, registration or
\nqualification with, any Governmental Authority or any other Person on the part
\nof the Borrower or any Consolidated Entity as a condition to the execution,
\ndelivery and performance of, or consummation of the transactions contemplated
\nby, or the validity or enforceability of, the Loan Documents, which, if not
\nobtained or effected, would be reasonably likely to have a Material Adverse
\nEffect, or if so, such consent, approval, authorization, filing, registration or
\nqualification has been duly obtained or effected, as the case may be.<\/p>\n
6.16. 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 ERISA Affiliate has fulfilled its obligations
\nunder the minimum funding standards imposed by ERISA and each is in compliance
\nin all material respects with the applicable provisions of ERISA, and (iii) no
\n“Reportable Event,” as defined in Section 4043(b) of ERISA, has occurred with
\nrespect to any plan maintained by the Borrower or any of its ERISA Affiliates.<\/p>\n
50<\/p>\n
6.17. No Default. As of the date hereof, there does not exist
\nany Default or Event of Default.<\/p>\n
6.18. Hazardous Materials. The Borrower and each Consolidated
\nEntity is in compliance with all applicable Environmental Laws in all material
\nrespects. Neither the Borrower nor any Consolidated Entity has been notified of
\nany action, suit, proceeding or investigation which, and neither the Borrower
\nnor any Consolidated Entity is aware of any facts which, (i) calls into
\nquestion, or could reasonably be expected to call into question, compliance in
\nall material respects by the Borrower or any Consolidated Entity with any
\nEnvironmental Laws, (ii) which seeks, or could reasonably be expected to form
\nthe basis of a meritorious proceeding, to suspend, revoke or terminate any
\nmaterial license, permit or approval necessary for the generation, handling,
\nstorage, treatment or disposal of any Hazardous Material, or (iii) seeks to
\ncause, or could reasonably be expected to form the basis of a meritorious
\nproceeding to cause, any property of the Borrower or any Consolidated Entity
\nmaterial to the operations of the Borrower or such Consolidated Entity to be
\nsubject to any material restrictions on ownership, use, occupancy or
\ntransferability under any Environmental Law.<\/p>\n
6.19. Employment Matters. (a) Except as set forth on Schedule
\n6.19, none of the employees of the Borrower or any Consolidated Entity is
\nsubject to any collective bargaining agreement and there are no strikes, work
\nstoppages, election or decertification petitions or proceedings, unfair labor
\ncharges, equal opportunity proceedings. or other material labor\/employee related
\ncontroversies or proceedings pending or, to the best knowledge of the Borrower,
\nthreatened against the Borrower or any Consolidated Entity or between the
\nBorrower or any Consolidated Entity and any of its employees, other than
\nemployee grievances, controversies or proceedings arising in the ordinary course
\nof business which could not reasonably be likely, individually or in the
\naggregate, to have a Material Adverse Effect; and<\/p>\n
(b) Except to the extent a failure to maintain compliance
\nwould not have a Material Adverse Effect, the Borrower and each Consolidated
\nEntity is in compliance in all respects with all applicable laws, rules and
\nregulations pertaining to labor or employment matters, including without
\nlimitation those pertaining to wages, hours, occupational safety and taxation
\nand there is neither pending nor threatened any litigation, administrative
\nproceeding or, to the knowledge of the Borrower, any investigation, in respect
\nof such matters which, if decided adversely, could reasonably be likely,
\nindividually or in the aggregate, to have a Material Adverse Effect.<\/p>\n
6.20. RICO. Neither the Borrower nor any Consolidated Entity
\nis engaged in or has engaged in any course of conduct that could subject any of
\ntheir respective properties to any Lien, seizure or other forfeiture under any
\ncriminal law, racketeer influenced and corrupt organizations law, civil or
\ncriminal, or other similar laws.<\/p>\n
6.21. Reimbursement from Third Party Payors. The accounts
\nreceivable of the Borrower and each Consolidated Entity and each Contract
\nProvider have been and will continue to be adjusted to reflect reimbursement
\npolicies of third party payors such as Medicare, Medicaid, Blue Cross\/Blue
\nShield, private insurance companies, health maintenance organizations, preferred
\nprovider organizations, alternative delivery systems, managed care systems,
\ngovernment contracting agencies and other third party payors. In particular,
\naccounts <\/p>\n
51<\/p>\n
receivable relating to such third party payors do not and shall not exceed
\namounts any obligee is entitled to receive under any capitation arrangement, fee
\nschedule, discount formula, cost-based reimbursement or other adjustment or
\nlimitation to its usual charges.<\/p>\n
6.22. Material Adverse Change. Since December 31, 1999, there
\nhas been no development or event, which has had or could reasonably be expected
\nto have a Material Adverse Effect.<\/p>\n
ARTICLE VII<\/p>\n
Affirmative Covenants<\/p>\n
The Borrower hereby agrees that, so long as the Revolving
\nCredit Commitments remain in effect, any Letter of Credit remains outstanding or
\nany Loan or other amount is owing to any Lender or the Administrative Agent
\nhereunder, unless the Required Lenders shall otherwise consent in writing, the
\nBorrower will, and where applicable will cause each Consolidated Entity to:<\/p>\n
7.1. Financial Statements, Reports, Etc. The Borrower shall
\ndeliver or cause to be delivered to the Administrative Agent and each Lender:<\/p>\n
(a) Not later than 50 days after the end of each of the first
\n three quarters of each Fiscal Year, a balance sheet and a statement of
\n income of the Borrower and its Consolidated Entities on a consolidated
\n basis and a statement of cash flow of the Borrower and its Consolidated
\n Entities on a consolidated basis for such calendar quarter and for the
\n period beginning on the first day of such Fiscal Year and ending on the
\n last day of such quarter (in sufficient detail to indicate the
\n Borrower’s and each Consolidated Entity’s compliance with the financial
\n covenants set forth in Section 8.1), together with statements in
\n comparative form for the corresponding date or period in the preceding
\n Fiscal Year as summarized in the Borrower’s Form 10-Q for the
\n corresponding period, and certified as to fairness, accuracy and
\n completeness by the chief executive officer, chief financial officer or
\n Treasurer of the Borrower.<\/p>\n
(b) Not later than 100 days after the end of each Fiscal Year,
\n financial statements (including a balance sheet, a statement of income,
\n a statement of changes in shareholders’ equity and a statement of cash
\n flow) of the Borrower and its Consolidated Entities on a consolidated
\n basis for such Fiscal Year (in sufficient detail to indicate the
\n Borrower’s and each Consolidated Entity’s compliance with the financial
\n covenants set forth in Section 8.1), together with statements in
\n comparative form as of the end of and for the preceding Fiscal Year as
\n summarized in the Borrower’s Form 10-K for the corresponding period,
\n and accompanied by an opinion of certified public accountants
\n acceptable to the Administrative Agent, which opinion shall state in
\n effect that such financial statements (A) were audited using generally
\n accepted auditing standards, (B) were prepared in accordance with
\n generally accepted accounting principles applied on a<\/p>\n
52<\/p>\n
Consistent Basis, and (C) present fairly the financial condition and
\n results of operations of the Borrower and its Consolidated Entities for
\n the periods covered.<\/p>\n
(c) Together with the financial statements required by
\n subsections (a) and (b) above a compliance certificate duly executed by
\n the chief executive officer or chief financial officer or Treasurer of
\n the Borrower in the form of Exhibit I (“Compliance Certificate”).<\/p>\n
(d) 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 statements, reports, notices and filings
\n distributed by the Borrower or any Consolidated Entity to its
\n stockholders or partners or filed with the Securities and Exchange
\n Commission (including reports on SEC Forms 10-K, 10-Q and 8-K).<\/p>\n
(e) 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 ERISA Affiliate, a certificate of the
\n president or chief financial officer of the Borrower setting forth the
\n details as to such “reportable event” and the action that the Borrower
\n or the ERISA Affiliate has taken or will take with respect thereto, and
\n promptly after the filing or receiving thereof, copies of all reports
\n and notices that the Borrower and each Consolidated Entity files under
\n ERISA with the Internal Revenue Service or the PBGC or the United
\n States Department of Labor.<\/p>\n
(f) 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
(g) 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 such Facility to
\n carry on its business as then conducted or the termination of any
\n material insurance or reimbursement program available to such Facility.<\/p>\n
(h) Such other information regarding any Facility or the
\n financial condition or operations of the Borrower or its Consolidated
\n Entities as the Administrative Agent shall reasonably request from time
\n to time or at any time.<\/p>\n
7.2. Maintain Properties. Maintain all properties necessary to
\nits operations in good working order and condition, make all needed repairs,
\nreplacements and renewals to such <\/p>\n
53<\/p>\n
properties, and maintain free from Liens all trademarks, trade names, service
\nmarks, patents, copyrights, trade secrets, know-how, and other intellectual
\nproperty and proprietary information (or adequate licenses thereto), in each
\ncase as are reasonably necessary to conduct its business as currently conducted
\nor as contemplated hereby, all in accordance with customary and prudent business
\npractices.<\/p>\n
7.3. Conduct of Business and Maintenance of Existence,
\nQualification, Etc. Except as otherwise expressly permitted under Section 8.4,
\ndo or cause to be done all things necessary to preserve and keep in full force
\nand effect its existence and all material rights and franchises, maintain its
\nlicense or qualification to do business as a foreign corporation and good
\nstanding in each jurisdiction in which its ownership or lease of property or the
\nnature of its business makes such license or qualification necessary and comply
\nwith all Contractual Obligations and Requirements of Law except to the extent
\nthat failure to comply therewith would not, in the aggregate, have a Material
\nAdverse Effect.<\/p>\n
7.4. Regulations and Taxes. Comply in all material respects
\nwith or contest in good faith all statutes and governmental regulations and pay
\nall taxes, assessments, governmental charges, claims for labor, supplies, rent
\nand any other obligation which, if unpaid, would become a Lien against any of
\nits properties except liabilities being contested in good faith by appropriate
\nproceedings diligently conducted and against which adequate reserves acceptable
\nto the Borrower’s independent certified public accountants have been established
\nunless and until any Lien resulting therefrom attaches to any of its property
\nand becomes enforceable by its creditors.<\/p>\n
7.5. Insurance. At all times maintain in force, and pay all
\npremiums and costs related to, insurance coverages in amounts deemed by the
\nmanagement of the Borrower to be sufficient in accordance with usual and
\ncustomary business practices and any other coverages required under applicable
\ngovernmental requirements. The Borrower shall deliver to the Administrative
\nAgent annually on or before each anniversary date of this Agreement, and at such
\nother time or times as the Administrative Agent may request (but not more often
\nthan monthly), a certificate of the president or chief financial officer of the
\nBorrower setting out in such detail as the Administrative Agent may reasonably
\nrequire a description of all insurance coverages maintained by the Borrower and
\neach Consolidated Entity. The Administrative Agent shall have no obligation to
\ngive the Borrower or any Consolidated Entity notice of any notification received
\nby the Administrative Agent with respect to any insurance policies or take any
\nsteps to protect the Borrower’s or any Consolidated Entity’s interests under
\nsuch policies.<\/p>\n
7.6. True Books. Keep true books of record and account in
\nwhich full, true and correct entries will be made of all of its dealings and
\ntransactions, and set up on its books such reserves as may be required by GAAP
\nwith respect to doubtful accounts and all taxes, assessments, charges, levies
\nand claims and with respect to its business in general, and include such
\nreserves in interim as well as year-end financial statements.<\/p>\n
7.7. Right of Inspection. Permit the representatives of any
\nLender to visit and inspect any of the properties, corporate books and financial
\nreports of the Borrower or any Subsidiary and to discuss its affairs, finances
\nand accounts with its principal officers and independent certified public
\naccountants, all at reasonable times, at reasonable intervals and with
\nreasonable prior notice.<\/p>\n
54<\/p>\n
7.8. Observe all Laws. Conform to and duly observe, and cause
\nall Contract Providers to conform to and duly observe, in all material respects
\nall laws, rules and regulations and all other valid requirements of any
\nregulatory authority with respect to the conduct of its business, including
\nwithout limitation Titles XVII and XIX of the Social Security Act, Medicare
\nRegulations, Medicaid Regulations, and all laws, rules and regulations of
\nGovernmental Authorities pertaining to the licensing of professional and other
\nhealth care providers, except where the failure to do so could not reasonably be
\nlikely to have a Material Adverse Effect.<\/p>\n
7.9. Governmental Licenses. Obtain and maintain, and use
\nreasonable effort to cause all Contract Providers to obtain and maintain, all
\nlicenses, permits, certifications and approvals of all applicable Governmental
\nAuthorities as are required for the conduct of its business as currently
\nconducted and herein contemplated, including without limitation professional
\nlicenses, Medicaid Certifications and Medicare Certifications, except where the
\nfailure to do so could not reasonably be likely to have a Material Adverse
\nEffect.<\/p>\n
7.10. Covenants Extending to Other Persons. Cause each of its
\nConsolidated Entities to do with respect to itself, its business and its assets,
\neach of the things required of the Borrower in Sections 7.2 through 7.9, 7.15
\nand 7.16 inclusive.<\/p>\n
7.11. Officer’s Knowledge of Default. Upon any Executive
\nOfficer of the Borrower obtaining knowledge of any Default or Event of Default
\nor any default or event of default under any other obligation of the Borrower or
\nany Consolidated Entity to any Lender, or any event, development or occurrence
\nwhich could reasonably be expected to have a Material Adverse Effect, cause such
\nExecutive Officer or an Authorized Representative to promptly notify the
\nAdministrative Agent of the nature thereof, the period of existence thereof, and
\nwhat action the Borrower or such Consolidated Entity proposes to take with
\nrespect thereto. The Administrative Agent shall notify the Lenders of receipt of
\nsuch notice.<\/p>\n
7.12. Suits or Other Proceedings. Upon any Executive Officer
\nof the Borrower obtaining knowledge of any litigation or other proceedings being
\ninstituted (i) against the Borrower or any Subsidiary, or any attachment, levy,
\nexecution or other process being instituted against any assets of the Borrower
\nor any Subsidiary or Controlled Partnership, which if adversely determined could
\nreasonably be likely to have a Material Adverse Effect or (ii) against the
\nBorrower, any Subsidiary or any Contract Provider (but only with respect to
\nservices provided to the Borrower or any Consolidated Entity) to suspend, revoke
\nor terminate any Medicaid Provider Agreement, Medicaid Certification, Medicare
\nProvider Agreement or Medicare Certification, which suspension, revocation or
\ntermination could reasonably be likely to have a Material Adverse Effect, cause
\nsuch Executive Officer or an Authorized Representative to promptly deliver to
\nthe Administrative Agent written notice thereof stating the nature and status of
\nsuch litigation, dispute, proceeding, levy, execution or other process.<\/p>\n
7.13. Notice of Discharge of Hazardous Material or
\nEnvironmental Complaint. Promptly provide to the Administrative Agent true,
\naccurate and complete copies of any and all notices, complaints, orders,
\ndirectives, claims, or citations received by the Borrower or any Consolidated
\nEntity relating to any of the following which is likely to have a Material
\nAdverse Effect: (a) violation or alleged violation by the Borrower or any
\nConsolidated Entity of any applicable Environmental Law; (b) release or
\nthreatened release by the Borrower or any <\/p>\n
55<\/p>\n
Consolidated Entity, or at any Facility or property owned or leased or operated
\nby the Borrower or any Consolidated Entity, of any Hazardous Material, except
\nwhere occurring legally; or (c) liability or alleged liability of the Borrower
\nor any Consolidated Entity for the costs of cleaning up, removing, remediating
\nor responding to a release of Hazardous Materials.<\/p>\n
7.14. Environmental Compliance. If the Borrower or any
\nConsolidated Entity shall receive any letter, notice, complaint, order,
\ndirective, claim or citation from any Governmental Authority alleging that the
\nBorrower or any Consolidated Entity has violated any Environmental Law or is
\nliable for the costs of cleaning up, removing, remediating or responding to a
\nrelease of Hazardous Materials, within the time period permitted by the
\napplicable Environmental Law or the Governmental Authority responsible for
\nenforcing such Environmental Law, remove or remedy, or cause the applicable
\nConsolidated Entity to remove or remedy, such violation or release or satisfy
\nsuch liability unless and only during the period that the applicability of such
\nEnvironmental Law, the fact of such violation or liability or what is required
\nto remove or remedy such violation is being contested by the Borrower or the
\napplicable Consolidated Entity by appropriate proceedings diligently conducted
\nand all reserves with respect thereto as may be required under GAAP, if any,
\nhave been made, and no Lien in connection therewith shall have attached to any
\nproperty of the Borrower or the applicable Consolidated Entity which shall have
\nbecome enforceable against creditors of such Person.<\/p>\n
7.15. Continuation of Current Business. Not engage in any
\nbusiness other than the business now being conducted by the Borrower (including
\nits Consolidated Entities) and other businesses directly related to such
\nservices.<\/p>\n
7.16. Management Contracts. Not enter into any agreement
\nwhereby the management, supervision or control of its business or any Facility
\nshall be delegated to or placed in any persons other than its governing body and
\nofficers, the Borrower or a Consolidated Entity, except that management of the
\nFacility owned by Vanderbilt Stallworth Rehabilitation Hospital, L.P. is vested
\nin part in a Governance Committee and in part in a Subsidiary of the Borrower
\npursuant to the applicable limited partnership agreement and a management
\nagreement.<\/p>\n
7.17. Payment of Obligations. Pay, discharge or otherwise
\nsatisfy at or before maturity or before they become delinquent, as the case may
\nbe, all its obligations of whatever nature, except where the amount or validity
\nthereof is currently being contested in good faith by appropriate proceedings
\nand reserves in conformity with GAAP with respect thereto have been provided on
\nthe books of the Borrower or its Subsidiaries, as the case may be.<\/p>\n
7.18. New Subsidiaries. Promptly cause any Subsidiary that
\nshall, after the Closing Date, directly or indirectly guarantee any Indebtedness
\nof the Borrower (x) to execute and deliver the Guarantee to the Administrative
\nAgent or (y) to become a party to such Guarantee, should such Guarantee already
\nbe in existence.<\/p>\n
56<\/p>\n
ARTICLE VIII<\/p>\n
Negative Covenants<\/p>\n
The Borrower hereby agrees that, so long as the Revolving
\nCredit Commitments remain in effect, any Letter of Credit remains outstanding or
\nany Loan or other amount is owing to any Lender or the Administrative Agent
\nhereunder, unless the Required Lenders shall otherwise consent in writing, the
\nBorrower will not, nor will it permit any Consolidated Entity to:<\/p>\n
8.1. Financial Covenants. (a) Minimum Net Worth. Permit
\nConsolidated Net Worth to be less than $2,750,000,000 plus (A) 50% of
\nConsolidated Net Income (if positive and including for purposes of this Section
\n8.1(a) only any extraordinary gain), on an ongoing basis for each fiscal quarter
\nbeginning with the fiscal quarter ended June 30, 1998, plus (B) the aggregate
\namount of all increases, if any, in its capital accounts resulting from the
\nissuance of Capital Stock or conversion of debt into Capital Stock or other
\nsecurities properly classified as equity in accordance with GAAP, or from the
\nsale or other disposition of treasury shares, from the date of this Agreement
\nthrough the date of determination plus (C) without duplication, any addition to
\nConsolidated Stockholders’ Equity resulting from an Acquisition after the
\nClosing Date which shall be accounted for on a pooling-of-interests basis.<\/p>\n
(b) Consolidated EBITDA to Consolidated Interest Expense
\nRatio. Permit the ratio of Consolidated EBITDA for any Four-Quarter Period to
\nConsolidated Interest Expense for such Four-Quarter Period to be less than or
\nequal to 3.00 to 1.00.<\/p>\n
(c) Consolidated Indebtedness to Consolidated Total Capital.
\nPermit the ratio of Consolidated Indebtedness to Consolidated Total Capital at
\nany time to equal or exceed 0.60 to 1.00.<\/p>\n
(d) Consolidated Indebtedness to Consolidated EBITDA. Permit
\nthe ratio of Consolidated Indebtedness at any date of determination to
\nConsolidated EBITDA for the Four-Quarter Period of the Borrower most recently
\nended on or prior to such date of determination to exceed 3.50 to 1.00.<\/p>\n
8.2. Investments and Loans. Purchase or otherwise acquire any
\nstock, security, obligation or evidence of indebtedness of, make any capital
\ncontribution to, own any equity interest in, or make any loan or advance to, any
\nother Person; provided, however, that the Borrower and its Consolidated Entities
\nmay (A) continue to hold all stock of and own partnership interests in the
\nPersons that constitute Consolidated Entities on the Closing Date and Persons
\nthat thereafter become Consolidated Entities as a result of Acquisitions
\npermitted under Section 8.8; (B) make Permitted Investments; and (C) make other
\ninvestments in an aggregate amount while this Agreement is outstanding not
\nexceeding 15% of Consolidated Total Assets.<\/p>\n
8.3. Indebtedness. Permit to exist Indebtedness, howsoever
\nevidenced, of Subsidiaries and Controlled Partnerships (exclusive of
\nIndebtedness to the Borrower) in an aggregate amount at any time exceeding the
\ngreater of $70,000,000 or 15% of Consolidated <\/p>\n
57<\/p>\n
Tangible Net Worth, excluding, however, Indebtedness of Subsidiaries and
\nControlled Partnerships existing as of the date hereof and described on Schedule
\n8.3.<\/p>\n
8.4. Disposition of Assets. Sell, lease or otherwise dispose
\nof assets in excess of 15% of Consolidated Total Assets as at the Closing Date
\nplus an amount equal to 15% of assets acquired following the Closing Date.<\/p>\n
8.5. Consolidation or Merger. Merge or consolidate with
\nanother Person unless (i) in the case of a merger or consolidation of the
\nBorrower, the Borrower is the continuing or surviving entity, (ii) in the case
\nof a merger or consolidation involving a Consolidated Entity, the continuing or
\nsurviving entity is majority-owned by the Borrower (with such majority ownership
\nconstituting a controlling interest), and (iii) before and after giving effect
\nto the proposed merger or consolidation, no Default or Event of Default shall
\nexist.<\/p>\n
8.6. Liens. Incur, create, assume or permit to exist any Lien
\nupon any of its accounts receivable, contract rights, chattel paper, inventory,
\nequipment, instruments, general intangibles or other personal or real property
\nof any character, whether now owned or hereafter acquired, other than (i) Liens
\nthat constitute Permitted Encumbrances, and (ii) Liens on assets which at no
\ntime have a book value of greater than 5% of Consolidated Total Assets.<\/p>\n
8.7. Dividends and Distributions. Permit any Consolidated
\nEntity to be or become subject to any restrictions on the ability of such
\nConsolidated Entity to pay dividends or to make partnership distributions other
\nthan as required by this Agreement or restrictions imposed by applicable law.<\/p>\n
8.8. Acquisitions and Capital Expenditures. In any Fiscal
\nYear, (a) make an Acquisition or enter into any agreement to make an Acquisition
\nunless (i) (A) the Person or Facility to be acquired is in substantially the
\nsame line of business presently engaged in by the Borrower or its Consolidated
\nEntities, (B) if the Cost of Acquisition exceeds $150,000,000 the Borrower shall
\nhave furnished to the Administrative Agent (1) pro forma historical financial
\nstatements as of the end of the most recently completed Fiscal Year of the
\nBorrower and most recent interim fiscal quarter, if applicable, giving effect to
\nsuch Acquisition and (2) a Compliance Certificate prepared on an historical pro
\nforma basis giving effect to such Acquisition, which certificate shall
\ndemonstrate that no Default or Event of Default would exist immediately after
\ngiving effect thereto and (C) the entire consideration paid for such Acquisition
\nis common stock of the Borrower or (ii) (A) the Person or Facility to be
\nacquired is in substantially the same line of business presently engaged in by
\nthe Borrower or its Consolidated Entities, (B) if the Cost of Acquisition
\nexceeds $150,000,000 the Borrower shall have furnished to the Administrative
\nAgent (1) pro forma historical financial statements as of the end of the most
\nrecently completed Fiscal Year of the Borrower and most recent interim fiscal
\nquarter, if applicable, giving effect to such Acquisition and (2) a Compliance
\nCertificate prepared on an historical pro forma basis giving effect to such
\nAcquisition, which certificate shall demonstrate that no Default or Event of
\nDefault would exist immediately after giving effect thereto and (C) (1) the
\naggregate amount of consideration (other than consideration in the form of
\ncommon stock of the Borrower) paid in such Acquisition and all other
\nAcquisitions consummated in such Fiscal Year pursuant to this clause (ii), plus
\n(2) the aggregate amount expended by the Borrower and its Subsidiaries for
\nCapital Expenditures during such Fiscal Year, does not exceed the<\/p>\n
58<\/p>\n
Acquisition\/CapEx Basket Amount for such Fiscal Year; or (b) make or commit to
\nmake any Capital Expenditure unless (i) the aggregate amount expended by the
\nBorrower and its Subsidiaries for Capital Expenditures during such Fiscal Year,
\nplus (ii) the aggregate amount of consideration (other than consideration in the
\nform of Common Stock) paid by the Borrower and its Subsidiaries during such
\nFiscal Year pursuant to the foregoing clause (a)(ii) in respect of Acquisitions,
\ndoes not exceed the Acquisition\/CapEx Basket Amount for such Fiscal Year.<\/p>\n
8.9. Restricted Payments; Other Payments. (a) Make any
\nRestricted Payment or apply or set apart any of their assets therefor or agree
\nto do any of the foregoing; provided, however, the Borrower may make Restricted
\nPayments in an amount not exceeding $50,000,000 in any Fiscal Year (on a
\nnon-cumulative basis, with the effect that amounts not paid in any Fiscal Year
\nmay not be carried over for payment in a subsequent period) if immediately prior
\nand immediately after giving effect thereto no Default or Event of Default shall
\nexist or occur and be continuing.<\/p>\n
(b) (i) amend, modify or otherwise change, or consent or agree
\nto any amendment, modification, waiver or other change to, any of the terms of
\nany Subordinated Debt (other than any such amendment, modification, waiver or
\nother change which (A) would extend the maturity or reduce the amount of any
\npayment of principal thereof, reduce the rate or extend the date for payment of
\ninterest thereon or relax any covenant or other restriction applicable to the
\nBorrower or any of its Subsidiaries and (B) does not involve the payment of a
\nconsent fee), or (ii) designate any Indebtedness (other than the Senior Debt) as
\n“Designated Senior Indebtedness” for the purposes of any instrument governing
\nany Subordinated Debt, including, without limitation, the Indentures governing
\nthe New Senior Subordinated Notes and the Convertible Subordinated Debentures.<\/p>\n
8.10. Compliance with ERISA. With respect to any Pension Plan,
\nEmployee Benefit Plan or Multiemployer Plan:<\/p>\n
(a) permit the occurrence of any Termination Event which would
\n result in a liability on the part of the Borrower or any ERISA
\n Affiliate to the PBGC which liability would have a Material Adverse
\n Effect; or<\/p>\n
(b) permit the present value of all benefit liabilities under
\n all Pension Plans to exceed the current value of the assets of such
\n Pension Plans allocable to such benefit liabilities; or<\/p>\n
(c) permit any accumulated funding deficiency (as defined in
\n Section 302 of ERISA and Section 412 of the Code) with respect to any
\n Pension Plan, whether or not waived; or<\/p>\n
(d) fail to make any contribution or payment to any
\n Multiemployer Plan which the Borrower or any ERISA Affiliate may be
\n required to make under any agreement relating to such Multiemployer
\n Plan, or any law pertaining thereto; or<\/p>\n
(e) engage, or permit any Subsidiary or any ERISA Affiliate to
\n engage, in any prohibited transaction under Section 406 of ERISA or
\n Section 4975 of the Code for <\/p>\n
59<\/p>\n
which a civil penalty pursuant to Section 502(I) of ERISA or a tax
\n pursuant to Section 4975 of the Code may be imposed; or<\/p>\n
(f) permit the establishment of any Employee Benefit Plan
\n providing post-retirement welfare benefits or establish or amend any
\n Employee Benefit Plan which establishment or amendment could result in
\n liability to the Borrower or any ERISA Affiliate or increase the
\n obligation of the Borrower or any ERISA Affiliate to a Multiemployer
\n Plan which liability or increase, individually or together with all
\n similar liabilities and increases, is in excess of $5,000,000; or<\/p>\n
(g) fail, or permit any Subsidiary or any ERISA Affiliate to
\n fail, to establish, maintain and operate each Employee Benefit Plan in
\n compliance in all material respects with the provisions of ERISA, the
\n Code and all other applicable laws and the regulations and
\n interpretations thereof.<\/p>\n
8.11. Fiscal Year. Change its Fiscal Year (other than a change
\nto conform the fiscal year of a Consolidated Entity to that of the Borrower).<\/p>\n
8.12. Dissolution, etc. Wind up, liquidate or dissolve
\n(voluntarily or involuntarily) or commence or suffer any proceedings seeking any
\nsuch winding up, liquidation or dissolution, except in connection with a merger
\nor consolidation permitted pursuant to Section 8.5 or where the liquidation or
\ndissolution of a Consolidated Entity occurs in the ordinary course of business
\nand does not have a Material Adverse Effect.<\/p>\n
8.13. Transactions with Affiliates. Other than transactions
\npermitted under Sections 8.2 and 8.5, enter into any transaction after the
\nClosing Date, including, without limitation, the purchase, sale, lease or
\nexchange of property, real or personal, or the rendering of any service, with
\nany Affiliate of the Borrower, except (a) that such Persons may render services
\nto the Borrower for compensation at the same rates generally paid by Persons
\nengaged in the same or similar businesses for the same or similar services, (b)
\nthat the Borrower may render services to such Persons for compensation at the
\nsame rates generally charged by the Borrower and (c) in either case in the
\nordinary course of business and pursuant to the reasonable requirements of the
\nBorrower’s business consistent with past practice of the Borrower and upon fair
\nand reasonable terms no less favorable to the Borrower than would be obtained in
\na comparable arm’s-length transaction with a Person not an Affiliate.<\/p>\n
ARTICLE IX<\/p>\n
Events of Default and Acceleration<\/p>\n
9.1. Events of Default. If any one or more of the following
\nevents (herein called “Events of Default”) shall occur for any reason whatsoever
\n(and whether such occurrence shall be voluntary or involuntary or come about or
\nbe effected by operation of law or pursuant to or in compliance with any
\njudgment, decree or order of any court or any order, rule or regulation of any
\nGovernmental Authority), that is to say:<\/p>\n
60<\/p>\n
(a) the Borrower shall fail to pay (i) when due, any principal
\n payable under the terms hereof or any Reimbursement Obligation or (ii)
\n not later than five Business Days of the date when due, any interest or
\n fees payable under the terms hereof or any other amount payable under
\n this Agreement or any other of the other Obligations or any other
\n amount owed to the Administrative Agent or any of the Lenders under or
\n in connection with the Loan Documents; or<\/p>\n
(b) the Borrower or any Material Group shall default in the
\n performance or observance of any other provision of this Agreement
\n (other than the provisions of Article VII and Article VIII) , except as
\n covered by clause (a) above, and shall not cure such default within
\n thirty days after the first to occur of (i) the date the Administrative
\n Agent or any Lender gives written or telephonic notice of such default
\n to the Borrower or (ii) the date the Borrower otherwise has notice
\n thereof; or<\/p>\n
(c) the Borrower or any Material Group shall default in the
\n observance or performance of any provision in Article VII or Article
\n VIII; or<\/p>\n
(d) the Administrative Agent shall reasonably determine that
\n any statement, certification, representation or warranty contained
\n herein, or in any of the other Loan Documents or in any report,
\n financial statement, certificate or other instrument delivered to the
\n Administrative Agent or any Lender by or on behalf of the Borrower or
\n any Consolidated Entity, was misleading or untrue in any material
\n respect at the time it was made or deemed made; or<\/p>\n
(e) default shall be made (i) in the payment of any
\n Indebtedness exceeding $5,000,000 (other than the Obligations) of the
\n Borrower or any Consolidated Entity when due or (ii) in the
\n performance, observance or fulfillment of any term or covenant
\n contained in any agreement or instrument under or pursuant to which any
\n such Indebtedness may have been issued, created, assumed, guaranteed or
\n secured by Borrower or any Consolidated Entity, if the effect of such
\n default in the performance, observance or fulfillment is to accelerate
\n the maturity of such Indebtedness or to permit the holder thereof to
\n cause such Indebtedness to become due prior to its stated maturity, and
\n the amount of the Indebtedness involved exceeds $5,000,000, and such
\n default shall not be cured within 10 days after the occurrence of such
\n default; or<\/p>\n
(f) the Borrower or any Material Group shall fail to pay or
\n admit in writing its inability to pay its or their debts generally as
\n they come due, or a receiver, trustee, liquidator or other custodian
\n shall be appointed for the Borrower or any Material Group or for any of
\n the property of the Borrower or any Material Group or a petition in
\n bankruptcy, or under any insolvency law, shall be filed by or against
\n the Borrower or any Material Group or the Borrower or any Material
\n Group shall apply for the benefit of, or take advantage of, any law for
\n relief of debtors, or enter into an arrangement or composition with, or
\n make an assignment for the benefit of, creditors; or<\/p>\n
(g) final judgment for the payment of money in excess of an
\n aggregate of $500,000 shall be rendered against the Borrower or any
\n Material Group, and the same <\/p>\n
61<\/p>\n
shall remain undischarged for a period of 30 days during which
\n execution shall not be effectively stayed; or<\/p>\n
(h) an event of default, as therein defined, shall occur under
\n any other Loan Document; or<\/p>\n
(i) this Agreement, the Loans, the LC Account Agreement, or
\n any part thereof, shall be deemed unenforceable by a court of competent
\n jurisdiction or shall no longer be effective; or<\/p>\n
(j) the Borrower or any Consolidated Entity shall, other than
\n in the ordinary course of business (as determined by past practices),
\n suspend all or any part of its operations material to the conduct of
\n the business of the Borrower and its Consolidated Entities, taken as a
\n whole, for a period of more than 60 days;<\/p>\n
(k) the Borrower or any Consolidated Entity shall breach any
\n of the material terms or conditions of any agreement under which any
\n Rate Hedging Obligations are created and such breach shall continue
\n beyond any grace period, if any, relating thereto pursuant to the terms
\n of such agreement, or the Borrower or any Consolidated Entity shall
\n disaffirm or seek to disaffirm any such agreement or any of its
\n obligations thereunder;<\/p>\n
(l) there shall occur (i) any cancellation, revocation,
\n suspension or termination of any Medicare Certification, Medicare
\n Provider Agreement, Medicaid Certification or Medicaid Provider
\n Agreement affecting the Borrower, any Subsidiary or any Contract
\n Provider, or (ii) the loss of any other permits, licenses,
\n authorizations, certifications or approvals from any federal, state or
\n local Governmental Authority or termination of any contract with any
\n such authority, in either case which cancellation, revocation,
\n suspension, termination or loss (X) in the case of any suspension or
\n temporary loss only, continues for a period greater than 60 days and
\n (Y) results in the suspension or termination of operations of the
\n Borrower or any Subsidiary or in the failure of the Borrower or any
\n Subsidiaries or any Contract Provider to be eligible to participate in
\n Medicare or Medicaid programs or to accept assignments of rights to
\n reimbursement under Medicaid Regulations or Medicare Regulations, if
\n and only if such Person, in the ordinary course of business,
\n participates in the Medicare or Medicare programs or accepts
\n assignments of rights to reimbursement thereunder; provided that any
\n such events described in this Section 9.1(1) shall constitute an Event
\n of Default only if such event shall result either singly or in the
\n aggregate in the termination, cancellation, suspension or material
\n impairment of operations or rights to reimbursement which produce 5% or
\n more of the Borrower’s gross revenues (on an annualized basis); or<\/p>\n
(m) there shall occur a Change of Control;<\/p>\n
then, and in any such event and at any time thereafter, if such Event of Default
\nor any other Event of Default shall then be continuing and shall have not been
\nwaived,<\/p>\n
62<\/p>\n
(A) either or both of the following actions may be taken: (i)
\n the Administrative Agent, with the consent of the Required Lenders,
\n may, and at the direction of the Required Lenders shall, declare any
\n obligation of the Lenders and the Issuing Bank to make further Loans or
\n to issue additional Letters of Credit terminated, whereupon the
\n obligation of each Lender to make further Loans and of the Issuing Bank
\n to issue additional Letters of Credit hereunder shall terminate
\n immediately, and (ii) the Administrative Agent shall at the direction
\n of the Required Lenders, at their option, declare by notice to the
\n Borrower any or all of the Obligations to be immediately due and
\n payable, and the same, including all interest accrued thereon and all
\n other obligations of the Borrower to the Administrative Agent and the
\n Lenders, shall forthwith become immediately due and payable without
\n presentment, demand, protest, notice or other formality of any kind,
\n all of which are hereby expressly waived, anything contained herein or
\n in any instrument evidencing the Obligations to the contrary
\n notwithstanding; provided, however, that notwithstanding the above, if
\n there shall occur an Event of Default under clause (f) above with
\n respect to the Borrower, then the obligation of the Lenders to make
\n Loans and of the Issuing Bank to issue Letters of Credit hereunder
\n shall automatically terminate and any and all of the Obligations shall
\n be immediately due and payable without the necessity of any action by
\n the Administrative Agent or the Required Lenders or notice to the
\n Administrative Agent or the Lenders; and<\/p>\n
(B) the Borrower shall, upon demand of the Administrative
\n Agent or the Required Lenders, deposit cash with the Administrative
\n Agent in an amount equal to the aggregate amount remaining undrawn
\n under all outstanding Letters of Credit, as collateral security for the
\n repayment of any future drawings or payments under such Letters of
\n Credit, and such amounts shall be held by the Administrative Agent
\n pursuant to the terms of the LC Account Agreement; and<\/p>\n
(C) the Administrative Agent and each of the Lenders shall
\n have all of the rights and remedies available under the Loan Documents
\n or under any applicable law.<\/p>\n
9.2. Administrative Agent to Act. In case any one or more
\nEvents of Default shall occur and be continuing and not have been waived, the
\nAdministrative Agent may, and at the direction of the Required Lenders shall,
\nproceed to protect and enforce their rights or remedies either by suit in equity
\nor by action at law, or both, whether for the specific performance of any
\ncovenant, agreement or other provision contained herein or in any other Loan
\nDocument, or to enforce the payment of the Obligations or any other legal or
\nequitable right or remedy.<\/p>\n
9.3. Cumulative Rights. No right or remedy herein conferred
\nupon the Lenders or the Administrative Agent is intended to be exclusive of any
\nother rights or remedies contained herein or in any other Loan Document, and
\nevery such right or remedy shall be cumulative and shall be in addition to every
\nother such right or remedy contained herein and therein or now or hereafter
\nexisting at law or in equity or by statute, or otherwise.<\/p>\n
63<\/p>\n
9.4. No Waiver. No course of dealing between the Borrower and
\nany Lender or the Administrative Agent or any failure or delay on the part of
\nany Lender or the Administrative Agent in exercising any rights or remedies
\nunder any Loan Document or otherwise available to it shall operate as a waiver
\nof any rights or remedies and no single or partial exercise of any rights or
\nremedies shall operate as a waiver or preclude the exercise of any other rights
\nor remedies hereunder or of the same right or remedy on a future occasion.<\/p>\n
9.5. Allocation of Proceeds. If an Event of Default has
\noccurred and not been waived, and the maturity of the Loans has been accelerated
\npursuant to this Article IX, all payments received by the Administrative Agent
\nhereunder, in respect of any principal of or interest on the Obligations or any
\nother amounts payable by the Borrower hereunder, shall be applied by the
\nAdministrative Agent in the following order:<\/p>\n
(i) amounts due to the Lenders pursuant to Section 2.2(d),
\n Section 2.10, Section 3.3 or Section 11.6;<\/p>\n
(ii) amounts due to the Administrative Agent and the Issuing
\n Bank pursuant to Section 10.8, Section 3.3 and Section 3.4;<\/p>\n
(iii) payments of interest, to be applied pro rata based on
\n the proportion which the principal amount of outstanding Loans and
\n Reimbursement Obligations of each Lender bears to the total of all
\n outstanding Loans and Reimbursement Obligations;<\/p>\n
(iv) payments of principal, to be applied pro rata based on
\n the proportion which the principal amount of outstanding Loans and
\n Reimbursement Obligations of each Lender bears to the total of all
\n outstanding Loans and Reimbursement Obligations;<\/p>\n
(v) payment of cash amounts to the Administrative Agent
\n pursuant to Section 9.1(B);<\/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 such other amounts due to the Lenders; and<\/p>\n
(vii) any surplus remaining after application as provided for
\n herein, to the Borrower or otherwise as may be required by applicable
\n law.<\/p>\n
ARTICLE X<\/p>\n
The Administrative Agent<\/p>\n
10.1. Appointment, Powers, and Immunities. Each Lender hereby
\nirrevocably appoints and authorizes the Administrative Agent to act as its
\nAdministrative Agent under this Agreement and the other Loan Documents with such
\npowers and discretion as are specifically delegated to the Administrative Agent
\nby the terms of this Agreement and the other Loan Documents, together with such
\nother powers as are reasonably incidental thereto. The <\/p>\n
64<\/p>\n
Administrative Agent (which term as used in this sentence and in Section 10.5
\nand the first sentence of Section 10.6 hereof shall include its affiliates and
\nits own and its affiliates’ officers, directors, employees, and agents): (a)
\nshall not have any duties or responsibilities except those expressly set forth
\nin this Agreement and shall not be a trustee or fiduciary for any Lender; (b)
\nshall not be responsible to the Lenders for any recital, statement,
\nrepresentation, or warranty (whether written or oral) made in or in connection
\nwith any Loan Document or any certificate or other document referred to or
\nprovided for in, or received by any of them under, any Loan Document, or for the
\nvalue, validity, effectiveness, genuineness, enforceability, or sufficiency of
\nany Loan Document, or any other document referred to or provided for therein or
\nfor any failure by any Person to perform any of its obligations thereunder; (c)
\nshall not be responsible for or have any duty to ascertain, inquire into, or
\nverify the performance or observance of any covenants or agreements by any
\nPerson or the satisfaction of any condition or to inspect the property
\n(including the books and records) of any Person; (d) shall not be required to
\ninitiate or conduct any litigation or collection proceedings under any Loan
\nDocument; and (e) shall not be responsible for any action taken or omitted to be
\ntaken by it under or in connection with any Loan Document, except for its own
\nnegligence or willful misconduct. The Administrative Agent may employ agents and
\nattorneys-in-fact and shall not be responsible for the negligence or misconduct
\nof any such agents or attorneys-in-fact selected by it with reasonable care. The
\nJoint Lead Arrangers, the Documentation Agent and Syndication Agent, in such
\nrespective capacities, shall have no responsibilities, and shall incur no
\nliabilities under this Agreement.<\/p>\n
10.2. Reliance by Administrative Agent. The Administrative
\nAgent shall be entitled to rely upon any certification, notice, instrument,
\nwriting, or other communication (including, without limitation, any thereof by
\ntelephone or telefacsimile) believed by it to be genuine and correct and to have
\nbeen signed, sent or made by or on behalf of the proper Person or Persons, and
\nupon advice and statements of legal counsel, independent accountants, and other
\nexperts selected by the Administrative Agent. The Administrative Agent may deem
\nand treat the payee of any Note as the holder thereof for all purposes hereof
\nunless and until the Administrative Agent receives and accepts an Assignment and
\nAcceptance executed in accordance with Section 11.1 hereof. As to any matters
\nnot expressly provided for by this Agreement, the Administrative Agent shall not
\nbe required to exercise any discretion or take any action, but shall be required
\nto act or to refrain from acting (and shall be fully protected in so acting or
\nrefraining from acting) upon the instructions of the Required Lenders, and such
\ninstructions shall be binding on all of the Lenders; provided, however, that the
\nAdministrative Agent shall not be required to take any action that exposes the
\nAdministrative Agent to personal liability or that is contrary to any Loan
\nDocument or applicable law or unless it shall first be indemnified to its
\nsatisfaction by the Lenders against any and all liability and expense which may
\nbe incurred by it by reason of taking any such action.<\/p>\n
10.3. Defaults. The Administrative Agent shall not be deemed
\nto have knowledge or notice of the occurrence of a Default or Event of Default
\nunless the Administrative Agent has received written notice from a Lender or the
\nBorrower specifying such Default or Event of Default and stating that such
\nnotice is a “Notice of Default”. In the event that the Administrative Agent
\nreceives such a notice of the occurrence of a Default or Event of Default, the
\nAdministrative Agent shall give prompt notice thereof to the Lenders. The
\nAdministrative Agent shall (subject to Section 10.2 hereof) take such action
\nwith respect to such Default or Event of Default as shall reasonably be directed
\nby the Required Lenders, provided that, unless<\/p>\n
65<\/p>\n
and until the Administrative Agent shall have received such directions, the
\nAdministrative Agent may (but shall not be obligated to) take such action, or
\nrefrain from taking such action, with respect to such Default or Event of
\nDefault as it shall deem advisable in the best interest of the Lenders.<\/p>\n
10.4. Rights as Lender. With respect to its Revolving Credit
\nCommitment and the Loans made by it, UBS AG, Stamford Branch (and any successor
\nacting as Administrative Agent) in its capacity as a Lender hereunder shall have
\nthe same rights and powers hereunder as any other Lender and may exercise the
\nsame as though it were not acting as the Administrative Agent, and the term
\n“Lender” or “Lenders” shall, unless the context otherwise indicates, include the
\nAdministrative Agent in its individual capacity. UBS AG, Stamford Branch (and
\nany successor acting as Administrative Agent) and its affiliates may (without
\nhaving to account therefor to any Lender) accept deposits from, lend money to,
\nmake investments in, provide services to, and generally engage in any kind of
\nlending, trust, or other business with the Borrower or any of its Subsidiaries
\nor affiliates as if it were not acting as Administrative Agent, and UBS AG,
\nStamford Branch (and any successor acting as Administrative Agent) and its
\naffiliates may accept fees and other consideration from the Borrower or any of
\nits Subsidiaries or affiliates for services in connection with this Agreement or
\notherwise without having to account for the same to the Lenders.<\/p>\n
10.5. Indemnification. The Lenders agree to indemnify the
\nAdministrative Agent (to the extent not reimbursed under Section 11.12 hereof,
\nbut without limiting the obligations of the Borrower under such Section) ratably
\nin accordance with their respective Revolving Credit Commitments, for any and
\nall liabilities, obligations, losses, damages, penalties, actions, judgments,
\nsuits, reasonable costs and expenses (including attorneys’ fees and
\ndisbursements), or disbursements of any kind and nature whatsoever that may be
\nimposed on, incurred by or asserted against the Administrative Agent (including
\nby any Lender) in any way relating to or arising out of any Loan Document or the
\ntransactions contemplated thereby (including, without limitation, the
\nRefinancing or any transactions connected therewith) or any action taken or
\nomitted by the Administrative Agent under any Loan Document; provided that no
\nLender shall be liable for any of the foregoing to the extent they arise (as
\ndetermined by a final judgment of a court of competent jurisdiction) from the
\ngross negligence or willful misconduct of the Person to be indemnified. Without
\nlimitation of the foregoing, each Lender agrees to reimburse the Administrative
\nAgent promptly upon demand for its ratable share of any costs or expenses
\npayable by the Borrower under Section 11.6, to the extent that the
\nAdministrative Agent is not promptly reimbursed for such costs and expenses by
\nthe Borrower. The agreements contained in this Section shall survive payment in
\nfull of the Loans and all other amounts payable under this Agreement.<\/p>\n
10.6. Non-Reliance on Administrative Agent and Other Lenders.
\nEach Lender agrees that it has, independently and without reliance on the
\nAdministrative Agent or any other Lender, and based on such documents and
\ninformation as it has deemed appropriate, made its own credit analysis of the
\nBorrower and its Subsidiaries and decision to enter into this Agreement and that
\nit will, independently and without reliance upon the Administrative Agent or any
\nother Lender, and based on such documents and information as it shall deem
\nappropriate at the time, continue to make its own analysis and decisions in
\ntaking or not taking action under the Loan Documents. Except for notices,
\nreports and other documents and information expressly <\/p>\n
66<\/p>\n
required to be furnished to the Lenders by the Administrative Agent hereunder,
\nthe Administrative Agent shall not have any duty or responsibility to provide
\nany Lender with any credit or other information concerning the affairs,
\nfinancial condition, or business of the Borrower or any of its Subsidiaries or
\naffiliates that may come into the possession of the Administrative Agent or any
\nof its affiliates.<\/p>\n
10.7. Resignation of Administrative Agent. The Administrative
\nAgent may resign at any time by giving notice thereof to the Lenders and the
\nBorrower. Upon any such resignation, the Required Lenders shall have the right
\nto appoint a successor Administrative Agent subject to the approval of the
\nBorrower so long as no Default or Event of Default shall have occurred and be
\ncontinuing, such approval not to be unreasonably withheld. If no successor
\nAdministrative Agent shall have been so appointed by the Required Lenders and
\nshall have accepted such appointment within thirty (30) days after the retiring
\nAdministrative Agent’s giving of notice of resignation, then the retiring
\nAdministrative Agent may, on behalf of the Lenders, appoint a successor
\nAdministrative Agent which shall be a commercial bank organized under the laws
\nof the United States of America having combined capital and surplus of at least
\n$100,000,000. Upon the acceptance of any appointment as Administrative Agent
\nhereunder by a successor, such successor shall thereupon succeed to and become
\nvested with all the rights, powers, discretion, privileges, and duties of the
\nretiring Administrative Agent, and the retiring Administrative Agent shall be
\ndischarged from its duties and obligations hereunder. After any retiring
\nAdministrative Agent’s resignation hereunder as Administrative Agent, the
\nprovisions of this Article X shall continue in effect for its benefit in respect
\nof any actions taken or omitted to be taken by it while it was acting as
\nAdministrative Agent.<\/p>\n
10.8. Fees. The Borrower agrees to pay to the Administrative
\nAgent, for its individual account, an annual Administrative Agent’s fee as from
\ntime to time agreed to by the Borrower and Administrative Agent in writing.<\/p>\n
ARTICLE XI<\/p>\n
Miscellaneous<\/p>\n
11.1. Assignments and Participations. (a) Each Lender may
\nassign to one or more Eligible Assignees all or a portion of its rights and
\nobligations under this Agreement (including, without limitation, all or a
\nportion of its Loans and its Revolving Credit Commitment); provided, however,
\nthat<\/p>\n
(i) each such assignment shall be to an Eligible Assignee;<\/p>\n
(ii) except in the case of an assignment by a Lender to an
\n affiliate of such Lender or a Controlled Investment Affiliate of such
\n Lender, or to another Lender, or an assignment of all of a Lender’s
\n rights and obligations under this Agreement, any such partial
\n assignment shall be in an amount at least equal to $4,000,000 or an
\n integral multiple of $1,000,000 in excess thereof;<\/p>\n
67<\/p>\n
(iii) each such assignment by a Lender shall be of a constant,
\n and not varying, percentage of all of its rights and obligations under
\n this Agreement; and<\/p>\n
(iv) the parties to such assignment shall execute and deliver
\n to the Administrative Agent for its acceptance an Assignment and
\n Acceptance together with any Note subject to such assignment and a
\n processing fee of $3,500.<\/p>\n
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
\nassignee thereunder shall be a party hereto and, to the extent of such
\nassignment, have the obligations, rights, and benefits of a Lender hereunder and
\nthe assigning Lender shall, to the extent of such assignment, relinquish its
\nrights and be released from its obligations under this Agreement. Upon the
\nconsummation of any assignment pursuant to this Section the assignor, the
\nAdministrative Agent and the Borrower shall make appropriate arrangements so
\nthat, if requested, new Notes are issued to the assignor and the assignee. If
\nthe assignee is not incorporated under the laws of the United States of America
\nor a state thereof, it shall deliver to the Borrower and the Administrative
\nAgent certification as to exemption from deduction or withholding of Taxes in
\naccordance with Section 4.6.<\/p>\n
(b) The Administrative Agent shall maintain at its address
\nreferred to in Section 11.2 (or such other address as the Administrative Agent
\nmay specify thereunder) a copy of each Assignment and Acceptance delivered to
\nand accepted by it and a register for the recordation of the names and addresses
\nof the Lenders and the Revolving Credit Commitment of, and principal amount of
\nthe Loans owing to, each Lender from time to time (the “Register”). The entries
\nin the Register shall be conclusive and binding for all purposes, absent
\nmanifest error, and the Borrower, the Administrative Agent and the Lenders may
\ntreat each Person whose name is recorded in the Register as a Lender hereunder
\nfor all purposes of this Agreement. The Register shall be available for
\ninspection by the Borrower or any Lender (with respect to entries relating to
\nsuch Lender) at any reasonable time and from time to time upon reasonable prior
\nnotice.<\/p>\n
(c) Upon its receipt of an Assignment and Acceptance executed
\nby the parties thereto, together with any Note subject to such assignment and
\npayment of the processing fee, the Administrative Agent shall, if such
\nAssignment and Acceptance has been completed and is in substantially the form of
\nExhibit B hereto, (i) accept such Assignment and Acceptance, (ii) record the
\ninformation contained therein in the Register and (iii) give prompt notice
\nthereof to the parties thereto.<\/p>\n
(d) Each Lender may sell participations to one or more Persons
\nin all or a portion of its rights, obligations or rights and obligations under
\nthis Agreement (including all or a portion of its Revolving Credit Commitment or
\nits Loans); provided, however, that (i) any such participation in a Revolving
\nCredit Commitment, but not its Loans, shall be in an amount at least equal to
\n$4,000,000 or an integral multiple of $1,000,000 in excess thereof, (ii) such
\nLender’s obligations under this Agreement shall remain unchanged, (iii) such
\nLender shall remain solely responsible to the other parties hereto for the
\nperformance of such obligations, (iv) the participant shall be entitled to the
\nbenefit of the yield protection provisions contained in Article IV and the right
\nof set-off contained in Section 11.4, and (v) the Borrower shall continue to
\ndeal solely and directly with such Lender in connection with such Lender’s
\nrights and obligations under this Agreement, and such Lender shall retain the
\nsole right to enforce the<\/p>\n
68<\/p>\n
obligations of the Borrower relating to its Loans and to approve any amendment,
\nmodification, or waiver of any provision of this Agreement (other than
\namendments, modifications, or waivers decreasing the amount of principal of or
\nthe rate at which interest is payable on such Loans, extending any scheduled
\nprincipal payment date or date fixed for the payment of interest on such Loans,
\nor extending its Revolving Credit Commitment).<\/p>\n
(e) For avoidance of doubt, the parties to this Agreement
\nacknowledge that the provisions of this Section 11.1 concerning assignments of
\nLoans relate only to absolute assignments and that such provisions do not
\nprohibit assignments creating security interests, including any pledge or
\nassignment by a Lender of any Loan to any Federal Reserve Bank in accordance
\nwith applicable law.<\/p>\n
(f) Any Lender may furnish any information concerning the
\nBorrower or any of its Subsidiaries in the possession of such Lender from time
\nto time to assignees and participants (including prospective assignees and
\nparticipants); provided, however that such Lender shall (a) take reasonable and
\ncustomary measures to safeguard the confidentiality of non-public information
\nand (b) advise such assignees or participants of the confidentiality of such
\nnon-public information.<\/p>\n
11.2. Notices. Any notice shall be conclusively deemed to have
\nbeen received by any party hereto and be effective (i) on the day on which
\ndelivered (including hand delivery by commercial courier service) to such party
\n(against receipt therefor), (ii) on the date of receipt at such address,
\ntelefacsimile number or telex number as may from time to time be specified by
\nsuch party in written notice to the other parties hereto or otherwise received),
\nin the case of notice by telegram, telefacsimile or telex, respectively (where
\nthe receipt of such message is verified by return), or (iii) on the fifth
\nBusiness Day after the day on which mailed, if sent prepaid by certified or
\nregistered mail, return receipt requested, in each case delivered, transmitted
\nor mailed, as the case may be, to the address, telex number or telefacsimile
\nnumber, as appropriate, set forth below or such other address or number as such
\nparty shall specify by notice hereunder:<\/p>\n
(a) if to the Borrower:<\/p>\n
Malcolm E. McVay, Senior Vice President and
\n Treasurer
\n HEALTHSOUTH Corporation
\n One HealthSouth Parkway
\n Birmingham, Alabama 35243
\n Tel: 205-969-6140
\n Fax: 205-969-4620
\n Email: tadd.mcvay@healthsouth.com<\/p>\n
with a copy to:<\/p>\n
William W. Horton
\n HEALTHSOUTH Corporation
\n One HealthSouth Parkway<\/p>\n
69<\/p>\n
Birmingham, Alabama 35243
\n Tel: 205-969-4977
\n Fax: 205-969-4730
\n Email: bill.horton@healthsouth.com<\/p>\n
(b) if to the Administrative Agent:<\/p>\n
UBS AG STAMFORD BRANCH
\n 677 Washington Boulevard
\n Stamford, Connecticut 06901
\n Attention: Jennifer Poccia
\n Tel: 203-719-3834
\n Fax: 203-719-3888
\n Email: jennifer.poccia@ubsw.com
\n Reference: HealthSouth<\/p>\n
(c) if to the Lenders:<\/p>\n
At the addresses set forth on each Lender’s Addendum
\n and on the signature page of each Assignment and
\n Acceptance.<\/p>\n
11.3. No Waiver. No failure or delay on the part of the
\nAdministrative Agent, any Lender or the Borrower in the exercise of any right,
\npower or privilege hereunder shall operate as a waiver of any such right, power
\nor privilege nor shall any such failure or delay preclude any other or further
\nexercise thereof. The rights and remedies herein provided are cumulative and not
\nexclusive of any rights or remedies provided by law.<\/p>\n
11.4. Rights of Setoff; Adjustments. (a) The Borrower agrees
\nthat the Administrative Agent and each Lender shall have a Lien for all the
\nObligations of the Borrower upon all deposits or deposit accounts of any kind,
\nor any interest in any deposits or deposit accounts thereof, now or hereafter
\npledged, mortgaged, transferred or assigned to the Administrative Agent or such
\nLender or otherwise in the possession or control of the Administrative Agent or
\nsuch Lender (other than for safekeeping) for any purpose for the account or
\nbenefit of the Borrower and including any balance of any deposit account or of
\nany credit of the Borrower with the Administrative Agent or such Lender, whether
\nnow existing or hereafter established and hereby authorizes the Administrative
\nAgent and each Lender at any time or times from and after the occurrence of a
\nDefault or an Event of Default with or without prior notice to set off against
\nand apply such balances or any part thereof to such of the Obligations of the
\nBorrower to the Lenders then past due and in such amounts as they may elect, and
\nwhether or not the collateral or the responsibility of other Person primarily,
\nsecondarily or otherwise liable may be deemed adequate.<\/p>\n
(b) If any Lender (a “benefitted Lender”) shall at any time
\nreceive any payment of all or part of the Loans owing to it, or interest
\nthereon, or receive any collateral in respect thereof (whether voluntarily or
\ninvoluntarily, by set-off, or otherwise), in a greater<\/p>\n
70<\/p>\n
proportion than any such payment to or collateral received by any other Lender,
\nif any, in respect of such other Lender’s Loans owing to it, or interest
\nthereon, such benefited Lender shall purchase for cash from the other Lenders a
\nparticipating interest in such portion of each such other Lender’s Loans owing
\nto it, or shall provide such other Lenders with the benefits of any such
\ncollateral, or the proceeds thereof, as shall be necessary to cause such
\nbenefited Lender to share the excess payment or benefits of such collateral or
\nproceeds ratably with each of the Lenders; provided, however that if all or any
\nportion of such excess payment or benefits is thereafter recovered from such
\nbenefited Lender, such purchase shall be rescinded, and the purchase price and
\nbenefits returned, to the extent of such recovery, but without interest. The
\nBorrower agrees that any Lender so purchasing a participation from a Lender
\npursuant to this Section 11.4 may, to the fullest extent permitted by law,
\nexercise all of its rights of payment (including the right of set-off) with
\nrespect to such participation as fully as if such Person were the direct
\ncreditor of the Borrower in the amount of such participation.<\/p>\n
11.5. Survival. All covenants, agreements, representations and
\nwarranties made herein shall survive the making by the Lenders of the Loans and
\nthe issuance of the Letters of Credit and the execution and delivery to the
\nLenders of this Agreement and shall continue in full force and effect so long as
\nany of Obligations remain outstanding or any Lender has any commitment hereunder
\nor the Borrower has continuing obligations hereunder unless otherwise provided
\nherein. Whenever in this Agreement any of the parties hereto is referred to,
\nsuch reference shall be deemed to include the successors and permitted assigns
\nof such party and all covenants, provisions and agreements by or on behalf of
\nthe Borrower which are contained in the Loan Documents shall inure to the
\nbenefit of the successors and permitted assigns of the Lenders or any of them.<\/p>\n
11.6. Expenses. The Borrower agrees (a) to pay or reimburse
\nthe Administrative Agent for all its reasonable and customary out-of-pocket
\ncosts and expenses incurred in connection with the preparation, negotiation and
\nexecution of, and any amendment, supplement or modification to, this Agreement
\nor any of the other Loan Documents, and the consummation of the transactions
\ncontemplated hereby and thereby, including, without limitation, the reasonable
\nfees and disbursements of counsel to the Administrative Agent, (b) to pay or
\nreimburse the Administrative Agent and each Lender for all their reasonable
\ncosts and expenses incurred in connection with the enforcement or preservation
\nof any rights under this Agreement, including without limitation, the reasonable
\nfees and disbursements of their counsel, (c) to pay, indemnify and hold harmless
\nthe Administrative Agent and each Lender from any and all recording and filing
\nfees and any and all liabilities with respect to, or resulting from any failure
\nof Borrower to pay or delay of Borrower in paying, documentary, stamp, excise,
\nwithholding and other similar taxes, if any, which may be payable or determined
\nto be payable in connection with the execution and delivery of, or consummation
\nof any amendment, supplement or modification of, or any waiver or consent under
\nor in respect of, this Agreement, and (d) from and after the occurrence of any
\nEvent of Default to pay, and indemnify and hold harmless the Administrative
\nAgent and each Lender from and against, any and all other liabilities,
\nobligations, losses, damages, penalties, actions, judgments, suits, costs,
\nexpenses or disbursements of any kind or nature whatsoever with respect to the
\nexecution, delivery, enforcement, performance and administration of this
\nAgreement or in any respect relating to the transactions contemplated hereby or
\nthereby (all the foregoing, collectively, the “indemnified liabilities”);
\nprovided, however, that the Borrower shall have no obligation hereunder with
\nrespect to indemnified<\/p>\n
71<\/p>\n
liabilities arising from (i) the willful misconduct or gross negligence of the
\nparty seeking indemnification, as determined by a final judgment of a court of
\ncompetent jurisdiction (ii) legal proceedings commenced against the
\nAdministrative Agent or any Lender by any security holder or creditor thereof
\narising out of and based upon rights afforded any such security holder or
\ncreditor solely in its capacity as such, (iii) any taxes imposed upon the
\nAdministrative Agent or any Lender other than the documentary, stamp, excise,
\nwithholding and similar taxes described in clause (c) above or any tax resulting
\nfrom any change described in Section 4.1, which tax would be payable to Lenders
\nby Borrower pursuant to Article IV, (iv) taxes imposed as a result of a transfer
\nor assignment of any Loan or Revolving Credit Commitment, participation or
\nassignment of a portion of rights therein, (v) any taxes imposed upon any
\nassignee of any Loan or Revolving Credit Commitment, or (vi) by reason of the
\nfailure of the Administrative Agent or any Lender to perform its or their
\nobligations under this Agreement. The agreements in this subsection shall
\nsurvive the Revolving Credit Termination Date, the Facility Extension Loan
\nTermination Date, if applicable, and the repayment of the Loans.<\/p>\n
11.7. Amendments and Waivers. Any provision of this Agreement
\nor any other Loan Document may be amended or waived if, but only if, such
\namendment or waiver is in writing and is signed by the Borrower and the Required
\nLenders (and, if Article X or the rights or duties of the Administrative Agent
\nare affected thereby, by the Administrative Agent); provided that no such
\namendment or waiver shall, unless signed by all the Lenders, (i) increase the
\nRevolving Credit Commitments or the Letter of Credit Commitment of the Lenders,
\n(ii) reduce the principal of or rate of interest on any Loan or any fees or
\nother amounts payable hereunder, (iii) postpone any date fixed for the payment
\nof any scheduled installment of principal of or interest on any Loan or any fees
\nor other amounts payable hereunder or for termination of any Revolving Credit
\nCommitment, (iv) change the percentage of the Revolving Credit Commitments or of
\nthe unpaid principal amount of the Loans, or the percentage of Lenders that
\nconstitute Required Lenders or (v) amend the definition of “Required Lenders” or
\namend Section 11.15.<\/p>\n
11.8. Counterparts. This Agreement may be executed in any
\nnumber of counterparts, each of which when so executed and delivered shall be
\ndeemed an original, and it shall not be necessary in making proof of this
\nAgreement to produce or account for more than one such fully-executed
\ncounterpart.<\/p>\n
11.9. 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 OTHER LOAN DOCUMENTS, THE OBLIGATIONS, OR ANY INSTRUMENT OR DOCUMENT
\nDELIVERED PURSUANT TO THIS AGREEMENT, OR THE VALIDITY, PROTECTION,
\nINTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF, OR ANY OTHER CLAIM OR DISPUTE
\nHOWSOEVER ARISING BETWEEN THE BORROWER AND THE LENDERS OR THE ADMINISTRATIVE
\nAGENT, EACH PARTY TO THIS AGREEMENT HEREBY WAIVES, TO THE EXTENT PERMITTED BY
\nLAW, TRIAL BY JURY IN CONNECTION WITH ANY SUCH LITIGATION.<\/p>\n
11.10. Termination. The termination of this Agreement shall
\nnot affect any rights of the Borrower, the Lenders or the Administrative Agent
\nor any obligation of the Borrower, the Lenders or the Administrative Agent,
\narising prior to the effective date of such termination, and the provisions
\nhereof shall continue to be fully operative until all transactions entered into
\nor rights created or obligations incurred prior to such termination have been
\nfully disposed of, <\/p>\n
72<\/p>\n
concluded or liquidated and the Obligations arising prior to or after such
\ntermination have been irrevocably paid in full. The rights granted to the
\nAdministrative Agent for the benefit of the Lenders hereunder and under the
\nother Loan Documents shall continue in full force and effect, notwithstanding
\nthe termination of this Agreement, until all of the Obligations have been paid
\nin full after the termination hereof or the Borrower has furnished the Lenders
\nand the Administrative Agent with an indemnification satisfactory to the
\nAdministrative Agent and each Lender with respect thereto. All representations,
\nwarranties, covenants, waivers and agreements contained herein shall survive
\ntermination hereof until payment in full of the Obligations unless otherwise
\nprovided herein. Notwithstanding the foregoing, if after receipt of any payment
\nof all or any part of the Obligations, any Lender is for any reason compelled to
\nsurrender such payment to any Person because such payment is determined to be
\nvoid or voidable as a preference, impermissible setoff, a diversion of trust
\nfunds or for any other reason, this Agreement shall continue in full force and
\nthe Borrower shall be liable to, and shall indemnify and hold such Lender
\nharmless for, the amount of such payment surrendered until such Lender shall
\nhave been finally and irrevocably paid in full. The provisions of the foregoing
\nsentence shall be and remain effective notwithstanding any contrary action which
\nmay have been taken by the Lenders in reliance upon such payment, and any such
\ncontrary action so taken shall be without prejudice to the Lenders’ rights under
\nthis Agreement and shall be deemed to have been conditioned upon such payment
\nhaving become final and irrevocable.<\/p>\n
11.11. Governing Law. (a) THIS AGREEMENT AND THE RIGHTS AND
\nOBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
\nCONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.<\/p>\n
(b) Submission To Jurisdiction; Waivers. The Borrower hereby
\nirrevocably and unconditionally:<\/p>\n
(i) submits for itself and its property in any legal action or
\n proceeding relating to this Agreement and the other Loan Documents to
\n which it is a party, or for recognition and enforcement of any judgment
\n in respect thereof, to the non-exclusive general jurisdiction of the
\n courts of the State of New York, the courts of the United States for
\n the Southern District of New York, and appellate courts from any
\n thereof;<\/p>\n
(ii) consents that any such action or proceeding may be
\n brought in such courts and waives any objection that it may now or
\n hereafter have to the venue of any such action or proceeding in any
\n such court or that such action or proceeding was brought in an
\n inconvenient court and agrees not to plead or claim the same;<\/p>\n
(iii) agrees that service of process in any such action or
\n proceeding may be efected by mailing a copy thereof by registered or
\n certified mail (or any substantially similar form of mail), postage
\n prepaid, to the Borrower at its address set forth in Section 11.2 or at
\n such other address of which the Administrative Agent shall have been
\n notified pursuant thereto; and<\/p>\n
(iv) agrees that nothing herein shall affect the right to
\n effect service of process in any other manner permitted by law or shall
\n limit the right to sue in any other jurisdiction.<\/p>\n
73<\/p>\n
11.12. Indemnification. In consideration of the execution and
\ndelivery of this Agreement by the Administrative Agent and each Lender and the
\nextension of the Revolving Credit Commitments, the Borrower hereby indemnifies,
\nexonerates and holds free and harmless the Administrative Agent and each Lender
\nand each of their respective officers, directors, employees, affiliates and
\nagents (collectively, the “Indemnified Parties”) from and against any and all
\nactions, causes of action, claims, suits, losses, costs, liabilities and
\ndamages, and expenses incurred in connection therewith (irrespective of whether
\nany such Indemnified Party is a party to the action for which indemnification
\nhereunder is sought), including reasonable attorneys’ fees and disbursements
\n(collectively, the “Indemnified Liabilities”), incurred by the Indemnified
\nParties or any of them as a result of, or arising out of, or relating to, any of
\nthe 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
\n 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 Subsidiaries or Controlled Partnerships of any
\n 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 of any hazardous waste material (including
\n any losses, liabilities, damages, injuries, costs, expenses or claims
\n asserted or arising under any environmental laws), regardless of
\n whether caused by, or within the control of, the Borrower or such
\n Subsidiary or Controlled 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 gross
\nnegligence or willful misconduct as determined by a final judgment of a court of
\ncompetent jurisdiction, and if and to the extent that the foregoing undertaking
\nmay be unenforceable for any reason, the Borrower hereby agrees to make the
\nmaximum contribution to the payment and satisfaction of each of the Indemnified
\nLiabilities which is permissible under applicable law. The agreements in this
\nSection 11.12 shall survive the Revolving Credit Termination Date, the Facility
\nExtension Loan Termination Date, if applicable, and the repayment of the Loans.<\/p>\n
11.13. Agreement Controls. In the event that any term of any
\nof the Loan Documents other than this Agreement conflicts with any term of this
\nAgreement, the terms and provisions of this Agreement shall control.<\/p>\n
11.14. Integration. This Agreement and the other Loan
\nDocuments represent the final agreement between the parties as to the subject
\nmatter hereof or thereof and may not be<\/p>\n
74<\/p>\n
contradicted by evidence of prior, contemporaneous, or subsequent oral
\nagreements of the parties. There are no oral agreements between the parties.<\/p>\n
11.15. 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 obligations hereunder without the prior written consent
\nof the Administrative Agent and all Lenders. The Administrative Agent and the
\nLenders may assign or transfer their interest hereunder but only as provided
\nherein.<\/p>\n
11.16. 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
11.17. Lender Addenda. Each initial Lender shall become a
\nparty to this Agreement by delivering to the Administrative Agent a Lender
\nAddendum duly executed by such Lender, the Borrower and the Administrative
\nAgent.<\/p>\n
11.18. Designated Senior Indebtedness. For purposes of the
\nConvertible Subordinated Debentures and the New Senior Subordinated Notes, the
\nObligations shall be designated “Designated Senior Indebtedness”.<\/p>\n
75<\/p>\n
IN WITNESS WHEREOF, the parties hereto have caused this Credit
\nAgreement to be duly executed and delivered in New York, New York by their
\nproper and duly authorized officers as of the day and year first written above.<\/p>\n
HEALTHSOUTH CORPORATION<\/p>\n
By: \/s\/Malcolm E. McVay
\n ——————————–
\n Name: Malcolm E. McVay
\n Title: Senior Vice President and Treasurer<\/p>\n
UBS AG, STAMFORD BRANCH, as Administrative Agent<\/p>\n
By: \/s\/Daniel W. Ladd III
\n ———————————–
\n Name: Daniel W. Ladd III
\n Title: Executive Director<\/p>\n
By: \/s\/Wilfred V. Saint
\n ———————————
\n Name: Wilfred V. Saint
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