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EXECUTION COPY
================================================================================
CREDIT AGREEMENT
dated as of
June 14, 2002
among
HEALTHSOUTH CORPORATION,
The Lenders Party Hereto,
JPMORGAN CHASE BANK,
as Administrative Agent
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Syndication Agent,
UBS WARBURG LLC,
SCOTIABANC, INC.
and
DEUTSCHE BANK AG,
SCOTIABANC, INC.
and
DEUTSCHE BANK AG,
NEW YORK BRANCH
as Co-Documentation Agents
and
BANK OF AMERICA, N.A.,
as Senior Managing Agent
--------------------------
J.P. MORGAN SECURITIES INC.
and
WACHOVIA SECURITIES,
as Joint Lead Arrangers and Joint Bookrunners
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
-----------
SECTION 1.01. Defined Terms..................................................1
SECTION 1.02. Classification of Loans and Borrowings........................26
SECTION 1.03. Terms Generally...............................................26
SECTION 1.04. Accounting Terms; GAAP........................................26
SECTION 1.05. Classification of Indebtedness................................27
ARTICLE II
The Credits
-----------
SECTION 2.01. Commitments...................................................27
SECTION 2.02. Loans and Borrowings..........................................27
SECTION 2.03. Requests for Revolving Borrowings.............................28
SECTION 2.04. Letters of Credit.............................................29
SECTION 2.05. Funding of Borrowings.........................................35
SECTION 2.06. Interest Elections............................................36
SECTION 2.07. Termination and Reduction of Commitments......................37
SECTION 2.08. Repayment of Loans; Evidence of Debt..........................38
SECTION 2.09. Prepayment of Loans...........................................39
SECTION 2.10. Fees..........................................................40
SECTION 2.11. Interest......................................................41
SECTION 2.12. Alternate Rate of Interest....................................42
SECTION 2.13. Increased Costs...............................................42
SECTION 2.14. Break Funding Payments........................................44
SECTION 2.15. Taxes.........................................................45
SECTION 2.16. Payments Generally; Pro Rata Treatment;
Sharing of Setoffs........................................46
SECTION 2.17. Mitigation Obligations; Replacement of Lenders................49
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.01. Organization and Authority....................................50
SECTION 3.02. Execution; No Conflicts.......................................50
SECTION 3.03. Solvency......................................................51
SECTION 3.04. Subsidiaries..................................................52
SECTION 3.05. Ownership Interests...........................................52
SECTION 3.06. Financial Condition...........................................52
SECTION 3.07. Title to Properties...........................................53
<PAGE>
SECTION 3.08. Taxes.........................................................53
SECTION 3.09. Other Agreements..............................................53
SECTION 3.10. Litigation....................................................54
SECTION 3.11. Margin Stock..................................................55
SECTION 3.12. Investment and Holding Company Status.........................55
SECTION 3.13. Intellectual Property.........................................55
SECTION 3.14. No Untrue Statement...........................................56
SECTION 3.15. No Consents, Etc..............................................56
SECTION 3.16. ERISA.........................................................56
SECTION 3.17. No Default....................................................57
SECTION 3.18. Environmental Matters.........................................57
SECTION 3.19. Employment Matters............................................57
SECTION 3.20. RICO..........................................................58
SECTION 3.21. Reimbursement from Third Party Payors.........................58
SECTION 3.22. Compliance with Laws..........................................58
SECTION 3.23. Insurance.....................................................58
ARTICLE IV
Conditions
----------
SECTION 4.01. Effective Date................................................59
SECTION 4.02. Each Credit Event.............................................60
ARTICLE V
Affirmative Covenants
---------------------
SECTION 5.01. Financial Statements, Reports, Etc............................61
SECTION 5.02. Maintain Properties...........................................64
SECTION 5.03. Existence, Qualification, Etc.................................64
SECTION 5.04. Regulations and Obligations...................................64
SECTION 5.05. Insurance.....................................................65
SECTION 5.06. True Books....................................................65
SECTION 5.07. Right of Inspection...........................................65
SECTION 5.08. Observe All Laws..............................................65
SECTION 5.09. Governmental Licences.........................................66
SECTION 5.10. Notice of Material Events.....................................66
SECTION 5.11. Suits or Other Proceedings....................................66
SECTION 5.12. Notice of Discharge of Hazardous Material or
Environmental Complaint.......................................67
ARTICLE VI
Negative Covenants
------------------
SECTION 6.01. Financial Covenants...........................................67
SECTION 6.02. Investments, Loans and Advances...............................67
<PAGE>
SECTION 6.03. Indebtedness..................................................68
SECTION 6.04. Disposition of Assets.........................................69
SECTION 6.05. Consolidation or Merger.......................................69
SECTION 6.06. Liens.........................................................70
SECTION 6.07. Restrictive Agreements........................................71
SECTION 6.08. Acquisitions..................................................71
SECTION 6.09. Restricted Payments; Certain Prepayments of
Indebtedness..................................................72
SECTION 6.10. Compliance with ERISA.........................................73
SECTION 6.11. Fiscal Year...................................................74
SECTION 6.12. Dissolution, etc..............................................74
SECTION 6.13. Transactions with Affiliates..................................74
SECTION 6.14. Sale and Leaseback Transactions...............................74
SECTION 6.15. Swap Agreements...............................................75
SECTION 6.16. Management Contracts..........................................75
SECTION 6.17. Continuation of Current Business..............................75
SECTION 6.18. Use of Proceeds...............................................75
ARTICLE VII
Events of Default
-----------------
ARTICLE VIII
The Administrative Agent
------------------------
ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. Notices.......................................................82
SECTION 9.02. Waivers; Amendments...........................................83
SECTION 9.03. Expenses; Indemnity; Damage Waiver............................84
SECTION 9.04. Successors and Assigns........................................86
SECTION 9.05. Survival......................................................91
SECTION 9.06. Counterparts; Integration; Effectiveness......................91
SECTION 9.07. Severability..................................................92
SECTION 9.08. Right of Setoff...............................................92
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service
of Process....................................................92
SECTION 9.10. WAIVER OF JURY TRIAL..........................................93
SECTION 9.11. Headings......................................................93
SECTION 9.12. Confidentiality...............................................93
SECTION 9.13. Additional Agents.............................................94
<PAGE>
SCHEDULES:
Schedule 2.01 -- Commitments
Schedule 2.04 -- Existing Letters of Credit
Schedule 3.04 -- Subsidiaries
Schedule 3.09 -- Other Agreements
Schedule 3.10 -- Litigation
Schedule 3.13 -- Intellectual Property
Schedule 3.18 -- Environmental Matters
Schedule 3.19 -- Employment Matters
Schedule 6.03 -- Indebtedness
Schedule 6.06 -- Liens
Schedule 6.07 -- Restrictive Agreements
EXHIBITS:
Exhibit A -- Form of Assignment and Assumption
Exhibit B-1 -- Form of Opinion of Borrower's Outside Counsel
Exhibit B-2 -- Form of Opinion of General Counsel of Borrower
<PAGE>
CREDIT AGREEMENT dated as of June
14, 2002 (this "Agreement") among
HEALTHSOUTH CORPORATION; the LENDERS party
hereto; JPMORGAN CHASE BANK, as
Administrative Agent; and WACHOVIA BANK,
NATIONAL ASSOCIATION, as Syndication Agent;
UBS WARBURG LLC, SCOTIABANC, INC. and
DEUTSCHE BANK AG, NEW YORK BRANCH, as
Co-Documentation Agents; and BANK OF
AMERICA, N.A., as Senior Managing Agent.
The Borrower has requested the Lenders to make Loans at any
time and from time to time prior to the Maturity Date in an aggregate principal
amount at any time outstanding not in excess of $1,250,000,000. The Borrower has
requested the Issuing Bank to issue Letters of Credit, in an aggregate face
amount at any time outstanding not in excess of $100,000,000, to support payment
obligations incurred in the ordinary course of business by the Borrower and the
Subsidiaries. The proceeds of the Loans will not be used for any purpose other
than (a) to repay a portion of the outstanding amounts under the Existing Credit
Facility, (b) to pay fees and expenses payable in connection with the
Transactions and (c) for general corporate purposes.
The parties hereto agree as follows:
ARTICLE I
Definitions
-----------
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
<PAGE>
"Administrative Agent" means JPMorgan Chase Bank, in its
capacity as administrative agent for the Lenders hereunder.
"Administrative" Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate per annum
equal to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable" Percentage" means, with respect to any Lender,
the percentage of the total Commitments represented by such Lender's Commitment.
If the Commitments have terminated or expired, the Applicable Percentages shall
be determined based upon the Commitments most recently in effect, giving effect
to any assignments.
"Applicable Rate" means, for any day, with respect to any ABR
Loan or Eurodollar Loan, or with respect to the commitment fees payable
hereunder, as the case may be, the applicable rate per annum (expressed in basis
points) set forth below under the caption "ABR Spread", "Eurodollar Spread" or
"Commitment Fee Rate", as the case may be, based upon the ratings by Moody's and
S&P, respectively, applicable on such date to the Index Debt:
===============================================================================
Index Debt Ratings: ABR Eurodollar Commitment Fee
Spread Spread Rate
-------------------------------------------------------------------------------
Category 1 0.0 100.0 27.5
----------
BBB/Baa2 or higher
-------------------------------------------------------------------------------
Category 2 25.0 125.0 32.5
----------
BBB-/Baa3
-------------------------------------------------------------------------------
<PAGE>
===============================================================================
Index Debt Ratings: ABR Eurodollar Commitment Fee
Spread Spread Rate
-------------------------------------------------------------------------------
Category 3 50.0 150.0 37.5
----------
BB+/Ba1
-------------------------------------------------------------------------------
Category 4 75.0 175.0 50.0
----------
BB/Ba2
-------------------------------------------------------------------------------
Category 5 100.0 200.0 50.0
----------
Ratings of BB- or
Ba3 or lower
===============================================================================
For purposes of the foregoing, (i) if either Moody's or S&P
shall not have in effect a rating for the Index Debt (other than by reason of
the circumstances referred to in the last sentence of this definition), then
such rating agency shall be deemed to have established a rating in Category 5;
(ii) if the ratings established or deemed to have been established by Moody's
and S&P for the Index Debt shall fall within different Categories, the
Applicable Rate shall be based on the higher of the two ratings, unless one of
the two ratings is two or more Categories lower than the other, in which case
the Applicable Rate shall be determined by reference to the Category next above
that of the lower of the two ratings; and (iii) if the ratings established or
deemed to have been established by Moody's and S&P for the Index Debt shall be
changed (other than as a result of a change in the rating system of Moody's or
S&P), such change shall be effective as of the date on which it is first
announced by the applicable rating agency, irrespective of when notice of such
change shall have been furnished by the Borrower to the Administrative Agent and
the Lenders pursuant to Section 5.01 or otherwise. Each change in the Applicable
Rate shall apply during the period commencing on the effective date of such
change and ending on the date immediately preceding the effective date of the
next such change. If the rating system of Moody's or S&P shall change, or if
either such rating agency shall cease to be in the business of rating corporate
debt obligations, the Borrower and the Lenders shall negotiate in good faith to
amend this definition to reflect such changed rating system or the
unavailability of ratings from such rating agency and, pending the effectiveness
of any such amendment, the Applicable Rate shall be determined by reference to
the rating most recently in effect prior to such change or cessation.
Notwithstanding the foregoing provisions of this definition, prior to December
31, 2002, the ABR Spread, Eurodollar Spread
<PAGE>
and Commitment Fee Rate in effect from time to time shall not be lower than
those corresponding to Category 2 in the table above.
"Approved Fund" has the meaning assigned to such term in
Section 9.04.
"Assignment and Assumption" means an assignment and assumption
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Attributable Debt" means, with respect to any Sale and
Leaseback Transaction, the present value (discounted at the rate set forth or
implicit in the terms of the lease included in such Sale and Leaseback
Transaction, compounded semiannually) of the total obligations of the lessee for
rental payments during the remaining term of the lease included in such Sale and
Leaseback Transaction (including any period for which such lease has been
extended). In the case of any lease which is terminable by the lessee upon
payment of a penalty, the Attributable Debt shall be the lesser of (i) the
Attributable Debt determined assuming termination upon the first date such lease
may be terminated (in which case the Attributable Debt shall also include the
amount of the penalty, but no rent shall be considered as required to be paid
under such lease subsequent to the first date upon which it may be so
terminated) and (ii) the Attributable Debt determined assuming no such
termination. Any determination of any rate implicit in the terms of the lease
included in such Sale and Leaseback Transaction made in accordance with
generally accepted financial practices by the Borrower shall be binding and
conclusive absent manifest error.
"Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means HEALTHSOUTH Corporation, a Delaware
corporation.
"Borrowing" means Loans of the same Type, made, converted or
continued on the same date and, in the case of
<PAGE>
Eurodollar Loans, as to which a single Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a
Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any person or group
(within the meaning of the Exchange Act), of Equity Interests representing more
than 20% of the aggregate ordinary voting power represented by the issued and
outstanding Equity Interests of the Borrower; (b) if, during any period of up to
24 consecutive months, commencing on the Closing Date, individuals who at the
beginning of such period were directors of the Borrower shall cease for any
reason (other than the death, disability or retirement of an officer of the
Borrower that is serving as a director at such time so long as another officer
of the Borrower replaces such Person as a director) to constitute a majority of
the board of directors of the Borrower; or (c) the acquisition of direct or
indirect Control of the Borrower by any Person or group.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuing Bank (or, for purposes of Section 2.13(b), by any lending office of
such Lender or by such Lender's or the Issuing Bank's holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any
<PAGE>
Governmental Authority made or issued after the date of this Agreement.
"CLO" has the meaning assigned to such term in Section 9.04.
"CMS" means the Centers for Medicare and Medicaid Services and
any successor thereto.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Commitment" means, with respect to each Lender, the
commitment of such Lender to make Loans and to acquire participations in Letters
of Credit hereunder, expressed as an amount representing the maximum aggregate
permitted amount of such Lender's Credit Exposure hereunder, as such commitment
may be (a) reduced from time to time pursuant to Section 2.07 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender's Commitment is set
forth on Schedule 2.01 or in the Assignment and Assumption pursuant to which
such Lender shall have assumed its Commitment, as applicable. The initial
aggregate amount of the Lenders' Commitments is $1,250,000,000.
"Consolidated Current Liabilities" means, on any date, the
consolidated current liabilities (other than the short-term portion of any
long-term Indebtedness of the Borrower or any Subsidiary and any short-term
Indebtedness of the Borrower or any Subsidiary) of the Borrower and the
Subsidiaries, as such amount would appear on a consolidated balance sheet of the
Borrower and the Subsidiaries prepared as of such date in accordance with GAAP.
"Consolidated EBITDA" means, for any period, Consolidated Net
Income for such period plus (a) without duplication and to the extent deducted
in determining such Consolidated Net Income, the sum of (i) Consolidated
Interest Expense for such period, (ii) consolidated income tax expense for such
period, (iii) all amounts attributable to depreciation and amortization for such
period, and (iv) any extraordinary or non-recurring non-cash charges for such
period; provided, however, that cash expenditures in respect of charges referred
to in this clause (iv) shall be deducted in determining Consolidated EBITDA for
the period during which such expenditures are made, and minus (b) without
duplication and to the extent included in determining such Consolidated Net
Income,
<PAGE>
(i) any extraordinary or non-recurring gains for such period and (ii)
consolidated interest for such period, in each case determined on a consolidated
basis in accordance with GAAP.
"Consolidated Intangible Assets" means, on any date, the
consolidated intangible assets of the Borrower and the Subsidiaries, as such
amount would appear on a consolidated balance sheet of the Borrower and the
Subsidiaries prepared in accordance with GAAP. As used herein, "intangible
assets" means the value (net of any applicable reserves) as shown on such
balance sheet of (i) all patents, patent rights, trademarks, trademark
registrations, service marks, trade names, business names, copyrights, designs
(and all reissues, divisions, continuations and extensions thereof), or any
right to any of the foregoing, (ii) goodwill and (iii) all other intangible
assets.
"Consolidated Interest Expense" means, for any period, the
interest expense (including imputed interest expense in respect of Capital Lease
Obligations) of the Borrower and the Subsidiaries for such period, determined on
a consolidated basis in accordance with GAAP.
"Consolidated Net Assets" means, on any date, the excess of
Consolidated Total Assets over Consolidated Current Liabilities.
"Consolidated Net Income" means, for any period, the net
income or loss of the Borrower and the Subsidiaries for such period determined
on a consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income of any Person (other than the Borrower or a Subsidiary)
in which any other Person (other than the Borrower or any Subsidiary or any
director holding qualifying shares in compliance with applicable law) owns an
Equity Interest, except to the extent of the amount of dividends or other
distributions actually paid to the Borrower or any of the Subsidiaries during
such period and (b) the income or loss of any Person accrued prior to the date
it becomes a Subsidiary or is merged into or consolidated with the Borrower or
any Subsidiary or the date that such Person's assets are acquired by the
Borrower or any Subsidiary.
"Consolidated Net Receivables" means, on any date, the net
receivables of the Borrower and the Subsidiaries, as such amount would appear on
a consolidated balance sheet of the Borrower and the Subsidiaries prepared as of
such date in accordance with GAAP; provided, however, that, when calculating
such amount in connection with determining the Borrower's
<PAGE>
compliance with the covenants set forth in Article VI, "Consolidated Net
Receivables" shall include, without duplication, accounts receivable of the
Borrower and the Subsidiaries that are the subject of Receivables Sales to the
extent, and only to the extent, such accounts receivable would not be reflected
on a consolidated balance sheet of the Borrower and the Subsidiaries prepared as
of such date in accordance with GAAP.
"Consolidated Net Tangible Assets" means, on any date,
Consolidated Total Assets minus the sum of (i) Consolidated Intangible Assets
plus (ii) Consolidated Current Liabilities.
"Consolidated Tangible Net Worth" means, on any date,
Consolidated Total Assets minus the sum of (i) Consolidated Intangible Assets
plus (ii) Consolidated Total Liabilities.
"Consolidated Total Assets" means, on any date, the
consolidated total assets of the Borrower and the Subsidiaries, as such amount
would appear on a consolidated balance sheet of the Borrower and the
Subsidiaries prepared as of such date in accordance with GAAP.
"Consolidated Total Indebtedness" means, on any date, the sum
of all Indebtedness (including without limitation Capitalized Lease Obligations)
of the Borrower and the Subsidiaries.
"Consolidated Total Liabilities" means, on any date, the
consolidated total liabilities of the Borrower and the Subsidiaries, as such
amount would appear on a consolidated balance sheet of the Borrower and the
Subsidiaries prepared as of such date in accordance with GAAP.
"Consolidated Total Revenue" means, for any period, the
consolidated total revenues of the Borrower and the Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP.
"Contract Provider" means any Person who provides professional
health care services under or pursuant to any contract, agreement or other
consensual arrangement with the Borrower or any Subsidiary.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise.
<PAGE>
"Controlling" and "Controlled" have meanings correlative thereto.
"Cost of Acquisition" means, in respect of any acquisition
permitted by Section 6.08, the sum of (i) the amount of cash paid by the
Borrower and the Subsidiaries in connection with such acquisition, (ii) the fair
market value of all Equity Interests of the Borrower or any Subsidiary issued or
given in connection with such acquisition, (iii) the amount (determined by using
the face amount or the amount payable at maturity, whichever is greater) of all
Indebtedness incurred, assumed or acquired in connection with such acquisition,
(iv) all additional purchase price amounts in the form of earnouts and other
contingent obligations that should be recorded on the financial statements of
the Borrower and the Subsidiaries in accordance with GAAP, (v) all amounts paid
in respect of covenants not to compete, consulting agreements and other
affiliated contracts in connection with such acquisition and (vi) the aggregate
fair market value of all other consideration given by the Borrower and the
Subsidiaries in connection with such acquisition.
"Credit Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Loans and its
LC Exposure at such time.
"Default" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"dollars" or "$" refers to lawful money of the United States
of America.
"Effective Date" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
9.02).
"Employee Benefit Plan" means any "employee benefit plan", as
defined in Section 3(3) of ERISA (other than a Multiemployer Plan), in respect
of which the Borrower, any Subsidiary or any ERISA Affiliate is (or, if such
plan were terminated, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"Environmental Laws" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated
<PAGE>
or entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
Release or threatened Release of any Hazardous Material or to health and safety
matters.
"Environmental Liability" means all liabilities, obligations,
damages, losses, claims, actions, suits, judgments, orders, fines, penalties,
fees, expenses and costs, (including administrative oversight costs, natural
resource damages and remediation costs), whether contingent or otherwise,
arising out of or relating to (a) compliance or non-compliance with any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the Release of any Hazardous Materials or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed
or imposed with respect to any of the foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower or any Subsidiary, is treated as
a single employer under Section 414(b) or (c) of the Code or, solely for
purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Pension Plan (other than an event for which the 30-day notice period is waived);
(b) the existence with respect to any Pension Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Pension Plan; (d) the incurrence by the Borrower, a
Subsidiary or any ERISA Affiliate of any liability under Title IV of ERISA with
respect to the
<PAGE>
termination of any Plan; (e) the receipt by the Borrower, a Subsidiary or any
ERISA Affiliate from the PBGC or a plan administrator of any notice relating to
an intention to terminate any Pension Plan or to appoint a trustee to administer
any Pension Plan; (f) the incurrence by the Borrower, a Subsidiary or any ERISA
Affiliate of any liability with respect to the withdrawal or partial withdrawal
from any Pension Plan or Multiemployer Plan; or (g) the receipt by the Borrower,
a Subsidiary or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower, a Subsidiary or any ERISA Affiliate of any
notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in
Article VII.
"Exchange Act" means the Securities and Exchange Act of 1934,
as amended, and the rules and regulations promulgated by the SEC thereunder.
"Excluded Taxes" means, with respect to the Administrative
Agent, any Lender, the Issuing Bank or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income or net worth by the
United States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which the Borrower is located and (c) in
the case of a Foreign Lender (other than an assignee pursuant to a request by
the Borrower under Section 2.17(b)), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement (or designates a new lending office) or is attributable
to such Foreign Lender's failure to comply with Section 2.15(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower
<PAGE>
with respect to such withholding tax pursuant to Section 2.15(a).
"Existing Credit Facility" means the Credit Facility dated as
of June 23, 1998 by and among the Borrower, Bank of America, N.A. (f/k/a
Nationsbank, National Association), as administrative agent, J.P. Morgan
Securities Inc., Deutsche Bank AG and Scotiabanc, Inc., as syndication agents,
and the lenders from time to time party thereto.
"Existing Issuing Bank" means Bank of America, N.A. in its
capacity as issuing bank under the Existing Credit Facility.
"Existing Letters of Credit" means the letters of credit
issued under the Existing Credit Facility and outstanding on the Effective Date,
as set forth on Schedule 2.04.
"Facility" means an inpatient or outpatient rehabilitation
facility, certified outpatient rehabilitation facility, skilled nursing
facility, specialty medical center, specialty orthopedic hospital or acute care
hospital, subacute inpatient facility, transitional living center, medical
office building, outpatient surgery center or outpatient diagnostic center, with
all buildings and improvements associated therewith, that is owned or leased, in
whole or in part, by the Borrower or a Subsidiary.
"Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of the Borrower.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
<PAGE>
"Foreign Subsidiary" means any Subsidiary that is organized
under the laws of a jurisdiction other than the United States of America or any
State thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"Hazardous Materials" shall mean (a) petroleum products and
byproducts, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, radon gas, chlorofluorocarbons and all other ozone-depleting
substances or (b) any chemical, material, substance, waste, pollutant or
contaminant that is prohibited, limited or regulated by or pursuant to any
Environmental Law.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed
<PAGE>
money or with respect to deposits or advances of any kind, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (e) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person
of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (i) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances, (j)
all obligations, contingent or otherwise, of such Person in respect of synthetic
lease facilities, (k) all Third Party Securities issued in connection with
Receivables Sales (regardless of whether denominated as debt or equity
securities), (l) all obligations, contingent or otherwise, of such Person in
respect of Swap Agreements and (m) all Attributable Debt. The Indebtedness of
any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Index Debt" means senior, unsecured, long-term indebtedness
for borrowed money of the Borrower that is not guaranteed by any other Person or
subject to any other credit enhancement.
"Information Memorandum" means the Confidential Information
Memorandum dated May 2002 relating to the Borrower and the Transactions.
"Interest Election Request" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.06.
<PAGE>
"Interest Payment Date" means (a) with respect to any ABR
Loan, the last day of each March, June, September and December and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period.
"Interest Period" means, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurodollar Borrowing only, such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Issuing Bank" means JPMorgan Chase Bank, in its capacity as
the issuer of Letters of Credit hereunder, and its successors in such capacity
as provided in Section 2.04(i). The term "Issuing Bank" shall also mean the
Existing Issuing Bank solely as such term is used in reference to the Existing
Letters of Credit. The Issuing Bank may, in its discretion, arrange for one or
more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which
case the term "Issuing Bank" shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.
"knowledge of the Borrower" (and correlative terms such as
"know" or "known") means, with respect to the Borrower and the Subsidiaries, the
knowledge of an executive officer (as set forth in the most recent Form 10-K of
the Borrower filed with the SEC) or a Financial Officer or, as to any specific
matter, any officer of the Borrower or a Subsidiary with the
<PAGE>
primary responsibility for overseeing or administering such matter.
"LC Disbursement" means a payment made by the Issuing Bank
pursuant to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time and (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption.
"Letter of Credit" means the Existing Letters of Credit and
any letter of credit issued pursuant to this Agreement.
"LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Dow Jones Market
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the "LIBO Rate"
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate (rounded upwards, if necessary, to the next 1/100 of 1%) at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
<PAGE>
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset and (b) the interest of a vendor or a lessor
under any conditional sale agreement, capital lease or title retention agreement
(or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"Margin Stock" means "margin stock" as defined in Regulation U
of the Board.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, properties or condition, financial or
otherwise, of the Borrower and the Subsidiaries, taken as a whole, (b) the
ability of the Borrower to perform any of its obligations under this Agreement
or (c) the rights or powers of or remedies available to the Administrative Agent
and the Lenders under this Agreement.
"Material Group" means any Subsidiary or group of Subsidiaries
(i) the book value of the net assets of which was greater than 5% of
Consolidated Net Assets as of the last day of the most recent fiscal period for
which financial statements shall have been delivered pursuant to Section 5.01(a)
or (b) (or, prior to the first delivery of such financial statements, greater
than 5% of Consolidated Net Assets as of the date of the most recent financial
statements referred to in Section 3.06), (ii) the total revenues of which were
greater than 5% of Consolidated Total Revenue for the four-fiscal-quarter period
ending on the last day of the most recent fiscal period for which financial
statements shall have been delivered pursuant to Section 5.01(a) or (b) (or,
prior to the first delivery of such financial statements, greater than 5% of
Consolidated Total Revenue for the four-fiscal-quarter period ending on the last
day of the most recent fiscal period set forth in the most recent financial
statements referred to in Section 3.06) or (iii) the EBITDA of which was greater
than 5% of Consolidated EBITDA for the four-fiscal-quarter period ending on the
last day of the most recent fiscal period for which financial statements shall
have been delivered pursuant to Section 5.01(a) or (b) (or, prior to the
delivery of such financial statements, greater than 5% of Consolidated EBITDA
for the four-fiscal-quarter period ending on the last day of the most recent
fiscal period set forth in the most recent financial statements referred to in
Section 3.06). For purposes of making the determinations
<PAGE>
required by this definition, assets, revenues and EBITDA of Foreign Subsidiaries
shall be converted into US dollars at the rates used in preparing the financial
statements of the Borrower which shall have been delivered pursuant to Section
5.01(a) or (b) (or, prior to the first delivery of such financial statements, at
the rates used in preparing the Borrower's most recent financial statements
referred to in Section 3.06).
"Material Indebtedness" means Indebtedness (other than the
Loans and Letters of Credit), or obligations in respect of one or more Swap
Agreements, of any one or more of the Borrower and the Subsidiaries in an
aggregate principal amount exceeding $25,000,000. For purposes of determining
Material Indebtedness, the "principal amount" of the obligations of the Borrower
or any Subsidiary in respect of any Swap Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that the
Borrower or such Subsidiary would be required to pay if such Swap Agreement were
terminated at such time.
"Maturity Date" means June 14, 2007.
"Medicaid Certification" means certification by CMS or a state
agency or entity under contract with CMS that a health care operation is in
compliance with all the conditions of participation set forth in the Medicaid
Regulations.
"Medicaid Provider Agreement" means an agreement entered into
between a state agency or other entity administering the Medicaid program and a
health care operation under which the health care operation agrees to provide
services for Medicaid patients in accordance with the terms of the agreement and
Medicaid Regulations.
"Medicaid Regulations" means, collectively, (a) all federal
statutes (whether set forth in Title XIX of the Social Security Act or
elsewhere) affecting the medical assistance program established by Title XIX of
the Social Security Act and any statutes succeeding thereto; (b) all applicable
provisions of all federal rules, regulations, manuals and orders of all
Governmental Authorities promulgated pursuant to or in connection with the
statutes described in clause (a) above and all Federal administrative,
reimbursement and other guidelines of all Governmental Authorities having the
force of law promulgated pursuant to or in connection with the statues described
in clause (a) above; (c) all state statutes and plans for medical assistance
enacted in connection with the statutes and provisions described in clauses (a)
and (b) above; and
<PAGE>
(d) all applicable provisions of all rules, regulations, manuals and orders of
all Governmental Authorities promulgated pursuant to or in connection with the
statutes described in clause (c) above and all state administrative,
reimbursement and other guidelines of all Governmental Authorities having the
force of law promulgated pursuant to or in connection with the statutes
described in clause (b) above, in each case as may be amended, supplemented or
otherwise modified from time to time.
"Medicare Certification" means certification by CMS or a state
agency or entity under contract with CMS that a health care operation is in
compliance with all the conditions of participation set forth in the Medicare
Regulations.
"Medicare Provider Agreement" means an agreement entered into
between a state agency or other entity administering the Medicare program and a
health care operation under which the health care operation agrees to provide
services for Medicare patients in accordance with the terms of the agreement and
Medicare Regulations.
"Medicare Regulations" means, collectively, all Federal
statutes (whether set forth in Title XVIII of the Social Security Act or
elsewhere) affecting the health insurance program for the aged and disabled
established by Title XVIII of the Social Security Act and any statutes
succeeding thereto, together with all applicable provisions of all rules,
regulations, manuals and orders and administrative, reimbursement and other
guidelines having the force of law of all Governmental Authorities (including
without limitation, Health and Human Services ("HHS"), CMS, the Office of the
Inspector General for HHS, or any Person succeeding to the functions of any of
the foregoing) promulgated pursuant to or in connection with any of the
foregoing having the force of law, as each may be amended, supplemented or
otherwise modified from time to time.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
<PAGE>
"Participant" has the meaning set forth in Section 9.04.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"Pension Plan" means any Employee Benefit Plan subject to the
provisions of Title IV or Section 302 of ERISA or Section 412 of the Code.
successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes, assessments and other
governmental charges that are not yet delinquent or are being
contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in compliance
with Section 5.04;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature,
in each case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII;
and
(f) easements, zoning restrictions, rights-of-way and
similar encumbrances on real property imposed by law or arising
in the ordinary course of business that do not secure any
monetary obligations and do not materially detract from the value
of the affected property or interfere with the ordinary conduct
of business of the Borrower or any Subsidiary;
<PAGE>
(g) Liens on any assets of a Person existing at the time
such Person is merged into or consolidated with the Borrower or a
Subsidiary or at the time of the purchase or acquisition of all
or substantially all the assets of such Person by the Borrower or
a Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such
Person becoming a Subsidiary, as the case may be, (ii) such Lien
shall not apply to any other property or assets of the Borrower
or any Subsidiary and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or
the date such Person becomes a Subsidiary, as the case may be;
(h) bankers' Liens with respect to the right of set-off
arising in the ordinary course of business against amounts
maintained in bank accounts or certificates of deposit in the
name of the Borrower or any Subsidiary; provided that such right
of set-off is not intended as security for Indebtedness of the
Borrower or any Subsidiary;
(i) Liens granted to the respective trustees under
indentures governing Material Indebtedness of the Borrower to
secure payment of fees and expenses of such trustees incurred in
connection with their acting as trustee under such indentures;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, the
United States of America (or by any agency thereof to the extent
such obligations are backed by the full faith and credit of the
United States of America), in each case maturing within one year
from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or
from Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from
<PAGE>
the date of acquisition thereof issued or guaranteed by or placed
with, and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof which has a
combined capital and surplus and undivided profits of not less
than $500,000,000;
(d) fully collateralized repurchase agreements with a term
of not more than 30 days for securities described in clause (a)
above and entered into with a financial institution satisfying
the criteria described in clause (c) above; and
(e) money market funds that (i) comply with the criteria set
forth in Securities and Exchange Commission Rule 2a-7 under the
Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa
by Moody's and (iii) have portfolio assets of at least
$5,000,000,000.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by JPMorgan Chase Bank as its prime rate in effect
at its principal office in New York City. Each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Receivables Sale" means the transfer and sale by the Borrower
or the Subsidiaries of accounts receivable to a Receivables Subsidiary, which
shall finance its acquisition of such accounts receivable (i) with proceeds from
the issuance of Third Party Securities, (ii) with Sellers' Retained Interests
and (iii) with proceeds from the sale or collection of accounts receivable
previously purchased by it. For purposes of measuring compliance with Section
6.03(d), the amount of any Indebtedness existing in respect of any Receivables
Sale at any time shall be deemed to equal the greater of (i) the aggregate
amount of Third Party Securities issued in connection with any Receivables Sale
which are outstanding at such time or (ii) the maximum purchase limit, however
denominated, under the financing of such Receivables Sale.
"Receivables Subsidiary" means a special purpose trust,
partnership, limited liability company or similar entity formed by the Borrower
for the purpose of effecting one or more
<PAGE>
Receivables Sales which, in connection therewith, issues Third Party Securities;
provided that such Subsidiary shall engage in no other business other than the
purchase of accounts receivable pursuant to Receivables Sales permitted
hereunder and the funding of such Receivables Sales.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Release" means any release, spill, emission, leaking,
dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching
or migration into or through the environment or within or upon any building,
structure, facility or fixture.
"Required Lenders" means, at any time, Lenders having Credit
Exposures and unused Commitments representing more than 50% of the sum of the
total Credit Exposures and unused Commitments at such time.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in the Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such Equity Interests in the Borrower or any option, warrant
or other right to acquire any such Equity Interests in the Borrower.
"Sale and Leaseback Transaction" means any arrangement whereby
the Borrower or a Subsidiary shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereinafter
acquired, and thereafter rent or lease from the buyer or transferee of the sold
or transferred property that it intends to use for substantially the same
purpose or purposes as the property sold or transferred; provided that any such
sale of any fixed or capital assets that is made for cash consideration in an
amount not less than the cost of such fixed or capital asset and is consummated
within 90 days after the acquisition or completion of the fixed or capital asset
shall not be deemed to be a Sale and Leaseback Transaction.
<PAGE>
"SEC" means the United States Securities and Exchange
Commission.
"Securities Act" means the Securities Act of 1933 and the
rules and regulations promulgated by the SEC thereunder.
"Sellers' Retained Interests" means the debt or equity
interests held by the Borrower or any Subsidiary in any Receivables Subsidiaries
to which accounts receivable of the Borrower and the Subsidiaries have been
transferred in Receivables Sales, including any such debt or equity interests
received in consideration for the assets transferred.
"S&P" means Standard & Poor's.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject, with respect to the Adjusted LIBO Rate, for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date, otherwise Controlled by
<PAGE>
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Swap Agreement" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.
"Syndication Agent" means Wachovia Bank, National Association,
in its capacity as syndication agent for the Lenders hereunder.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Third Party Securities" means, with respect to any
Receivables Sale, notes, bonds or other debt instruments, beneficial interests
in a trust, undivided ownership interests or other securities issued for cash
consideration by any Receivables Subsidiary to banks, investors or other
financing sources (other than the Borrower and the Subsidiaries) the proceeds of
which are used to finance, in whole or part, the purchase by the Receivables
Subsidiary of accounts receivable in Receivables Sales.
"Transactions" means the execution, delivery and performance
by the Borrower of this Agreement, the borrowing of the Loans, the use of the
proceeds thereof, the obtaining of the Letters of Credit and the other
transactions contemplated hereby.
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial
<PAGE>
withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans and Borrowings may be classified and referred
to by Type (e.g., a "Eurodollar Loan" or an "ABR Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in
<PAGE>
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
SECTION 1.05. Classification of Indebtedness. The Borrower
acknowledges and agrees that the Indebtedness incurred under this Agreement
constitutes "Designated Senior Indebtedness" (and any other similar term
defining senior Indebtedness) under the indentures and other agreements
governing Indebtedness set forth on Schedule 6.03 or Schedule 6.07 to the extent
this Indebtedness must be so specifically classified herein in order to be
treated as "Designated Senior Indebtedness" (or such similar term) under any
such indenture or agreement.
Article II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees to make Loans to the Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in such Lender's Credit Exposure exceeding such Lender's Commitment.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be
made as part of a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender's failure to make Loans
as required.
(b) Subject to Section 2.12, (i) each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith. Each Lender at its option may make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement.
<PAGE>
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $10,000,000. At the time that
each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $1,000,000 and not less than $10,000,000; provided
that an ABR Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the total Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.04(e).
Borrowings of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of 10 Eurodollar
Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03. Requests for Revolving Borrowings. To request a
Borrowing, the Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.,
New York City time, three Business Days before the date of the proposed
Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New
York City time, one Business Day before the date of the proposed Borrowing;
provided that any such notice of an ABR Borrowing to finance the reimbursement
of an LC Disbursement as contemplated by Section 2.04(e) may be given not later
than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Each
such telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
the Borrower. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
<PAGE>
(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period contemplated
by the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of Section
2.05.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, on the date the
Administrative Agent receives a Borrowing Request the Administrative Agent shall
advise each Lender of the details thereof and of the amount of such Lender's
Loan to be made as part of the requested Borrowing.
SECTION 2.04. Letters of Credit. (a) General. Prior to the
Effective Date, the Existing Issuing Bank issued the Existing Letters of Credit,
which on and after the Effective Date shall constitute Letters of Credit under
this Agreement. Subject to the terms and conditions set forth herein, the
Borrower may request the issuance of Letters of Credit for its own account, in a
form reasonably acceptable to the Administrative Agent and the Issuing Bank, at
any time and from time to time during the Availability Period. In the event of
any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by the Borrower to, or entered into by the Borrower with,
the Issuing Bank relating to any Letter of Credit, the terms and conditions of
this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or send by telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall
<PAGE>
be a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Borrower also shall submit a
letter of credit application on the Issuing Bank's standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to represent and
warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) the LC Exposure shall not exceed $100,000,000 and (ii) the total
Credit Exposures shall not exceed the total Commitments. Notwithstanding
anything herein to the contrary, the Borrower shall not be permitted to amend,
renew or extend any Existing Letter of Credit.
(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Lender, and each Lender hereby acquires from the
Issuing Bank, a participation in such Letter of Credit equal to such Lender's
Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Lender hereby absolutely and unconditionally agrees to pay to the Administrative
Agent, for the account of the Issuing Bank, such Lender's Applicable Percentage
of each LC Disbursement made by the Issuing Bank and not reimbursed by the
Borrower on the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to the Borrower for any reason.
Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
<PAGE>
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. In the event that
any Lender does not pay the Issuing Bank its Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in paragraph (e) of this Section, then the applicable
Lender and the Borrower severally agree to pay to the Issuing Bank forthwith on
demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Issuing Bank, at (i) in the case of such
Lender, the greater of the Federal Funds Effective Rate and a rate determined by
the Issuing Bank in accordance with banking industry rules on interbank
compensation or (ii) in the case of the Borrower, the interest rate applicable
to ABR Loans.
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrower receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that,
if such LC Disbursement is not less than $10,000,000, the Borrower may, subject
to the conditions to borrowing set forth herein, request in accordance with
Section 2.03 that such payment be financed with an ABR Borrowing in an
equivalent amount and, to the extent so financed, the Borrower's obligation to
make such payment shall be discharged and replaced by the resulting ABR
Borrowing. If the Borrower fails to make such payment when due, the
Administrative Agent shall notify each Lender of the applicable LC Disbursement,
the payment then due from the Borrower in respect thereof and such Lender's
Applicable Percentage thereof. Promptly following receipt of such notice and in
no event later than one Business Day following receipt of such notice, each
Lender shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrower, in the same manner as provided in Section
2.05 with respect to Loans made by such
<PAGE>
Lender (and Section 2.05 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to
the Issuing Bank the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Borrower
pursuant to this paragraph and in any event within one Business Day thereafter,
the Administrative Agent shall distribute such payment to the Issuing Bank or,
to the extent that Lenders have made payments pursuant to this paragraph to
reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their
interests may appear. Any payment made by a Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of
ABR Loans as contemplated above) shall not constitute a Loan and shall not
relieve the Borrower of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any
draft or other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be
<PAGE>
construed to excuse the Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank's
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or wilful
misconduct on the part of the Issuing Bank (as finally determined by a court of
competent jurisdiction), the Issuing Bank shall be deemed to have exercised care
in each such determination. In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented which appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary,
or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided that,
if the Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.11(c) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by
<PAGE>
any Lender pursuant to paragraph (e) of this Section to reimburse the Issuing
Bank shall be for the account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.10(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Lenders with LC Exposure representing greater
than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to the LC Exposure as of such
date plus any accrued and unpaid interest thereon; provided that the obligation
to deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to the
Borrower described in clause (h) or (i) of Article VII. Such deposit shall be
held by the Administrative Agent as collateral for the payment and performance
of the obligations of the Borrower under this Agreement. The Administrative
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Other than any interest
<PAGE>
earned on the investment of such deposits, which investments shall be made at
the option and sole discretion of the Administrative Agent and at the Borrower's
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrower for the LC Exposure at such time or, if the maturity
of the Loans has been accelerated (but subject to the consent of Lenders with LC
Exposure representing greater than 50% of the total LC Exposure), be applied to
satisfy other obligations of the Borrower under this Agreement. If the Borrower
is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.
(k) Rights of Issuing Bank. The Issuing Bank shall, to the
extent applicable, have all of the benefits and immunities provided to the
Administrative Agent with respect to any actions taken or not taken by the
Issuing Bank in connection with Letters of Credit under this Agreement.
SECTION 2.05. Funding of Borrowings. (a) Subject to Section
2.03 hereof, each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00
noon, New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent in New York City and designated by the
Borrower in the applicable Borrowing Request; provided that ABR Loans made to
finance the reimbursement of an LC Disbursement as provided in Section 2.04(e)
shall be remitted by the Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make
<PAGE>
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrower, the interest rate applicable to ABR Loans. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.06. Interest Elections. (a) Each Borrowing initially
shall be of the Type specified in the applicable Borrowing Request and, in the
case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the Borrower may elect to
convert such Borrowing to a different Type or to continue such Borrowing and, in
the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as
provided in this Section. The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Borrower
were requesting a Borrowing of the Type resulting from such election to be made
on the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected
<PAGE>
with respect to different portions thereof, the portions
thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv)
below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to
such election, which shall be a period contemplated by the
definition of the term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly and in no event later than one Business Day
following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender of the details thereof and of such Lender's portion of
each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrower, then, so long
as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
SECTION 2.07. Termination and Reduction of Commitments. (a)
Unless previously terminated, the Commitments shall terminate on the Maturity
Date.
<PAGE>
(b) The Borrower may at any time terminate, or from time to
time reduce, the Commitments; provided that (i) each reduction of the
Commitments shall be in an amount that is an integral multiple of $1,000,000 and
not less than $10,000,000 and (ii) the Borrower shall not terminate or reduce
the Commitments if, after giving effect to any concurrent prepayment of the
Loans in accordance with Section 2.09, the Credit Exposure would exceed the
total Commitments.
(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly and in no event later than one Business Day following receipt
of any notice, the Administrative Agent shall advise the Lenders of the contents
thereof. Each notice delivered by the Borrower pursuant to this Section shall be
irrevocable; provided that a notice of termination of the Commitments delivered
by the Borrower may state that such notice is conditioned upon the effectiveness
of other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied. Any termination or reduction
of the Commitments shall be permanent. Each reduction of the Commitments shall
be made ratably among the Lenders in accordance with their respective
Commitments.
SECTION 2.08. Repayment of Loans; Evidence of Debt
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Loan on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the
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Administrative Agent hereunder for the account of the Lenders and each Lender's
share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced
by a promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and
in a form approved by the Administrative Agent. Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.09. Prepayment of Loans. (a) The Borrower shall have
the right at any time and from time to time to prepay any Borrowing in whole or
in part, subject to prior notice in accordance with paragraph (b) of this
Section.
(b) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid; provided that, if a notice of
prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.07, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.07. Promptly following receipt of any such notice relating to a
Borrowing, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in
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the case of an advance of a Borrowing of the same Type as provided in Section
2.02. Each prepayment of a Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.11.
SECTION 2.10. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Applicable Rate on the daily unused amount of the Commitment
of such Lender during the period from and including the date hereof to but
excluding the date on which such Commitment terminates. Accrued commitment fees
shall be payable in arrears on the last day of March, June, September and
December of each year and on the date on which the Commitments terminate,
commencing on the first such date to occur after the date hereof. All commitment
fees shall be computed on the basis of a year of 360 days and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day).
(b) The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate used to determine the interest rate applicable to Eurodollar Loans on the
average daily amount of such Lender's LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender's Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall
accrue at the rate of 0.125% per annum on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Commitments and the date
on which there ceases to be any LC Exposure, as well as the Issuing Bank's
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Effective Date; provided that all such fees shall be payable on the date on
which the Commitments terminate and any such fees accruing after the date on
which the
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Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
10 days after demand. All participation fees and fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times separately
agreed upon between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders. Fees paid shall not be
refundable under any circumstances.
SECTION 2.11. Interest. (a) The Loans comprising each ABR
Borrowing shall bear interest at the Alternate Base Rate plus the Applicable
Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
plus the rate applicable to ABR Loans as provided in paragraph (a) of this
Section.
(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and upon termination of the
Commitments; provided that (i) interest accrued pursuant to paragraph (c) of
this Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end
of the Availability Period), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii)
in the event of any conversion of any Eurodollar Loan prior to the end of the
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current Interest Period therefor, accrued interest on such Loan shall be payable
on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.12. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBO
Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required
Lenders that the Adjusted LIBO Rate for such Interest Period will
not adequately and fairly reflect the cost to such Lenders (or
Lender) of making or maintaining their Loans (or its Loan)
included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing; provided that if the circumstances
giving rise to such notice affect only one Type of Borrowings, then the other
Type of Borrowings shall be permitted.
SECTION 2.13. Increased Costs. (a) If any Change in Law shall:
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(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Lender (except any
such reserve requirement reflected in the Adjusted LIBO Rate) or
the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or the Issuing Bank's capital or on
the capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by the Issuing
Bank, to a level below that which such Lender or the Issuing Bank or such
Lender's or the Issuing Bank's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's or the Issuing Bank's
policies and the policies of such Lender's or the Issuing Bank's holding company
with respect to capital adequacy), then from time to time the Borrower will pay
to such Lender or the Issuing Bank, as the case may be, such additional amount
or amounts as will compensate such Lender or the Issuing Bank or such Lender's
or the Issuing Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting
forth the amount or amounts necessary to compensate such Lender or the Issuing
Bank or its holding company, as the case may be, as specified in paragraph (a)
or (b) of this Section shall be delivered to the Borrower and shall be
conclusive
<PAGE>
absent manifest error. The Borrower shall pay such Lender or the Issuing Bank,
as the case may be, the amount shown as due on any such certificate within 10
days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or the Issuing Bank's right to demand such compensation;
provided that the Borrower shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 270 days prior to the date that such Lender or the Issuing
Bank, as the case may be, notifies the Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.14. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.09(b) and is revoked in accordance therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.17, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the
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commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurocurrency market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The B