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CREDIT AGREEMENT
by and among
HEALTHSOUTH CORPORATION,
as Borrower,
NATIONSBANK, NATIONAL ASSOCIATION,
as Administrative Agent and Arranger
J.P. MORGAN SECURITIES INC.,
DEUTSCHE BANK AG and
SCOTIABANC, INC.,
as Syndication Agents and Co-Arrangers
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
June 23, 1998
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<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Terms
1.1. Definitions..........................................................2
1.2. Rules of Interpretation.............................................26
1.3. Classes and Types of Loans..........................................27
ARTICLE II
The Loans
2.1. Revolving Loans......................................................28
2.2. Competitive Bid Loans................................................30
2.3. Payment of Interest..................................................34
2.4. Payment of Principal.................................................34
2.5. Non-Conforming Payments..............................................35
2.6. Notes................................................................35
2.7. Pro Rata Payments....................................................36
2.8. Reductions...........................................................36
2.9. Conversions and Elections of Subsequent Interest Periods.............37
2.10. Unused Fees..........................................................37
2.11. Deficiency Advances..................................................37
2.12. Use of Proceeds......................................................38
2.13. Increase and Decrease in Amounts.....................................38
ARTICLE III
Letters of Credit
3.1. Letters of Credit....................................................39
3.2. Reimbursement........................................................39
3.3. Letter of Credit Facility Fees.......................................42
3.4. Administrative Fees..................................................43
ARTICLE IV
Change in Circumstances
4.1. Increased Cost and Reduced Return. ..................................44
4.2. Limitation on Types of Loans.........................................45
<PAGE>
4.3. Illegality...........................................................45
4.4. Treatment of Affected Loans..........................................46
4.5. Compensation.........................................................46
4.6. Taxes................................................................47
ARTICLE V
Conditions to Making Loans and Issuing Letters of Credit
5.1. Conditions of Initial Advance........................................49
5.2. Conditions of Loans and Letters of Credit............................50
ARTICLE VI
Representations and Warranties
6.1. Organization and Authority...........................................52
6.2. Loan Documents.......................................................52
6.3. Solvency.............................................................53
6.4. Subsidiaries.........................................................53
6.5. Ownership Interests..................................................53
6.6. Financial Condition..................................................53
6.7. Title to Properties..................................................54
6.8. Taxes................................................................54
6.9. Other Agreements.....................................................54
6.10. Litigation...........................................................55
6.11. Margin Stock.........................................................55
6.12. Investment Company...................................................55
6.13. Patents, Etc.........................................................55
6.14. No Untrue Statement..................................................55
6.15. No Consents, Etc.....................................................56
6.16. ERISA Requirement....................................................56
6.17. No Default...........................................................56
6.18. Hazardous Materials..................................................56
6.19. Employment Matters...................................................56
6.20. RICO.................................................................57
6.21. Reimbursement from Third Party Payors................................57
6.22. Year 2000 Compliance.................................................57
ARTICLE VII
Affirmative Covenants
7.1. Financial Statements, Reports, Etc...................................58
7.2. Maintain Properties..................................................59
ii
<PAGE>
7.3. Existence, Qualification, Etc........................................59
7.4. Regulations and Taxes................................................60
7.5. Insurance............................................................60
7.6. True Books...........................................................60
7.7. Right of Inspection..................................................60
7.8. Observe all Laws.....................................................60
7.9. Governmental Licenses................................................60
7.10. Covenants Extending to Other Persons.................................61
7.11. Officer's Knowledge of Default.......................................61
7.12. Suits or Other Proceedings...........................................61
7.13. Notice of Discharge of Hazardous Material or Environmental Complaint.61
7.14. Environmental Compliance.............................................61
7.15. Continuation of Current Business.....................................62
7.16. Management Contracts.................................................62
7.17. Year 2000 Compliance.................................................62
ARTICLE VIII
Negative Covenants
8.1. Financial Covenants..................................................63
8.2. Investments and Loans................................................63
8.3. Indebtedness.........................................................63
8.4. Disposition of Assets................................................64
8.5. Consolidation or Merger..............................................64
8.6. Liens................................................................64
8.7. Dividends and Distributions..........................................64
8.8. Acquisitions.........................................................64
8.9. Restricted Payments..................................................64
8.10. Compliance with ERISA................................................64
8.11. Fiscal Year..........................................................65
8.12. Dissolution, etc.....................................................65
8.13. [Reserved]...........................................................65
8.14. Transactions with Affiliates.........................................65
ARTICLE IX
Events of Default and Acceleration
9.1. Events of Default....................................................67
9.2. Agent to Act.........................................................69
9.3. Cumulative Rights....................................................69
9.4. No Waiver............................................................70
9.5. Allocation of Proceeds...............................................70
iii
<PAGE>
ARTICLE X
The Agent
10.1. Appointment, Powers, and Immunities..................................71
10.2. Reliance by Agent....................................................71
10.3. Defaults.............................................................71
10.4. Rights as Lender.....................................................72
10.5. Indemnification......................................................72
10.6. Non-Reliance on Agent and Other Lenders..............................72
10.7. Resignation of Agent.................................................73
10.8. Fees.................................................................73
ARTICLE XI
Miscellaneous
11.1. Assignments and Participations.......................................74
11.2. Notices..............................................................75
11.3. No Waiver............................................................76
11.4. Rights of Setoff; Adjustments........................................76
11.5. Survival.............................................................77
11.6. Expenses.............................................................77
11.7. Amendments and Waivers...............................................78
11.8. Counterparts.........................................................78
11.9. Waivers by Borrower..................................................78
11.10. Termination..........................................................79
11.11. Governing Law........................................................79
11.12. Indemnification......................................................79
11.13. Agreement Controls...................................................80
11.14. Integration..........................................................80
11.15. Successors and Assigns...............................................80
11.16. Severability.........................................................80
11.17. Usury Savings Clause.................................................80
EXHIBIT A Applicable Commitment Percentages..................................A-1
EXHIBIT B Form of Assignment and Acceptance..................................B-1
EXHIBIT C Notice of Appointment (or Revocation) of Authorized Representative.C-1
EXHIBIT D Form of Borrowing Notice...........................................D-1
EXHIBIT E Form of Interest Rate Selection Notice.............................E-1
EXHIBIT F Form of Note.......................................................F-1
EXHIBIT G Investments........................................................G-1
EXHIBIT H Form of Opinion of Borrower's Counsel..............................H-1
EXHIBIT I Compliance Certificate.............................................I-1
EXHIBIT J Executive Officers.................................................J-1
iv
<PAGE>
EXHIBIT K Form of Competitive Bid Quote Request..............................K-1
EXHIBIT L Form of Competitive Bid Quote......................................L-1
EXHIBIT M Form of Competitive Bid Note.......................................M-1
Schedule 1.1 Existing Letters of Credit
Schedule 6.4 Subsidiaries
Schedule 6.13 Patent Issue
Schedule 6.19 Employment Matters
Schedule 8.3 Existing Subsidiary Indebtedness
v
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of June 23, 1998 (this "Agreement") is
entered into by and among HEALTHSOUTH CORPORATION, a Delaware corporation (the
"Borrower"), the Lenders signatories hereto (the "Lenders") and NATIONSBANK,
N.A., a national banking association, as agent for the Lenders (the "Agent").
RECITAL:
The Borrower has heretofore entered into a Third Amended and Restated
Credit Agreement dated April 18, 1996 (the "Prior Agreement") pursuant to which
the lenders party thereto have made loans to the Borrower (the "Prior Loans")
and issued letters of credit for the benefit of the Borrower. The Borrower has
requested that the Lenders make a revolving credit facility of up to
$1,750,000,000, including a $75,000,000 sublimit for the issuance of standby
letters of credit, to the Borrower, the proceeds of which shall be used as set
forth in Section 2.12 and the Lenders have agreed to make such revolving credit
facility available to the Borrower on the following terms and conditions:
<PAGE>
ARTICLE I
Definitions and Terms
1.1. Definitions. For the purposes of this Agreement, in addition to the
definitions set forth above, the following terms shall have the respective
meanings set forth below:
"Absolute Rate" shall have the meaning assigned to such term in
Section 2.2(c)(ii)(D).
"Absolute Rate Auction" shall mean a solicitation of Competitive Bid
Quotes setting forth Absolute Rates pursuant to Section 2.2.
"Absolute Rate Loans" shall mean the Competitive Bid Loans the
interest rates on which are determined on the basis of Absolute Rates set
at Absolute Rate Auctions.
"Acquisition" means the acquisition, whether with cash, property,
stock or promise to pay, of all or a portion of a Person or a Facility or
Facilities of a Person, permitted under Section 8.8; provided such Person
or Facilities is in substantially the same line of business engaged in by
Borrower or its Consolidated Entities.
"Actual/360 Basis" shall mean a method of computing interest or other
charges hereunder on the basis of an assumed year of 360 days for actual
number of days elapsed, meaning that interest or other charges accrued for
each day will be computed by multiplying the rate applicable on that day by
the unpaid principal balance (or other relevant sum) on that day and
dividing the result by 360.
"Advance" means a borrowing under the Revolving Credit Facility
consisting of the aggregate principal amount of a Syndicated Loan or a
Competitive Bid Loan.
"Affiliate" of any specified Person means any other Person (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person; or
(ii) which beneficially owns or holds 5% or more of any class of the
outstanding voting stock (or in the case of a Person which is not a
corporation, 5% or more of the equity interest) of such specified Person;
or 5% or more of any class of the outstanding voting stock (or in the case
of a Person which is not a corporation, 5% or more of the equity interest)
of which is beneficially owned or held by such specified Person. The term
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting stock, by contract or otherwise.
"Applicable Commitment Percentage" means, with respect to each Lender,
that portion of the Total Revolving Credit Commitment allocable to such
Lender (a) with respect to Lenders as of the Closing Date, as set forth on
Exhibit A, and (b) with respect to any Person who becomes a Lender
thereafter, as reflected in each Assignment and
2
<PAGE>
Acceptance to which such Lender is a party assignee; provided that the
Applicable Commitment Percentage of each Lender shall be increased or
decreased to reflect any assignments to or by such Lender effected in
accordance with Section 11.1.
"Applicable Lending Office" means, for each Lender and for each Type
of Loan, the "Lending Office" of such Lender (or an affiliate of such
Lender) designated for such Type of Loan on the signature pages hereof or
such other office of such Lender (or an affiliate of such Lender) as such
Lender may from time to time specify to the Agent and the Borrower by
written notice in accordance with the terms hereof as the office by which
its Loans of such Type are to be made and maintained.
"Applicable Margin" means that number of basis points per annum set
forth below determined based upon the more favorable to the Borrower of
either (i) the highest Rating of outstanding senior unsecured Indebtedness
of the Borrower from time to time as specified in Table I below (provided
that in the event of a Rating split between Tiers, then the Tier next above
the Tier corresponding to the lower Rating shall apply) or (ii) the ratio
of Consolidated Indebtedness at the date of determination to Consolidated
EBITDA for the Four-Quarter Period most recently ended as specified in
Table II below:
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TABLE I
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Tier Rating Applicable Margin
S&P or Moody's
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I A- A3 25 b.p.
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II BBB+ Baa1 30
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III BBB Baa2 35
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IV BBB- Baa3 45
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V BB+ Ba1 65
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VI BB Ba2 100
or lower or lower
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TABLE II
--------------------------------------------------------------------------------
Tier Ratio of Consolidated Indebtedness to Applicable Margin
Consolidated EBITDA
--------------------------------------------------------------------------------
I Less than 1.50 to 1.00 30 b.p.
--------------------------------------------------------------------------------
II Equal to or greater than 1.50 to 1.00 35
but less than 2.00 to 1.00
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3
<PAGE>
--------------------------------------------------------------------------------
III Equal to or greater than 2.00 to 1.00 45
but less than 2.50 to 1.00
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IV Equal to or greater than 2.50 to 1.00 65
but less than 3.00 to 1.00
--------------------------------------------------------------------------------
V Equal to or greater than 3.00 to 1.00 100
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; provided, however, that any time during which the sum of Revolving Credit
Outstandings, outstanding Competitive Bid Loans and Letter of Credit
Outstandings exceed $875,000,000, five (5) basis points shall automatically
be added to the Applicable Margin set forth in Tables I and II above.
The Applicable Margin shall be established in the case of a Rating from
time to time based upon the Rating then in effect and, in the case of the
ratio, at the end of each fiscal quarter of the Borrower (the "Ratio
Determination Date"). Any change in the Applicable Margin following each
Ratio Determination Date shall be determined based upon the computations
set forth in the Compliance Certificate, subject to review and approval of
such computations by the Agent, and shall be effective commencing on the
date following the date such certificate is received until the date
following the date on which a new Compliance Certificate is delivered or is
required to be delivered, whichever shall first occur; provided however, if
the Borrower shall fail to deliver any such certificate within the time
period required by Section 7.1, then the Applicable Margin shall be 2%
until the appropriate certificate is so delivered. From the Closing Date to
the first Ratio Determination Date, the Applicable Margin shall be 35 basis
points (subject to the proviso in the first sentence of this definition).
"Applicable Unused Fee" means that number of basis points per annum
set forth below determined based upon the more favorable to the Borrower of
either (i) the highest Rating of outstanding senior unsecured Indebtedness
of the Borrower from time to time as specified in Table III below (provided
that in the event of a Rating split between Tiers, then the Tier next above
the Tier corresponding to the lower Rating shall apply) or (ii) the ratio
of Consolidated Indebtedness at the date of determination to Consolidated
EBITDA for the Four-Quarter Period most recently ended as specified in
Table IV below:
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TABLE III
--------------------------------------------------------------------------------
Tier Rating Applicable Unused
S&P or Moody's Fee
--------------------------------------------------------------------------------
I A- A3 9.0 b.p.
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II BBB+ Baa1 10.0
--------------------------------------------------------------------------------
III BBB Baa2 12.5
4
<PAGE>
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IV BBB- Baa3 15.0
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V BB+ Ba1 20.0
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VI BB Ba2 25.0
or lower or lower
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TABLE IV
--------------------------------------------------------------------------------
Tier Ratio of Consolidated Indebtedness to Applicable Unused
Consolidated EBITDA Fee
--------------------------------------------------------------------------------
I Less than 1.50 to 1.00 10.0 b.p.
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II Equal to or greater than 1.50 to 1.00 12.5
but less than 2.00 to 1.00
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III Equal to or greater than 2.00 to 1.00 15.0
but less than 2.50 to 1.00
--------------------------------------------------------------------------------
IV Equal to or greater than 2.50 to 1.00 20.0
but less than 3.00 to 1.00
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V Equal to or greater than 3.00 to 1.00 25.0
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The Applicable Unused Fee shall be established in the case of a Rating from
time to time based upon the Rating then in effect, and in the case of the
ratio, at the end of each fiscal quarter of the Borrower (the "Ratio
Determination Date"). Any change in the Applicable Unused Fee following
each Ratio Determination Date shall be determined based upon the
computations set forth in the Compliance Certificate, subject to review and
approval of such computations by the Agent and shall be effective
commencing on the date following the date such certificate is received
until the date following the date on which a new Compliance Certificate is
delivered or is required to be delivered, whichever shall first occur;
provided however, if the Borrower shall fail to deliver any such
certificate within the time period required by Section 7.1, then the
Applicable Unused Fee shall be 2%. From the Closing Date to the first Ratio
Determination Date, the Applicable Unused Fee shall be 12.5 basis points.
"Applications and Agreements for Letters of Credit" means,
collectively, the Applications and Agreements for Letters of Credit, or
similar documentation, executed by the Borrower from time to time and
delivered to the Issuing Bank to support the issuance of Letters of Credit.
"Assignment and Acceptance" shall mean an Assignment and Acceptance in
the form of Exhibit B (with blanks appropriately filled in) delivered to
the Agent in
5
<PAGE>
connection with an assignment of a Lender's interest under this Agreement
pursuant to Section 11.1.
"Authorized Representative" means any of the Executive Officers of the
Borrower or, with respect to financial matters, the Treasurer or the Chief
Financial Officer of the Borrower, or any other Person expressly designated
by the Board of Directors of the Borrower (or the appropriate committee
thereof) as an Authorized Representative of the Borrower, as set forth from
time to time in a certificate in the form of Exhibit C.
"Base Rate" means, for any day, the rate per annum equal to the higher
of (i) the Prime Rate for such day or (ii) the Federal Funds Rate for such
day plus one-half of one percent (1/2%). Any change in the Base Rate due to
a change in the Prime Rate or the Federal Funds Rate shall be effective on
the effective date of such change in the Prime Rate or Federal Funds Rate.
"Base Rate Loan" means a Loan for which the rate of interest is
determined by reference to the Base Rate.
"Base Rate Refunding Loan" means an Advance under the Revolving Credit
Facility which bears interest at a Base Rate made to satisfy Reimbursement
Obligations arising from a drawing under a Letter of Credit.
"Board" means the Board of Governors of the Federal Reserve System (or
any successor body).
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving Credit
Facility, in the form of Exhibit D.
"Business Day" means, (i) except in the case of a Eurodollar Rate
Loan, any day which is not a Saturday, Sunday or a day on which banks in
the States of New York and North Carolina are authorized or obligated by
law, executive order or governmental decree to be closed and, (ii) with
respect to any Eurodollar Rate Loan, any day which is a Business Day, as
described above, and on which the relevant international financial markets
are open for the transaction of business contemplated by this Agreement in
London, England, New York, New York and Charlotte, North Carolina.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board and
any successor thereof.
"Capital Stock" of any Person means any and all shares, rights to
purchase, warrants or options (whether or not currently exercisable),
participation or other equivalents of or interest in (however designated)
the equity (including without limitation
6
<PAGE>
common stock, preferred stock and partnership and joint venture interests)
of such Person (excluding any debt securities that are convertible into, or
exchangeable for, such equity).
"Change of Control" means, at any time:
(i) any "person" or "group" (each as used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act), who are not as of the Closing Date
owners of one percent (1%) or more of the Voting Stock of the
Borrower, either (A) becomes the "beneficial owner" (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, of Voting
Stock of the Borrower (or securities convertible into or exchangeable
for such Voting Stock) representing 15% or more of the combined voting
power of all Voting Stock of the Borrower (on a fully diluted basis)
or (B) otherwise has the ability, directly or indirectly, to elect a
majority of the board of directors of the Borrower;
(ii) 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
(iii) any Person or two or more Persons acting in concert shall
have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation thereof, will result
in its or their acquisition, of the power to exercise, directly or
indirectly, a controlling influence on the management or policies of
the Borrower.
"Closing Date" means the date as of which this Agreement is executed
by the Borrower, the Lenders and the Agent and on which the conditions set
forth in Section 5.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder.
"Common Stock" means the common stock, par value $.01 per share, of
the Borrower.
"Competitive Bid Borrowing" shall have the meaning assigned to such
term in Section 2.2(b).
"Competitive Bid Loans" shall mean the Loans provided for by Section
2.2.
"Competitive Bid Notes" shall mean the promissory notes provided for
by Section 2.6(c) substantially in the form of Exhibit M and all promissory
notes delivered in
7
<PAGE>
substitution or exchange therefor, in each case as the same shall be
modified and supplemented and in effect from time to time.
"Competitive Bid Quote" shall mean an offer in accordance with Section
2.2(c) by a Lender to make a Competitive Bid Loan with one single specified
interest rate.
"Competitive Bid Quote Request" shall have the meaning assigned to
such term in Section 2.2(b).
"Compliance Certificate" shall have the meaning attributed to that
term in Section 7.1(c).
"Consistent Basis" in reference to the application of GAAP means the
accounting principles observed in the period referred to are comparable in
all material respects to those applied in the preparation of the audited
financial statements of the Borrower referred to in Section 6.6(a).
"Consolidated Amortization Expense" of the Borrower for any period
means the amortization expense of the Borrower and its Consolidated
Entities for such period (to the extent included in the computation of
Consolidated Net Income), determined on a consolidated basis in accordance
with GAAP.
"Consolidated Depreciation Expense" of the Borrower means the
depreciation expense of the Borrower and its Consolidated Entities for such
period (to the extent included in the computation of Consolidated Net
Income of the Borrower), determined on a consolidated basis in accordance
with GAAP.
"Consolidated EBITDA" means, with respect to the Borrower and its
Consolidated Entities for any Four-Quarter Period ending on the date of
computation thereof, the sum of, without duplication, (i) Consolidated Net
Income, (ii) Consolidated Interest Expense, (iii) Consolidated Income Tax
Expense, (iv) Consolidated Amortization Expense, (v) Consolidated
Depreciation Expense and (vi) the minority interest of any Person or
Persons in the income of Consolidated Entities for such period, all
determined on a consolidated basis in accordance with GAAP applied on a
Consistent Basis.
"Consolidated Entity" shall mean any Person whose financial statements
are appropriately consolidated with the Borrower's financial statements
under GAAP.
"Consolidated Indebtedness" means all Indebtedness of the Borrower and
its Consolidated Entities, all determined on a consolidated basis.
"Consolidated Interest Expense" means, with respect to any
Four-Quarter Period ending on the date of computation thereof, the gross
interest expense of the Borrower and its Consolidated Entities, including
without limitation (i) the current amortized portion of debt discounts to
the extent included in gross interest expense, (ii) the current amortized
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<PAGE>
portion of all fees (including fees payable in respect of any Rate Hedging
Obligation) payable in connection with the incurrence of Indebtedness to
the extent included in gross interest expense, (iii) the portion of any
payments made in connection with Capital Leases allocable to interest
expense, and (iv) lease payments, other than the Headquarters Obligations,
made pursuant to the Headquarters Lease, all determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis.
"Consolidated Net Income" of the Borrower for any period means the net
income (or loss) of the Borrower and its Consolidated Entities for such
period determined on a consolidated basis in accordance with GAAP, without
giving effect to dividends on any series of preferred stock of any
Consolidated Entity, whether or not in cash, to the extent such
consolidated net income was reduced thereby; provided that there shall be
excluded from such net income (for all purposes, other than compliance with
Section 8.1(a), to the extent otherwise included therein), without
duplication, (i) the net income of any Person (other than a Consolidated
Entity) to the extent that any such income has not actually been received
by the Borrower or a Consolidated Entity in the form of dividends or
similar distributions during such period, but including, in any event, net
income of any Person who becomes a Consolidated Entity whose Acquisition is
accounted for on a "pooling of interests" basis; (ii) except to the extent
includable in the consolidated net income of the Borrower or a Consolidated
Entity pursuant to the foregoing clause (i), the net income of any Person
that accrued prior to the date that (a) such Person becomes a Consolidated
Entity or is merged into or consolidated with a Consolidated Entity or (b)
the assets of such Person are acquired by the Borrower or a Consolidated
Entity; (iii) the net income of any Consolidated Entity to the extent that
the declaration or payment of dividends or similar distributions by such
Consolidated Entity of that income is not permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Consolidated
Entity during such period; (iv) any gain (or loss), together with any
related provisions for taxes on any such gain, realized during such period
by the Borrower or its Consolidated Entities upon (a) the acquisition of
any securities, or the extinguishment of any Indebtedness, of the Borrower
or its Consolidated Entities or (b) any asset sale by the referent person
or any of its Subsidiaries; (v) any extraordinary gain (or extraordinary
loss), together with any related provision for taxes or tax benefit
resulting from any such extraordinary gain or loss, realized by the
Borrower or its Consolidated Entities during such period; and (vi) in the
case of a successor to any Person by consolidation, merger or transfer of
its assets, any earnings of the successor prior to such merger,
consolidation or transfer of assets; provided, further, however, that there
shall be added back to net income non-recurring, non-cash expenses and cash
transaction costs relating to professional fees arising in conjunction with
an Acquisition provided such expenses do not exceed 10% of the Cost of
Acquisition.
"Consolidated Net Worth" of the Borrower as of any date means the
Consolidated Stockholders' Equity (including any preferred stock that is
classified as equity under GAAP, other than Disqualified Stock) of the
Borrower and its Consolidated Entities (excluding any equity adjustment for
foreign currency translation for any period
9
<PAGE>
subsequent to the Closing Date) on a consolidated basis at such date, as
determined in accordance with GAAP, less all write-ups subsequent to the
Closing Date in the book value of any asset owned by the Borrower or any of
its Consolidated Entities.
"Consolidated Stockholders' Equity" shall mean at any time as at which
the amount thereof is to be determined, the sum of the following amounts in
respect of the Borrower and the Consolidated Entities: (i) the par or
stated value of all Capital Stock of the Borrower, (ii) retained earnings,
(iii) additional paid in capital, (iv) capital surplus and (v) earned
surplus minus treasury stock.
"Consolidated Tangible Net Worth" means, as of any date on which the
amount thereof is to be determined, Consolidated Stockholders' Equity minus
(without duplication of deductions in respect of items already deducted in
arriving at surplus and retained earnings) (i) all reserves (other than
contingency reserves not allocated to any particular purpose), including
without limitation reserves for depreciation, depletion, amortization,
obsolescence, deferred income taxes, insurance and inventory valuation and
(ii) the net book value of all assets which would be treated as intangible
assets, such as (without limitation) goodwill (whether representing the
excess of cost over book value of assets acquired or otherwise),
capitalized expenses, unamortized debt discount and expense, consignment
inventory rights, patents, trademarks, trade names, copyrights, franchises
and licenses, all as determined on a consolidated basis in accordance with
GAAP applied on a Consistent Basis.
"Consolidated Total Assets" means, as of any date on which the amount
thereof is to be determined, the net book value of all assets of the
Borrower and its Consolidated Entities as determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis.
"Consolidated Total Capital" means, as of any date on which the amount
thereof is to be determined, the sum of Consolidated Indebtedness plus
Consolidated Stockholders' Equity of the Borrower and its Consolidated
Entities.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 2.9 hereof of a Eurodollar Rate Loan of
one Type as a Eurodollar Rate Loan of the same Type from one Interest
Period to the next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.9 or Article IV of one Type of Loan into another Type
of Loan.
"Contract Provider" means any Person who provides professional health
care services under or pursuant to any contract with the Borrower or any
Subsidiary.
"Controlled Partnership" shall mean a general partnership of which the
Borrower or a Subsidiary is a general partner (but not including Alabama
World Football), or a limited partnership whose general partners include
the Borrower or a Subsidiary (but not
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including Vanderbilt), or a limited liability company whose members include
the Borrower or a Subsidiary or another Controlled Partnership, which
partnership, whether general or limited, or limited liability company has
assets with a value in excess of $2,000.00, and with respect to which
partnership or limited liability company the Borrower or a Subsidiary is
entitled to receive not less than 50% of any distributions of cash made to
the partners or members thereof, other than any preferred cash distribution
arrangement in existence at the Closing Date or approved by the Required
Lenders in writing, or which is otherwise a Consolidated Entity.
"Cost of Acquisition" means, in respect of any Acquisition, the sum of
(i) the amount of cash paid by the Borrower and its Consolidated Entities
in connection with such Acquisition, (ii) the Fair Market Value of all
Capital Stock or other ownership interests of the Borrower or any
Consolidated Entity 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 its
Consolidated Entities in connection with Generally Accepted Accounting
Principles, (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 its Consolidated Entities in
connection with such Acquisition.
"Default" means any event or condition which, with the giving or
receipt of notice or lapse of time or both, would constitute an Event of
Default.
"Default Rate" means (i) with respect to each Fixed Rate Loan, until
the end of the Interest Period applicable thereto, a rate of two percent
(2%) plus the Fixed Rate applicable to such Loan, and thereafter at a rate
of interest per annum which shall be two percent (2%) plus the Base Rate,
(ii) with respect to Base Rate Loans, at a rate of interest per annum which
shall be two percent (2%) plus the Base Rate and (iii) in any case, the
maximum rate permitted by applicable law, if lower.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or is redeemable at the option of the holder thereof, in whole or in part,
on or prior to the Revolving Credit Termination Date.
"Dollars" and the symbol "$" mean dollars constituting legal tender
for the payment of public and private debts in the United States of
America.
"Eligible Assignee" means (i) a Lender, (ii) an affiliate of a Lender,
and (iii) any other Person approved by the Agent and, unless an Event of
Default has occurred and is continuing at the time any assignment is
effected in accordance with Section 11.1, the
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Borrower, such approval not to be unreasonably withheld or delayed by the
Borrower or the Agent and such approval to be deemed given by the Borrower
if no objection is received by the assigning Lender and the Agent from the
Borrower within two Business Days after written notice of such proposed
assignment has been provided by the assigning Lender to the Borrower;
provided, however, that neither the Borrower nor an affiliate of the
Borrower shall qualify as an Eligible Assignee.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (i) is maintained for employees of
the Borrower or any of its ERISA Affiliates or is assumed by the Borrower
or any of its ERISA Affiliates in connection with any Acquisition or (ii)
has at any time been maintained for the employees of the Borrower or any
current or former ERISA Affiliate.
"Environmental Laws" means any federal, state or local statute, law,
ordinance, code, rule, regulation, order, decree, permit or license
regulating, relating to, or imposing liability or standards of conduct
concerning any environmental matters or conditions, environmental
protection or conservation, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended;
the Superfund Amendments and Reauthorization Act of 1986, the Resource
Conservation and Recovery Act, as amended; the Toxic Substances Control
Act, as amended; the Clean Air Act, as amended; the Clean Water Act, as
amended; together with all regulations promulgated thereunder, and any
other "Superfund" or "Superlien" law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute and all rules and
regulations promulgated thereunder.
"ERISA Affiliate", as applied to the Borrower, means any Person or
trade or business which is a member of a group which is under common
control with the Borrower, who together with the Borrower, is treated as a
single employer within the meaning of Section 414(b) and (c) of the Code.
"Eurodollar Auction" shall mean a solicitation of Competitive Bid
Quotes setting forth Eurodollar Margins based on the Interbank Offered Rate
pursuant to Section 2.2.
"Eurodollar Margin" shall have the meaning assigned to such term in
Section 2.2(c)(ii)(C).
"Eurodollar Market Loans" shall mean Competitive Bid Loans interest
rates on which are determined on the basis of the Interbank Offered Rate
pursuant to a Eurodollar Auction.
"Eurodollar Market Rate" means the interest rate per annum calculated
according to the following formula:
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Eurodollar = Interbank Offered Rate + Eurodollar
--------------------------- -
Market Rate 1- Reserve Requirement Margin
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
---------------------------
Rate 1- Reserve Requirement Margin
"Eurodollar Rate Loan" means a Loan for which the rate of interest is
determined by reference to the Eurodollar Rate.
"Event of Default" means any of the occurrences set forth as such in
Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the regulations promulgated thereunder.
"Executive Officer" means any Person who from time to time holds the
offices with Borrower listed on Exhibit J.
"Existing Letters of Credit" means those Letters of Credit described
on Schedule 1.1 previously issued by the Issuing Bank under the Prior
Agreement.
"Facility" shall mean 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 part, by the Borrower or a Subsidiary or any
Controlled Partnership.
"Fair Market Value" shall mean, with respect to any capital stock or
other ownership interests issued or given by the Borrower or any
Consolidated Entity in connection with an Acquisition, (i) in the case of
capital stock that is Common Stock and such Common Stock is then designated
as a national market system security by the National Association of
Securities Dealers, Inc. ("NASD") or is listed on a national securities
exchange, the average of the last reported bid and ask quotations or prices
reported thereon for Common Stock or such other value as may be ascribed to
the Common Stock in a definitive merger or acquisition agreement provided
such value is determined according to customary methods for like
transactions and is approved (to the extent required by Borrower's charter
or bylaws) by the Borrower's Board of Directors or (ii) in the case of
capital stock that is not Common Stock or in the event that Common Stock is
not so designated by NASD or listed on such national exchange, or in the
case of any other ownership interests, the determination of the fair market
value thereof in good faith by a majority of disinterested members of the
board of directors of the Borrower or such Consolidated Entity, in each
case effective as of the close of business on the Business Day immediately
preceding the closing date of such Acquisition.
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"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the
next succeeding Business Day, and (b) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate charged to the Agent (in its individual capacity)
on such day on such transaction as determined by the Agent.
"Fiscal Year" means, with respect to the Borrower, the twelve month
fiscal period of the Borrower commencing on January 1 of each calendar year
and ending on December 31 of each calendar year.
"Fixed Rate" shall mean the Absolute Rate or the Eurodollar Market
Rate or the Eurodollar Rate, as the case may be.
"Fixed Rate Loan" means a Loan for which the rate of interest is
determined by reference to the Fixed Rate.
"Four-Quarter Period" means a period of four full consecutive fiscal
quarters of the Borrower and its Subsidiaries, taken together as one
accounting period.
"GAAP" or "Generally Accepted Accounting Principles" means generally
accepted accounting principles, being those principles of accounting set
forth in pronouncements of the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants or which have other
substantial authoritative support and are applicable in the circumstances
as of the date of a report.
"Governmental Authority" shall mean any Federal, state, municipal,
national or other governmental department, commission, board, bureau,
court, agency or instrumentality or political subdivision thereof or any
entity or officer exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to any government or any
court, in each case whether associated with a state of the United States,
the United States, or a foreign entity or government.
"Guaranteed Obligations" of any Person shall mean all guaranties
(including guaranties of guaranties and guaranties of dividends and other
monetary obligations), endorsements, assumptions and other contingent
obligations with respect to, or to purchase or to otherwise pay or acquire,
Indebtedness of others; provided, however, that such term shall not include
obligations under leases and other contracts initially incurred directly by
another Person and subsequently directly assumed by the Person in question,
but such term shall include obligations that, if the same had been
initially incurred directly by the Person in question, would have
constituted Guaranteed Obligations.
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"Hazardous Material" means and includes any pollutant, contaminant, or
hazardous, toxic or dangerous waste, substance or material (including
without limitation petroleum products, asbestos-containing materials, and
lead), the generation, handling, storage, disposal, treatment or emission
of which is subject to any Environmental Law.
"HCFA" means the United States Health Care Financing Administration
and any successor thereto.
"Headquarters Lease" means the Lease Agreement between HEALTHSOUTH
Holdings, Inc., as Lessee, and First Security Bank of Utah, N.A., as
Lessor, dated as of November 16, 1995 providing for the lease to
HEALTHSOUTH Holdings, Inc. of the land and improvements thereon located on
the property described therein, as such Lease Agreement may be amended,
modified, supplemented or restated in its entirety from time to time.
"Headquarters Obligations" means all of the Holder Advances and Loans,
as each such term is defined in the Participation Agreement.
"Indebtedness" of any Person at any date means, without duplication:
(i) all indebtedness of such Person for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only
to a portion thereof); (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments; (iii) all
obligations (contingent or otherwise) of such Person in respect of letters
of credit or other similar instruments (or reimbursement obligations with
respect thereto); (iv) all obligations of such Person with respect to Rate
Hedging Obligations (other than those that fix the interest rate on
variable rate indebtedness otherwise permitted hereunder or that protect
the Borrower and or its Consolidated Entities against changes in foreign
exchange rates); (v) obligations of such Person to pay the deferred and
unpaid purchase price of property or services, except trade payables and
accrued expenses incurred in the ordinary course of business; (vi) all
Capitalized Lease Obligations of such Person; (vii) all indebtedness of
others secured by a Lien on any assets of such Person, whether or not such
indebtedness is assumed by such Person; (viii) all Guaranteed Obligations;
(ix) the Headquarters Obligations; and (x) all obligations of a like nature
to those described in clauses (i) through (ix) above of a partnership of
which such Person is a general partner or of a limited liability company of
which such Person is a member. The amount of Indebtedness of any Person at
any date shall be the outstanding balance at such date of all unconditional
obligations as described above, the maximum liability of such Person for
any such contingent obligations at such date and, in the case of clause
(vii), the amount of the Indebtedness secured.
"Interbank Offered Rate" means, for any Eurodollar Rate Loan or
Eurodollar Market Loan for the Interest Period applicable thereto, the rate
per annum (rounded upwards, if necessary, to the nearest one-one hundredth
(1/100) of one percent) appearing on Dow Jones Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two
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Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Interbank Offered Rate" shall mean, for any Eurodollar
Rate Loan or Eurodollar Market Loan for the Interest Period applicable
thereto, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period for
a term comparable to such Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if
necessary, to the nearest 1/100 of 1%).
"Interest Period" shall mean:
(i) with respect to any Eurodollar Rate Loan, each period commencing
on the date such Eurodollar Rate Loan is made or Converted from a Loan of
another Type or the last day of the next preceding Interest Period for such
Loan and ending on the numerically corresponding day in the first, second,
third or sixth calendar month thereafter, as the Borrower may select as
provided in Section 2.3, except that each Interest Period that commences on
the last Business Day of a calendar month (or on any day for which there is
no numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Business Day of the appropriate subsequent
calendar month;
(ii) with respect to any Absolute Rate Loan, the period commencing on
the date such Absolute Rate Loan is made and ending on any Business Day up
to 180 days thereafter, as the Borrower may select as provided in Section
2.2(b); and
(iii) with respect to any Eurodollar Market Loan, the period
commencing on the date such Eurodollar Market Loan is made and ending on
the numerically corresponding day in the first, second, third or sixth
calendar month thereafter, as the Borrower may select as provided in
Section 2.2(b), except that each Interest Period that commences on the last
Business Day of a calendar month (or any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar
month.
Notwithstanding the foregoing: (i) if any Interest Period for any
Competitive Bid Loan would otherwise end after the Revolving Credit
Termination Date, such Interest Period shall end on the Revolving Credit
Termination Date; (ii) if any Interest Period for any Eurodollar Rate Loan
would otherwise end after the Revolving Credit Termination Date, such
Interest Period shall end on the Revolving Credit Termination Date; (iii)
each Interest Period that would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day (or, in the case
of an Interest Period for a Eurodollar Rate Loan or a Eurodollar Market
Loan, if such next succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day); and (iv)
notwithstanding clauses (i), (ii) and (iii) above, no Interest Period for
any Loan (other than an Absolute Rate Loan) shall have a duration of less
than one month (in the case of
16
<PAGE>
a Eurodollar Rate Loan or a Eurodollar Market Loan) and, if the Interest
Period for any Eurodollar Rate Loan or Eurodollar Market Loan would
otherwise be a shorter period, such Loan shall not be available hereunder
for such period.
"Interest Rate Selection Notice" means the written notice delivered by
an Authorized Representative in connection with the election of a
subsequent Interest Period for any Eurodollar Rate Loan or the Conversion
of any Eurodollar Rate Loan into a Base Rate Loan or the Conversion of any
Base Rate Loan into a Eurodollar Rate Loan, in the form of Exhibit E.
"Issuing Bank" means NationsBank as issuer of Letters of Credit under
Article III.
"LC Account Agreement" means the LC Account Agreement dated as of the
date hereof between the Borrower and the Issuing Bank, as amended, modified
or supplemented from time to time.
"Letter of Credit" means a standby letter of credit issued by the
Issuing Bank pursuant to Article III for the account of the Borrower in
favor of a Person advancing credit or securing an obligation on behalf of
the Borrower, including the Existing Letters of Credit.
"Letter of Credit Commitment" means, with respect to each Lender, the
obligation of such Lender to acquire Participations in respect of Letters
of Credit and Reimbursement Obligations up to an aggregate amount at any
one time outstanding equal to such Lender's Applicable Commitment
Percentage of the Total Letter of Credit Commitment as the same may be
increased or decreased from time to time pursuant to this Agreement.
"Letter of Credit Facility" means the facility described in Article
III providing for the issuance by the Issuing Bank for the account of the
Borrower of Letters of Credit in an aggregate stated amount at any time
outstanding not exceeding, together with all Reimbursement Obligations, the
Total Letter of Credit Commitment.
"Letter of Credit Outstandings" means, as of any date of
determination, the aggregate amount remaining undrawn under all Letters of
Credit plus Reimbursement Obligations then outstanding.
"Lien" means any interest in property securing any obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but
not limited to the lien or security interest arising from a mortgage,
encumbrance, pledge, security agreement, conditional sale or trust receipt
or a lease, consignment or bailment for security purposes. For the purposes
of this Agreement, the Borrower and any Subsidiary shall be deemed to be
the owner of any property which it has acquired or holds subject to a
conditional sale agreement, financing lease, or other arrangement pursuant
to which title to the property has been retained by or vested in some other
Person for security purposes.
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"Loan" or "Loans" means any Syndicated Loans, Competitive Bid Loans,
Reimbursement Obligations and Letter of Credit Outstandings and all
extensions and renewals thereof.
"Loan Documents" means this Agreement, the Notes, the LC Account
Agreement, the Applications and Agreements for Letter of Credit and all
other instruments and documents heretofore or hereafter executed or
delivered to or in favor of any Lender or the Agent in connection with the
Loans made, Letters of Credit issued and transactions contemplated under
this Agreement, as the same may be amended, supplemented or replaced from
time to time.
"Material Adverse Effect" means a material adverse effect on (i) the
business, properties, operations or condition, financial or otherwise, of
the Borrower and its Consolidated Entities, taken as a whole, (ii) the
ability of the Borrower to pay or perform its obligations, liabilities and
indebtedness under the Loan Documents as such payment or performance
becomes due in accordance with the terms thereof, or (iii) the rights,
powers and remedies of the Agent or any Lender under any Loan Document or
the validity, legality or enforceability thereof (including for purposes of
clauses (ii) and (iii) the imposition of burdensome conditions thereon).
"Material Group" shall mean, at any time, any group, whether one or
more, or combination of Consolidated Entities (a) whose assets, in the
aggregate, constitute 5% or more of the assets of the Borrower and the
Consolidated Entities on a consolidated basis or (b) whose net revenues, in
the aggregate, constitute 5% or more of the net revenues of the Borrower
and the Consolidated Entities on a consolidated basis.
"Medicaid Certification" means certification by HCFA or a state agency
or entity under contract with HCFA 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, (i) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical assistance program established by Title XIX of the
Social Security Act and any statutes succeeding thereto; (ii) all
applicable provisions of all federal rules, regulations, manuals and orders
of all Governmental Authorities promulgated pursuant to or in connection
with the statutes described in clause (i) above and all federal
administrative, reimbursement and other guidelines of all Governmental
Authorities having the force of law promulgated pursuant to or in
connection with the statutes described in clause (i) above; (iii) all state
statutes and plans for medical assistance enacted in connection with the
statutes and provisions described in clauses (i) and (ii) above; and (iv)
all applicable provisions of all
18
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rules, regulations, manuals and orders of all Governmental Authorities
promulgated pursuant to or in connection with the statutes described in
clause (iii) above and all state administrative, reimbursement and other
guidelines of all Governmental Authorities having the force of law
promulgated pursuant to or in connection with the statutes described in
clause (ii) above, in each case as may be amended, supplemented or
otherwise modified from time to time.
"Medicare Certification" means certification by HCFA or a state agency
or entity under contract with HCFA that 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"), HCFA, the
Office of the Inspector General for HHS, or any Person succeeding to the
functions of any of the foregoing) promulgated pursuant to or in connection
with any of the foregoing having the force of law, as each may be amended,
supplemented or otherwise modified from time to time.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making, or is accruing an obligation to make, contributions or has made, or
been obligated to make, contributions within the preceding six (6) Fiscal
Years.
"NationsBank" means NationsBank, National Association.
"1997 10-K" means the Borrower's Annual Report on Form 10-K for the
Fiscal Year Ended December 31, 1997;
"Notes" means, collectively, the Revolving Notes and the Competitive
Bid Notes.
"Obligations" means the obligations, liabilities and Indebtedness of
the Borrower with respect to (i) the principal and interest on the Loans as
evidenced by the Notes, (ii) the Reimbursement Obligations and otherwise in
respect of the Letters of Credit, (iii) all liabilities of the Borrower to
any Lender which arise under a Swap Agreement, and (iv)
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the payment and performance of all other obligations, liabilities and
Indebtedness of the Borrower to the Lenders or the Agent hereunder, under
any one or more of the other Loan Documents or with respect to the Loans.
"Participation" means, with respect to any Lender (other than the
Issuing Bank) and a Letter of Credit, the extension of credit represented
by the participation of such Lender hereunder in the liability of the
Issuing Bank in respect of a Letter of Credit issued by the Issuing Bank in
accordance with the terms hereof.
"Participation Agreement" means the Participation Agreement dated
November 16, 1995 among HEALTHSOUTH Corporation, as Construction Agent,
HEALTHSOUTH Holdings, Inc., as Lessee, First Security Bank of Utah, N.A.,
as Trustee, the Holders identified therein, the Lenders identified therein,
and NationsBank, National Association, as Agent, as such Participation
Agreement may be amended, modified, supplemented or restated in its
entirety from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" means any employee pension benefit plan within the
meaning of Section 3(2) of ERISA, other than a Multiemployer Plan, which is
subject to the provisions of Title IV of ERISA or Section 412 of the Code
and which (i) is maintained for employees of the Borrower or any of its
ERISA Affiliates or is assumed by the Borrower or any of its ERISA
Affiliates in connection with any Acquisition or (ii) has at any time been
maintained for the employees of the Borrower or any current or former ERISA
Affiliate.
"Permitted Encumbrances" shall mean:
(1) liens for taxes, assessments and other governmental charges
that are not delinquent or that are being contested in good faith by
appropriate proceedings duly pursued;
(2) mechanic's, materialmen's, contractor's, landlord's or other
similar liens arising in the ordinary course of business, securing
obligations that are not delinquent or that are being contested in
good faith by appropriate proceedings duly pursued;
(3) restrictions, exceptions, reservations, easements,
conditions, limitations and other matters of record that do not
materially adversely affect the value or utility of the affected
property;
(4) Liens on assets securing Indebtedness the proceeds of which
are used to acquire such assets;
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(5) Liens and other matters approved in writing by the Required
Lenders; and
(6) Liens in favor of landlords, the amount secured by which
landlords' Liens, in the aggregate, would not materially adversely
affect the Borrower or a Material Group.
"Permitted Investments" shall mean:
(1) direct obligations of, or obligations the payment of which is
guaranteed by, the United States of America or an interest in any
trust or fund that invests solely in such obligations or repurchase
agreements, properly secured, with respect to such obligations.
(2) direct obligations of agencies or instrumentalities of the
United States of America having a rating of A or higher by S&P or A2
or higher by Moody's;
(3) a certificate of deposit issued by, or other interest-bearing
deposits with, a bank which is a Lender or an affiliate of a Lender,
or a bank having its principal place of business in the United States
of America and having equity capital of not less than $250,000,000;
(4) a certificate of deposit issued by, or other interest-bearing
deposits with, any other bank organized under the laws of the United
States of America or any state thereof, provided that such deposit is
either (i) insured by the Federal Deposit Insurance Corporation or
(ii) properly secured by such bank by pledging direct obligations of
the United States of America having a market value not less than the
face amount of such deposits;
(5) the capital stock of and partnership interests in, and loans
made by the Borrower to, Controlled Partnerships and Subsidiaries;
(6) prime commercial paper maturing within 270 days of the
acquisition thereof and, at the time of acquisition, having a rating
of A-1 or higher by S&P, or P-1 or higher by Moody's;
(7) eligible banker's acceptances, repurchase agreements and
tax-exempt municipal bonds having a maturity of less than one year, in
each case having a rating, or that is the full recourse obligation of
a person whose senior debt is rated, A or higher by S&P or A2 or
higher by Moody's;
(8) loans made by the Borrower or a Consolidated Entity in an
aggregate amount of $2,000,000 or less to employees of the Borrower or
of a Consolidated Entity;
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(9) loans made by the Borrower or a Controlled Partnership in an
aggregate amount of $1,000,000 or less to limited partners (or
potential limited partners) of Controlled Partnerships for the purpose
of enabling such limited partners to acquire limited partnership
interests in Controlled Partnerships, to operate their practices or to
restructure partnership interests;
(10) loans in an aggregate amount of up to $20,000,000 made by
the Borrower to the HEALTHSOUTH Employee Stock Benefit Plan;
(11) scholarship loans made by the Borrower in an aggregate
amount not exceeding $1,000,000 to individuals who meet certain
eligibility requirements as established by the Borrower from time to
time;
(12) up to 100% of the outstanding shares of stock of Caretenders
Healthcorp (formerly known as Senior Services, Inc.) provided that
aggregate costs incurred to purchase such shares shall not exceed
$12,000,000;
(13) other investments of less than $5,000,000 in the aggregate
expressly approved in writing by the Agent and investments of
$5,000,000 or greater expressly approved in writing by the Required
Lenders;
(14) any other investment having a rating of A or higher or A-1
or higher by S&P or A2 or higher or P-1 or higher by Moody's;
(15) loans to health care practitioners and other persons not to
exceed in the aggregate $5,000,000;
(16) investments in Acacia Venture Partners, HEALTHSMART,
MedPartners and Austin Medical Office Building which in the aggregate
do not exceed $5,000,000; and
(17) additional investments existing on the Closing Date and
described in Exhibit G.
"Person" means an individual, partnership, corporation, limited
liability company, trust, unincorporated organization, association, joint
venture or a government or agency or political subdivision thereof.
"Prime Rate" means the per annum rate of interest established from
time to time by NationsBank as its prime rate, which rate may not be the
lowest rate of interest charged by NationsBank to its Customers.
"Principal Office" means the office of the Agent at NationsBank,
National Association, Independence Center, 15th Floor, NC1 001-15-04,
Charlotte, North Carolina
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28255, Attention: Agency Services, or such other office and address as the
Agent may from time to time designate.
"Rate Hedging Obligations" means any and all obligations of the
Borrower or any Consolidated Entity, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired (including
all renewals, extensions and modifications thereof and substitutions
therefor), under (i) any and all agreements, devices or arrangements
designed to protect the Borrower or such Consolidated Entity from the
fluctuations of interest rates, exchange rates or forward rates applicable
to such party's assets, liabilities or exchange transactions, including,
but not limited to, Dollar- denominated or cross-currency interest rate
exchange agreements, forward currency exchange agreements, interest rate
cap or collar protection agreements, forward rate currency or interest rate
options, puts, warrants and those commonly known as interest rate "swap"
agreements; and (ii) any and all cancellations, buybacks, reversals,
terminations or assignments of any of the foregoing.
"Rating" means the rating of senior unsecured Indebtedness of the
Borrower in effect at any time which rating is made by either of Moody's or
S&P.
"Regulation D" means Regulation D of the Board as the same may be
amended or supplemented from time to time.
"Reimbursement Obligation" shall mean, at any time, the obligation of
the Borrower with respect to any Letter of Credit to reimburse the Issuing
Bank and the Lenders to the extent of their respective Participations
(including by the receipt by the Issuing Bank of proceeds of Loans pursuant
to Section 3.2) for amounts theretofore paid by the Issuing Bank pursuant
to a drawing under such Letter of Credit.
"Required Lenders" means, as of any date, Lenders on such date having
Credit Exposures (as defined below) aggregating at least 51% of the
aggregate Credit Exposures of all the Lenders on such date. For purposes of
the preceding sentence, the amount of the "Credit Exposure" of each Lender
shall be equal to the aggregate principal amount of the Loans without
regard to any Competitive Bid Loan, so long as there exists no Event of
Default, owing to such Lender plus the aggregate unutilized amounts of such
Lender's Revolving Credit Commitment plus the amount of such Lender's
Applicable Commitment Percentage of Letter of Credit Outstandings; provided
that, if any Lender shall have failed to pay to the Issuing Bank its
Applicable Commitment Percentage of any drawing under any Letter of Credit
resulting in an outstanding Reimbursement Obligation, such Lender's Credit
Exposure attributable to Letters of Credit and Reimbursement Obligations
shall be deemed to be held by the Issuing Bank for purposes of this
definition.
"Reserve Requirement" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board by member banks of the
Federal Reserve System (or any successor) by member banks of the
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Federal Reserve System against "Eurocurrency liabilities" (as such term is
used in Regulation D). Without limiting the effect of the foregoing, the
Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to (i) any category of
liabilities which includes deposits by reference to which the Eurodollar
Rate is to be determined, or (ii) any category of extensions of credit or
other assets which include Eurodollar Rate Loans. The Eurodollar Rate shall
be adjusted automatically on and as of the effective date of any change in
the Reserve Requirement.
"Restricted Payment" means (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of
Borrower or any of its Consolidated Entities (other than those payable or
distributable solely to the Borrower) now or hereafter outstanding, except
a dividend payable solely in shares of a class of stock to the holders of
that class; (b) any redemption, conversion, exchange, retirement or similar
payment, purchase or other acquisition for value, direct or indirect, of
any shares of any class of stock of the Borrower or any of its Consolidated
Entities (other than those payable or distributable solely to the Borrower)
now or hereafter outstanding; (c) any payment made to retire, or to obtain
the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of stock of the Borrower or any of its
Consolidated Entities now or hereafter outstanding; and (d) any issuance
and sale of capital stock of any Consolidated Entity of the Borrower (or
any option, warrant or right to acquire such stock) other than to the
Borrower.
"Revolving Credit Commitment" means, with respect to each Lender, the
obligation of such Lender to make Syndicated Loans to the Borrower up to an
aggregate principal amount at any one time outstanding equal to such
Lender's Applicable Commitment Percentage of the Total Revolving Credit
Commitment.
"Revolving Credit Facility" means the facility described in Article II
providing for Loans to the Borrower by the Lenders in the aggregate
principal amount of the Total Revolving Credit Commitment.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Syndicated Loans then
outstanding.
"Revolving Credit Termination Date" means (i) the Stated Termination
Date or (ii) such earlier date of termination of Lenders' Obligations as
may be determined pursuant to Section 9.1 upon the occurrence of an Event
of Default, or (iii) such date as the Borrower may voluntarily and
permanently terminate the Revolving Credit Facility by payment in full of
all Revolving Credit Outstandings, Competitive Bid Loans and all Letter of
Credit Outstandings and cancellation of all Letters of Credit, together
with all accrued and unpaid interest and fees thereon.
"Revolving Notes" means, collectively, the promissory notes of the
Borrower evidencing Syndicated Loans executed and delivered to the Lenders
as provided in Section
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2.5, substantially in the form of Exhibit F, with appropriate insertions as
to amounts, dates and names of Lenders.
"S&P" means Standard & Poor's Rating Group, a division of The McGraw
Hill Companies.
"Single Employer Plan" means any employee pension benefit plan covered
by Title IV of ERISA in respect of which the Borrower or any Subsidiary is
an "employer" as described in Section 4001(b) of ERISA and which is not a
Multiemployer Plan.
"Solvent" means, when used with respect to any Person, that at the
time of determination:
(i) the fair value of its assets (both at fair valuation and at
present fair saleable value on an orderly basis) is in excess of the
total amount of its liabilities, including contingent obligations; and
(ii) it is then able and expects to be able to pay its debts as
they mature; and
(iii) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
"Stated Termination Date" means June 22, 2003.
"Subordinated Debt" means any unsecured Indebtedness of the Borrower
or any Consolidated Entity (other than inter-company Indebtedness) which is
subordinated in right of payment in all respects to the Obligations in a
manner reasonably acceptable to the Agent.
"Subsidiary" means any corporation or other entity in which more than
50% of its outstanding voting stock or more than 50% of all equity
interests is owned directly or indirectly by the Borrower and/or by one or
more of the Borrower's Subsidiaries.
"Swap Agreement" means one or more agreements between the Borrower and
any Person with respect to Indebtedness evidenced by any or all of the
Notes, on terms mutually acceptable to Borrower and such Person and
approved by each of the Lenders, which agreements create Rate Hedging
Obligations; provided, however, that no such approval of the Lenders shall
be required to the extent such agreements are entered into between the
Borrower and any Lender.
"Syndicated Loans" shall mean any borrowing pursuant to an Advance
provided for by Section 2.1, which may be Base Rate Loans or Eurodollar
Rate Loans.
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"Termination Event" means: (i) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder (unless the
notice requirement has been waived by applicable regulation); or (ii) the
withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan
during a plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA or was deemed such under Section 4062(e) of
ERISA; or (iii) the termination of a Pension Plan, the filing of a notice
of intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA; or (iv) the
institution of proceedings to terminate a Pension Plan by the PBGC; or (v)
any other event or condition which would constitute grounds under Section
4042(a) of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; or (vi) the partial or complete withdrawal of
the Borrower or any ERISA Affiliate from a Multiemployer Plan; or (vii) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302 of
ERISA; or (viii) any event or condition which results in the reorganization
or insolvency of a Multiemployer Plan under Section 4241 or Section 4245 of
ERISA, respectively; or (ix) any event or condition which results in the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by the PBGC of proceedings to terminate a Multiemployer Plan
under Section 4042 of ERISA.
"Total Letter of Credit Commitment" means an amount not to exceed
$75,000,000.
"Total Revolving Credit Commitment" means a principal amount equal to
$1,750,000,000, as reduced from time to time in accordance with Section
2.1(a) and Section 2.8.
"Unused Amount" shall mean with respect to each Lender, (a) the
Revolving Credit Commitment of such Lender less (b) such Lender's pro rata
share of outstanding Syndicated Loans and Letter of Credit Outstandings
less (c) the outstanding principal amount of all Competitive Bid Loans then
held by such Lender; provided that in no event shall such amount be a
negative number.
"Vanderbilt" shall mean Vanderbilt Stallworth Rehabilitation Hospital,
L.P., the partners of which are the Borrower, Vanderbilt University and
Vanderbilt Health Services.
"Voting Stock" means shares of Capital Stock issued by a corporation,
or equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening of
such a contingency.
1.2. Rules of Interpretation.
(a) All accounting terms not specifically defined herein shall have
the meanings assigned to such terms and shall be interpreted in accordance
with GAAP applied on a Consistent Basis.
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(b) The headings, subheadings and table of contents used herein or in
any other Loan Document are solely for convenience of reference and shall
not constitute a part of any such document or affect the meaning,
construction or effect of any provision thereof.
(c) Except as otherwise expressly provided, references herein to
articles, sections, paragraphs, clauses, annexes, appendices, exhibits and
schedules are references to articles, sections, paragraphs, clauses,
annexes, appendices, exhibits and schedules in or to this Agreement.
(d) All definitions set forth herein or in any other Loan Document
shall apply to the singular as well as the plural form of such defined
term, and all references to the masculine gender shall include reference to
the feminine or neuter gender, and vice versa, as the context may require.
(e) When used herein or in any other Loan Document, words such as
"hereunder", "hereto", "hereof" and "herein" and other words of like import
shall, unless the context clearly indicates to the contrary, refer to the
whole of the applicable document and not to any particular article,
section, subsection, paragraph or clause thereof.
(f) References to "including" means including without limiting the
generality of any description preceding such term, and for purposes hereof
the rule of ejusdem generis shall not be applicable to limit a general
statement, followed by or referable to an enumeration of specific matters,
to matters similar to those specifically mentioned.
(g) All dates and times of day specified herein shall refer to such
dates and times at Charlotte, North Carolina.
(h) Each of the parties to the Loan Documents and their counsel have
reviewed and revised, or requested (or had the opportunity to request)
revisions to, the Loan Documents, and any rule of construction that
ambiguities are to be resolved against the drafting party shall be
inapplicable in the construing and interpretation of the Loan Documents and
all exhibits, schedules and appendices thereto.
(i) Any reference to an officer of the Borrower or any other Person by
reference to the title of such officer shall be deemed to refer to each
other officer of such Person, however titled, exercising the same or
substantially similar functions.
(j) All references to any agreement or document as amended, modified
or supplemented, or words of similar effect, shall mean such document or
agreement, as the case may be, as amended, modified or supplemented from
time to time only as and to the extent permitted therein and in the Loan
Documents.
1.3. Classes and Types of Loans. Loans hereunder are distinguished by
"Class" and by "Type". The "Class" of a Loan refers to whether such Loan is a
Competitive Bid Loan or a Syndicated Loan, each of which constitutes a Class.
The "Type" of a Loan refers to whether
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such Loan is a Base Rate Loan, a Eurodollar Rate Loan, an Absolute Rate Loan, or
a Eurodollar Market Loan, each of which constitutes a Type. Loans may be
identified by both Class and Type.
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ARTICLE II
The Loans
2.1. Syndicated Loans.
(a) Commitment. Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make Advances to the Borrower under the
Revolving Credit Facility from time to time from the Closing Date until the
Revolving Credit Termination Date on a pro rata basis as to the total borrowing
requested by the Borrower on any day determined by such Lender's Applicable
Commitment Percentage up to but not exceeding the Revolving Credit Commitment of
such Lender, provided, however, that the Lenders will not be required and shall
have no obligation to make any such Advance (i) so long as a Default or an Event
of Default has occurred and is continuing or (ii) if the maturity of any of the
Notes has been accelerated as a result of an Event of Default; provided further,
however, that immediately after giving effect to each such Advance, the
principal amount of Revolving Credit Outstandings plus Letters of Credit
Outstandings plus outstanding Competitive Bid Loans shall not exceed the Total
Revolving Credit Commitment. Within such limits, the Borrower may borrow, repay
and reborrow under the Revolving Credit Facility on a Business Day from the
Closing Date until, but (as to borrowings and reborrowings) not including, the
Revolving Credit Termination Date; provided, however, that (y) no Loan that is a
Eurodollar Rate Loan shall be made which has an Interest Period that extends
beyond the Revolving Credit Termination Date and (z) each Loan that is a
Eurodollar Rate Loan may, subject to the provisions of Section 2.4, be repaid
only on the last day of the Interest Period with respect thereto unless such
payment is accompanied by the additional payment, if any, required by Section
4.5.
(b) Amounts. The aggregate unpaid principal amount of the Revolving
Credit Outstandings plus Letter of Credit Outstandings plus outstanding
Competitive Bid Loans shall not exceed the Total Revolving Credit Commitment
and, in the event there shall be outstanding any such excess, the Borrower shall
immediately make such payments and prepayments as shall be necessary to comply
with this restriction. Each Syndicated Loan hereunder, other than Base Rate
Refunding Loans, and each Conversion under Section 2.9, shall be in an amount of
at least $5,000,000, and, if greater than $5,000,000, an integral multiple of
$1,000,000.
(c) Advances. (i) An Authorized Representative shall give the Agent
(1) at least three (3) Business Days' irrevocable written notice by
telefacsimile transmission of a Borrowing Notice or Interest Rate Selection
Notice (as applicable) with appropriate insertions, effective upon receipt, of
each Syndicated Loan that is a Eurodollar Rate Loan (whether representing an
additional borrowing hereunder or the Conversion of a borrowing hereunder from
Base Rate Loans to Eurodollar Rate Loans) prior to 10:30 A.M. and (2)
irrevocable written notice by telefacsimile transmission of a Borrowing Notice
or Interest Rate Selection Notice (as applicable) with appropriate insertions,
effective upon receipt, of each Syndicated Loan (other than Base Rate Refunding
Loans to the extent the same are effected without notice pursuant to Section
2.1(c)(iv)) that is a Base Rate Loan (whether representing an additional
borrowing hereunder or the Conversion of borrowing hereunder from Eurodollar
Rate Loans to Base Rate
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Loans) prior to 10:30 A.M. on the day of such proposed Syndicated Loan. Each
such notice shall specify the amount of the borrowing, the Type of Loan (Base
Rate or Eurodollar Rate), the date of borrowing and, if a Eurodollar Rate Loan,
the Interest Period to be used in the computation of interest. Notice of receipt
of such Borrowing Notice or Interest Rate Selection Notice, as the case may be,
together with the amount of each Lender's portion of an Advance requested
thereunder, shall be provided by the Agent to each Lender by telefacsimile
transmission with reasonable promptness, but (provided the Agent shall have
received such notice by 10:30 A.M.) not later than 1:00 P.M. on the same day as
the Agent's receipt of such notice.
(ii) Not later than 2:00 P.M. on the date specified for each borrowing
under this Section 2.1, each Lender shall, pursuant to the terms and subject to
the conditions of this Agreement, make the amount of the Loan or Loans to be
made by it on such day available by wire transfer to the Agent in the amount of
its pro rata share, determined according to such Lender's Applicable Commitment
Percentage of the Syndicated Loan or Syndicated Loans to be made on such day.
Such wire transfer shall be directed to the Agent at the Principal Office and
shall be in the form of Dollars constituting immediately available funds. The
amount so received by the Agent shall, subject to the terms and conditions of
this Agreement, be made available to the Borrower by delivery of the proceeds
thereof as shall be directed in the applicable Borrowing Notice by the
Authorized Representative and reasonably acceptable to the Agent.
(iii) The Borrower shall have the option to elect the duration of the
initial and any subsequent Interest Periods and to Convert the Syndicated Loans
in accordance with Section 2.9. Eurodollar Rate Loans and Base Rate Loans may be
outstanding at the same time, provided, however, there shall not be outstanding
at any one time Loans (whether Syndicated Loans or Competitive Bid Loans) having
more than eight (8) different Interest Periods. If the Agent does not receive a
Borrowing Notice or an Interest Rate Selection Notice giving notice of election
of the duration of an Interest Period or of Conversion of any Loan to or
Continuation of a Loan as a Eurodollar Rate Loan by the time prescribed by
Section 2.1(c) or 2.9, the Borrower shall be deemed to have elected to Convert
such Loan to (or Continue such Loan as) a Base Rate Loan until the Borrower
notifies the Agent in accordance with Section 2.9.
(iv) Notwithstanding the foregoing, if a drawing is made under any Letter
of Credit, such drawing is honored by the Issuing Bank prior to the Revolving
Credit Termination Date, and the Borrower shall not immediately fully reimburse
the Issuing Bank in respect of such drawing, (A) provided that the conditions to
making a Syndicated Loan as herein provided shall then be satisfied, the
Reimbursement Obligation arising from such drawing shall be paid to the Issuing
Bank by the Agent without the requirement of notice to or from the Borrower from
immediately available funds which shall be advanced as a Base Rate Refunding
Loan by each Lender under the Revolving Credit Facility in an amount equal to
such Lender's Applicable Commitment Percentage of such Reimbursement Obligation,
and (B) if the conditions to making a Loan as herein provided shall not then be
satisfied, each of the Lenders shall fund by payment to the Agent (for the
benefit of the Issuing Bank) in immediately available funds the purchase from
the Issuing Bank of their respective Participations in the related Reimbursement
Obligation based on their respective Applicable Commitment Percentages. If a
drawing is presented under any Letter of Credit in accordance with the terms
thereof and the Borrower shall not immediately reimburse
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the Issuing Bank in respect thereof, then notice of such drawing or payment
shall be provided promptly by the Issuing Bank to the Agent and the Agent shall
provide notice to each Lender by telephone or telefacsimile transmission. If
notice to the Lenders of a drawing under any Letter of Credit is given by the
Agent at or before 12:00 noon on any Business Day, each Lender shall, pursuant
to the conditions specified in this Section 2.1(c)(iv), either make a Base Rate
Refunding Loan or fund the purchase of its Participation in the amount of such
Lender's Applicable Commitment Percentage of such drawing or payment and shall
pay such amount to the Agent for the account of the Issuing Bank at the
Principal Office in Dollars and in immediately available funds before 2:30 P.M.
on the same Business Day. If notice to the Lenders of a drawing under a Letter
of Credit is given by the Agent after 12:00 noon on any Business Day, each
Lender shall, pursuant to the conditions specified in this Section 2.1(c)(iv),
either make a Base Rate Refunding Loan or fund the purchase of its Participation
in the amount of such Lender's Applicable Commitment Percentage of such drawing
or payment and shall pay such amount to the Agent for the account of the Issuing
Bank at the Principal Office in Dollars and in immediately available funds
before 12:00 noon on the next following Business Day. Any such Base Rate
Refunding Loan shall be advanced as, and shall Continue as, a Base Rate Loan
unless and until the Borrower Converts such Base Rate Loan in accordance with
the terms of Section 2.9.
2.2. Competitive Bid Loans.
(a) In addition to borrowings of Syndicated Loans, at any time prior
to the Revolving Credit Termination Date, the Borrower may, as set forth in
this Section 2.2, request the Lenders to make offers to make Competitive
Bid Loans to the Borrower in Dollars. The Lenders may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this
Section 2.2. Competitive Bid Loans may be Eurodollar Market Loans or
Absolute Rate Loans (each a "Type" of Competitive Bid Loan), provided that:
(i) the aggregate amount of outstanding Competitive Bid Loans
shall not exceed the Total Revolving Credit Commitment less the sum of
the principal amount of Revolving Credit Outstandings and Letter of
Credit Outstandings;
(ii) there may be no more than eight (8) different Interest
Periods for both Syndicated Loans and Competitive Bid Loans
outstanding at the same time (for which purpose Interest Periods
described in different lettered clauses of the definition of the term
"Interest Period" shall be deemed to be different periods even if they
are coterminous);
(iii) the aggregate amount of outstanding Competitive Bid Loans
of a Lender shall not exceed at any time an amount equal to such
Lender's Revolving Credit Commitment;
(iv) the aggregate principal amount of all Competitive Bid Loans,
together with the sum of (1) Revolving Credit Outstandings and (2)
Letter of
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Credit Outstandings shall not exceed the Total Revolving Credit
Commitment at such time; and
(v) no Competitive Bid Loan shall have a maturity date subsequent
to the Revolving Credit Termination Date.
(b) When the Borrower wishes to request offers to make Competitive Bid
Loans, it shall give the Agent (which shall promptly notify the Lenders)
notice (a "Competitive Bid Quote Request") to be received no later than
11:00 a.m. on (x) the fourth Business Day prior to the date of borrowing
proposed therein, in the case of a Eurodollar Auction or (y) the Business
Day next preceding the date of borrowing proposed therein, in the case of
an Absolute Rate Auction (or, in any such case, such other time and date as
the Borrower and the Agent, with the consent of the Required Lenders, may
agree). The Borrower may request offers to make Competitive Bid Loans for
up to three (3) different Interest Periods in a single notice (for which
purpose Interest Periods in different lettered clauses of the definition of
the term "Interest Period" shall be deemed to be different Interest Periods
even if they are coterminous); provided that the request for each separate
Interest Period shall be deemed to be a separate Competitive Bid Quote
Request for a separate borrowing (a "Competitive Bid Borrowing") and there
shall not be outstanding at any one time more than four (4) Competitive Bid
Borrowings. Each such Competitive Bid Quote Request shall be substantially
in the form of Exhibit K and shall specify as to each Competitive Bid
Borrowing:
(i) the proposed date of such Competitive Bid Borrowing, which
shall be a Business Day;
(ii) the aggregate amount of such Competitive Bid Borrowing,
which shall be at least $10,000,000 (or a larger integral multiple of
$1,000,000) but shall not cause the limits specified in Section 2.2(a)
to be violated;
(iii) the duration of the Interest Period applicable thereto;
(iv) whether the Competitive Bid Quotes requested for a
particular Interest Period are seeking quotes for Eurodollar Market
Loans or Absolute Rate Loans; and
(v) if the Competitive Bid Quotes requested are seeking Absolute
Rate Loans, the date on which the Competitive Bid Quotes are to be
submitted if it is before the proposed date of Borrowing (the date on
which such Competitive Bid Quotes are to be submitted is called the
"Quotation Date").
Except as otherwise provided in this Section 2.2(b), no Competitive Bid
Quote Request shall be given within five (5) Business Days (or such other
number of days as the Borrower and the Agent, with the consent of the
Required Lenders, may agree) of any other Competitive Bid Quote Request.
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(c) (i) Each Lender may submit one or more Competitive Bid
Quotes, each containing an offer to make a Competitive Bid Loan in
response to any Competitive Bid Quote Request; provided that, if the
Borrower's request under Section 2.2(b) specified more than one
Interest Period, such Lender may make a single submission containing
one or more Competitive Bid Quotes for each such Interest Period. Each
Competitive Bid Quote must be submitted to the Agent not later than
(x) 2:00 p.m. on the fourth Business Day prior to the proposed date of
borrowing, in the case of a Eurodollar Auction or (y) 10:00 a.m. on
the Quotation Date, in the case of an Absolute Rate Auction (or, in
any such case, such other time and date as the Borrower and the Agent,
with the consent of the Required Lenders, may agree); provided that
any Competitive Bid Quote may be submitted by NationsBank (or its
Applicable Lending Office) only if NationsBank (or such Applicable
Lending Office) notifies the Borrower of the terms of the offer
contained therein not later than (x) 1:00 p.m. on the fourth Business
Day prior to the proposed date of borrowing, in the case of a
Eurodollar Auction or (y) 9:45 a.m. on the Quotation Date, in the case
of an Absolute Rate Action. Subject to Article IV, Article VI and
Article IX, any Competitive Bid Quote so made shall be irrevocable
except with the consent of the Agent given on the instructions of the
Borrower.
(ii) Each Competitive Bid Quote shall be substantially in the
form of Exhibit L and shall specify:
(A) the proposed date of borrowing and the Interest Period
therefor;
(B) the principal amount of the Competitive Bid Loan for
which each such Competitive Bid Quote is being made, which
principal amount shall be at least $5,000,000 (or a larger
integral multiple of $1,000,000); provided that the aggregate
principal amount of all Competitive Bid Loans for which a Lender
submits Competitive Bid Quotes (x) may not exceed the Revolving
Credit Commitment of such Lender and (y) may not exceed the
principal amount of the Competitive Bid Borrowing for a
particular Interest Period for which offers were requested;
(C) in the case of a Eurodollar Auction, the margin above or
below the applicable Interbank Offered Rate adjusted for any
Reserve Requirement (the "Eurodollar Margin") offered for each
such Competitive Bid Loan, expressed as a percentage (rounded
upwards, if necessary, to the nearest 1/10,000th of 1%) to be
added to or subtracted from the applicable Interbank Offered Rate
as so adjusted;
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (rounded upwards, if necessary, to the nearest
1/10,000th of 1%) offered for each such Competitive Bid Loan (the
"Absolute Rate"); and
(E) the identity of the quoting Lender.
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Unless otherwise agreed by the Agent and the Borrower, no Competitive Bid
Quote shall contain qualifying, conditional or similar language or propose
terms other than or in addition to those set forth in the applicable
Competitive Bid Quote Request and, in particular, no Competitive Bid Quote
may be conditioned upon acceptance by the Borrower of all (or some
specified minimum) of the principal amount of the Competitive Bid Loan for
which such Competitive Bid Quote is being made.
(d) The Agent shall (x) in the case of a Eurodollar Auction, by 4:00
p.m. on the day a Competitive Bid Quote is submitted or (y) in the case of
an Absolute Rate Auction, as promptly as practicable after the Competitive
Bid Quote is submitted (but in any event not later than 10:30 a.m. on the
Quotation Date), notify the Borrower of the terms (i) of any Competitive
Bid Quote submitted by a Lender that is in accordance with Section 2.2(c)
and (ii) of any Competitive Bid Quote that amends, modifies or is otherwise
inconsistent with a previous Competitive Bid Quote submitted by such Lender
with respect to the same Competitive Bid Quote Request. Any such subsequent
Competitive Bid Quote shall be disregarded by the Agent unless such
subsequent Competitive Bid Quote is submitted solely to correct a manifest
error in such former Competitive Bid Quote. The Agent's notice to the
Borrower shall specify (A) the aggregate principal amount of the
Competitive Bid Borrowing for which Competitive bid Quotes have been
received and (B) the respective principal amounts and Eurodollar Margins or
Absolute Rates, as the case may be, so offered by each Lender (identifying
the Lender that made such Competitive Bid Quote).
(e) Not later than 11:00 a.m. on (x) the third Business Day prior to
the proposed date of borrowing, in the case of a Eurodollar Auction or (y)
the Quotation Date, in the case of an Absolute Rate Auction (or, in any
such case, such other time and date as the Borrower and the Agent, with the
consent of the Required Lenders, may agree), the Borrower shall notify the
Agent of its acceptance or nonacceptance of the offers so notified to it
pursuant to Section 2.2(d) (and the failure of the Borrower to give such
notice by such time shall constitute nonacceptance) and the Agent shall
promptly notify each affected Lender. In the case of acceptance, such
notice shall specify the aggregate principal amount of offers for each
Interest Period that are accepted. The Borrower may accept any Competitive
Bid Quote in whole or in part (provided that any Competitive Bid Quote
accepted in part shall be at least $5,000,000 or a larger integral multiple
of $1,000,000); provided that:
(i) the aggregate principal amount of each Competitive Bid
Borrowing may not exceed the applicable amount set forth in the
related Competitive Bid Request;
(ii) the aggregate principal amount of each Competitive Bid
Borrowing shall be at least $10,000,000 (or a larger integral multiple
of $1,000,000) but shall not cause the limits specified in Section
2.2(a) to be violated;
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(iii) acceptance of offers may be made only in ascending order of
Eurodollar Margins or Absolute Rates, as the case may be, in each case
beginning with the lowest rate so offered; provided, however, that the
Borrower, in its sole discretion, may accept other than the lowest
rate where acceptance of the lowest rate will result in (x) the
outstanding Loans of a Lender or Lenders offering the lowest rate
exceeding such Lender's Revolving Credit Commitment and (y) an
increase in the Applicable Unused Fee payable by the Borrower under
Section 2.10.
(iv) the Borrower may not accept any offer where the Agent has
correctly advised the Borrower that such offer fails to comply with
Section 2.2(c)(ii) or otherwise fails to comply with the requirements
of this Agreement (including, without limitation, Section 2.2(a)).
If offers are made by two or more Lenders with the same Eurodollar Margins
or Absolute Rates, as the case may be, for a greater aggregate principal
amount than the amount in respect of which offers are permitted to be
accepted for the related Interest Period after the acceptance of all
offers, if any, of all lower Eurodollar Margins or Absolute Rates, as the
case may be, offered by any Lender for such related Interest Period, the
principal amount of Competitive Bid Loans in respect of which such offers
are accepted shall be allocated by the Borrower among such Lenders as
nearly as possible (in amounts of at least $5,000,000 or larger integral
multiples of $1,000,000) in proportion to the aggregate principal amount of
such offers. Determinations by the Borrower of the amounts of Competitive