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AMENDED AND RESTATED
CREDIT AGREEMENT
among
HEALTHSOUTH REHABILITATION CORPORATION
and
NATIONSBANK OF NORTH CAROLINA, NATIONAL ASSOCIATION,
as Agent
and
LENDERS AS SIGNATORIES HERETO,
--------
$550,000,000 Revolving Credit and Term Loan Facility
Dated as of June 7, 1994
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
REVOLVING FACILITY TERMS, TERM LOAN AND COLLATERAL
SECTION 2.1 Syndicated Loans............................................. 24
SECTION 2.2 Advances of Syndicated Loans................................. 25
SECTION 2.3 Competitive Bid Loans........................................ 26
SECTION 2.4 Term Loan.................................................... 30
SECTION 2.5 Payments..................................................... 31
SECTION 2.6 Joint and Several Obligations................................ 31
SECTION 2.7 Pledge Agreement............................................. 32
SECTION 2.8 Prepayment................................................... 33
SECTION 2.9 Notes........................................................ 33
SECTION 2.10 Reduction in Revolving Facility.............................. 34
SECTION 2.11 Unused Fee................................................... 34
SECTION 2.12 Lending Offices.............................................. 34
SECTION 2.13 Letter of Credit Borrowings.................................. 34
SECTION 2.14 Pro Rata Payments............................................ 38
SECTION 2.15 Deficiency Advances.......................................... 38
SECTION 2.16 Adjustments by Agent......................................... 39
ARTICLE III
INTEREST ON SYNDICATED LOANS
SECTION 3.1 Applicable Interest Rates.................................... 40
SECTION 3.2 Procedure for Exercising Interest Rate Options............... 40
SECTION 3.3 Base Rate.................................................... 40
SECTION 3.4 Fixed Rate................................................... 41
SECTION 3.5 Changes in Syndicated Margin. .............................. 41
ARTICLE IV
TERMINATION OF LIBOR-BASED RATE AND YIELD PROTECTION
SECTION 4.1 Suspension of Loans.......................................... 42
SECTION 4.2 Compensation................................................. 43
SECTION 4.3 Taxes........................................................ 43
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Organization, Powers, Existence, etc......................... 46
SECTION 5.2 Authorization of Borrowing, etc.............................. 46
SECTION 5.3 Liabilities.................................................. 46
SECTION 5.4 Taxes........................................................ 47
SECTION 5.5 Litigation................................................... 47
SECTION 5.6 Agreements................................................... 47
SECTION 5.7 Use of Proceeds.............................................. 47
SECTION 5.8 ERISA Requirement............................................ 47
SECTION 5.9 Subsidiaries................................................. 47
SECTION 5.10 Principal Place of Business.................................. 48
SECTION 5.11 Environmental Laws........................................... 48
SECTION 5.12 Disclosure................................................... 48
SECTION 5.13 Licenses..................................................... 48
SECTION 5.14 Title to Properties.......................................... 48
<PAGE>
ARTICLE VI
GENERAL CONDITIONS OF LENDING
SECTION 6.1 Representations and Warranties............................... 50
SECTION 6.2 No Default................................................... 50
SECTION 6.3 Supporting Documents......................................... 50
ARTICLE VII
GENERAL COVENANTS OF THE BORROWER
SECTION 7.1 Existence, Properties, etc................................... 52
SECTION 7.2 Payment of Indebtedness, Taxes, etc.......................... 52
SECTION 7.3 Financial Statements, Reports, etc........................... 52
SECTION 7.4 Litigation Notice............................................ 54
SECTION 7.5 Default Notice............................................... 55
SECTION 7.6 Further Assurances........................................... 55
SECTION 7.7 Insurance.................................................... 55
SECTION 7.8 Covenants Regarding Financial Condition...................... 55
SECTION 7.9 Continuation of Current Business............................. 61
SECTION 7.10 Management Contracts......................................... 61
SECTION 7.11 Cooperation; Inspection of Properties........................ 61
SECTION 7.12 Use of Proceeds.............................................. 61
SECTION 7.13 Limit on Investment in HEALTHSOUTH of
Birmingham, Inc.............................................. 62
SECTION 7.14 Additional Consolidated Entities............................. 62
SECTION 7.15 ERISA. ..................................................... 62
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.1 Events of Default............................................ 64
SECTION 8.2 Agent to Act................................................. 67
SECTION 8.3 Cumulative Rights............................................ 67
SECTION 8.4 No Waiver.................................................... 67
SECTION 8.5 Default...................................................... 67
SECTION 8.6 Allocation of Proceeds....................................... 68
ARTICLE IX
THE AGENT
SECTION 9.1 Appointment.................................................. 69
SECTION 9.2 Attorneys-in-fact............................................ 69
SECTION 9.3 Limitation on Liability...................................... 69
SECTION 9.4 Reliance..................................................... 69
SECTION 9.5 Notice of Default............................................ 70
SECTION 9.6 No Representations........................................... 70
SECTION 9.7 Indemnification.............................................. 71
SECTION 9.8 Lender....................................................... 71
SECTION 9.9 Resignation.................................................. 71
SECTION 9.10 Sharing of Payments, etc..................................... 72
SECTION 9.11 Fees......................................................... 72
SECTION 9.12 Independent Agreements....................................... 72
<PAGE>
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Assignments and Participations.............................. 73
SECTION 10.2 Notices..................................................... 75
SECTION 10.3 No Waiver................................................... 76
SECTION 10.4 Setoff...................................................... 76
SECTION 10.5 Survival.................................................... 76
SECTION 10.6 Expenses.................................................... 77
SECTION 10.7 Amendments.................................................. 78
SECTION 10.8 Counterparts................................................ 78
SECTION 10.9 Waivers by Borrower......................................... 79
SECTION 10.10 Termination................................................. 79
SECTION 10.11 Governing Law............................................... 80
SECTION 10.12 Indemnification............................................. 80
SECTION 10.13 Agreement Controls.......................................... 81
SECTION 10.14 Integration................................................. 81
SECTION 10.15 Successors and Assigns...................................... 81
SECTION 10.16 Severability................................................ 81
Exhibit A - Applicable Commitment Percentage
Exhibit B - Form of Assignment and Acceptance
Exhibit C-1 - Form of Partnership Guaranty Agreement
Exhibit C-2 - Form of Subsidiary Guaranty Agreement
Exhibit D - Form of Request for Advance or Interest Rate
Election
Exhibit E - Form of Competitive Bid Quote Requests
Exhibit F - Form of Competitive Bid Quote
Exhibit G - Subsidiaries and Controlled Partnerships
Exhibit H-1 - Form of Syndicated Note
Exhibit H-2 - Form of Competitive Bid Note
Exhibit H-3 - Form of Term Note
Exhibit I - Form of Compliance Certificate and Schedules
Thereto
Exhibit J - Summary of Insurance
Exhibit K - Outstanding Letters of Credit
Exhibit L - Investments or Equity Interest
Exhibit M - Subsidiaries and Controlled Partnerships
Exhibit N - Existing Liens
Exhibit O - Disposal Properties
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 7, 1994
(this "Agreement") is entered into by and among HEALTHSOUTH REHABILITATION
CORPORATION, a Delaware corporation (the "Borrower"), the Lenders as signatories
hereto (the "Lenders") and NATIONSBANK OF NORTH CAROLINA, NATIONAL ASSOCIATION,
a national banking association (the "Agent").
RECITAL:
Pursuant to a Credit Agreement dated as of November 20, 1992 as amended
by Amendments No. 1 and No. 2 (the "Prior Agreement"), the lenders party thereto
(the "Prior Lenders") have agreed to make loans and cause to be issued letters
of credit all in an aggregate outstanding amount of not to exceed $390,000,000.
Pursuant to the terms of the Prior Agreement all Participating Subsidiaries and
Participating Partnerships (each defined in the Prior Agreement) have guaranteed
payment of all Credit Obligations (as defined in the Prior Agreement). In
addition, the Borrower, and certain of the Participating Subsidiaries have
executed and delivered to the Agent, for the benefit of the Lenders, Pledge
Agreements conveying the property described therein as security for the Credit
Obligations. The Borrower has requested that the Prior Agreement be amended and
restated in its entirety in order to increase the amount of the credit facility,
to change certain of the provisions contained therein and to increase the number
of lenders participating therein. Accordingly, the Borrower, the Lenders and the
Agent agree that the Prior Agreement is hereby amended and restated in its
entirety as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 For the purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
All accounting terms not otherwise defined herein have the
meanings assigned to them, and all computations herein provided for
shall be made, in accordance with generally accepted accounting
principles applied on a consistent basis. All references herein to
"GAAP" refer to such principles as they exist at the date of
application thereof.
All references in this instrument to designated "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections and subdivisions of this instrument as originally executed.
The terms "herein", "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.
<PAGE>
The terms "include," "including" and similar terms shall be
construed as if followed by the phrase "without being limited to."
All Article and Section captions herein are used for
reference only and in no way limit or describe the scope or intent of,
or in any way affect, this Agreement.
Words importing the singular number shall mean and include
the plural number and visa versa.
All recitals set forth in this Agreement are hereby
incorporated in the operative provisions of this Agreement.
No inference in favor of or against either party shall be
drawn from the fact that such party or its counsel has drafted any
portion hereof.
The term "person" shall include individual, corporation,
partnership, joint venture, association, trust, unincorporated
organization and any government or any agency or political subdivision
thereof.
Absolute Rate shall have the meaning assigned to such term
in Section 2.3(c)(ii)(D) hereof.
Absolute Rate Auction shall mean a solicitation of
Competitive Bid Quotes setting forth Absolute Rates pursuant
to Section 2.3 hereof.
Absolute Rate Loans shall mean the Competitive Bid Loans the
interest rates on which are determined on the basis of Absolute Rates
set at Absolute Rate Auctions.
Acquisition means the acquisition, whether with cash,
property, stock or promise to pay all or a portion of a person or a
Facility or Facilities of a person, permitted under Sections 7.8(a)(8)
and 7.8(a)(17) hereof; provided (i) such Person or Facilities is in the
same line of business engaged in by Borrower or its Consolidated
Entities, (ii) the person or Facility to be acquired does not oppose
the acquisition, and (iii) at the time of giving effect to such
Acquisition such person or Facility is a Consolidated Entity.
Actual/360 Basis shall mean a method of computing interest
or other charges hereunder on the basis of an assumed year of 360 days
for actual number of days elapsed, meaning that interest or other
charges accrued for each day will be computed by multiplying the rate
applicable on that day by the unpaid principal balance (or other
relevant sum) on that day and dividing the result by 360.
Advance means a borrowing under the Revolving Facility
consisting of the aggregate principal amount of a Syndicated Loan or a
Competitive Bid Loan.
<PAGE>
Affiliate of any specified person shall mean any other
person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified person. For
purposes of this definition "control" when used with respect to any
specified person means the power to direct the management and policies
of such person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
Applicable Commitment Percentage means, for each Lender, a
fraction, the numerator of which shall be the then amount of such
Lender's Commitment and the denominator of which shall be the Revolving
Facility, which Applicable Commitment Percentage for each Lender as of
the Closing Date is as set forth in Exhibit A attached hereto and
incorporated herein by reference; provided that the Applicable
Commitment Percentage of each Lender shall be increased or decreased to
reflect any assignments to or by such Lender effected in accordance
with Section 10.1 hereof.
Applicable Lending Office shall mean, for each Lender and
for each Type of Loan, the "Lending Office" of such Lender (or of an
Affiliate of such Lender) designated for such Type of Loan on the
signature pages hereof or such other office of such Lender (or of an
Affiliate of such Lender) as such Lender may from time to time specify
to the Agent and the Borrower as the office by which its Loans of such
Type are to be made and maintained.
Application shall mean the Application and Agreement for
Letter of Credit pursuant to which the Borrower may apply for the
issuance of a Letter of Credit by NationsBank as provided in Section
2.13 hereof.
Asset Sale for any person means the sale, lease conveyance
or other disposition (including, without limitation, by merger or
consolidation, and whether by operation of law or otherwise) of any of
that person's assets (including, without limitation, the sale or other
disposition of Capital Stock of any Subsidiary of such person, whether
by such person or by such Subsidiary), whether owned on the date of
initial issuance of the Senior Subordinated Notes or subsequently
acquired, in one transaction or a series of related transactions, in
which such person and or its Subsidiaries sell, lease, convey or
otherwise dispose of (i) all or substantially all of the Capital Stock
of any of such person's Subsidiaries, (ii) assets which constitute
substantially all of an operating unit or business of such person or
any of its Subsidiaries, or (iii) any health care facility; provided,
however, that the following shall not constitute Asset Sales: (i) a
transaction or series of related transactions that results in a Change
of Control (as such term is defined in the Indenture dated March 24,
1994 relating to the Senior Subordinated Notes), and (ii) transactions
between the Borrower and any of its Wholly Owned Subsidiaries (as such
term is defined in the Indenture dated March 24, 1994 relating to the
Senior Subordinated Notes) or among such Wholly Owned Subsidiaries.
<PAGE>
Assignment and Acceptance shall mean an Assignment and
Acceptance in the form of Exhibit B (with blanks appropriately filled
in) delivered in connection with an assignment of a portion of the
Lender's interest under this Agreement pursuant to Section 10.1.
Attributable Indebtedness when used with respect to any Sale
and Leaseback Transaction or an operating lease with respect to a
healthcare facility means, as at the time of determination, the present
value (discounted at a rate equivalent to the interest rate implicit in
the lease, compounded on a semiannual basis) of the total obligations
of the lessee for rental payments, after excluding all amounts required
to be paid on account of maintenance and repairs, insurance, taxes,
utilities and other similar expenses payable by the lessee pursuant to
the terms of the lease, during the remaining term of the lease included
in any such Sale and Leaseback Transaction or such operating lease or
until the earliest date on which the lessee may terminate such lease
without penalty or upon payment of a penalty (in which case the rental
payments shall include such penalty); provided, that the Attributable
Indebtedness with respect to a Sale and Leaseback Transaction shall be
no less than the fair market value of the property subject to such Sale
and Leaseback Transaction.
Base Rate shall mean the higher of the (i) Prime Rate or
(ii) the Federal Funds Effective Rate plus 1/2% per annum.
Base Rate Loans shall mean Syndicated Loans that bear
interest at rates based upon the Base Rate.
Business Day shall mean (a) any day on which commercial
banks are not authorized or required to close in Charlotte, North
Carolina and New York City and (b) if such day relates to the giving of
notices or quotes in connection with a LIBOR Auction or to a borrowing
of, a payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a LIBOR Loan or a
LIBOR Market Loan or a notice by the Borrower with respect to any such
borrowing, payment, prepayment, Conversion or Interest Period, any day
on which dealings in Dollar deposits are carried out in the London
interbank market.
Capital Expenditure shall mean any expenditure or liability
that is properly charged to a capital account or otherwise capitalized
on the consolidated balance sheet in accordance with GAAP.
Capital Stock of any person means any and all shares, rights
to purchase, warrants or options (whether or not currently
exercisable); participation or other equivalents of or interest in
(however designated) the equity (including without limitation common
stock, preferred stock and partnership and joint venture interests) of
such Person (excluding any debt securities that are convertible into,
or exchangeable for, such equity).
<PAGE>
Capitalized Lease Obligations of any person means the
obligation of such person to pay rent or other amounts under a lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
Cash Available for Capital Expenditures means the sum of (i)
Consolidated Net Income, (ii) Consolidated Depreciation Expense and
(iii) Consolidated Amortization Expense minus Consolidated Current
Maturities.
Class shall have the meaning assigned to such term in
Section 1.2 hereof.
Closing Date shall mean the date of this Agreement.
Collateral shall mean all property covered by the Pledge
Agreements or that otherwise at any time secures any of the Credit
Obligations.
Commitment shall mean, as to each Lender, the obligation of
such Lender to make Syndicated Loans pursuant to Section 2.1 hereof in
an aggregate amount at any one time outstanding up to but not exceeding
the amount set opposite such Lender's name on the signature pages
hereof under the caption "Commitment" (as the same may be reduced at
any time or from time to time pursuant to Section 2.10 hereof);
provided that the Commitment of each Lender shall be increased or
decreased to reflect any assignments to or by such Lender effected in
accordance with Section 10.1 hereof.
Competitive Bid Borrowing shall have the meaning assigned to
such term in Section 2.3(b) hereof.
Competitive Bid Loans shall mean the Loans provided for by
Section 2.3 hereof.
Competitive Bid Notes shall mean the promissory notes
provided for by Section 2.9(b) hereof and all promissory notes
delivered in substitution or exchange therefor, in each case as the
same shall be modified and supplemented and in effect from time to
time.
Competitive Bid Quote shall mean an offer in accordance with
Section 2.3(c) hereof by a Lender to make a Competitive Bid Loan with
one single specified interest rate.
<PAGE>
Competitive Bid Quote Request shall have the meaning
assigned to such term in Section 2.3(b) hereof.
Compliance Certificate shall have the meaning attributed to
that term in Section 7.3(3) below.
Consolidated Adjusted Interest Expense means Consolidated
Interest Expense plus (to the extent not otherwise included within the
definition of Interest Expense as imputed interest) one-third of the
rental expense on Attributable Indebtedness of the Borrower and its
Consolidated Entities for such period determined on a consolidated
basis.
Consolidated Amortization Expense of the Borrower for any
period means the amortization expense of the Borrower and its
Consolidated Entities for such period (to the extent included in the
computation of Consolidated Net Income), determined on a consolidated
basis in accordance with GAAP.
Consolidated Cash Flow means, for Borrower and its
Consolidated Entities for any Four-Quarter Period, Consolidated Net
Income, plus amounts that have been deducted in determining
Consolidated Net Income for such period for (i) Consolidated Income Tax
Expense, (ii) Consolidated Interest Expense, (iii) Consolidated
Depreciation Expense, (iv) Consolidated Amortization Expense and (v)
the minority interests of any person or persons in Consolidated
Entities.
Consolidated Current Assets means cash and all other assets
or resources of the Borrower and its Consolidated Entities which are
expected to be realized in cash, sold in the ordinary course of
business, or consumed within one year, determined on a consolidated
basis in accordance with GAAP.
Consolidated Current Liabilities means the amount of all
liabilities of the Borrower and its Consolidated Entities which by
their terms are payable within one year (including all Indebtedness
payable on demand or maturing not more than one year from the date of
computation) and the current portion of Indebtedness having a maturity
date in excess of one year, determined on a consolidated basis in
accordance with GAAP.
Consolidated Current Maturities means Principal Maturities
of the Borrower and its Consolidated Entities.
Consolidated Depreciation Expense of the Borrower means the
depreciation expense of the Borrower and its Consolidated Entities for
such period (to the extent included in the computation of Consolidated
Net Income of the Borrower), determined on a consolidated basis in
accordance with GAAP.
Consolidated EBITDA of the Borrower means, with respect to
any Four-Quarter Period, Consolidated Net Income before extraordinary
losses and losses realized in connection with sale of assets, plus (i)
Consolidated Income Tax Expense, plus (ii) Consolidated Depreciation
Expense, plus (iii) Consolidated Amortization Expense, plus (iv)
Consolidated Adjusted Interest Expense, plus (v) all other non-cash
items reducing Consolidated Net Income of the Borrower and its
Consolidated Entities, determined on a consolidated basis in accordance
with GAAP, plus (vi) without duplication, for calculation of an EBITDA
Coverage Ratio for periods ending on or before December 31, 1994 the
sum of $31,500,000 (representing expenses related to the Borrower's
acquisition of certain rehabilitation facilities and related assets
from National Medical Enterprises, Inc. effective December 31, 1993,
net of Federal income tax effect), plus (vii) without duplication, any
amount, net of Federal income tax effects, representing expenses
relating to an Acquisition, up to a maximum of 10% of the purchase
price thereof, determined on a consolidated basis in accordance with
GAAP, and less all non-cash items increasing Consolidated Net Income,
determined on a consolidated basis in accordance with GAAP.
<PAGE>
Consolidated Entity shall mean any person whose financial
statements are appropriately consolidated with the Borrower's financial
statements under GAAP.
Consolidated Income Tax Expense of the Borrower for any
period means the provision for taxes based on income and profits of the
Borrower and its Consolidated Entities to the extent such income or
profits were included in computing Consolidated Net Income for such
period.
Consolidated Interest Expense of the Borrower for any period
means the Interest Expense of the Borrower and its Consolidated
Entities for such period, determined on a consolidated basis in
accordance with GAAP.
Consolidated Lease Expense means for any period all Lease
Payments paid or accrued during such period under operating leases
(whether or not constituting rental expense) by the Borrower and its
Consolidated Entities determined on a consolidated basis in accordance
with GAAP.
<PAGE>
Consolidated Net Income of the Borrower for any period means
the net income (or loss) of the Borrower and its Consolidated Entities
for such period determined on a consolidated basis in accordance with
GAAP, without giving effect to dividends on any series of preferred
stock of any Consolidated Entity, whether or not in cash, to the extent
such consolidated net income was reduced thereby; provided that there
shall be excluded from such net income (for all purposes, other than
compliance with Section 7.8(a)(1)(A), to the extent otherwise included
therein), without duplication; (i) the net income of any person (other
than a Consolidated Entity) to the extent that any such income has not
actually been received by the Borrower or a Consolidated Entity in the
form of dividends or similar distributions during such period; (ii)
except to the extent includable in the consolidated net income of the
Borrower or a Consolidated Entity pursuant to the foregoing clause (i),
the net income of any person that accrued prior to the date that (a)
such Person becomes a Consolidated Entity or is merged into or
consolidated with a Consolidated Entity or (b) the assets of such
person are acquired by the Borrower or a Consolidated Entity; (iii) the
net income of any Consolidated Entity to the extent that the
declaration or payment of dividends or similar distributions by such
Subsidiary of that income is not permitted by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary
during such period; (iv) any gain (or loss), together with any related
provisions for taxes on any such gain, realized during such period by
the Borrower or its Consolidated Entities upon (a) the acquisition of
any securities, or the extinguishment of any Indebtedness, of the
Borrower or its Consolidated Entities or (b) any asset sale by the
referent person or any of its Subsidiaries; (v) any extraordinary gain
(or extraordinary loss), together with any related provision for taxes
or tax benefit resulting from any such extraordinary gain or loss,
realized by the Borrower or its Consolidated Entities during such
period; and (vi) in the case of a successor to such person by
consolidation, merger or transfer of its assets, any earnings of the
successor prior to such merger, consolidation or transfer of assets.
Consolidated Net Worth of the Borrower as of any date means
the Consolidated Stockholders' Equity (including any preferred stock
that is classified as equity under GAAP, other than Disqualified Stock)
of such person and its Subsidiaries (excluding any equity adjustment
for foreign currency translation for any period subsequent to the
Closing Date on a consolidated basis at such date, as determined in
accordance with GAAP, less all write-ups subsequent to the Closing Date
in the book value of any asset owned by such Borrower or any of its
Consolidated Entities; provided, however, that in calculating the
Consolidated Net Worth of the Borrower immediately prior to an
Acquisition by the Borrower of another person, there shall be
subtracted from the Borrower's Consolidated Net Worth immediately prior
to such Acquisition the lesser of (a) such amount, net of Federal
income tax effects, as represents expenses relating to such
Acquisition, or (b) 10% of the purchase price or fair market value of
the consideration paid by the Borrower in connection with such
Acquisition.
Consolidated Stockholders' Equity shall mean at any time as
at which the amount thereof is to be determined, the sum of the
following amounts in respect of the Borrower and the Consolidated
Entities (i) the par or stated value of all Capital Stock of the
Borrower, (ii) retained earnings, (iii) additional paid in capital,
(iv) capital surplus and (v) earned surplus minus treasury stock.
<PAGE>
Consolidated Total Capital shall mean the sum of (i)
Consolidated Stockholders' Equity and (ii) Indebtedness of the Borrower
and its Consolidated Entities.
Controlled Partnership shall mean a general partnership of
which the Borrower or a Subsidiary is a general partner (but not
including Alabama World Football), or a limited partnership whose
general partners include the Borrower or a Subsidiary (but not
including Vanderbilt), which partnership, whether general or limited,
has assets with a value in excess of $2,000.00, and with respect to
which partnership the Borrower or a Subsidiary is entitled to receive
not less than 50% of any distributions of cash made to the partners
thereof, other than any preferred cash distribution arrangement
approved by the Required Lenders in writing.
Convert, Conversion and Converted shall refer to a
conversion pursuant to Section 3.2 hereof of one Type of Syndicated
Loan into another Type of Syndicated Loan, which may be accompanied by
the transfer by a Lender (at its sole discretion) of a Loan from one
Applicable Lending Office to another.
Conversion Date means June 1, 1997, the date the Revolving
Facility shall convert to a Term Loan pursuant to Section 2.4 hereof.
Convertible Subordinated Debentures means the 5% Convertible
Subordinated Debentures due 2001 of the Borrower dated as of March 24,
1994 in the aggregate original principal amount of $115,000,000.
Credit Obligations shall mean the Revolving Facility
Obligations, the Letter of Credit Obligations, the Term Loan and all
other obligations and debts owing to the Lenders, and arising under the
terms of this Agreement, the Notes, the Applications and the other Loan
Documents, whether now or hereafter incurred, existing or arising,
including the principal amount of all Advances, all Letter of Credit
Borrowings, Reimbursement Obligations and the Term Loan with respect
thereto, any sums expended by the Agent or the Lenders in exercising
the rights and remedies described in Section 8.1, all accrued interest
on Advances, Letter of Credit Reimbursement Obligations and the Term
Loan, and all costs, fees, charges and expenses incurred and payable in
connection therewith, including fees payable under the terms of, or in
connection with, this Agreement, and all other obligations and debts
owing to the Agent or the Lenders arising in connection with, ancillary
to, or in support of Advances, Letter of Credit Borrowings and the Term
Loan, and all extensions, alterations, modifications, revisions and
renewals of any of the foregoing.
Debt Service Coverage Ratio with respect to any FourQuarter
Period means the ratio of (A) Consolidated Net Income plus amounts that
have been deducted in determining Consolidated Net Income for such
period for (i) Consolidated Depreciation Expense, (ii) Consolidated
Interest Expense, (iii) Consolidated Amortization Expense, (iv)
Consolidated Lease Expense, and (v) the minority interests of any
person or persons to (B) the sum of (i) Consolidated Interest Expense,
(ii) Consolidated Lease Expense and (iii) Consolidated Current
Maturities.
<PAGE>
Default shall mean an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.
Disqualified Stock means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder
thereof, in whole or in part, on or prior to the Maturity Date.
Dollars and the symbol $ shall mean dollars constituting
legal tender for the payment of public and private debts in the United
States of America.
EBITDA Coverage Ratio with respect to any period means the
ratio of (i) Consolidated EBITDA to (ii) the aggregate amount of
Consolidated Adjusted Interest Expense for such period; provided,
however, that if any calculation of the EBITDA Coverage Ratio requires
the use of any quarter prior to the date of initial issuance of the
Senior Subordinated Notes, such calculation shall be made on a pro
forma basis, giving effect to the issuance of the Senior Subordinated
Notes and the use of the net proceeds therefrom as if the same had
occurred at the beginning of the Four-Quarter Period used to make such
calculation; and provided further that if any such calculation requires
the use of any quarter prior to the date that any Asset Sale was
consummated, or that any Indebtedness was incurred, or that any
acquisition of a hospital or other healthcare facility or any assets
purchased outside the ordinary course of business was effected, by the
Borrower or any of its Subsidiaries, such calculation shall be made on
a pro forma basis, giving effect to each such Asset Sale, incurrence of
Indebtedness or acquisition, as the case may be, and the use of any
proceeds therefrom, as if the same had occurred at the beginning of the
Four-Quarter Period used to make such calculation.
ERISA shall mean the Employee Retirement Income Security Act
of 1974, as amended.
Event of Default shall have the meaning assigned to such
term in Article VIII hereof.
Facility shall mean an in-patient or out-patient
rehabilitation facility, a certified out-patient rehabilitation
facility, skilled nursing facility, specialty medical center, specialty
orthopedic hospital or acute care hospital, sub-acute in-patient
facility, transitional living center, medical office building,
outpatient surgery center and outpatient diagnostic center with all
buildings and improvements associated therewith, that is owned or
leased, in whole or part, by the Borrower or a Subsidiary or any
partnership controlled directly or indirectly by the Borrower.
<PAGE>
Federal Funds Effective Rate shall mean, for any day, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day,
provided that (a) if the day for which such rate is to be determined is
not a Business Day, the Federal Funds Effective Rate for such day shall
be such rate on such transactions on the next preceding Business Day as
so published for any Business Day, and (b) if such rate is not so
published for any Business Day, the Federal Funds Effective Rate for
such Business Day shall be the average rate charged to the Agent on
such Business Day on such transactions as determined by the Agent.
Fiscal Year means the twelve month period of the Borrower
commencing on January 1 of each calendar year and ending December 31 of
each calendar year.
Fixed Rate shall mean the Absolute Rate or the LIBORBased
Rate.
Fixed Rate Segment shall mean a Segment to which a Fixed
Rate is (or is proposed to be) applicable.
Four-Quarter Period means a period of four full consecutive
fiscal quarter periods, taken together as one accounting period;
provided, however, for purposes of Sections 7.8(a)(5), 7.8(a)(6) and
7.8(a)(7) the results of operations for the three, six and nine month
periods of the Fiscal Year ending December 31, 1994 shall be
annualized.
GAAP means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the
United States, as from time to time in effect.
Governmental Authority shall mean any federal, state, county
or municipal agency, authority, department, commission, bureau, board
or court.
Governmental Requirements shall mean all laws, rules,
regulations, requirements, ordinances, judgments, decrees, codes and
orders of any Governmental Authority applicable to the Borrower, any
Consolidated Entity or any Facility.
<PAGE>
Guaranteed Obligations of any person shall mean all
guaranties (including guaranties of guaranties and guaranties of
dividends and other monetary obligations), endorsement, assumptions and
other contingent obligations with respect to, or to purchase or to
otherwise pay or acquire, Indebtedness of others; provided, however,
that such term shall not include obligations under leases and other
contracts initially incurred directly by another person and
subsequently directly assumed by the person in question, but such term
shall include obligations that, if the same had been initially incurred
directly by the person in question, would have constituted Guaranteed
Obligations.
Guaranty Agreements shall have the meaning attributed to
that term in Section 2.6(a).
Hedging Obligations of any person means the obligations of
such person pursuant to any interest rate swap agreement, foreign
currency exchange agreement, interest rate collar agreement, option or
futures contract or other similar agreement or arrangement relating to
interest rates or foreign exchange rates.
Indebtedness of any person at any date means, without
duplication: (i) all indebtedness of such person for borrowed money
(whether or not the recourse of the lender is to the whole of the
assets of such person or only to a portion thereof); (ii) all
obligations of such person evidenced by bonds, debentures, notes or
other similar instruments; (iii) all obligations of such person in
respect of letters of credit or other similar instruments (or
reimbursement obligations with respect thereto); (iv) all obligations
of such person with respect to Hedging Obligations (other than those
that fix the interest rate on variable rate indebtedness otherwise
permitted hereunder or that protect the Borrower and or its
Consolidated Entities against changes in foreign exchange rates); (v)
obligations of such person to pay the deferred and unpaid purchase
price of property or services, except trade payables and accrued
expenses incurred in the ordinary course of business; (vi) all
Capitalized Lease Obligations of such person; (vii) all indebtedness of
others secured by a Lien on any assets of such person, whether or not
such indebtedness is assumed by such person; and (viii) all Guaranteed
Obligations. The amount of Indebtedness of any person at any date shall
be the outstanding balance at such date of all unconditional
obligations as described above, the maximum liability of such person
for any such contingent obligations at such date and, in the case of
clause (vii), the amount of the Indebtedness secured.
Interest Expense of any person for any period means the
aggregate amount of interest which, in accordance with GAAP, would be
set opposite the caption "interest expense" or any like caption on an
income statement for such person (including, without limitation or
duplication, imputed interest included in Capitalized Lease
Obligations, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing,
the net costs associated with Hedging Obligations, amortization of
financing fees and expenses, the interest portion of any deferred
payment obligation, amortization of discount and all other non-cash
interest expense other than interest amortized to cost of sales) plus
the aggregate amount, if any, by which such interest expense was
reduced as a result of the amortization of deferred debt restructuring
credits for such period.
<PAGE>
Interest Period shall mean:
(a) with respect to any LIBOR Loan, each period commencing
on the date such LIBOR Loan is made or Converted from a Loan of another
Type or the last day of the next preceding Interest Period for such
Loan and ending on the numerically corresponding day in the first,
second or third calendar month thereafter, as the Borrower may select
as provided in Section 3.2 hereof, except that each Interest Period
that commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business
Day of the appropriate subsequent calendar month;
(b) with respect to any Absolute Rate Loan, the period
commencing on the date such Absolute Rate Loan is made and ending on
any Business Day up to 180 days thereafter, as the Borrower may select
as provided in Section 2.3(b) hereof; and
(c) with respect to any LIBOR Market Loan, the period
commencing on the date such LIBOR Market Loan is made and ending on the
numerically corresponding day in the first, second, third or sixth
calendar month thereafter, as the Borrower may select as provided in
Section 2.3(b) hereof, except that each Interest Period that commences
on the last Business Day of a calendar month (or any day for which
there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month.
Notwithstanding the foregoing: (i) if any Interest Period for any
Competitive Bid Loan would otherwise end after the Conversion Date,
such Interest Period shall end on the Conversion Date; (ii) if any
Interest Period for any LIBOR Loan would otherwise end after the
Maturity Date, such Interest Period shall end on the Maturity Date;
(iii) each Interest Period that would otherwise end on a day which is
not a Business Day shall end on the next succeeding Business Day (or,
in the case of an Interest Period for a LIBOR Loan or a LIBOR Market
Loan, if such next succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day); and (iv)
notwithstanding clauses (i), (ii) and (iii) above, no Interest Period
for any Loan (other than an Absolute Rate Loan) shall have a duration
of less than one month (in the case of a LIBOR Loan or a LIBOR Market
Loan) and, if the Interest Period for any LIBOR Loan or LIBOR Market
Loan would otherwise be a shorter period, such Loan shall not be
available hereunder for such period.
<PAGE>
LC Account Agreement shall mean the LC Account Agreement
dated as of the date hereof between the Borrower and the Agent, as
amended or modified from time to time.
Lease Payments shall mean all amounts payable under any
lease agreement other than obligations under lease agreements that
constitute Indebtedness.
Letter of Credit Borrowings shall mean as of any date the
maximum aggregate amount that the Agent could be required to pay under
drafts that could properly be drawn in compliance with the terms of all
Letters of Credit outstanding on such date, other than drafts that have
been drawn and paid.
Letter of Credit Commitment shall mean an amount not to
exceed $40,000,000.
Letter of Credit Obligations shall mean (a) the Letter of
Credit Borrowings and (b) the Reimbursement Obligations and other
obligations under this Agreement and the Applications with respect to
drawings made on Letters of Credit, including obligations with respect
to all principal, interest, fees and other charges related thereto.
Letters of Credit shall mean and include all letters of
credit heretofore or hereafter issued by NationsBank for the account of
the Borrower pursuant to this Agreement.
Liabilities of any person shall mean obligations that are
properly classified as liabilities under GAAP.
LIBOR Auction shall mean a solicitation of Competitive Bid
Quotes setting forth LIBOR Margins based on the LIBORBased Rate
pursuant to Section 2.3 hereof.
LIBOR-Based Rate shall mean the rate of interest determined
by the Agent at approximately 11:00 A.M. London time two (2) Business
Days prior to the commencement of the Interest Period, based upon such
factors as the Agent deems relevant, as the Agent's best estimate of
the cost of funds available to the Agent from the purchase on the
London interbank market of funds in the form of time deposits in
Dollars in the approximate amount of the Segment that is to bear
interest at the LIBOR-Based Rate, having a maturity comparable to the
Interest Period during which the LIBOR-Based Rate is to be in effect,
it being expressly understood that (i) the Agent may not actually
purchase any such time deposits and obtain such funds (ii) the
LIBOR-Based Rate will be an estimate, and for a variety of reasons,
including changing market conditions, the actual cost of funds to the
Agent (if the Agent elects to purchase funds in the form of time
deposits on such date) might vary from the Agent's estimate.
<PAGE>
LIBOR Loans shall mean Syndicated Loans interest rates on
which are determined on the basis of LIBOR-Based Rates plus the
Syndicated Margin.
LIBOR Margin shall have the meaning assigned to such term in
Section 2.3(c)(ii)(C) hereof.
LIBOR Market Loans shall mean Competitive Bid Loans interest
rates on which are determined on the basis of LIBORBased Rates pursuant
to a LIBOR Auction.
LIBOR Reserve Requirement shall mean the percentage
(expressed as a decimal) prescribed by the Board of Governors of the
Federal Reserve System (or any successor), on the date on which the
LIBOR-Based Rate is determined, for determining the reserve
requirements of the Agent (including any marginal, emergency,
supplemental, special or other reserves) with respect to liabilities
relating to time deposits purchased in the London interbank market
having a maturity equal to the period during which the LIBOR-Based Rate
will be in effect and in an amount equal to the Segment involved,
without any benefit or credit for any proration, exemptions or offsets
under any now or hereafter applicable regulations.
Lien shall mean any mortgage, pledge, assignment, charge,
encumbrance, lien, security interest or financing lease.
Loan Documents shall mean this Agreement, the Notes, the
Applications, the Subsidiary Guaranty Agreements and amendments
thereto, the Partnership Guaranty Agreements and amendments thereto,
the Pledge Agreements, the LC Account Agreement and all other
agreements, instruments and documents executed or delivered at any time
in connection with the Credit Obligations, or to evidence or secure any
of the Credit Obligations.
Loans shall mean the Syndicated Loans, Competitive Bid
Loans, Term Loans, Letter of Credit Borrowings and Reimbursement
Obligations and all extensions and renewals thereof.
Margin Stock shall have the meaning attributed to that term
in Regulation U of the Federal Reserve Board, as amended.
Material Group shall mean, at any time, any group, whether
one or more, or combination of Consolidated Entities (a) whose assets,
in the aggregate, constitute 5% or more of the assets of the Borrower
and the Consolidated Entities on a consolidated basis or (b) whose net
revenues, in the aggregate, constitute 5% or more of the net revenues
of the Borrower and the Consolidated Entities on a consolidated basis.
<PAGE>
Maturity Date means November 30, 2000.
Multi-employer Plan means an employee pension benefit plan
covered by Title IV of ERISA and in respect of which the Borrower or
any Consolidated Entity is an "employer" as described in Section
4001(b) of ERISA, which is also a multi-employer plan as defined in
Section 4001(a)(3) of ERISA;
NationsBank means NationsBank of North Carolina, National
Association, as a Lender and as issuer of the Letters of Credit
pursuant to Section 2.13 hereof and any successor thereof.
Notes shall mean the Syndicated Notes, the Competitive Bid
Notes and the Term Notes.
Opinion of Counsel shall mean a favorable written opinion of
an attorney or firm of attorneys duly licensed to practice law in the
jurisdiction the laws of which are applicable to the legal matters in
question and who is not an employee of the Borrower or of an Affiliate
of the Borrower.
Partnership Liability shall mean, with respect to a
Participating Partnership, that part, if any, of an Advance (together
with interest thereon and fees, prepayment premiums and other charges
properly attributable thereto) that is to be received by and used by or
for the benefit of such Participating Partnership, as certified to the
Agent by the Borrower, under Section 2.6, in connection with the
Borrowers' request for such Advance, and Partnership Liabilities shall
mean the aggregate amount of all such parts of Advances that are to be
received by and used by or for the benefit of such Participating
Partnership.
Partnership Guaranty Agreement shall mean a guaranty
agreement of a Participating Partnership in the form attached hereto
and marked Exhibit C-1, as amended and supplemented from time to time.
Participating Partnership shall mean a Controlled
Partnership that has executed and delivered to the Agent a Partnership
Guaranty Agreement and all other documents necessary to assume joint
and several liability as to the Credit Obligations to the extent of its
Partnership Liabilities.
Participating Subsidiary shall mean a Subsidiary that has
executed and delivered to the Agent a Subsidiary Guaranty Agreement and
all other documents necessary to assume joint and several liability as
to the Credit Obligations (in the maximum amount provided for in such
Subsidiary Guaranty Agreement).
Participation shall mean, with respect to any Lender (other
than NationsBank), the extension of credit represented by the
participation of such Lender hereunder in the liability of NationsBank
in respect of a Letter of Credit issued by NationsBank in accordance
with the terms hereof.
<PAGE>
Permitted Encumbrances shall mean:
(1) taxes, assessments and other governmental charges that
are not delinquent or that are being contested in good faith
by appropriate proceedings duly pursued;
(2) mechanics', materialmen's, contractor's, landlord's or
other similar liens arising in the ordinary course of
business, securing obligations that are not delinquent or
that are being contested in good faith by appropriate
proceedings duly pursued;
(3) restrictions, exception, reservations, easements,
conditions, limitations and other matters of record other
than Liens that do not adversely affect the value or utility
of the property;
(4) Liens on equipment used in a Facility (a) that secure
Indebtedness that already existed when such equipment was
purchased or acquired, or (b) that were created to secure
loans, the proceeds of which were used in their entirety to
pay the purchase price of such equipment, provided that such
Liens attach only to the equipment so purchased;
(5) Liens in favor of the Agent for the benefit of the
Lenders under this Agreement;
(6) Liens and other matters approved in writing by the
Required Lenders; and
(7) Liens in favor of landlords, the amount secured by which
landlords' Liens, in the aggregate, would not materially
adversely affect the Borrower or a Material Group.
Permitted Investments shall mean:
(1) direct obligations of, or obligations the payment of
which is guaranteed by, the United States of America or an
interest in any trust or fund that invests solely in such
obligations or repurchase agreements, properly secured, with
respect to such obligations.
(2) direct obligations of agencies or instrumentalities of
the United States of America having a rating of A or higher
by Standard & Poor's Corporation or A2 or higher by Moody's
Investors Service, Inc.;
(3) a certificate of deposit issued by, or other
interest-bearing deposits with, a bank having its principal
place of business in the United States of America and having
equity capital of not less than $250,000,000;
<PAGE>
(4) a certificate of deposit by, or other interest-bearing
deposits with, any other bank organized under the laws of
the United States of America or any state thereof, provided
that such deposit is either (i) insured by the Federal
Deposit Insurance Corporation or (ii) properly secured by
such bank by pledging direct obligations of the United
States of America having a market value not less than the
face amount of such deposits;
(5) the capital stock of and partnership interests in, and
loans made by the Borrower to, Controlled Partnerships and
Subsidiaries;
(6) prime commercial paper maturing within 270 days of the
acquisition thereof and, at the time of acquisition, having
a rating of A-1 or higher by Standard & Poor's Corporation,
or P-1 or higher by Moody's Investors Service, Inc.;
(7) eligible banker's acceptances, repurchase agreements and
tax-exempt municipal bonds having a maturity of less than
one year, in each case having a rating, or that is the full
recourse obligation of a person whose senior debt is rated,
A or higher by Standard & Poor's Corporation or A2 or higher
by Moody's Investors Service, Inc.;
(8) loans made by the Borrower or a Consolidated Entity in
an aggregate amount of $2,000,000 or less to employees of
the Borrower or of a Consolidated Entity;
(9) loans made by the Borrower or a Controlled Partnership
in an aggregate amount of $1,000,000 or less to limited
partners (or potential limited partners) of Controlled
Partnerships for the purpose of enabling such limited
partners to acquire limited partnership interests in
Controlled Partnerships, to operate their practices or to
restructure partnership interests;
(10) loans in the amount of up to $20,000,000 made by the
Borrower to the HEALTHSOUTH Employee Stock Ownership Plan;
(11) scholarship loans made by the Borrower in an aggregate
amount not exceeding $500,000 to individuals who meet
certain eligibility requirements as established by the
Borrower from time to time;
(12) up to 100% of the outstanding shares of stock of
Caretenders Healthcorp (formerly known as Senior Services,
Inc.) provided that aggregate costs incurred to purchase
such shares shall not exceed $12,000,000;
<PAGE>
(13) other investments of less than $5,000,000 in the
aggregate expressly approved in writing by the Agent and
investments of $5,000,000 or greater expressly approved in
writing by the Required Lenders;
(14) any other investment having a rating of A or higher or
A-1 or higher by Standard & Poor's Corporation or A2 or
higher or P-1 or higher by Moody's Investors Service, Inc.;
(15) loans to health care practitioners and other persons
not to exceed in the aggregate $5,000,000; and
(16) investments in Wellmark, HEALTHSMART, MedPartners and
Austin Medical Office Building which in the aggregate do not
exceed $3,500,000.
Pledge Agreement shall have the meaning attributed to that
term in Section 2.7.
Prime Rate shall mean that rate of interest designated by
the Agent from time to time as its "prime rate", it being expressly
understood and agreed that its prime rate is merely an index rate used
by the Agent to establish lending rates and is not necessarily the
Agent's most favorable lending rate, and that changes in the Agent's
prime rate are discretionary with the Agent. Any change in the Prime
Rate shall be effective as of the date of such change.
Principal Maturities shall mean principal maturing or coming
due on Indebtedness during the next succeeding period of 12 calendar
months.
Principal Office shall mean the principal office of the
Agent located at NationsBank Corporate Center, 100 North Tryon
Street, Charlotte, North Carolina 28255.
Reimbursement Obligation shall mean at any time, the
obligation of the Borrower with respect to any Letter of Credit to
reimburse NationsBank and the Lenders to the extent of their respective
Participations (including by the receipt by NationsBank of proceeds of
Loans pursuant to Section 2.1(b) hereof) for amounts theretofore paid
by NationsBank pursuant to a drawing under such Letter of Credit.
Request for Advance or Interest Election shall have the
meaning attributed to that term in Section 2.2.
Required Lenders shall mean Lenders having at least 66- 2/3%
of the aggregate amount of the Commitments or, if the Commitments shall
have terminated, Lenders holding at least 66-2/3% of the aggregate
unpaid principal amount of the Loans, provided that if any Lender shall
have failed to fund its portion of any Syndicated Loan pursuant to
Section 2.1 and the Agent or NationsBank has made such Loan on such
Lender's behalf, NationsBank shall be deemed the holder of such portion
of such Lender's Commitment for purposes of this definition.
<PAGE>
Revolving Facility shall mean the credit facility made
available to the Borrower by the Lenders under the terms of Article II
in an aggregate amount of up to $550,000,000 as reduced by Borrower
pursuant to Section 2.10 hereof.
Revolving Facility Obligations shall mean the outstanding
principal amount of all Advances, all interest accrued thereon, all
costs, charges, fees and expenses payable in connection therewith, and
all extensions and renewals thereof.
Sale and Leaseback Transaction means, with respect to any
person, an arrangement with any bank, insurance company or other lender
or investor or to which such lender or investor is a party, providing
for the leasing by such person or any of its Subsidiaries of any
property or asset of such person or any of its Subsidiaries which has
been or is being sold or transferred by such person or such Subsidiary
to such lender or investor or to any person to whom funds have been or
are to be advanced by such lender or investor on the security of such
property or asset.
Segment shall mean a portion of the Advances (or all
thereof) with respect to which a particular interest rate is (or is
proposed to be) applicable.
Senior Indebtedness means the Credit Obligations and that
Indebtedness permitted to be incurred pursuant to Section 7.8(a)(9)(B),
(D), (E) and (F) hereof.
Senior Subordinated Notes means the 9.5% Senior Subordinated
Notes due 2001 of the Borrower in the aggregate original principal
amount of $250,000,000.
Single Employer Plan means any employee pension benefit plan
covered by Title IV of ERISA and in respect of which the Borrower or
any Consolidated Entity is an "employer" as described in Section
4001(b) of ERISA, which is not a Multiemployer Plan;
Subordinated Indebtedness means the Senior Subordinated
Notes, the Convertible Subordinated Debentures and any other
Indebtedness incurred pursuant to Section 7.8(a)(9)(G) hereof to
refinance the Senior Subordinated Notes or the Convertible Subordinated
Debentures.
Subsidiary shall mean any corporation, more than 50% of the
shares of stock of which having general voting power under ordinary
circumstances to elect the board of directors, managers or trustees of
such corporation, irrespective of whether or not at the time stock of
any other class or classes shall have or might have voting power by
reason of the happening of any contingency, which is owned or
controlled directly or indirectly by the Borrower and which has either
assets with a value exceeding $2,000 or positive annual operating
income.
<PAGE>
Subsidiary Guaranty Agreement shall mean a guaranty
agreement of a Participating Subsidiary in the form attached hereto and
marked Exhibit C-2, as amended and supplemented from time to time.
Syndicated Loans shall mean the loans provided for by
Section 2.1 or Section 2.4 hereof, which may be Base Rate Loans or
LIBOR Loans.
Syndicated Margin means that percent per annum set forth
below in the case of a LIBOR Loan, which percent shall be the
Syndicated Margin effective on the date of delivery to the Agent of a
Compliance Certificate pursuant to Section 7.3(3) for the fiscal
quarter period as at the end of which the ratio of Indebtedness of the
Borrower and its Consolidated Entities to Consolidated Cash Flow is
greater than or equal to or less than, as the case may be, the ratio
set forth opposite such Syndicated Margin:
Syndicated Margin
-----------------------------
Prior to On or After
Conversion Conversion
Ratio Date Date
------- ----------- ------------
(a) Greater than or equal to 1 5/8% 2 1/8%
5.00 to 1.00
(b) Less than 5.00 to 1.00 but 1 3/8% 1 7/8%
equal to or greater than
4.50 to 1.00
(c) Less than 4.50 to 1.00 but 1 1/8% 1 5/8%
equal to or greater than
3.75 to 1.00
(d) Less than 3.75 to 1.00 but 7/8% 1 3/8%
equal to or greater than
3.00 to 1.00
(e) Less than 3.00 to 1.00 5/8% 1 1/8%
Notwithstanding the foregoing, during the period from the Closing Date
through the date of delivery of a Compliance Certificate for the
quarter period ended September 30, 1994 the Syndicated Margin shall be
1 3/8%
Syndicated Notes shall mean the promissory notes provided
for by Section 2.9 hereof and all promissory notes delivered in
substitution or exchange thereof, in each case as the same shall be
modified and supplemented and in effect from time to time.
<PAGE>
Term Loan means the Loan or Loans made by the Lenders on the
Conversion Date to the Borrower pursuant to Section 2.4 hereof.
Term Loan Commitment means the undertaking of the Lenders,
subject to the terms and conditions of this Agreement, to make the Term
Loan to the Borrower hereunder on the Conversion Date.
Term Note and Term Notes means the promissory notes provided
for by Section 2.9 hereof and all promissory notes delivered in
substitution or exchange thereof, in each case as the same shall be
modified and supplemented and in effect from time to time.
Type shall have the meaning assigned to such term in Section
1.2 hereof.
Unused Amount shall mean with respect to each Lender, (a)
the Commitment of such Lender less (b) such Lender's pro rata share of
outstanding Syndicated Loans and Letter of Credit Obligations less (c)
the outstanding principal amount of all Competitive Bid Loans then held
by such Lender.
Unused Margin means that percent per annum set forth below,
which percent shall be the Unused Margin effective upon the date of
delivery to the Agent of a Compliance Certificate pursuant to Section
7.7(3) for the fiscal quarter as at the end of which the ratio of
Indebtedness of the Borrower and its Consolidated Entities to
Consolidated Cash Flow is greater than or equal to or less than, as the
case may be, the ratio set forth opposite such Unused Margin.
Ratio Unused Margin
------- --------------
(a) Greater than or equal to 1/2%
5.00 to 1.00
(b) Less than 5.00 to 1.00 but 3/8%
equal to or greater than
4.50 to 1.00
(c) Less than 4.50 to 1.00 but 3/8%
equal to or greater than
3.75 to 1.00
(d) Less than 3.75 to 1.00 1/4%
Notwithstanding the foregoing, during the period from the Closing Date
through the date of delivery of a Compliance Certificate for the
quarter ended September 30, 1994 the Unused Margin shall be 3/8%.
Vanderbilt shall mean The Vanderbilt Stallworth
Rehabilitation Hospital, L.P., the partners of which are the Borrower,
Vanderbilt University and Vanderbilt Health Services.
SECTION 1.2 Classes and Types of Loans. Loans hereunder are
distinguished by "Class" and by "Type". The "Class" of a Loan refers to whether
such Loan is a Competitive Bid Loan or a Syndicated Loan, each of which
constitutes a Class. The "Type" of a Loan refers to whether such Loan is a Base
Rate Loan, a LIBOR Loan, an Absolute Loan or a LIBOR Market Loan, each of which
constitutes a Type. Loans may be identified by both Class and Type.
<PAGE>
ARTICLE II
REVOLVING FACILITY TERMS, TERM LOAN AND COLLATERAL
SECTION 2.1 Syndicated Loans.
(a) From and after the Closing Date to and including the
Conversion Date, on the terms and subject to the conditions set forth in this
Agreement, each Lender severally agrees to lend to the Borrower and the Borrower
may borrow, repay and reborrow, an amount not exceeding the amount of the
Commitment of such Lender in effect from time to time, less the amount of such
Lender's Syndicated Loans and the Reimbursement Obligation and Letter of Credit
Borrowings applicable to such Lender; provided, however, that no more than eight
(8) different Interest Periods for both Syndicated Loans and Competitive Bid
Loans may be outstanding at the same time (for which purpose Interest Periods
described in different lettered clauses of the definition of the term "Interest
Period" shall be deemed to be different Interest Periods even if they are
coterminous). All Advances made by the Lenders to the Borrower under this
Agreement with respect to the Revolving Facility shall be evidenced by a
promissory note for each Lender each dated the date of this Agreement payable to
the order of each Lender, duly executed by the Borrower, and in the aggregate
maximum principal amount of $550,000,000 all as provided in Section 2.9 hereof.
The Advances shall bear interest as provided in Article III below. The unpaid
principal amount of all Loans hereunder shall not exceed the Revolving Facility
and each Syndicated Loan made hereunder shall be allocated pro rata among
Lenders based upon their Applicable Commitment Percentage regardless of amounts
outstanding under Competitive Bid Loans.
(b) If a drawing is made under any Letter of Credit in
accordance with the terms thereof prior to the Conversion Date the drawing shall
be paid by the Agent without the requirement of notice from the Borrower from
immediately available funds which shall be advanced by the Lenders under the
Revolving Facility. If a drawing is presented under any Letter of Credit in
accordance with the terms thereof notice of such drawing shall be provided
promptly by NationsBank to the Agent and the Agent shall provide notice to each
Lender by telephone or telecopy. If notice to the Lenders of a drawing under any
Letter of Credit is given by the Agent at or before 12:00 noon Charlotte, North
Carolina time on any Business Day, each Lender shall, pursuant to the conditions
of this Agreement, make a Base Rate Loan in the amount of such Lender's
Applicable Commitment Percentage of such drawing and shall pay such amount to
the Agent for the account of NationsBank at the Principal Office in Dollars and
in immediately available funds before 2:00 P.M. Charlotte, North Carolina time
on the same Business Day. If notice to the Lenders of a drawing under a Letter
of Credit is given by the Agent after 12:00 noon Charlotte, North Carolina time
on any Business Day, each Lender shall, pursuant to the terms and subject to the
conditions of this Agreement, make a Base Rate Loan in the amount of such
Lender's Applicable Commitment Percentage of such drawing and shall pay such
amount to the Agent for the account of NationsBank at the Principal Office in
Dollars and in immediately available funds before 12:00 noon Charlotte, North
Carolina time on the next following Business Day. Such Base Rate Loan shall be
deemed made for a period ending on the following Business Day, which shall be
extended automatically to the next succeeding Business Day unless and until the
Borrower converts such Base Rate Loan in accordance with the terms of Section
3.2 hereof.
<PAGE>
SECTION 2.2 Advances of Syndicated Loans. Advances of Syndicated Loans
shall be made no more frequently than three (3) times in each week. Each Advance
shall be in an amount no less than $5,000,000 and multiples of $1,000,000
thereafter. Each request for an Advance must be in writing (which may be by
facsimile transmission) and must be received by the Agent not later than 10:00
a.m., Charlotte, North Carolina, time, (x) at least three Business Days prior to
the date of any LIBOR Loan and (y) on the day which the Advance is to be made in
the case of a Base Rate Loan. Each request for an Advance shall be in the form
attached hereto as Exhibit D ("Request for Advance or Interest Rate Election")
and shall specify the amount of the Advance requested, the day as of which the
Advance is to be made and the part or parts, if any, of the Advance that are to
be used by or for the benefit of Participating Partnerships, specifying the part
allocable to each Participating Partnership, and shall provide the interest rate
information called for in Section 3.2. The Agent shall promptly (not later than
1:00 P.M. Charlotte, North Carolina time) furnish each Lender by telecopy
transmission a copy of each Request for Advance or Interest Rate Election. Not
later than 2:00 P.M. Charlotte, North Carolina time on the date specified for
each Advance hereunder, each Lender shall make available the amount of the
Syndicated Loan or Loans to be made by it on such date to the Agent at the
Principal Office, in Dollars and in immediately available funds, and the amount
received by the Agent shall be made available to the Borrower by depositing the
proceeds thereof into an account with the Agent in the name of the Borrower.
Subject to Section 2.4, the Lenders' obligation to make Advances shall
terminate, if not sooner terminated pursuant to the provisions of this
Agreement, on the Conversion Date. Each Request for Advance or Interest Rate
Election, whether submitted under this Section 2.2 in connection with a
requested Advance or under Section 3.2 in connection with an interest rate
election, and each Application shall be signed by an officer of the Borrower
designated as authorized to sign and submit Request for Advance or Interest Rate
Election forms and Applications in the documents submitted to the Agent pursuant
to Section 6.3(a) below. The Borrower may, from time to time, by written notice
to the Agent, terminate the authority of any person to submit Request for
Advance or Interest Rate Election forms and Applications and designate new or
additional persons to so act by delivering to the Agent a certificate of the
Secretary of the Borrower certifying the incumbency and specimen signature of
each such person. The Agent shall be entitled to rely conclusively upon the
authority of any person so designated by the Borrower.
<PAGE>
SECTION 2.3 Competitive Bid Loans.
(a) In addition to borrowings of Syndicated Loans, at any
time prior to the Conversion Date and so long as the ratio of Indebtedness of
the Borrower and its Consolidated Entities to Consolidated Cash Flow is equal to
or less than 4.50 to 1.00 the Borrower may, as set forth in this Section 2.3,
request the Lenders to make offers to make Competitive Bid Loans to the Borrower
in Dollars. The Lenders may, but shall have no obligation to, make such offers
and the Borrower may, but shall have no obligation to, accept any such offers in
the manner set forth in this Section 2.3. Competitive Bid Loans may be LIBOR
Market Loans or Absolute Rate Loans (each a "Type" of Competitive Bid Loan),
provided that:
(i) the aggregate amount of outstanding Competitive Bid
Loans of all Lenders shall not exceed one half of the
Revolving Facility;
(ii) there may be no more than eight (8) different
Interest Periods for both Syndicated Loans and Competitive
Bid Loans outstanding at the same time (for which purpose
Interest Periods described in different lettered clauses of
the definition of the term "Interest Period" shall be deemed
to be different Interest Periods even if they are
coterminous);
(iii) the aggregate amount of outstanding Competitive
Bid Loans of a Lender shall not exceed at any time an amount
equal to such Lender's Commitment;
(iv) the aggregate principal amount of all Competitive
Bid Loans, together with the sum of (i) the aggregate
principal amount of all outstanding Syndicated Loans, (ii)
then outstanding Letter of Credit Borrowings and (iii)
Reimbursement Obligations shall not exceed the aggregate
amount of the Commitments at such time; and
(v) no Competitive Bid Loan shall have a maturity
date subsequent to the Conversion Date.
(b) When the Borrower wishes to request offers to make
Competitive Bid Loans, it shall give the Agent (which shall promptly notify the
Lenders) notice (a "Competitive Bid Quote Request") to be received no later than
11:00 a.m. Charlotte, North Carolina time on (x) the fourth Business Day prior
to the date of borrowing proposed therein, in the case of a LIBOR Auction or (y)
the Business Day next preceding the date of borrowing proposed therein, in the
case of an Absolute Rate Auction (or, in any such case, such other time and date
as the Borrower and the Agent, with the consent of the Required Lenders, may
agree). The Borrower may request offers to make Competitive Bid Loans for up to
two (2) different Interest Periods in a single notice (for which purpose
Interest Periods in different lettered clauses of the definition of the term
"Interest Period" shall be deemed to be different Interest Periods even if they
are coterminous); provided that the request for each separate Interest Period
shall be deemed to be a separate Competitive Bid Quote Request for a separate
borrowing (a "Competitive Bid Borrowing") and there shall not be outstanding at
any one time more than four (4) Competitive Bid Borrowings. Each such
Competitive Bid Quote Request shall be substantially in the form of Exhibit E
hereto and shall specify as to each Competitive Bid Borrowing:
<PAGE>
(i) the proposed date of such borrowing, which shall be
a Business Day;
(ii) the aggregate amount of such Competitive Bid
Borrowing, which shall be at least $10,000,000 (or a larger
multiple of $1,000,000) but shall not cause the limits
specified in Section 2.3(a) hereof to be violated;
(iii) the duration of the Interest Period applicable
thereto;
(iv) whether the Competitive Bid Quotes requested for a
particular Interest Period are seeking quotes for LIBOR
Market Loans or Absolute Rate Loans; and
(v) if the Competitive Bid Quotes requested are seeking
quotes for Absolute Rate Loans, the date on which the
Competitive Bid Quotes are to be submitted if it is before
the proposed date of borrowing (the date on which such
Competitive Bid Quotes are to be submitted is called the
"Quotation Date").
Except as otherwise provided in this Section 2.3(b), no Competitive Bid Quote
Request shall be given within five (5) Business Days (or such other number of
days as the Borrower and the Agent, with the consent of the Required Lenders,
may agree) of any other Competitive Bid Quote Request.
(c) (i) Each Lender may submit one or more Competitive Bid
Quotes, each containing an offer to make a Competitive Bid Loan in response to
any Competitive Bid Quote Request; provided that, if the Borrower's request
under Section 2.3(b) hereof specified more than one Interest Period, such Lender
may make a single submission containing one or more Competitive Bid Quotes for
each such Interest Period. Each Competitive Bid Quote must be submitted to the
Agent not later than (x) 2:00 p.m. Charlotte, North Carolina time on the fourth
Business Day prior to the proposed date of borrowing, in the case of a LIBOR
Auction or (y) 10:00 a.m. Charlotte, North Carolina time on the Quotation Date,
in the case of an Absolute Rate Auction (or, in any such case, such other time
and date as the Borrower and the Agent, with the consent of the Required
Lenders, may agree); provided that any Competitive Bid Quote may be submitted by
NationsBank (or its Applicable Lending Office) only if NationsBank (or such
Applicable Lending Office) notifies the Borrower of the terms of the offer
contained therein not later than (x) 1:00 p.m. Charlotte, North Carolina time on
the fourth Business Day prior to the proposed date of borrowing, in the case of
a LIBOR Auction or (y) 9:45 a.m. Charlotte, North Carolina time on the Quotation
Date, in the case of an Absolute Rate Auction. Subject to Sections 4.2, 4.3 and
Article VI and IX hereof, any Competitive Bid Quote so made shall be irrevocable
except with the consent of the Agent given on the instructions of the Borrower.
<PAGE>
(ii) Each Competitive Bid Quote shall be substantially
in the form of Exhibit F hereto and shall specify:
(A) the proposed date of borrowing and the Interest
Period therefor;
(B) the principal amount of the Competitive Bid Loan for
which each such order is being made, which principal amount
shall be at least $2,000,000 (or a larger multiple of
$1,000,000); provided that the aggregate principal amount of
all Competitive Bid Loans for which a Lender submits
Competitive Bid Quotes (x) may not exceed the Commitment of
such Lender and (y) may not exceed the principal amount of
the Competitive Bid Borrowing for a particular Interest
Period for which offers were requested;
(C) in the case of a LIBOR Auction, the margin above or
below the applicable LIBOR-Based Rate (the "LIBOR Margin")
offered for each such Competitive Bid Loan, expressed as a
percentage (rounded upwards, if necessary, to the nearest
1/10,000th of 1%) to be added to or subtracted from the
applicable LIBOR-Based Rate;
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (rounded upwards, if necessary, to the
nearest 1/10,000th of 1%) offered for each such Competitive
Bid Loan (the "Absolute Rate"); and
(E) the identity of the quoting Lender.
Unless otherwise agreed by the Agent and the Borrower, no Competitive Bid Quote
shall contain qualifying, conditional or similar language or propose terms other
than or in addition to those set forth in the applicable Competitive Bid Quote
Request and, in particular, no Competitive Bid Quote may be conditioned upon
acceptance by the Borrower of all (or some specified minimum) of the principal
amount of the Competitive Bid Loan for which such Competitive Bid Quote is being
made.
(d) The Agent shall (x) in the case of a LIBOR Auction, by
4:00 p.m. Charlotte, North Carolina time on the day a Competitive Bid Quote is
submitted or (y) in the case of an Absolute Rate Auction, as promptly as
practicable after the Competitive Bid Quote is submitted (but in any event not
later than 10:30 a.m. Charlotte, North Carolina time on the Quotation Date),
notify the Borrower of the terms (i) of any Competitive Bid Quote submitted by a
Lender that is in accordance with Section 2.3(c) hereof and (ii) of any
Competitive Bid Quote that amends, modifies or is otherwise inconsistent with a
previous Competitive Bid Quote submitted by such Lender with respect to the same
Competitive Bid Quote Request. Any such subsequent Competitive Bid Quote shall
be disregarded by the Agent unless such subsequent Competitive Bid Quote is
submitted solely to correct a manifest error in such former Competitive Bid
Quote. The Agent's notice to the Borrower shall specify (A) the aggregate
principal amount of the Competitive Bid Borrowing for which orders have been
received and (B) the respective principal amounts and LIBOR Margins or Absolute
Rates, as the case may be, so offered by each Lender (identifying the Lender
that made each Competitive Bid Quote).
<PAGE>
(e) Not later than 11:00 a.m. Charlotte, North Carolina time
on (x) the third Business Day prior to the proposed date of borrowing, in the
case of a LIBOR Auction or (y) the Quotation Date, in the case of an Absolute
Rate Auction (or, in any such case, such other time and date as the Borrower and
the Agent, with the consent of the Required Lenders, may agree), the Borrower
shall notify the Agent of its acceptance or nonacceptance of the offers so
notified to it pursuant to Section 2.3(d) hereof (and the failure of the
Borrower to give such notice by such time shall constitute nonacceptance) and
the Agent shall promptly notify each affected Lender. In the case of acceptance,
such notice shall specify the aggregate principal amount of offers for each
Interest Period that are accepted. The Borrower may accept any Competitive Bid
Quote in whole or in part (provided that any Competitive Bid Quote accepted in
part shall be at least $2,000,000 or a larger multiple of $1,000,000); provided
that:
(i) the aggregate principal amount of each Competitive
Bid Borrowing may not exceed the applicable amount set forth
in the related Competitive Bid Quote Request;
(ii) the aggregate principal amount of each Competitive
Bid Borrowing shall be at least $10,000,000 (or a larger
multiple of $1,000,000) but shall not cause the limits
specified in Section 2.3(a) hereof to be violated;
(iii) acceptance of offers may be made only in ascending
order of LIBOR Margins or Absolute Rates, as the case may
be, in each case beginning with the lowest rate so offered;
provided, however, that the Borrower, in its sole
discretion, may accept other than the lowest rate where
acceptance of the lowest rate will result in (x) the
outstanding Loans of a Lender or Lenders offering the lowest
rate exceeding such Lender's Commitment and (y) an increase
in the Unused Fee payable by Borrower under Section 2.11
hereof; and
(iv) the Borrower may not accept any offer where the
Agent has correctly advised the Borrower that such offer
fails to comply with Section 2.3(c)(ii) hereof or otherwise
fails to comply with the requirements of this Agreement
(including, without limitation, Section 2.3(a) hereof).
<PAGE>
If offers are made by two or more Lenders with the same LIBOR Margins or
Absolute Rates, as the case may be, for a greater aggregate principal amount
than the amount in respect of which offers are accepted for the related Interest
Period after the acceptance of all offers, if any, of all lower LIBOR Margins or
Absolute Rates, as the case may be, offered by any Lender for such related
Interest Period, the principal amount of Competitive Bid Loans in respect of
which such offers are accepted shall be allocated by the Borrower among such
Lenders as nearly as possible (in amounts of at least $2,000,000 or larger
multiples of $1,000,000) in proportion to the aggregate principal amount of such
offers. Determinations by the Borrower of the amounts of Competitive Bid Loans
and the lowest bid after adjustment as provided in Section 2.3(e)(iii) shall be
conclusive in the absence of manifest error.
(f) Any Lender whose offer to make any Competitive Bid Loan
has been accepted shall, not later than 1:00 p.m. Charlotte, North Carolina time
on the date specified for the making of such Loan, make the amount of such Loan
available to the Agent at the Principal Office in Dollars and in immediately
available funds, for account of the Borrower. The amount so received by the
Agent shall, subject to the terms and conditions of this Agreement, be made
available to the Borrower on such date by depositing the same, in Dollars and in
immediately available funds, in an account of the Borrower maintained at the
Principal Office.
SECTION 2.4 Term Loan. (a) On the Conversion Date, on the terms and
subject to the conditions set forth in this Agreement, each Lender severally
agrees to convert all or such portion of its Commitment as the Borrower may
request by written notice to the Agent not later than 10:00 A.M., Charlotte,
North Carolina time, on the third Business Day preceding the Conversion Date to
a Term Loan. Each Lender's portion of the Term Loan Commitment shall be
evidenced by a promissory note of the Borrower dated the Conversion Date payable
to the order of such Lender, duly executed by the Borrower, all as provided in
Section 2.9 hereof and shall be equal to such Lender's Applicable Commitment
Percentage of the total of all outstanding Advances on the Conversion Date which
Borrower has requested be continued as a Term Loan. The Term Loan shall bear
interest as provided in Article III below.
(b) The Borrower shall make fourteen (14) consecutive
quarterly payments of principal on the Term Loans, each payment to be due on the
last day of March, June, September and December commencing June 30, 1997, each
of which shall be in an amount equal to 6.666% of the Term Loan. The Borrower
shall make a fifteenth payment on November 30, 2000 which payment shall be in an
amount sufficient to repay in full the remaining principal amount of the Term
Loan together with accrued interest and unpaid fees, if any. Interest on the
Term Loan will be payable as set forth in Section 2.5 and Article III.
<PAGE>
(c) The Borrower shall pay to the Agent for the benefit of
the Lenders on the Conversion Date a fee of 1/4% of each Lender's portion of the
Term Loan.
SECTION 2.5 Payments. All interest accrued on Loans subject to the Base
Rate shall be payable on the last day of each successive March, June, September
and December, commencing on June 30, 1994 and upon payment in full of such
Loans, and all interest accrued on each Fixed Rate Loan, shall be payable at the
earlier of (i) the end of the applicable Interest Period then in effect or (ii)
the end of each ninety (90) day period in the case of an Absolute Rate and each
three (3) month period in the case of a LIBOR Market Rate. The principal amount
of the Advances shall be due on the Conversion Date unless such Advances are
converted to a Term Loan pursuant to Section 2.4. All payments of Credit
Obligations shall be payable to the Agent on or before 11:00 A.M. Charlotte,
North Carolina time on the date when due, at the Principal Office in Dollars and
in immediately available funds free and clear of all rights of set-off or
counterclaim.
SECTION 2.6 Joint and Several Obligations.
(a) Each of the Subsidiaries and Controlled Partnerships
named in Exhibit G attached hereto and made a part hereof shall execute and
deliver to the Agent as of the Closing Date either an Amended and Restated
Subsidiary Guaranty Agreement or Amended and Restated Partnership Guaranty
Agreement or a Subsidiary Guaranty Agreement or Partnership Guaranty Agreement,
and each other Subsidiary and Controlled Partnership that is to become after the
Closing Date a Participating Subsidiary or Participating Partnership, as the
case may be, shall, at the time it is to become a Participating Subsidiary or
Participating Partnership, execute and deliver to the Agent a Subsidiary
Guaranty Agreement or Partnership Guaranty Agreement, as the case may be in the
form attached hereto as Exhibit C-2 and Exhibit C-1, respectively ("collectively
the "Guaranty Agreements").
(b) Although Advances shall be and heretofore have been made
only to the Borrower, all or portions of such Advances may be used by the
Borrower for the benefit of or loaned by the Borrower to a Participating
Subsidiary or Participating Partnership. As a condition to the use of Loans for
the benefit of Participating Subsidiaries and Participating Partnerships, the
Lenders have required that the Participating Subsidiaries and Participating
Partnerships guaranty the payment of the Credit Obligations of Borrower arising
under this Agreement and the other Loan Documents to the extent set forth in the
respective Guaranty Agreements to which they are a party. Each of the
Participating Subsidiaries and Participating Partnerships separately and
severally, hereby appoints and designates the Borrower as each such party's
agent and attorney-in-fact to act on behalf of each such party for all purposes
of the Loan Documents relating to the Credit Obligations. The Borrower shall
have authority to exercise on behalf of each Participating Subsidiary and
Participating Partnership all rights and powers that the Borrower deems
necessary, incidental or convenient in connection with the Loan Documents
relating to the Credit Obligations, including the authority to execute and
<PAGE>
deliver certificates, documents, agreements and other instruments referred to in
or contemplated by such Loan Documents, request Advances hereunder for their
benefit, request for the issuance of Letters of Credit for their benefit,
receive all proceeds of Advances, give all notices, approvals and consents
required or requested from time to time by the Agent or Lenders and take any
other actions and steps that a Participating Subsidiary or a Participating
Partnership could take for its own account in connection with the Loan Documents
from time to time, it being the intent of the Participating Subsidiaries and the
Participating Partnerships to grant to the Borrower plenary power to act on
behalf of the Participating Subsidiaries and the Participating Partnerships in
connection with and pursuant to such Loan Documents. The appointment of the
Borrower as agent and attorney-in-fact for the Participating Subsidiaries and
the Participating Partnerships hereunder shall be coupled with an interest and
be irrevocable so long as any Loan Document relating to the Credit Obligations
shall remain in effect. The Agent or Lenders need not obtain any Participating
Subsidiary's or Participating Partnership's consent or approval for any act
taken by the Borrower pursuant to any Loan Document, and all such acts shall
bind and obligate the Borrower, the Participating Subsidiaries and the
Participating Partnerships, jointly and severally. Each Participating Subsidiary
and Participating Partnership forever waives and releases any claim (whether now
or hereafter arising) against the Agent or Lenders based on the Borrower's lack
of authority to act on behalf of any Participating Subsidiary or Participating
Partnership in connection with the Loan Documents relating to the Revolving
Facility.
SECTION 2.7 Pledge Agreement. As security for the Credit Obligations,
the Borrower and certain of the Participating Subsidiaries have, pursuant to the
Prior Agreement, executed and delivered a pledge and security agreement to the
Agent and shall execute and deliver to the Agent amended and restated pledge
agreements on the Closing Date and from time to time after the Closing Date
pursuant to the terms of Section 7.14 hereof or upon request by the Agent,
pledge and security agreements in form acceptable to the Agent and its counsel
(all being collectively called the "Pledge Agreements") granting to the Agent a
first priority security interest in and lien on (i) all shares of stock of all
Subsidiaries owned directly or indirectly by the Borrower, (ii) all right, title
and interest in and to both the ownership interest of Borrower in any
partnership and all distributions payable to the Borrower or any Subsidiary as a
partner of any partnership (including Controlled Partnerships but not including
Vanderbilt), (iii) all notes payable to Borrower by any Subsidiary or Controlled
Partnership evidencing any loan or advance made by Borrower, and (iv) all
accounts receivable due to Borrower by any Subsidiary or Controlled Partnership
arising by reason of any loan or advance made by Borrower, together with all
financing statements, stock certificates and duly executed stock powers
necessary to perfect the Agent's security interest therein, in each case whether
now owned or hereafter acquired.
<PAGE>
SECTION 2.8 Prepayment. (a) The Borrower may at any time prior to the
Conversion Date prepay all or any part of the Advances, without premium or
penalty (except as set forth below); provided, however, that no Fixed Rate
Segment may be prepaid during an Interest Period unless the Borrower shall pay
to the Agent the amounts required by Section 4.2 hereof. The Borrower shall pay
all interest accrued to the date of prepayment on any amount prepaid as
permitted under the terms of the next preceding sentence on or prior to the
Conversion Date in connection with the prepayment in full of the Credit
Obligations and the concurrent termination of this Agreement. The Borrower shall
give the Agent notice of its intent to pay any Base Rate Loan not later than
11:00 a.m. on the date of payment. Failure to give such notice shall result in
payment of interest through the next succeeding Business Day on the amount so
paid.
(b) The Borrower from time to time after the Conversion Date
(but not more frequently than quarterly), upon not less than three (3) Business
Days prior written notice to the Agent, may prepay the Term Loan in whole or in
part. The Agent shall give each Lender, within one (1) Business Day thereafter,
telephonic notice (confirmed in writing) of such prepayment. Each such
prepayment shall be in the aggregate amount of $10,000,000 or such greater
amount which is an integral multiple of $1,000,000 or the unpaid balance of all
Credit Obligations. No such prepayment shall result in the payment of a portion
of the Term Loan bearing interest at a Fixed Rate other than on the last day of
the Interest Period of such Loan.
SECTION 2.9 Notes.
(a) Prior to the Conversion Date, the Syndicated Loans made
by each Lender shall be evidenced by a single promissory note of the Borrower
substantially in the form of Exhibit H-1 hereto, dated the date hereof, payable
to such Lender in a principal amount equal to the amount of its Commitment as
originally in effect and otherwise duly completed.
(b) The Competitive Bid Loans made by any Lender shall be
evidenced by a single promissory note of the Borrower substantially in the form
of Exhibit H-2 hereto, dated the date hereof, payable to such Lender and
otherwise duly completed.
(c) The Term Loan made by each Lender on the Conversion Date
shall be evidenced by a single promissory note of the Borrower substantially in
the form of Exhibit H-3 hereto, dated the Conversion Date, payable to such
Lender in a principal amount equal to the amount of its Applicable Commitment
Percentage of the Term Loan Commitment and otherwise duly completed.
(d) The date, amount, Type, interest rate and duration of
Interest Period (if applicable) of each Loan of each Class made by each Lender
to the Borrower, and each payment made on account of the principal thereof,
shall be recorded by such Lender on its books and, prior to any transfer of the
Note evidencing the Loans of such Class held by it, endorsed by such Lender on
the schedule attached to such Note or any continuation thereof; provided that
<PAGE>
the failure of such Lender to make, or any error by the Lender in making any
such recordation or endorsement, shall not affect the obligations of the
Borrower to make a payment when due of any amount owing hereunder or under such
Note in respect of the Loans to be evidenced by such Note.
(e) No Lender shall be entitled to have its Notes
subdivided, by exchange for promissory notes of lesser denominations or
otherwise, except in connection with a permitted assignment of all or any
portion of such Lender's Commitment, Loans and Notes pursuant to Section 10.1
hereof.
(f) Each Lender that is a Prior Lender under the Prior
Agreement shall surrender to the Borrower the promissory notes delivered to it
pursuant to the Prior Agreement in exchange for the Notes described in Section
2.9(a) and (b).
SECTION 2.10 Reduction in Revolving Facility. The Borrower shall have
the right from time to time (but not more frequently than once during each
quarterly period), but upon not less than three (3) Business Days written notice
to the Agent to reduce the amount of the Revolving Facility. The Agent shall
give each Lender, within one (1) Business Day thereafter, telephonic notice
(confirmed in writing) of such reduction. Each such reduction shall be in the
aggregate principal amount of $10,000,000 or such greater amount which is an
integral multiple of $1,000,000, and shall permanently reduce the Commitment of
each Lender on a pro rata basis. No such reduction shall result in payment of a
Fixed Rate Loan other than on the last day of the Interest Period of such Loan.
Each reduction of the Revolving Facility shall be accompanied by payment of the
Loans to the extent that the Credit Obligations exceed the Revolving Facility
after giving effect to such reductions together with accrued and unpaid interest
on the amounts prepaid.
SECTION 2.11 Unused Fee. The Borrower shall pay to the Agent for the
benefit of each Lender a fee (the "Unused Fee") computed at a per annum rate of
the then applicable Unused Margin times the daily average Unused Amount of such
Lender. The Unused Fee shall be payable quarterly on the last day of each
successive March, June, September and December in each year for the immediately
preceding quarterly period, commencing on June 30, 1994, and upon the Conversion
Date. The Unused Fee shall be computed on an Actual/360 Basis.
SECTION 2.12 Lending Offices. The Loans of each Type made by each
Lender shall be made and maintained at such Lender's Applicable Lending Office
for Loans of such Type.
SECTION 2.13 Letter of Credit Borrowings.
(a) NationsBank may issue from time to time in accordance
with Section 6.1, in its sole discretion, for the account of the Borrower
Letters of Credit in an aggregate outstanding stated amount up to but not to
exceed the Letter of Credit Commitment. All Letters of Credit issued pursuant to
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this Agreement, shall expire on or before the fifth (5th) Business Day next
preceding the Conversion Date. The aggregate Letter of Credit Obligations shall
at no time exceed the Letter of Credit Commitment. In the event that the
Borrower shall pay in full all amounts outstanding under the Revolving Facility
and permanently reduce the Revolving Facility to zero as permitted pursuant to
Section 2.10 hereof, it shall simultaneously cause all obligations of
NationsBank under the Letters of Credit and all obligations of the Lenders with
respect to Participations to be discharged in full, whether by providing
replacement letters of credit therefor or payment in full of the amount
outstanding with respect to the Letter of Credit.
(b) The Borrower hereby unconditionally agrees to pay to
NationsBank on demand at the Principal Office (i) all amounts required to pay
all drafts drawn in accordance with the terms of the Letter of Credit or
purporting to be drawn under the Letters of Credit and (ii) the face amount of
each draft complying with the Letter of Credit accepted by NationsBank on the
maturity date of such draft, or in the event of a Default or Event of Default,
and any and all reasonable expenses of every kind incurred by NationsBank in
connection with the Letters of Credit and in any event and without demand to
place in possession of NationsBank (which shall include Advances under the
Revolving Facility if permitted by Section 2.1 hereof) sufficient funds to pay
all debts and liabilities arising under any Letter of Credit. Subject to the
terms hereof, the Borrower's obligations to pay NationsBank under this Section
2.13, and the right of NationsBank to receive the same, shall be absolute and
unconditional and shall not be affected by any circumstance whatsoever.
NationsBank may charge any account the Borrower may have with it for any and all
amounts NationsBank pays under a Letter of Credit, plus commissions, charges and
expenses as from time to time agreed to by NationsBank and the Borrower;
provided that to the extent permitted by Section 2.1(b), amounts shall be paid
pursuant to Advances under the Revolving Facility. The Borrower agrees that
NationsBank may, in its sole discretion, accept or pay, as complying with the
terms of any Letter of Credit, any drafts or other documents otherwise in order
which may be signed or issued by an administrator, executor, trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
liquidator, receiver, attorney in fact or other legal representative of a party
who is authorized under such Letter of Credit to draw or issue any drafts or
other documents. The Borrower agrees to pay NationsBank interest on any amounts
not paid when due hereunder at the Base Rate plus two percent (2%), or such
lower rate as may be required by law.
(c) In accordance with the provisions of Section 2.1(b)
hereof, NationsBank shall notify the Agent (and shall also notify the Borrower)
of any drawing under any Letter of Credit issued for account of the Borrower as
promptly as practicable following the receipt by NationsBank of such drawing.
(d) Each Lender (other than NationsBank) shall automatically
acquire on the date of issuance thereof, a Participation in the liability of
NationsBank in respect of each Letter of Credit in an amount equal to such
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Lender's Applicable Commitment Percentage of such liability, and to the extent
that the Borrower is obligated to pay NationsBank under Section 2.13(a), each
Lender (other than NationsBank) thereby shall absolutely, unconditionally and
irrevocably assume, and shall be unconditionally obligated to pay to NationsBank
as hereinafter described, its Applicable Commitment Percentage of the liability
of NationsBank under such Letter of Credit. On the fifth Business Day prior to
the Conversion Date, each Lender (including NationsBank in its capacity as a
Lender) shall make a Base Rate Loan to the Borrower by paying to the Agent for
the account of NationsBank at the Principal Office in Dollars and in immediately
available funds, an amount equal to its Applicable Commitment Percentage of any
drawing under a Letter of Credit, all as described and pursuant to Section
2.1(b). With respect to drawings under any of the Letters of Credit, each
Lender, upon receipt from the Agent of notice of a drawing in the manner
described in Section 2.1(b), shall promptly pay to the Agent for the account of
NationsBank, prior to the applicable time set forth in Section 2.1(b), its
Applicable Commitment Percentage of such drawing. Simultaneously with the making
of each such payment by a Lender or NationsBank, such Lender shall,
automatically and without any further action on the part of NationsBank or such
Lender, acquire a Participation in an amount equal to such payment (excluding
the portion thereof constituting interest) in the related Reimbursement
Obligation of the Borrower. The Reimbursement Obligations of the Borrower shall
be immediately due and payable whether by Advances made in accordance with
Section 2.1(b) or otherwise. Each Lender's obligation to make payment to the
Agent for the account of NationsBank pursuant to this Section 2.13(d), and the
right of NationsBank to receive the same, shall be absolute and unconditional,
shall not be affected by any circumstance whatsoever and shall be made without
any offset, abatement, withholding or reduction whatsoever. If any Lender is
obligated to pay but does not pay amounts to the Agent for the account of
NationsBank in full upon receipt of such notice of a drawing as required by this
Section 2.13(d), such Lender shall, on demand, pay to the Agent for the account
of NationsBank interest on the unpaid amount for each day during the period
commencing on the date of notice given to such Lender pursuant to Section 2.1(b)
until such Lender pays such amount to the Agent for the account of NationsBank
in full at the interest rate per annum for overnight borrowing by NationsBank
from the Federal Reserve Bank.
(e) Promptly following the end of each calendar quarter,
NationsBank shall deliver to the Agent, and the Agent shall deliver to each
Lender, a notice describing the aggregate undrawn amount of Letters of Credit
and aggregate face amount of all drafts accepted and outstanding at the end of
such quarter. Upon the request of any Lender from time to time, NationsBank
shall deliver to the Agent, and the Agent shall deliver to such Lender, any
other information reasonably requested by such Lender with respect to the Letter
of Credit then outstanding.
(f) The issuance by NationsBank of any Letter of Credit
shall be subject to the conditions that such Letter of Credit be insuch form,
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contain such terms and support such transactions or obligations as shall be
reasonably satisfactory to NationsBank consistent with its then current
practices and procedures with respect to similar letters of credit. All Letters
of Credit shall be issued pursuant to and subject to the Uniform Customs and
Practice for Documentary Creditors, 1993 revision, International Chamber of
Commerce Publication No. 500 and all subsequent amendments and revisions
thereto. The Borrower shall have executed and delivered such other instruments
and agreements relating to such Letter of Credit as NationsBank shall have
reasonably requested consistent with such practices and procedures.
(g) Without duplication of Section 10.12 hereof, the
Borrower hereby indemnifies and holds harmless NationsBank, each other Lender
and the Agent from and against any and all claims and damages, losses,
liabilities, costs or expenses which NationsBank, such other Lender or the Agent
may reasonably incur (or which may be claimed against NationsBank, such other
Lender or the Agent) by any person by reason of or in connection with the
issuance or transfer of or payment or failure to pay under any Letter of Credit;
provided that the Borrower shall not be required to indemnify NationsBank, any
other Lender or the Agent for any claims, damages, losses, liabilities, costs or
expenses to the extent, but only to the extent, (i) caused by the willful
misconduct or negligence of the party to be indemnified, (ii) caused by the
failure of NationsBank to pay under any Letter of Credit after the presentation
to it of a request strictly complying with the terms and conditions of such
Letter of Credit, unless such payment is prohibited by any law, regulation,
court order or decree, or (iii) paid or payable by any Lender under Section 2.15
or Section 9.10 hereof and provided, further, Borrower shall not be required to
indemnify any Lender who has failed to perform its obligations hereunder.
(h) Without limiting Borrower's rights as set forth in
Section 2.13(g) above, the obligation of Borrower to immediately reimburse Agent
for drawings made under the Letter of Credit in accordance with the terms
thereof shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement and such Letters of
Credit, under all circumstances whatsoever.
(i) The Borrower agrees to pay to the Agent for the benefit
of the Lenders a per annum Letter of Credit fee equal to the applicable
Syndicated Margin in effect at the time of issuance of each such Letter of
Credit times the amount of outstanding Letter of Credit Borrowings. In addition,
the Borrower agrees to pay to the Agent for its own account an issuance fee
equal to one-eighth of one percent (1/8%) per annum times the amount of
outstanding Letter of Credit Borrowings. Such fees shall be payable quarterly in
arrears on the last day of each March, June, September and December, beginning,
however, on the first such day to occur following the Closing Date.
(j) The Borrower acknowledges that NationsBank as issuer of
the Letter of Credit will be required by applicable rules and regulations of the
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Federal Reserve Board to maintain reserves for its liability to honor draws made
pursuant to a Letter of Credit notwithstanding the obligation of the Lenders for
a Participation in such liability. The Borrower agrees to promptly reimburse
NationsBank for all additional costs which it may hereafter incur solely by
reason of its acting as issuer of the Letter of Credit and its being required to
reserve for such liability, it being understood by the Borrower that other
interest and fees