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THIRD
AMENDED AND RESTATED
CREDIT AGREEMENT
by and among
HEALTHSOUTH CORPORATION,
as Borrower,
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
April 18, 1996
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<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
ARTICLE I
Definitions and Terms
<S> <C> <C>
1.1. Definitions............................................................................................... 2
1.2. Rules of Interpretation................................................................................... 30
1.3. Classes and Types of Loans................................................................................ 31
ARTICLE II
The Loans
2.1. Syndicated Loans.......................................................................................... 32
2.2. Competitive Bid Loans..................................................................................... 35
2.3. Payment of Interest....................................................................................... 40
2.4. Payment of Principal...................................................................................... 40
2.5. Non-Conforming Payments................................................................................... 41
2.6. Notes..................................................................................................... 41
2.7. Pro Rata Payments......................................................................................... 42
2.8. Reductions................................................................................................ 42
2.9. Conversions and Elections of Subsequent Interest
Periods................................................................................................... 43
2.10. Increase and Decrease in Amounts.......................................................................... 44
2.11. Unused Fees............................................................................................... 44
2.12. Deficiency Advances....................................................................................... 44
2.13. Use of Proceeds........................................................................................... 45
2.14. Extension of Stated Termination Date...................................................................... 45
ARTICLE III
Letters of Credit
3.1. Letters of Credit......................................................................................... 48
3.2. Reimbursement............................................................................................. 48
3.3. Letter of Credit Facility Fees............................................................................ 52
3.4. Administrative Fees....................................................................................... 52
ARTICLE IV
Termination of Eurodollar Rate and Yield Protection
4.1. Suspension of Loans....................................................................................... 53
4.2. Compensation.............................................................................................. 54
4.3. Taxes..................................................................................................... 55
ARTICLE V
Conditions to Making Loans and Issuing Letters of Credit
5.1. Conditions of Initial Advance............................................................................. 57
5.2. Conditions of Loans and Letters of Credit................................................................. 59
<PAGE>
<CAPTION>
ARTICLE VI
Representations and Warranties
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6.1. Organization and Authority................................................................................ 61
6.2. Loan Documents............................................................................................ 61
6.3. Solvency.................................................................................................. 62
6.4. Subsidiaries.............................................................................................. 62
6.5. Ownership Interests....................................................................................... 62
6.6. Financial Condition....................................................................................... 62
6.7. Title to Properties....................................................................................... 63
6.8. Taxes..................................................................................................... 63
6.9. Other Agreements.......................................................................................... 63
6.10. Litigation................................................................................................ 64
6.11. Margin Stock.............................................................................................. 64
6.12. Investment Company........................................................................................ 65
6.13. Patents, Etc.............................................................................................. 65
6.14. No Untrue Statement....................................................................................... 65
6.15. No Consents, Etc.......................................................................................... 65
6.16. ERISA Requirement......................................................................................... 66
6.17. No Default................................................................................................ 66
6.18. Hazardous Materials....................................................................................... 66
6.19. Employment Matters........................................................................................ 66
6.20. RICO...................................................................................................... 67
6.21. Reimbursement from Third Party Payors..................................................................... 67
ARTICLE VII
Affirmative Covenants
7.1. Financial Statements, Reports, Etc........................................................................ 68
7.2. Maintain Properties....................................................................................... 70
7.3. Existence, Qualification, Etc............................................................................. 70
7.4. Regulations and Taxes..................................................................................... 70
7.5. Insurance................................................................................................. 70
7.6. True Books................................................................................................ 70
7.7. Right of Inspection....................................................................................... 71
7.8. Observe all Laws.......................................................................................... 71
7.9. Governmental Licenses..................................................................................... 71
7.10. Covenants Extending to Other Persons...................................................................... 71
7.11. Officer's Knowledge of Default............................................................................ 71
7.12. Suits or Other Proceedings................................................................................ 71
7.13. Notice of Discharge of Hazardous Material or
Environmental Complaint................................................................................... 72
7.14. Environmental Compliance.................................................................................. 72
7.15. Continuation of Current Business.......................................................................... 73
7.16. Management Contracts...................................................................................... 73
ARTICLE VIII
Negative Covenants
8.1. Financial Covenants....................................................................................... 74
8.2. Investments and Loans..................................................................................... 74
ii
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<CAPTION>
<S> <C> <C>
8.3. Indebtedness.............................................................................................. 74
8.4. Disposition of Assets..................................................................................... 75
8.5. Consolidation or Merger................................................................................... 75
8.6. Liens..................................................................................................... 75
8.7. Dividends and Distributions............................................................................... 75
8.8. Acquisitions.............................................................................................. 75
8.9. Restricted Payments....................................................................................... 75
8.10. Compliance with ERISA..................................................................................... 76
8.11. Fiscal Year............................................................................................... 76
8.12. Dissolution, etc.......................................................................................... 76
ARTICLE IX
Events of Default and Acceleration
9.1. Events of Default......................................................................................... 78
9.2. Agent to Act.............................................................................................. 81
9.3. Cumulative Rights......................................................................................... 81
9.4. No Waiver................................................................................................. 81
9.5. Allocation of Proceeds.................................................................................... 81
ARTICLE X
The Agent
10.1. Appointment.............................................................................................. 83
10.2. Attorneys-in-fact........................................................................................ 83
10.3. Limitation on Liability.................................................................................. 83
10.4. Reliance................................................................................................. 83
10.5. Notice of Default........................................................................................ 84
10.6. No Representations....................................................................................... 84
10.7. Indemnification.......................................................................................... 85
10.8. Lender................................................................................................... 85
10.9. Resignation.............................................................................................. 85
10.10. Sharing of Payments, etc................................................................................. 86
10.11. Fees..................................................................................................... 87
10.12. Independent Agreements................................................................................... 87
ARTICLE XI
Miscellaneous
11.1. Assignments and Participations........................................................................... 88
11.2. Notices.................................................................................................. 90
11.3. No Waiver................................................................................................ 91
11.4. Setoff................................................................................................... 92
11.5. Survival................................................................................................. 92
11.6. Expenses................................................................................................. 92
11.7. Amendments............................................................................................... 93
11.8. Counterparts............................................................................................. 94
11.9. Waivers by Borrower...................................................................................... 94
11.10. Termination.............................................................................................. 95
11.11. Governing Law............................................................................................ 96
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<CAPTION>
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11.12. Indemnification.......................................................................................... 96
11.13. Agreement Controls....................................................................................... 97
11.14. Integration.............................................................................................. 97
11.15. Successors and Assigns................................................................................... 97
11.16. Severability............................................................................................. 97
11.17. Usury Savings Clause..................................................................................... 97
EXHIBIT A Applicable Commitment Percentages...................................................................A-1
EXHIBIT B Form of Assignment and Acceptance...................................................................B-1
EXHIBIT C Notice of Appointment (or Revocation)
of Authorized Representative........................................................................C-1
EXHIBIT D Form of Borrowing Notice............................................................................D-1
EXHIBIT E Form of Competitive Bid Note........................................................................E-1
EXHIBIT F Form of Interest Rate Selection Notice..............................................................F-1
EXHIBIT G Form of Line of Credit Note.........................................................................G-1
EXHIBIT H Investments.........................................................................................H-1
EXHIBIT I Form of Revolving Note..............................................................................I-1
EXHIBIT J Form of Competitive Bid Quote Request...............................................................J-1
EXHIBIT K Form of Competitive Bid Quote.......................................................................K-1
EXHIBIT L Form of Opinion of Borrower's Counsel...............................................................L-1
EXHIBIT M Compliance Certificate..............................................................................M-1
EXHIBIT N Executive Officers..................................................................................N-1
Schedule 6.4 Subsidiaries
Schedule 6.19 Employment Matters
Schedule 8.3 Existing Subsidiary Indebtedness
</TABLE>
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<PAGE>
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 18,
1996 (this "Agreement") is entered into by and among HEALTHSOUTH CORPORATION, a
Delaware corporation (the "Borrower"), the Lenders signatories hereto (the
"Lenders") and NATIONSBANK, N.A., a national banking association, as agent for
the Lenders (the "Agent").
RECITAL:
--------
Pursuant to a Credit Agreement dated as of November 20, 1992 as amended
by Amendments No. 1 and No. 2 (the "Original Agreement"), the lenders party
thereto (the "Original Lenders") 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 Original Agreement all Participating
Subsidiaries and Participating Partnerships (each as defined in the Original
Agreement) guaranteed payment of all Credit Obligations (as defined in the
Original Agreement). In addition, the Borrower and certain of the Participating
Subsidiaries 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. At the request of the Borrower, by Amended and
Restated Credit Agreement dated June 7, 1994 (the "First Restated Agreement")
the Borrower, the Agent and certain of the Original Lenders together with
additional lenders (the "First Restatement Lenders") amended and restated the
Original Agreement thereby increasing the amount of the credit facility to
$550,000,000, changing certain provisions of the Original Agreement and
resulting in the addition of certain Participating Subsidiaries. At the request
of the Borrower, by Second Amended and Restated Credit Agreement dated April 11,
1995, as amended by Amendment No. 1 and Amendment No. 2 (the "Second Restated
Agreement"), the Borrower, the Agent and the First Restatement Lenders together
with additional lenders (the "Second Restated Lenders") amended and restated the
First Restated Agreement thereby increasing the amount of the credit facility to
$1,000,000,000, changing certain provisions of the First Restated Agreement and
resulting in the addition of certain Participating Subsidiaries and
Participating Partnerships. The Borrower has requested that the Second Restated
Agreement be further amended and restated in its entirety in order to increase
the amount of the credit facility and to further change certain of the
provisions contained therein and to change certain of the lenders participating
therein. Accordingly, the Borrower, the Lenders and the Agent agree that the
Second Restated Agreement is hereby amended and restated in its entirety as
follows, effective as of the Closing Date:
<PAGE>
ARTICLE I
Definitions and Terms
---------------------
1.1. Definitions. For the purposes of this Agreement, in addition
to the definitions set forth above, the following terms shall have the
respective meanings set forth below:
"Absolute Rate" shall have the meaning assigned to such term
in Section 2.2(c)(ii)(D).
"Absolute Rate Auction" shall mean a solicitation of
Competitive Bid Quotes setting forth Absolute Rates pursuant
to Section 2.2.
"Absolute Rate Loans" shall mean the Competitive Bid Loans the
interest rates on which are determined on the basis of Absolute Rates
set at Absolute Rate Auctions.
"Acquisition" means the acquisition, whether with cash,
property, stock or promise to pay, of all or a portion of a Person or a
Facility or Facilities of a Person, permitted under Section 8.8;
provided such Person or Facilities is in substantially the same line of
business engaged in by Borrower or its Consolidated Entities.
"Actual/360 Basis" shall mean a method of computing interest
or other charges hereunder on the basis of an assumed year of 360 days
for actual number of days elapsed, meaning that interest or other
charges accrued for each day will be computed by multiplying the rate
applicable on that day by the unpaid principal balance (or other
relevant sum) on that day and dividing the result by 360.
"Advance" means a borrowing under the Revolving Credit
Facility or Line of Credit Facility consisting of the aggregate
principal amount of a Syndicated Loan or a Competitive Bid Loan.
"Affiliate" of any specified Person means any other Person (i)
which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such
specified Person; or (ii) which beneficially owns or holds 5% or more
of any class of the outstanding voting stock (or in the case of a
Person which is not a corporation, 5% or more of the equity interest)
of such specified Person; or 5% or more of any class of the outstanding
voting stock (or in the case of a Person which is not a corporation, 5%
or more of the equity interest) of which is beneficially owned or held
by such specified Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction
of the
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management and policies of a Person, whether through ownership of
voting stock, by contract or otherwise.
"Applicable Commitment Percentage" means, with respect to each
Lender, that portion of the Total Line of Credit Commitment and Total
Revolving Credit Commitment allocable to such Lender (a) with respect
to Lenders as of the Closing Date, as set forth on Exhibit A, and (b)
with respect to any Person who becomes a Lender thereafter, as
reflected in each Assignment and Acceptance to which such Lender is a
party assignee; provided that the Applicable Commitment Percentage of
each Lender shall be increased or decreased to reflect any assignments
to or by such Lender effected in accordance with Section 11.1.
"Applicable Margin" means that number of basis points per
annum set forth below determined based upon the more favorable of
either (i) the highest Rating of outstanding senior unsecured
Indebtedness of the Borrower from time to time or (ii) the ratio of
Consolidated EBITDA to Consolidated Interest Expense for the
Four-Quarter Period most recently ended as specified below:
Rating
------
Ratio of Consolidated Applicable
EBITDA to Consolidated Interest S&P or Moody's Margin
------------------------------- -------------- ------
a) Greater than 7.50 to 1.00 A- A3 25 b.p.
b) Equal to or Less than 7.50
to 1.00 but Greater than
6.50 to 1.00 BBB+ Baa1 30
c) Equal to or Less than 6.50
to 1.00 but Greater than
5.50 to 1.00 BBB Baa2 35
d) Equal to or Less than 5.50
to 1.00 but Greater than
4.50 to 1.00 BBB- Baa3 45
e) Equal to or Less than 4.50
to 1.00 but Greater than
3.50 to 1.00 BB+ Ba1 55
f) Equal to or Less than 3.50
to 1.00 but Greater than
3.00 to 1.00 BB Ba2 62.5
g) Equal to or Less than 3.00
to 1.00 but Greater than BB- Ba3
2.50 to 1.00 or Lower 75
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The Applicable Margin shall be established in the case of a Rating from
time to time based upon the Rating then in effect and, in the case of
the ratio, at the end of each fiscal quarter of the Borrower (the
"Ratio Determination Date"). Any change in the Applicable Margin
following each Ratio Determination Date shall be determined based upon
the computations set forth in the Compliance Certificate, subject to
review and approval of such computations by the Agent, and shall be
effective commencing on the date following the date such certificate is
received until the date following the date on which a new Compliance
Certificate is delivered or is required to be delivered, whichever
shall first occur; provided however, if the Borrower shall fail to
deliver any such certificate within the time period required by Section
7.1, then the Applicable Margin shall be 2% until the appropriate
certificate is so delivered. From the Closing Date to the first Ratio
Determination Date, the Applicable Margin shall be 45 basis points
unless there is an improvement in the Rating from the Rating in effect
at the Closing Date.
"Applicable Unused Fee" means that number of basis points per
annum set forth below, which shall be determined based upon the more
favorable of either (i) the highest Rating of outstanding senior
unsecured Indebtedness of the Borrower from time to time or (ii) the
ratio of Consolidated EBITDA to Consolidated Interest Expense for the
Four-Quarter Period most recently ended as specified below:
<TABLE>
<CAPTION>
Rating Applicable Unused Fee
------ ---------------------
Ratio of Consolidated Line of Revolving
EBITDA to Consolidated Interest S&P or Moody's Credit Facility Credit Facility
------------------------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
a) Greater than 7.50 to 1.00 A- A3 8 b.p. 9 b.p.
b) Equal to or Less than 7.50
to 1.00 but Greater than
6.50 to 1.00 BBB+ Baa1 9 10
c) Equal to or Less than 6.50
to 1.00 but Greater than
5.50 to 1.00 BBB Baa2 10 12.5
d) Equal to or Less than 5.50
to 1.00 but Greater than
4.50 to 1.00 BBB- Baa3 12.5 15
e) Equal to or Less than 4.50
to 1.00 but Greater than
3.50 to 1.00 BB+ Ba1 15 17.5
f) Equal to or Less than 3.50
to 1.00 but Greater than
3.00 to 1.00 BB Ba2 17.5 20
g) Equal to or Less than 3.00
to 1.00 but Greater than BB- Ba3
2.50 to 1.00 or Lower 22.5 25
</TABLE>
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The Applicable Unused Fee shall be established in the case of a Rating
from time to time based upon the Rating then in effect, and in the case
of the ratio, at the end of each fiscal quarter of the Borrower (the
"Ratio Determination Date"). Any change in the Applicable Unused Fee
following each Ratio Determination Date shall be determined based upon
the computations set forth in the Compliance Certificate, subject to
review and approval of such computations by the Agent and shall be
effective commencing on the date following the date such certificate is
received until the date following the date on which a new Compliance
Certificate is delivered or is required to be delivered, whichever
shall first occur; provided however, if the Borrower shall fail to
deliver any such certificate within the time period required by Section
7.1, then the Applicable Unused Fee shall be 2%. From the Closing Date
to the first Ratio Determination Date, the Applicable Unused Fee shall
be 15 basis points on the Revolving Credit Facility and 12.5 basis
points on the Line of Credit Facility unless there is an improvement in
the Rating from the Rating in effect at the Closing Date.
"Applications and Agreements for Letters of Credit" means,
collectively, the Applications and Agreements for Letters of Credit, or
similar documentation, executed by the Borrower from time to time and
delivered to the Issuing Bank to support the issuance of Letters of
Credit.
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit B (with blanks appropriately filled
in) delivered to the Agent in connection with an assignment of a
Lender's interest under this Agreement pursuant to Section 11.1.
"Authorized Representative" means any of the Executive
Officers of the Borrower or, with respect to financial matters, the
Treasurer or the chief financial officer of the Borrower, or any other
Person expressly designated by the Board of Directors of the Borrower
(or the appropriate committee thereof) as an Authorized Representative
of the Borrower, as set forth from time to time in a certificate in the
form of Exhibit C.
"Base Rate" means the per annum rate of interest equal to the
greater of (i) the Prime Rate or (ii) the Federal Funds Effective Rate
plus one-half of one percent (1/2%). Any change in the Base Rate
resulting from a change in the Prime Rate or the Federal Funds
Effective Rate shall become effective as of 12:01 A.M. of the Business
Day on which each such change occurs. The Base Rate is a reference rate
used by the Agent in determining interest rates on certain loans and is
not intended to be the lowest rate of interest charged on any extension
of credit to any debtor.
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"Base Rate Loan" means a Loan for which the rate of interest
is determined by reference to the Base Rate.
"Base Rate Segment" means a Segment bearing interest or to
bear interest at the Base Rate.
"Base Rate Refunding Loan" means an Advance under the
Revolving Credit Facility which bears interest at a Base Rate made to
satisfy Reimbursement Obligations arising from a drawing under a Letter
of Credit.
"Board" means the Board of Governors of the Federal Reserve
System (or any successor body).
"Borrowing Notice" means the notice delivered by an Authorized
Representative in connection with an Advance under the Revolving Credit
Facility or Line of Credit Facility, in the form of Exhibit D.
"Business Day" means, (i) except in the case of a Eurodollar
Loan, any day which is not a Saturday, Sunday or a day on which banks
in the States of New York and North Carolina are authorized or
obligated by law, executive order or governmental decree to be closed
and, (ii) with respect to any Eurodollar Rate Loan, any day which is a
Business Day, as described above, and on which the relevant
international financial markets are open for the transaction of
business contemplated by this Agreement in London, England, New York,
New York and Charlotte, North Carolina.
"Capital Leases" means all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time
including Statement No. 13 of the Financial Accounting Standards Board
and any successor thereof.
"Capital Stock" of any Person means any and all shares, rights
to purchase, warrants or options (whether or not currently
exercisable), participation or other equivalents of or interest in
(however designated) the equity (including without limitation common
stock, preferred stock and partnership and joint venture interests) of
such Person (excluding any debt securities that are convertible into,
or exchangeable for, such equity).
"Change of Control" means, at any time:
(i) any "person" or "group" (each as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act), who are not as of
the Closing Date owners of one percent (1%) or more of the
Voting Stock of the Borrower, either (A) becomes the
"beneficial owner" (as defined in Rule 13d-3 of the Exchange
Act), directly or indirectly, of Voting Stock of the Borrower
(or securities convertible into or
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exchangeable for such Voting Stock) representing 15% or more
of the combined voting power of all Voting Stock of the
Borrower (on a fully diluted basis) or (B) otherwise has the
ability, directly or indirectly, to elect a majority of the
board of directors of the Borrower;
(ii) during any period of up to 24 consecutive months,
commencing on the Closing Date, individuals who at the
beginning of such period were directors of the Borrower shall
cease for any reason (other than the death, disability or
retirement of an officer of the Borrower that is serving as a
director at such time so long as another officer of the
Borrower replaces such Person as a director) to constitute a
majority of the board of directors of the Borrower; or
(iii) any Person or two or more Persons acting in concert
shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation
thereof, will result in its or their acquisition, of the power
to exercise, directly or indirectly, a controlling influence
on the management or policies of the Borrower.
"Closing Date" means the date as of which this Agreement is
executed by the Borrower, the Lenders and the Agent and on which the
conditions set forth in Section 5.1 have been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder.
"Commitment" shall mean, as to each Lender, the obligation of
such Lender to make Loans pursuant to Section 2.1 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 limited or reduced at any time
or from time to time pursuant to Section 2.8); 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 11.1.
"Common Stock" means the common stock, par value $.01 per
share, of the Borrower.
"Competitive Bid Borrowing" shall have the meaning assigned to
such term in Section 2.2(b).
"Competitive Bid Loans" shall mean the Loans provided for by
Section 2.2.
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"Competitive Bid Notes" shall mean the promissory notes
provided for by Section 2.6(c) substantially in the form of Exhibit E
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 2.2(c) by a Lender to make a Competitive Bid Loan with one
single specified interest rate.
"Competitive Bid Quote Request" shall have the meaning
assigned to such term in Section 2.2(b).
"Compliance Certificate" shall have the meaning attributed to
that term in Section 7.1(c).
"Consistent Basis" in reference to the application of GAAP
means the accounting principles observed in the period referred to are
comparable in all material respects to those applied in the preparation
of the audited financial statements of the Borrower referred to in
Section 6.6(a).
"Consolidated Amortization Expense" of the Borrower for any
period means the amortization expense of the Borrower and its
Consolidated Entities for such period (to the extent included in the
computation of Consolidated Net Income), determined on a consolidated
basis in accordance with GAAP.
"Consolidated Depreciation Expense" of the Borrower means the
depreciation expense of the Borrower and its Consolidated Entities for
such period (to the extent included in the computation of Consolidated
Net Income of the Borrower), determined on a consolidated basis in
accordance with GAAP.
"Consolidated EBITDA" means, with respect to the Borrower and
its Consolidated Entities for any Four-Quarter Period ending on the
date of computation thereof, the sum of, without duplication, (i)
Consolidated Net Income, (ii) Consolidated Interest Expense, (iii)
Consolidated Income Tax Expense, (iv) Consolidated Amortization
Expense, (v) Consolidated Depreciation Expense and (vi) the minority
interest of any Person or Persons in Consolidated Entities, all
determined on a consolidated basis in accordance with GAAP applied on a
Consistent Basis.
"Consolidated Entity" shall mean any Person whose financial
statements are appropriately consolidated with the Borrower's financial
statements under GAAP.
"Consolidated Indebtedness" means all Indebtedness of the
Borrower and its Consolidated Entities, all determined on a
consolidated basis.
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"Consolidated Interest Expense" means, with respect to any
Four-Quarter Period ending on the date of computation thereof, the
gross interest expense of the Borrower and its Consolidated Entities,
including without limitation (i) the current amortized portion of debt
discounts to the extent included in gross interest expense, (ii) the
current amortized portion of all fees (including fees payable in
respect of any Rate Hedging Obligation) payable in connection with the
incurrence of Indebtedness to the extent included in gross interest
expense, (iii) the portion of any payments made in connection with
Capital Leases allocable to interest expense, and (iv) lease payments,
other than the Headquarters Obligations, made pursuant to the
Headquarters Lease, all determined on a consolidated basis in
accordance with GAAP applied on a Consistent Basis.
"Consolidated Net Income" of the Borrower for any period means
the net income (or loss) of the Borrower and its Consolidated Entities
for such period determined on a consolidated basis in accordance with
GAAP, without giving effect to dividends on any series of preferred
stock of any Consolidated Entity, whether or not in cash, to the extent
such consolidated net income was reduced thereby; provided that there
shall be excluded from such net income (for all purposes, other than
compliance with Section 8.1(a), to the extent otherwise included
therein), without duplication, (i) the net income of any Person (other
than a Consolidated Entity) to the extent that any such income has not
actually been received by the Borrower or a Consolidated Entity in the
form of dividends or similar distributions during such period, but
including, in any event, net income of any Person who becomes a
Consolidated Entity whose Acquisition is accounted for on a "pooling of
interests" basis; (ii) except to the extent includable in the
consolidated net income of the Borrower or a Consolidated Entity
pursuant to the foregoing clause (i), the net income of any Person that
accrued prior to the date that (a) such Person becomes a Consolidated
Entity or is merged into or consolidated with a Consolidated Entity or
(b) the assets of such Person are acquired by the Borrower or a
Consolidated Entity; (iii) the net income of any Consolidated Entity to
the extent that the declaration or payment of dividends or similar
distributions by such Consolidated Entity of that income is not
permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Consolidated Entity during such period;
(iv) any gain (or loss), together with any related provisions for taxes
on any such gain, realized during such period by the Borrower or its
Consolidated Entities upon (a) the acquisition of any securities, or
the extinguishment of any Indebtedness, of the Borrower or its
Consolidated Entities or (b) any asset sale by the referent person or
any of its Subsidiaries; (v) any extraordinary gain (or
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extraordinary loss), together with any related provision for taxes or
tax benefit resulting from any such extraordinary gain or loss,
realized by the Borrower or its Consolidated Entities during such
period; and (vi) in the case of a successor to any Person by
consolidation, merger or transfer of its assets, any earnings of the
successor prior to such merger, consolidation or transfer of assets;
provided, further, however, that there shall be added back to net
income non-recurring, non-cash expenses and cash transaction costs
relating to professional fees arising in conjunction with an
Acquisition provided such expenses do not exceed 10% of the Cost of
Acquisition.
"Consolidated Net Worth" of the Borrower as of any date means
the Consolidated Stockholders' Equity (including any preferred stock
that is classified as equity under GAAP, other than Disqualified Stock)
of the Borrower and its Consolidated Entities (excluding any equity
adjustment for foreign currency translation for any period subsequent
to the Closing Date) on a consolidated basis at such date, as
determined in accordance with GAAP, less all write-ups subsequent to
the Closing Date in the book value of any asset owned by the Borrower
or any of its Consolidated Entities.
"Consolidated Stockholders' Equity" shall mean at any time as
at which the amount thereof is to be determined, the sum of the
following amounts in respect of the Borrower and the Consolidated
Entities: (i) the par or stated value of all Capital Stock of the
Borrower, (ii) retained earnings, (iii) additional paid in capital,
(iv) capital surplus and (v) earned surplus minus treasury stock.
"Consolidated Tangible Net Worth" means, as of any date on
which the amount thereof is to be determined, Consolidated
Stockholders' Equity minus (without duplication of deductions in
respect of items already deducted in arriving at surplus and retained
earnings) (i) all reserves (other than contingency reserves not
allocated to any particular purpose), including without limitation
reserves for depreciation, depletion, amortization, obsolescence,
deferred income taxes, insurance and inventory valuation and (ii) the
net book value of all assets which would be treated as intangible
assets, such as (without limitation) goodwill (whether representing the
excess of cost over book value of assets acquired or otherwise),
capitalized expenses, unamortized debt discount and expense,
consignment inventory rights, patents, trademarks, trade names,
copyrights, franchises and licenses, all as determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis.
"Consolidated Total Assets" means, as of any date on which the
amount thereof is to be determined, the net book value of all assets of
the Borrower and its Consolidated
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Entities as determined on a consolidated basis in accordance with GAAP
applied on a Consistent Basis.
"Consolidated Total Capital" means, as of any date on which
the amount thereof is to be determined, the sum of Consolidated
Indebtedness plus Consolidated Shareholders' Equity of the Borrower and
its Consolidated Entities.
"Contract Provider" means any Person who provides professional
health care services under or pursuant to any contract with the
Borrower or any Subsidiary.
"Controlled Partnership" shall mean a general partnership of
which the Borrower or a Subsidiary is a general partner (but not
including Alabama World Football), or a limited partnership whose
general partners include the Borrower or a Subsidiary (but not
including Vanderbilt), or a limited liability company whose members
include the Borrower or a Subsidiary or another Controlled Partnership,
which partnership, whether general or limited, or limited liability
company has assets with a value in excess of $2,000.00, and with
respect to which partnership or limited liability company the Borrower
or a Subsidiary is entitled to receive not less than 50% of any
distributions of cash made to the partners or members thereof, other
than any preferred cash distribution arrangement in existence at the
Closing Date or approved by the Required Lenders in writing, or which
is otherwise a Consolidated Entity.
"Cost of Acquisition" means, in respect of any Acquisition,
the sum of (i) the amount of cash paid by the Borrower and its
Consolidated Entities in connection with such Acquisition, (ii) the
Fair Market Value of all Capital Stock or other ownership interests of
the Borrower or any Consolidated Entity issued or given in connection
with such Acquisition, (iii) the amount (determined by using the face
amount or the amount payable at maturity, whichever is greater) of all
Indebtedness incurred, assumed or acquired in connection with such
Acquisition, (iv) all additional purchase price amounts in the form of
earnouts and other contingent obligations that should be recorded on
the financial statements of the Borrower and its Consolidated Entities
in connection with Generally Accepted Accounting Principles, (v) all
amounts paid in respect of covenants not to compete, consulting
agreements and other affiliated contracts in connection with such
Acquisition and (vi) the aggregate fair market value of all other
consideration given by the Borrower and its Consolidated Entities in
connection with such Acquisition.
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"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default.
"Default Rate" means (i) with respect to each Eurodollar Rate
Loan and Eurodollar Rate Segment, until the end of the Interest Period
applicable thereto, a rate of two percent (2%) plus the Eurodollar Rate
applicable to such Loan or Segment, and thereafter at a rate of
interest per annum which shall be two percent (2%) plus the Base Rate,
(ii) with respect to Base Rate Loans and Base Rate Segments, at a rate
of interest per annum which shall be two percent (2%) plus the Base
Rate and (iii) in any case, the maximum rate permitted by applicable
law, if lower.
"Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or
for which it is exchangeable), or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder
thereof, in whole or in part, on or prior to the Revolving Credit
Termination Date.
"Dollars" and the symbol "$" mean dollars constituting legal
tender for the payment of public and private debts in the United States
of America.
"Employee Benefit Plan" means any employee benefit plan within
the meaning of Section 3(3) of ERISA which (i) is maintained for
employees of the Borrower or any of its ERISA Affiliates or is assumed
by the Borrower or any of its ERISA Affiliates in connection with any
Acquisition or (ii) has at any time been maintained for the employees
of the Borrower or any current or former ERISA Affiliate.
"Environmental Laws" means, collectively, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, the Superfund Amendments and Reauthorization Act of 1986, the
Resource Conservation and Recovery Act, as amended, the Toxic
Substances Control Act, as amended, the Clean Air Act, as amended, the
Clean Water Act, as amended, any other "Superfund" or "Superlien" law
or any other federal, or applicable state or local statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating
to, or imposing liability or standards of conduct concerning, any
Hazardous Material.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute and all rules
and regulations promulgated thereunder.
"ERISA Affiliate", as applied to the Borrower, means any
Person or trade or business which is a member of a group which
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is under common control with the Borrower, who together with the
Borrower, is treated as a single employer within the meaning of Section
414(b) and (c) of the Code.
"Eurodollar Auction" shall mean a solicitation of Competitive
Bid Quotes setting forth Eurodollar Margins based on the Interbank
Offered Rate pursuant to Section 2.2.
"Eurodollar Margin" shall have the meaning assigned to such
term in Section 2.2(c)(ii)(C).
"Eurodollar Market Loans" shall mean Competitive Bid Loans
interest rates on which are determined on the basis of Interbank
Offered Rate pursuant to a Eurodollar Auction.
"Eurodollar Rate" means the interest rate per annum calculated
according to the following formula:
Eurodollar = Interbank Offered Rate + Applicable
--------------------------------
Rate 1- Eurodollar Reserve Percentage Margin
"Eurodollar Rate Loan" means a Loan or Segment of a Loan for
which the rate of interest is determined by reference to the Eurodollar
Rate.
"Eurodollar Rate Segment" means a Segment bearing interest or
to bear interest at the Eurodollar Rate.
"Eurodollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D or any successor regulation, as the maximum
reserve requirement (including any basic, supplemental, emergency,
special, or marginal reserves) applicable with respect to Eurocurrency
liabilities as that term is defined in Regulation D (or against any
other category of liabilities that includes deposits by reference to
which the interest rate on Eurodollar Rate Loans is determined),
whether or not the Agent or any Lender has any Eurocurrency liabilities
subject to such requirements, without benefits of credits or proration,
exceptions or offsets that may be available from time to time to the
Agent or any Lender. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" means any of the occurrences set forth as
such in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
"Executive Officer" means any Person who from time to time
holds the offices with Borrower listed on Exhibit N.
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"Facility" shall mean an inpatient or outpatient
rehabilitation facility, certified outpatient rehabilitation facility,
skilled nursing facility, specialty medical center, specialty
orthopedic hospital or acute care hospital, subacute inpatient
facility, transitional living center, medical office building,
outpatient surgery center or outpatient diagnostic center with all
buildings and improvements associated therewith, that is owned or
leased, in whole or part, by the Borrower or a Subsidiary or any
partnership controlled directly or indirectly by the Borrower.
"Facility Termination Date" means the date on which both the
Revolving Credit Termination Date and the Line of Credit Termination
Date shall have occurred, no Letters of Credit shall remain outstanding
and the Borrower shall have fully, finally and irrevocably paid and
satisfied all Obligations.
"Fair Market Value" shall mean, with respect to any capital
stock or other ownership interests issued or given by the Borrower or
any Consolidated Entity in connection with an Acquisition, (i) in the
case of capital stock that is Common Stock and such Common Stock is
then designated as a national market system security by the National
Association of Securities Dealers, Inc. ("NASD") or is listed on a
national securities exchange, the average of the last reported bid and
ask quotations or prices reported thereon for Common Stock or such
other value as may be ascribed to the Common Stock in a definitive
merger or acquisition agreement provided such value is determined
according to customary methods for like transactions and is approved
(to the extent required by Borrower's charter or bylaws) by the
Borrower's Board of Directors or (ii) in the case of capital stock that
is not Common Stock or in the event that Common Stock is not so
designated by NASD or listed on such national exchange, or in the case
of any other ownership interests, the determination of the fair market
value thereof in good faith by a majority of disinterested members of
the board of directors of the Borrower or such Consolidated Entity, in
each case effective as of the close of business on the Business Day
immediately preceding the closing date of such Acquisition.
"Federal Funds Effective Rate" means, for any day, the rate
per annum (rounded upward to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New
York on the Business Day next succeeding such day, provided that (a) if
such day is not a Business Day, the Federal Funds Effective Rate for
such day shall be such rate on such transactions on the next preceding
Business Day, and (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Effective Rate for such day
shall be the average rate
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<PAGE>
quoted to the Agent on such day on such transaction as determined by
the Agent.
"Fiscal Year" means the twelve month fiscal period of the
Borrower commencing on January 1 of each calendar year and ending on
December 31 of each calendar year.
"Fixed Rate" shall mean the Absolute Rate or the Interbank
Offered Rate plus the Applicable Margin or the Eurodollar Margin, as
the case may be.
"Fixed Rate Loan" means a Loan for which the rate of interest
is determined by reference to the Fixed Rate.
"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 quarters of the Borrower and its Subsidiaries, taken together as
one accounting period; provided, however, for purposes of this
Agreement, for periods prior to December 31, 1996 the results of
operations shall be determined for the Four-Quarter Period ending on
the last day of (i) the first quarter of Fiscal Year 1996 by
multiplying the results of operations for the first quarter by four
(4), (ii) the second quarter of Fiscal Year 1996 by multiplying the
results of operations for the first and second quarters by two (2), and
(iii) for the third quarter of Fiscal Year 1996 by multiplying the
results of operations of the sum of the first, second and third
quarters by four-thirds (4/3's).
"GAAP" or "Generally Accepted Accounting Principles" means
generally accepted accounting principles, being those principles of
accounting set forth in pronouncements of the Financial Accounting
Standards Board or the American Institute of Certified Public
Accountants or which have other substantial authoritative support and
are applicable in the circumstances as of the date of a report.
"Governmental Authority" shall mean any Federal, state,
municipal, national or other governmental department, commission,
board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity or officer exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a
foreign entity or government.
"Guaranteed Obligations" of any person shall mean all
guaranties (including guaranties of guaranties and guaranties of
dividends and other monetary obligations), endorsements, assumptions
and other contingent obligations with respect to,
15
<PAGE>
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.
"Hazardous Material" means and includes any hazardous, toxic
or dangerous waste, substance or material, the generation, handling,
storage, disposal, treatment or emission of which is subject to any
Environmental Law.
"HCFA" means the United States Health Care Financing
Administration and any successor thereto.
"Headquarters Lease" means the Lease Agreement between
HEALTHSOUTH Holdings, Inc., as Lessee, and First Security Bank of Utah,
N.A., as Lessor, dated as of November 16, 1995 providing for the lease
to HEALTHSOUTH Holdings, Inc. of the land and improvements thereon
located on the property described therein, as such Lease Agreement may
be amended, modified or supplemented from time to time.
"Headquarters Obligations" means all of the Holder Advances
and Loans, as each such term is defined in the Participation Agreement.
"Indebtedness" of any Person at any date means, without
duplication: (i) all indebtedness of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof); (ii) all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments; (iii) all obligations (contingent or
otherwise) of such Person in respect of letters of credit or other
similar instruments (or reimbursement obligations with respect
thereto); (iv) all obligations of such Person with respect to Rate
Hedging Obligations (other than those that fix the interest rate on
variable rate indebtedness otherwise permitted hereunder or that
protect the Borrower and or its Consolidated Entities against changes
in foreign exchange rates); (v) obligations of such Person to pay the
deferred and unpaid purchase price of property or services, except
trade payables and accrued expenses incurred in the ordinary course of
business; (vi) all Capitalized Lease Obligations of such Person; (vii)
all indebtedness of others secured by a Lien on any assets of such
Person, whether or not such indebtedness is assumed by such Person;
(viii) all Guaranteed Obligations; (ix) the Headquarters Obligations;
and (x) all obligations of a like nature to those described in clauses
(i) through (ix) above of a partnership of which such Person is a
general partner. The
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amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as
described above, the maximum liability of such Person for any such
contingent obligations at such date and, in the case of clause (vii),
the amount of the Indebtedness secured.
"Interbank Offered Rate" means, with respect to any Eurodollar
Rate Loan or Eurodollar Rate Segment or Eurodollar Market Loans for the
Interest Period applicable thereto, the average (rounded upward to the
nearest one-sixteenth (1/16) of one percent) per annum rate of interest
determined by the Agent (each such determination to be conclusive and
binding absent manifest error) as of two Business Days prior to the
first day of such Interest Period, as the effective rate at which
deposits in immediately available funds in Dollars are being, have
been, or would be offered or quoted by the Agent to major banks in the
applicable interbank market for Eurodollar deposits at any time during
the Business Day which is the second Business Day immediately preceding
the first day of such Interest Period, for a term comparable to such
Interest Period and in the amount of such Eurodollar Rate Loan or
Eurodollar Rate Segment or Eurodollar Market Loan. If no such offers or
quotes are generally available for such amount, then the Agent shall be
entitled to determine the Eurodollar Rate by estimating in its
reasonable judgment the per annum rate (as described above) that would
be applicable if such quote or offers were generally available.
"Interest Period" shall mean:
(i) with respect to any Eurodollar Rate Loan, each period
commencing on the date such Eurodollar Rate Loan is made or converted
from a Loan of another Type or the last day of the next preceding
Interest Period for such Loan and ending on the numerically
corresponding day in the first, second, third or sixth calendar month
thereafter, as the Borrower may select as provided in Section 2.3,
except that each Interest Period that commences on the last Business
Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Business Day of the appropriate subsequent
calendar month;
(ii) with respect to any Absolute Rate Loan, the period
commencing on the date such Absolute Rate Loan is made and ending on
any Business Day up to 180 days thereafter, as the Borrower may select
as provided in Section 2.2(b); and
(iii) with respect to any Eurodollar Market Loan, the period
commencing on the date such Eurodollar Market Loan is made and ending
on the numerically corresponding day in the first, second, third or
sixth calendar month thereafter, as
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<PAGE>
the Borrower may select as provided in Section 2.2(b), except that each
Interest Period that commences on the last Business Day of a calendar
month (or any day for which there is no numerically corresponding day
in the appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) if any Interest Period for any
Competitive Bid Loan would otherwise end after the Revolving Credit
Termination Date, such Interest Period shall end on the Revolving
Credit Termination Date; (ii) if any Interest Period for any Eurodollar
Rate Loan would otherwise end after the Revolving Credit Termination
Date or Line of Credit Termination Date, such Interest Period shall end
on the Revolving Credit Termination Date or Line of Credit Termination
Date, respectively; (iii) each Interest Period that would otherwise end
on a day which is not a Business Day shall end on the next succeeding
Business Day (or, in the case of an Interest Period for a Eurodollar
Rate Loan or a Eurodollar Market Loan, if such next succeeding Business
Day falls in the next succeeding calendar month, on the next preceding
Business Day); and (iv) notwithstanding clauses (i), (ii) and (iii)
above, no Interest Period for any Loan (other than an Absolute Rate
Loan) shall have a duration of less than one month (in the case of a
Eurodollar Rate Loan or a Eurodollar Market Loan) and, if the Interest
Period for any Eurodollar Rate Loan or Eurodollar Market Loan would
otherwise be a shorter period, such Loan shall not be available
hereunder for such period.
"Interest Rate Selection Notice" means the written notice
delivered by an Authorized Representative in connection with the
election of a subsequent Interest Period for any Eurodollar Rate Loan
or Eurodollar Rate Segment or the conversion of any Eurodollar Rate
Loan or Eurodollar Rate Segment into a Base Rate Loan or Base Rate
Segment or the conversion of any Base Rate Loan or Base Rate Segment
into a Eurodollar Rate Loan or Eurodollar Rate Segment, in the form of
Exhibit F.
"Issuing Bank" means NationsBank as issuer of Letters of
Credit under Article III.
"LC Account Agreement" means the LC Account Agreement dated as
of the date hereof between the Borrower and the Issuing Bank, as
amended, modified or supplemented from time to time.
"Lending Office" means, as to each Lender and for each Type of
Loan, the Lending Office of such Lender (or an Affiliate of such
Lender) designated for such Type of Loan on the signature pages hereof
or in an Assignment and Acceptance or such other office of such Lender
(or of an affiliate of
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<PAGE>
such Lender) as such Lender may from time to time specify to an
Authorized Representative and the Agent as the office by which its
Loans are to be made and maintained.
"Letter of Credit" means a standby letter of credit issued by
the Issuing Bank pursuant to Article III for the account of the
Borrower in favor of a Person advancing credit or securing an
obligation on behalf of the Borrower.
"Letter of Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to acquire Participations in
respect of Letters of Credit and Reimbursement Obligations up to an
aggregate amount at any one time outstanding equal to such Lender's
Applicable Commitment Percentage of the Total Letter of Credit
Commitment as the same may be increased or decreased from time to time
pursuant to this Agreement.
"Letter of Credit Facility" means the facility described in
Article III providing for the issuance by the Issuing Bank for the
account of the Borrower of Letters of Credit in an aggregate stated
amount at any time outstanding not exceeding, together with all
Reimbursement Obligations, the Total Letter of Credit Commitment.
"Letter of Credit Outstandings" means, as of any date of
determination, the aggregate amount remaining undrawn under all Letters
of Credit plus Reimbursement Obligations then outstanding.
"Lien" means any interest in property securing any obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the lien or security interest arising
from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. For the purposes of this Agreement, the Borrower and any
Subsidiary shall be deemed to be the owner of any property which it has
acquired or holds subject to a conditional sale agreement, financing
lease, or other arrangement pursuant to which title to the property has
been retained by or vested in some other Person for security purposes.
"Line of Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to make Line of Credit Loans to
the Borrower in a principal amount equal to such Lender's Applicable
Commitment Percentage of the Total Line of
Credit Commitment.
"Line of Credit Facility" means the facility described in
Section 2.1(b) providing for Line of Credit Loans to the
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Borrower by the Lenders in the original principal amount of the Total Line of
Credit Commitment.
"Line of Credit Loan" means a loan made pursuant to the Line
of Credit Facility in accordance with Section 2.1(b).
"Line of Credit Notes" means, collectively, the promissory
notes of the Borrower evidencing Line of Credit Loans executed and
delivered to the Lenders as provided in Section 2.6(b) substantially in
the form of Exhibit G, with appropriate insertions as to amounts, dates
and names of Lenders.
"Line of Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of Line of Credit Loans
then outstanding and all interest accrued thereon.
"Line of Credit Termination Date" means (i) the Stated
Termination Date or (ii) such earlier date of termination of Lenders'
obligations pursuant to Section 9.1 upon the occurrence of an Event of
Default, or (iii) such date as the Borrower may voluntarily and
permanently terminate the Line of Credit Facility by payment in full of
all Line of Credit Outstandings.
"Loan" or "Loans" means any Syndicated Loans, Competitive Bid
Loans, Reimbursement Obligations and Letter of Credit Outstandings and
all extensions and renewals thereof.
"Loan Documents" means this Agreement, the Notes, the LC
Account Agreement, the Applications and Agreements for Letter of
Credit, and all other instruments and documents heretofore or hereafter
executed or delivered to or in favor of any Lender or the Agent in
connection with the Loans made, Letters of Credit issued and
transactions contemplated under this Agreement, as the same may be
amended, supplemented or replaced from time to time.
"Material Adverse Effect" means a material adverse effect on
(i) the business, properties, operations or condition, financial or
otherwise, of the Borrower and its Consolidated Entities, taken as a
whole, (ii) the ability of the Borrower to pay or perform its
obligations, liabilities and indebtedness under the Loan Documents as
such payment or performance becomes due in accordance with the terms
thereof, or (iii) the rights, powers and remedies of the Agent or any
Lender under any Loan Document or the validity, legality or
enforceability thereof (including for purposes of clauses (ii) and
(iii) the imposition of burdensome conditions thereon).
"Material Group" shall mean, at any time, any group, whether
one or more, or combination of Consolidated Entities
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(a) whose assets, in the aggregate, constitute 5% or more of the assets
of the Borrower and the Consolidated Entities on a consolidated basis
or (b) whose net revenues, in the aggregate, constitute 5% or more of
the net revenues of the Borrower and the Consolidated Entities on a
consolidated basis.
"Medicaid Certification" means certification by HCFA or a
state agency or entity under contract with HCFA that a health care
operation is in compliance with all the conditions of participation set
forth in the Medicaid Regulations.
"Medicaid Provider Agreement" means an agreement entered into
between a state agency or other entity administering the Medicaid
program and a health care operation under which the health care
operation agrees to provide services for Medicaid patients in
accordance with the terms of the agreement and Medicaid Regulations.
"Medicaid Regulations" means, collectively, (i) all federal
statutes (whether set forth in Title XIX of the Social Security Act or
elsewhere) affecting the medical assistance program established by
Title XIX of the Social Security Act and any statutes succeeding
thereto; (ii) all applicable provisions of all federal rules,
regulations, manuals and orders of all Governmental Authorities
promulgated pursuant to or in connection with the statutes described in
clause (i) above and all federal administrative, reimbursement and
other guidelines of all Governmental Authorities having the force of
law promulgated pursuant to or in connection with the statutes
described in clause (i) above; (iii) all state statutes and plans for
medical assistance enacted in connection with the statutes and
provisions described in clauses (i) and (ii) above; and (iv) all
applicable provisions of all rules, regulations, manuals and orders of
all Governmental Authorities promulgated pursuant to or in connection
with the statutes described in clause (iii) above and all state
administrative, reimbursement and other guidelines of all Governmental
Authorities having the force of law promulgated pursuant to or in
connection with the statutes described in clause (ii) above, in each
case as may be amended, supplemented or otherwise modified from time to
time.
"Medicare Certification" means certification by HCFA or a
state agency or entity under contract with HCFA that a health care
operation is in compliance with all the conditions of participation set
forth in the Medicare Regulations.
"Medicare Provider Agreement" means an agreement entered into
between a state agency or other entity administering the Medicare
program and a health care operation under which the health care
operation agrees to provide services for Medicare
21
<PAGE>
patients in accordance with the terms of the agreement and Medicare
Regulations.
"Medicare Regulations" means, collectively, all federal
statutes (whether set forth in Title XVIII of the Social Security Act
or elsewhere) affecting the health insurance program for the aged and
disabled established by Title XVIII of the Social Security Act and any
statutes succeeding thereto; together with all applicable provisions of
all rules, regulations, manuals and orders and administrative,
reimbursement and other guidelines having the force of law of all
Governmental Authorities (including without limitation, Health and
Human Services ("HHS"), HCFA, the Office of the Inspector General for
HHS, or any Person succeeding to the functions of any of the foregoing)
promulgated pursuant to or in connection with any of the foregoing
having the force of law, as each may be amended, supplemented or
otherwise modified from time to time.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making, or is accruing an obligation to make,
contributions or has made, or been obligated to make, contributions
within the preceding six (6) Fiscal Years.
"NationsBank" means NationsBank, National Association.
"Notes" means, collectively, the Line of Credit Notes and the
Revolving Notes and the Competitive Bid Notes.
"Obligations" means the obligations, liabilities and
Indebtedness of the Borrower with respect to (i) the principal and
interest on the Loans as evidenced by the Notes, (ii) the Reimbursement
Obligations and otherwise in respect of the Letters of Credit, and
(iii) the payment and performance of all other obligations, liabilities
and Indebtedness of the Borrower to the Lenders or the Agent hereunder,
under any one or more of the other Loan Documents or with respect to
the Loans.
"Participation" means, with respect to any Lender (other than
the Issuing Bank) and a Letter of Credit, the extension of credit
represented by the participation of such Lender hereunder in the
liability of the Issuing Bank in respect of a Letter of Credit issued
by the Issuing Bank in accordance with the terms hereof.
"Participation Agreement" means the Participation Agreement
dated November 16, 1995 among HEALTHSOUTH Corporation, as Construction
Agent, HEALTHSOUTH Holdings, Inc., as Lessee, First Security Bank of
Utah, N.A., as
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Trustee, the Holders identified therein, the Lenders identified
therein, and NationsBank, National Association, as Agent.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"Pension Plan" means any employee pension benefit plan within the
meaning of Section 3(2) of ERISA, other than a Multiemployer Plan,
which is subject to the provisions of Title IV of ERISA or Section 412
of the Code and which (i) is maintained for employees of the Borrower
or any of its ERISA Affiliates or is assumed by the Borrower or any of
its ERISA Affiliates in connection with any Acquisition or (ii) has at
any time been maintained for the employees of the Borrower or any
current or former ERISA Affiliate.
"Permitted Encumbrances" shall mean:
(1) liens for taxes, assessments and other governmental
charges that are not delinquent or that are being contested in
good faith by appropriate proceedings duly pursued;
(2) 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, exceptions, reservations, easements,
conditions, limitations and other matters of record other than
Liens that do not materially adversely affect the value or
utility of the affected property;
(4) Liens on assets securing Indebtedness the proceeds of
which are used to acquire such assets;
(5) Liens and other matters approved in writing by the
Required Lenders; and
(6) Liens in favor of landlords, the amount secured by which
landlords' Liens, in the aggregate, would not materially
adversely affect the Borrower or a Material Group.
"Permitted Investments" shall mean:
(1) direct obligations of, or obligations the payment of which
is guaranteed by, the United States of America or an interest
in any trust or fund that invests solely in such obligations
or repurchase agreements, properly secured, with respect to
such obligations.
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(2) direct obligations of agencies or instrumentalities of the
United States of America having a rating of A or higher by S&P
or A2 or higher by Moody's;
(3) a certificate of deposit issued by, or other
interest-bearing deposits with, a bank having its principal
place of business in the United States of America and having
equity capital of not less than $250,000,000;
(4) a certificate of deposit issued by, or other
interest-bearing deposits with, any other bank organized under
the laws of the United States of America or any state thereof,
provided that such deposit is either (i) insured by the
Federal Deposit Insurance Corporation or (ii) properly secured
by such bank by pledging direct obligations of the United
States of America having a market value not less than the face
amount of such deposits;
(5) the capital stock of and partnership interests in, and
loans made by the Borrower to, Controlled Partnerships and
Subsidiaries;
(6) prime commercial paper maturing within 270 days of the
acquisition thereof and, at the time of acquisition, having a
rating of A-1 or higher by S&P, or P-1 or higher by Moody's;
(7) eligible banker's acceptances, repurchase agreements and
tax-exempt municipal bonds having a maturity of less than one
year, in each case having a rating, or that is the full
recourse obligation of a person whose senior debt is rated, A
or higher by S&P or A2 or higher by Moody's;
(8) loans made by the Borrower or a Consolidated Entity in an
aggregate amount of $2,000,000 or less to employees of the
Borrower or of a Consolidated Entity;
(9) loans made by the Borrower or a Controlled Partnership in
an aggregate amount of $1,000,000 or less to limited partners
(or potential limited partners) of Controlled Partnerships for
the purpose of enabling such limited partners to acquire
limited partnership interests in Controlled Partnerships, to
operate their practices or to restructure partnership
interests;
(10) loans in an aggregate amount of up to $20,000,000 made by
the Borrower to the HEALTHSOUTH Employee Stock Benefit Plan;
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(11) scholarship loans made by the Borrower in an aggregate
amount not exceeding $1,000,000 to individuals who meet
certain eligibility requirements as established by the
Borrower from time to time;
(12) up to 100% of the outstanding shares of stock of
Caretenders Healthcorp (formerly known as Senior Services,
Inc.) provided that aggregate costs incurred to purchase such
shares shall not exceed $12,000,000;
(13) other investments of less than $5,000,000 in the
aggregate expressly approved in writing by the Agent and
investments of $5,000,000 or greater expressly approved in
writing by the Required Lenders;
(14) any other investment having a rating of A or higher
or A-1 or higher by S&P or A2 or higher or P-1 or higher
by Moody's;
(15) loans to health care practitioners and other persons not
to exceed in the aggregate $5,000,000;
(16) investments in Acacia Venture Partners, Wellmark,
HEALTHSMART, MedPartners and Austin Medical Office Building
which in the aggregate do not exceed $5,000,000; and
(17) additional investments existing on the Closing Date
and described in Exhibit H.
"Person" means an individual, partnership, corporation,
limited liability company, trust, unincorporated organization,
association, joint venture or a government or agency or political
subdivision thereof.
"Prime Rate" means the rate of interest per annum announced
publicly by the Agent as its prime rate from time to time.
"Principal Office" means the office of the Agent at
NationsBank, National Association, Independence Center, 15th Floor, NC1
001-15-04, Charlotte, North Carolina 28255, Attention: Agency Services,
or such other office and address as the Agent may from time to time
designate.
"Rate Hedging Obligations" means any and all obligations of
the Borrower or any Consolidated Entity, whether absolute or contingent
and howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (i) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
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rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, Dollar- denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts, warrants and
those commonly known as interest rate "swap" agreements; and (ii) any
and all cancellations, buybacks, reversals, terminations or assignments
of any of the foregoing.
"Rating" means the rating of senior unsecured Indebtedness of
the Borrower in effect at any time which rating is made by either of
Moody's or S&P.
"Regulation D" means Regulation D of the Board as the same may
be amended or supplemented from time to time.
"Reimbursement Obligation" shall mean, at any time, the
obligation of the Borrower with respect to any Letter of Credit to
reimburse the Issuing Bank and the Lenders to the extent of their
respective Participations (including by the receipt by the Issuing Bank
of proceeds of Loans pursuant to Section 3.2) for amounts theretofore
paid by the Issuing Bank pursuant to a drawing under such Letter of
Credit.
"Required Lenders" means, as of any date, Lenders on such date
having Credit Exposures (as defined below) aggregating at least 51% of
the aggregate Credit Exposures of all the Lenders on such date. For
purposes of the preceding sentence, the amount of the "Credit Exposure"
of each Lender shall be equal to the aggregate principal amount of the
Loans without regard to any Competitive Bid Loan, so long as there
exists no Event of Default, owing to such Lender plus the aggregate
unutilized amounts of such Lender's Line of Credit Commitment and
Revolving Credit Commitment plus the amount of such Lender's Applicable
Commitment Percentage of Letter of Credit Outstandings; provided that,
if any Lender shall have failed to pay to the Issuing Bank its
Applicable Commitment Percentage of any drawing under any Letter of
Credit resulting in an outstanding Reimbursement Obligation, such
Lender's Credit Exposure attributable to Letters of Credit and
Reimbursement Obligations shall be deemed to be held by the Issuing
Bank for purposes of this definition.
"Restricted Payment" means (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of
Borrower or any of its Consolidated Entities (other than those payable
or distributable solely to the Borrower) now or hereafter outstanding,
except a dividend payable solely in shares of a class of stock to the
holders of that class; (b) any redemption, conversion, exchange,
retirement or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of
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stock of the Borrower or any of its Consolidated Entities (other than
those payable or distributable solely to the Borrower) now or hereafter
outstanding; (c) any payment made to retire, or to obtain the surrender
of, any outstanding warrants, options or other rights to acquire shares
of any class of stock of the Borrower or any of its Consolidated
Entities now or hereafter outstanding; and (d) any issuance and sale of
capital stock of any Consolidated Entity of the Borrower (or any
option, warrant or right to acquire such stock) other than to the
Borrower.
"Revolving Credit Commitment" means, with respect to each
Lender, the obligation of such Lender to make Revolving Loans to the
Borrower up to an aggregate principal amount at any one time
outstanding equal to such Lender's Applicable Commitment Percentage of
the Total Revolving Credit Commitment.
"Revolving Credit Facility" means the facility described in
Section 2.1(a) providing for Loans to the Borrower by the Lenders in
the aggregate principal amount of the Total Revolving Credit
Commitment.
"Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Revolving Loans
then outstanding and all interest accrued thereon.
"Revolving Credit Termination Date" means (i) March 31, 2001
or (ii) such earlier date of termination of Lenders' obligations
pursuant to Section 9.1 upon the occurrence of an Event of Default, or
(iii) such date as the Borrower may voluntarily and permanently
terminate the Revolving Credit Facility by payment in full of all
Revolving Credit Outstandings, Competitive Bid Loans and Letter of
Credit Outstandings and cancellation of all Letters of Credit.
"Revolving Loan" means any borrowing pursuant to an Advance
under the Revolving Credit Facility in accordance with Section 2.1(a).
"Revolving Notes" means, collectively, the promissory notes of
the Borrower evidencing Revolving Loans executed and delivered to the
Lenders as provided in Section 2.6(a) substantially in the form of
Exhibit I, with appropriate insertions as to amounts, dates and names
of Lenders.
"S&P" means Standard & Poor's, a division of The McGraw Hill
Companies.
"Segment" means a portion of a Loan (or all thereof) with
respect to which a particular interest rate is (or is proposed to be)
applicable.
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"Single Employer Plan" means any employee pension benefit plan
covered by Title IV of ERISA in respect of which the Borrower or any
Subsidiary is an "employer" as described in Section 4001(b) of ERISA
and which is not a Multiemployer Plan.
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(i) the fair value of its assets (both at fair
valuation and at present fair saleable value on an orderly
basis) is in excess of the total amount of its liabilities,
including contingent obligations; and
(ii) it is then able and expects to be able to pay
its debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
"Stated Termination Date" means March 31, 1997 or such later
date as the parties may agree pursuant to Section 2.14.
"Subordinated Debt" means any unsecured Indebtedness of the
Borrower or any Consolidated Entity (other than inter-company
Indebtedness) which is subordinated in right of payment in all respects
to the Obligations in a manner reasonably acceptable to the Agent.
"Subsidiary" means any corporation or other entity in which
more than 50% of its outstanding voting stock or more than 50% of all
equity interests is owned directly or indirectly by the Borrower and/or
by one or more of the Borrower's Subsidiaries.
"Swap Agreement" means one or more agreements between the
Borrower and any Person with respect to Indebtedness evidenced by any
or all of the Notes, on terms mutually acceptable to Borrower and such
Person and approved by each of the Lenders, which agreements create
Rate Hedging Obligations; provided, however, that no such approval of
the Lenders shall be required to the extent such agreements are entered
into between the Borrower and any Lender.
"Syndicated Loans" shall mean the Revolving Loans and Line of
Credit Loans provided for by Section 2.1, which may be Base Rate Loans
or Eurodollar Rate Loans.
"Termination Event" means: (i) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder (unless the
notice requirement has been waived by applicable regulation); or (ii)
the withdrawal of the Borrower or any ERISA Affiliate from a Pension
Plan during a plan year
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in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or was deemed such under Section 4068(f) of ERISA;
or (iii) the termination of a Pension Plan, the filing of a notice of
intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA; or (iv) the
institution of proceedings to terminate a Pension Plan by the PBGC; or
(v) any other event or condition which would constitute grounds under
Section 4042(a) of ERISA for the termination of, or the appointment of
a trustee to administer, any Pension Plan; or (vi) the partial or
complete withdrawal of the Borrower or any ERISA Affiliate from a
Multiemployer Plan; or (vii) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA; or (viii) any event or
condition which results in the reorganization or insolvency of a
Multiemployer Plan under Section 4241 or Section 4245 of ERISA,
respectively; or (ix) any event or condition which results in the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by the PBGC of proceedings to terminate a Multiemployer
Plan under Section 4042 of ERISA.
"Total Letter of Credit Commitment" means an amount not to exceed
$75,000,000.
"Total Line of Credit Commitment" means a principal amount
equal to $350,000,000, as reduced from time to time in accordance with
Section 2.1(b) and Section 2.8.
"Total Revolving Credit Commitment" means a principal amount
equal to $900,000,000, as reduced from time to time in accordance with
Section 2.1(a) and Section 2.8.
"Type" shall have the meaning assigned to such term in Section
1.3.
"Unused Amount" shall mean with respect to each Lender, (a)
the Revolving Credit Commitment of such Lender less (b) such Lender's
pro rata share of outstanding Revolving Loans and Letter of Credit
Outstandings less (c) the outstanding principal amount of all
Competitive Bid Loans then held by such Lender; provided, that in no
event shall such amount be a negative number.
"Vanderbilt" shall mean Vanderbilt Stallworth Rehabilitation
Hospital, L.P., the partners of which are the Borrower, Vanderbilt
University and Vanderbilt Health Services.
"Voting Stock" means shares of Capital Stock issued by a
corporation, or equivalent interests in any other Person, the holders
of which are ordinarily, in the absence of contingencies, entitled to
vote for the election of directors (or persons performing similar
functions) of such Person, even
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if the right so to vote has been suspended by the happening of such a
contingency.
1.2 Rules of Interpretation.
-----------------------
(a) All accounting terms not specifically defined herein
shall have the meanings assigned to such terms and shall be interpreted
in accordance with GAAP applied on a Consistent Basis.
(b) The headings, subheadings and table of contents used
herein or in any other Loan Document are solely for convenience of
reference and shall not constitute a part of any such document or
affect the meaning, construction or effect of any provision thereof.
(c) Except as otherwise expressly provided, references
herein to articles, sections, paragraphs, clauses, annexes, appendices,
exhibits and schedules are references to articles, sections,
paragraphs, clauses, annexes, appendices, exhibits and schedules in or
to this Agreement.
(d) All definitions set forth herein or in any other Loan
Document shall apply to the singular as well as the plural form of such
defined term, and all references to the masculine gender shall include
reference to the feminine or neuter gender, and vice versa, as the
context may require.
(e) When used herein or in any other Loan Document, words
such as "hereunder", "hereto", "hereof" and "herein" and other words of
like import shall, unless the context clearly indicates to the
contrary, refer to the whole of the applicable document and not to any
particular article, section, subsection, paragraph or clause thereof.
(f) References to "including" means including without
limiting the generality of any description preceding such term, and for
purposes hereof the rule of ejusdem generis shall not be applicable to
limit a general statement, followed by or referable to an enumeration
of specific matters, to matters similar to those specifically
mentioned.
(g) All dates and times of day specified herein shall refer
to such dates and times at Charlotte, North Carolina.
(h) Each of the parties to the Loan Documents and their
counsel have reviewed and revised, or requested (or had the opportunity
to request) revisions to, the Loan Documents, and any rule of
construction that ambiguities are to be resolved against the drafting
party shall be inapplicable in the construing and interpretation of the
Loan Documents and all exhibits, schedules and appendices thereto.
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(i) Any reference to an officer of the Borrower or any
other Person by reference to the title of such officer shall be deemed
to refer to each other officer of such Person, however titled,
exercising the same or substantially similar functions.
(j) All references to any agreement or document as
amended, modified or supplemented, or words of similar effect, shall
mean such document or agreement, as the case may be, as amended,
modified or supplemented from time to time only as and to the extent
permitted therein and in the Loan Documents.
1.3. Classes and Types of Loans. Loans hereunder are distinguished
by "Class" and by "Type". The "Class" of a Loan refers to whether such Loan is a
Competitive Bid Loan or a Syndicated Loan (and if a Syndicated Loan, a Revolving
Loan or Line of Credit Loan), each of which constitutes a Class. The "Type" of a
Loan refers to whether such Loan is a Base Rate Loan, a Eurodollar Rate Loan, an
Absolute Rate Loan or a Eurodollar Market Loan, each of which constitutes a
Type. Loans may be identified by both Class and Type.
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ARTICLE II
The Loans
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2.1. Syndicated Loans.
----------------
(a) Revolving Credit Facility. Subject to the terms and
conditions of this Agreement, each Lender severally agrees to make Advances to
the Borrower under the Revolving Credit Facility from time to time from the
Closing Date until the Revolving Credit Termination Date on a pro rata basis as
to the total borrowing requested by the Borrower on any day determined by such
Lender's Applicable Commitment Percentage up to but not exceeding the Revolving
Credit Commitment of such Lender, provided, however, that the Lenders will not
be required and shall have no obligation to make any such Advance (i) so long as
a Default or an Event of Default has occurred and is continuing or (ii) if the
maturity of any of the Notes has been accelerated as a result of an Event of
Default; provided further, however, that immediately after giving effect to each
such Advance, the aggregate principal amount of Revolving Credit Outstandings
plus Letter of Credit Outstandings plus outstanding Competitive Bid Loans shall
not exceed the Total Revolving Credit Commitment. Within such limits, the
Borrower may borrow, repay and reborrow under the Revolving Credit Facility on a
Business Day from the Closing Date until, but (as to borrowings and
reborrowings) not including, the Revolving Credit Termination Date; provided,
however, that (y) no Revolving Loan that is a Eurodollar Rate Loan shall be made
which has an Interest Period that extends beyond the Revolving Credit
Termination Date and (z) each Revolving Loan that is a Eurodollar Rate Loan may,
subject to the provisions of Section 2.4, be repaid only on the last day of the
Interest Period with respect thereto unless such payment is accompanied by the
additional payment, if any, required by Section 4.2.
(b) Line of Credit Facility. Subject to the terms and
conditions of this Agreement, each Lender severally agrees to make Advances to
the Borrower under the Line of Credit Facility from time to time from the
Closing Date until the Line of Credit Termination Date on a pro rata basis as to
the total borrowing requested by the Borrower on any day determined by such
Lender's Applicable Commitment Percentage up to but not exceeding the Line of
Credit Commitment of such Lender, provided, however, that the Lenders will not
be required and shall have no obligation to make any such Advance (i) so long as
a Default or an Event of Default has occurred and is continuing or (ii) if the
maturity of any of the Notes has been accelerated as a result of an Event of
Default; provided further, however, that immediately after giving effect to each
such Advance, the principal amount of Line of Credit Outstandings shall not
exceed the Total Line of Credit Commitment. Within such limits, the Borrower may
borrow, repay and reborrow under the Line of Credit Facility on a Business Day
from the Closing Date until, but (as to borrowings and reborrowings) not
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including, the Line of Credit Termination Date; provided, however, that (y) no
Line of Credit Loan that is a Eurodollar Rate Loan shall be made which has an
Interest Period that extends beyond the Line of Credit Termination Date and (z)
each Line of Credit Loan that is a Eurodollar Rate Loan may, subject to the
provisions of Section 2.4, be repaid only on the last day of the Interest Period
with respect thereto unless such payment is accompanied by the additional
payment, if any, required by Section 4.2.
(c) Amounts. The aggregate unpaid principal amount of
the Revolving Credit Outstandings plus Letter of Credit Outstandings plus
outstanding Competitive Bid Loans shall not exceed at any time the Total
Revolving Credit Commitment, and the aggregate unpaid principal amount of the
Line of Credit Outstandings shall not exceed the Total Line of Credit Commitment
and, in the event there shall be outstanding any such excess, the Borrower shall
immediately make such payments and prepayments as shall be necessary to comply
with this restriction. Each Syndicated Loan hereunder, other than Base Rate
Refunding Loans, and each conversion under Section 2.9, shall be in an amount of
at least $5,000,000, and, if greater than $5,000,000, an integral multiple of
$1,000,000.
(d) Advances. An Authorized Representative shall give
the Agent (1) at least three (3) Business Days' irrevocable written notice by
telefacsimile transmission of a Borrowing Notice or Interest Rate Selection
Notice (as applicable) with appropriate insertions, effective upon receipt, of
each Syndicated Loan that is a Eurodollar Rate Loan (whether representing an
additional borrowing hereunder or the conversion of a borrowing hereunder from
Base Rate Loans to Eurodollar Rate Loans) prior to 10:30 A.M. and (2)
irrevocable written notice by telefacsimile transmission of a Borrowing Notice
or Interest Rate Selection Notice (as applicable) with appropriate insertions,
effective upon receipt, of each Syndicated Loan (other than Base Rate Refunding
Loans to the extent the same are effected without notice pursuant to Section
2.1(d)(iv)) that is a Base Rate Loan (whether representing an additional
borrowing hereunder or the conversion of borrowing hereunder from Eurodollar
Rate Loans to Base Rate Loans) prior to 10:30 A.M. on the day of such proposed
Syndicated Loan. Each such notice shall specify the amount of the borrowing,
whether the Loan is a Revolving Loan or Line of Credit Loan, the Type of Loan
(Base Rate or Eurodollar Rate), the date of borrowing and, if a Eurodollar Rate
Loan, the Interest Period to be used in the computation of interest. Notice of
receipt of such Borrowing Notice or Interest Rate Selection Notice, as the case
may be, together with the amount of each Lender's portion of an Advance
requested thereunder, shall be provided by the Agent to each Lender by
telefacsimile transmission with reasonable promptness, but (provided the Agent
shall have received such notice by 10:30 A.M.) not later than 1:00 P.M. on the
same day as the Agent's receipt of such notice.
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(ii) Not later than 2:00 P.M. on the date specified for each
borrowing under this Section 2.1, each Lender shall, pursuant to the terms and
subject to the conditions of this Agreement, make the amount of the Loan or
Loans to be made by it on such day available by wire transfer to the Agent in
the amount of its pro rata share, determined according to such Lender's
Applicable Commitment Percentage of the Syndicated Loan or Syndicated Loans to
be made on such day. Such wire transfer shall be directed to the Agent at the
Principal Office and shall be in the form of Dollars constituting immediately
available funds. The amount so received by the Agent shall, subject to the terms
and conditions of this Agreement, be made available to the Borrower by delivery
of the proceeds thereof as shall be directed in the applicable Borrowing Notice
by the Authorized Representative and reasonably acceptable to the Agent.
(iii) The Borrower shall have the option to elect the duration of the
initial and any subsequent Interest Periods and to convert the Syndicated Loans
in accordance with Section 2.9. Eurodollar Rate Loans and Base Rate Loans may be
outstanding at the same time, provided, however, there shall not be outstanding
at any one time Loans (whether Syndicated Loans or Competitive Bid Loans) having
more than eight (8) different Interest Periods. If the Agent does not receive a
Borrowing Notice or an Interest Rate Selection Notice giving notice of election
of the duration of an Interest Period or of conversion of any Loan to or
continuation of a Loan as a Eurodollar Rate Loan by the time prescribed by
Section 2.1(d) or 2.9, the Borrower shall be deemed to have elected to convert
such Segment to (or continue such Segment as) a Base Rate Loan until the
Borrower notifies the Agent in accordance with Section 2.9.
(iv) Notwithstanding the foregoing, if a drawing is made under any
Letter of Credit, such drawing is honored by the Issuing Bank prior to the
Revolving Credit Termination Date, and the Borrower shall not immediately fully
reimburse the Issuing Bank in respect of such drawing, (A) provided that the
conditions to making a Revolving Loan as herein provided shall then be
satisfied, the Reimbursement Obligation arising from such drawing shall be paid
to the Issuing Bank by the Agent without the requirement of notice to or from
the Borrower from immediately available funds which shall be advanced as a Base
Rate Refunding Loan by each Lender under the Revolving Credit Facility in an
amount equal to such Lender's Applicable Commitment Percentage of such
Reimbursement Obligation, and (B) if the conditions to making a Revolving Loan
as herein provided shall not then be satisfied, each of the Lenders shall fund
by payment to the Agent (for the benefit of the Issuing Bank) in immediately
available funds the purchase from the Issuing Bank of their respective
Participations in the related Reimbursement Obligation based on their respective
Applicable Commitment Percentages. If a drawing is presented under any Letter of
Credit in accordance with the terms thereof and the Borrower shall not
immediately reimburse the Issuing Bank in respect thereof, then notice of such
drawing or payment shall be provided promptly by the
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Issuing Bank to the Agent and the Agent shall provide notice to each Lender by
telephone or telefacsimile transmission. If notice to the Lenders of a drawing
under any Letter of Credit is given by the Agent at or before 12:00 noon on any
Business Day, each Lender shall, pursuant to the conditions specified in this
Section 2.1(d)(iv), either make a Base Rate Refunding Loan or fund the purchase
of its Participation in the amount of such Lender's Applicable Commitment
Percentage of such drawing or payment and shall pay such amount to the Agent for
the account of the Issuing Bank at the Principal Office in Dollars and in
immediately available funds before 2:30 P.M. on the same Business Day. If notice
to the Lenders of a drawing under a Letter of Credit is given by the Agent after
12:00 noon on any Business Day, each Lender shall, pursuant to the conditions
specified in this Section 2.1(d)(iv), either make a Base Rate Refunding Loan or
fund the purchase of its Participation in the amount of such Lender's Applicable
Commitment Percentage of such drawing or payment and shall pay such amount to
the Agent for the account of the Issuing Bank at the Principal Office in Dollars
and in immediately available funds before 12:00 noon on the next following
Business Day. Any such Base Rate Refunding Loan shall be advanced as, and shall
continue as, a Base Rate Loan unless and until the Borrower converts such Base
Rate Loan in accordance with the terms of Section 2.9.
2.2. Competitive Bid Loans.
---------------------
(a) In addition to borrowings of Syndicated Loans, at any time
prior to the Revolving Credit Termination Date the Borrower may, as set forth in
this Section 2.2, request the Lenders to make offers to make Competitive Bid
Loans to the Borrower in Dollars. The Lenders may, but shall have no obligation
to, make such offers and the Borrower may, but shall have no obligation to,
accept any such offers in the manner set forth in this Section 2.2. Competitive
Bid Loans may be Eurodollar Market Loans or Absolute Rate Loans (each a "Type"
of Competitive Bid Loan), provided that:
(i) the aggregate amount of outstanding Competitive Bid
Loans shall not exceed the Total Revolving Credit Commitment
less the sum of the principal amount of Revolving Credit
Outstandings and Letter of Credit Outstandings;
(ii) there may be no more than eight (8) different
Interest Periods for both Syndicated Loans and Competitive Bid
Loans outstanding at the same time (for which purpose Interest
Periods described in different lettered clauses of the
definition of the term "Interest Period" shall be deemed to be
different 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
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amount equal to such Lender's Revolving Credit Commitment;
(iv) the aggregate principal amount of all Competitive Bid
Loans, together with the sum of (i) the aggregate principal
amount of all outstanding Revolving Loans and (ii) the Letter
of Credit Outstandings shall not exceed the Total Revolving
Credit Commitment at such time; and
(v) no Competitive Bid Loan shall have a maturity date
subsequent to the Revolving Credit Termination Date.
(b) When the Borrower wishes to request offers to make
Competitive Bid Loans, it shall give the Agent (which shall promptly notify the
Lenders) notice (a "Competitive Bid Quote Request") to be received no later than
11:00 a.m. on (x) the fourth Business Day prior to the date of borrowing
proposed therein, in the case of a Eurodollar Auction or (y) the Business Day
next preceding the date of borrowing proposed therein, in the case of an
Absolute Rate Auction (or, in any such case, such other time and date as the
Borrower and the Agent, with the consent of the Required Lenders, may agree).
The Borrower may request offers to make Competitive Bid Loans for up to three
(3) different Interest Periods in a single notice (for which purpose Interest
Periods in different lettered clauses of the definition of the term "Interest
Period" shall be deemed to be different Interest Periods even if they are
coterminous); provided that the request for each separate Interest Period shall
be deemed to be a separate Competitive Bid Quote Request for a separate
borrowing (a "Competitive Bid Borrowing") and there shall not be outstanding at
any one time more than four (4) Competitive Bid Borrowings. Each such
Competitive Bid Quote Request shall be substantially in the form of Exhibit J
and shall specify as to each Competitive Bid Borrowing:
(i) the proposed date of such Competitive Bid
Borrowing, which shall be a Business Day;
(ii) the aggregate amount of such Competitive Bid
Borrowing, which shall be at least $10,000,000 (or a larger
integral multiple of $1,000,000) but shall not cause the
limits specified in Sec