EXHIBIT 10.14
CREDIT AGREEMENT
Dated as of May 11, 1999
among
HEALTHTRUST, INC. - THE HOSPITAL COMPANY
and
CERTAIN SUBSIDIARIES
FROM TIME TO TIME PARTY HERETO,
as Borrower,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
CITICORP USA, INC.
and
THE CHASE MANHATTAN BANK,
as Syndication Agents
CREDIT LYONNAIS NEW YORK BRANCH
and
SOCIETE GENERALE,
as Co-Agents
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Administrative Agent
NATIONSBANC XXXXXXXXXX SECURITIES, LLC,
as Lead Arranger and Sole Book Manager
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS................................................... 1
1.1 Definitions..................................................... 1
1.2 Computation of Time Periods..................................... 1
1.3 Accounting Terms................................................ 31
SECTION 2 CREDIT FACILITIES............................................. 32
2.1 Commitments..................................................... 32
2.2 Method of Borrowing............................................. 33
2.3 Interest........................................................ 35
2.4 Repayment....................................................... 35
2.5 Notes........................................................... 37
2.6 Additional Provisions relating to Letters of Credit............. 37
2.7 Additional Provisions relating to Swingline Loans............... 41
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES................ 42
3.1 Default Rate.................................................... 42
3.2 Continuation and Conversion..................................... 42
3.3 Prepayments..................................................... 43
3.4 Reduction and Termination of Revolving Commitments.............. 46
3.5 Fees............................................................ 46
3.6 Capital Adequacy................................................ 47
3.7 Limitation on Eurodollar Loans.................................. 47
3.8 Illegality...................................................... 48
3.9 Requirements of Law............................................. 48
3.10 Treatment of Affected Loans.................................... 49
3.11 Taxes.......................................................... 50
3.12 Compensation................................................... 51
3.13 Pro Rata Treatment............................................. 52
3.14 Sharing of Payments............................................ 53
3.15 Payments, Computations, Etc.................................... 54
3.16 Evidence of Debt............................................... 56
SECTION 4 [INTENTIONALLY OMITTED]....................................... 56
SECTION 5 CONDITIONS.................................................... 57
5.1 Closing Conditions.............................................. 57
5.2 Conditions to all Extensions of Credit.......................... 59
5.3 Conditions to Release of HTI from Credit Agreement.............. 60
5.4 Conditions to Release of Holdings from the Credit Agreement..... 62
5.5 Conditions to Release of HTI from HTI Guaranty Agreement........ 63
SECTION 6 REPRESENTATIONS AND COVENANTS OF HTI.......................... 68
6.1 Financial Condition and Financial Reporting..................... 68
6.2 Notices......................................................... 69
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6.3 Existence and Authority......................................... 69
6.4 Compliance with Requirements of Law............................. 69
6.5 Governmental Regulations, Etc................................... 70
6.6 Legal Proceedings............................................... 70
6.7 No Defaults..................................................... 70
6.8 Purpose of Extensions of Credit................................. 70
6.9 No Material Misstatements....................................... 70
6.10 Indebtedness................................................... 71
6.11 Ownership of Property; Liens................................... 71
6.12 Mergers; Acquisitions and Asset Sales.......................... 71
6.13 Investments.................................................... 72
6.14 Restricted Payments............................................ 72
6.15 Transactions with Affiliates................................... 72
SECTION 7 REPRESENTATIONS AND WARRANTIES................................ 72
7.1 Financial Condition............................................. 72
7.2 No Changes or Restricted Payments............................... 73
7.3 Organization; Existence; Compliance with Law.................... 73
7.4 Power; Authorization; Enforceable Obligations................... 74
7.5 No Legal Bar.................................................... 74
7.6 No Material Litigation and Disputes............................. 74
7.7 No Defaults..................................................... 75
7.8 Ownership and Operation of Property............................. 75
7.9 Intellectual Property........................................... 75
7.10 No Burdensome Restrictions..................................... 75
7.11 Taxes.......................................................... 76
7.12 ERISA.......................................................... 76
7.13 Governmental Regulations, Etc.................................. 77
7.14 Subsidiaries................................................... 78
7.15 Purpose of Extensions of Credit................................ 78
7.16 Environmental Matters.......................................... 78
7.17 Year 2000 Compliance........................................... 79
7.18 No Material Misstatements...................................... 80
7.19 Labor Matters.................................................. 80
7.20 Security Documents............................................. 80
7.21 Location of Real Property and Leased Premises.................. 82
7.22 Solvency....................................................... 82
7.23 Distribution Agreement......................................... 82
SECTION 8 AFFIRMATIVE COVENANTS......................................... 83
8.1 Information Covenants........................................... 83
8.2 Preservation of Existence and Franchises........................ 87
8.3 Books and Records............................................... 87
8.4 Compliance with Law............................................. 87
8.5 Payment of Taxes and Other Indebtedness......................... 87
8.6 Insurance....................................................... 87
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8.7 Maintenance of Property........................................ 88
8.8 Performance of Obligations..................................... 88
8.9 Use of Proceeds................................................ 88
8.10 Audits/Inspections............................................ 88
8.11 Financial Covenants........................................... 89
8.12 Additional Guarantors......................................... 90
8.13 Pledged Assets................................................ 91
8.14 Year 2000 Compliance.......................................... 92
SECTION 9 NEGATIVE COVENANTS........................................... 92
9.1 Indebtedness................................................... 92
9.2 Liens.......................................................... 93
9.3 Nature of Business............................................. 93
9.4 Merger and Consolidation, Dissolution and Acquisitions......... 94
9.5 Asset Dispositions............................................. 95
9.6 Investments.................................................... 96
9.7 Restricted Payments............................................ 96
9.8 Modifications and Payments in respect of Funded Debt........... 96
9.9 Transactions with Affiliates................................... 96
9.10 Fiscal Year; Organizational Documents......................... 97
9.11 Limitation on Restricted Actions.............................. 97
9.12 Ownership of Subsidiaries; Limitations on Parent.............. 97
9.13 Sale Leasebacks............................................... 98
9.14 No Further Negative Pledges................................... 98
9.15 Operating Lease Obligations................................... 98
SECTION 10 EVENTS OF DEFAULT............................................ 98
10.1 Events of Default............................................. 98
10.2 Acceleration; Remedies........................................ 101
SECTION 11 AGENCY PROVISIONS............................................ 102
11.1 Appointment, Powers and Immunities............................ 102
11.2 Reliance by Administrative Agent.............................. 103
11.3 Defaults...................................................... 103
11.4 Rights as a Lender............................................ 104
11.5 Indemnification............................................... 104
11.6 Non-Reliance on Administrative Agent and Other Lenders........ 105
11.7 Successor Administrative Agent................................ 105
SECTION 12 MISCELLANEOUS................................................ 105
12.1 Notices....................................................... 105
12.2 Right of Set-Off; Adjustments................................. 107
12.3 Benefit of Agreement.......................................... 107
12.4 No Waiver; Remedies Cumulative................................ 109
12.5 Expenses; Indemnification..................................... 109
12.6 Amendments, Waivers and Consents............................. 110
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12.7 Counterparts.................................................. 112
12.8 Headings...................................................... 113
12.9 Survival...................................................... 113
12.10 Governing Law; Submission to Jurisdiction; Venue............. 113
12.11 Severability................................................. 114
12.12 Entirety..................................................... 114
12.13 Binding Effect; Termination.................................. 114
12.14 Confidentiality.............................................. 114
12.15 Source of Funds.............................................. 115
12.16 Conflict..................................................... 116
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SCHEDULES
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Schedule 2.1 Lenders and Commitments
Schedule 2.2(a)(i) Form of Notice of Borrowing
Schedule 2.2(a)(ii) Form of Notice of Request of Letter of Credit
Schedule 2.5-1 Form of Revolving Note
Schedule 2.5-2 Form of Bridge Note
Schedule 2.5-3 Form of Tranche A Term Note
Schedule 2.5-4 Form of Tranche B Term Note
Schedule 2.6(b) Existing Letters of Credit
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 3.3(b) Approved Asset Dispositions
Schedule 5.3(a) Form of Assumption Agreement
Schedule 5.3(b) Form of Release of Borrower
Schedule 5.5 Form of Release of Guaranty
Schedule 7.6 Litigation
Schedule 7.8 Liens
Schedule 7.9 Intellectual Property
Schedule 7.14 Subsidiaries
Schedule 7.19 Labor Matters
Schedule 7.21(a) Mortgaged Properties
Schedule 7.21(b) Locations of Collateral
Schedule 7.21(c) Chief Executive Offices/Principal Places
of Business
Schedule 8.1(c) Form of Officer's Compliance Certificate
Schedule 8.6 Insurance
Schedule 8.13 Excluded Property
Schedule 9.1 Indebtedness
Schedule 9.6 Investments
Schedule 12. 1 Lenders' Addresses
Schedule 12.3(b) Form of Assignment and Acceptance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of May 11, 1999 (as amended, modified,
restated or supplemented from time to time, the "Credit Agreement"), is by and
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among HEALTHTRUST, INC. - THE HOSPITAL COMPANY, a Delaware corporation ("HTI"),
---
and certain Subsidiaries of HTI which may hereafter become the Borrower in
accordance with the provisions hereof (the "Borrower"), the Lenders (as defined
--------
herein), CITICORP USA, INC. and THE CHASE MANHATTAN BANK, as Syndication Agents,
CREDIT LYONNAIS NEW YORK BRANCH and SOCIETE GENERALE, as Co-Agents, and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Administrative Agent for the
Lenders (in such capacity, the "Administrative Agent").
--------------------
W I T N E S S E T H
WHEREAS, HTI has requested that the Lenders provide $465 million in credit
facilities for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facilities
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
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1.1 Definitions.
-----------
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition", by any Person, means the acquisition by such Person of
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(i) assets, property and/or operations of another Person or (ii) the
Capital Stock of another Person, if such Person would be a Subsidiary after
giving effect to such acquisition, in each case whether or not involving a
merger or consolidation with such other Person.
"Administrative Agent" shall have the meaning assigned to such term in
--------------------
the heading hereof, together with any successors or assigns.
"Administrative Agent's Fee Letter" means that certain letter
---------------------------------
agreement, dated as of April 6, 1999, between the Administrative Agent and
HTI, as amended, modified, restated or supplemented from time to time.
"Affiliate" means, with respect to any Person, any other Person (i)
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directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person or (ii) directly or indirectly
owning or holding five percent (5%) or more of the Capital Stock in such
Person. For purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agency Services Address" means the notice address for the
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Administrative Agent set forth in Section 12.1 or such other address as may
be identified by written notice from the Administrative Agent to the
Borrower.
"Aggregate Revolving Committed Amount" means the aggregate amount of
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Revolving Commitments in effect from time to time, as referenced in Section
2.1(a), being initially ONE HUNDRED TWENTY-FIVE MILLION DOLLARS
($125,000,000).
"Applicable Lending Office" means, for each Lender, the office of such
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Lender (or of an Affiliate of such Lender) as such Lender may from time to
time specify to the Administrative Agent and the Borrower by written notice
as the office by which its Eurodollar Loans are made and maintained.
"Applicable Percentage" means for any day, the rate per annum set
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forth below opposite the applicable Consolidated Total Leverage Ratio then
in effect, it being understood that the Applicable Percentage for (i) Base
Rate Loans shall be the percentage set forth under the column "Base Rate
Loans", (ii) Eurodollar Loans shall be the percentage set forth under the
column "Eurodollar Loans", and (iii) the Commitment Fee shall be the
percentage set forth under the column "Commitment Fee".
Revolving Loans,
Tranche A Term Loan and Bridge Loan Tranche B Term Loan
----------------------------------- -------------------
Consolidated
Total Leverage Eurodollar Base Rate Commitment Eurodollar Base Rate
Ratio Loans Loans Fee Loans Loans
----- ----- ----- --- ----- -----
*4.25:1.0 3.25% 2.25% 0.625% 4.00% 3.00%
*3.75:1.0 but less than 4.25:1.0 3.00% 2.00% 0.625% 4.00% 3.00%
*3.25:1.0 but less than 3.75:1.0 2.75% 1.75% 0.500% 4.00% 3.00%
*2.75:1.0 but less than 3.25:1.0 2.25% 1.25% 0.500% 4.00% 3.00%
less than 2.75:1.0 1.75% 0.75% 0.500% 4.00% 3.00%
The Applicable Percentage shall be determined and adjusted quarterly on the
date (each a "Rate Determination Date") five (5) Business Days after the
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date by which the annual and quarterly compliance certificates and related
financial statements and information are required in accordance with the
provisions of Sections 8.1(a), (b) and (c) (the "Required Financial
------------------
Information"), as appropriate; provided that:
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* More than and equal to
2
(a) the initial Applicable Percentages shall be (i) with
respect to Revolving Loans, the Bridge Loan and the Tranche A Term
Loan, (A) in the case of Eurodollar Loans, 3.25%, (B) in the case of
Base Rate Loans, 2.25% and (C) in the case of the Commitment Fee,
0.625%, and (ii) with respect to the Tranche B Term Loan, (A) in the
case of Eurodollar Loans, 4.00% and (B) in the case of Base Rate
Loans, 3.00%, and such initial Applicable Percentages shall remain in
effect for a period of six months following the Closing Date,
whereupon the pricing level shall be adjusted on the basis of the most
recent quarterly compliance certificate and related annual or
quarterly financial statements and information as are then available
and shall remain in effect until the next Rate Determination Date, and
(b) notwithstanding the foregoing, in the event an annual
or quarterly compliance certificate and related financial statements
and information are not delivered timely to the Agency Services
Address by the date required by Sections 8.1(a), (b) and (c), as
appropriate, the Applicable Percentages shall be based on the highest
(most expensive) pricing level until such time as an appropriate
compliance certificate and related financial statements and
information are delivered, whereupon the applicable pricing level
shall be adjusted based on the information contained in such
compliance certificate and related financial statements and
information.
Subject to the qualifications set forth above, each Applicable Percentage
shall be effective from a Rate Determination Date until the next such Rate
Determination Date. The Administrative Agent shall determine the
appropriate Applicable Percentages in the pricing matrix promptly upon
receipt of the quarterly or annual compliance certificate and related
financial information and shall promptly notify the Borrower and the
Lenders of any change thereof. Such determinations by the Administrative
Agent shall be conclusive absent manifest error. Adjustments in the
Applicable Percentages shall be effective as to existing Extensions of
Credit as well as new Extensions of Credit made thereafter.
"Approved Asset Disposition" shall mean and include (i) the sale or
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other disposition by any member of the Consolidated Group of the property
described on Schedule 3.3(b) and (ii) receipt by any member of the
Consolidated Group of any cash insurance proceeds or condemnation award
payable by reason of loss, physical destruction or damage, taking or
similar event with respect to any of the property described on Schedule
--------
3.3(b).
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"Asset Disposition" shall mean and include (i) the sale, lease or
other disposition of any property or asset by a member of the Consolidated
Group (including the Capital Stock of a Subsidiary), and (ii) receipt by
any member of the Consolidated Group of any cash insurance proceeds or
condemnation award payable by reason of theft, loss, physical destruction
or damage, taking or similar event with respect to any of their property or
assets; but for purposes hereof shall not include, in any event, (A) the
sale of inventory in the ordinary course of business, (B) the sale, lease
or other disposition of machinery and
3
equipment which is no longer used or useful in the conduct of business or
which is worn-out, (C) a sale or disposition which would constitute an
Equity Transaction hereunder, (D) a sale, lease, transfer or disposition of
property or assets to a Domestic Credit Party other than Holdings, (E) use
or operating agreements or short-term operating leases entered into by a
Credit Party as owner or lessor with respect to personal property in the
ordinary course of business and on market terms, (F) the existing leases of
Overland Park Regional Medical Center and Independence Regional Health
Center and the related ambulatory surgical centers (provided that any
exercise of a put or call option (or other purchase option) thereunder
shall be deemed an "Asset Disposition"), (G) operating leases of office
space in the ordinary course of business and on market terms, (H) operating
leases of real property (other than Principal Property) in the ordinary
course of business and on market terms, (I) operating leases of equipment
and machinery deemed in good faith by a Credit Party to be temporarily
surplus and on market terms and (J) for purposes of Section 9.5, but not
for purposes of Section 3.3, any sale, lease or other disposition (or any
series or relates sales, leases or other dispositions) of any Property
which has an aggregate fair market value of less than $100,000.
"Assumption Agreement" means an Assumption Agreement substantially in
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the form of Schedule 5.3(a) hereto, executed and delivered by Holdings in
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accordance with Section 5.3(a) or Triad in accordance with Section 5.4(a).
"Bank of America" means Bank of America National Trust and Savings
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Association and its successors.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
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States Code, as amended, modified, succeeded or replaced from time to time.
"Bankruptcy Event" means, with respect to any Person, the occurrence
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of any of the following with respect to such Person: (i) a court or
governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of such Person in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or ordering the winding up or
liquidation of its affairs; or (ii) there shall be commenced against such
Person an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or any case, proceeding or
other action for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or for the winding up or
liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged or
unbonded for a period of sixty (60) consecutive days; or (iii) such Person
shall commence a voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or consent to the entry of
an order for relief in an involuntary case under any such law, or consent
to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such
Person or for any substantial part of its Property or make any general
assignment for the benefit of creditors; or (iv) such Person shall be
unable to, or shall admit in writing its inability to, pay its debts
generally as they become due.
4
"Base Rate" means, for any day, the rate per annum equal to the higher
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of (a) the Federal Funds Rate for such day plus one-half of one percent
(0.5%) and (b) the rate of interest publicly announced from time to time by
Bank of America in San Francisco, California as its reference rate (the
"Reference Rate") for such day. The Reference Rate is a rate set by Bank of
--------------
America based upon various factors including Bank of America's costs and
desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate. Any change in the Base Rate due to a change
in the Reference Rate or the Federal Funds Rate shall be effective on the
effective date of such change in the Reference Rate or Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate determined
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by reference to the Base Rate.
"Borrower" means (a) prior to the Holdings Group Joinder Event, HTI,
--------
(b) after the Holdings Group Joinder Event (but prior to the Triad Group
Joinder Event), Holdings and (c) after the Triad Group Joinder Event,
Triad.
"Borrower Pledge Agreement" means the pledge agreement given by Triad
-------------------------
to the Administrative Agent to secure the obligations of Triad under the
Credit Documents, as amended and modified.
"Borrower Security Agreement" means the security agreement given by
---------------------------
Triad to the Administrative Agent to secure the obligations of Triad under
the Credit Documents, as amended and modified.
"Bridge Lenders" means Lenders holding Bridge Loan Commitments, as
--------------
identified on Schedule 2.1, and their successors and assigns.
------------
"Bridge Loan" shall have the meaning assigned to such term in Section
-----------
2.1(d).
"Bridge Loan Commitment" means, with respect to each Bridge Lender,
----------------------
the commitment of such Lender to make Bridge Loan advances in an aggregate
principal amount up to such Bridge Lender's Bridge Loan Committed Amount
(and for purposes of making determinations of Required Lenders and for
purposes of calculations referred to in Section 12.6(b), the principal
amount outstanding on the Bridge Loan).
"Bridge Loan Commitment Percentage" means, for each Bridge Lender, a
---------------------------------
fraction (expressed as a percentage) the numerator of which is the amount
of the Bridge Loan Commitment of such Lender at such time and the
denominator of which is the aggregate amount of the Bridge Loan Commitment
at such time. The initial Bridge Loan Commitment Percentages are set out
on Schedule 2.1.
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"Bridge Loan Committed Amount" means, collectively, the aggregate
----------------------------
amount of all of the Bridge Loan Commitments and, individually, the amount
of each Bridge Lender's
5
Bridge Loan Commitment as specified on Schedule 2.1, as such amounts may be
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reduced from time to time in accordance with the provisions hereof.
"Bridge Loan Maturity Date" means (a) if the Reorganization and the
-------------------------
HTI Release have not occurred by such date, the date two (2) days following
the Closing Date (or, if not a Business Day, the next succeeding Business
Day), and (b) if the Reorganization and the HTI Release Event have occurred
by the date two (2) days following the Closing Date, May 11, 2000.
"Bridge Note" or "Bridge Notes" means the promissory notes of the
----------- ------------
Borrower in favor of each of the Bridge Lenders (or nominees thereof)
evidencing the Bridge Loan in substantially the form attached as Schedule
--------
2.5-2, individually or collectively, as appropriate, as such promissory
-----
notes may be amended, modified, supplemented, extended or renewed from time
to time.
"Business Day" means a day other than a Saturday, Sunday or other day
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on which commercial banks in Charlotte, North Carolina, San Francisco,
California or New York, New York are authorized or required by law to
close, except that, when used in connection with a Eurodollar Loan, such
------ ----
day shall also be a day on which dealings between banks are carried on in
Dollar deposits in London, England.
"Capital Lease" means, as applied to any Person, any lease of any
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Property (whether real, personal or mixed) by that Person as lessee which,
in accordance with GAAP, is or should be accounted for as a capital lease
on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation, capital stock,
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(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated)
of capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation
that confers on a Person the right to receive a share of the profits and
losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued or directly and fully
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guaranteed or insured by the United States or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is
pledged in support thereof) having maturities of not more than twelve
months from the date of acquisition, (b) Dollar denominated time deposits
and certificates of deposit of (i) any Lender, (ii) any domestic commercial
bank of recognized standing having capital and surplus in excess of
$500,000,000 or (iii) any bank whose short-term commercial paper rating
from S&P is at least A-1 or the equivalent thereof or from Xxxxx'x is at
least P-1 or the equivalent thereof (any such bank being an "Approved
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Bank"), in each case with maturities of not more than 270 days from the
----
date of acquisition, (c) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any
variable rate notes issued by, or guaranteed by, any domestic corporation
rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the
equivalent thereof) or better by Moody's and maturing within six months of
the date of acquisition, (d) repurchase agreements entered into by any
Person with a bank or trust
6
company (including any of the Lenders) or recognized securities dealer
having capital and surplus in excess of $500,000,000 for direct obligations
issued by or fully guaranteed by the United States in which such Person
shall have a perfected first priority security interest (subject to no
other Liens) and having, on the date of purchase thereof, a fair market
value of at least 100% of the amount of the repurchase obligations and (e)
Investments, classified in accordance with GAAP as current assets, in money
market investment programs registered under the Investment Company Act of
1940, as amended, which are administered by reputable financial
institutions having capital of at least $500,000,000 and the portfolios of
which are limited to Investments of the character described in the
foregoing subdivisions (a) through (d).
"Change of Control" means any of the following events: (a) Holdings
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shall fail to own directly 100% of the outstanding Capital Stock of Triad,
(b) any Person or two or more Persons acting in concert shall have acquired
beneficial ownership, directly or indirectly, of, or shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation, will result in its or their acquisition of or
control over, Voting Stock of Holdings (or other securities convertible
into such Voting Stock) representing 30% or more of the combined voting
power of all Voting Stock of Holdings, or (c) during any period of up to 24
consecutive months, commencing after the Closing Date, individuals who at
the beginning of such 24 month period were directors of Holdings (together
with any new director whose election by Holdings' Board of Directors or
whose nomination for election by Holdings' shareholders was approved by a
vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the directors of Holdings then in office. As used
herein, "beneficial ownership" shall have the meaning provided in Rule 13d-
3 of the Securities and Exchange Commission under the Securities Exchange
Act.
"Closing Date" means the date hereof.
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"Code" means the Internal Revenue Code of 1986, as amended, and any
----
successor statute thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time. References
to sections of the Code shall be construed also to refer to any successor
sections.
"Collateral" means a collective reference to the collateral which is
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identified in, and at any time will be covered by, the Collateral
Documents.
"Collateral Documents" means a collective reference to the Security
--------------------
Agreements, the Pledge Agreements, the Mortgage Instruments and such other
documents executed and delivered in connection with the attachment and
perfection of the Administrative Agent's security interests and liens
arising thereunder, including without limitation, UCC financing statements
and patent and trademark filings.
"Columbia/HCA" means Columbia/HCA Healthcare Corporation, a Delaware
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corporation, and its successors and assigns.
"Columbia/HCA Debt" means the intercompany indebtedness owing to
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Columbia/HCA in the principal amount of up to $1,800,000,000.
7
"Columbia/HCA Side Letter" means the side letter provided by
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Columbia/HCA pursuant to Section 5.1(d).
"Commitment Fee" shall have the meaning assigned to such term in
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Section 3.5(a).
"Commitments" means any of the Revolving Commitments, the LOC
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Commitments, the Swingline Commitments, the Bridge Loan Commitments and/or
the Term Loan Commitments.
"Commitment Period" means the period from and including the Closing
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Date to but not including the earlier of (i) the Revolving Commitment
Termination Date, or (ii) the date on which the Revolving Commitments
terminate in accordance with the provisions of this Credit Agreement.
"Committed Amount" means any of the Revolving Committed Amount, the
----------------
LOC Committed Amount, the Swingline Committed Amount, the Bridge Loan
Committed Amount and/or the Term Loan Committed Amounts.
"Consolidated Capital Expenditures" means, for any period, without
---------------------------------
duplication, all expenditures (whether paid in cash or other consideration)
during such period that, in accordance with GAAP, are or should be included
in additions to property, plant and equipment or similar items reflected in
the consolidated statement of cash flows for such period; provided, that
--------
Consolidated Capital Expenditures shall not include, for purposes hereof,
expenditures of proceeds of insurance settlements, condemnation awards and
other settlements in respect of lost, destroyed, damaged or condemned
assets, equipment or other property to the extent such expenditures are
made to replace or repair such lost, destroyed, damaged or condemned
assets, equipment or other property or otherwise to acquire assets or
properties useful in the business of the members of the Consolidated Group.
"Consolidated EBITDA" means, for any period for the Consolidated
-------------------
Group, the sum of (i) Consolidated Net Income plus (ii), to the extent
----
deducted in determining net income, (A) Consolidated Interest Expense, (B)
taxes, (C) depreciation and amortization, (D) ESOP expense, (E) non-
recurring, non-cash charges and adjustments for impairment of long-lived
assets (including the effect of the conversion of the Kansas City leases
and the prior period adjustment at Paradise Valley), (F) minority interests
and (G) other non-cash extraordinary items, in each case on a consolidated
basis determined in accordance with GAAP. Notwithstanding any provision to
the contrary contained herein, for purposes of calculating the Consolidated
Total Leverage Ratio and the Consolidated Senior Leverage Ratio (i) for the
Borrower's fiscal quarter ending June 30, 1999, Consolidated EBITDA shall
be the result obtained by multiplying the actual Consolidated EBITDA for
the period of two fiscal quarters ending June 30, 1999 by two (2); (ii) for
the Borrower's fiscal quarter ending September 30, 1999, Consolidated
EBITDA shall be the
8
result obtained by multiplying the actual Consolidated EBITDA for the
period of three fiscal quarters ending September 30, 1999 by one and one-
third (1) and (iii) for the Borrower's fiscal quarter ending December 31,
1999 and each fiscal quarter thereafter, Consolidated EBITDA shall be the
actual Consolidated EBITDA for the period of four consecutive fiscal
quarters ending as of the date of determination.
"Consolidated Fixed Charge Coverage Ratio" means, for any period, the
----------------------------------------
ratio of Consolidated Net Income Available for Fixed Charges to
Consolidated Fixed Charges.
"Consolidated Fixed Charges" means, for any period for the
--------------------------
Consolidated Group, the sum of (i) the cash portion of Consolidated
Interest Expense for such period, (ii) cash taxes paid for such period, and
(iii) scheduled current maturities of Consolidated Total Funded Debt
(including, for purposes hereof, mandatory commitment reductions, sinking
fund payments, payments in respect of the principal component under Capital
Leases and the like relating thereto, but excluding, for purposes hereof,
the scheduled maturity of the Bridge Loan) for the period of four
consecutive fiscal quarters beginning the day after the date of
determination, in each case on a consolidated basis determined in
accordance with GAAP, subject, however, to adjustment to give effect on a
Pro Forma Basis to any Permitted Acquisitions and any Asset Dispositions
consummated during such period as provided in Section 1.3. Except as
otherwise expressly provided, the applicable period shall be for the four
consecutive fiscal quarters ending as of the date of determination.
"Consolidated Group" means (a) prior to the HTI Release Event, HTI and
------------------
its Subsidiaries and (b) after the HTI Release Event, Holdings and its
Subsidiaries (including Triad).
"Consolidated Interest Expense" means, for any period for the
-----------------------------
Consolidated Group, all interest expense (net of credits under Hedging
Agreements), including the amortization of debt discount and premium, the
interest component under Capital Leases and the implied interest component
under Securitization Transactions, in each case on a consolidated basis
determined in accordance with GAAP. Except as expressly provided otherwise,
the applicable period shall be for the four consecutive fiscal quarters
ending as of the date of determination.
"Consolidated Net Income" means, for any period for the Consolidated
-----------------------
Group, net income (or loss) determined on a consolidated basis in
accordance with GAAP. Except as otherwise expressly provided, the
applicable period shall be for the four consecutive fiscal quarters ending
as of the date of determination.
"Consolidated Net Income Available for Fixed Charges" means, for any
---------------------------------------------------
period for the Consolidated Group, the sum of (i) Consolidated EBITDA minus
(ii) beginning with the fiscal quarter ending December 31, 2000,
Consolidated Capital Expenditures, in each case on a consolidated basis
determined in accordance with GAAP, subject, however, to adjustment to give
effect on a Pro Forma Basis to any Permitted Acquisitions and any Asset
Dispositions consummated during such period as provided in Section 1.3.
Except as otherwise expressly provided, the applicable period shall be for
the four consecutive fiscal quarters ending as of the date of
determination.
9
"Consolidated Net Worth" means, as of any date for the Consolidated
----------------------
Group, consolidated shareholder's equity or net worth as determined
accordance with GAAP.
"Consolidated Senior Funded Debt" means Consolidated Total Funded Debt
-------------------------------
other than Consolidated Subordinated Debt.
"Consolidated Senior Leverage Ratio" means, as of the last day of each
----------------------------------
fiscal quarter, the ratio of Consolidated Senior Funded Debt on such day to
Consolidated EBITDA for the period of four consecutive fiscal quarters
ending as of such day.
"Consolidated Subordinated Debt" means Subordinated Debt of the
------------------------------
Consolidated Group determined on a consolidated basis in accordance with
GAAP.
"Consolidated Tangible Net Worth" means, as of any date for the
-------------------------------
Consolidated Group, Consolidated Net Worth minus intangible assets as
-----
determined in accordance with GAAP.
"Consolidated Total Funded Debt" means Funded Debt of the Consolidated
------------------------------
Group determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Leverage Ratio" means, as of the last day of each
---------------------------------
fiscal quarter, the ratio of Consolidated Total Funded Debt on such day to
Consolidated EBITDA for the period of four consecutive fiscal quarters
ending as of such day.
"Continue", "Continuation", and "Continued" shall refer to the
-------- ------------ ---------
continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
security issued or guaranteed by such Person or of any material agreement,
instrument or undertaking to which such Person is a party or by which it or
any of its property is bound.
"Convert", "Conversion", and "Converted" shall refer to a conversion
------- ---------- ---------
pursuant to Section 3.2 or Sections 3.7 through 3.12, inclusive, of a Base
Rate Loan into a Eurodollar Loan.
"Credit Documents" means a collective reference to this Credit
----------------
Agreement, the Notes, the Guaranty Agreement, the HTI Guaranty Agreement,
the LOC Documents, each Assumption Agreement, each Guaranty Joinder
Agreement, the Administrative Agent's Fee Letter, the Columbia/HCA Side
Letter, the Collateral Documents and all other related agreements and
documents issued or delivered hereunder or thereunder or pursuant hereto or
thereto (in each case as the same may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time), and "Credit
Document" means any one of them.
10
"Credit Parties" means a collective reference to the Borrower and the
--------------
Guarantors, and "Credit Party" means any one of them.
------------
"Debt Transaction" means, with respect to any member of the
----------------
Consolidated Group, any sale, issuance, placement, guaranty, assumption or
collateralization of Funded Debt, whether or not evidenced by promissory
note or other written evidence of indebtedness, except for Funded Debt
permitted to be incurred pursuant to Section 9.1(a) through (g).
"Default" means any event, act or condition which with notice or lapse
-------
of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a) has failed
-----------------
to make a Loan or purchase a Participation Interest required pursuant to
the terms of this Credit Agreement within one Business Day of when due, (b)
other than as set forth in (a) above, has failed to pay to the
Administrative Agent or any Lender an amount owed by such Lender pursuant
to the terms of this Credit Agreement within one Business Day of when due,
unless such amount is subject to a good faith dispute or (c) has been
deemed insolvent or has become subject to a bankruptcy or insolvency
proceeding or with respect to which (or with respect to any of the assets
of which) a receiver, trustee or similar official has been appointed.
"Distribution Agreement" means that certain Distribution Agreement
----------------------
dated as of May 11, 1999 by and among Columbia/HCA, LifePoint Hospitals,
Inc., a Delaware corporation, and Holdings.
"Dollars" and "$" means dollars in lawful currency of the United
------- -
States.
"Domestic Credit Party" means any Credit Party which is incorporated
---------------------
or organized under the laws of any State of the United States or the
District of Columbia.
"Domestic Subsidiary" means any Subsidiary which is incorporated or
-------------------
organized under the laws of any State of the United States or the District
of Columbia.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender
-----------------
or any fund that invests in bank loans and is managed by an investment
advisor (or an Affiliate of an investment advisor) to a Lender; and (iii)
any other Person approved by the Administrative Agent and, unless an Event
of Default has occurred and is continuing at the time any assignment is
effected in accordance with Section 12.3, the Borrower (such approval by
the Administrative Agent or the Borrower not to be unreasonably withheld or
delayed and such approval to be deemed given by the Borrower if no
objection is received by the assigning Lender and the Administrative Agent
from the Borrower within two Business Days after notice of such proposed
assignment has been provided by the assigning Lender to the Borrower);
provided, however, that neither the Borrower nor an Affiliate of the
-------- -------
Borrower shall qualify as an Eligible Assignee.
11
"Eligible Real Property" means, with respect to any member of the
----------------------
Consolidated Group, including any Person that becomes a member of the
Consolidated Group after the Closing Date as contemplated by Section 8.12,
any real property which (i) is located in the United States or (to the
extent deemed material by the Administrative Agent or the Required Lenders
in its or their sole reasonable discretion) located outside of the United
States, (ii) is owned or (to the extent deemed material by the
Administrative Agent or the Required Lenders in its or their sole
reasonable discretion) leased by such member of the Consolidated Group and
(iii) is not Excluded Property.
"Environmental Laws" means any and all applicable federal, state,
------------------
local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to the
environment or to emissions, discharges, releases or threatened releases of
Materials of Environmental Concern into the environment including, without
limitation, ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of Materials of Environmental
Concern.
"Equity Transaction" means, with respect to any member of the
------------------
Consolidated Group, any issuance or sale of shares of its capital stock or
other equity interest, other than an issuance (i) in connection with a
conversion of debt securities to equity and (ii) in connection with
exercise by a present or former employee, officer or director under a stock
incentive plan, stock option plan or other equity-based compensation plan
or arrangement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity which, at the relevant time, is
---------------
under common control with any member of the Consolidated Group within the
meaning of Section 4001(a)(14) of ERISA, or is a member of a group which
includes any member of the Consolidated Group and which is treated as a
single employer under Sections 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Single Employer Plan or
-----------
Multiple Employer Plan, the occurrence of a Reportable Event or the
substantial cessation of operations (within the meaning of Section 4062(e)
of ERISA); (ii) the withdrawal by any member of the Consolidated Group or
any ERISA Affiliate from a Multiple Employer Plan during a plan year in
which it was a substantial employer (as such term is defined in Section
4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan; (iii)
the distribution of a notice of intent to terminate or the actual
termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA;
(iv) the institution of proceedings to terminate or the actual termination
of a Plan by the PBGC under Section 4042 of ERISA; (v) any event or
condition which could reasonably constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (vi) the complete or
12
partial withdrawal of any member of the Consolidated Group or any ERISA
Affiliate from a Multiemployer Plan; (vii) the conditions for imposition of
a lien under Section 302(f) of ERISA exist with respect to any Single
Employer Plan or Multiple Employer Plan; or (viii) the adoption of an
amendment to any Plan requiring the provision of security to such Plan
pursuant to Section 307 of ERISA.
"ESOP" means the employee stock ownership plan of Holdings.
----
"Eurodollar Loan" means any Loan that bears interest at a rate based
---------------
upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest
---------------
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by the Administrative Agent to be equal to
the quotient obtained by dividing (a) the Interbank Offered Rate for such
Eurodollar Loan for such Interest Period by (b) 1 minus the Eurodollar
Reserve Requirement for such Eurodollar Loan for such Interest Period.
"Eurodollar Reserve Requirement" means, at any time, the maximum rate
------------------------------
at which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) by member banks of the Federal
Reserve System against "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Eurodollar
Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to (i) any category of
liabilities which includes deposits by reference to which the Eurodollar
Rate is to be determined, or (ii) any category of extensions of credit or
other assets which include Eurodollar Loans. The Eurodollar Rate shall be
adjusted automatically on and as of the effective date of any change in the
Eurodollar Reserve Requirement.
"Event of Default" shall have the meaning assigned to such term in
----------------
Section 10.1.
"Excess Proceeds" shall have the meaning assigned to such term in
---------------
Section 8.6(b).
"Excluded Property" means, with respect to any member of the
-----------------
Consolidated Group, including any Person that becomes a member of the
Consolidated Group after the Closing Date as contemplated by Section 8.12,
any Property of such member of the Consolidated Group (i) which, subject to
the terms of Section 9.11 and Section 9.15, is subject to a Lien of the
type described in clause (viii) of the definition of "Permitted Liens"
pursuant to documents which prohibit such member of the Consolidated Group
from granting any other Liens in such Property, (ii) which is listed on
Schedule 8.13 or (iii) which has a fair market value of less than
-------------
$1,000,000.
"Executive Officer" of any Person means any of the chief executive
-----------------
officer, chief operating officer, president, vice president, chief
financial officer or treasurer of such Person.
13
"Existing Letters of Credit" means those Letters of Credit outstanding
--------------------------
on the Closing Date and identified on Schedule 2.6(b).
---------------
"Extension of Credit" means, as to any Lender, the making of, or
-------------------
participation in, a Loan by such Lender (including Continuations and
Conversions thereof other than a Conversion of a Eurodollar Loan into a
Base Rate Loan) or the issuance or extension of, or participation in, a
Letter of Credit.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
------------------
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day; provided that (a) if such day is not a
--------
Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the
next succeeding Business Day, and (b) if no such rate is so published on
such next succeeding Business Day, the Federal Funds Rate for such day
shall be the average rate charged to the Administrative Agent (in its
individual capacity) on such day on such transactions as determined by the
Administrative Agent.
"Fees" means all fees payable pursuant to Section 3.5.
----
"Foreign Credit Party" means a Credit Party which is not a Domestic
--------------------
Credit Party.
"Foreign Subsidiary" means a Subsidiary which is not a Domestic
------------------
Subsidiary.
"Funded Debt" means, with respect to any Person, without duplication,
-----------
(i) all obligations of such Person for borrowed money, (ii) all obligations
of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (iii)
all purchase money Indebtedness (including for purposes hereof,
indebtedness and obligations in respect of conditional sale or title
retention arrangements described in clause (c) of the definition of
"Indebtedness" and obligations in respect of the deferred purchase price of
property or services described in clause (d) of the definition of
"Indebtedness") of such Person, including without limitation the principal
portion of all obligations of such Person under Capital Leases, (iv) all
Guaranty Obligations of such Person with respect to Funded Debt of another
Person, (v) the maximum available amount of all standby letters of credit
or acceptances issued or created for the account of such Person, (vi) all
Funded Debt of another Person secured by a Lien on any Property of such
Person, whether or not such Funded Debt has been assumed, provided that for
--------
purposes hereof the amount of such Funded Debt shall be limited to the
amount of such Funded Debt as to which there is recourse to such Person or
the fair market value of the property which is subject to the Lien, if
less, (vii) the outstanding attributed principal amount under any
Securitization Transaction, and (viii) the principal balance outstanding
under Synthetic Leases. The Funded Debt of any Person shall include the
Funded Debt of any partnership or joint venture in which such Person is a
general partner or joint venturer, but only to the extent to which there is
recourse to such Person for the payment of such Funded Debt.
14
"GAAP" means generally accepted accounting principles in the United
----
States applied on a consistent basis and subject to the terms of Section
1.3.
"Governmental Authority" means any Federal, state, local or foreign
----------------------
court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantor Pledge Agreement" means the pledge agreement given by
--------------------------
Holdings and the other pledgors identified therein to the Administrative
Agent to secure the obligations of the Guarantors under the Credit
Documents, as amended and modified.
"Guarantor Security Agreement" means the security agreement given by
----------------------------
Holdings and the other Guarantors to the Administrative Agent to secure the
obligations of the Guarantors under the Credit Documents, as amended and
modified.
"Guarantors" means (a) after the Holdings Group Joinder Event (but
----------
before the HTI Release Event), HTI and (b) after the HTI Release Event,
Holdings and each other Person which provides a guaranty of the obligations
of the Borrower under the Credit Documents, in each case together with
their successors and permitted assigns, and "Guarantor " means any one of
---------
them.
"Guaranty Agreement" means the guaranty agreement given by Holdings
------------------
and the other Guarantors to the Administrative Agent with respect to the
obligations of the Borrower under the Credit Documents, as amended and
modified.
"Guaranty Joinder Agreement" means a Guaranty Joinder Agreement
--------------------------
substantially in the form of Schedule 1 to the Guaranty Agreement, executed
----------
and delivered by a new Guarantor in accordance with the provisions of
Section 8.12.
"Guaranty Obligations" means, with respect to any Person, without
--------------------
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of any
other Person in any manner, whether direct or indirect, and including
without limitation any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or any Property constituting security
therefor, (ii) to advance or provide funds or other support for the payment
or purchase of any such Indebtedness or to maintain working capital,
solvency or other balance sheet condition of such other Person (including
without limitation keep well agreements, maintenance agreements, comfort
letters or similar agreements or arrangements) for the benefit of any
holder of Indebtedness of such other Person, (iii) to lease or purchase
Property, securities or services primarily for the purpose of assuring the
holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof. The
amount of any Guaranty Obligation hereunder shall (subject to any
limitations set forth therein) be deemed to be an amount equal to the
outstanding principal amount (or maximum principal amount, if larger) of
the Indebtedness in respect of which such Guaranty Obligation is made.
15
"HTI" means Healthtrust, Inc. - The Hospital Company, a Delaware
---
corporation, and its successors and permitted assigns.
"HTI Guaranty Agreement" means the Guaranty Agreement given by HTI to
---
the Administrative Agent with respect to the obligations of Holdings under
the Credit Documents, as amended and modified.
"HTI Release Event" shall have occurred upon the satisfaction or
-----------------
waiver of each of the conditions set forth in Section 5.5.
"Hedging Agreements" means any interest rate protection agreement or
------------------
foreign currency exchange agreement.
"Holdings" means Triad Hospitals, Inc., a Delaware corporation, and
--------
its successors and permitted assigns.
"Holdings Group Joinder Event" shall have occurred upon the
----------------------------
satisfaction or waiver of each of the conditions set forth in Section 5.3.
"Indebtedness" means, with respect to any Person, without duplication,
------------
(a) all obligations of such Person for borrowed money, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to Property purchased by such Person (other than
customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all
obligations of such Person issued or assumed as the deferred purchase price
of Property or services purchased by such Person (other than trade debt
incurred in the ordinary course of business and due within six months of
the incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (e) all obligations of such Person under take-or-pay
or similar arrangements or under commodities agreements, (f) all
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on, or payable out of the proceeds of production from,
Property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Guaranty Obligations of such
Person with respect to Indebtedness of another Person, (h) the principal
portion of all obligations of such Person under Capital Leases, (i) all
obligations of such Person under Hedging Agreements, (j) the maximum amount
of all standby letters of credit issued or bankers' acceptances facilities
created for the account of such Person and, without duplication, all drafts
drawn thereunder (to the extent unreimbursed), (k) all preferred Capital
Stock issued by such Person and which by the terms thereof could be (at the
request of the holders thereof or otherwise) subject to mandatory sinking
fund payments, repurchase, redemption or other acceleration (other than as
a result of a Change of Control or an Asset Disposition that does not in
fact result in a redemption of such preferred Capital Stock) at any time
during the term of the Credit Agreement, (l) the principal portion of all
obligations of such Person under Synthetic Leases, (m) the Indebtedness of
any partnership or unincorporated joint venture in which such Person is a
general partner or a joint venturer
16
and (n) with respect to any member of the Consolidated Group, the
outstanding attributed principal amount under any Securitization
Transaction.
"Interbank Offered Rate" means, for any Eurodollar Loan for any
----------------------
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or
any successor page) as the London interbank offered rate for deposits in
Dollars at approximately 11:00 A.M. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such
Interest Period. If for any reason such rate is not available, the term
"Interbank Offered Rate" shall mean, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the first
day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen
-------- -------
LIBO Page, the applicable rate shall be the arithmetic mean of all such
rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).
"Interest Payment Date" means (i) as to any Base Rate Loan, the last
---------------------
day of each March, June, September and December and the Revolving
Commitment Termination Date, the Bridge Loan Maturity Date, and the date of
the final principal amortization installment on each Term Loan, as
applicable, and (ii) as to any Eurodollar Loan and Swingline Loan, the last
day of each Interest Period for such Loan, the date of repayment of
principal of such Loan and on the Revolving Commitment Termination Date,
the Bridge Loan Maturity Date, and the date of the final principal
amortization installment on each Term Loan, as applicable, and in addition
where the applicable Interest Period is more than three months, then also
on the date three months from the beginning of the Interest Period, and
each three months thereafter. If an Interest Payment Date falls on a date
which is not a Business Day, such Interest Payment Date shall be deemed to
be the next succeeding Business Day.
"Interest Period" means (i) as to any Eurodollar Loan, a period of
---------------
one, two, three, six or, if available to all Lenders, nine months'
duration, as the Borrower may elect, commencing in each case on the date of
the borrowing (including Conversions, extensions and renewals) and (ii) as
to any Swingline Loan, a period of such duration as the Borrower may
request and the Swingline Lender may agree in accordance with the
provisions of Section 2.2(a)(iii), commencing in each case, on the date of
borrowing; provided, however, (A) if any Interest Period would end on a day
-------- -------
which is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day (except that in the case of Eurodollar Loans
where the next succeeding Business Day falls in the next succeeding
calendar month, then on the next preceding Business Day), (B)(i) in the
case of Loans comprising Revolving Loans, no Interest Period shall extend
beyond the Revolving Commitment Termination Date, (ii) in the case of Loans
comprising the Bridge Loan, no Interest Period shall extend beyond the
Bridge Loan Maturity Date and (iii) in the case of Loans comprising the
Term Loans, no Interest Period shall extend beyond any principal
amortization payment date unless, and to the extent that, the portion of
the applicable Term Loan comprised of Eurodollar Loans expiring prior to
the applicable principal amortization payment date plus the portion of the
applicable Term Loan comprised of Base Rate Loans equals or exceeds the
principal amortization payment then
17
due, and (C) in the case of Eurodollar Loans, where an Interest Period
begins on a day for which there is no numerically corresponding day in the
calendar month in which the Interest Period is to end, such Interest Period
shall end on the last day of such calendar month.
"Investment" in any Person means (a) the acquisition (whether for
----------
cash, property, services, assumption of Indebtedness, securities or
otherwise) of Capital Stock, bonds, notes, debentures, partnership, joint
ventures or other ownership interests or other securities of such other
Person or (b) any deposit with, or advance, loan or other extension of
credit to, such Person (other than deposits made in connection with the
purchase of equipment or other assets in the ordinary course of business)
or (c) any other capital contribution to or investment in such Person,
including, without limitation, any Guaranty Obligations (including any
support for a letter of credit issued on behalf of such Person) incurred
for the benefit of such Person, but excluding any Restricted Payment to
such Person.
"Involuntary Disposition" shall have the meaning assigned to such term
-----------------------
in Section 8.6(b).
"Issuing Lender" means Bank of America.
--------------
"Issuing Lender Fees" shall have the meaning assigned to such term in
-------------------
Section 3.5(c)(ii).
"Lenders" means each of the Persons identified as a "lender" on the
-------
signature pages hereto, and their successors and assigns.
"Letter of Credit" means any Existing Letter of Credit and any letter
----------------
of credit issued by the Issuing Lender for the account of the Borrower in
accordance with the terms of Section 2.1(b).
"Letter of Credit Fee" shall have the meaning assigned to such term in
--------------------
Section 3.5(b)(i).
"Licenses" means all licenses, permits and other grants of authority
--------
obtained or required to be obtained from any Governmental Authorities in
connection with the management or operation of the business, or the
ownership, lease, license or use of any Property, of any member of the
Consolidated Group.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the
Uniform Commercial Code as adopted and in effect in the relevant
jurisdiction or other similar recording or notice statute, and any lease in
the nature thereof).
"Loan" or "Loans" means the Revolving Loans, the Swingline Loans, the
---- -----
Bridge Loan and/or the Term Loans, and the Base Rate Loans, Eurodollar
Loans and Quoted Rate Swingline Loans comprising such Loans.
18
"LOC Commitment" means the commitment of the Issuing Lender to issue
--------------
Letters of Credit in an aggregate face amount at any time outstanding
(together with the amounts of any unreimbursed drawings thereon) of up to
the LOC Committed Amount.
"LOC Committed Amount" shall have the meaning assigned to such term in
--------------------
Section 2.1(b).
"LOC Documents" means, with respect to any Letter of Credit, such
-------------
Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application
or applicable only to such Letter of Credit) governing or providing for (i)
the rights and obligations of the parties concerned or at risk or (ii) any
collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum
---------------
amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding, assuming compliance with
all requirements for drawings referred to in such Letters of Credit plus
----
(ii) the aggregate amount of all drawings under Letters of Credit honored
by the Issuing Lender but not theretofore reimbursed.
"Material Adverse Effect" means a material adverse effect on (i) the
-----------------------
condition (financial or otherwise), operations, business, assets,
liabilities or prospects of the Consolidated Group taken as a whole, (ii)
the ability of any member of the Consolidated Group to perform any material
obligation under the Credit Documents to which it is a party or (iii) the
material rights and remedies of the Administrative Agent and the Lenders
under the Credit Documents.
"Materials of Environmental Concern" means any gasoline or petroleum
----------------------------------
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Laws, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor or
-------
assignee of the business of such company in the business of rating
securities.
"Mortgage Instruments" shall have the meaning assigned such term in
--------------------
Section 5.5(g).
"Mortgage Policies" shall have the meaning assigned such term in
-----------------
Section 5.5(g).
"Mortgaged Properties" shall have the meaning assigned such term in
--------------------
Section 5.5(g).
"Multiemployer Plan" means a Plan which is a "multiemployer plan" as
------------------
defined in Sections 3(37) or 4001(a)(3) of ERISA.
19
"Multiple Employer Plan" means a Plan (other than a Multiemployer
----------------------
Plan) which any member of the Consolidated Group or any ERISA Affiliate and
at least one employer other than the members of the Consolidated Group or
any ERISA Affiliate are contributing sponsors.
"Net Proceeds" means gross cash proceeds (including any cash received
------------
by way of deferred payment pursuant to a promissory note, receivable or
otherwise, but only as and when received) received in connection with an
Asset Disposition, Equity Transaction or Debt Transaction, net of (i)
reasonable transaction costs, including in the case of an Equity
Transaction or a Debt Transaction, underwriting discounts and commissions
and in the case of an Asset Disposition occurring in connection with a
claim under an insurance policy, costs incurred in connection with
adjustment and settlement of the claim, (ii) estimated taxes payable in
connection therewith, (iii) in the case of an Asset Disposition or Debt
Transaction, any amounts payable in respect of Funded Debt, including
without limitation principal, interest, premiums and penalties, which is
secured by, or otherwise related to, any property or asset which is the
subject thereof to the extent that such Funded Debt and any payments in
respect thereof are paid with a portion of the proceeds therefrom and (iv)
in the case of an Asset Disposition, the amount of any reserves necessary
for post-closing adjustments (including indemnification payments), as
determined by the Borrower in its reasonable discretion, provided that to
--------
the extent such reserves are not applied to, and in the Borrower's
reasonable discretion are no longer necessary with respect to, such post-
closing adjustments, such reserves shall thereupon become Net Proceeds.
"Note" or "Notes" means any of the Revolving Notes, the Bridge Notes
---- -----
and/or the Term Notes.
"Notice of Borrowing" means a written notice of borrowing in
-------------------
substantially the form of Schedule 2.2(a)(i), as required by Section
2.2(a)(i), Section 2.2(a)(iii), Section 2.2(a)(iv) or Section 2.2(a)(v).
"Notice of Continuation/Conversion" means the written notice of
---------------------------------
Continuation or Conversion in substantially the form of Schedule 3.2, as
------------
required by Section 3.2.
"Obligations" means, collectively, the Revolving Loans, the Swingline
-----------
Loans, the LOC Obligations, the Bridge Loan and the Term Loans.
"Operating Lease" means, as applied to any Person, any lease
---------------
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed) which
is not a Capital Lease other than any such lease in which that Person is
the lessor.
"Other Taxes" shall have the meaning assigned to such term in Section
-----------
3.11.
20
"Participation Interest" means the purchase by a Lender of a
----------------------
participation in LOC Obligations as provided in Section 2.6(c), in
Swingline Loans as provided in Section 2.7 and in Loans as provided in
Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation established
----
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Acquisition" means any Acquisition by a member of the
---------------------
Consolidated Group, provided that (i) consideration paid is not greater
than the fair market value thereof, (ii) the party or property which is the
subject of such Acquisition shall be in the same or similar line of
business as the members of the Consolidated Group which are parties
thereto, (iii) in the case of a merger or consolidation, and in other cases
where appropriate, the board of directors or other governing body of the
other party which is the subject of the transaction of merger or
consolidation shall have approved the Acquisition, (iv) the Borrower shall
have delivered to the Administrative Agent a Pro Forma Compliance
Certificate demonstrating that, upon giving effect to such Acquisition on a
Pro Forma Basis, the Borrower shall be in compliance with all of the
covenants set forth in Section 8.11, (v) if the Acquisition involves an
interest in a partnership and a requirement that a member of the
Consolidated Group be a general partner, the general partner shall be a
newly formed special purpose Subsidiary of the Borrower, (vi) after giving
effect to the Acquisition, there shall be at least $50 million of
availability under the Revolving Commitments hereunder, (vii) the aggregate
consideration paid in connection with all such Acquisitions (including cash
consideration and the fair value of any non-cash consideration and
indebtedness assumed) shall not exceed $40 million in any fiscal year and
(viii) in the case of an asset swap, the Borrower shall have delivered to
the Administrative Agent a certificate of an Executive Officer, in detail
reasonably satisfactory to the Administrative Agent, demonstrating that,
upon giving effect to such asset swap on a Pro Forma Basis, Consolidated
Funded Debt will not be greater than, and Consolidated EBITDA will not be
less than, prior to the asset swap.
"Permitted Investments" means Investments which are (i) cash and Cash
---------------------
Equivalents; (ii) accounts receivable created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; (iii) Investments consisting of Capital Stock,
obligations, securities or other property received in settlement of
accounts receivable (created in the ordinary course of business) from
bankrupt obligors; (iv) Investments existing as of the Closing Date and set
forth in Schedule 9.6; (v) advances or loans to directors, officers and
------------
employees that do not exceed $1,000,000 in the aggregate at any one time
outstanding; (vi) advances or loans to customers and suppliers in the
ordinary course of business that do not exceed $1,000,000 in the aggregate
at any one time outstanding; (vii) Investments by members of the
Consolidated Group in their Subsidiaries and Affiliates existing on the
Closing Date, (viii) Investments by members of the Consolidated Group in
and to Domestic Credit Parties, (ix) Investments which constitute Permitted
Acquisitions, (x) loans made in connection with the purchase of common
stock of Holdings pursuant to any Plan (including ESOP) and loans of up to
$15,000,000 in the aggregate at any time outstanding made in connection
with the purchase of common stock of Holdings pursuant to Holdings
executive stock purchase plan, and (xi) Investments of a nature not
contemplated in the foregoing subsections in an
21
amount not to exceed at any time ten percent (10%) of Consolidated Tangible
Net Worth at such time.
"Permitted Liens" means:
---------------
(i) Liens in favor of the Administrative Agent to secure the
obligations of the Credit Parties under the Credit Documents;
(ii) Liens in favor of a Lender or an Affiliate of a Lender pursuant
to a Hedging Agreement permitted hereunder, but only (A) to the extent such
Liens secure obligations under such agreements permitted under Section 9.1,
(B) to the extent such Liens are on the same collateral as to which the
Lenders hereunder also have a Lien, and (C) so long as the obligations
under such Hedging Agreement and the loans and obligations hereunder and
under the other Credit Documents shall share pari passu in the collateral
subject to such Liens;
(iii) Liens (other than Liens created or imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due or Liens
for taxes being contested in good faith by appropriate proceedings for
which adequate reserves determined in accordance with GAAP have been
established (and as to which the Property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof);
(iv) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens imposed
by law or pursuant to customary reservations or retentions of title arising
in the ordinary course of business, provided that such Liens secure only
--------
amounts not yet due and payable or, if due and payable, are unfiled and no
other action has been taken to enforce the same or are being contested in
good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to which
the Property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof);
(v) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by any member of the Consolidated Group in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(vi) Liens in connection with attachments or judgments (including
judgment or appeal bonds) provided that the judgments secured shall, within
--------
30 days after the entry thereof, have been discharged or execution thereof
stayed pending appeal, or shall have been discharged within 30 days after
the expiration of any such stay;
(vii) easements, rights-of-way, covenants, restrictions (including
zoning restrictions), defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of
the encumbered Property for its intended purposes;
22
(viii) Liens on Property of any Person securing purchase money and
sale/leaseback Indebtedness (including Capital Leases and Synthetic Leases)
of such Person to the extent permitted under Section 9.1(c), provided that
--------
any such Lien attaches only to the Property financed or leased and such
Lien attaches concurrently with or within 90 days after the acquisition or
construction thereof;
(ix) leases or subleases granted to others not interfering in any
material respect with the business of any member of the Consolidated Group;
(x) any interest or title of a lessor under, and Liens arising from
UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, leases permitted by this
Credit Agreement;
(xi) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(xii) Liens created or deemed to exist in connection with a
Securitization Transaction permitted hereunder (including any related
filings of any UCC financing statements), but only to the extent that any
such Lien relates to the applicable Securitization Receivables actually
sold, contributed, financed or otherwise conveyed or pledged pursuant to
such transaction;
(xiii) Liens deemed to exist in connection with Investments in
repurchase agreements which constitute Permitted Investments;
(xiv) normal and customary rights of setoff upon deposits of cash in
favor of banks or other depository institutions;
(xv) Liens of a collection bank arising under Section 4-210 of the
Uniform Commercial Code on items in the course of collection; and
(xvi) Liens existing as of the Closing Date and set forth on Schedule
--------
7.8; provided that (a) no such Lien shall at any time be extended to or
--- --------
cover any Property other than the Property subject thereto on the Closing
Date and (b) the principal amount of the Indebtedness secured by such Liens
shall not be extended, renewed, refunded or refinanced.
"Person" means any individual, partnership, joint venture, firm,
------
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3) of
----
ERISA) which is covered by ERISA and with respect to which any member of
the Consolidated Group or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be)
an "employer" within the meaning of Section 3(5) of ERISA.
23
"Pledge Agreements" means a collective reference to the Borrower
-----------------
Pledge Agreement and the Guarantor Pledge Agreement.
"Pro Forma Basis" means, for purposes of calculating (utilizing the
---------------
principles set forth in the second paragraph of Section 1.3) the applicable
pricing level under the definition of "Applicable Percentage" and
determining compliance with each of the financial covenants set forth in
Section 8.11, that the referenced transaction shall be deemed to have
occurred as of the first day of the four fiscal-quarter period ending as of
the most recent fiscal quarter end preceding the date of such transaction
with respect to which the Administrative Agent has received the Required
Financial Information. As used herein, "transaction" shall mean (i) any
-----------
merger or consolidation permitted under Section 9.4, (ii) any Asset
Disposition permitted under Section 9.5 or (iii) any Acquisition permitted
under the definition of "Permitted Acquisition". In connection with any
---------------------
calculation of the financial covenants set forth in Section 8.11 upon
giving effect to a transaction on a Pro Forma Basis:
(A) for purposes of any such calculation in respect of any Asset
Disposition permitted under Section 9.5, (1) income statement items
(whether positive or negative) attributable to the Property disposed
of in such Asset Disposition shall be excluded and (2) any
Indebtedness which is retired in connection with such Asset
Disposition shall be excluded and deemed to have been retired as of
the first day of the applicable period; and
(B) for purposes of any such calculation in respect of any
merger or consolidation permitted under Section 9.4 or any Acquisition
permitted under the definition of "Permitted Acquisition", (1) any
---------------------
Indebtedness incurred by any member of the Consolidated Group in
connection with such transaction (x) shall be deemed to have been
incurred as of the first day of the applicable period and (y) if such
Indebtedness has a floating or formula rate, shall have an implied
rate of interest for the applicable period for purposes of this
definition determined by utilizing the rate which is or would be in
effect with respect to such Indebtedness as at the relevant date of
determination, and (2) income statement items (whether positive or
negative) attributable to the Property acquired in such transaction or
pursuant to the Acquisition comprising such transaction, as
applicable, shall be included beginning as of the first day of the
applicable period.
"Pro Forma Compliance Certificate" means a certificate of an Executive
--------------------------------
Officer of the Borrower delivered to the Administrative Agent in connection
with (i) any incurrence, assumption or retirement of Indebtedness permitted
under Section 9.1(i), (ii) any merger or consolidation permitted under
Section 9.4, (iii) any Asset Disposition permitted under Section 9.5 or
(iv) any Acquisition permitted under the definition of "Permitted
---------
Acquisition", as applicable, and containing reasonably detailed
-----------
calculations, upon giving effect to the applicable transaction on a Pro
Forma Basis, of the Consolidated Fixed Charge Coverage Ratio, the
Consolidated Total Leverage Ratio, the Consolidated Senior Leverage Ratio
and Consolidated Net Worth as of the most recent fiscal quarter end
preceding the date of the applicable transaction with respect to which the
Administrative Agent shall have received the Required Financial
Information.
24
"Property" means any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.
"Quoted Rate" means, with respect to a Quoted Rate Swingline Loan, the
-----------
fixed or floating percentage rate per annum, if any, offered by the
Swingline Lender and accepted by the Borrower.
"Quoted Rate Swingline Loan" means a Swingline Loan bearing interest
--------------------------
at the Quoted Rate.
"Rate Determination Date" shall have the meaning assigned to such term
-----------------------
in the definition of "Applicable Percentage".
"Register" shall have the meaning assigned to such term in Section
--------
12.3(c).
"Regulation D, T, U, or X" means Regulation D, T, U or X,
------------------------
respectively, of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion thereof.
"Release of Borrower" means a Release of Borrower substantially in the
-------------------
form of Schedule 5.4 hereto, executed and delivered by the Administrative
------------
Agent, on behalf of the Lenders, in accordance with Section 5.3 relating to
the obligations of HTI under this Credit Agreement and the Notes or Section
5.4 relating to the obligations of Holdings under this Credit Agreement and
the Notes.
"Release of Guaranty" means a Release of Guaranty substantially in the
-------------------
form of Schedule 5.5 hereto, executed and delivered by the Administrative
------------
Agent, on behalf of the Lenders, in accordance with Section 5.5 relating to
the obligations of HTI under the HTI Guaranty Agreement.
"Reorganization" means the plan of reorganization and transactions
--------------
contemplated in the Ruling Letter issued to Columbia/HCA by the Internal
Revenue Service dated March 30, 1999 or in the Distribution Agreement.
"Reportable Event" means any of the events set forth in Section
----------------
4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation.
"Required Financial Information" means the annual and quarterly
------------------------------
compliance certificates and related financial statements and information
required by the provisions of Sections 8.1(a), (b) and (c), as referenced
in the definition of "Applicable Percentage".
"Required Lenders" means, at any time, Lenders having more than sixty-
----------------
six and two-thirds percent (66%) of the aggregate Commitments, or if the
Commitments have been terminated, Lenders having more than sixty-six and
two-thirds percent (66%) of the aggregate principal amount of the
Obligations outstanding (taking into account in each case Participation
Interests or obligation to participate therein); provided that the
--------
25
Commitments of, and outstanding principal amount of Obligations (taking
into account Participation Interests therein) owing to, a Defaulting Lender
shall be excluded for purposes hereof in making a determination of Required
Lenders.
"Requirement of Law" means, as to any Person, the certificate of
------------------
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule, regulation or ordinance (including,
without limitation, Environmental Laws) or determination of an arbitrator
or a court or other Governmental Authority, in each case applicable to or
binding upon such Person or to which any of its material Property is
subject.
"Restricted Payment" means (i) any dividend or other payment or
------------------
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any member of the Consolidated Group, now or hereafter
outstanding (including without limitation any payment in connection with
any dissolution, merger, consolidation or disposition involving any member
of the Consolidated Group), or to the holders, in their capacity as such,
of any shares of any class of Capital Stock of any member of the
Consolidated Group, now or hereafter outstanding (other than dividends or
distributions payable in the same class of Capital Stock of the applicable
Person or to any Credit Party (directly or indirectly through
Subsidiaries)), (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of
any shares of any class of Capital Stock of any member of the Consolidated
Group, now or hereafter outstanding, and (iii) 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 Capital Stock of any member of the
Consolidated Group, now or hereafter outstanding.
"Revolving Commitment" means, with respect to each Revolving Lender,
--------------------
the commitment of such Revolving Lender to make Revolving Loans in an
aggregate principal amount at any time outstanding of up to such Revolving
Lender's Revolving Committed Amount, as such amount may be reduced from
time to time in accordance with the provisions hereof.
"Revolving Commitment Percentage" means, for each Revolving Lender, a
-------------------------------
fraction (expressed as a percentage) the numerator of which is the
Revolving Commitment of such Revolving Lender at such time and the
denominator of which is the Aggregate Revolving Committed Amount at such
time. The initial Revolving Commitment Percentages are set out on Schedule
--------
2.1.
---
"Revolving Commitment Termination Date" means (a) if the
-------------------------------------
Reorganization and the HTI Release Event have not occurred by such date,
the date two (2) days following the Closing Date (or, if not a Business
Day, the next succeeding Business Day), and (b) if the Reorganization and
the HTI Release Event have occurred by the date two (2) days following the
Closing Date, May 11, 2005.
"Revolving Committed Amount" means, collectively, the aggregate amount
--------------------------
of all of the Revolving Commitments and, individually, the amount of each
Revolving Lender's Revolving Commitment as specified in Schedule 2.1.
------------
26
"Revolving Lenders" means Lenders holding Revolving Commitments, as
-----------------
identified on Schedule 2.1, and their successors and assigns.
------------
"Revolving Loans" shall have the meaning assigned to such term in
---------------
Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory notes of
-------------- ---------------
the Borrower in favor of each of the Revolving Lenders (or nominees
thereof) evidencing the Revolving Loans and Swingline Loans in
substantially the form attached as Schedule 2.5-1, individually or
--------------
collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended, renewed or replaced from time to time.
"Revolving Obligations" means, collectively, the Revolving Loans,
---------------------
Swingline Loans and LOC Obligations.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw
---
Hill Companies, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"Sale and Leaseback Transaction" means any arrangement pursuant to
------------------------------
which any member of the Consolidated Group, directly or indirectly, becomes
liable as lessee, guarantor or other surety with respect to any lease,
whether an Operating Lease or a Capital Lease, of any Property (a) which
such member of the Consolidated Group has sold or transferred (or is to
sell or transfer) to, or arranged the purchase by, a Person which is not a
member of the Consolidated Group or (b) which such member of the
Consolidated Group intends to use for substantially the same purpose as any
other Property which has been sold or transferred (or is to be sold or
transferred) by such member of the Consolidated Group to another Person
which is not a member of the Consolidated Group in connection with such
lease.
"Securities Exchange Act" means the Securities Exchange Act of 1934.
-----------------------
"Securitization Transaction" means any financing transaction or series
--------------------------
of financing transactions that have been or may be entered into by a member
of the Consolidated Group pursuant to which such member of the Consolidated
Group may sell, convey or otherwise transfer to (i) a Subsidiary or
affiliate (a "Securitization Subsidiary"), or (ii) any other Person, or may
-------------------------
grant a security interest in, any accounts receivable, notes receivable,
rights to future lease payments or residuals or other similar rights to
payment (the "Securitization Receivables") (whether such Securitization
--------------------------
Receivables are then existing or arising in the future) of such member of
the Consolidated Group, and any assets related thereto, including without
limitation, all security interests in merchandise or services financed
thereby, the proceeds of such Securitization Receivables, and other assets
which are customarily sold or in respect of which security interests are
customarily granted in connection with securitization transactions
involving such assets.
27
"Security Agreements" means a collective reference to the Borrower
-------------------
Security Agreement and the Guarantor Security Agreement.
"Senior Subordinated Notes" means those 11% Senior Subordinated Notes
-------------------------
of HTI due 2009 issued pursuant to the terms of that Indenture dated as of
May 11, 1999 with Citibank, N.A., as Trustee, in each case as amended and
modified.
"Single Employer Plan" means any Plan which is covered by Title IV of
--------------------
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"Subordinated Debt" means (i) the Senior Subordinated Notes and (ii)
-----------------
any other Indebtedness of a member of the Consolidated Group which by its
terms is expressly subordinated in right of payment to the prior payment of
the loans and obligations under the Credit Agreement and the other Credit
Documents on the terms and conditions and evidenced by documentation
satisfactory to the Administrative Agent and the Required Lenders.
"Subsidiary" means, as to any Person at any time, (a) any corporation
----------
more than 50% of whose Capital Stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at such time, any class or
classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at such time owned by such Person
directly or indirectly through Subsidiaries, and (b) any partnership,
association, joint venture or other entity of which such Person directly or
indirectly through Subsidiaries owns at such time more than 50% of the
Capital Stock; provided that no Plan (including ESOP) shall be considered a
Subsidiary of Holdings or Triad.
"Swingline Commitment" means the commitment of the Swingline Lender to
--------------------
make Swingline Loans in an aggregate principal amount at any time
outstanding up to the Swingline Committed Amount and the commitment of the
Revolving Lenders to purchase participation interests in the Swingline
Loans up to their respective Revolving Commitment Percentage as provided in
Section 2.1(c), as such amounts may be reduced from time to time in
accordance with the provisions hereof.
"Swingline Committed Amount" means the amount of the Swingline
--------------------------
Lender's Commitment as specified in Section 2.1(c).
"Swingline Lender" means Bank of America.
----------------
"Swingline Loan" means a swingline revolving loan made by the
--------------
Swingline Lender pursuant to the provisions of Section 2.1(c).
"Synthetic Lease" means any synthetic lease, tax retention operating
---------------
lease, off-balance sheet loan or similar off-balance sheet financing
product where such transaction is considered borrowed money indebtedness
for tax purposes but is classified as an Operating Lease under GAAP.
28
"Tax Sharing Agreement" means the Tax Sharing and Indemnification
---------------------
Agreement, dated on or about the date hereof, by and among Columbia/HCA,
Holdings and LifePoint Hospitals, Inc.
"Taxes" shall have the meaning assigned to such term in Section 3.11.
-----
"Term Lenders" means Lenders holding Term Loan Commitments, as
------------
identified on Schedule 2.1, and their successors and assigns.
"Term Loans" means the Tranche A Term Loan and/or the Tranche B Term
----------
Loan.
"Term Loan Commitments" means the Tranche A Term Loan Commitments
---------------------
and/or the Tranche B Term Loan Commitments.
"Term Loan Commitment Percentage" means the Tranche A Term Loan
-------------------------------
Commitment Percentage and/or the Tranche B Term Loan Commitment Percentage,
as appropriate.
"Term Loan Committed Amounts" means the Tranche A Term Loan Committed
---------------------------
Amount and/or the Tranche B Term Loan Committed Amount.
"Tranche A Term Lenders" means Lenders holding Tranche A Term Loan
----------------------
Commitments, as identified on Schedule 2.1, and their successors and
------------
assigns.
"Tranche A Term Loan" shall have the meaning assigned to such term in
-------------------
Section 2.1(e).
"Tranche A Term Loan Commitment" means, with respect to each Tranche A
------------------------------
Term Lender, the commitment of such Tranche A Term Lender to make a Tranche
A Term Loan advance equal to such Tranche A Term Lender's Tranche A Term
Loan Committed Amount (and for purposes of making determinations of
Required Lenders and for purposes of calculations referred to in Section
12.6(b), the principal amount outstanding on the Tranche A Term Loan).
"Tranche A Term Loan Commitment Percentage" means, for each Tranche A
-----------------------------------------
Term Lender, a fraction (expressed as a percentage) the numerator of which
is the amount of the Tranche A Term Loan Commitment of such Lender at such
time and the denominator of which is the aggregate amount of the Tranche A
Term Loan Commitment at such time. The initial Tranche A Term Loan
Commitment Percentages are set out on Schedule 2.1.
------------
"Tranche A Term Loan Committed Amount" means, collectively, the
------------------------------------
aggregate amount of all of the Tranche A Term Loan Commitments and,
individually, the amount of each Tranche A Term Lender's Tranche A Term
Loan Commitment as specified on Schedule 2.1, as such amounts may be
------------
reduced from time to time in accordance with the provisions hereof.
29
"Tranche A Term Note" or "Tranche A Term Notes" means the promissory
------------------- --------------------
notes of the Borrower in favor of each of the Tranche A Term Lenders (or
nominees thereof) evidencing the Tranche A Term Loan in substantially the
form attached as Schedule 2.5-3, individually or collectively, as
--------------
appropriate, as such promissory notes may be amended, modified,
supplemented, extended or renewed from time to time.
"Tranche B Term Lenders" means Lenders holding Tranche B Term Loan
----------------------
Commitments, as identified on Schedule 2.1, and their successors and
------------
assigns.
"Tranche B Term Loan" shall have the meaning assigned to such term in
-------------------
Section 2.1(f).
"Tranche B Term Loan Commitment" means, with respect to each Tranche B
------------------------------
Term Lender, the commitment of such Tranche B Term Lender to make a Tranche
B Term Loan advance equal to such Tranche B Term Lender's Tranche B Term
Loan Committed Amount (and for purposes of making determinations of
Required Lenders hereunder after the Closing Date and for purposes of
making calculations referred to in Section 12.6(b), the aggregate principal
amount of the Tranche B Term Loan).
"Tranche B Term Loan Commitment Percentage" means, for each Tranche B
-----------------------------------------
Term Lender, a fraction (expressed as a percentage) the numerator of which
is the amount of the Tranche B Term Loan Commitment of such Lender at such
time and the denominator of which is the aggregate amount of the Tranche B
Term Loan Commitment at such time. The initial Tranche B Term Loan
Commitment Percentages are set out on Schedule 2.1.
------------
"Tranche B Term Loan Committed Amount" means, collectively, the
------------------------------------
aggregate amount of all of the Tranche B Term Loan Commitments and,
individually, the amount of each Tranche B Term Lender's Tranche B Term
Loan Commitment as specified on Schedule 2.1, as such amounts may be
------------
reduced from time to time in accordance with the provisions hereof.
"Tranche B Term Note" or "Tranche B Term Notes" means the promissory
------------------- --------------------
notes of the Borrower in favor of each of the Tranche B Term Lenders (or
nominees thereof) evidencing the Tranche B Term Loan in substantially the
form attached as Schedule 2.5-3, individually or collectively, as
--------------
appropriate, as such promissory notes may be amended, modified,
supplemented, extended or renewed from time to time.
"Triad" means Triad Hospitals Holdings, Inc., a Delaware corporation,
-----
and its successors and permitted assigns.
"Triad Group Joinder Event" shall have occurred upon the satisfaction
-------------------------
or waiver of each of the conditions set forth in Section 5.4.
"Voting Stock" means, with respect to any Person, Capital Stock issued
------------
by such 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 though the right so to
vote has been suspended by the happening of such a contingency.
30
"Wholly Owned Subsidiary" of any Person means any Subsidiary 100% of
-----------------------
whose Voting Stock is at the time owned by such Person directly or
indirectly through other Wholly Owned Subsidiaries.
"Year 2000 Compliant" shall have the meaning assigned to such term in
-------------------
Section 7.17.
1.2 Computation of Time Periods.
---------------------------
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding."
1.3 Accounting Terms.
----------------
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 8.1 (or,
prior to the delivery of the first financial statements pursuant to Section 8.1,
consistent with the annual audited financial statements referenced in Section
7.1(i) hereof); provided, however, if (a) the Borrower shall object to
-------- -------
determining such compliance on such basis at the time of delivery of such
financial statements due to any change in GAAP or the rules promulgated with
respect thereto after the Closing Date or (b) the Administrative Agent or the
Required Lenders shall so object, in either case in writing within 60 days after
delivery of such financial statements, then such calculations shall be made on a
basis consistent with the most recent financial statements delivered by the
Borrower to the Lenders as to which no such objection shall have been made.
Notwithstanding the above, the parties hereto acknowledge and agree that, for
purposes of all calculations made under the financial covenants set forth in
Section 8.11 (including without limitation for purposes of the definitions of
"Applicable Percentage" and "Pro Forma Basis" hereunder), (i) in connection with
any Asset Disposition permitted under Section 9.5, (A) income statement items
(whether positive or negative) attributable to the Property disposed of shall be
excluded to the extent relating to any period occurring prior to the date of
such transaction and (B) Indebtedness which is retired shall be excluded and
deemed to have been retired as of the first day of the applicable period and
(ii) in connection with any merger or consolidation permitted under Section 9.4
or any Acquisition referred to in the definition of "Permitted Acquisition",
---------------------
income statement items (whether positive or negative) attributable to any Person
or Property acquired in any Permitted Acquisition shall, to the extent not
otherwise included in such income statements items for the members of the
Consolidated Group in accordance with GAAP or in accordance with any defined
terms set forth herein, be included to the extent relating to any period
applicable in such calculations.
31
SECTION 2
CREDIT FACILITIES
2.1 Commitments.
-----------
(a) Revolving Commitment. During the Commitment Period, subject to the
--------------------
terms and conditions hereof, each Revolving Lender severally agrees to make
revolving loans (the "Revolving Loans") to the Borrower in the amount of such
---------------
Revolving Lender's Revolving Commitment Percentage of such Revolving Loans for
the purposes hereinafter set forth; provided that (i) with regard to the
--------
Revolving Lenders collectively, the aggregate principal amount of Revolving
Obligations at any time shall not exceed ONE HUNDRED TWENTY-FIVE MILLION DOLLARS
($125,000,000) (the "Aggregate Revolving Committed Amount") and (ii) with regard
------------------------------------
to each Revolving Lender individually, such Revolving Lender's Revolving
Commitment Percentage of Revolving Obligations at any time shall not exceed such
Revolving Lender's Revolving Committed Amount. Revolving Loans may consist of
Base Rate Loans or Eurodollar Loans, or a combination thereof, as the Borrower
may request, and may be repaid and reborrowed in accordance with the provisions
hereof.
(b) Letter of Credit Sublimit Commitment. During the Commitment Period,
------------------------------------
subject to the terms and conditions hereof and of the LOC Documents, if any, and
such other terms and conditions which the Issuing Lender may reasonably require,
the Issuing Lender shall issue, and the Revolving Lenders shall participate
severally in, such standby Letters of Credit as the Borrower may request, in
form acceptable to the Issuing Lender, for the purposes hereinafter set forth;
provided that (i) the aggregate amount of LOC Obligations shall not exceed
--------
TWENTY-FIVE MILLION DOLLARS ($25,000,000) at any time (the "LOC Committed
-------------
Amount"), (ii) with regard to the Revolving Lenders collectively, the aggregate
------
principal amount of Revolving Obligations at any time shall not exceed the
Aggregate Revolving Committed Amount and (iii) with regard to each Revolving
Lender individually, such Revolving Lender's Revolving Commitment Percentage of
Revolving Obligations at any time shall not exceed such Revolving Lender's
Revolving Committed Amount. Letters of Credit issued hereunder shall have an
expiry date not more than one year from the date of issuance or extension, and
may not extend beyond the date five (5) Business Days prior to the Revolving
Commitment Termination Date.
(c) Swingline Sublimit Commitment. During the Commitment Period, subject
-----------------------------
to the terms and conditions hereof, the Swingline Lender agrees to make certain
revolving loans (the "Swingline Loans") to the Borrower; provided that (i) the
--------------- --------
aggregate principal amount of Swingline Loans shall not exceed TEN MILLION
DOLLARS ($10,000,000) (the "Swingline Committed Amount"), (ii) with regard to
--------------------------
the Revolving Lenders collectively, the aggregate principal amount of Revolving
Obligations at any time shall not exceed the Aggregate Revolving Committed
Amount and (iii) with regard to each Revolving Lender individually, such
Revolving Lender's Revolving Commitment Percentage of Revolving Obligations at
any time shall not exceed such Revolving Lender's Revolving Committed Amount.
Swingline Loans may consist of Base Rate Loans or Quoted Rate Swingline Loans,
or a combination thereof, as the Borrower may request, and may be repaid and
reborrowed in accordance with the provisions hereof.
32
(d) Bridge Term Loan Commitment. On the Closing Date, subject to the terms
---------------------------
and conditions hereof, each Bridge Lender severally agrees to make its Bridge
Loan Commitment Percentage of a bridge loan (the "Bridge Loan") in the aggregate
-----------
principal amount of SEVENTY-FIVE MILLION DOLLARS ($75,000,000) to the Borrower
for the purposes hereinafter set forth. The Bridge Loan may be comprised of Base
Rate Loans or Eurodollar Loans, or a combination thereof, as the Borrower may
request. Amounts repaid on the Bridge Loan may not be reborrowed.
(e) Tranche A Term Loan Commitment. On the Closing Date, subject to the
------------------------------
terms and conditions hereof, each Tranche A Term Lender severally agrees to make
its Tranche A Term Loan Commitment Percentage of a term loan (the "Tranche A
---------
Term Loan") in the aggregate principal amount of SIXTY-FIVE MILLION DOLLARS
---------
($65,000,000) to the Borrower for the purposes hereinafter set forth. The
Tranche A Term Loan may be comprised of Base Rate Loans or Eurodollar Loans, or
a combination thereof, as the Borrower may request. Amounts repaid on the
Tranche A Term Loan may not be reborrowed.
(f) Tranche B Term Loan Commitment. On the Closing Date, subject to the
------------------------------
terms and conditions hereof, each Tranche B Term Lender severally agrees to make
its Tranche B Term Loan Commitment Percentage of a term loan (the "Tranche B
---------
Term Loan") in the aggregate principal amount of TWO HUNDRED MILLION DOLLARS
---------
($200,000,000) to the Borrower for the purposes hereinafter set forth. The
Tranche B Term Loan may be comprised of Base Rate Loans or Eurodollar Loans, or
a combination thereof, as the Borrower may request. Amounts repaid on the
Tranche B Term Loan may not be reborrowed.
2.2 Method of Borrowing.
-------------------
(a) Notice of Request for Extensions of Credit. The Borrower shall request
------------------------------------------
an Extension of Credit hereunder by written notice (or telephone notice
promptly confirmed in writing) as follows:
(i) Revolving Loans. In the case of Revolving Loans, to the
---------------
Administrative Agent not later than 9:00 A.M. (San Francisco, California
time) on the Business Day prior to the date of the requested borrowing in
the case of Base Rate Loans, and on the third Business Day prior to the
date of the requested borrowing in the case of Eurodollar Loans. Each such
request for borrowing shall be irrevocable and shall specify (A) that a
Revolving Loan is requested, (B) the date of the requested borrowing (which
shall be a Business Day), (C) the aggregate principal amount to be
borrowed, and (D) whether the borrowing shall be comprised of Base Rate
Loans, Eurodollar Loans or a combination thereof, and if Eurodollar Loans
are requested, the Interest Period(s) therefor. A form of Notice of
Borrowing is attached as Schedule 2.2(a)(i). The Administrative Agent shall
------------------
give notice to each Revolving Lender promptly upon receipt of each Notice
of Borrowing pursuant to this Section 2.2(a)(i), the contents thereof and
each such Revolving Lender's share of any borrowing to be made pursuant
thereto.
(ii) Letters of Credit. In the case of Letters of Credit, to the
-----------------
Issuing Lender with a copy to the Administrative Agent not later than
9:00 A.M. (San Francisco, California time) on the third Business Day
prior to the date of the requested issuance or
33
extension (or such shorter period as may be agreed by the Issuing Lender).
Each such request for issuance or extension of a Letter of Credit shall be
irrevocable and shall specify, among other things, (A) that a Letter of
Credit is requested, (B) the date of the requested issuance or extension,
(C) the type, amount, expiry date and terms on which the Letter of Credit
is to be issued or extended, and (D) the beneficiary. A form of Notice of
Request for Letter of Credit is attached as Schedule 2.2(a)(ii).
------------------
(iii) Swingline Loans. In the case of Swingline Loans, to the
---------------
Swingline Lender not later than 9:00 A.M. (San Francisco, California time)
on the Business Day of the requested borrowing. Each such request for
borrowing shall be irrevocable and shall specify (A) that a Swingline Loan
is requested, (B) the date of the requested borrowing (which shall be a
Business Day), (C) the aggregate principal amount to be borrowed, and (D)
the interest rate option and maturity requested therefor. A form of Notice
of Borrowing is attached as Schedule 2.2(a)(i). Each Swingline Loan shall
------------------
have a maturity date as the Borrower may request and the Swingline Lender
may agree.
(iv) Bridge Loan. In the case of the Bridge Loan, to the
-----------
Administrative Agent not later than 9:00 A.M. (San Francisco, California
time) on the Business Day prior to the Closing Date in the case of Base
Rate Loans, and on the third Business Day prior to the Closing Date in the
case of Eurodollar Loans. Each such request for borrowing shall be
irrevocable and shall specify (A) that the Bridge Loan is requested, (B)
the aggregate principal amount to be borrowed, and (C) whether the
borrowing shall be comprised of Base Rate Loans, Eurodollar Loans or a
combination thereof, and if Eurodollar Loans are requested, the Interest
Period(s) therefor. A form of Notice of Borrowing is attached as Schedule
--------
2.2(a)(i). The Administrative Agent shall give notice to each Bridge Lender
---------
promptly upon receipt of each Notice of Borrowing pursuant to this Section
2.1(a)(iv), the contents thereof and each such Bridge Lender's share of any
borrowing to be made pursuant thereto.
(v) Term Loans. In the case of the Term Loans, to the
----------
Administrative Agent not later than 9:00 A.M. (San Francisco, California
time) on the Business Day prior to the Closing Date in the case of Base
Rate Loans, and on the third Business Day prior to the Closing Date in the
case of Eurodollar Loans. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Term Loan is requested and the
respective Tranche thereof, (B) the aggregate principal amount to be
borrowed, and (C) whether the borrowing shall be comprised of Base Rate
Loans, Eurodollar Loans or a combination thereof, and if Eurodollar Loans
are requested, the Interest Period(s) therefor. A form of Notice of
Borrowing is attached as Schedule 2.2(a)(i). The Administrative Agent shall
------------------
give notice to each Term Lender promptly upon receipt of each Notice of
Borrowing pursuant to this Section 2.1(a)(v), the contents thereof and each
such Term Lender's share of any borrowing to be made pursuant thereto.
(b) Minimum Amounts. Each Loan advance shall be in a minimum principal
---------------
amount of $5,000,000, in the case of Eurodollar Loans, or $1,000,000 (or the
remaining Committed Amount, if less), in the case of Base Rate Loans, and
integral multiples of $250,000 in excess thereof. Each Swingline Loan advance
shall be in a minimum principal amount of $1,000,000 and integral multiples of
$100,000 in excess thereof.
34
(c) Information Not Provided. If in connection with any such request for
------------------------
an Extension of Credit, the Borrower shall fail to specify (i) an applicable
Interest Period in the case of a Eurodollar Loan, the Borrower shall be deemed
to have requested an Interest Period of one month, or (ii) the type of loan
requested in the case of Revolving Loans, the Term Loan or the Swingline Loan,
the Borrower shall be deemed to have requested a Base Rate Loan.
(e) Maximum Number of Eurodollar Loans. In connection with any request
----------------------------------
for an Extension of Credit, (i) the Revolving Loans may be comprised of no more
than five (5) Eurodollar Loans outstanding at any time, (ii) the Bridge Loan may
be comprised of no more than five (5) Eurodollar Loans outstanding at any time,
(iii) the Tranche A Term Loan may be comprised of no more than five (5)
Eurodollar Loans outstanding at any time and (iv) the Tranche B Term Loan may be
comprised of no more than five (5) Eurodollar Loans outstanding at any time. For
purposes hereof, Eurodollar Loans with separate or different Interest Periods
will be considered as separate Eurodollar Loans even if their Interest Periods
expire on the same date.
2.3 Interest.
--------
Subject to Section 3.1, the Loans hereunder shall bear interest at a per
annum rate, payable in arrears on each applicable Interest Payment Date (or at
such other times as may be specified herein), as follows:
(a) Base Rate Loans. During such periods as the Loans shall be comprised
---------------
of Base Rate Loans, the sum of the Base Rate plus the Applicable Percentage;
(b) Eurodollar Loans. During such periods as the Loans shall be comprised
----------------
of Eurodollar Loans, the sum of the Eurodollar Rate plus the Applicable
Percentage; and
(c) Quoted Rate Swingline Loans. During such periods as the Swingline
---------------------------
Loans shall be comprised of Quoted Rate Swingline Loans, the Quoted Rate.
2.4 Repayment.
---------
(a) Revolving Loans. The principal amount of all Revolving Loans shall be
---------------
due and payable in full on the Revolving Commitment Termination Date.
(b) Swingline Loans. The principal amount of all Swingline Loans shall be
---------------
due and payable on the earlier of (A) the maturity date agreed to by the
Swingline Lender and the Borrower with respect to such Loan, or (B) the
Revolving Commitment Termination Date.
(c) Bridge Loan. The principal amount of the Bridge Loan shall be due and
-----------
payable in full on the Bridge Loan Maturity Date.
(d) Tranche A Term Loan. The principal amount of the Tranche A Term Loan
-------------------
shall be due and payable (i) if the Reorganization and the HTI Release Event
have not occurred by such date, in full on the date two (2) days following the
Closing Date (or, if not a Business Day, the next
35
succeeding Business Day), and (ii) if the Reorganization and the HTI Release
Event have occurred by the date two (2) days following the Closing Date, in
twenty (20) consecutive quarterly installments, as follows:
Principal Principal
Amortization Amortization
Date Payment Date Payment
---- ------- ---- -------
August 11, 1999 $5,000,000 February 11, 2002 $ 2,500,000
November 11, 1999 $5,000,000 May 11, 2002 $ 2,500,000
February 11, 2000 $5,000,000 August 11, 2002 $ 4,375,000
May 11, 2000 $5,000,000 November 11, 2002 $ 4,375,000
August 11, 2000 $2,500,000 February 11, 2003 $ 4,375,000
November 11, 2000 $2,500,000 May 11, 2003 $ 4,375,000
February 11, 2001 $2,500,000 August 11, 2003 $ 1,875,000
May 11, 2001 $2,500,000 November 11, 2003 $ 1,875,000
August 11, 2001 $2,500,000 February 11, 2004 $ 1,875,000
November 11, 2001 $2,500,000 May 11, 2004 $ 1,875,000
-----------
Total $65,000,000
(d) Tranche B Term Loan. The principal amount of the Tranche B Term Loan
-------------------
shall be due and payable (i) if the Reorganization and the HTI Release Event
have not occurred by such date, in full on the date two (2) days following the
Closing Date (or, if not a Business Day, the next succeeding Business Day) and
(ii) if the Reorganization and the HTI Release Event have occurred by the date
two (2) days following the Closing Date, in twenty-six (26) consecutive
quarterly installments, as follows:
Principal Principal
Amortization Amortization
Date Payment Date Payment
---- ------- ---- -------
August 11, 1999 $500,000 November 11, 2002 $ 500,000
November 11, 1999 $500,000 February 11, 2003 $ 500,000
February 11, 2000 $500,000 May 11, 2003 $ 500,000
May 11, 2000 $500,000 August 11, 2003 $ 1,000,000
August 11, 2000 $500,000 November 11, 2003 $ 1,000,000
November 11, 2000 $500,000 February 11, 2004 $ 23,750,000
February 11, 2001 $500,000 May 11, 2004 $ 23,750,000
May 11, 2001 $500,000 August 11, 2004 $ 23,750,000
August 11, 2001 $500,000 November 11, 2004 $ 23,750,000
November 11, 2001 $500,000 February 11, 2005 $ 23,750,000
February 11, 2002 $500,000 May 11, 2005 $ 23,750,000
May 11, 2002 $500,000 August 11, 2005 $ 23,750,000
August 11, 2002 $500,000 November 11, 2005 $ 23,750,000
------------
Total $200,000,000
36
2.5 Notes.
-----
The Revolving Loans and Swingline Loans shall be evidenced by the Revolving
Notes. The Bridge Loan shall be evidenced by the Bridge Notes. The Term Loans
shall be evidenced by the Term Notes.
2.6 Additional Provisions relating to Letters of Credit.
---------------------------------------------------
(a) Reports. The Issuing Lender will provide to the Administrative Agent
-------
at least monthly, and more frequently upon request, a detailed summary report on
its Letters of Credit and the activity thereon, in form and substance acceptable
to the Administrative Agent. In addition, the Issuing Lender will provide to
the Administrative Agent for dissemination to the Revolving Lenders at least
quarterly, and more frequently upon request, a detailed summary report on its
Letters of Credit and the activity thereon, including, among other things, the
Credit Party for whose account the Letter of Credit is issued, the beneficiary,
the face amount, and the expiry date. The Issuing Lender will provide copies of
the Letters of Credit to the Administrative Agent and the Revolving Lenders
promptly upon request.
(b) Participation. Each Revolving Lender, with respect to the Existing
-------------
Letters of Credit, hereby purchases a participation interest in such Existing
Letters of Credit, and with respect to Letters of Credit issued on or after the
Closing Date, upon issuance of a Letter of Credit, shall be deemed to have
purchased without recourse a risk participation from the Issuing Lender in such
Letter of Credit and the obligations arising thereunder, in each case in an
amount equal to its pro rata share of the obligations under such Letter of
Credit (based on the respective Revolving Commitment Percentages of the
Revolving Lenders) and shall absolutely, unconditionally and irrevocably assume,
as primary obligor and not as surety, and be obligated to pay to the Issuing
Lender therefor and discharge when due, its pro rata share of the obligations
arising under such Letter of Credit. Without limiting the scope and nature of
each Revolving Lender's participation in any Letter of Credit, to the extent
that the Issuing Lender has not been reimbursed as required hereunder or under
any such Letter of Credit, each Revolving Lender shall pay to the Issuing Lender
its pro rata share of such unreimbursed drawing in same day funds on the day of
notification by the Issuing Lender of an unreimbursed drawing pursuant to the
provisions of subsection (d) hereof. The obligation of each Revolving Lender to
so reimburse the Issuing Lender shall be absolute and unconditional and shall
not be affected by the occurrence of a Default, an Event of Default or any other
occurrence or event. Any such reimbursement shall not relieve or otherwise
impair the obligation of the Borrower to reimburse the Issuing Lender under any
Letter of Credit, together with interest as hereinafter provided.
(c) Reimbursement. In the event of any drawing under any Letter of
-------------
Credit, the Issuing Lender will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Issuing Lender that the Borrower intends
to otherwise reimburse the Issuing Lender for such drawing, the Borrower shall
be deemed to have requested that the Revolving Lenders make a Revolving Loan in
the amount of the drawing as provided in subsection (d) hereof on the related
Letter of Credit, the proceeds of which will be used to satisfy the related
reimbursement obligations. The Borrower promises to reimburse the Issuing Lender
on the day of drawing under any Letter of Credit (either with the proceeds of a
Revolving Loan obtained hereunder or otherwise) in same day funds. If the
Borrower shall fail to reimburse the Issuing Lender as provided
37
hereinabove, the unreimbursed amount of such drawing shall bear interest at a
per annum rate equal to the Base Rate plus the sum of (i) the Applicable
Percentage and (ii) two percent (2%). The Borrower's reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of setoff, counterclaim or defense to payment the
Borrower may claim or have against the Issuing Lender, the Administrative Agent,
the Lenders, the beneficiary of the Letter of Credit drawn upon or any other
Person, including without limitation any defense based on any failure of the
Borrower or any other Credit Party to receive consideration or the legality,
validity, regularity or unenforceability of the Letter of Credit. The Issuing
Lender will promptly notify the other Revolving Lenders of the amount of any
unreimbursed drawing and each Revolving Lender shall promptly pay to the
Administrative Agent for the account of the Issuing Lender in Dollars and in
immediately available funds, the amount of such Revolving Lender's Revolving
Commitment Percentage of such unreimbursed drawing. Such payment shall be made
on the day such notice is received by such Revolving Lender from the Issuing
Lender if such notice is received at or before 12:00 Noon (San Francisco,
California time) otherwise such payment shall be made at or before 11:00 A.M.
(San Francisco, California time) on the Business Day next succeeding the day
such notice is received. If such Revolving Lender does not pay such amount to
the Issuing Lender in full upon such request, such Revolving Lender shall, on
demand, pay to the Administrative Agent for the account of the Issuing Lender
interest on the unpaid amount during the period from the date of such drawing
until such Revolving Lender pays such amount to the Issuing Lender in full at a
rate per annum equal to, if paid within two (2) Business Days of the date that
such Revolving Lender is required to make payments of such amount pursuant to
the preceding sentence, the Federal Funds Rate and thereafter at a rate equal to
the Base Rate. Each Revolving Lender's obligation to make such payment to the
Issuing Lender, and the right of the Issuing Lender to receive the same, shall
be absolute and unconditional, shall not be affected by any circumstance
whatsoever and without regard to the termination of this Credit Agreement or the
Commitments hereunder, the existence of a Default or Event of Default or the
acceleration of the obligations of the Borrower hereunder and shall be made
without any offset, abatement, withholding or reduction whatsoever.
Simultaneously with the making of each such payment by a Revolving Lender to the
Issuing Lender, such Revolving Lender shall, automatically and without any
further action on the part of the Issuing Lender or such Revolving Lender,
acquire a participation in an amount equal to such payment (excluding the
portion of such payment constituting interest owing to the Issuing Lender) in
the related unreimbursed drawing portion of the LOC Obligation and in the
interest thereon and in the related LOC Documents, and shall have a claim
against the Borrower with respect thereto.
(d) Repayment with Revolving Loans. On any day on which the Borrower
------------------------------
shall have requested, or been deemed to have requested, a Revolving Loan advance
to reimburse a drawing under a Letter of Credit, the Administrative Agent shall
give notice to the Revolving Lenders that a Revolving Loan has been requested or
deemed requested by the Borrower to be made in connection with a drawing under a
Letter of Credit, in which case a Revolving Loan advance comprised of Base Rate
Loans (or Eurodollar Loans to the extent the Borrower has complied with the
procedures of Section 2.2(a)(i) with respect thereto) shall be immediately made
to the Borrower by all Revolving Lenders (notwithstanding any termination of the
Commitments pursuant to Section 10.2) pro rata based on the respective Revolving
--------
Commitment Percentages of the Revolving Lenders (determined before giving effect
to any termination of the Commitments pursuant to Section 10.2) and the proceeds
thereof shall be paid directly to the Issuing Lender for application to the
respective LOC Obligations. Each such Revolving Lender hereby irrevocably
agrees to make
38
its pro rata share of each such Revolving Loan immediately upon any such request
or deemed request in the amount, in the manner and on the date specified in the
preceding sentence notwithstanding (i) the amount of such borrowing may not
---------------
comply with the minimum amount for advances of Revolving Loans otherwise
required hereunder, (ii) whether any conditions specified in Section 5.2 are
then satisfied, (iii) whether a Default or an Event of Default then exists, (iv)
failure for any such request or deemed request for Revolving Loan to be made by
the time otherwise required hereunder, (v) whether the date of such borrowing is
a date on which Revolving Loans are otherwise permitted to be made hereunder or
(vi) any termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower or any Credit Party), then each
such Revolving Lender hereby agrees that it shall forthwith purchase (as of the
date such borrowing would otherwise have occurred, but adjusted for any payments
received from the Borrower on or after such date and prior to such purchase)
from the Issuing Lender such participation in the outstanding LOC Obligations as
shall be necessary to cause each such Revolving Lender to share in such LOC
Obligations ratably (based upon the respective Commitment Percentages of the
Revolving Lenders (determined before giving effect to any termination of the
Commitments pursuant to Section 10.2)), provided that in the event such payment
--------
is not made on the day of drawing, such Revolving Lender shall pay in addition
to the Issuing Lender interest on the amount of its unfunded Participation
Interest at a rate equal to, if paid within two (2) Business Days of the date of
drawing, the Federal Funds Rate, and thereafter at the Base Rate.
(e) Designation of other Credit Parties as Account Parties.
------------------------------------------------------
Notwithstanding anything to the contrary set forth in this Credit Agreement,
including without limitation Section 2.2(a)(ii) hereof, a Letter of Credit
issued hereunder may contain a statement to the effect that such Letter of
Credit is issued for the account of a Credit Party, provided that
notwithstanding such statement, the Borrower shall be the actual account party
for all purposes of this Credit Agreement for such Letter of Credit and such
statement shall not affect the Borrower's reimbursement obligations hereunder
with respect to such Letter of Credit.
(f) Renewal, Extension. The renewal or extension of any Letter of Credit
------------------
shall, for purposes hereof, be treated in all respects the same as the issuance
of a new Letter of Credit hereunder.
(g) Uniform Customs and Practices. The Issuing Lender may have the
-----------------------------
Letters of Credit be subject to The Uniform Customs and Practice for Documentary
Credits, as published as of the date of issue by the International Chamber of
Commerce (the "UCP"), in which case the UCP may be incorporated therein and
deemed in all respects to be a part thereof.
(h) Indemnification; Nature of Issuing Lender's Duties.
--------------------------------------------------
(i) In addition to its other obligations under this Section 2.6,
the Borrower hereby agrees to protect, indemnify, pay and save the Issuing
Lender harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Lender may incur or be
39
subject to as a consequence, direct or indirect, of (A) the issuance of any
Letter of Credit or (B) the failure of the Issuing Lender to honor a
drawing under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions, herein
called "Government Acts").
----------------
(ii) As between the Borrower and the Issuing Lender, the Borrower
shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. The Issuing Lender shall not be
responsible: (A) for the form, validity, sufficiency, accuracy, genuineness
or legal effect of any document submitted by any party in connection with
the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (B) for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (D) for
any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under a Letter of Credit or of the proceeds
thereof; and (E) for any consequences arising from causes beyond the
control of the Issuing Lender, including, without limitation, any
Government Acts. None of the above shall affect, impair, or prevent the
vesting of the Issuing Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
the Issuing Lender, under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in good faith, shall not put such
Issuing Lender under any resulting liability to the Borrower or any other
Credit Party. It is the intention of the parties that this Credit Agreement
shall be construed and applied to protect and indemnify the Issuing Lender
against any and all risks involved in the issuance of the Letters of
Credit, all of which risks are hereby assumed by the Borrower (on behalf of
itself and each of the other Credit Parties), including, without
limitation, any and all Government Acts. The Issuing Lender shall not, in
any way, be liable for any failure by the Issuing Lender or anyone else to
pay any drawing under any Letter of Credit as a result of any Government
Acts or any other cause beyond the control of the Issuing Lender.
(iv) Nothing in this subsection (h) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d)
above. The obligations of the Borrower under this subsection (h) shall
survive the termination of this Credit Agreement. No act or omissions of
any current or prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Issuing Lender to enforce any right,
power or benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (h), the Borrower shall have no obligation to indemnify the
Issuing Lender in respect of any liability incurred by the Issuing Lender
(A) arising solely out of the gross negligence or willful misconduct of the
Issuing Lender, as determined by a court of competent
40
jurisdiction, or (B) caused by the Issuing Lender's failure to pay under
any Letter of Credit after presentation to it of a request strictly
complying with the terms and conditions of such Letter of Credit, as
determined by a court of competent jurisdiction, unless such payment is
prohibited by any law, regulation, court order or decree.
(i) Responsibility of Issuing Xxxxxx.Xx is expressly understood and agreed
--------------------------------
that the obligations of the Issuing Lender hereunder to the Lenders are only
those expressly set forth in this Credit Agreement and that the Issuing Lender
shall be entitled to assume that the conditions precedent set forth in Section
5.2 have been satisfied unless it shall have acquired actual knowledge that any
such condition precedent has not been satisfied; provided, however, that nothing
-------- -------
set forth in this Section 2.6 shall be deemed to prejudice the right of any
Lender to recover from the Issuing Lender any amounts made available by such
Lender to the Issuing Lender pursuant to this Section 2.6 in the event that it
is determined by a court of competent jurisdiction that the payment with respect
to a Letter of Credit constituted gross negligence or willful misconduct on the
part of the Issuing Lender.
(j) Conflict with LOC Documents. Solely as among the parties hereto, in
---------------------------
the event of any conflict between this Credit Agreement and any LOC Document
(including any letter of credit application), this Credit Agreement shall
control.
2.7 Additional Provisions relating to Swingline Loans.
-------------------------------------------------
The Swingline Lender may, at any time, in its sole discretion, by written
notice to the Borrower and the Revolving Lenders, demand repayment of its
Swingline Loans by way of a Revolving Loan advance, in which case the Borrower
shall be deemed to have requested a Revolving Loan advance comprised solely of
Base Rate Loans in the amount of such Swingline Loans; provided, however, that
-------- -------
any such demand shall be deemed to have been given one Business Day prior to the
Revolving Commitment Termination Date and on the date of the occurrence of any
Event of Default described in Section 10.1 and upon acceleration of the
indebtedness hereunder and the exercise of remedies in accordance with the
provisions of Section 10.2. Each Revolving Lender hereby irrevocably agrees to
make its Revolving Commitment Percentage of each such Revolving Loan in the
amount, in the manner and on the date specified in the preceding sentence
notwithstanding (I) the amount of such borrowing may not comply with the minimum
---------------
amount for advances of Revolving Loans otherwise required hereunder, (II)
whether any conditions specified in Section 5.2 are then satisfied, (III)
whether a Default or an Event of Default then exists, (IV) failure of any such
request or deemed request for Revolving Loan to be made by the time otherwise
required hereunder, (V) whether the date of such borrowing is a date on which
Revolving Loans are otherwise permitted to be made hereunder or (VI) any
termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower or any other Credit Party), then
each Revolving Lender hereby agrees that it shall forthwith purchase (as of the
date such borrowing would otherwise have occurred, but adjusted for any payments
received from the Borrower on or after such date and prior to such purchase)
from the Swingline Lender such Participation Interests in the outstanding
Swingline Loans as shall be necessary to cause each such Revolving Lender to
share in such Swingline Loans ratably based upon its Revolving Commitment
Percentage of the Revolving Committed Amount
41
(determined before giving effect to any termination of the Commitments pursuant
to Section 3.4), provided that (A) all interest payable on the Swingline Loans
--------
shall be for the account of the Swingline Lender until the date as of which the
respective Participation Interest is funded and (B) at the time any purchase of
Participation Interests pursuant to this sentence is actually made, the
purchasing Revolving Lender shall be required to pay to the Swingline Lender, to
the extent not paid to the Swingline Lender by the Borrower in accordance with
the terms of Section 2.4(b), interest on the principal amount of Participation
Interests purchased for each day from and including the day upon which such
borrowing would otherwise have occurred to but excluding the date of payment for
such Participation Interests, at the rate equal to the Federal Funds Rate.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
----------------------------------------------
3.1 Default Rate.
------------
Upon the occurrence, and during the continuance, of an Event of Default,
(i) the principal of and, to the extent permitted by law, interest on the Loans
and any other amounts owing hereunder or under the other Credit Documents shall
bear interest, payable on demand, at a per annum rate 2% greater than the rate
which would otherwise be applicable (or if no rate is applicable, whether in
respect of interest, fees or other amounts, then the Base Rate plus 2%) and (ii)
----
Letter of Credit Fee shall accrue at a per annum rate 2% greater than the rate
which would otherwise be applicable.
3.2 Continuation and Conversion.
---------------------------
The Borrower shall have the option, on any Business Day, to extend existing
Loans into a subsequent permissible Interest Period or to convert Loans into
Loans of another interest rate type; provided, however, that (i) except as
-------- -------
provided in Section 3.8, Eurodollar Loans may be converted into Base Rate Loans
or extended as Eurodollar Loans for new Interest Periods only on the last day of
the Interest Period applicable thereto, (ii) without the consent of the Required
Lenders, Eurodollar Loans may be extended, and Base Rate Loans may be converted
into Eurodollar Loans, only if the conditions precedent set forth in Section 5.2
are satisfied on the date of Continuation or Conversion, (iii) Loans extended
as, or converted into, Eurodollar Loans shall be subject to the terms of the
definition of "Interest Period" and shall be in such minimum amounts as provided
---------------
in Section 2.2(b), (iv) no more than five (5) Eurodollar Loans which comprise
Revolving Loans, no more than five (5) Eurodollar Loans which comprise the
Bridge Loan, no more than five (5) Eurodollar Loans which comprise the Tranche A
Term Loan and no more than five (5) Eurodollar Loans which comprise the Tranche
B Term Loan shall be outstanding hereunder at any time (it being understood
that, for purposes hereof, Eurodollar Loans with different Interest Periods
shall be considered as separate Eurodollar Loans, even if they begin on the same
date, although borrowings, Continuations and Conversions may, in accordance with
the provisions hereof, be combined at the end of existing Interest Periods to
constitute a new Eurodollar Loan with a single Interest Period) and (v) any
request for Continuation or Conversion of a Eurodollar Loan which shall fail to
specify an Interest Period shall be deemed to be a request for an Interest
Period of one month. Each such Continuation or Conversion shall be effected by
the Borrower by giving a Notice of Extension/Conversion (or telephonic notice
promptly confirmed in writing) to the office of the
42
Administrative Agent specified in Schedule 2.1, or at such other office as the
-------------
Administrative Agent may designate in writing, prior to 9:00 A.M. (San
Francisco, California time) on the Business Day of, in the case of the
Conversion of a Eurodollar Loan into a Base Rate Loan, and on the third Business
Day prior to, in the case of the Continuation of a Eurodollar Loan as, or
Conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the proposed
Continuation or Conversion, specifying the date of the proposed Continuation or
Conversion, the Loans to be so Continued or Converted, the types of Loans into
which such Loans are to be Converted and, if appropriate, the applicable
Interest Periods with respect thereto. Each request for Continuation or
Conversion shall be irrevocable and shall constitute a representation and
warranty by the Borrower of the matters specified in subsections (a), (b), (c),
(d) and (e) of Section 5.2. In the event the Borrower fails to request
Continuation or Conversion of any Eurodollar Loan in accordance with this
Section, or any such Conversion or Continuation is not permitted or required by
this Section, then such Eurodollar Loan shall be automatically Converted into a
Base Rate Loan at the end of the Interest Period applicable thereto. The
Administrative Agent shall give each Lender notice as promptly as practicable of
any such proposed extension or conversion affecting any Loan.
3.3 Prepayments.
-----------
(a) Voluntary Prepayments. The Loans may be repaid in whole or in
---------------------
part without premium or penalty (other than as provided in Section 3.3(d));
provided that (i) Eurodollar Loans may be prepaid only upon three (3) Business
--------
Days' prior written notice to the Administrative Agent and must be accompanied
by payment of any amounts owing under Section 3.12, and (ii) partial prepayments
shall be minimum principal amounts of $1,000,000, in the case of Eurodollar
Loans, and $1,000,000, in the case of Base Rate Loans, and in integral multiples
of $1,000,000 in excess thereof.
(b) Mandatory Prepayments.
---------------------
(i) Revolving Committed Amount. If at any time, (A) the
--------------------------
aggregate principal amount of Revolving Obligations shall exceed the
Aggregate Revolving Committed Amount, (B) the aggregate amount of LOC
Obligations shall exceed the LOC Committed Amount or (C) the aggregate
principal amount of Swingline Loans shall exceed the Swingline Committed
Amount, the Borrower shall immediately make payment on the Revolving Loans,
on the Swingline Loans and/or to a cash collateral account in respect of
the LOC Obligations, in an amount sufficient to eliminate the excess.
(ii) Asset Dispositions.
------------------
(A) Approved Asset Dispositions. The Loans shall be prepaid
---------------------------
as hereafter provided in an amount equal to the Net Proceeds received from
any Approved Asset Disposition in an amount equal to (i) one hundred
percent (100%) of such Net Proceeds until the Bridge Loan is paid in full
and (ii) after the Bridge Loan has been paid in full, (x) if the
Consolidated Total Leverage Ratio is greater than or equal to 3.25:1.0 (as
of the end of the fiscal quarter immediately preceding the date of such
Approved Asset Disposition), fifty percent (50%) of such Net Proceeds, and
(y) if the Consolidated Total Leverage Ratio is less than 3.25:1.0 (as of
the end of the fiscal quarter
43
immediately preceding the date of such Approved Asset Disposition), zero
percent (0%) of such Net Proceeds; provided that payment of such Net
--------
Proceeds need not be made until such time as the aggregate amount payable
hereunder shall be at least $1,000,000 at any time.
(B) Other Asset Dispositions. The Loans shall be prepaid as
------------------------
hereafter provided in an amount equal to one hundred percent (100%) of the
Net Proceeds received from any Asset Disposition other than Approved Asset
Dispositions to the extent (A) such Net Proceeds are not reinvested in the
same or similar property or assets within twelve (12) months of the date of
such Asset Disposition, and (B) the aggregate amount of such Net Proceeds
not reinvested in accordance with the foregoing clause (A) shall exceed
$5,000,000 in any fiscal year; provided that payment of the Net Proceeds
--------
which exceed the foregoing threshold amount need not be made until such
time as the aggregate amount payable in excess of such threshold shall be
at least $1,000,000 at any time.
(iii) Debt Transactions. The Loans shall be prepaid as
-----------------
hereafter provided in an amount equal to one hundred percent (100%) of the
Net Proceeds received from any Debt Transaction.
(iv) Equity Transactions. The Loans shall be prepaid as
-------------------
hereafter provided in an amount equal to one hundred percent (100%) of the
Net Proceeds received from any Equity Transaction.
(c) Application.
-----------
(i) Voluntary Prepayments. Voluntary prepayments on the
---------------------
Revolving Obligations shall be applied as specified by the Borrower.
Voluntary prepayments on the Bridge Loan or the Term Loans shall be applied
first to the Bridge Loan until paid in full, and thereafter, ratably to the
Tranche A Term Loan and the Tranche B Term Loan (in each case ratably to
the remaining principal amortization installments thereof) until paid in
full, and thereafter, to the Revolving Obligations (with a corresponding
reduction in the Revolving Committed Amount in an amount equal to all
amounts applied to the Revolving Obligations pursuant to this Section
3.3(c)(i)). Within the parameters of the applications set forth above,
voluntary prepayments shall be applied first to Base Rate Loans and then to
Eurodollar Loans and Quoted Rate Swingline Loans in direct order of
Interest Period maturities.
(ii) Mandatory Prepayments.
---------------------
(A) Prepayments in respect of Asset Dispositions. Mandatory
--------------------------------------------
prepayments made under subsection (b)(ii)(A) in respect of Approved Asset
Dispositions shall be applied first to the Bridge Loan until paid in full,
and thereafter, ratably to the Tranche A Term Loan and the Tranche B Term
Loan (in each case ratably to the remaining principal amortization
installments thereof) until paid in full, and thereafter, to the Revolving
Obligations (with a corresponding permanent reduction in the Revolving
Committed Amount in an amount equal to all amounts applied to the Revolving
Obligations
44
pursuant to this Section 3.3(c)(ii)(A)). Mandatory prepayments made under
subsection (b)(ii)(B) in respect of other asset dispositions shall be
applied first to the Bridge Loan until paid in full, then the next $150
million in Net Proceeds shall be applied ratably to the Tranche A Term Loan
and the Tranche B Term Loan (in each case ratably to the remaining
principal amortization installments thereof), or until paid in full, and
thereafter ratably to the remaining Obligations hereunder (based, in the
case of the Revolving Obligations, on the Revolving Commitments, and with a
corresponding permanent reduction in the Revolving Committed Amount in an
amount equal to all such amounts applied to the Revolving Obligations
pursuant to this Section 3.3(c)(ii)(A)). Within the parameters of the
applications set forth above, mandatory prepayments shall be applied first
to Base Rate Loans and then to Eurodollar Loans and Quoted Rate Swingline
Loans in direct order of Interest Period maturities
(B) Prepayments in respect of Debt Transactions or Equity
-----------------------------------------------------
Transactions. Mandatory prepayments made under subsection (b)(iii) in
------------
respect of Debt Transactions or under subsection (b)(iv) in respect of
Equity Transactions shall be applied first to the Bridge Loan until paid in
full, and thereafter, ratably to the Tranche A Term Loan and the Tranche B
Term Loan (in each case ratably to the remaining principal amortization
installments thereof) until paid in full, and thereafter, to the Revolving
Obligations (with a corresponding permanent reduction in the Revolving
Committed Amount in an amount equal to all amounts applied to the Revolving
Obligations pursuant to this Section 3.3(c)(ii)(B)). Within the parameters
of the applications set forth above, mandatory prepayments shall be applied
first to Base Rate Loans and then to Eurodollar Loans and Quoted Rate
Swingline Loans in direct order of Interest Period maturities.
(iii) Availability. Amounts prepaid on the Revolving Obligations
------------
may, subject to the terms and conditions hereof, be reborrowed. Amounts
prepaid on the Bridge Loan and the Term Loans may not be reborrowed.
(iv) Declined Prepayments. One or more holders of the Tranche B
--------------------
Term Loans may decline to accept a voluntary prepayment under Section
3.3(a) or a mandatory prepayment under Section 3.3(b) to the extent the
outstanding principal amount of the Bridge Loan and the Tranche A Term Loan
is sufficient to be paid with such prepayment, in which case such declined
prepayments shall be applied first to the Bridge Loan, if not then paid in
full, and thereafter, to the Tranche A Term Loan.
(d) Prepayment Penalty. In the event the Borrower voluntarily elects
------------------
to prepay in whole or in part the Tranche B Term Loan between the Closing
Date and May 11, 2000 as permitted by Section 3.3(a), the Borrower shall be
obligated to pay a prepayment penalty equal to two percent (2.0%) of the
principal amount prepaid, and in the event the Borrower voluntarily elects
to prepay in whole or in part the Tranche B Term Loan between May 11, 2000
and May 11, 2001 as permitted by Section 3.3(a), the Borrower shall be
obligated to pay a prepayment penalty equal to one percent (1.0%) of the
principal amount prepaid. After two years from the Closing Date, the
Borrower may prepay the Tranche B Term Loan without a prepayment penalty or
fee.
45
3.4 Reduction and Termination of Revolving Commitments.
--------------------------------------------------
(a) Voluntary Reduction of Revolving Commitments. The Revolving
--------------------------------------------
Commitments may be terminated or permanently reduced in whole or in part upon
three (3) Business Days' prior written notice to the Administrative Agent,
provided that (i) after giving effect to any voluntary reduction the aggregate
--------
amount of Revolving Obligations shall not exceed the Aggregate Revolving
Committed Amount, as reduced, and (ii) partial reductions shall be in a minimum
principal amount of $5,000,000, and in integral multiples of $1,000,000 in
excess thereof.
(b) Mandatory Reduction of Revolving Commitments. On any date that
--------------------------------------------
the Revolving Obligations are required to be prepaid pursuant to the terms of
Section 3.3(b), the Revolving Commitments automatically shall be permanently
reduced by the amount of such required prepayment.
(c) Termination of Revolving Commitments. The Revolving Commitments
------------------------------------
hereunder shall terminate on the Revolving Commitment Termination Date.
3.5 Fees.
----
(a) Commitment Fee. In consideration of the Revolving
--------------
Commitments hereunder, the Borrower agrees to pay to the Administrative
Agent for the ratable benefit of the Revolving Lenders a commitment fee
(the "Commitment Fee") for the period from the Closing Date to the
--------------
Revolving Commitment Termination Date equal to the Applicable Percentage
per annum on the actual daily unused amount of the Revolving Committed
Amount for the applicable period. The Commitment Fee shall be payable
quarterly in arrears on the 15th day following the last day of each
calendar quarter for the immediately preceding quarter (or portion thereof)
beginning with the first such date to occur after the Closing Date and on
the Revolving Commitment Termination Date. For purposes of computation of
the Commitment Fee, Swingline Loans shall not be counted toward or
considered usage under the Revolving Committed Amount.
(b) Letter of Credit Fees.
---------------------
(i) Letter of Credit Issuance Fee. In consideration of the
-----------------------------
issuance of standby Letters of Credit hereunder, the Borrower promises
to pay to the Administrative Agent for the account of each Revolving
Lender a fee (the "Letter of Credit Fee") on such Revolving Lender's
--------------------
Revolving Commitment Percentage of the actual daily maximum amount
available to be drawn under each such standby Letter of Credit
computed at a per annum rate for each day from the date of issuance to
the date of expiration equal to the Applicable Percentage for
Revolving Loans which are Eurodollar Loans. The Letter of Credit Fee
shall be payable quarterly in arrears on the 15th day following the
last day of each calendar quarter for the immediately preceding
quarter (or portion thereof) beginning with the first such date to
occur after the Closing Date and on the Revolving Commitment
Termination Date.
46
(ii) Issuing Lender Fees. In addition to the Letter of Credit Fee
-------------------
payable pursuant to clause (i) above, the Borrower promises to pay to
the Issuing Lender without sharing by the other Lenders (i) a letter
of credit fronting fee of one-fourth of one percent (0.25%) on the
actual daily maximum amount available to be drawn under each Letter of
Credit computed at a per annum rate for each day from the date of
issuance to the date of expiration and (ii) the customary charges from
time to time of the Issuing Lender with respect to the issuance,
amendment, transfer, administration, cancellation and conversion of,
and drawings under, such Letters of Credit (collectively, the "Issuing
-------
Lender Fees").
------------
(c) Administrative Fees. The Borrower agrees to pay to the
-------------------
Administrative Agent, for its own account, the fees referred to in the
Administrative Agent's Fee Letter.
3.6 Capital Adequacy.
----------------
If any Lender has determined that, after the date hereof, the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any law, rule
or regulation regarding capital adequacy applicable to such Lender (or its
parent holding company or its Applicable Lending Office), or compliance by such
Lender (or its parent holding company or its Applicable Lending Office) with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such Governmental Authority, central bank or comparable agency,
has or would have the effect of reducing the rate of return on such Lender's
capital or assets as a consequence of its commitments or obligations hereunder
to a level below that which such Lender could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Lender's policies with respect to capital adequacy), then, upon notice from such
Lender to the Borrower, the Borrower shall be obligated to pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction. Each determination by any such Lender of amounts owing under this
Section shall, absent manifest error, be conclusive and binding on the parties
hereto.
3.7 Limitation on Eurodollar Loans.
------------------------------
If on or prior to the first day of any Interest Period for any Eurodollar
Loan:
(a) the Administrative Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar
Rate for such Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Administrative Agent that the Eurodollar Rate
will not adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Loans for such Interest Period;
then the Administrative Agent shall give the Borrower prompt notice thereof, and
so long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Eurodollar Loans, Continue Eurodollar Loans, or to
Convert Base Rate Loans into Eurodollar Loans, and the
47
Borrower shall, on the last day(s) of the then current Interest Period(s) for
the outstanding Eurodollar Loans, either prepay such Eurodollar Loans or Convert
such Eurodollar Loans into Base Rate Loans in accordance with the terms of this
Credit Agreement.
3.8 Illegality.
----------
Notwithstanding any other provision of this Credit Agreement, in the event
that it becomes unlawful for any Lender (or its Applicable Lending Office) to
make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).
3.9 Requirements of Law.
-------------------
If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Loans, its Notes, or its obligation to make Eurodollar
Loans, or change the basis of taxation of any amounts payable to such
Lender (or its Applicable Lending Office) under this Credit Agreement
or its Notes in respect of any Eurodollar Loans (other than franchise
taxes and taxes imposed on the overall net income of such Lender by
the jurisdiction in which such Lender has its principal office or such
Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Eurodollar Reserve Requirement utilized in the determination of the
Adjusted Eurodollar Rate) relating to any extensions of credit or
other assets of, or any deposits with or other liabilities or
commitments of, such Lender (or its Applicable Lending Office),
including the Commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting
this Credit Agreement or its Notes or any of such extensions of credit
or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this
48
Section 3.9, the Borrower may, by notice to such Lender (with a copy to the
Administrative Agent), suspend the obligation of such Lender to make or Continue
Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans, until the
event or condition giving rise to such request ceases to be in effect (in which
case the provisions of Section 3.10 shall be applicable); provided that such
suspension shall not affect the right of such Lender to receive the compensation
so requested. Each Lender shall promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
Section 3.9 and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole judgment of such Lender, be otherwise disadvantageous
to it. Any Lender claiming compensation under this Section 3.9 shall furnish to
the Borrower and the Administrative Agent a statement setting forth the
additional amount or amounts to be paid to it hereunder which shall be
conclusive in the absence of manifest error. In determining such amount, such
Lender may use any reasonable averaging and attribution methods. Notwithstanding
the foregoing, the coming into effect of the Treasury regulations issued on
October 6, 1997 (as revised prior to the date hereof) with respect to new
withholding forms shall not constitute a change in applicable law, rule or
regulation under this Section 3.9.
3.10 Treatment of Affected Loans.
---------------------------
If the obligation of any Lender to make any Eurodollar Loan or to Continue,
or to Convert Base Rate Loans into, Eurodollar Loans shall be suspended pursuant
to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans shall be
automatically Converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for such Eurodollar Loans (or, in the case of a
Conversion required by Section 3.8 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to the Administrative Agent) and, unless
and until such Lender gives notice as provided below that the circumstances
specified in Section 3.8 or 3.9 hereof that gave rise to such Conversion no
longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Eurodollar Loans shall be applied instead to
its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such
Lender as Eurodollar Loans shall be made or Continued instead as Base Rate
Loans, and all Base Rate Loans of such Lender that would otherwise be
Converted into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 3.8 or 3.9 hereof that gave
rise to the Conversion of such Lender's Eurodollar Loans pursuant to this
Section 3.10 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding Eurodollar Loans and by
such Lender are held pro rata (as to principal amounts, interest rate basis, and
Interest Periods) in accordance with their respective Commitments.
49
3.11 Taxes.
-----
(a) Any and all payments by the Borrower to or for the account of
any Lender or the Administrative Agent hereunder or under any other Credit
Document shall be made free and clear of and without deduction for any and
all present or future taxes, duties, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto, excluding, in
---------
the case of each Lender and the Administrative Agent, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction under the
laws of which such Lender (or its Applicable Lending Office) or the
Administrative Agent (as the case may be) is organized or maintained or any
political subdivision thereof (all such non-excluded taxes, duties, levies,
imposts, deductions, charges, withholdings, and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by
-----
law to deduct or withhold any Taxes from or in respect of any sum payable
under this Credit Agreement or any other Credit Document to any Lender or
the Administrative Agent, (i) the sum payable shall be increased as
necessary so that after making all required deductions or withholdings
(including deductions or withholdings applicable to additional sums payable
under this Section 3.11) such Lender or the Administrative Agent receives
an amount equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions or withholdings,
(iii) the Borrower shall pay the full amount deducted or withheld to the
relevant taxation authority or other Governmental Authority in accordance
with applicable law, and (iv) within thirty (30) days after the date of any
payment of Taxes, the Borrower shall furnish to the Administrative Agent,
at its address referred to in Section 12.1, the original or a certified
copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this
Credit Agreement or any other Credit Document or from the execution or
delivery of, or otherwise with respect to, this Credit Agreement or any
other Credit Document (hereinafter referred to as "Other Taxes").
-----------
(c) The Borrower agrees to indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section 3.11)
paid by such Lender or the Administrative Agent (as the case may be) and
any liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto.
(d) Each Lender that is not a United States person under Section
7701(a)(30) of the Code, on or prior to the date of its execution and
delivery of this Credit Agreement in the case of each Lender listed on the
signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter
if requested in writing by the Borrower or the Administrative Agent (but
only so long as such Lender remains lawfully able to do so), shall provide
the Borrower and the Administrative Agent with (i) Internal Revenue Service
Form 1001 or 4224, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender is entitled to
benefits under an income tax treaty to which the United States is a
50
party which eliminates the rate of withholding tax on payments of interest
or certifying that the income receivable pursuant to this Credit Agreement
is effectively connected with the conduct of a trade or business in the
United States, (ii) Internal Revenue Service Form W-8 or W-9, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, and/or (iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h) and 881(c)
of the Internal Revenue Code), certifying that such Lender is entitled to
an exemption from or a reduced rate of tax on payments pursuant to this
Credit Agreement or any of the other Credit Documents.
(e) For any period with respect to which a Lender has failed to
provide the Borrower and the Administrative Agent with the appropriate form
pursuant to Section 3.11(d) (unless such failure is due to a change in
treaty, law, or regulation enacted or promulgated subsequent to the date on
which a form with respect to such Lender originally was required to be
provided), such Lender shall not be entitled to indemnification under
Section 3.11(a) or 3.11(b) with respect to Taxes imposed by the United
States; provided, however, that should a Lender, which is otherwise exempt
-------- -------
from or subject to a reduced rate of withholding tax, become subject to
Taxes because of its failure to deliver a form required hereunder, the
Borrower shall take such steps as such Lender shall reasonably request to
assist such Lender, at such Lender's expense, to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Lender pursuant to this Section 3.11, then such Lender
will agree to use reasonable efforts to change the jurisdiction of its
Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the sole judgment of
such Lender, is not otherwise materially disadvantageous to such Lender.
(g) If any Lender determines that it has recovered or used as a
credit any amount withheld on its account pursuant to Section 3.9 or
Section 3.11, it shall reimburse (without any interest) the Borrower to the
extent of such amount so determined to have been recovered (to the extent
of any tax benefit actually received) or used as a credit, provided that
nothing in this paragraph (g) shall require any Lender to make available
its tax returns (or any other information relating to its taxes which it
deems to be confidential).
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 3.11 shall survive the repayment of the Loans,
LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
3.12 Compensation.
------------
Upon the request of any Lender, the Borrower shall pay to such Lender such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense (excluding loss of
anticipated profits) incurred by it as a result of:
51
(a) any payment, prepayment, or Conversion of a Eurodollar Loan for
any reason (including, without limitation, (i) in connection with any
assignment pursuant to Section 12.3(b) as part of the primary syndication
of the Loans during the 90-day period immediately following the Closing
Date and (ii) the acceleration of the Loans pursuant to Section 10.2) on a
date other than the last day of the Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Section 5
to be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Loan
on the date for such borrowing, Conversion, Continuation, or prepayment
specified in the relevant notice of borrowing, prepayment, Continuation, or
Conversion under this Credit Agreement.
With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, Converted or Continued,
for the period from the date of such prepayment or of such failure to borrow,
Convert or Continue to the last day of the applicable Interest Period (or, in
the case of a failure to borrow, Convert or Continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurodollar Loans provided for herein (excluding,
however, the Applicable Percentage included therein, if any) over (b) the amount
of interest (as reasonably determined by such Lender) which would have accrued
to such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurodollar market. Without prejudice
to the survival of any other agreement of the Borrower hereunder, the covenants
of the Borrower set forth in this Section 3.12 shall survive the repayment of
the Loans, LOC Obligations and other obligations under the Credit Documents and
the termination of the Commitments hereunder.
3.13 Pro Rata Treatment.
------------------
Except to the extent otherwise provided herein:
(a) Loans. Each Revolving Loan advance, each payment or prepayment
-----
of principal of any Revolving Loan (other than Swingline Loans) or
reimbursement obligations arising from drawings under Letters of Credit,
each payment of interest on the Revolving Loans or reimbursement
obligations arising from drawings under Letters of Credit, each payment of
Commitment Fees, each payment of the Letter of Credit Fee, each reduction
of the Revolving Committed Amount and each conversion or extension of any
Revolving Loan (other than Swingline Loans), shall be allocated pro rata
among the Revolving Lenders in accordance with the respective Revolving
Commitment Percentages. Each Bridge Loan advance, each payment or
prepayment of principal on the Bridge Loan, each payment of interest on the
Bridge Loan and each conversion or extension of any Loan comprising the
Bridge Loan, shall be allocated pro rata among the Bridge Lenders in
accordance with the respective principal amounts of their respective Bridge
Loan Commitment Percentages. Each Tranche A Term Loan advance, each payment
or prepayment of principal on the Tranche A Term Loan, each payment of
interest on the Tranche A Term Loan and each conversion or extension of
any Loan comprising the Tranche A Term Loan, shall be allocated pro rata
among the Tranche A Term Lenders in accordance with the respective
principal amounts of their respective Tranche A Term Loan
52
Commitment Percentages. Each Tranche B Term Loan advance, each payment or
prepayment of principal on the Tranche B Term Loan, each payment of
interest on the Tranche B Term Loan and each conversion or extension of any
Loan comprising the Tranche B Term Loan, shall be allocated pro rata among
the Tranche B Term Lenders in accordance with the respective principal
amounts of their respective Tranche B Term Loan Commitment Percentages.
(b) Advances. No Lender shall be responsible for the failure or delay
--------
by any other Lender in its obligation to make its ratable share of a
borrowing hereunder; provided, however, that the failure of any Lender to
-------- -------
fulfill its obligations hereunder shall not relieve any other Lender of its
obligations hereunder. Unless the Administrative Agent shall have been
notified by any Lender prior to the date of any requested borrowing that
such Lender does not intend to make available to the Administrative Agent
its ratable share of such borrowing to be made on such date, the
Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on the date of such borrowing, and
the Administrative Agent in reliance upon such assumption, may (in its sole
discretion but without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent, the Administrative Agent
shall be able to recover such corresponding amount from such Lender. If
such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent will
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover from the Lender or the Borrower, as the
case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount
is recovered by the Administrative Agent at a per annum rate equal to (i)
from the Borrower at the applicable rate for the applicable borrowing
pursuant to the Notice of Borrowing and (ii) from a Lender at the Federal
Funds Rate.
3.14 Sharing of Payments.
-------------------
The Lenders agree among themselves that, in the event that any Lender shall
obtain payment in respect of any Loan, LOC Obligations or any other obligation
owing to such Lender under this Credit Agreement through the exercise of a right
of setoff, banker's lien or counterclaim, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly purchase from the other
Lenders a Participation Interest in such Loans, LOC Obligations and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by repurchase of a Participation Interest theretofore sold,
return its share of that benefit (together with
53
its share of any accrued interest payable with respect thereto) to each Lender
whose payment shall have been rescinded or otherwise restored. The Borrower
agrees that any Lender so purchasing such a Participation Interest may, to the
fullest extent permitted by law, exercise all rights of payment, including
setoff, banker's lien or counterclaim, with respect to such Participation
Interest as fully as if such Lender were a holder of such Loan, LOC Obligations
or other obligation in the amount of such Participation Interest. Except as
otherwise expressly provided in this Credit Agreement, if any Lender or the
Administrative Agent shall fail to remit to the Administrative Agent or any
other Lender an amount payable by such Lender or the Administrative Agent to the
Administrative Agent or such other Lender pursuant to this Credit Agreement on
the date when such amount is due, such payments shall be made together with
interest thereon for each date from the date such amount is due until the date
such amount is paid to the Administrative Agent or such other Lender at a rate
per annum equal to the Federal Funds Rate. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a setoff to which this Section 3.14 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders under this Section 3.14 to share in
the benefits of any recovery on such secured claim.
3.15 Payments, Computations, Etc.
---------------------------
(a) Generally. Except as otherwise specifically provided herein, all
---------
payments hereunder shall be made to the Administrative Agent in Dollars in
immediately available funds, without setoff, deduction, counterclaim or
withholding of any kind, at the Administrative Agent's office specified in
Schedule 2.1 not later than 11:00 A.M. (San Francisco, California time) on
------------
the date when due. Payments received after such time shall be deemed to
have been received on the next succeeding Business Day. The Administrative
Agent may (but shall not be obligated to) debit the amount of any such
payment which is not made by such time to any ordinary deposit account of
the Borrower maintained with the Administrative Agent (with notice to the
Borrower). The Borrower shall, at the time it makes any payment under this
Credit Agreement, specify to the Administrative Agent the Loans, LOC
Obligations, Fees, interest or other amounts payable by the Borrower
hereunder to which such payment is to be applied (and in the event that it
fails so to specify, or if such application would be inconsistent with the
terms hereof, the Administrative Agent shall distribute such payment to the
Lenders in such manner as the Administrative Agent may determine to be
appropriate in respect of obligations owing by the Borrower hereunder,
subject to the terms of Section 3.13(a)). The Administrative Agent will
distribute such payments to such Lenders, if any such payment is received
prior to 11:00 A.M. (San Francisco, California time) on a Business Day in
like funds as received prior to the end of such Business Day and otherwise
the Administrative Agent will distribute such payment to such Lenders on
the next succeeding Business Day. Whenever any payment hereunder shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day (subject to accrual
of interest and Fees for the period of such extension), except that in the
case of Eurodollar Loans, if the extension would cause the payment to be
made in the next following calendar month, then such payment shall instead
be made on the next preceding Business Day. Except as expressly provided
otherwise herein, all computations of interest and fees shall be made on
the basis of actual number of days elapsed over a year of 360 days, except
with respect to computation of interest on Base Rate Loans which shall be
calculated based on a year of
54
365 or 366 days, as appropriate. Interest shall accrue from and include the
date of borrowing, but exclude the date of payment.
(b) Allocation of Payments After Event of Default. Notwithstanding
---------------------------------------------
any other provisions of this Credit Agreement to the contrary, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received on or in respect of the Obligations (or other amounts
owing under the Credit Documents in connection therewith) shall be paid
over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of
the collateral agent incurred in connection with the execution of its
duties as collateral agent in exercising or attempting to exercise
rights and remedies in respect of the collateral and all protective
advances made with respect thereto;
SECOND, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of
the Administrative Agent in connection with enforcing the rights and
remedies of the Lenders under the Credit Documents and any protective
advances made with respect thereto;
THIRD, to payment of any fees owed to the Administrative Agent;
FOURTH, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
each of the Lenders hereunder in connection with enforcing its rights
under the Credit Documents or otherwise with respect to the
Obligations owing to such Lender;
FIFTH, to the payment of all accrued interest and fees on or in
respect of the Obligations;
SIXTH, to the payment of the outstanding principal amount of the
Obligations hereunder (including the payment or cash collateralization
of the outstanding LOC Obligations);
SEVENTH, to all other Obligations hereunder and other obligations
which shall have become due and payable under the Credit Documents
otherwise and not repaid pursuant to clauses "FIRST" through "SIXTH"
above; and
EIGHTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (ii) except as otherwise provided, the Lenders
shall receive amounts ratably in accordance with their respective pro rata
share (based on the proportion that the then outstanding Obligations held
by such Lenders bears to the aggregate amount of Obligations then
outstanding) of amounts
55
available to be applied pursuant to clauses "FOURTH", "FIFTH", "SIXTH" and
"SEVENTH" above; and (iii) to the extent that any amounts available for
distribution pursuant to clause "SIXTH" above are attributable to the
issued but undrawn amount of outstanding Letters of Credit, such amounts
shall be held by the Administrative Agent in a cash collateral account and
applied (A) first, to reimburse the Issuing Lender for any drawings under
such Letters of Credit and (B) then, following the expiration of all
Letters of Credit, to all other obligations of the types described in
clauses "FIFTH" and "SIXTH" above in the manner provided in this Section
3.15(b).
3.16 Evidence of Debt.
----------------
(a) Each Lender shall maintain an account or accounts evidencing each
Loan made by such Lender to the Borrower from time to time, including the
amounts of principal and interest payable and paid to such Lender from time
to time under this Credit Agreement. Each Lender will make reasonable
efforts to maintain the accuracy of its account or accounts and to promptly
update its account or accounts from time to time, as necessary.
(b) The Administrative Agent shall maintain the Register pursuant to
Section 12.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and
Interest Period of each such Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to each
Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder from or for the account of the Borrower and
each Lender's share thereof. The Administrative Agent will make reasonable
efforts to maintain the accuracy of the subaccounts referred to in the
preceding sentence and to promptly update such subaccounts from time to
time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if
consistent with the entries of the Administrative Agent, subsection (a))
shall be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
-------- -------
failure of any Lender or the Administrative Agent to maintain any such
account, such Register or such subaccount, as applicable, or any error
therein, shall not in any manner affect the obligation of the Borrower to
repay the Loans and other obligations owing to such Lender.
SECTION 4
[INTENTIONALLY OMITTED]
56
SECTION 5
CONDITIONS
----------
5.1 Closing Conditions.
------------------
The obligation of the Lenders to enter into this Credit Agreement and to
make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) Executed Credit Documents. Receipt by the Administrative Agent of
-------------------------
multiple counterparts of: (i) this Credit Agreement and (ii) the Notes,
each duly executed by an appropriate officer of the parties thereto.
(b) Financial Information. Receipt of such financial information
---------------------
regarding HTI, Holdings, Triad and their respective Subsidiaries as may be
requested by, and in each case in form and substance satisfactory to, the
Administrative Agent and the Lenders.
(c) Senior Subordinated Notes. Receipt by the Administrative Agent of
-------------------------
evidence that HTI shall have received gross proceeds from the sale of the
Senior Subordinated Notes in an aggregate principal amount of at least
$325,000,000. The Administrative Agent shall have received a copy,
certified by an Executive Officer of HTI as true and complete, of the
indenture or other governing instrument relating thereto, as originally
executed and delivered, together with all exhibits and schedules thereto.
The indenture or other governing instrument relating to the Senior
Subordinated Notes shall be in form and substance satisfactory to the
Administrative Agent.
(d) Columbia/HCA Side Letter. Receipt by the Administrative Agent of
------------------------
a side letter dated as of the Closing Date provided by Columbia/HCA in
which Columbia/HCA represents and warrants that (i) the only material
assets owned by Columbia/HCA are the capital stock of HTI and the
Columbia/HCA Debt, (ii) other than as described in clause (i), all other
assets of Columbia/HCA have been transferred to and owned by HTI and its
Subsidiaries and (iii) the Columbia/HCA Debt shall be subordinated in right
of payment to all of the indebtedness, liabilities and obligations of the
Credit Parties under the Credit Documents.
(e) Corporate Documents. Receipt by the Administrative Agent of the
-------------------
following:
(i) Charter Documents. Copies of the articles or certificates
-----------------
of incorporation or other charter documents of HTI certified to be
true and complete as of a recent date by the appropriate Governmental
Authority of the state or other jurisdiction of its incorporation and
certified by a secretary or assistant secretary of HTI to be true and
correct as of the Closing Date.
57
(ii) Bylaws. A copy of the bylaws of HTI certified by a
------
secretary or assistant secretary of HTI to be true and correct as of
the Closing Date.
(iii) Resolutions. Copies of resolutions of the Board of
-----------
Directors of HTI approving and adopting the Credit Documents to which
it is a party, the transactions contemplated therein and authorizing
execution and delivery thereof, certified by a secretary or assistant
secretary of HTI to be true and correct and in force and effect as of
the Closing Date.
(iv) Good Standing. Copies of (A) certificates of good standing,
-------------
existence or its equivalent with respect to HTI certified as of a
recent date by the appropriate Governmental Authorities of the state
or other jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing could
reasonably be expected to have a Material Adverse Effect and (B) to
the extent available, a certificate indicating payment of all
corporate or comparable franchise taxes certified as of a recent date
by the appropriate governmental taxing authorities.
(v) Incumbency. An incumbency certificate of HTI certified by a
----------
secretary or assistant secretary to be true and correct as of the
Closing Date.
(f) Opinions of Counsel. The Administrative Agent shall have
-------------------
received opinions of counsel in form and substance satisfactory to the
Required Lenders.
(g) Corporate Structure. Receipt by the Administrative Agent of the
-------------------
corporate capital and ownership structure of the members of the
Consolidated Group (prior to the Reorganization).
(h) Material Adverse Effect. No material adverse change shall have
-----------------------
occurred since December 31, 1998 in the condition (financial or otherwise),
business, management or prospects of HTI and its Subsidiaries taken as a
whole, Holdings and its Subsidiaries taken as a whole or Triad and its
Subsidiaries taken as a whole.
(i) Litigation. There shall not exist (i) any order, decree,
----------
judgment, ruling or injunction which restrains, or seeks to restrain or to
obtain damages as a result of, the consummation of the Reorganization in
the manner contemplated by the Distribution Agreement or (ii) any pending
or threatened action, suit, investigation or proceeding against a HTI,
Holdings, Triad or any of their respective Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.
(j) Distribution Agreement. The Administrative Agent shall have
----------------------
received copies, each certified by an Executive Officer of Triad as true
and complete and in full force and effect, of the Distribution Agreement,
the Tax Sharing Agreement and all other material documents relating to the
Reorganization, each as originally executed and delivered, together with
all exhibits and schedules. The Distribution Agreement, the Tax Sharing
Agreement and all other material documents relating to the Reorganization
shall be in form and substance satisfactory to the Administrative Agent
including, without limitation, the
58
indemnification provisions (including title indemnity covering the assets
involved in the Reorganization) contained in the Distribution Agreement.
(k) Fees and Expenses. Payment by the Credit Parties of all fees and
-----------------
expenses owed by them to the Lenders and the Administrative Agent,
including, without limitation, payment to the Administrative Agent of the
fees set forth in the Administrative Agent's Fee Letter.
(l) Other. Receipt by the Lenders of such other documents,
-----
instruments, agreements or information as reasonably requested by any
Lender, including, but not limited to, information regarding litigation,
tax, accounting, labor, insurance, pension liabilities (actual or
contingent), real estate leases, material contracts, debt agreements,
property ownership, environmental matters, contingent liabilities,
corporate structure and management of HTI, Holdings, Triad and their
respective Subsidiaries, which information may include, if requested by the
Lenders, (a) asset appraisal reports with respect to all real and personal
property owned by HTI, Holdings, Triad and their respective Subsidiaries
and (b) a written audit of the accounts receivable, inventory, payables,
controls and systems of HTI, Holdings, Triad and their respective
Subsidiaries.
5.2 Conditions to all Extensions of Credit.
--------------------------------------
The obligation of each Lender to make any Extension of Credit hereunder
(including the initial Extension of Credit to be made hereunder) is subject to
the satisfaction of the following conditions precedent on the date of making
such Extension of Credit:
(a) Representations and Warranties. The representations and
------------------------------
warranties made by the Borrower herein (other than, after the HTI Release Event,
the representations and warranties made in Section 6 herein) or by the Credit
Parties in any other Credit Documents or which are contained in any certificate
furnished at any time under or in connection herewith shall be true and correct
in all material respects on and as of the date of such Extension of Credit as if
made on and as of such date (except for those which expressly relate to an
earlier date).
(b) No Default or Event of Default. No Default or Event of Default
------------------------------
shall have occurred and be continuing on such date or after giving effect to the
Extension of Credit to be made on such date and the application of the proceeds
thereof unless such Default or Event of Default shall have been waived in
accordance with this Credit Agreement.
(c) Involuntary Bankruptcy or Insolvency. There shall not have been
------------------------------------
commenced against any of the Credit Parties an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or any case, proceeding or other action for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or for the
winding up or liquidation of its affairs, and shall remain undismissed,
undischarged or unbonded.
59
(d) No Material Adverse Effect. No circumstances, events or
--------------------------
conditions shall have occurred since December 31, 1998 which could reasonably be
expected to have a Material Adverse Effect.
(e) Triad Group Joinder Event. With respect to each Extension of
-------------------------
Credit other than the initial borrowing by HTI, the Triad Group Joinder Event
shall have occurred.
(f) Additional Conditions to Revolving Loans. If a Revolving Loan is
----------------------------------------
requested pursuant to Sections 2.1 and 2.2, all conditions set forth therein
shall have been satisfied.
(g) Additional Conditions to Letters of Credit. If the issuance of a
------------------------------------------
Letter of Credit is requested pursuant to Sections 2.1 and 2.2, all conditions
set forth therein shall have been satisfied.
(h) Additional Conditions to Swingline Loans. If a Swingline Loan is
----------------------------------------
requested pursuant to Sections 2.1 and 2.2, all conditions set forth therein
shall have been satisfied.
(i) Additional Conditions to Bridge Loan Advance. If a Bridge Loan
--------------------------------------------
advance is requested pursuant to Sections 2.1 and 2.2, all conditions set forth
therein shall have been satisfied.
(j) Additional Conditions to Term Loan Advance. If a Term Loan
------------------------------------------
advance is requested pursuant to Sections 2.1 and 2.2, all conditions set forth
therein shall have been satisfied.
Each request for an Extension of Credit (including extensions and
conversions) and each acceptance by the Borrower of an Extension of Credit
(including extensions and conversions) shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in paragraphs (a), (b), (c) and (d), and
in (e), (f), (g), (h) or (i) of this subsection have been satisfied.
5.3 Conditions to Release of HTI from Credit Agreement.
--------------------------------------------------
Upon the satisfaction of each of the following conditions (in form and
substance acceptable to the Required Lenders), the Administrative Agent, on
behalf of itself and each of the Lenders, shall execute and deliver (and each of
the Lenders hereby authorized the Administrative Agent to execute and deliver) a
Release of Borrower in favor of HTI:
(a) Section 5 Conditions. Each of the conditions set forth in Section
--------------------
5.1 shall have been satisfied.
(b) Holdings Group Joinder Documents. Receipt by the Administrative
--------------------------------
Agent of multiple counterparts of: (i) an Assumption Agreement duly
executed by Holdings, (ii) the HTI Guaranty Agreement and (iii) replacement
Notes duly executed by Holdings, each duly executed by an appropriate
officer of the parties thereto.
60
(c) Corporate Documents. Receipt by the Administrative Agent of the
-------------------
following:
(i) Charter Documents. Copies of the articles or certificates of
-----------------
incorporation or other charter documents of Holdings certified to be
true and complete as of a recent date by the appropriate Governmental
Authority of the state or other jurisdiction of its incorporation and
certified by a secretary or assistant secretary of Holdings to be true
and correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws of Holdings certified by a
------
secretary or assistant secretary of Holdings to be true and correct as
of the Closing Date.
(iii) Resolutions. Copies of resolutions of the Board of
-----------
Directors of Holdings approving and adopting the Credit Documents to
which it is a party, the transactions contemplated therein and
authorizing execution and delivery thereof, certified by a secretary
or assistant secretary of Holdings to be true and correct and in force
and effect as of the Closing Date.
(iv) Good Standing. Copies of (A) certificates of good standing,
-------------
existence or its equivalent with respect to Holdings certified as of a
recent date by the appropriate Governmental Authorities of the state
or other jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing could
reasonably be expected to have a Material Adverse Effect and (B) to
the extent available, a certificate indicating payment of all
corporate or comparable franchise taxes certified as of a recent date
by the appropriate governmental taxing authorities.
(v) Incumbency. An incumbency certificate of Holdings certified
----------
by a secretary or assistant secretary to be true and correct as of the
Closing Date.
(d) Opinions of Counsel. The Administrative Agent shall have received
-------------------
opinions of counsel in form and substance satisfactory to the Required
Lenders.
(e) Distribution Agreement. The dropdown of indebtedness and assets to
----------------------
Holdings contemplated in the Distribution Agreement shall have been
consummated substantially in accordance with the terms and conditions of
the Distribution Agreement and in compliance with all applicable laws and
regulatory approvals, and all conditions precedent to the obligations of
the parties thereunder shall have been satisfied. There shall not have been
any material modification, amendment, supplement or waiver to the
Distribution Agreement, the Tax Sharing Agreement or any other material
documents relating to the Reorganization without the prior written consent
of the Administrative Agent, including, but not limited to, any
modification, amendment, supplement or waiver relating to all disclosure
schedules and exhibits.
(f) Litigation. There shall not exist (i) any order, decree,
----------
judgment, ruling or injunction which restrains, or seeks to restrain or to
obtain damages as a result of, the
61
consummation of the Reorganization in the manner contemplated by the
Distribution Agreement or (ii) any pending or threatened action, suit,
investigation or proceeding against HTI, Holdings, Triad or any of their
respective Subsidiaries that could reasonably be expected to have a
Material Adverse Effect.
5.4 Conditions to Release of Holdings from the Credit Agreement.
-----------------------------------------------------------
Upon the satisfaction in order of each of the following conditions (in form
and substance acceptable to the Required Lenders), the Administrative Agent, on
behalf of itself and each of the Lenders, shall execute and deliver (and each of
the Lenders hereby authorized the Administrative Agent to execute and deliver) a
Release of Borrower in favor of Holdings:
(a) Section 5 Conditions. Each of the conditions set forth in Section
--------------------
5.1 and Section 5.3 shall have been satisfied.
(b) Triad Group Joinder Documents. Receipt by the Administrative
-----------------------------
Agent of multiple counterparts of: (i) an Assumption Agreement duly
executed by Triad, (ii) the Guaranty Agreement duly executed by Holdings
and (iii) replacement Notes duly executed by Triad, each duly executed by
an appropriate officer of the parties thereto.
(c) Corporate Documents. Receipt by the Administrative Agent of the
-------------------
following:
(i) Charter Documents. Copies of the articles or certificates of
-----------------
incorporation or other charter documents of Triad certified to be true
and complete as of a recent date by the appropriate Governmental
Authority of the state or other jurisdiction of its incorporation and
certified by a secretary or assistant secretary of Triad to be true
and correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws of Triad certified by a
------
secretary or assistant secretary of Triad to be true and correct as of
the Closing Date.
(iii) Resolutions. Copies of resolutions of the Board of
-----------
Directors of Triad approving and adopting the Credit Documents to
which it is a party, the transactions contemplated therein and
authorizing execution and delivery thereof, certified by a secretary
or assistant secretary of Triad to be true and correct and in force
and effect as of the Closing Date.
(iv) Good Standing. Copies of (A) certificates of good standing,
-------------
existence or its equivalent with respect to Triad certified as of a
recent date by the appropriate Governmental Authorities of the state
or other jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing could
reasonably be expected to have a Material Adverse Effect and (B) to
the extent available, a certificate indicating payment of all
corporate or comparable franchise taxes certified as of a recent date
by the appropriate governmental taxing authorities.
62
(v) Incumbency. An incumbency certificate of Triad certified by a
----------
secretary or assistant secretary to be true and correct as of the Closing
Date.
(d) Opinions of Counsel. The Administrative Agent shall have received
-------------------
opinions of counsel in form and substance satisfactory to the Required
Lenders.
(e) Distribution Agreement. The dropdown of indebtedness and assets to
----------------------
Triad contemplated in the Distribution Agreement shall have been
consummated substantially in accordance with the terms and conditions of
the Distribution Agreement and in compliance with all applicable laws and
regulatory approvals, and all conditions precedent to the obligations of
the parties thereunder shall have been satisfied. There shall not have been
any material modification, amendment, supplement or waiver to the
Distribution Agreement, the Tax Sharing Agreement or any other material
documents relating to the Reorganization without the prior written consent
of the Administrative Agent, including, but not limited to, any
modification, amendment, supplement or waiver relating to all disclosure
schedules and exhibits.
(f) Litigation. There shall not exist (i) any order, decree,
----------
judgment, ruling or injunction which restrains, or seeks to restrain or to
obtain damages as a result of, the consummation of the Reorganization in
the manner contemplated by the Distribution Agreement or (ii) any pending
or threatened action, suit, investigation or proceeding against HTI,
Holdings, Triad or any of their respective Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.
5.5 Conditions to Release of HTI from HTI Guaranty Agreement.
--------------------------------------------------------
Upon the satisfaction in order of each of the following conditions (in form
and substance acceptable to the Required Lenders), the Administrative Agent, on
behalf of itself and each of the Lenders, shall execute and deliver (and each of
the Lenders hereby authorized the Administrative Agent to execute and deliver) a
release of Guaranty in favor of HTI:
(a) Section 5 Conditions. Each of the conditions set forth in Section
--------------------
5.1, Section 5.3 and Section 5.4 shall have been satisfied.
(b) Guaranty Joinder Agreement. Receipt by the Administrative Agent
--------------------------
of a multiple counterparts of the Guaranty Joinder Agreement executed by
all of Holdings Domestic Subsidiaries (other than Triad), duly executed by
an appropriate officer of the parties thereto.
(c) Collateral Documents. Receipt by the Administrative Agent of
--------------------
multiple counterparts of the Collateral Documents, each duly executed by an
appropriate officer of the parties thereto.
(d) Triad Post-Closing Letter. Receipt by the Administrative Agent of
-------------------------
a side letter from Triad relating to certain post-closing conditions which
must be satisfied by Triad within a certain number of days from the Closing
Date, which letter shall be in form and substance satisfactory to the
Administrative Agent.
63
(e) Distribution Agreement. There shall not have been any material
----------------------
modification, amendment, supplement or waiver to the Distribution
Agreement, the Tax Sharing Agreement or any other material documents
relating to the Reorganization without the prior written consent of the
Administrative Agent, including, but not limited to, any modification,
amendment, supplement or waiver relating to all disclosure schedules and
exhibits.
(f) Corporate Documents. Receipt by the Administrative Agent of the
-------------------
following:
(i) Charter Documents. Copies of the articles or certificates of
-----------------
incorporation or other charter documents of each Domestic Subsidiary
of Holdings (other than Triad) certified to be true and complete as of
a recent date by the appropriate Governmental Authority of the state
or other jurisdiction of its incorporation and certified by a
secretary or assistant secretary of such Subsidiary to be true and
correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws of each Domestic Subsidiary of
------
Holdings (other than Triad) certified by a secretary or assistant
secretary of such Subsidiary to be true and correct as of the Closing
Date.
(iii) Resolutions. Copies of resolutions of the Board of
-----------
Directors of each Domestic Subsidiary of Holdings (other than Triad)
approving and adopting the Credit Documents to which it is a party,
the transactions contemplated therein and authorizing execution and
delivery thereof, certified by a secretary or assistant secretary of
such Subsidiary to be true and correct and in force and effect as of
the Closing Date.
(iv) Good Standing. Copies of (A) certificates of good standing,
-------------
existence or its equivalent with respect to each Domestic Subsidiary
of Holdings (other than Triad) certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in which the
failure to so qualify and be in good standing could reasonably be
expected to have a Material Adverse Effect and (B) to the extent
available, a certificate indicating payment of all corporate or
comparable franchise taxes certified as of a recent date by the
appropriate governmental taxing authorities.
(v) Incumbency. An incumbency certificate of each Domestic
----------
Subsidiary of Holdings (other than Triad) certified by a secretary or
assistant secretary to be true and correct as of the Closing Date.
(g) Opinions of Counsel. The Administrative Agent shall have received
-------------------
opinions of counsel in form and substance satisfactory to the Required
Lenders.
64
(h) Personal Property Collateral. The Administrative Agent shall
----------------------------
have received:
(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office of Holdings and Triad and
each jurisdiction where any Collateral is located or where a filing
would need to be made in order to perfect the Administrative Agent's
security interest in the Collateral, copies of the financing
statements on file in such jurisdictions and evidence that no Liens
exist other than Permitted Liens;
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Administrative
Agent's sole discretion, to perfect the Administrative Agent's
security interest in the Collateral;
(iii) searches of ownership of, and Liens on, intellectual
property of Triad and each Guarantor in the appropriate governmental
offices;
(iv) all certificates evidencing any certificated Capital Stock
pledged to the Administrative Agent pursuant to the Pledge Agreements,
together with duly executed in blank, undated stock powers attached
thereto;
(v) such patent/trademark/copyright filings as requested by
the Administrative Agent in order to perfect the Administrative
Agent's security interest in the Collateral;
(vi) all instruments and chattel paper in the possession of any
of Triad or the Guarantors, together with allonges or assignments as
may be necessary or appropriate to perfect the Administrative Agent's
security interest in the Collateral;
(vii) duly executed consents as are necessary, in the
Administrative Agent's sole discretion, to perfect the Administrative
Agent's security interest in the Collateral; and
(viii) in the case of any personal property Collateral located at
a premises leased by Triad or a Guarantor, such estoppel letters,
consents and waivers from the landlords on such real property as may
be required by the Administrative Agent.
(i) Real Property Collateral. The Administrative Agent shall have
------------------------
received, in form and substance reasonably satisfactory to the
Administrative Agent:
(i) fully executed and notarized mortgages or deeds of trust
(each, as the same may be amended, modified, restated or supplemented
from time to time, a "Mortgage Instrument" and collectively the
-------------------
"Mortgage Instruments") encumbering the fee interest and/or leasehold
--------------------
interest of Triad or any Guarantor in each real property asset
designated in Schedule 7.21(a) (each a "Mortgaged Property" and
---------------- ------------------
collectively the "Mortgaged Properties");
--------------------
65
(ii) a title report obtained by Triad and the Guarantors in
respect of each of the Mortgaged Properties;
(iii) ALTA mortgagee title insurance policies (or similar form
policies approved by the Administrative Agent) issued by Chicago Title
Insurance Company (the "Mortgage Policies"), in amounts not less than
-----------------
the respective amounts designated in Schedule 7.20(a) with respect to
----------------
any particular Mortgaged Property, assuring the Administrative Agent
that each of the Mortgage Instruments creates a valid first priority
mortgage lien on the applicable Mortgaged Property, free and clear of
all defects and encumbrances except Permitted Liens, which Mortgage
Policies shall be in form and substance reasonably satisfactory to the
Administrative Agent and shall provide for affirmative insurance and
such reinsurance as the Administrative Agent may reasonably request,
all of the foregoing in form and substance reasonably satisfactory to
the Administrative Agent;
(iv) evidence reasonably satisfactory to the Administrative
Agent as to (A) whether any Mortgaged Property is in an area
designated by the Federal Emergency Management Agency as having
special flood or mud slide hazards (a "Flood Hazard Property") and (B)
---------------------
if any Mortgaged Property is a Flood Hazard Property, (1) whether the
community in which such Mortgaged Property is located is participating
in the National Flood Insurance Program, (2) the applicable Credit
Party's written acknowledgment of receipt of written notification from
the Administrative Agent (a) as to the fact that such Mortgaged
Property is a Flood Hazard Property and (b) as to whether the
community in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program and (3) copies
of insurance policies or certificates of insurance of the members of
the Consolidated Group evidencing flood insurance satisfactory to the
Administrative Agent and naming the Administrative Agent as sole loss
payee on behalf of the Lenders; and
(j) Evidence of Insurance. Receipt by the Administrative Agent of
---------------------
copies of insurance policies or certificates of insurance of the members of
the Consolidated Group evidencing liability and casualty insurance meeting
the requirements set forth in the Credit Documents, including, but not
limited to, naming the Administrative Agent as additional insured (in the
case of liability insurance) or sole loss payee (in the case of hazard
insurance) on behalf of the Lenders.
(k) Corporate Structure. Receipt by the Administrative Agent of the
-------------------
corporate capital and ownership structure of the members of the
Consolidated Group (after giving effect to the Reorganization).
(l) Consolidated Total Leverage Ratio. Receipt by the Administrative
---------------------------------
Agent of a certificate of an Executive Officer of Triad, dated as of the
date of the HTI Release Event, demonstrating that upon giving effect to the
Reorganization and the Triad Joinder
66
Event, the Consolidated Total Leverage Ratio shall not be greater than
4.80:1.0 on a Pro Forma Basis.
(m) Officer's Certificates. The Administrative Agent shall have
----------------------
received a certificate or certificates executed by an Executive Officer of
Triad, in form and substance satisfactory to the Administrative Agent,
stating that (A) each Credit Party is in compliance with all existing
financial obligations, (B) all governmental, shareholder and material third
party consents and approvals, if any, with respect to the Credit Documents
and the transactions contemplated thereby have been obtained, (C) no
action, suit, investigation or proceeding is pending or threatened in any
court or before any arbitrator or governmental instrumentality that
purports to affect any Credit Party or any transaction contemplated by the
Credit Documents, if, after giving effect to any applicable insurance and
the obligations of Columbia/HCA under the Distribution Agreement and the
Tax Sharing Agreement, such action, suit, investigation or proceeding could
reasonably be expected to have a Material Adverse Effect, (D) the
Reorganization has been consummated substantially in accordance with the
terms of the Distribution Agreement, and (E) immediately after giving
effect to the Reorganization, (1) no Default or Event of Default exists,
(2) all representations and warranties contained herein and in the other
Credit Documents are true and correct in all material respects and (3) the
Credit Parties are in compliance with each of the financial covenants set
forth in Section 8.11.
(n) Solvency Opinion. The Administrative Agent and the Lenders shall
----------------
have received an opinion from an independent auditor or appraiser
acceptable to the Administrative Agent in usual and customary form as to
the financial condition, solvency and related matters of Holdings, Triad
and Triad's Domestic Subsidiaries, in each case after giving effect to the
Reorganization, the Credit Agreement and the initial borrowings hereunder.
(o) Year 2000 Problem. The Administrative Agent shall be satisfied
-----------------
that (i) the Credit Parties and their Subsidiaries are taking all necessary
and appropriate steps to ascertain the extent of, and to quantify and
successfully address, business and financial risks facing the Credit
Parties and Subsidiaries as a result of what is commonly referred to as the
"Year 2000 Problem" (i.e., the inability of certain computer applications
to recognize correctly and perform date-sensitive functions involving
certain dates prior to and after December 31, 1999) and (ii) the Credit
Parties' and their Subsidiaries' material computer applications will, on a
timely basis, adequately address the Year 2000 Problem in all material
respects.
(p) Priority of Liens. The Administrative Agent shall have received
-----------------
satisfactory evidence that (i) upon filing of all UCC-1 financing
statements and the Mortgage Instruments, the Administrative Agent, on
behalf of the Lenders, will hold a perfected, first priority Lien on all
Collateral and (ii) none of the Collateral is subject to any other Liens
other than Permitted Liens.
(q) Other Indebtedness. Receipt by the Administrative Agent of
------------------
evidence that, after giving effect to the Reorganization, the Consolidated
Group shall have no Funded Debt other than (i) the Funded Debt under the
Credit Documents, (ii) the Senior
67
Subordinated Notes and (iii) Funded Debt assumed in connection with the
Reorganization in an aggregate principal amount of up to $9,500,000.
(r) Government Consent. Receipt by the Administrative Agent of
------------------
evidence that (i) all governmental, shareholder and material third party
consents (including Xxxx-Xxxxx-Xxxxxx clearance) and approvals necessary or
desirable in connection with the Reorganization have been obtained and (ii)
all applicable waiting periods have expired without any action being taken
by any authority that could restrain, prevent or impose any material
adverse conditions on the Reorganization or that could seek or threaten any
of the foregoing, and no law or regulation shall be applicable which in the
judgment of the Administrative Agent could have such effect.
(s) Litigation. There shall not exist (i) any order, decree,
----------
judgment, ruling or injunction which restrains, or seeks to restrain or to
obtain damages as a result of, the consummation of the Reorganization in
the manner contemplated by the Distribution Agreement or (ii) any pending
or threatened action, suit, investigation or proceeding against HTI,
Holdings, Triad or any of their respective Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.
SECTION 6
REPRESENTATIONS AND COVENANTS OF HTI
------------------------------------
To induce the Lenders to enter into this Credit Agreement and to make Loans
hereunder to HTI, HTI hereby represents and warrants and covenants to the
Administrative Agent and to each Lender as follows:
6.1 Financial Condition and Financial Reporting.
-------------------------------------------
(a) The financial statements described below (copies of which have
heretofore been provided to the Administrative Agent for distribution to the
Lenders) have been prepared in accordance with GAAP consistently applied
throughout the periods covered thereby, are complete and correct in all material
respects and present fairly the financial condition (including disclosure of all
material liabilities, contingent and otherwise) and results of operations of the
Persons and for the periods specified, subject in the case of interim company-
prepared statements to normal year-end adjustment and the absence of footnotes:
(i) audited consolidated balance sheets for Columbia/HCA and its
consolidated subsidiaries dated as of December 31, 1996, December 31, 1997
and December 31, 1998, together with related audited consolidated
statements of income and cash flows for the fiscal years then ending,
certified by Ernst & Young LLP, certified public accountants; and
(ii) company-prepared consolidated balance sheets for
Columbia/HCA and its consolidated subsidiaries dated as of March 31, 1999,
together with related consolidated statements of income and cash flows for
the fiscal quarter then ending.
68
(b) Unless and until released from its obligations as a Credit Party
hereunder, HTI will furnish, or cause to be furnished, to the Administrative
Agent and each of the Lenders, promptly upon request by the Administrative
Agent, any other financial information reasonably requested by the
Administrative Agent.
6.2 Notices.
-------
Unless and until released from its obligations as a Credit Party hereunder,
HTI will furnish, or cause to be furnished, to the Administrative Agent (i)
notice of the occurrence of any event or condition which would constitute a
Default or Event of Default immediately upon discovery, and (ii) notice of the
pendency, commencement or material development in any investigation, assertion
of liability, litigation, arbitral, governmental or other legal proceedings
which could reasonably be expected to have a Material Adverse Effect.
6.3 Existence and Authority.
-----------------------
HTI is duly organized, validly existing in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and authority to
own and operate its property and conduct its business as currently conducted and
to authorize the execution, delivery and performance of this Credit Agreement
and the other Credit Documents to which it is or will be a party, is duly
qualified as a foreign entity in each jurisdiction where failure to so qualify
could reasonably be expected to have a Material Adverse Effect. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with (i)
acceptance of Loans by HTI or with the execution, delivery or performance of any
Credit Documents by HTI (other than those which have been obtained, such filings
as are required by the SEC and to fulfill other reporting requirements with
Governmental Authorities), other than those the failure to obtain could not
reasonably be expected to have a Material Adverse Effect, or (ii) with the
validity or enforceability of any Credit Document against HTI. HTI has duly
authorized, executed and delivered this Credit Agreement and the other Credit
Documents to which it is a party, and this Credit Agreement and the other Credit
Documents to which it is a party constitute the legal, valid and binding
obligations of the HTI enforceable against it in accordance with their
respective terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law). Unless and until
released from its obligations as a Credit Party hereunder, HTI will take action
as necessary to maintain its existence and qualifications in force and effect
6.4 Compliance with Requirements of Law.
-----------------------------------
Except as disclosed in Columbia/HCA's Annual Report for the fiscal year
ended December 31, 1998 and any Current Reports on Form 8-K filed with the
Securities and Exchange Commission prior to the date hereof, HTI is, and unless
and until released from its obligations as a Credit Party hereunder, will
continue to be, in compliance with all Requirements of Law, except to the extent
that failure to be in compliance therewith could not reasonably be expected to
have a material adverse effect on the ability of HTI to perform its obligations
under the Credit
69
Documents to which it is a party or the material rights and remedies of the
Administrative Agent and the Lenders under the Credit Documents against HTI.
Neither the execution, delivery or performance by HTI of its obligations under
the Credit Documents, will violate any Requirement of Law or Contractual
Obligation applicable to HTI or its Subsidiaries. The Extensions of Credit
hereunder will not be used, directly or indirectly, for the purpose of
purchasing or carrying "margin stock" in violation of the requirements of
Regulation U.
6.5 Governmental Regulations, Etc.
-----------------------------
HTI is not subject to regulation under the Public Utility Holdings Company
Act of 1935, the Federal Power Act or the Investment Company Act of 1940, each
as amended. In addition, HTI is not (i) an "investment company" registered or
required to be registered under the Investment Company Act of 1940, as amended,
and is not controlled by such a company, or (ii) a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary" of a "holding company", within the meaning of the
Public Utility Holdings Company Act of 1935, as amended.
6.6 Legal Proceedings.
-----------------
Except as disclosed in Columbia/HCA's Annual Report for the fiscal year
ended December 31, 1998 and any Current Reports on Form 8-K filed with the
Securities and Exchange Commission prior to the date hereof, no unsealed
litigation or, to the best knowledge of HTI, investigation, assertion of
liability, sealed litigation, arbitral, governmental or other legal proceedings
is pending, or to the best knowledge of HTI, threatened by or against HTI or its
Subsidiaries, or their properties or operations, which (i) relate to the Credit
Documents or the transactions contemplated herein, or (ii) could reasonably be
expected to have a material adverse effect on the ability of HTI to perform its
obligations under the Credit Documents to which it is a party or the material
rights and remedies of the Administrative Agent and the Lenders under the Credit
Documents against HTI.
6.7 No Defaults.
-----------
No Default or Event of Default has occurred and is continuing hereunder.
6.8 Purpose of Extensions of Credit.
-------------------------------
The Loans to HTI hereunder will be used exclusively to repay, directly or
indirectly, the Columbia/HCA Debt, to pay for costs and expenses incurred in
connection with the transactions contemplated hereby and by the Reorganization,
and for no other purposes.
6.9 No Material Misstatements.
-------------------------
None of the information contained in any of the information, reports,
financial statements, exhibit or schedules, taken as a whole, furnished by or on
behalf of HTI or its Subsidiaries to the Administrative Agent or the Lenders in
connection with the negotiation of the Credit Documents or included therein or
delivered pursuant thereto contains any material misstatement fact or omits any
material fact necessary to make the statements therein, in light of
70
the circumstances under which they were made, not materially misleading,
provided that in the case of forecasts and projections, HTI represents only that
it acted in good faith using reasonable assumptions and due care in the
preparation of such information, report, financial statement, exhibit or
schedule.
6.10 Indebtedness.
------------
Unless and until released from its obligations as a Credit Party hereunder,
HTI will not contract, create, incur, assume or permit to exist, nor will it
permit any of its Subsidiaries to contract, create, incur, assume or permit to
exist, any Indebtedness, except
(i) Indebtedness existing or arising under this Credit Agreement
and the other Credit Documents;
(ii) the Senior Subordinated Notes;
(iii) Indebtedness of up to $360 million under the Credit Agreement
dated as of May 11, 1999 by and among Healthtrust, Inc. - The Hospital
Company, a Delaware corporation, the lenders party thereto, Fleet National
Bank, as Administrative Agent, Arranger and Co-Arranger, Deutsche Bank AG,
New York and/or Cayman Islands Branch, as Co-Arranger and Syndication
Agent, ScotiaBanc Inc., as Co-Arranger and Documentation Agent and Suntrust
Bank, Nashville, N.A., as Co-Agent; and
(iv) Indebtedness existing as of the Closing Date and not created or
incurred in anticipation or contemplation of this Credit Agreement, as
fully described in the financial statements referenced in Section 6.1 and
as described on Schedule 9.1.
------------
6.11 Ownership of Property; Liens.
----------------------------
(a) HTI has good title to, or a valid leasehold interest in, all its
material real property, and good title to, or a valid leasehold interest in, all
its other material Property, and none of such Property is subject to any Lien
other than those existing as of the Closing Date (and not created or incurred in
anticipation or contemplation of this Credit Agreement) which would not, in the
aggregate, make the information described in the financial statements referenced
in Section 6.1 misleading in any material respect.
(b) Unless and until released from its obligations as a Credit Party
hereunder, HTI will not contract, create, incur, assume or permit to exist any
Lien, nor will it permit Holdings or any of Holdings' Subsidiaries to contract,
create, incur, assume or permit to exist, any Liens other than those existing as
of the Closing Date (and not created or incurred in anticipation or
contemplation of this Credit Agreement) which would not, in the aggregate, make
the information described in the financial statements referenced in Section 6.1
misleading in any material respect.
6.12 Mergers; Acquisitions and Asset Sales.
-------------------------------------
71
Unless and until released from its obligations as a Credit Party hereunder,
except in connection with the Reorganization, HTI will not, nor will it permit
Holdings or any of Holdings' Subsidiaries to, (i) enter into any transaction of
merger, consolidation or combination, (ii) dissolve, liquidate or wind-up its
affairs, (iii) acquire the Capital Stock of any other Person or acquire any
assets, property or operations from any other Person other than in the ordinary
course of business, or (iv) make any sale, lease or other disposition of assets
or property other than in the ordinary course of business.
6.13 Investments.
-----------
Unless and until released from its obligations as a Credit Party hereunder,
except in connection with the Reorganization, HTI will not, nor will it permit
any of its Subsidiaries to, make or permit to exist any Investment other than
(i) cash and Cash Equivalents, (ii) Investments of the types described in
clauses (ii) and (iii) of the definition of "Permitted Investments", (iii)
Investments existing as of the Closing Date and not created or incurred in
anticipation or contemplation of this Credit Agreement, as fully described in
the financial statements referenced in Section 6.1, and (iv) other Investments
consistent with normal practices in the ordinary course of business.
6.14 Restricted Payments.
-------------------
Unless and until released from its obligations as a Credit Party hereunder,
HTI will not, nor will it permit any of its Subsidiaries to, make or permit, any
Restricted Payment other than the payment, directly or indirectly, of up to $900
million on the Columbia/HCA Debt and restricted payments by HTI to its
Subsidiaries.
6.15 Transactions with Affiliates.
----------------------------
Unless and until released from its obligations as a Credit Party hereunder,
except in connection with the Reorganization, HTI will not, nor will it permit
any of its Subsidiaries to, have any dealings with any officer, director,
shareholder, Subsidiary or Affiliate, unless and to the extent that such
dealings are made on terms as would be obtainable in a comparable transaction
made with an unrelated third party on an arms' length basis.
SECTION 7
REPRESENTATIONS AND WARRANTIES
------------------------------
To induce the Lenders to make the Extensions of Credit hereunder to Triad,
Triad, by execution and delivery of an Assumption Agreement, hereby represents
and warrants to the Administrative Agent and to each Lender that:
7.1 Financial Condition.
-------------------
Each of the financial statements described below (copies of which have
heretofore been provided to the Administrative Agent for distribution to the
Lenders) have been prepared in
72
accordance with GAAP consistently applied throughout the periods covered
thereby, are complete and correct in all material respects and present fairly
the financial condition (including disclosure of all material liabilities,
contingent or otherwise) and results of operations of the Persons and for the
periods specified, subject in the case of interim company-prepared statements to
normal year-end adjustments and the absence of footnotes:
(i) audited combined balance sheets for the net assets and
operations contributed to Holdings and its consolidated subsidiaries dated
as of December 31, 1996, December 31, 1997, and December 31, 1998, together
with related audited statements of income and cash flows certified by Ernst
& Young LLP, certified public accountants;
(ii) company-prepared consolidated balance sheets for Holdings and
its consolidated subsidiaries and Triad and its consolidated subsidiaries,
in each case dated as of March 31, 1999, together with related consolidated
statements of income and cash flows; and
(iii) after the Closing Date, the annual and quarterly financial
statements provided in accordance with Sections 8.1(a) and (b).
7.2 No Changes or Restricted Payments.
---------------------------------
Since the date of the most-recent annual audited financial statements
referenced in Section 7.1(i) hereof,
(i) for the period to the Closing Date, except as previously
disclosed in writing to the Administrative Agent and the Lenders, (A) there
have been no material sales, transfers or other dispositions of any
material part of the business or property of the members of the
Consolidated Group, nor have there been any material purchases or other
acquisitions of any business or property (including the capital stock of
any other person) by the members of the Consolidated Group, which are not
reflected in the company-prepared quarterly financial statements referenced
in Section 7.1(ii), and (B) no Restricted Payments have been declared or
paid by members of the Consolidated Group; and
(ii) there has been no circumstance, development or event which has
had or could reasonably be expected to have a Material Adverse Effect.
7.3 Organization; Existence; Compliance with Law.
--------------------------------------------
Each of the members of the Consolidated Group (a) is duly organized,
validly existing in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary
organizational power and authority, and the legal right to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
entity and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of Property or the conduct of its business
requires such qualification, other than in such jurisdictions where the failure
to be so qualified and in good standing has not had and could not have a
Material Adverse Effect, and (d) is
73
in compliance with all Requirements of Law, except to the extent that the
failure to comply therewith has not had and could not be reasonably expected to
have a Material Adverse Effect.
7.4 Power; Authorization; Enforceable Obligations.
---------------------------------------------
Each of the Credit Parties has the corporate or other necessary
organizational power and authority, and the legal right, to make, deliver and
perform the Credit Documents to which it is a party and has taken all necessary
corporate or other action to authorize the execution, delivery and performance
by it of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with
acceptance of Extensions of Credit or the making of the guaranties hereunder or
with the execution, delivery or performance of any Credit Documents by the
Credit Parties (other than those which have been obtained, such filings as are
required by the SEC and to fulfill other reporting requirements with
Governmental Authorities) or with the validity or enforceability of any Credit
Document against the Credit Parties (except such filings as are necessary in
connection with the perfection of the Liens created by such Credit Documents).
Each Credit Document to which it is a party constitutes a legal, valid and
binding obligation of such Credit Party enforceable against such Credit Party in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
7.5 No Legal Bar.
------------
The execution, delivery and performance of the Credit Documents, the
borrowings hereunder and the use of the Extensions of Credit will not violate
any Requirement of Law or any Contractual Obligation of any member of the
Consolidated Group (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of any
Lien on any of its respective properties or revenues pursuant to any Requirement
of Law or Contractual Obligation other than the Liens arising under or
contemplated in connection with the Credit Documents. No member of the
Consolidated Group is in default under or with respect to any of its Contractual
Obligations in any respect which has had or could reasonably be expected to have
a Material Adverse Effect.
7.6 No Material Litigation and Disputes.
-----------------------------------
(a) No unsealed litigation or, to the best knowledge of the Credit
Parties, claims, investigation, sealed litigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the best knowledge of the
Credit Parties, threatened by or against, any members of the Consolidated Group
or against any of their respective properties or revenues which (a) relate to
the Credit Documents or any of the transactions contemplated hereby or thereby
or (b) if adversely determined, could, after giving effect to any applicable
insurance and the obligations of Columbia/HCA under the Distribution Agreement
and the Tax Sharing Agreement, reasonably be expected to have a Material Adverse
Effect. Set forth on Schedule 7.6
------------
74
is a summary of all claims, litigation, investigations and proceedings pending
or threatened by or against the members of the Consolidated Group or against any
of their respective properties or revenues known to the Credit Parties, and none
of such actions, individually or in the aggregate, have had or could reasonably
be expected to have a Material Adverse Effect.
(b) No default exists, nor, to the best knowledge of the Credit Parties,
is any such default asserted under any Contractual Obligations to which any
members of the Consolidated Group are party which individually or in the
aggregate has had or could reasonably be expected to have a Material Adverse
Effect.
7.7 No Defaults.
-----------
No Default or Event of Default has occurred and is continuing.
7.8 Ownership and Operation of Property.
-----------------------------------
Each of the members of the Consolidated Group (i) has good title to, or a
valid leasehold interest in, all its material real property, and good title to,
or a valid leasehold interest in, all its other material Property, and none of
such Property is subject to any Lien, except for Permitted Liens, and (ii) has
obtained all material licenses, permits, franchises or other certifications,
consents, approvals and authorizations, governmental or private, necessary to
the ownership of its Property and to the conduct of its business, which are
material to the Consolidated Group taken as a whole.
7.9 Intellectual Property.
---------------------
Each of the members of the Consolidated Group owns, or has the legal right
to use, all United States trademarks, tradenames, copyrights, patents,
technology, know-how, processes and other intellectual property, if any,
necessary for each of them to conduct its business as currently conducted (the
"Intellectual Property") except for those the failure to own or have such legal
---------------------
right to use have not had and could not be reasonably expected to have a
Material Adverse Effect. Set forth on Schedule 7.9 is a list of Intellectual
------------
Property owned or used by members of the Consolidated Group. Except as provided
on the foregoing Schedule, no claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does any
Credit Party know of any such claim, and the use of such Intellectual Property
by the members of the Consolidated Group does not infringe on the rights of any
Person, except for such claims and infringements that, in the aggregate, have
not had and could not be reasonably expected to have a Material Adverse Effect.
7.10 No Burdensome Restrictions.
--------------------------
No Requirement of Law or Contractual Obligation of the members of the
Consolidated Group has had or could be reasonably expected to have a Material
Adverse Effect.
75
7.11 Taxes.
-----
Each of the members of the Consolidated Group has filed or caused to be
filed all income tax returns (federal, state, local and foreign) and all other
material tax returns which are required to be filed and has paid (i) all amounts
shown therein to be due (including interest and penalties) and (ii) all other
taxes, fees, assessments and other governmental charges (including mortgage
recording taxes, documentary stamp taxes and intangibles taxes) owing, except
for such taxes which are not yet delinquent or as are being contested in good
faith by proper proceedings and against which adequate reserves are being
maintained in accordance with GAAP. No tax claim or assessment has been asserted
against members of the Consolidated Group which has had or, if adversely
determined, could reasonably be expected to have a Material Adverse Effect .
7.12 ERISA
-----
Except as has not had and could not reasonably be expected to have a
Material Adverse Effect:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred, and, to
the best knowledge of the Credit Parties, no event or condition has occurred or
exists as a result of which any ERISA Event could reasonably be expected to
occur, with respect to any Plan; (ii) no "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the Internal
Revenue Code, whether or not waived, has occurred with respect to any Plan;
(iii) each Plan has been maintained, operated, and funded in compliance with its
own terms and in material compliance with the provisions of ERISA, the Internal
Revenue Code, and any other applicable federal or state laws; and (iv) no lien
in favor of the PBGC or a Plan has arisen or is reasonably likely to arise on
account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as defined
in Section 4001(a)(16) of ERISA), whether or not vested, under each Single
Employer Plan, as of the last annual valuation date prior to the date on which
this representation is made or deemed made (determined, in each case, in
accordance with Financial Accounting Standards Board Statement 87, utilizing the
actuarial assumptions used in such Plan's most recent actuarial valuation
report), did not exceed as of such valuation date the fair market value of the
assets of such Plan.
(c) No member of the Consolidated Group nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, could be reasonably
expected to incur, any withdrawal liability under ERISA to any Multiemployer
Plan or Multiple Employer Plan. No member of the Consolidated Group nor any
ERISA Affiliate would become subject to any withdrawal liability under ERISA if
any member of the Consolidated Group or any ERISA Affiliate were to withdraw
completely from all Multiemployer Plans and Multiple Employer Plans as of the
valuation date most closely preceding the date on which this representation is
made or deemed made. No member of the Consolidated Group nor any ERISA Affiliate
has received any notification that any Multiemployer Plan is in reorganization
(within the meaning of Section 4241 of ERISA), is insolvent (within the meaning
of Section 4245 of ERISA), or has been terminated (within the meaning of Title
IV of ERISA), and no Multiemployer Plan is, to the best knowledge of the Credit
Parties, reasonably expected to be in reorganization, insolvent, or terminated.
76
(d) No prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Internal Revenue Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected or may
subject any member of the Consolidated Group or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Internal Revenue Code, or under any agreement or other instrument pursuant
to which any member of the Consolidated Group or any ERISA Affiliate has agreed
or is required to indemnify any person against any such liability.
(e) No member of the Consolidated Group nor any ERISA Affiliates has any
liability with respect to "expected post-retirement benefit obligations" within
the meaning of the Financial Accounting Standards Board Statement 106. Each Plan
which is a welfare plan (as defined in Section 3(1) of ERISA) to which Sections
601-609 of ERISA and Section 4980B of the Internal Revenue Code apply has been
administered in compliance in all material respects of such sections.
(f) Neither the execution and delivery of this Credit Agreement nor the
consummation of the financing transactions contemplated thereunder will involve
any transaction which is subject to the prohibitions of Sections 404, 406 or 407
of ERISA or in connection with which a tax could be imposed pursuant to Section
4975 of the Code. The representation by the Credit Parties in the preceding
sentence is made in reliance upon and subject to the accuracy of the Lenders'
representation in Section 12.15 with respect to their source of funds and is
subject, in the event that the source of the funds used by the Lenders in
connection with this transaction is an insurance company's general asset
account, to the application of Prohibited Transaction Class Exemption 95-60, 60
Fed. Reg. 35,925 (1995), compliance with the regulations issued under Section
401(c)(1)(A) of ERISA, or the issuance of any other prohibited transaction
exemption or similar relief, to the effect that assets in an insurance company's
general asset account do not constitute assets of an "employee benefit plan"
within the meaning of Section 3(3) of ERISA of a "plan" within the meaning of
Section 4975(e)(1) of the Code.
7.13 Governmental Regulations, Etc.
-----------------------------
(a) No part of the proceeds of the Extensions of Credit hereunder will be
used, directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation U, or for the purpose of
purchasing or carrying or trading in any other securities. If requested by any
Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in said Regulation
U. No indebtedness being reduced or retired out of the proceeds of the
Extensions of Credit hereunder was or will be incurred for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation U or
any "margin security" within the meaning of Regulation T. "Margin stock" within
the meanings of Regulation U does not constitute more than 25% of the value of
the consolidated assets of the Borrower and its Subsidiaries. None of the
transactions contemplated by this Credit Agreement (including, without
limitation, the direct or indirect use of the proceeds of the Loans) will
violate or result in a violation of the Securities Act of 1933, as amended, or
the Securities Exchange Act, as amended, or regulations issued pursuant thereto,
or Regulation T, U or X.
(b) None of the members of the Consolidated Group is subject to
regulation under the Public Utility Holdings Company Act of 1935, the Federal
Power Act or the Investment Company
77
Act of 1940, each as amended. In addition, none of the members of the
Consolidated Group is (i) an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, and is not
controlled by such a company, or (ii) a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary" of a "holding company", within the meaning of the Public Utility
Holdings Company Act of 1935, as amended.
(c) No director, executive officer or principal shareholder of any member
of the Consolidated Group is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with reference to any
Lender) have the respective meanings assigned thereto in Regulation O issued by
the Board of Governors of the Federal Reserve System.
7.14 Subsidiaries.
------------
Set forth on Schedule 7.14 are all the Subsidiaries of Holdings, including
-------------
the jurisdiction of organization, classes of Capital Stock or other equity
interests (including options, warrants, rights of subscription, conversion and
exchangeability and other similar rights) and ownership and ownership
percentages thereof. The outstanding shares of Capital Stock shown have been
validly issued, fully paid and are non-assessable and owned free of Liens other
than Permitted Liens. The foregoing shares of Capital Stock and equity interests
are not the subject of buy-sell, voting trust or other shareholder agreement
except as identified on Schedule 7.14.
-------------
7.15 Purpose of Extensions of Credit.
-------------------------------
The Loans will be used solely to (i) finance working capital, capital
expenditures and other corporate purposes (including transaction costs
associated with the Reorganization) and (ii) to repay existing Indebtedness of
HTI and its Subsidiaries including the Columbia/HCA Debt up to $900 million.
The Letters of Credit shall be used only for or in connection with appeal bonds,
reimbursement obligations arising in connection with surety and reclamation
bonds, reinsurance, domestic or international trade transactions and obligations
not otherwise aforementioned relating to transactions entered into by the
applicable account party in the ordinary course of business.
7.16 Environmental Matters.
---------------------
Except as has not had and could not reasonably be expected to result in a
Material Adverse Effect, to the knowledge of the Consolidated Group:
(a) All of the facilities and properties owned, leased or operated by any
member of the Consolidated Group (the "Subject Properties") and all of the
------------------
Consolidated Group's respective operations at the Subject Properties (the
"Businesses") are in compliance with all applicable Environmental Laws, and
----------
there is no violation of any Environmental Law with respect to the Subject
Properties or the Businesses.
(b) None of the Subject Properties contains any Materials of
Environmental Concern at, on or under the Subject Properties in amounts or
concentrations that constitute a violation of, or could give rise to liability
under, Environmental Laws.
78
(c) Materials of Environmental Concern have not been generated, treated,
stored or disposed of at, on or under any of the Subject Properties or any other
location, or transported from the Subject Properties to or disposed of at any
other location, by or on behalf of any members of the Consolidated Group in
violation of any Environmental Law.
(d) No member of the Consolidated Group has (i) received any written
notice of any judicial proceeding or administrative action that is pending or
threatened under any Environmental Law with respect to any member of the
Consolidated Group, the Subject Properties or the Businesses; (ii) entered into
or been subject to any consent decrees or other decrees, consent orders,
administrative orders or compliance orders, or other administrative or judicial
requirements that remain outstanding under any Environmental Law; or (iii) been
subject to any governmental enforcement action under any Environmental Laws with
respect to the Subject Properties or any off-site waste disposal site .
(e) There has been no release of Materials of Environmental Concern at or
from the Subject Properties, or arising from or related to the operations of any
member of the Consolidated Group in connection with the Subject Properties or
the Businesses.
7.17 Year 2000 Compliance.
--------------------
The Borrower has (i) initiated a review and assessment of all areas within
its and each of its Subsidiaries' business and operations (including those
affected by suppliers, vendors and customers) that could be adversely affected
by the "Year 2000 Problem" (that is, the risk that computer applications used by
-----------------
the Borrower or any of its Subsidiaries (or suppliers, vendors and customers)
may be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999), (ii)
developed a plan and timeline for addressing the Year 2000 Problem on a timely
basis, and (iii) to date, implemented that plan in accordance with that
timetable. Based on the foregoing, the Borrower believes that all computer
applications (including those of its suppliers, vendors and customers (other
than any Governmental Authority or any Lender)) that are material to its or any
of its Subsidiaries' business and operations are reasonably expected on a timely
basis to be able to perform properly date-sensitive functions for all dates
before and after January 1, 2000 (that is, be "Year 2000 Compliant"), except to
-------------------
the extent that a failure to do so could not reasonably be expected to have a
Material Adverse Effect.
79
7.18 No Material Misstatements.
-------------------------
None of (i) the information contained in the confidential information
memorandum, or (ii) any other information, reports, financial statements,
exhibits or schedules, taken as a whole, furnished by or on behalf of any member
of the Consolidated Group to the Administrative Agent or any Lender in
connection with the negotiation of the Credit Documents or included therein or
delivered pursuant thereto contained, contains or will contain any material
misstatement of fact or omitted, omits or will omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were, are or will be made, not materially misleading, provided that
--------
to the extent any such information, report, financial statement, exhibit or
schedule was based upon or constitutes a forecast or projection, Triad
represents only that it acted in good faith and utilized reasonable assumptions
and due care in the preparation of such information, report, financial
statement, exhibit or schedule.
7.19 Labor Matters.
-------------
Except as set forth in Schedule 7.19,
-------------
(i) There are no strikes or lockouts against any members of the
Consolidated Group pending or, to the best knowledge of the Credit Parties,
threatened;
(ii) the hours worked by and payments made to employees of the
Consolidated Group have not been in violation of the Fair Labor Standards
Act or any other applicable federal, state, local or foreign law dealing
with such matters in any case where a Material Adverse Effect has occurred
or could reasonably be expected to occur as a result of the violation
thereof;
(iii) all payments due from members of the Consolidated Group, or for
which any claim may be made against a member of the Consolidated Group, on
account of wages and employee health and welfare insurance and other
benefits, have been paid or accrued as a liability on the books of the
respective members of the Consolidated Group; and
(iv) none of the members of the Consolidated Group is party to a
collective bargaining agreement.
7.20 Security Documents.
------------------
After the HTI Release Event:
(a) Borrower Security Agreement. The Borrower Security Agreement is
---------------------------
effective to create in favor of the Administrative Agent, for the ratable
benefit of the holders of the Secured Obligations (as defined in the Borrower
Security Agreement), a legal valid and enforceable security interest in the
Collateral (as defined in the Borrower Security Agreement) owned by the Borrower
and, when financing statements in appropriate form are filed in the offices for
the locations in Schedule 2 and Schedule 3 to the Borrower Security Agreement,
the Borrower Security Agreement shall create a fully perfected Lien on, and
security interest in, all right, title
80
and interest of the Borrower in such Collateral that may be perfected by filing,
recording or registering a financing statement under the Uniform Commercial Code
as in effect, in each case prior and superior in right to any other Lien on any
Collateral other than Permitted Liens.
(b) Guarantor Security Agreement. The Guarantor Security Agreement is
----------------------------
effective to create in favor of the Administrative Agent, for the ratable
benefit of the holders of the Secured Obligations (as defined in the Guarantor
Security Agreement), a legal valid and enforceable security interest in the
Collateral (as defined in the Guarantor Security Agreement) owned by the
Guarantors and, when financing statements in appropriate form are filed in the
offices for the locations in Schedule 2 and Schedule 3, the Guarantor Security
Agreement shall create a fully perfected Lien on, and security interest in, all
right, title and interest of the Guarantors in such Collateral that may be
perfected by filing, recording or registering a financing statement under the
Uniform Commercial Code as in effect, in each case prior and superior in right
to any other Lien on any Collateral other than Permitted Liens.
(c) Borrower Pledge Agreement. The Borrower Pledge Agreement is effective
-------------------------
to create in favor of the Administrative Agent, for the ratable benefit of the
holders of the Secured Obligations (as defined in the Borrower Pledge
Agreement), a legal valid and enforceable security interest in the Collateral
(as defined in the Borrower Pledge Agreement) and, when such Collateral is
delivered to the Administrative Agent, the Borrower Pledge Agreement shall
constitute a fully perfected first priority Lien on, and security interest in,
all right, title and interest of the Borrower in such Collateral, in each case
prior and superior in right to any other Lien.
(d) Guarantor Pledge Agreement. The Guarantor Pledge Agreement is
--------------------------
effective to create in favor of the Administrative Agent, for the ratable
benefit of the holders of the Secured Obligations (as defined in the Guarantor
Pledge Agreement), a legal valid and enforceable security interest in the
Collateral (as defined in the Guarantor Pledge Agreement) and, when such
Collateral is delivered to the Administrative Agent, the Guarantor Pledge
Agreement shall constitute a fully perfected first priority Lien on, and
security interest in, all right, title and interest of the pledgors thereunder
in such Collateral, in each case prior and superior in right to any other Lien.
(e) Intellectual Property.
---------------------
(i) The Borrower Security Agreement together with the Notice of Grant
of Security Interest in Trademarks and the Notice of Grant of Security
Interest in Patents when filed with the United States Patent and Trademark
Office, and the Notice of Grant of Security Interest in Copyrights filed
with the United States Copyright Office will create a fully perfected Lien
on, and security interest in, all right, title and interest of the Borrower
in all Patents and Patent Licenses, Trademarks and Trademark Licenses and
Copyrights and Copyright Licenses (each as defined in the Borrower Security
Agreement) and in which a security interest may be perfected by filing,
recording or registration of a Notice in the United States Patent and
Trademark Office and the United States Copyright Office, in each case prior
and superior in right to any other person other than Permitted Liens; and
81
(ii) The Guarantor Security Agreement together with the Notice of
Grant of Security Interest in Trademarks and the Notice of Grant of
Security Interest in Patents when filed with the United States Patent and
Trademark Office, and the Notice of Grant of Security Interest in
Copyrights filed with the United States Copyright Office will create a
fully perfected Lien on, and security interest in, all right, title and
interest of the Guarantors in all Patents and Patent Licenses, Trademarks
and Trademark Licenses and Copyrights and Copyright Licenses (each as
defined in the Guarantor Security Agreement) and in which a security
interest may be perfected by filing, recording or registration of a Notice
in the United States Patent and Trademark Office and the United States
Copyright Office, in each case prior and superior in right to any other
person other than Permitted Liens.
(f) Mortgages. The Mortgages are effective to create in favor of the
---------
Administrative Agent, for the ratable benefit of the holders of the Secured
Obligations identified therein, a legal, valid and enforceable Lien on all of
the respective grantors' right, title and interest in and to the Mortgaged
Properties thereunder and the proceeds thereof, and when the Mortgages are
recorded in the appropriate offices and the proper amount of mortgage recording
or similar taxes (if any) are paid and when the financing statements are duly
filed in the appropriate public records, the Mortgages shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the grantors in such Mortgaged Properties and the proceeds thereof, in each case
prior and superior to the right of any other Lien other than Permitted Liens.
7.21 Location of Real Property and Leased Premises.
---------------------------------------------
Set forth on Schedule 7.21(a) is a complete and correct list of all of the
----------------
Mortgaged Properties. Set forth on Schedule 7.21(b) is a list of all locations
----------------
where any tangible personal property of any member of the Consolidated Group is
located, including street address and state where located. Set forth on Schedule
--------
7.21(c) is the chief executive office and principal place of business of each
-------
member of the Consolidated Group.
7.22 Solvency.
--------
Immediately after giving effect to the Reorganization and the initial
Extensions of Credit hereunder, (i) the fair value of the assets of each Credit
Party will exceed its debts and liabilities, subordinated, contingent or
otherwise; (ii) the present fair saleable value of the property of each Credit
Party will be greater than the amount that will be required to pay the probable
liability of its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and mature; and
(iii) each Credit Party will not have unreasonably small capital with which to
conduct the business in which it is engaged as such business is now conducted
and is proposed to be conducted following the Closing Date.
7.23 Distribution Agreement.
----------------------
The Distribution Agreement has been duly authorized, executed and delivered
by Holdings and Triad, and to the best of such parties' knowledge, the other
parties thereto, and is a legal, valid and binding obligation of Holdings and
Triad and, to the best of such parties' knowledge, the other parties thereto
except as may be limited by applicable bankruptcy, insolvency, reorganization,
82
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law). The Distribution Agreement has not been
amended or modified, nor have any material provisions been the subject of any
waiver, except as disclosed to the Administrative Agent and the Lenders.
SECTION 8
AFFIRMATIVE COVENANTS
---------------------
Triad, by execution and delivery of an Assumption Agreement, hereby
covenants and agrees that, after the Triad Group Joinder Event, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding or any Letter of Credit is
outstanding, and until all of the Commitments hereunder shall have terminated:
8.1 Information Covenants.
---------------------
The members of the Consolidated Group will furnish, or cause to be
furnished, to the Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in any
---------------------------
event within 90 days after the close of each fiscal year of the
Consolidated Group, a consolidated balance sheet and income statement of
the members of the Consolidated Group as of the end of such fiscal year,
together with related consolidated statements of operations and retained
earnings and of cash flows for such fiscal year, in each case setting forth
in comparative form consolidated figures for the preceding fiscal year, all
such financial information described above to be in reasonable form and
detail and audited by independent certified public accountants of
recognized national standing reasonably acceptable to the Administrative
Agent and whose opinion shall be to the effect that such financial
statements have been prepared in accordance with GAAP (except for changes
with which such accountants concur) and shall not be limited as to the
scope of the audit or qualified as to the status of the members of the
Consolidated Group as a going concern or any other material qualifications
or exceptions.
(b) Quarterly Financial Statements. As soon as available, and in any
------------------------------
event within 45 days after the close of each fiscal quarter of the
Consolidated Group (other than the fourth fiscal quarter, in which case 90
days after the end thereof) a consolidated balance sheet and income
statement of the members of the Consolidated Group as of the end of such
fiscal quarter, together with related consolidated statements of operations
and retained earnings and of cash flows for such fiscal quarter, in each
case setting forth in comparative form consolidated figures for the
corresponding period of the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
reasonably acceptable to the Administrative Agent, and accompanied by a
certificate of an Executive Officer of the Borrower to the effect that such
quarterly financial statements fairly present in all material respects the
financial condition of the members of the Consolidated Group and have been
prepared in accordance with GAAP, subject to changes resulting from audit
and normal year-end audit adjustments.
83
(c) Monthly Financial Statements. As soon as available, and in any
----------------------------
event within 30 days after the close of each fiscal month of the
Consolidated Group, a summary of operating statistics, including revenues,
EBITDA and net income, on a hospital-by-hospital basis certified by an
Executive Officer of the Borrower to be true and correct in all material
respects to the best of his knowledge.
(d) Officer's Certificate. At the time of delivery of the financial
---------------------
statements provided for in Sections 8.1(a) and 8.1(b) above, a certificate
of an Executive Officer of the Borrower substantially in the form of
Schedule 8.1(c), (i) demonstrating compliance with the financial covenants
---------------
contained in Section 8.11 by calculation thereof as of the end of each such
fiscal period and (ii) stating that no Default or Event of Default exists,
or if any Default or Event of Default does exist, specifying the nature and
extent thereof and what action the Credit Parties propose to take with
respect thereto.
(e) Annual Business Plan and Budgets. At least 30 days prior to the
--------------------------------
end of each fiscal year of the Borrower, beginning with the fiscal year
ending December 31, 1999, an annual business plan and budget of the members
of the Consolidated Group containing, among other things, pro forma
financial statements for the next fiscal year.
(f) Compliance With Certain Provisions of the Credit Agreement.
----------------------------------------------------------
Within 90 days after the end of each fiscal year of the Credit Parties, a
certificate containing information regarding the amount of all Asset
Dispositions, Debt Transactions and Equity Transactions that were made
during the prior fiscal year.
(g) Accountant's Certificate. Within the period for delivery of the
------------------------
annual financial statements provided in Section 8.1(a), a certificate of
the accountants conducting the annual audit stating that they have reviewed
this Credit Agreement and stating further whether, in the course of their
audit, they have become aware of any Default or Event of Default and, if
any such Default or Event of Default exists, specifying the nature and
extent thereof.
(h) Auditor's Reports. Promptly upon receipt thereof, a copy of any
-----------------
other report or "management letter" submitted by independent accountants to
any member of the Consolidated Group in connection with any annual, interim
or special audit of the books of such Person.
(i) Reports. Promptly upon transmission or receipt thereof, (i)
-------
copies of any filings and registrations with, and reports to or from, the
Securities and Exchange Commission, or any successor agency, and copies of
all financial statements, proxy statements, notices and reports as any
member of the Consolidated Group shall send to its shareholders or to a
holder of any Indebtedness owed by any member of the Consolidated Group in
its capacity as such a holder and (ii) upon the request of the
Administrative Agent, all reports and written information to and from the
United States Environmental Protection Agency, or any state or local agency
responsible for environmental matters, the United States Occupational
Health and Safety Administration, or any state or local agency
84
responsible for health and safety matters, or any successor agencies or
authorities concerning environmental, health or safety matters.
(j) Notices. Upon any Executive Officer of a Credit Party obtaining
--------
knowledge thereof, the Credit Parties will give written notice to the
Administrative Agent immediately of (i) the occurrence of a Default or
Event of Default, specifying the nature and existence thereof and what
action the Credit Parties propose to take with respect thereto, and (ii)
the occurrence of any of the following with respect to any member of the
Consolidated Group (A) the pendency or commencement of any litigation,
arbitral or governmental proceeding against such Person which if adversely
determined is likely to have a Material Adverse Effect or (B) the
institution of any proceedings against such Person with respect to, or the
receipt of notice by such Person of potential liability or responsibility
for violation, or alleged violation of any federal, state or local law,
rule or regulation, including but not limited to, Environmental Laws, the
violation of which could have a Material Adverse Effect.
(k) ERISA. Upon any Executive Officer of a Credit Party obtaining
-----
knowledge thereof, the Credit Parties will give written notice to the
Administrative Agent promptly (and in any event within five Business Days)
of: (i) any event or condition, including, but not limited to, any
Reportable Event, that constitutes, or might reasonably lead to, an ERISA
Event; (ii) with respect to any Multiemployer Plan, the receipt of notice
as prescribed in ERISA or otherwise of any withdrawal liability assessed
against the Credit Parties or any ERISA Affiliates, or of a determination
that any Multiemployer Plan is in reorganization or insolvent (both within
the meaning of Title IV of ERISA); (iii) the failure to make full payment
on or before the due date (including extensions) thereof of all amounts
which any member of the Consolidated Group or any ERISA Affiliate is
required to contribute to each Plan pursuant to its terms and as required
to meet the minimum funding standard set forth in ERISA and the Code with
respect thereto; or (iv) any change in the funding status of any Plan that
could have a Material Adverse Effect, together with a description of any
such event or condition or a copy of any such notice and a statement by an
Executive Officer of the Borrower briefly setting forth the details
regarding such event, condition, or notice, and the action, if any, which
has been or is being taken or is proposed to be taken by the Credit Parties
with respect thereto. Promptly upon request, the Credit Parties shall
furnish the Administrative Agent and the Lenders with such additional
information concerning any Plan as may be reasonably requested, including,
but not limited to, copies of each annual report/return (Form 5500 series),
as well as all schedules and attachments thereto required to be filed with
the Department of Labor and/or the Internal Revenue Service pursuant to
ERISA and the Code, respectively, for each "plan year" (within the meaning
of Section 3(39) of ERISA).
(l) Environmental.
-------------
(i) Upon the reasonable written request of the Administrative
Agent following the occurrence of any event or the discovery of any
condition which the Administrative Agent or the Required Lenders
reasonably believe has caused (or could be reasonably expected to
cause) the representations and warranties set forth in Section 7.16 to
be untrue, the Credit Parties will furnish or cause to be furnished
85
to the Administrative Agent, at the Credit Parties' expense, a report
of an environmental assessment of reasonable scope, form and depth,
(including, where appropriate, soil or groundwater sampling) by a
consultant possessing relevant qualifications and skills to undertake
such an environmental assessment of the nature and extent of the
presence of any Materials of Environmental Concern on any Subject
Properties (as defined in Section 7.16) and as to the compliance by
any member of the Consolidated Group with Environmental Laws at such
Subject Properties. If the Credit Parties fail to deliver such an
environmental report within seventy-five (75) days after receipt of
such written request then the Administrative Agent may arrange for
same, and the members of the Consolidated Group hereby grant to the
Administrative Agent and their representatives access to the Subject
Properties to reasonably undertake such an assessment (including,
where appropriate, soil or groundwater sampling). The reasonable cost
of any assessment arranged for by the Administrative Agent pursuant to
this provision will be payable by the Credit Parties on demand and
added to the obligations secured by the Collateral Documents.
(ii) The members of the Consolidated Group will conduct and
complete all investigations, studies, sampling, and testing and all
remedial, removal, and other actions necessary to address all
Materials of Environmental Concern on any of the Subject Properties to
the extent required to comply with all Environmental Laws and with the
orders and directives of all Governmental Authorities issued
thereunder to the extent that any failure to comply could reasonably
be expected to result in a Material Adverse Effect. However, nothing
in this Credit Agreement shall limit any rights of the members of the
Consolidated Group under any Environmental Laws or other Requirements
of Law to seek to require third parties to conduct, complete, or pay
for any investigations, studies, sampling, testing, or remedial,
removal, or other actions necessary to address Materials of
Environmental Concern on, from or affecting any of the Subject
Properties to the extent necessary to comply with all applicable
Environmental Laws.
(iii) Notwithstanding this paragraph 8.1(l), nothing in this
Credit Agreement shall prevent the members of the Consolidated Group
from exercising any rights to contest or appeal any order or directive
issued under Environmental Laws by a Governmental Authority prior to
undertaking any investigations, studies, sampling, testing, or
remedial, removal, or other actions required thereunder.
(m) Additional Patents and Trademarks. At the time of delivery of the
---------------------------------
financial statements and reports provided for in Section 8.1(a), a report
signed by an Executive Officer of the Borrower setting forth (i) a list of
registration numbers for all patents, trademarks, service marks, tradenames
and copyrights awarded to any member of the Consolidated Group since the
last day of the immediately preceding fiscal year and (ii) a list of all
patent applications, trademark applications, service xxxx applications,
trade name applications and copyright applications submitted by any member
of the Consolidated Group since the last day of the immediately preceding
fiscal year and the status of each such application, all in such form as
shall be reasonably satisfactory to the Administrative Agent.
86
(n) Other Information. With reasonable promptness upon any such
-----------------
request, such other information regarding the business, properties or
financial condition of any member of the Consolidated Group as the
Administrative Agent or the Required Lenders may reasonably request.
8.2 Preservation of Existence and Franchises.
----------------------------------------
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 9.4 or Section 9.5, each
member of the Consolidated Group will do all things necessary to preserve and
keep in full force and effect its existence, rights, franchises and authority.
8.3 Books and Records.
-----------------
Each member of the Consolidated Group will keep complete and accurate books
and records of its transactions in accordance with good accounting practices on
the basis of GAAP (including the establishment and maintenance of appropriate
reserves).
8.4 Compliance with Law.
-------------------
Each member of the Consolidated Group will comply with all laws, rules,
regulations and orders, and all applicable restrictions imposed by all
Governmental Authorities, applicable to it and its Property if noncompliance
with any such law, rule, regulation, order or restriction could have a Material
Adverse Effect.
8.5 Payment of Taxes and Other Indebtedness.
---------------------------------------
Each member of the Consolidated Group will pay and discharge (a) all taxes,
assessments and governmental charges or levies imposed upon it, or upon its
income or profits, or upon any of its Properties, before they shall become
delinquent, (b) all lawful claims (including claims for labor, materials and
supplies) which, if unpaid, might give rise to a Lien upon any of its
properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that no member of the
-------- -------
Consolidated Group shall be required to pay any such tax, assessment, charge,
levy, claim or Indebtedness (i) which is being contested in good faith by
appropriate proceedings and as to which adequate reserves therefor have been
established in accordance with GAAP or (ii) if the failure to make any such
payment (A) would not give rise to an immediate right to foreclose on a Lien
securing such amounts and (B) could not have a Material Adverse Effect.
8.6 Insurance.
---------
(a) Each member of the Consolidated Group will at all times maintain
in full force and effect insurance (including worker's compensation
insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and
liabilities and with such deductibles or self-insurance retentions as are
in accordance with normal industry practice (or as otherwise required by
the Collateral Documents). The Administrative Agent, for the ratable
benefit of the Lenders, shall be
87
named as loss payee or mortgagee, as its interest may appear, and/or
additional insured with respect to any such insurance providing coverage in
respect of any Collateral, and each provider of any such insurance shall
agree, by endorsement upon the policy or policies issued by it or by
independent instruments furnished to the Administrative Agent, that it will
give the Administrative Agent thirty (30) days prior written notice before
any such policy or policies shall be altered or canceled, and that no act
or default of any member of the Consolidated Group or any other Person
shall affect the rights of the Administrative Agent or the Lenders under
such policy or policies. The present insurance coverage of the members of
the Consolidated Group is outlined as to carrier, policy number, expiration
date, type and amount on Schedule 8.6.
------------
(b) The proceeds from insurance may be held by the Administrative
Agent in a collateral account or delivered over to the applicable member of
the Consolidated Group, in the discretion of the Administrative Agent.
Amounts held in a collateral account will be disbursed to the applicable
member of the Consolidated Group on evidence of repair, replacement or
reinvestment in the same or similar property. The members of the
Consolidated Group will account for amounts delivered over to them and the
uses to which the proceeds are put and make payments as may be required
hereunder by Section 3.3(b)(ii) or otherwise.
8.7 Maintenance of Property.
-----------------------
Each member of the Consolidated Group will maintain and preserve its
properties and equipment material to the conduct of its business in good repair,
working order and condition, normal wear and tear, obsolescence and casualty and
condemnation excepted, and will make, or cause to be made, in such properties
and equipment from time to time all repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto as may be needed or proper, to
the extent and in the manner customary for companies in similar businesses.
8.8 Performance of Obligations.
--------------------------
Each member of the Consolidated Group will perform in all material respects
all of its obligations under the terms of all material agreements, indentures,
mortgages, security agreements and other debt instruments to which it is a party
or by which it is bound.
8.9 Use of Proceeds.
---------------
The Borrower will use the proceeds of Extensions of Credit solely for the
purposes set forth in Section 7.15.
8.10 Audits/Inspections.
------------------
Upon reasonable notice and during normal business hours, each member of the
Consolidated Group will permit representatives appointed by the Administrative
Agent, including, without limitation, independent accountants, agents,
attorneys, and appraisers to visit and inspect such member's property, including
its books and records, its accounts receivable and inventory, its facilities and
its other business assets, and to make photocopies or photographs thereof and to
write
88
down and record any information such representative obtains and shall permit the
Administrative Agent or its representatives to investigate and verify the
accuracy of information provided to the Administrative Agent or the Lenders and
to discuss all such matters with the officers, employees and, subject to the
right of the representatives of the Consolidated Group to be present,
representatives of such Person (in each case excluding patient medical records
and any other material which is confidential pursuant to any Requirement of
Law). The Credit Parties agree that the Administrative Agent, and its
representatives, may conduct an annual audit of the Collateral, at the expense
of the Borrower.
8.11 Financial Covenants.
-------------------
(a) Consolidated Net Worth. At all times, Consolidated Net Worth shall be
----------------------
not less than the sum of (i) $375 million plus (ii) as of the end of each fiscal
----
quarter to occur after the Closing Date, an amount equal to ninety percent (90%)
of Consolidated Net Income (but not less than zero) for such fiscal quarter,
such increases to be cumulative, plus (iii) an amount equal to one hundred
----
percent (100%) of net proceeds from Equity Transactions occurring after the
Closing Date .
(b) Consolidated Senior Leverage Ratio. As of the end of each fiscal
----------------------------------
quarter set forth below, the Consolidated Senior Leverage Ratio shall be not
greater than:
Fiscal Quarter Ending
---------------------
June 30, 1999 2.75:1.0
September 30, 1999 2.75:1.0
December 31, 1999 2.75:1.0
March 31, 2000 2.25:1.0
June 30, 2000 2.00:1.0
September 30, 2000 2.00:1.0
December 31, 2000 2.00:1.0
March 31, 2001 and thereafter 1.75:1.0
(c) Consolidated Total Leverage Ratio. As of the end of each fiscal
---------------------------------
quarter set forth below, the Consolidated Total Leverage Ratio shall be not
greater than:
Fiscal Quarter Ending
---------------------
June 30, 1999 4.95:1.0
September 30, 1999 4.95:1.0
December 31, 1999 4.50:1.0
March 31, 2000 4.25:1.0
June 30, 2000 4.00:1.0
September 30, 2000 4.00:1.0
December 31, 2000 4.00:1.0
March 31, 2001 and thereafter 3.50:1.0
89
(d) Consolidated Fixed Charge Coverage Ratio. As of the end of each
----------------------------------------
fiscal quarter, the Consolidated Fixed Charge Coverage Ratio shall be not less
than:
Fiscal Quarter Ending
---------------------
June 30, 1999 N/A
September 30, 1999 N/A
December 31, 1999 1.75:1.0
March 31, 2000 1.75:1.0
June 30, 2000 1.75:1.0
September 30, 2000 1.75:1.0
December 31, 2000 0.85:1.0
March 31, 2001 1.00:1.0
June 30, 2001 1.00:1.0
September 30, 2001 and thereafter 1.15:1.0
(e) Capital Expenditures. Consolidated Capital Expenditures for each
--------------------
fiscal year set forth below shall not exceed:
Fiscal year 1999 $120,000,000
Fiscal year 2000 $ 92,000,000
Fiscal year 2001 $ 94,000,000
Fiscal year 2002 $ 96,300,000
Fiscal year 2003 $ 98,600,000
Fiscal year 2004 $102,500,000
Fiscal year 2005 $106,800,000
plus (a) the unused amount available for Consolidated Capital Expenditures under
this Section 8.11 for the immediately preceding fiscal year (excluding any carry
forward available from any prior fiscal year), (b) the amount of any Net
Proceeds from Approved Asset Dispositions permitted to be retained by the
Borrower pursuant to Section 3.3(b)(ii)(A) to the extent that the Borrower
applies such amount to Consolidated Capital Expenditures within twelve (12)
months of the date of such Approved Asset Disposition and (c) the amount of any
Consolidated Capital Expenditures which constitute Permitted Acquisitions
hereunder.
8.12 Additional Guarantors.
---------------------
As soon as practicable and in any event within 30 days after any Person
becomes a direct or indirect Subsidiary of Holdings, the Borrower shall provide
the Administrative Agent with written notice thereof setting forth information
in reasonable detail describing all of the Property of such Person and shall (a)
if such Person is a Domestic Subsidiary, cause such Person to execute a Guaranty
Joinder Agreement in substantially the same form as Schedule 1 to the Guaranty
Agreement, (b) if such Person is a Domestic Subsidiary, cause 100% of the issued
and outstanding Capital Stock of such Person owned by any Credit Party to be
delivered to the Administrative Agent (together with undated stock powers signed
in blank) and pledged to the Administrative Agent pursuant to an appropriate
pledge agreement(s) in substantially the form of the Guarantor Pledge Agreement
and otherwise in form acceptable to the Administrative Agent,
90
(c) if such Person is a direct Foreign Subsidiary of a Credit Party, cause 65%
(or such greater percentage which would not result in material adverse tax
consequences) of the issued and outstanding Capital Stock entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued
and outstanding Capital Stock not entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) of such Person to be delivered to the Administrative
Agent (together with undated stock powers signed in blank (unless, with respect
to a Foreign Subsidiary, such stock powers are deemed unnecessary by the
Administrative Agent in its reasonable discretion under the law of the
jurisdiction of incorporation of such Person)) and pledged to the Administrative
Agent pursuant to an appropriate pledge agreement(s) in substantially the form
of the Guarantor Pledge Agreement and otherwise in form acceptable to the
Administrative Agent and (d) cause such Person to (i) if such Person is a
Domestic Subsidiary which has any Eligible Real Property, deliver to the
Administrative Agent, with respect to such Eligible Real Property, documents,
instruments and other items of the types required to be delivered pursuant to
Section 5.5(g) all in form, content and scope reasonably satisfactory to the
Administrative Agent and (ii) deliver such other documentation as the
Administrative Agent may reasonably request in connection with the foregoing,
including, without limitation, appropriate UCC-1 financing statements, real
estate title insurance policies, environmental reports, landlord's waivers,
certified resolutions and other organizational and authorizing documents of such
Person, favorable opinions of counsel to such Person (which shall cover, among
other things, the legality, validity, binding effect and enforceability of the
documentation referred to above and the perfection of the Administrative Agent's
liens thereunder) and other items of the types required to be delivered pursuant
to Section 5.5 (e), (f), (g), (h) and (i), all in form, content and scope
reasonably satisfactory to the Administrative Agent.
8.13 Pledged Assets.
--------------
Each Credit Party will cause (i) all of its owned personal property located
in the United States, (ii) all of its owned real property located in the United
States other than Excluded Property and (iii) to the extent deemed to be
material by the Administrative Agent or the Required Lenders, (A) all of its
owned real property located outside of the United States other than Excluded
Property and (B) all of its leased real property (wherever located) other than
Excluded Property, to be subject at all times to first priority, perfected and,
in the case of real property (whether leased or owned), title insured Liens in
favor of the Administrative Agent to secure such party's obligations under the
Credit Documents pursuant to the terms and conditions of the Collateral
Documents or, with respect to any such property acquired subsequent to the
Closing Date, such other additional security documents as the Administrative
Agent shall reasonably request, subject in any case to Permitted Liens. With
respect to any real property acquired by any Credit Party subsequent to the
Closing Date and required by this Section 8.13 to be pledged to the
Administrative Agent, such Person will cause to be delivered to the
Administrative Agent with respect to such real property documents, instruments
and other items of the types required to be delivered pursuant to Section 5.5(g)
in form acceptable to the Administrative Agent. Without limiting the generality
of the above, the Credit Parties will cause (i) 100% of the issued and
outstanding Capital Stock of the Borrower, (ii) 100% of the issued and
outstanding Capital Stock of each Domestic Subsidiary and (iii) 65% (or such
greater percentage which would not result in material adverse tax consequences)
of the issued and outstanding Capital Stock entitled to vote (within the meaning
of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the
91
issued and outstanding Capital Stock not entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) of each Foreign Subsidiary directly owned by
Holdings or any Domestic Subsidiary to be subject at all times to a first
priority, perfected Lien in favor of the Administrative Agent pursuant to the
terms and conditions of the Collateral Documents or such other security
documents as the Administrative Agent shall reasonably request.
If, subsequent to the Closing Date, a Credit Party shall (a) acquire any
intellectual property, securities, instruments, chattel paper or other personal
property required to be pledged to the Administrative Agent as Collateral
hereunder or under any of the Collateral Documents or (b) acquire or lease any
real property, the Credit Parties shall promptly notify the Administrative Agent
of same. Each Credit Party shall, and shall cause each of its Subsidiaries to,
take such action (including but not limited to the actions set forth in Sections
5.3(e) and (f)) at its own expense as requested by the Administrative Agent to
ensure that the Administrative Agent has a first priority perfected Lien to
secure such party's obligations under the Credit Documents in (i) all owned real
property and personal property of the Credit Parties located in the United
States, (ii) to the extent deemed to be material by the Administrative Agent or
the Required Lenders in its or their sole reasonable discretion, all other owned
real and personal property of the Credit Parties and (iii) all leased real
property located in the United States, subject in each case only to Permitted
Liens. Each Credit Party shall, and shall cause each of its Subsidiaries to,
adhere to the covenants regarding the location of personal property as set forth
in the Security Agreements.
8.14 Year 2000 Compliance.
--------------------
Each member of the Consolidated Group will promptly notify the
Administrative Agent in the event any member of the Consolidated Group discovers
or determines that any computer application (including those of its suppliers,
vendors and customers) that is material to its or any of its Subsidiaries'
business and operations will not be Year 2000 Compliant, except to the extent
that such failure could not reasonably be expected to have a Material Adverse
Effect.
SECTION 9
NEGATIVE COVENANTS
------------------
Triad, by execution and delivery of an Assumption Agreement, hereby
covenants and agrees that, after the Triad Group Joinder Event, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding or any Letter of Credit is
outstanding, and until all of the Commitments hereunder shall have terminated:
9.1 Indebtedness.
------------
No member of the Consolidated Group will contract, create, incur, assume or
permit to exist any Indebtedness, except:
(a) Indebtedness existing or arising under this Credit Agreement or
the other Credit Documents;
92
(b) Indebtedness set forth on Schedule 9.1, and renewals, refinancings
------------
and extensions thereof on terms and conditions no less favorable to the
members of the Consolidated Group than for such existing Indebtedness;
(c) Capital Lease Obligations and Indebtedness incurred, in each case,
to provide all or a portion of the purchase price or costs of construction
of fixed assets, or in the case of a Sale and Leaseback Transaction, to
finance the value of such asset owned by a member of the Consolidated
Group, and renewals, refinancings and extensions thereof; provided that (i)
--------
such Indebtedness when incurred shall not exceed the purchase price or cost
of construction of such asset or, in the case of a Sale and Leaseback
Transaction or refinancing transaction, the fair market value of such
asset, (ii) no such Indebtedness shall be refinanced for a principal amount
in excess of the principal balance outstanding thereon at the time of such
refinancing, and (iii) the total aggregate outstanding principal amount of
all such Indebtedness shall not exceed $5,000,000 at any one time
outstanding;
(d) Indebtedness owing under interest rate, commodities and foreign
currency exchange protection agreements entered into in the ordinary course
of business to manage existing or anticipated risks and not for speculative
purposes;
(e) unsecured intercompany Indebtedness owing by a member of the
Consolidated Group to another member of the Consolidated Group (subject,
however, to the limitations of Section 9.6 and Permitted Investments
thereunder, in the case of the member of the Consolidated Group extending
the loan, advance or credit);
(f) the Senior Subordinated Notes in an aggregate principal amount up
to $325 million;
(g) other unsecured Funded Debt in an aggregate outstanding principal
amount of up to $5,000,000 at any time;
(h) Guaranty Obligations of Indebtedness permitted hereunder (which
guaranty obligations in respect of Subordinated Debt shall be similarly
subordinated).
9.2 Liens.
-----
No member of the Consolidated Group will contract, create, incur, assume or
permit to exist any Lien with respect to any of its Property, whether now owned
or after acquired, except for Permitted Liens.
9.3 Nature of Business.
------------------
No member of the Consolidated Group will substantively alter the character
or conduct of the business conducted by such Person as of the date of the Triad
Group Joinder Event.
93
9.4 Merger and Consolidation, Dissolution and Acquisitions.
------------------------------------------------------
(a) No member of the Consolidated Group will enter into any transaction of
merger or consolidation, other than the Reorganization, except that
(i) a Domestic Credit Party other than Holdings may be party to a
transaction of merger or consolidation with another Domestic Credit Party
other than Holdings, provided that if the Borrower is a party to such
--------
transaction, it shall be the surviving entity;
(ii) a Foreign Subsidiary may be party to a transaction of merger or
consolidation with a Subsidiary of the Borrower, provided that (A) if a
--------
Domestic Subsidiary is a party thereto, it shall be the surviving entity
and if such Domestic Subsidiary is not already a Credit Party, it shall
execute and deliver such joinder and pledge agreements as may be necessary
for compliance with the provisions of Sections 8.12 and 8.13, and (B) if a
Foreign Subsidiary is the other party thereto, the surviving entity shall
be a Foreign Subsidiary and the Borrower and its Subsidiaries shall be in
compliance with the pledge requirements of Sections 8.12 and 8.13;
(iii) a Domestic Subsidiary of the Borrower may be a party to a
transaction of merger or consolidation with a person other than Holdings,
the Borrower or their Subsidiaries, provided that (A) the surviving entity
--------
shall be a Domestic Subsidiary of the Borrower and shall execute and
deliver such joinder and pledge agreements as may be necessary for
compliance with the provisions of Sections 8.12 and 8.13, (B) no Default or
Event of Default shall exist immediately after giving effect thereto, and
(C) the transaction shall otherwise constitute a Permitted Acquisition;
(iv) a Subsidiary of the Borrower may enter into a transaction of
merger or consolidation in connection with an Asset Disposition permitted
under Section 9.5.
(b) No member of the Consolidated Group, other than a wholly-owned
Subsidiary of the Borrower (and then only if no Material Adverse Effect shall
result on account thereof), may dissolve, liquidate or wind up its affairs.
(c) No member of the Consolidated Group shall purchase or otherwise
acquire the Capital Stock of a Person which is not a member of the Consolidated
Group, nor shall any member of the Consolidated Group purchase or otherwise
acquire the assets, property and/or operations of a Person which is not a member
of the Consolidated Group, unless:
(i) in the case of an acquisition of Capital Stock, after giving
effect to such acquisition,
(A) if the acquisition is not of a controlling interest in the
subject Person such that after giving effect thereto the subject
Person will not be a Subsidiary, then the acquisition shall constitute
a Permitted Investment hereunder; and
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(B) if the acquisition is of a controlling interest in the
subject Person such that after giving effect thereto the subject
Person will be a Subsidiary, then (I) it shall be a Subsidiary of the
Borrower, (II) it shall execute and deliver such joinder and pledge
agreements as may be necessary for compliance with the provisions of
Sections 8.12 and 8.13, (III) no Default or Event of Default shall
exist immediately after giving effect thereto, and (IV) it shall
otherwise constitute a Permitted Acquisition.
(ii) in the case of an acquisition of assets, property and/or
operations, after giving effect to such acquisition (A) such joinder and
pledge agreements shall be executed, and other actions taken, as may be
necessary to perfect the security interests therein in accordance with the
provisions of Section 8.13, and (B) no Default or Event of Default shall
exist immediately after giving effect thereto, and (C) the acquisition
shall otherwise constitute a Permitted Acquisition.
9.5 Asset Dispositions.
------------------
No member of the Consolidated Group will make any Asset Disposition
(including, without limitation, any Sale and Leaseback Transaction), other than
the Reorganization and the Approved Asset Dispositions, unless
(i) the sale, lease or other disposition is to a Domestic Credit
Party;
(ii) the sale, transfer or disposition is in connection with an
asset swap which otherwise constitutes a Permitted Acquisition; or
(iii) it is the disposition of Overland Park Regional Medical Center
or Independence Regional Health Center in accordance with the terms of the
existing leases relating thereto;
(iv) in all other cases, (A) the consideration paid therefor shall
consist solely of cash and Cash Equivalents, (B) if the subject transaction
is a Sale and Leaseback Transaction, such transaction shall be permitted by
Section 9.13, (C) if the subject transaction involves Capital Stock of a
Subsidiary, the subject transaction is of a controlling interest in such
Subsidiary, (D) the aggregate net book value of all assets sold, leased or
otherwise disposed of shall not exceed $10,000,000 in any fiscal year, (E)
no Default or Event of Default shall exist immediately after giving effect
thereto, (F) the Borrower shall have demonstrated compliance with the
financial covenants hereunder on a Pro Forma Basis after giving effect to
the disposition and shall have delivered to the Administrative Agent a Pro
Forma Compliance Certificate (including reaffirmation of the
representations and warranties hereunder as of such date before and after
giving effect to such transaction) in connection therewith, and (G) the
Borrower shall have given written notice to the Administrative Agent at
least 15 days in advance of the prospective disposition, and the terms
thereof, in sufficient detail as to the book value and consideration to be
paid, terms of disposition, and net proceeds expected therefrom and
intended application thereof.
95
The Administrative Agent will promptly deliver to the Borrower upon
request, at the Borrower's expense, such release documentation (including
delivery of applicable stock certificates) as may be reasonably requested to
give effect to the release of subject assets from the security interests
securing the obligations hereunder in connection with Asset Dispositions
permitted hereunder.
9.6 Investments.
-----------
No member of the Consolidated Group will make or permit to exist
Investments in or to any Person, except for Permitted Investments.
9.7 Restricted Payments.
-------------------
No member of the Consolidated Group will make any Restricted Payment.
9.8 Modifications and Payments in respect of Funded Debt.
----------------------------------------------------
No member of the Consolidated Group will
(a) After the issuance thereof, amend or modify (or permit the amendment
or modification of) the terms of any Indebtedness (including Subordinated Debt)
in a manner adverse to the interests of the Lenders (including specifically
shortening any maturity or average life to maturity or requiring any payment
sooner than previously scheduled or increasing the interest rate or fees
applicable thereto);
(b) Amend or modify, or permit or acquiesce to the amendment or
modification (including waivers) of, any subordination provisions relating to
any Subordinated Debt;
(c) Make any payment in contravention of the terms of any Subordinated
Debt; or
(d) Make any prepayment, redemption, defeasance or acquisition for value
of (including without limitation, by way of depositing money or securities with
the trustee with respect thereto before due for the purpose of paying when due),
or refund, refinance or exchange of any Funded Debt (other than the Indebtedness
under the Credit Documents and intercompany Indebtedness permitted hereunder)
other than regularly scheduled payments of principal and interest on such Funded
Debt.
9.9 Transactions with Affiliates.
----------------------------
No member of the Consolidated Group will enter into or permit to exist any
transaction or series of transactions with any officer, director, shareholder,
Subsidiary or Affiliate of such Person other than (a) advances of working
capital to any Credit Party other than Holdings, (b) transfers of cash and
assets to any Credit Party other than Holdings, (c) transactions permitted by
Section 9.1, Section 9.4, Section 9.5, Section 9.6, or Section 9.7, (d) normal
compensation and reimbursement of expenses of officers and directors and (e)
except as otherwise specifically limited in this Credit Agreement, other
transactions which are entered into in the ordinary course of such Person's
business on terms and conditions substantially as favorable to such Person as
would be obtainable
96
by it in a comparable arms-length transaction with a Person other than an
officer, director, shareholder, Subsidiary or Affiliate.
9.10 Fiscal Year; Organizational Documents.
-------------------------------------
No member of the Consolidated Group will change its fiscal year or amend,
modify or change its articles of incorporation (or corporate charter or other
similar organizational document) or bylaws (or other similar document).
9.11 Limitation on Restricted Actions.
--------------------------------
No member of the Consolidated Group will, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Person to (a) pay dividends or make any
other distributions on its Capital Stock or with respect to any other interest
or participation in, or measured by, its profits, (b) pay any Indebtedness or
other obligation, (c) make loans, advances or capital contributions, (d) sell,
lease or otherwise transfer any of its properties or assets, or (e) act as a
guarantor or pledge its assets, except for such encumbrances or restrictions
existing under or by reason of (i) this Credit Agreement and the other Credit
Documents, (ii) pursuant to the terms of the Senior Subordinated Notes, or (iii)
Permitted Liens.
9.12 Ownership of Subsidiaries; Limitations on Parent.
------------------------------------------------
Notwithstanding any other provisions of this Credit Agreement to the
contrary:
(a) No member of the Consolidated Group will (i) permit any Person
(other than the Borrower or any Wholly-Owned Subsidiary of the Borrower) to
own any Capital Stock of any Subsidiary of the Borrower, except (A) to
qualify directors where required by applicable law or to satisfy other
requirements of applicable law with respect to the ownership of Capital
Stock of Foreign Subsidiaries or (B) as a result of or in connection with a
dissolution, merger, consolidation or disposition of a Subsidiary permitted
under Section 9.4 or Section 9.5, (ii) permit any Subsidiary of the
Borrower to issue any shares of preferred Capital Stock or (iii) permit,
create, incur, assume or suffer to exist any Lien on any Capital Stock of
any Subsidiary of the Borrower, except for Permitted Liens.
(b) Holdings shall not (i) hold any assets other than the Capital
Stock of the Borrower, (ii) have any liabilities other than (A) the
liabilities under the Credit Documents, (B) tax liabilities in the ordinary
course of business, (C) loans and advances permitted under Section 9.9 and
(D) corporate, administrative and operating expenses in the ordinary course
of business or (iii) engage in any business other than (A) owning the
Capital Stock of the Borrower and activities incidental or related thereto
and (B) acting as a Guarantor hereunder and pledging its assets to the
Administrative Agent, for the benefit of the Lenders, pursuant to the
Collateral Documents to which it is a party.
97
9.13 Sale Leasebacks.
---------------
No member of the Consolidated Group will enter into any Sale and Leaseback
Transaction unless such Sale and Leaseback Transaction constitutes purchase
money indebtedness permitted by Section 9.1(c).
9.14 No Further Negative Pledges.
---------------------------
No member of the Consolidated Group will enter into, assume or become
subject to any agreement prohibiting or otherwise restricting the creation or
assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired, or requiring the grant of any security for any obligation if
security is given for any other obligation, except (a) pursuant to this Credit
Agreement and the other Credit Documents, (b) pursuant to the terms of any
Subordinated Debt permitted by Section 9.1(f), and (c) pursuant to the terms of
any purchase money indebtedness or capital lease obligations permitted by
Section 9.1(c) to the extent such limitations relate only to the property which
is the subject of such financing.
9.15 Operating Lease Obligations.
---------------------------
No member of the Consolidated Group will enter into, assume or permit to
exist any obligations for the payment of rental under Operating Leases which in
the aggregate for all such Persons would exceed $35 million in any fiscal year.
SECTION 10
EVENTS OF DEFAULT
-----------------
10.1 Events of Default.
-----------------
An Event of Default shall exist upon the occurrence of any of the following
specified events (each an "Event of Default"):
----------------
(a) Payment. There shall occur a
-------
(i) default in the payment when due of any principal of any of
the Loans or of any reimbursement obligations arising from drawings
under Letters of Credit, or
(ii) default, and such default shall continue for three (3) or
more Business Days, in the payment when due of any interest on the
Loans or on any reimbursement obligations arising from drawings under
Letters of Credit, or of any Fees or other amounts owing hereunder,
under any of the other Credit Documents or in connection herewith or
therewith; or
(b) Representations. Any representation, warranty or statement made
---------------
or deemed to be made by (i) the Borrower herein or any Credit Party in any
of the other Credit
98
Documents or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto or (ii) Columbia/HCA in the
Columbia/HCA Side Letter, shall prove untrue in any material respect on the
date as of which it was made or deemed to have been made; or
(c) Covenants. There shall occur a
---------
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 6.1 through 6.15, 8.2,
8.9, 8.11, 8.12, 8.13 or 9.1 through 9.15, inclusive;
(ii) default in the due performance or observance of any term,
covenant or agreement contained in Sections 8.1(a), (b) (c), (d) or
(j) and such default shall continue unremedied for a period of at
least 5 days after the earlier of an Executive Officer of a Credit
Party becoming aware of such default or notice thereof by the
Administrative Agent; or
(iii) default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in
subsections (a), (b), (c)(i) or (c)(ii) of this Section 10.1)
contained in this Credit Agreement or any other Credit Document and
such default shall continue unremedied for a period of at least 30
days after the earlier of an Executive Officer of a Credit Party
becoming aware of such default or notice thereof by the Administrative
Agent; or
(d) Other Credit Documents. Except as a result of or in connection
----------------------
with a dissolution, merger or disposition of a Subsidiary permitted under
Section 9.4 or Section 9.5, any Credit Document shall fail to be in full
force and effect or to give the Administrative Agent and/or the Lenders the
Liens, rights, powers and privileges purported to be created thereby, or
any Credit Party shall so state in writing; or
(e) Guaranties. Except as the result of or in connection with a
----------
dissolution, merger or disposition of a Subsidiary permitted under Section
9.4 or Section 9.5, the guaranty given by any Guarantor (including any
Person which becomes a Guarantor after the Closing Date in accordance with
Section 8.12) or any provision of the Guaranty Agreement shall cease to be
in full force and effect, or any Guarantor (including any Person which
becomes a Guarantor after the Closing Date in accordance with Section 8.12)
or any Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under the Guaranty Agreement or any
Guarantor shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to
the Guaranty Agreement; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect to
----------
any member of the Consolidated Group; or
99
(g) Defaults under Other Agreements.
-------------------------------
(i) the occurrence of an Event of Default under the Senior
Subordinated Notes or the indenture or other governing instrument
relating thereto;
(ii) Any member of the Consolidated Group shall default in the
performance or observance (beyond the applicable grace period with
respect thereto, if any) of any material obligation or condition of
any contract or lease material to the members of the Consolidated
Group taken as a whole; or
(iii) With respect to any Indebtedness (other than Indebtedness
outstanding under this Credit Agreement) in excess of $1,000,000 in
the aggregate for the members of the Consolidated Group taken as a
whole, (A) any member of the Consolidated Group shall (1) default in
any payment (beyond the applicable grace period with respect thereto,
if any) with respect to any such Indebtedness, or (2) the occurrence
and continuance of a default in the observance or performance relating
to such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event or
condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or to permit, the holder or
holders of such Indebtedness (or trustee or agent on behalf of such
holders) to cause (determined without regard to whether any notice or
lapse of time is required), any such Indebtedness to become due prior
to its stated maturity; or (B) any such Indebtedness shall be declared
due and payable, or required to be prepaid other than by a regularly
scheduled required prepayment, prior to the stated maturity thereof;
or
(h) Judgments. One or more judgments or decrees shall be entered
---------
against one or more of the members of the Consolidated Group involving a
liability of $1,000,000 or more in the aggregate (to the extent not paid or
fully covered by insurance provided by a carrier who has acknowledged
coverage and has the ability to perform) and any such judgments or decrees
shall not have been vacated, discharged or stayed or bonded pending appeal
within 30 days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such event or
-----
condition could reasonably be expected to involve possible taxes,
penalties, and other liabilities against one or more members of the
Consolidated Group in an aggregate amount in excess of $1,000,000: (i) any
"accumulated funding deficiency," as such term is defined in Section 302 of
ERISA and Section 412 of the Code, whether or not waived, shall exist with
respect to any Plan, or any lien shall arise on the assets of any member of
the Consolidated Group or any ERISA Affiliate in favor of the PBGC or a
Plan; (ii) an ERISA Event shall occur with respect to a Single Employer
Plan, which is, in the reasonable opinion of the Administrative Agent,
likely to result in the termination of such Plan for purposes of Title IV
of ERISA; (iii) an ERISA Event shall occur with respect to a Multiemployer
Plan or Multiple Employer Plan, which is, in the reasonable opinion of the
Administrative Agent, likely to result in (A) the termination of such Plan
for purposes of Title IV of ERISA, or (B) any member of the Consolidated
Group or any ERISA Affiliate incurring any liability in connection with a
withdrawal from, reorganization of (within the
100
meaning of Section 4241 of ERISA), or insolvency (within the meaning of
Section 4245 of ERISA) of such Plan; or (iv) any prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the Code) or
breach of fiduciary responsibility shall occur which may subject any member
of the Consolidated Group or any ERISA Affiliate to any liability under
Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code,
or under any agreement or other instrument pursuant to which any member of
the Consolidated Group or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability; or
(j) Ownership. There shall occur a Change of Control.
---------
10.2 Acceleration; Remedies.
----------------------
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 12.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures in
Section 12.6), the Administrative Agent may, and upon the request and direction
of the Required Lenders shall, by written notice to the Borrower take any of the
following actions:
(a) Termination of Commitments. Declare the Commitments terminated
--------------------------
whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any accrued
------------
interest in respect of all Loans, any reimbursement obligations arising
from drawings under Letters of Credit and any and all other indebtedness or
obligations of any and every kind owing by the Borrower to the
Administrative Agent and/or any of the Lenders hereunder to be due
whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower. Amounts received after termination of the
Commitments and acceleration of the maturity of the Loans and Obligations
hereunder, shall be shared ratably among the Revolving Loans based on the
outstanding principal amount of Revolving Obligations, the Bridge Lenders
based on the outstanding principal amount of the Bridge Loan, the Tranche A
Term Lenders based on the outstanding principal amount of the Tranche A
Term Loan and the Tranche B Term Lenders based on the outstanding principal
amount of the Tranche B Term Loan.
(c) Cash Collateral. Direct the Borrower to pay (and the Borrower
---------------
agrees that upon receipt of such notice, or upon the occurrence of an Event
of Default under Section 10.1(f), it will immediately pay) to the
Administrative Agent additional cash, to be held by the Administrative
Agent, for the benefit of the Revolving Lenders, in a cash collateral
account as additional security for the LOC Obligations in respect of
subsequent drawings under all then outstanding Letters of Credit in an
amount equal to the maximum aggregate amount which may be drawn under all
Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and interests
---------------------
created and existing under the Credit Documents including, without
limitation, all rights and remedies existing under the Collateral
Documents, all rights and remedies against a Guarantor and all rights of
set-off.
101
Notwithstanding the foregoing, if an Event of Default specified in Section
10.1(f) shall occur with respect to any member of the Consolidated Group, then
the Commitments shall automatically terminate and all Loans, all reimbursement
obligations arising from drawings under Letters of Credit, all accrued interest
in respect thereof, all accrued and unpaid Fees and other indebtedness or
obligations owing to the Administrative Agent and/or any of the Lenders
hereunder by the Borrower automatically shall immediately become due and payable
without the giving of any notice or other action by the Administrative Agent or
the Lenders.
Notwithstanding anything contained in this Section 10.2, if at any time
within sixty (60) days after an acceleration of the Loans pursuant to this
Section 10.2, the Borrower shall pay all arrears of interest and all payments on
account of principal which shall have become due otherwise than by acceleration
(with interest on principal and, to the extent permitted by law, on overdue
interest, at the rates specified in this Credit Agreement) and all Events of
Default and Defaults (other than non-payment of the principal of and accrued
interest on the Loans, in each case which is due and payable solely by virtue of
acceleration) shall be waived pursuant to Section 12.6, the Required Lenders, by
written notice to the Borrower, may at their option rescind and annul the
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Default or impair any right consequent thereon.
The provisions of this paragraph are intended merely to bind the Lenders to a
decision which may be made at the election of the Required Lenders and are not
intended to benefit the Borrower and do not grant the Borrower the right to
require the Lenders to rescind or annual any acceleration hereunder, even if the
conditions set forth herein are met.
SECTION 11
AGENCY PROVISIONS
-----------------
11.1 Appointment, Powers and Immunities.
----------------------------------
Each Lender hereby irrevocably appoints and authorizes the Administrative
Agent to act as its agent under this Credit Agreement and the other Credit
Documents with such powers and discretion as are specifically delegated to the
Administrative Agent by the terms of this Credit Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental thereto.
Each Lender further authorizes and directs the Administrative Agent to execute
and deliver releases (or similar agreements) to give effect to the provisions of
this Credit Agreement and the other Credit Documents, including specifically,
without limitation, the provisions of Section 9.5 hereof. The Administrative
Agent (which term as used in this sentence and in Section 11.5 and the first
sentence of Section 11.6 hereof shall include its Affiliates and its own and its
Affiliates' officers, directors, employees, and agents): (a) shall not have any
duties or responsibilities except those expressly set forth in this Credit
Agreement and shall not be a trustee or fiduciary for any Lender; (b) shall not
be responsible to the Lenders for any recital, statement, representation, or
warranty (whether written or oral) made by a member of the Consolidated Group or
other Lender in or in connection with any Credit Document or any certificate or
other document referred to or provided for in, or received by any of them under,
any Credit Document, or for the value, validity, effectiveness, genuineness,
enforceability, or
102
sufficiency of any Credit Document, or any other document referred to or
provided for therein or for any failure by any Credit Party or any other Person
to perform any of its obligations thereunder; (c) shall not be responsible for
or have any duty to ascertain, inquire into, or verify the performance or
observance of any covenants or agreements by any Credit Party or the
satisfaction of any condition or to inspect the property (including the books
and records) of any Credit Party or any of its Subsidiaries or Affiliates; (d)
shall not be required to initiate or conduct any litigation or collection
proceedings under any Credit Document, except as expressly provided under the
Credit Documents; and (e) shall not be responsible for any action taken or
omitted to be taken by it under or in connection with any Credit Document,
except for its own gross negligence or willful misconduct. The Administrative
Agent may employ agents and attorneys-in-fact and shall not be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
it with reasonable care. Each of the Syndication Agents and the Co-Agents, in
its capacity as such, shall not have any duties or responsibilities under this
Credit Agreement.
11.2 Reliance by Administrative Agent.
--------------------------------
The Administrative Agent shall be entitled to rely upon any certification,
notice, instrument, writing, or other communication (including, without
limitation, any thereof by telephone or telecopy) believed by it to be genuine
and correct and to have been signed, sent or made by or on behalf of the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel for any Credit Party), independent accountants, and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the holder thereof for all purposes hereof unless
and until the Administrative Agent receives and accepts an Assignment and
Acceptance executed in accordance with Section 12.3(b) hereof. As to any
matters not expressly provided for by this Credit Agreement, the Administrative
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding on all of the Lenders; provided,
--------
however, that the Administrative Agent shall not be required to take any action
-------
that exposes the Administrative Agent to personal liability or that is contrary
to any Credit Document or applicable law or unless it shall first be indemnified
to its satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking any such action.
11.3 Defaults.
--------
The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of a Default or Event of Default unless the Administrative Agent
has received written notice from a Lender or a Credit Party specifying such
Default or Event of Default and stating that such notice is a "Notice of
Default". In the event that the Administrative Agent receives such a notice of
the occurrence of a Default or Event of Default, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall
(subject to Section 11.2 hereof) take such action with respect to such Default
or Event of Default as shall reasonably be directed by the Required Lenders (or
such other Lenders as required by Section 12.6), provided that, unless and until
-------- ----
the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking
103
such action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders.
11.4 Rights as a Lender.
------------------
With respect to its Commitment and the Loans made by it, Bank of America
(and any successor acting as Administrative Agent) in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as the Administrative
Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include the Administrative Agent in its individual capacity. Bank of
America (and any successor acting as Administrative Agent) and its Affiliates
may (without having to account therefor to any Lender) accept deposits from,
lend money to, make investments in, provide services to, and generally engage in
any kind of lending, trust, or other business with any Credit Party or any of
its Subsidiaries or Affiliates as if it were not acting as Administrative Agent,
and Bank of America (and any successor acting as Administrative Agent) and its
Affiliates may accept fees and other consideration from any Credit Party or any
of its Subsidiaries or Affiliates for services in connection with this Credit
Agreement or otherwise without having to account for the same to the Lenders.
11.5 Indemnification.
---------------
The Lenders agree to indemnify the Administrative Agent (to the extent not
reimbursed under Section 12.5 hereof, but without limiting the obligations of
the Borrower under Section 12.5) ratably (in accordance with their respective
(i) Revolving Commitments (or, if the Revolving Commitments have been
terminated, the outstanding Revolving Loans, Swingline Loans and Participation
Interests in Letters of Credit and Swingline Loan (including the Participation
Interests of the Issuing Lender in Letters of Credit and the Participation
Interests of the Swingline Lender in Swingline Loans)), (ii) outstanding Bridge
Loans (and Participation Interests therein), (iii) outstanding Tranche A Term
Loans (and Participation Interests therein) and (iv) outstanding Tranche B Term
Loans (and Participation Interests therein)) for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including reasonable attorneys' fees), or disbursements of any kind
and nature whatsoever that may be imposed on, incurred by or asserted against
the Administrative Agent in such capacity (including by any Lender) in any way
relating to or arising out of any Credit Document or the transactions
contemplated thereby or any action taken or omitted by the Administrative Agent
under any Credit Document; provided that no Lender shall be liable for any of
--------
the foregoing to the extent they arise from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation of the
foregoing, each Lender agrees to reimburse the Administrative Agent promptly
upon demand for its ratable share of any costs or expenses payable by the
Borrower under Section 12.5, to the extent that the Administrative Agent is not
promptly reimbursed for such costs and expenses by the Borrower. The agreements
in this Section 11.5 shall survive the repayment of the Loans, LOC Obligations
and other obligations under the Credit Documents and the termination of the
Commitments hereunder.
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11.6 Non-Reliance on Administrative Agent and Other Lenders.
------------------------------------------------------
Each Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Credit Parties and their Subsidiaries and decision to enter into this Credit
Agreement and that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under the Credit
Documents. Except for notices, reports, and other documents and information
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition, or business of any Credit Party or any of its Subsidiaries
or Affiliates that may come into the possession of the Administrative Agent or
any of its Affiliates.
11.7 Successor Administrative Agent.
------------------------------
The Administrative Agent may resign at any time by giving notice thereof to
the Lenders and the Credit Parties. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty (30) days after
the retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be a commercial bank organized under the laws
of the United States having combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor, such successor shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges, and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Section 11 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.
SECTION 12
MISCELLANEOUS
-------------
12.1 Notices.
-------
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Borrower and the
Administrative Agent, set forth below, and, in the case of the Lenders, set
forth
105
on Schedule 12.1, or at such other address as such party may specify by
-------------
written notice to the other parties hereto:
if to the Borrower:
Triad Hospitals Holdings, Inc.
00000 Xxxx Xxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxx
Chief Financial Officer
Telephone: 000-000-0000
Telecopy: 000-000-0000
with a copy to:
Triad Hospitals Holdings, Inc.
00000 Xxxx Xxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxx
General Counsel
Telephone: 000-000-0000
Telecopy: 000-000-0000
if to the Administrative Agent:
Bank of America National Trust and Savings Association
Agency Administration
Unit # 5596
0000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
with a copy to:
Bank of America National Trust and Savings Association
000 X. Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
106
12.2 Right of Set-Off; Adjustments.
-----------------------------
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its Affiliates) is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, with the consent of
the Administrative Agent (which consent shall not be unreasonably withheld or
delayed), to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender (or any of its Affiliates) to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Credit Agreement, under the Notes, under
any other Credit Document or otherwise, irrespective of whether such Lender
shall have made any demand under hereunder or thereunder and although such
obligations may be unmatured. Each Lender agrees promptly to notify the
Borrower after any such set-off and application made by such Lender; provided,
--------
however, that the failure to give such notice shall not affect the validity of
-------
such set-off and application. The rights of each Lender under this Section 12.2
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) that such Lender may have.
12.3 Benefit of Agreement.
--------------------
(a) This Credit Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided that the Borrower may not assign or transfer
--------
any of its interests and obligations without prior written consent of each
of the Lenders; provided further that the rights of each Lender to
-------- -------
transfer, assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth in this Section 12.3.
(b) Each Lender may assign to one or more Eligible Assignees all or
a portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Loans, its Notes,
and its Commitment); provided, however, that
-------- -------
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to an existing
Lender, an Affiliate of an existing Lender or any fund that invests in
bank loans and is advised or managed by an investment advisor (or any
Affiliate to an investment advisor) to an existing Lender or an
assignment of all of a Lender's rights and obligations under this
Credit Agreement, any such partial assignment shall be in an amount at
least equal to $1,000,000 (or, if less, the remaining amount of the
Commitment being assigned by such Lender);
(iii) any such assignment shall be of a constant, not varying,
percentage of all of the Obligations and Commitments hereunder (other
than the Tranche B Term Loan); and
(iii) the parties to such assignment shall execute and deliver
to the Administrative Agent for its acceptance an Assignment and
Acceptance in the
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form of Schedule 12.3(b) hereto, together with any Note subject
----------------
to such assignment and a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance,
the assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender
hereunder and the assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from its obligations under this
Credit Agreement. Upon the consummation of any assignment pursuant to this
Section 12.3(b), the assignor, the Administrative Agent and the Borrower
shall make appropriate arrangements so that, if required, new Notes are
issued to the assignor and the assignee. If the assignee is not a United
States person under Section 7701(a)(30) of the Code, it shall deliver to
the Borrower, the Guarantors and the Administrative Agent certification as
to exemption from deduction or withholding of Taxes in accordance with
Section 3.11.
(c) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 12.1 a copy of each
Assignment and Acceptance delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender from
time to time (the "Register"). The entries in the Register shall be
--------
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice. Any assignment of any Loan or
other obligations shall be effective only upon an entry with respect
thereto being made in the Register.
(d) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the
form of Schedule 12.3(b) hereto, (i) accept such Assignment and Acceptance,
----------------
(ii) record the information contained therein in the Register and (iii)
give prompt notice thereof to the parties thereto.
(e) Each Lender may sell participations to one or more Persons in
all or a portion of its rights, obligations or rights and obligations under
this Credit Agreement (including all or a portion of its Commitment or its
Loans); provided, however, that (i) such Lender's obligations under this
-------- -------
Credit Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) the participant shall be entitled to the benefit of the
yield protection provisions contained in Sections 3.7 through 3.12,
inclusive, and the right of set-off contained in Section 12.2, and (iv) the
Credit Parties shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Credit
Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Credit Parties relating to the Loans and other
obligations owing to such Lender and to approve any amendment,
modification, or waiver of any provision of this
108
Credit Agreement (other than amendments, modifications, or waivers (i)
decreasing the amount of principal of or the rate at which interest is
payable on such Loans or Notes, (ii) extending any scheduled principal
payment date or date fixed for the payment of interest on such Loans or
Notes, (iii) extending its Commitment, (iv) except as the result of or in
connection with an Asset Disposition permitted by Section 9.5, release all
or substantially all of the Collateral, or (v)except as the result of or in
connection with a dissolution, merger or disposition of a member of the
Consolidated Group permitted under Section 9.4, release the Borrower or
substantially all of the other Credit Parties from its or their obligations
under the Credit Documents).
(f) Notwithstanding any other provision set forth in this Credit
Agreement, any Lender may at any time assign and pledge all or any portion
of its Loans and its Notes (i) to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank or (ii) in the case of any Lender which has made
Tranche B Term Loans hereunder and is an investment fund, to the trustee
under the indenture to which such fund is a party in support of its
obligations to such trustee for the benefit of the applicable trust
beneficiaries. No such assignment shall release the assigning Lender from
its obligations hereunder.
(g) Any Lender may furnish any information concerning the members
of the Consolidated Group in the possession of such Lender from time to
time to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 12.14 hereof.
(h) Notwithstanding any other provisions set forth in this Credit
Agreement, the obligations of any Credit Party to any participant shall be
no greater than they would be in the absence of such transfer.
12.4 No Waiver; Remedies Cumulative.
------------------------------
No failure or delay on the part of the Administrative Agent or any Lender
in exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Administrative Agent or any Lender
and any of the Credit Parties shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies provided herein are cumulative and not exclusive of any
rights or remedies which the Administrative Agent or any Lender would otherwise
have. No notice to or demand on any Credit Party in any case shall entitle the
Credit Parties to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent
or the Lenders to any other or further action in any circumstances without
notice or demand.
12.5 Expenses; Indemnification.
-------------------------
(a) The Borrower agrees to pay on demand all costs and expenses of
the Administrative Agent in connection with the syndication, preparation,
execution, delivery, administration, modification, and amendment of this
Credit Agreement, the
109
other Credit Documents, and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of counsel
for the Administrative Agent (including the cost of internal counsel) with
respect thereto and with respect to advising the Administrative Agent as to
its rights and responsibilities under the Credit Documents. The Borrower
further agrees to pay on demand all costs and expenses of the
Administrative Agent and the Lenders, if any (including, without
limitation, reasonable attorneys' fees and expenses and the cost of
internal counsel), in connection with the enforcement (whether through
negotiations, legal proceedings, or otherwise) of the Credit Documents and
the other documents to be delivered thereunder.
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent and each Lender and each of their Affiliates and their
respective officers, directors, employees, agents, and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
-----------------
liabilities, costs, and expenses (including, without limitation, reasonable
attorneys' fees) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any
investigation, litigation, or proceeding or preparation of defense in
connection therewith) the Credit Documents, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the
Loans, except to the extent such claim, damage, loss, liability, cost, or
expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 12.5
applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by any of the Credit
Parties, their respective directors, shareholders or creditors or an
Indemnified Party or any other Person or any Indemnified Party is otherwise
a party thereto and whether or not the transactions contemplated hereby are
consummated. The Borrower agrees not to assert any claim against the
Administrative Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys, agents, and advisors,
on any theory of liability, for special, indirect, consequential, or
punitive damages arising out of or otherwise relating to the Credit
Documents, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Loans.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 12.5 shall survive the repayment of the Loans,
LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.
12.6 Amendments, Waivers and Consents.
--------------------------------
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided, however, that:
-------- -------
110
(a) without the consent of each Lender affected thereby, neither this
Credit Agreement nor any other Credit Document may be amended to
(i) extend the final maturity of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit, or extend or waive any principal
amortization payment of the Bridge Loan, the Tranche A Term Loan or
the Tranche B Term Loan, or any portion thereof,
(ii) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any post-
default increase in interest rates) thereon or Fees hereunder,
(iii) reduce or waive the principal amount of any Loan or of any
reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(iv) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver of any
Default or Event of Default or mandatory reduction in the Commitments
shall not constitute a change in the terms of any Commitment of any
Lender),
(v) except as the result of or in connection with an Asset
Disposition permitted by Section 9.5, release all or substantially all
of the Collateral,
(vi) except as the result of or in connection with a
dissolution, merger or disposition of a member of the Consolidated
Group permitted under Section 9.4, release the Borrower or
substantially all of the other Credit Parties from its or their
obligations under the Credit Documents,
(vii) amend, modify or waive any provision of this Section 12.6
or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15,
10.1(a), 12.2, 12.3, 12.5 or 12.9,
(viii) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders, or
(ix) consent to the assignment or transfer by the Borrower or
all or substantially all of the other Credit Parties of any of its or
their rights and obligations under (or in respect of) the Credit
Documents except as permitted thereby;
(b) (i) without the consent of the Revolving Lenders holding more
than 50% of the Revolving Commitments, or if the Revolving Commitments have
been terminated, Lenders having more than 50% of the aggregate principal
amount of the Revolving Obligations outstanding (taking into account in
each case Participation Interests or obligation to participate therein),
extend the time for, or reduce the amount, or otherwise alter the manner of
application of proceeds in respect of the Revolving
111
Obligations on account of the mandatory prepayment provisions of clauses
(ii) through (iv), inclusive, of Section 3.3(b) or the application
provisions of Section 3.3(c).
(ii) without the consent of the Tranche A Term Lenders holding
more than 50% of the Tranche A Term Loan Commitments, extend the time for,
or reduce the amount, or otherwise alter the manner of application of
proceeds in respect of the Tranche A Term Loan on account of the mandatory
prepayment provisions of clauses (ii) through (iv), inclusive, of Section
3.3(b) or the application provisions of Section 3.3(c).
(iii) without the consent of the Tranche B Term Lenders holding
more than 50% of the Tranche B Term Loan Commitments, extend the time for,
or reduce the amount, or otherwise alter the manner of application of
proceeds in respect of the Tranche B Term Loan on account of the mandatory
prepayment provisions of clauses (ii) through (iv), inclusive, of Section
3.3(b) or the application provisions of Section 3.3(c).
(iv) without the consent of the Bridge Lenders holding more
than 50% of the Bridge Loan Commitments, extend the time for, or reduce the
amount, or otherwise alter the manner of application of proceeds in respect
of the Bridge Loan on account of the mandatory prepayment provisions of
clause (ii) of Section 3.3(b) or the application provisions of Section
3.3(c).
(c) without the consent of the Administrative Agent, no provision of
Section 11 may be amended; and
(d) without the consent of the Issuing Lender, no provision of
Section 2.2 may be amended.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to
vote as such Lender sees fit on any bankruptcy reorganization plan that
affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to
allow a Credit Party to use cash collateral in the context of a bankruptcy
or insolvency proceeding.
12.7 Counterparts.
------------
This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any
of the parties hereto of an executed counterpart of this Credit Agreement shall
be as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
112
12.8 Headings.
--------
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
12.9 Survival.
--------
All indemnities set forth herein, including, without limitation, in Section
2.2(i), 3.11, 3.12, 11.5 or 12.5 shall survive the execution and delivery of
this Credit Agreement, the making of the Loans, the issuance of the Letters of
Credit, the repayment of the Loans, LOC Obligations and other obligations under
the Credit Documents and the termination of the Commitments hereunder, and all
representations and warranties made by the Borrower herein shall survive
delivery of the Notes and the making of the Loans hereunder.
12.10 Governing Law; Submission to Jurisdiction; Venue.
------------------------------------------------
(a) THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY PROVIDED
THEREIN, THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any legal
action or proceeding with respect to this Credit Agreement or any other
Credit Document may be brought in the courts of the State of New York in
New York County, or of the United States for the Southern District of New
York, and, by execution and delivery of this Credit Agreement, the Borrower
hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the nonexclusive jurisdiction of such
courts. The Borrower further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address set out for notices pursuant to Section 12.1,
such service to become effective three (3) days after such mailing. Nothing
herein shall affect the right of the Administrative Agent or any Lender to
serve process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against any Credit Party in any other
jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Credit
Agreement or any other Credit Document brought in the courts referred to in
subsection (a) above and hereby further irrevocably waives and agrees not
to plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE ADMINISTRATIVE
AGENT, THE LENDERS AND THE BORROWER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
113
12.11 Severability.
------------
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
12.12 Entirety.
--------
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
12.13 Binding Effect; Termination.
---------------------------
(a) This Credit Agreement shall become effective at such time on or
after the Closing Date when it shall have been executed by the Borrower and
the Administrative Agent, and the Administrative Agent shall have received
copies hereof (telefaxed or otherwise) which, when taken together, bear the
signatures of each Lender, and thereafter this Credit Agreement shall be
binding upon and inure to the benefit of the Borrower, the Administrative
Agent and each Lender and their respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the
other Credit Documents shall remain outstanding, no Letters of Credit shall
be outstanding, no Hedging Agreement between the Borrower and a Lender or
an Affiliate of a Lender shall remain outstanding and all of the
Commitments hereunder shall have expired or been terminated.
12.14 Confidentiality.
---------------
The Administrative Agent and each Lender (each, a "Lending Party") agrees
-------------
to keep (and to cause its affiliates and its and their respective officers,
directors, employees, agents and advisors to keep) confidential any information
furnished or made available to it by the Credit Parties pursuant to this Credit
Agreement that is marked confidential; provided that nothing herein shall
--------
prevent any Lending Party from disclosing such information (a) to any other
Lending Party or any Affiliate of any Lending Party, or any officer, director,
employee, agent, or advisor of any Lending Party or Affiliate of any Lending
Party, (b) to any other Person if reasonably incidental to the administration of
the credit facility provided herein, (c) as required by any law, rule, or
regulation, (d) upon the order of any court or administrative agency or pursuant
to subpoena or other legal process, (e) upon the request or demand of any
regulatory agency or authority, (f) that is or becomes available to the public
or that is or becomes available to any Lending Party other than as a result of a
disclosure prohibited by this Credit Agreement, (g) in connection with any
litigation to which such Lending Party or any of its Affiliates may be a party,
(h) to the extent necessary in connection with the exercise of any remedy under
this Credit Agreement or any other Credit Document, (i) to the National
Association of Insurance
114
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender, (j) to any direct
or indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty (i) has been approved in
writing by the Borrower and (ii) agrees in a writing enforceable by the Borrower
to be bound by the provisions of this Section 12.14) and (k) subject to
provisions the same as those contained in this Section 12.14, to any actual or
proposed participant or assignee.
12.15 Source of Funds.
---------------
Each of the Lenders hereby represents and warrants to the Borrower that at
least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any
separate account maintained by such Lender in which any employee benefit
plan (or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes assets
allocated to any separate account maintained by such Lender, such Lender
has disclosed to the Borrower the name of each employee benefit plan whose
assets in such account exceed 10% of the total assets of such account as of
the date of such purchase (and, for purposes of this subsection (b), all
employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan);
(c) to the extent that any part of such funds constitutes assets of
an insurance company's general account, such insurance company has complied
with all of the requirements of the regulations issued under Section
401(c)(1)(A) of ERISA;
(d) such funds constitute assets of one or more specific benefit
plans which such Lender has identified in writing to the Borrower; or
(e) such funds are from a fund managed by a "Qualified Professional
Asset Manager" ("QPAM") within the meaning of Part I of Prohibited
----
Transaction Exemption PTCE 84-14 issued by the United States Department of
Labor, and such QPAM made the investment decision on behalf of such Lender
to enter into this Credit Agreement and such transaction satisfies the
requirements of subsections (a) through (g) of Part I of PTCE 84-14.
As used in this Section 12.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
115
12.16 Conflict.
--------
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[Signature Page to Follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: HEALTHTRUST, INC. - THE HOSPITAL COMPANY,
--------
a Delaware corporation
By: /s/ R. Xxxxxx Xxxxxxx
--------------------------------
Name: R. Xxxxxx Xxxxxxx
Title: Vice President and Chief
Financial Officer
[Signature Pages Continue]
ADMINISTRATIVE AGENT: BANK OF AMERICA NATIONAL TRUST
--------------------
AND SAVINGS ASSOCIATION,
in its capacity as Administrative Agent
By: /s/ Xxxx Xxxxxx
----------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
LENDERS: BANK OF AMERICA NATIONAL TRUST
-------
AND SAVINGS ASSOCIATION,
individually in its capacity as a Lender
By: /s/ Xxxxxxx Xxxxx
----------------------------------
Name: Xxxxxxx Xxxxx
Title:
XXXXXXX XXXXX
By:
----------------------------------
Name:
Title:
FOOTHILL INCOME TRUST, L.P.,
a Delaware Corporation
By: FIT G.P., LLC, its General Partner
By: /s/ M.E. Xxxxxxx
----------------------------------
Name: M.E. Xxxxxxx
Title: Managing Member
OAK HILL SECURITIES FUND, L.P.,
By: Oak Hill Securities GenPar, L.P.;
its General Partner
By: Oak Hill Securities MGP, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxx
----------------------------------
Name: Xxxxx X. Xxxxx
Title Vice President
[Signature Pages Continue]
X'XXXXXXXX GRAEV & KARABELL, LLP
By:
--------------------------------
Name:
Title:
SCOTIABANC INC.
By: /s/ Xxxx Xxxxxxx
--------------------------------
Name: Xxxx Xxxxxxx
Title: Relationship Manager
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
GREEN TREE FINANCIAL SERVICING
CORPORATION
By: /s/ C.A. Gouskos
--------------------------------
Name: C.A. Gouskos
Title: Sr. Vice President
CITICORP USA, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Attorney-in-Fact
THE CHASE MANHATTAN BANK
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
OFFITBANK INVESTMENT FUND, INC.
By: /s/ Xxxxxxx Xxxxxx-Xxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx-Xxxxx
Title: Secretary/Treasurer
[Signature Pages Continue]
ALLIANCE CAPITAL MANAGEMENT CORP.
By:_____________________________
Name:
Title
MACKAY XXXXXXX FINANCIAL CORPORATION
By:_____________________________
Name:
Title
BERLACK, ISRAEL, XXXXXXXX LLP
By:_____________________________
Name:
Title
THE OCTAGON CREDIT INVESTORS
By:_____________________________
Name:
Title
SOCIETE GENERALE
By: /s/ X. Xxxxxx Xxxxxxx
-------------------------------
Name: X. Xxxxxx Xxxxxxx
Title Director
KZH STERLING LLC
By:_____________________________
Name:
Title
[Signature Pages Continue]
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title Senior Vice President
UNION BANK OF SWITZERLAND
By:_____________________________
Name:
Title
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title Duly Authorized Signatory
BANK OF OKLAHOMA, N.A.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title Vice President
