<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transaction period from to
---- ----
Commission File Number 000-18799
-----------
HEALTH MANAGEMENT ASSOCIATES, INC.
- ------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 61-0963645
- -------------------------------- -----------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
5811 Pelican Bay Boulevard, Suite 500, Naples, Florida 34108-2710
- --------------------------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
(941)598-3131
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
--- ----
At May 5, 1997, the following shares of the Registrant were outstanding:
Class A Common Stock 108,190,920 shares
<PAGE>
HEALTH MANAGEMENT ASSOCIATES, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
INDEX
-----
PART I. FINANCIAL INFORMATION Page
ITEM 1. FINANCIAL STATEMENTS
Consolidated Statements of Income --
Three Months Ended March 31, 1997 and 1996.................... 3
Consolidated Statements of Income --
Six Months Ended March 31, 1997 and 1996...................... 4
March 31, 1997 and September 30, 1996......................... 5
Consolidated Statements of Cash Flows--
Six Months Ended March 31, 1997 and 1996...................... 6
Notes to Interim Condensed Consolidated Financial
Statements..................................................... 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF
OPERATIONS................................................ 8-11
PART II. OTHER INFORMATION.......................................... 12
SIGNATURES........................................................... 13
INDEX TO EXHIBITS....................................................14-15
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
HEALTH MANAGEMENT ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
March 31,
--------------------------
1997 1996
------------ ------------
<S> <C> <C>
Net patient service revenue......... $237,792,000 $184,826,000
Costs and expenses:
Salaries and benefits............ 81,005,000 61,952,000
Supplies and expenses............ 69,459,000 53,342,000
Provision for doubtful accounts.. 19,497,000 17,396,000
Depreciation and amortization.... 9,010,000 6,479,000
Rent expense..................... 4,833,000 3,867,000
Interest, net.................... 1,411,000 688,000
------------ ------------
Total costs and expenses..... 185,215,000 143,724,000
------------ ------------
Income before income taxes.......... 52,577,000 41,102,000
Provision for income taxes ......... 20,635,000 16,132,000
------------ ----------
Net income ......................... $ 31,942,000 $ 24,970,000
============ ===========
Net income per share................ $ .29 $ .23
============ ============
Weighted average number of common
and common equivalent
shares outstanding ............... 111,684,000 110,430,000
============ ============
</TABLE>
See accompanying notes.
3
<PAGE>
HEALTH MANAGEMENT ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended
March 31,
--------------------------
1997 1996
------------- ------------
<S> <C> <C>
Net patient service revenue......... $436,954,000 $336,769,000
Costs and expenses:
Salaries and benefits............ 152,947,000 116,301,000
Supplies and expenses............ 130,775,000 101,421,000
Provision for doubtful accounts.. 38,845,000 31,803,000
Depreciation and amortization.... 17,340,000 12,408,000
Rent expense..................... 9,261,000 7,619,000
Interest, net.................... 2,486,000 1,342,000
------------ ------------
Total costs and expenses..... 351,654,000 270,894,000
------------ ------------
Income before income taxes.......... 85,300,000 65,875,000
Provision for income taxes ......... 33,480,000 25,856,000
------------- -----------
Net income ......................... $ 51,820,000 $ 40,019,000
============= ============
Net income per share................ $ .47 $ .36
============ ===========
Weighted average number
of common and common
equivalent shares outstanding .... 111,284,000 109,946,000
============ ===========
</TABLE>
See accompanying notes.
4
<PAGE>
HEALTH MANAGEMENT ASSOCIATES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
------
March 31, September 30,
1997 1996
------------ -------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents....................... $ 27,676,000 $ 31,172,000
Receivables--net................................ 124,078,000 114,547,000
Supplies, prepaids and other assets............. 22,933,000 17,469,000
Funds held by trustee........................... 1,630,000 2,276,000
Income taxes - receivable and deferred.......... 12,339,000 12,339,000
------------ ------------
Total current assets........................... 188,656,000 177,803,000
Property, plant and equipment.................... 583,808,000 504,950,000
Less accumulated depreciation and amortization..
123,270,000 107,206,000
Net property, plant and equipment.............. ------------ ------------
460,538,000 397,744,000
Other assets:
Funds held by trustee........................... 889,000 136,000
Deferred charges and other assets............... 17,965,000 16,024,000
------------ ------------
Total.......................................... 18,854,000 16,160,000
------------ ------------
$668,048,000 $591,707,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<CAPTION>
Current liabilities:
<S> <C> <C>
Accounts payable................................ $ 37,826,000 $ 28,754,000
Accrued expenses and other liabilities.......... 30,982,000 29,724,000
Current maturities of long-term debt............ 5,489,000 8,438,000
Income taxes--currently payable and deferred.... 12,877,000 3,980,000
------------ ------------
Total current liabilities..................... 87,174,000 70,896,000
Deferred income taxes............................ 19,099,000 19,099,000
Other long-term liabilities...................... 15,906,000 15,271,000
Long-term debt................................... 67,839,000 68,702,000
Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000
shares authorized.............................. - -
Common stock, Class A, $.01 par value, 150,000,000
shares authorized, 107,145,000 and 105,699,000
shares issued and outstanding at March 31,
1997 and September 30, 1996, respectively...... 1,070,000 1,057,000
Additional paid-in capital...................... 157,650,000 149,191,000
Retained earnings............................... 319,310,000 267,491,000
------------ ------------
Total stockholders' equity.................... 478,030,000 417,739,000
------------ ------------
$668,048,000 $591,707,000
</TABLE>
See accompanying notes.
5
<PAGE>
HEALTH MANAGEMENT ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six months ended
March 31,
----------------------------
1997 1996
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income........................................... $ 51,820,000 $ 40,019,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization..................... 17,340,000 12,408,000
<Gain> loss on sale of fixed assets...................... (112,000) 198,000
Changes in assets and liabilities:
Receivables--net................................ (3,801,000) (13,662,000)
Other current assets............................ (908,000) (1,131,000)
Deferred charges and other assets............... (6,006,000) (4,761,000)
Accounts payable................................ 6,308,000 1,895,000
Accrued expenses and other liabilities.......... (1,563,000) (936,000)
Income taxes--
currently payable and deferred................ 8,897,000 4,833,000
Other long term liabilities..................... 635,000 765,000
------------ ------------
Net cash provided by operating activities . 72,610,000 39,628,000
------------ ------------
Cash flows from investing activities:
Acquisition of facilities, net of cash acquired...... (51,117,000) (30,239,000)
Additions to property, plant and equipment........... (28,961,000) (16,534,000)
Proceeds from sale of equipment...................... 293,000 16,000
------------ ------------
Net cash used in investing activities........ (79,785,000) (46,757,000)
------------ ------------
Cash flows from financing activities:
Proceeds from long-term borrowings................... 249,000 643,000
Principal payments on debt........................... (4,935,000) (3,373,000)
Increase in funds held by trustee.................... (107,000) (263,000)
Issuance of common stock, net of costs............... 8,472,000 4,266,000
------------ ------------
Net cash provided by
financing activities....................... 3,679,000 1,273,000
------------ ------------
Net decrease in cash................... (3,496,000) (5,856,000)
Cash and cash equivalents at beginning of period....... 31,172,000 75,326,000
------------ ------------
Cash and cash equivalents at end of period............. $ 27,676,000 $ 69,470,000
============ ============
</TABLE>
See accompanying notes.
6
<PAGE>
HEALTH MANAGEMENT ASSOCIATES, INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
- -------------------------
The consolidated balance sheet as of September 30, 1996 has been derived
from the audited consolidated financial statements included in Health Management
Associates, Inc.'s (the Company's) 1996 Annual Report. The interim consolidated
financial statements at March 31, 1997 and for the three and six month periods
ended March 31, 1997 and 1996 are unaudited; however, such interim statements
reflect all adjustments (consisting only of a normal recurring nature) which
are, in the opinion of management, necessary for a fair presentation of the
financial position and results of operations for the interim periods presented.
The results of operations for the interim periods presented are not necessarily
indicative of the results to be expected for the full year. The interim
financial statements should be read in conjunction with the audited consolidated
financial statements of the Company included in its 1996 Annual Report.
2. Acquisitions
- ----------------
Effective January 1, 1997 the Company acquired certain assets of a 112-bed
acute care hospital and a 125-bed acute care hospital through long-term lease
agreements for consideration totaling approximately $51,117,000, including
working capital. Approximately $49,538,000 of cash was paid at closing and
funded from available cash on hand. The operating results of the foregoing
hospitals have been included in the accompanying consolidated statements of
income from the January 1, 1997 acquisition date.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
- ---------------------
Three months ended March 31, 1997 compared
- ------------------------------------------
to three months ended March 31, 1996
- ------------------------------------
Net patient service revenue for the three months ended March 31, 1997
("1997 Period") was $237,792,000, as compared to $184,826,000 for the three
months ended March 31, 1996 ("1996 Period"). This represented an increase in
net patient service revenue of $52,966,000, or 28.7%. Hospitals in operation for
the entire 1997 Period and 1996 Period ("same store hospitals") provided
$12,923,000 of the increase in net patient service revenue, which resulted
primarily from inpatient and outpatient volume increases. The remaining
increase of $40,043,000 included $40,001,000 of net patient service revenue from
the acquisition of the 112-bed Rankin Medical Center effective January 1, 1997,
the 125-bed Stringfellow Memorial Hospital effective January 1, 1997 and the
206-bed Midwest City Regional Hospital effective June 1, 1996, and $42,000 in
Corporate and miscellaneous revenue.
During the 1997 Period the Company's hospitals generated total patient days
of service and an occupancy rate of 138,535 and 50.0%, respectively, versus
116,135 and 48.4%, respectively, for the 1996 Period. Same store patient days
and occupancy for the 1997 Period were 117,636 and 49.6%, respectively, versus
116,135 and 48.4%, respectively for the 1996 Period. Same store admissions for
the Company during the 1997 Period were 23,358, up 4.1% from the 22,429
admissions during the 1996 Period.
The Company's operating expenses (salaries and benefits, supplies and
expenses, provision for doubtful accounts and rent expense) for the 1997 Period
were $174,794,000 or 73.5% of net patient service revenue as compared to
$136,557,000 or 73.9% of net patient service revenue for the 1996 Period. Of
the total $38,237,000 increase, approximately $7,341,000 related to same store
hospitals, which was largely attributable to the increased patient volumes.
Another $30,904,000 of increased operating expense related to the acquisitions
mentioned previously, which was offset by a $8,000 decrease in Corporate and
miscellaneous other operating expenses.
The Company's earnings before depreciation and amortization, interest and
income taxes (EBITDA) were $62,998,000 for the 1997 Period as compared to
$48,269,000 for the 1996 Period, an increase of $14,729,000 or 30.5%. The
EBITDA margin was 26.5% for the 1997 Period compared to 26.1% for the 1996
Period.
The Company's depreciation and amortization costs increased by $2,531,000
and interest expense increased by $723,000. The increase in depreciation and
amortization resulted primarily from the acquisitions mentioned previously. The
increase in interest expense reflects lower investment income in the 1997 Period
(as a result of cash used for the acquisitions previously mentioned), which is
netted against interest expense.
8
<PAGE>
Item 2. Management's discussion and Analysis of Financial
Condition and Results of Operations (continued)
The Company's income before income taxes was $52,577,000 for the 1997
Period as compared to $41,102,000 for the 1996 Period, an increase of
$11,475,000 or 27.9%. The increase resulted primarily from same-store volume
increases and the acquisitions mentioned previously. The Company's provision
for income taxes was $20,635,000 for the 1997 Period as compared to $16,132,000
for the 1996 Period. These provisions reflect effective income tax rates of
39.25% for both periods. As a result of the foregoing, the Company's net income
was $31,942,000 for the 1997 Period as compared to $24,970,000 for the 1996
Period.
Results of Operations
- ---------------------
Six months ended March 31, 1997 compared
- ----------------------------------------
to six months ended March 31, 1996
- ----------------------------------
Net patient service revenue for the six months ended March 31, 1997 ("1997
Six Month Period") was $436,954,000, as compared to $336,769,000 for the six
months ended March 31, 1996 ("1996 Six Month Period"). This represented an
increase in net patient service revenue of $100,185,000, or 29.7%. Same store
hospitals provided $21,894,000 of the increase in net patient service revenue,
which resulted primarily from inpatient and outpatient volume increases and an
acuity increase. The remaining increase of $78,291,000 included $78,339,000 of
net patient service revenue from the acquisitions previously mentioned, offset
by a decrease of $48,000 of Corporate and miscellaneous revenue.
During the 1997 Six Month Period the Company's hospitals generated 253,033
total patient days of service and an occupancy rate of 47.0%, respectively,
versus 209,286 and 45.1%, respectively, for the 1996 Six Month Period. Same
store patient days and occupancy for the 1997 Six Month Period were 201,113 and
45.3%, respectively, versus 199,926 and 44.8%, respectively, for the 1996 Six
Month Period. Same store admissions for the Company during the 1997 Six Month
Period were 40,675, up 3.4% from the 39,349 admissions during the 1996 Six Month
Period.
The Company's operating expenses for the 1997 Six Month Period were
$331,828,000 or 75.9% of net patient service revenue as compared to $257,144,000
or 76.4% of net patient service revenue for the 1996 Six Month Period. Of the
total $74,684,000 increase, approximately $14,397,000 related to same store
hospitals, which was largely attributable to increased patient volumes.
Another $59,457,000 of increased operating expense related to the hospital
acquisitions mentioned previously. The remaining increase of $830,000
represented an increase in Corporate and miscellaneous other operating
expenses.
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
The Company's earnings before depreciation and amortization, interest and
income taxes were $105,126,000 for the 1997 Six Month Period as compared to
$79,625,000 for the 1996 Six Month Period, an increase of $25,501,000 or 32.0%.
The Company's EBITDA margin increased to 24.1% for the 1997 Six Month Period, as
compared to 23.6% for the 1996 Six Month Period.
The Company's depreciation and amortization costs increased by $4,932,000
and interest expense increased by $1,144,000. The increase in depreciation and
amortization resulted primarily from the acquisitions previously mentioned. The
increase in interest expense reflects lower investment income in the 1997 Six
Month Period, which is netted against interest expense.
The Company's income before income taxes was $85,300,000 for the 1997 Six
Month Period as compared to $65,875,000 for the 1996 Six Month Period, an
increase of $19,425,000, or 29.5%. The increase resulted primarily from same-
store volume increases and the acquisitions mentioned previously. The Company's
provision for income taxes was $33,480,000 for the 1997 Six Month Period as
compared to $25,856,000 for the 1996 Six Month Period. These provisions reflect
effective income tax rates of 39.25% for both periods. As a result of the
foregoing, the Company's net income was $51,820,000 for the 1997 Six Month
Period as compared to $40,019,000 for the 1996 Six Month Period.
Liquidity and Capital Resources
- -------------------------------
The Company's operating cash flows totaled $72,610,000 for the 1997 Six
Month Period as compared to $39,628,000 for the 1996 Six Month Period. The
positive cash flows resulted from the Company's increased profitability and
management of its working capital. The Company's investing activities used
$79,785,000 and $46,757,000 for the 1997 Six Month Period and 1996 Six Month
Period, respectively. Acquisitions and ongoing capital expenditure requirements
accounted for substantially all of the funds used in investing activities.
Financing activities provided net cash of $3,679,000 for the 1997 Six Month
Period and $1,273,000 during the 1996 Six Month Period. See the Condensed
Consolidated Statements of Cash Flows for the six months ended March 31, 1997
and 1996 at page 6 of this Report.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
The Company had approximately $45,000,000 of available cash on hand at
April 30, 1997. In addition, the Company has a total of $310 million of credit
available under its two unsecured lines of credit.
The Company's credit agreements contain certain covenants which, without
prior consent of the banks, limit certain activities of the Company and its
subsidiaries, including those relating to merger, consolidation and the
Company's ability to secure indebtedness, make guarantees, and grant security
interests. The Company must also maintain minimum levels of consolidated
tangible net worth, debt service coverage, and debt to cash flow and net worth.
At the present time, the Company anticipates that cash on hand,
internally generated funds and funds available under its lines of credit will be
sufficient to satisfy the Company's requirements for capital expenditures,
future acquisitions and working capital.
11
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
-----------------
None.
Item 2. Changes in Securities.
---------------------
None.
Item 3. Defaults upon Senior Securities.
-------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
At the Annual Meeting of Stockholders of the Company held on February
18, 1997, the stockholders of the Company approved a proposal to adopt
a Certificate of Amendment to the Fifth Restated Certificate of
Incorporation of the Company to increase the number of authorized
shares of Common Stock, par value $.01 per share, to an aggregate of
300,000,000 shares (86,755,887 votes for; 5,345,560 votes against).
Item 5. Other Information.
-----------------
None.
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
a. Exhibits:
--------
See Index to Exhibits located on page 14.
b. Reports on Form 8-K:
-------------------
None
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HEALTH MANAGEMENT ASSOCIATES, INC.
DATE: May 9, 1997 BY: /s/ Stephen M. Ray
-------------------------------
Stephen M. Ray
Senior Vice President-Finance
(Duly authorized officer and
Principal Financial Officer)
13
<PAGE>
INDEX TO EXHIBITS
(2) Plan of acquisition, reorganization, arrangement, liquidation or
succession.
Not applicable.
(3) (i) Articles of Incorporation
3.1 The Fifth Restated Certificate of Incorporation, previously filed and
included as Exhibit 3.1 to the Company's Quarterly Report on Form 10-
Q for the quarter ended March 31, 1995, is incorporated herein by
reference.
(ii) By-laws
The By-laws, as amended, previously filed and included as Exhibit 3.2
to the Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1995, is incorporated herein by reference.
(4) Instruments defining the rights of security holders, including indentures.
The Exhibits referenced under (3) of this Index to Exhibits are
incorporated herein by reference.
Fourth Amended and Restated Credit and Reimbursement Agreement among the
Company and NationsBank of Florida National Association and the Banks named
therein, dated December 1, 1994, previously filed and included as Exhibit
4.12 to the Company's Annual Report on Form 10-K for the year ended
September 30, 1994, is incorporated herein by reference.
Credit Agreement dated May 6, 1996 between First Union National Bank of
Florida and the Company, pertaining to a $10 million working capital and
cash management line of credit, previously filed and included as Exhibit
4.3 to the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1996, is incorporated herein by reference.
Amendment Agreement No. 1 to Fourth Amended and Restated Revolving Credit
and Reimbursement Agreement, made as of September 30, 1996, is included
herein as Exhibit 4.1 at page 16 of this Report.
(10) Material contracts
Amendment Agreement No. 1 to Term Loan Agreement by and among Riverview
Regional Medical Center, Inc. And NationsBank, National Association (South)
and The Bank of Novia Scotia, made as of December 1996, is included herein
as Exhibit 10.1 at page 52 of this Report.
(11) Statement re computation of per share earnings.
Statement re computation of per share earnings is included as Exhibit 11.1
at page 61 of this Report.
(15) Letter re unaudited interim financial information.
Not Applicable.
14
<PAGE>
INDEX TO EXHIBITS (Continued)
(18) Letter re change in accounting principles.
Not applicable.
(19) Report furnished to security holders.
Not applicable.
(22) Published report regarding matters submitted to vote of security holders.
Not applicable
(23) Consents of experts and counsel.
Not applicable.
(24) Power of Attorney.
Not applicable.
(27) Financial Data Schedule.
Financial Data Schedule is included herein as Exhibit 27.1 at page 62 of
this report.
(99) Additional exhibits.
Not applicable.
15
<PAGE>
EXHIBIT 4.1
AMENDMENT AGREEMENT NO. 1
TO FOURTH AMENDED AND RESTATED REVOLVING CREDIT
AND REIMBURSEMENT AGREEMENT
THIS AMENDMENT AGREEMENT made and entered into as of the 30th day of
September, 1996, by and among HEALTH MANAGEMENT ASSOCIATES, INC., a Delaware
corporation (herein called the "Company"), NATIONSBANK, NATIONAL ASSOCIATION
(SOUTH), a national banking association (formerly known as NationsBank of
Florida, National Association) and each other lender listed on the signature
pages hereto (herein called the "Banks") and NATIONSBANK, NATIONAL ASSOCIATION
(SOUTH), in its capacity as agent for the Banks (the "Agent").
WITNESSETH:
----------
WHEREAS, the Company, the Agent and the Banks have entered into a Fourth
Amended and Restated Revolving Credit and Reimbursement Agreement dated as of
December 1, 1994 (the "Agreement") whereby the Banks agreed to make loans to the
Company and to issue Letters of Credit on behalf of the Company; and
WHEREAS, the Banks have required as a condition of entering into the
Agreement that each of the Company's Subsidiaries guarantee payment of the
Obligations arising under the Agreement; and
WHEREAS, the Company has requested that the Agent and the Banks amend the
Agreement in the manner set forth herein;
NOW, THEREFORE, the Company, the Agent and the Banks do hereby agree as
follows:
1. From and after the date hereof, the term "Agreement" as used herein
and in Loan Documents shall mean the Agreement as hereby amended and modified.
Unless the context otherwise requires, all terms used herein without definition
shall have the definition provided therefor in the Agreement.
2. Subject to compliance with paragraph 5 hereof, the Agreement is
amended, effective as of the date hereof, as follows:
(a) The following additional definitions are added to Section 1, which
definitions shall read as follows:
"'Absolute Rate' shall have the meaning assigned to such term in
Section 2.02(c)(ii)(D);
'Absolute Rate Auction' shall mean a solicitation of Competitive
Bid Quotes setting forth Absolute Rates pursuant to Section 2.02;
16
<PAGE>
'Absolute Rate Loans' shall mean the Competitive Bid Loans the
interest rates on which are determined on the basis of Absolute Rates
set at Absolute Rate Auctions;
'Competitive Bid Borrowing' shall have the meaning assigned to
such term in Section 2.02(b);
'Competitive Bid Loans' shall mean the Loans provided for by
Section 2.02;
'Competitive Bid Notes' shall mean the promissory notes provided
for by Section 2.08(c) substantially in the form of Exhibit 10 and all
----------
promissory notes delivered in substitution or exchange therefor, in
each case as the same shall be modified and supplemented and in effect
from time to time;
'Competitive Bid Quote' shall mean an offer in accordance with
Section 2.02(c) by a Bank to make a Competitive Bid Loan with one
single specified interest rate;
'Competitive Bid Quote Request' shall have the meaning assigned
to such term in Section 2.02(b);
'Fixed Rate' shall mean the Absolute Rate or the Applicable Base
Rate plus the Applicable Interest Addition or the LIBOR Margin, as the
case may be;
'Fixed Rate Loan' means a Loan for which the rate of interest is
determined by reference to the Fixed Rate;
'Fixed Rate Segment' shall mean a Segment to which a Fixed Rate
is (or is proposed to be) applicable;
'LIBOR Auction' shall mean a solicitation of Competitive Bid
Quotes setting forth LIBOR Margins based on the Applicable Base Rate
pursuant to Section 2.02;
'LIBOR Margin' shall have the meaning assigned to such term in
Section 2.02(c)(ii)(C);
'LIBOR Market Loans' shall mean Competitive Bid Loans the
interest rates on which are determined on the basis of Applicable Base
Rate pursuant to a LIBOR Auction;"
(b) The definition of "Applicable Base Rate" in Section 1 is amended
by restating clause (ii) in its entirety so that as amended it shall read
as follows:
"(ii) for any LIBOR Loan or LIBOR Market Loan, in respect of the
Interest Period specified by the Authorized Representative in the
Borrowing Notice for
17
<PAGE>
such LIBOR Loan or LIBOR Market Loan, 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 "Applicable Base Rate"
shall mean, with respect to any LIBOR Loan or LIBOR Market Loan for
any Interest Period applicable thereto, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days, in the case of a LIBOR Loan and four Business Days in
the case of a LIBOR Market Loan, 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."
(c) The definition of "Applicable Interest Addition" in Section 1 is
amended in its entirety so that as amended it shall read as follows:
"'Applicable Interest Addition' means for each CD or LIBOR Loan
that percent per annum set forth below, which shall be (i) determined
as of each Determination Date and furnished to the Agent not later
than the time set forth in Section 7.01.(a) and (b) hereof (the
"Compliance Date"), based upon the Consolidated Debt to Cash Flow
Ratio, as specified below:
Consolidated Debt to Applicable
Cash Flow Ratio Interest Addition
-------------------- -----------------
(a) Greater than 2.25 to 1.00 0.50%
(b) Greater than 1.25 to 1.00 0.45%
but Equal to or Less than
2.25 to 1.00
(c) Equal to or Less than 1.25 0.40%
to 1.00
(d) The definition of "Applicable Unused Fee" in Section 1 is amended
in its entirety so that as amended it shall read as follows:
"'Applicable Unused Fee' means that percent per annum set forth
below, which shall be (i) determined as
18
<PAGE>
of each Determination Date and furnished to the Agent not later than the
time set forth in Section 7.01(a) and (b) hereof and (ii) applicable as of
the first day of the quarterly period next following the Compliance Date,
based upon the Consolidated Debt to Cash Flow Ratio, as specified below:
Consolidated Debt to Applicable
Cash Flow Ratio Unused Fee
-------------------------- -----------
(a) Greater than 2.25 to 1.00 0.15%
(b) Greater than 1.25 to 1.00 0.15%
but Equal to or Less than
2.25 to 1.00
(c) Equal to or Less than 1.25 0.125%
to 1.00
(e) The definition of "Interest Period" in Section 1 is amended in its
entirety so that as amended it shall read as follows:
"'Interest Period' shall mean:
(i) with respect to any CD Loan and LIBOR Loan, each period
commencing on the date such CD Loan or LIBOR Loan is made or converted
or the last day of the next preceding Interest Period for such Loan,
as the case may be, and ending, at the Company's option (A) for any CD
Loan 30, 60, 90 or 180 days thereafter as notified to the Agent two
(2) Business Days prior to the beginning of such Interest Period and
(B) for any LIBOR Loan on the numerically corresponding day in the
first, second or third calendar month thereafter, as the Company may
notify the Agent three (3) LIBOR Business Days prior to the beginning
of such Interest Period, except that each Interest Period that
commences on the last Business Day of a calendar month (or on any day
for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month;
(ii) with respect to any Absolute Rate Loan, the period
commencing on the date such Absolute Rate Loan is made and ending on
any Business Day up to 180 days thereafter, as the Company may select
as provided in Section 2.02(b); and
(iii) with respect to any LIBOR Market Loan, the period
commencing on the date such LIBOR Market Loan is made and ending on
the numerically corresponding day in the first, second or third
calendar month thereafter, as the Company may select as provided in
Section 2.02(b),
19
<PAGE>
except that each Interest Period that commences on the last Business
Day of a calendar month (or any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall
end on the last Business Day of the appropriate subsequent calendar
month.
Notwithstanding the foregoing: (i) if any Interest Period for any
Competitive Bid Loan would otherwise end after the Revolving Credit
Termination Date, such Interest Period shall end on the Revolving
Credit Termination Date; (ii) if any Interest Period for any LIBOR
Loan would otherwise end after the Revolving Credit Termination Date,
such Interest Period shall end on the Revolving Credit Termination
Date; (iii) each Interest Period that would otherwise end on a day
which is not a Business Day shall end on the next succeeding Business
Day (or, in the case of an Interest Period for a LIBOR Loan or a LIBOR
Market Loan, if such next succeeding Business Day falls in the next
succeeding calendar month, on the next preceding Business Day); and
(iv) notwithstanding clauses (i), (ii) and (iii) above, no Interest
Period for any Loan (other than an Absolute Rate Loan) shall have a
duration of less than one month (in the case of a LIBOR Loan or a
LIBOR Market Loan) and, if the Interest Period for any LIBOR Loan or
LIBOR Market Loan would otherwise be a shorter period, such Loan shall
not be available hereunder for such period.
(f) The definition of "Loans" in Section 1 is amended in its entirety
so that as amended it shall read as follows:
"'Loan' or 'Loans' means any borrowing by the Company hereunder
and/or any extension or credit by the Agent or any of the Banks to or
for the Company hereunder, and shall include the Revolving Credit
Loans, Swing Line Loans and Competitive Bid Loans including any
renewal, amendment, modification or extension of any thereof."
(g) The definition of "Notes" in Section 1 is amended by adding the
phrase "and (iii) the Competitive Bid Notes" immediately preceding the
period at the end thereof.
(h) The definition of "Requisite Banks" in Section 1 is amended by
adding the phrase "without regard to any Competitive Bid Loan" immediately
following the word "Loans" first appearing in the second sentence of such
definition.
(i) Section 2.01 through 2.04 are amended in their entirety so that as
amended they shall read as follows:
" SECTION 2. The Credit.
----------
20
<PAGE>
Section 2.01. (a) Revolving Credit Facility. Subject to the
-------------------------
terms and conditions of this Agreement and so long as no Default or
Event of Default exists hereunder, each Bank severally agrees to make
loans to the Company (individually a "Revolving Credit Loan" and
collectively the "Revolving Credit Loans") from time to time on any
Business Day in the case of a Prime Loan or CD Loan or a LIBOR
Business Day in the case of a LIBOR Loan from the date hereof until
the Revolving Credit Termination Date on a pro rata basis up to but
--- ----
not exceeding its Revolving Credit Commitment; provided, however, that
--------
immediately after giving effect to each loan, the principal amount of
outstanding Revolving Credit Loans plus the amount of Outstanding
Letters of Credit, Swing Line Loans and Competitive Bid Loans shall
not exceed the Total Revolving Credit Commitment. Within such limits,
the Company may borrow, repay and reborrow pursuant to this Section
2.01, in each case on a Business Day in the case of a Prime Loan or CD
Loan, and on a LIBOR Business Day in the case of a LIBOR Loan from the
date of this Agreement until, but not including, the Revolving Credit
Termination Date; provided, however, that (a) no CD Loan shall be made
-------- -------
less than thirty (30) days before the Revolving Credit Termination
Date and no LIBOR Loan shall be made less than one month before the
Revolving Credit Termination Date and (b) a CD Loan and LIBOR Loan may
be repaid only on the last day of an Interest Period with respect
thereto. Each borrowing which shall not utilize the Revolving Credit
Commitments in full and each repayment shall be in an aggregate
principal amount equal to no less than $500,000.
The parties hereto acknowledge and agree that the amount and the
pro rata portion of the Commitments may change from time to time
--- ----
hereafter by the assignment by a Bank or another lender of all or a
portion of its Revolving Credit Commitment pursuant to Section 11.08.
(b) Types of Loans. Each Revolving Credit Loan (other than a
--------------
Swing Line Loan) shall be, at the option of the Company specified in
the Borrowing Notice furnished to the Agent pursuant to Section
2.01(c) hereof, either a Prime Loan, a CD Loan or a LIBOR Loan, which
shall in each case be made or maintained by each Bank at its
applicable Lending Office. CD Loans, LIBOR Loans and Prime Loans may
be outstanding at the same time, but there shall not be outstanding at
any one time more than eight (8) Loans that are Fixed Rate Loans.
21
<PAGE>
(c) Manner of Borrowing. (i) The Company shall give the Agent
-------------------
(a) at least two (2) Business Days' irrevocable telephonic notice of
each Prime Loan or CD Loan (whether representing an additional
borrowing hereunder or a conversion of borrowings hereunder pursuant
to Section 2.10 hereof) prior to 10:00 A.M. Charlotte, North Carolina
time; and (b) at least three (3) LIBOR Business Days' irrevocable
telephonic notice of each LIBOR Loan (whether representing an
additional borrowing hereunder or a conversion of borrowing pursuant
to Section 2.10 hereof) prior to 10:00 A.M. Charlotte, North Carolina
time. Each such Borrowing Notice, which shall promptly be effective
upon receipt by the Agent, shall specify the amount of the borrowing,
the type (Prime, CD or LIBOR) of Loan or Loans, the date of borrowing
and the Interest Period to be used in the computation of interest in
respect of a CD Loan or LIBOR Loan. The Company shall promptly
provide the Agent written confirmation of such telephonic notice in
the form attached hereto as Exhibit 3 with appropriate insertions but
---------
failure to provide such notice shall not affect the validity of such
telephonic notice. Notice of receipt of such Borrowing Notice shall
be provided by the Agent to each Bank by telephone or telefacsimile
not later than 12:30 P.M. on the same day as Agent's receipt of such
notice in the city in which the Lending Office of each such Bank is
located. The Agent shall provide each Bank a copy of the written
confirmation of the Company in the form attached hereto as Exhibit 3
---------
with appropriate insertions but failure to provide such notice shall
not affect the validity of such telephonic notice.
(ii) Not later than 2:00 P.M., Charlotte, North Carolina time on
the date specified for each borrowing hereunder, each Bank shall,
pursuant to the terms and subject to the conditions of this Agreement,
make the amount of the Revolving Credit Loan or Revolving Credit Loans
to be made by it on such day available at the Principal Office of the
Agent, by depositing or transferring the proceeds thereof in
immediately available funds at the Principal Office. The amount so
received by the Agent shall, subject to the terms and conditions of
this Agreement be made available to the Company by depositing the
proceeds thereof in immediately available funds, in an account of the
Company designated by the Company and maintained with the Agent at its
Principal Office or such other office agreed to by the Agent.
(iii) Notwithstanding the foregoing, if a drawing
22
<PAGE>
is made under any Letter of Credit prior to the Revolving Credit
Termination Date and the Company shall not immediately reimburse
NationsBank for the amount of such draw or payment, then notice of
such drawing or payment shall be provided promptly by NationsBank to
the Agent and the Agent shall provide notice to each Bank by telephone
or telefacsimile. If notice to the Banks of a drawing under any Letter
of Credit is given by the Agent at or before 12:00 noon Charlotte,
North Carolina time on any Business Day, provided that no event of the
type specified in Sections 9.07, 9.08 or 9.09 has occurred and is
continuing the Company shall be deemed to have requested, and each
Bank shall, pursuant to the conditions of this Agreement, make a Prime
Loan under the Revolving Credit Facility in the amount of such Bank's
Applicable Commitment Percentage of such drawing or payment and shall
pay such amount to the Agent for the account of NationsBank at the
Principal Office in Dollars and in immediately available funds before
2:30 P.M. Charlotte, North Carolina time on the same Business Day. If
notice to the Banks is given by the Agent after 12:00 noon Charlotte,
North Carolina time on any Business Day, provided that no event of the
type specified in Sections 9.07, 9.08 or 9.09 has occurred and is
continuing the Company shall be deemed to have requested, and each
Bank shall, pursuant to the terms and subject to the conditions of
this Agreement, make a Prime Loan under the Revolving Credit Facility
in the amount of such Bank's Applicable Commitment Percentage of such
drawing or payment and shall pay such amount to the Agent for the
account of NationsBank at the Principal Office in Dollars and in
immediately available funds before 12:00 noon Charlotte, North
Carolina time on the next following Business Day. Such Prime Loan
shall continue unless and until the Company converts such Prime Loan
in accordance with the terms of Section 2.10 hereof. If an event
described in Section 9.07, 9.08 or 9.09 has occurred, each Bank shall
promptly purchase from NationsBank a Participation equal to its
Applicable Commitment Percentage of any drawing under a Letter of
Credit.
2.02. Competitive Bid Loans.
---------------------
(a) In addition to borrowings of Revolving Credit Loans, at any
time prior to the Revolving Credit Termination Date the Company may,
as set forth in this Section 2.02, request the Banks to make offers to
make Competitive Bid Loans to the Company in Dollars. The Banks may,
but shall have no obligation to, make such offers and the Company may,
but shall have no obligation
23
<PAGE>
to, accept any such offers in the manner set forth in this Section
2.02. Competitive Bid Loans may be LIBOR Market Loans or Absolute Rate
Loans (each a "Type" of Competitive Bid Loan), provided that:
--------
(i) the aggregate amount of outstanding Competitive Bid
Loans shall not exceed the Total Revolving Credit Commitment less
the sum of the principal amount of Revolving Credit Outstandings,
Swing Line Loans and Outstanding Letter of Credit;
(ii) there may be no more than eight (8) different Interest
Periods for Fixed Rate Loans outstanding at the same time (for
which purpose Interest Periods described in different lettered
clauses of the definition of the term "Interest Period" shall be
deemed to be different Interest Periods even if they are
coterminous);
(iii) the aggregate amount of outstanding Competitive Bid
Loans of a Bank shall not exceed at any time an amount equal to
the Total Revolving Credit Commitment; and
(iv) no Competitive Bid Loan shall have a maturity date
subsequent to the Revolving Credit Termination Date.
(b) When the Company wishes to request offers to make Competitive
Bid Loans, it shall give the Agent (which shall promptly notify the
Banks) notice (a "Competitive Bid Quote Request") to be received no
later than 11:00 a.m. on (x) the fourth Business Day prior to the date
of borrowing proposed therein, in the case of a LIBOR Auction or (y)
the Business Day next preceding the date of borrowing proposed
therein, in the case of an Absolute Rate Auction (or, in any such
case, such other time and date as the Company and the Agent, with the
consent of the Requisite Banks, may agree). The Company may request
offers to make Competitive Bid Loans for up to three (3) different
Interest Periods in a single notice (for which purpose Interest
Periods in different lettered clauses of the definition of the term
"Interest Period" shall be deemed to be different Interest Periods
even if they are coterminous); provided that the request for each
--------
separate Interest Period shall be deemed to be a separate Competitive
Bid Quote Request for a separate borrowing (a "Competitive Bid
Borrowing") and there shall not be outstanding at any one time more
than four (4)
24
<PAGE>
Competitive Bid Borrowings. Each such Competitive Bid Quote Request
shall be substantially in the form of Exhibit 11 and shall
----------
specify as to each Competitive Bid Borrowing:
(i) the proposed date of such Competitive Bid Borrowing,
which shall be a Business Day;
(ii) the aggregate amount of such Competitive Bid Borrowing,
which shall be at least $10,000,000 (or a larger integral
multiple of $1,000,000) but shall not cause the limits specified
in Section 2.02(a) to be violated;
(iii) the duration of the Interest Period applicable thereto;
(iv) whether the Competitive Bid Quotes requested for a
particular Interest Period are seeking quotes for LIBOR Market
Loans or Absolute Rate Loans; and
(v) if the Competitive Bid Quotes requested are seeking
quotes for Absolute Rate Loans, the date on which the Competitive
Bid Quotes are to be submitted if it is before the proposed date
of borrowing (the date on which such Competitive Bid Quotes are
to be submitted is called the "Quotation Date").
Except as otherwise provided in this Section 2.02(b), no Competitive
Bid Quote Request shall be given within five (5) Business Days (or
such other number of days as the Company and the Agent, with the
consent of the Requisite Banks, may agree) of any other Competitive
Bid Quote Request.
(c) (i) Each Bank may submit one or more Competitive Bid Quotes,
each containing an offer to make a Competitive Bid Loan in response to
any Competitive Bid Quote Request; provided that, if the Company's
--------
request under Section 2.02(b) specified more than one Interest Period,
such Bank may make a single submission containing one or more
Competitive Bid Quotes for each such Interest Period. Each
Competitive Bid Quote must be submitted to the Agent not later than
(x) 2:00 p.m. on the fourth Business Day prior to the proposed date of
borrowing, in the case of a LIBOR Auction or (y) 10:00 a.m. on the
Quotation Date, in the case of an Absolute Rate Auction
25
<PAGE>
(or, in any such case, such other time and date as the Company and the
Agent, with the consent of the Requisite Banks, may agree); provided
--------
that anyCompetitive Bid Quote may be submitted by Nations Bank
(or its applicable Lending Office) only if NationsBank (or such
applicable Lending Office) notifies the Company of the terms of the
offer contained therein not later than (x) 1:00 p.m. on the fourth
Business Day prior to the proposed date of borrowing, in the case of a
LIBOR Auction or (y) 9:45 a.m. on the Quotation Date, in the case of
an Absolute Rate Auction. Subject to Section 4, Section 5 and Section
9, any Competitive Bid Quote so made shall be irrevocable except with
the consent of the Agent given on the instructions of the Company.
(ii) Each Competitive Bid Quote shall be substantially in
the form of Exhibit 12 and shall specify:
----------
(A) the proposed date of borrowing
and the Interest Period therefor;
(B) the principal amount of the
Competitive Bid Loan for which each such Competitive Bid Quote is
being made, which principal amount shall be at least $5,000,000
(or a larger integral multiple of $1,000,000); provided that the
--------
aggregate principal amount of all Competitive Bid Loans
for which a Bank submits Competitive Bid Quotes (x) may not
exceed the Total Revolving Credit Commitment and (y) may not
exceed the principal amount of the Competitive Bid Borrowing for
a particular Interest Period for which offers were requested;
(C) in the case of a LIBOR Auction,
the margin above or below the Applicable Base Rate adjusted for
any Reserve Requirement (the "LIBOR Margin") offered for each
such Competitive Bid Loan, expressed as a percentage (rounded
upwards, if necessary, to the nearest 1/10,000th of 1%) to be
added to or subtracted from the Applicable Base Rate as so
adjusted;
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (rounded upwards, if necessary, to the nearest
1/10,000th of 1%) offered for each such Competitive Bid Loan (the
"Absolute Rate"); and
26
<PAGE>
(E) the identity of the quoting Bank.
Unless otherwise agreed by the Agent and the Company, no Competitive
Bid Quote shall contain qualifying, conditional or similar language or
propose terms other than or in addition to those set forth in the
applicable Competitive Bid Quote Request and, in particular, no
Competitive Bid Quote may be conditioned upon acceptance by the
Company of all (or some specified minimum) of the principal amount of
the Competitive Bid Loan for which such Competitive Bid Quote is being
made.
(d) The Agent shall (x) in the case of a LIBOR Auction, by 4:00
p.m. on the day a Competitive Bid Quote is submitted or (y) in the
case of an Absolute Rate Auction, as promptly as practicable after the
Competitive Bid Quote is submitted (but in any event not later than
10:30 a.m. on the Quotation Date), notify the Company of the terms (i)
of any Competitive Bid Quote submitted by a Bank that is in accordance
with Section 2.02(c) and (ii) of any Competitive Bid Quote that
amends, modifies or is otherwise inconsistent with a previous
Competitive Bid Quote submitted by such Bank with respect to the same
Competitive Bid Quote Request. Any such subsequent Competitive Bid
Quote shall be disregarded by the Agent unless such subsequent
Competitive Bid Quote is submitted solely to correct a manifest error
in such former Competitive Bid Quote. The Agent's notice to the
Company shall specify (A) the aggregate principal amount of the
Competitive Bid Borrowing for which Competitive Bid Quotes have been
received and (B) the respective principal amounts and LIBOR Margins or
Absolute Rates, as the case may be, so offered by each Bank
(identifying the Bank that made each Competitive Bid Quote).
(e) Not later than 11:00 a.m. on (x) the third Business Day prior
to the proposed date of borrowing, in the case of a LIBOR Auction or
(y) the Quotation Date, in the case of an Absolute Rate Auction (or,
in any such case, such other time and date as the Company and the
Agent, with the consent of the Requisite Banks, may agree), the
Company shall notify the Agent of its acceptance or nonacceptance of
the offers so notified to it pursuant to Section 2.02(d) (and the
failure of the Company to give such notice by such time shall
constitute nonacceptance) and the Agent shall promptly notify each
affected Bank. In the case of acceptance, such notice shall specify
the aggregate principal amount of offers for each Interest Period that
are accepted. The Company may accept any Competitive Bid Quote in
whole or in part
27
<PAGE>
(provided that any Competitive Bid Quote accepted in part shall be at
--------
least $5,000,000 or a larger integral multiple of $1,000,000);
provided that:
--------
(i) the aggregate principal amount of each Competitive Bid
Borrowing may not exceed the applicable amount set forth in the
related Competitive Bid Quote Request;
(ii) the aggregate principal amount of each Competitive Bid
Borrowing shall be at least $10,000,000 (or a larger integral
multiple of $1,000,000) but shall not cause the limits specified
in Section 2.02(a) to be violated;
(iii) acceptance of offers may be made only in ascending
order of LIBOR Margins or Absolute Rates, as the case may be, in
each case beginning with the lowest rate so offered; and
(iv) the Company may not accept any offer where the Agent
has correctly advised the Company that such offer fails to comply
with Section 2.02(c)(ii) or otherwise fails to comply with the
requirements of this Agreement (including, without limitation,
Section 2.02(a)).
If offers are made by two or more Banks with the same LIBOR Margins or
Absolute Rates, as the case may be, for a greater aggregate principal
amount than the amount in respect of which offers are permitted to be
accepted for the related Interest Period after the acceptance of all
offers, if any, of all lower LIBOR Margins or Absolute Rates, as the
case may be, offered by any Bank for such related Interest Period, the
principal amount of Competitive Bid Loans in respect of which such
offers are accepted shall be allocated by the Company among such Banks
as nearly as possible (in amounts of at least $5,000,000 or larger
integral multiples of $1,000,000) in proportion to the aggregate
principal amount of such offers. Determinations by the Company of the
amounts of Competitive Bid Loans and the lowest bid after adjustment
as provided in Section 2.02(e)(iii) shall be conclusive in the absence
of manifest error.
(f) Any Bank whose offer to make any Competitive Bid Loan has
been accepted shall, not later than 1:00 p.m. on the date specified
for the making of such Loan, make the amount of such Loan available to
the Agent at
28
<PAGE>
the Principal Office in Dollars and in immediately available funds,
for account of the Company. The amount so received by the Agent shall,
subject to the terms and conditions of this Agreement, be made
available to the Company on such date by depositing the same, in
Dollars and in immediately available funds, in an account of the
Company maintained at the Principal Office.
2.03. Reserved.
--------
2.04. Several Obligations; Limitations on Obligations of Banks.
--------------------------------------------------------
No Bank shall be responsible for any default of any other Bank in
respect to such other Bank's obligation to make any Loan hereunder nor
shall the Revolving Credit Commitment of any Bank hereunder be
increased as a result of such default of any other Bank. Without
limiting the generality of the foregoing, in the event any Bank shall
fail to advance funds to the Company as herein provided, the Agent may
in its discretion, but shall not be obligated to, advance under the
Note in its favor as a Bank all or any portion of such amount (the
"deficiency advance") and shall thereafter be entitled to payments of
principal of and interest on such deficiency advance in the same
manner and at the same interest rate or rates to which such other Bank
would have been entitled had it made such advance under its Note;
provided that, upon payment to the Agent from such other Bank of the
entire outstanding amount of such deficiency advance, together with
interest thereon, from the most recent date or dates interest was paid
to the Agent by the Company on each Loan comprising the deficiency
advance at the interest rate per annum for overnight borrowing by the
Agent from the Federal Reserve Bank, then such payment shall be
credited against the Note of the Agent in full payment of such
deficiency advance and the Company shall be deemed to have borrowed
the amount of such deficiency advance from such other Bank as of the
most recent date or dates, as the case may be, upon which any payments
of interest were made by the Company thereon.
2.05. Interest. The Company shall pay interest to the Agent for
--------
the account of each Bank on the outstanding and unpaid principal
amount of each Loan made by such Bank for the period commencing on the
date of such Loan until such Loan shall be paid at the then applicable
Prime Rate for Prime Loans and Fixed Rate for Fixed Rate Loans, as
designated by the Company pursuant to Section 2.01(c), Section 2.02(e)
or Section 2.10 hereof (except Swing Line Loans shall bear interest as
provided in
29
<PAGE>
Section 2.06); provided, however, that if any amount shall
--------
not be paid when due (at maturity, by acceleration or otherwise), such
amount shall bear interest thereafter until paid at a rate which shall
be 2% above the higher of (i) the rate at which interest was payable
on such Loan on the day immediately preceding the due date of such
Loan or (ii) the Prime Rate from the date such amount was due and
payable until the date such amount is paid in full.
Interest on each Loan shall be calculated on the basis of a year
of 360 days for the actual number of days elapsed. Any change in the
Prime Rate shall be effective as of the Business Day such change is
announced. Interest on Loans which are Prime Loans shall be paid: (a)
on the last Business Day of each calendar quarter during each year,
commencing the first such date to occur after the date of any Prime
Loan outstanding on the date hereof, (b) on the last day of the
Applicable Interest Period for each Fixed Rate Loan and, if such
Interest Period extends for more than three (3) months, at intervals
of three (3) months after the first day of such Interest Period, and
(c) upon the Revolving Credit Termination Date."
(j) Section 2.07 is hereby amended in order to add a new clause C.
thereto reading as follows:
"C. Competitive Bid Loans. The principal amount of each
---------------------
Competitive Bid Loan shall be due and payable to the Agent for the
benefit of the applicable Bank in full on the last day of the Interest
Period applicable thereto, or earlier as specifically provided
herein."
(k) Section 2.08 is hereby amended in order to add a new clause (c)
thereto reading as follows:
"(c) Competitive Bid Loans made by each Bank shall be evidenced
by the Competitive Bid Note payable to the order of such Bank and
representing the obligation of the Company to pay the lesser of (i)
the Total Revolving Credit Commitment or (ii) the unpaid principal
amount of all Competitive Bid Loans made by such Bank. Each Bank is
hereby authorized to record the date and amount of each Competitive
Bid Loan made by such Bank, the maturity date thereof, the date and
amount of each payment of principal thereof and the interest rate with
respect thereto on the schedule attached to and constituting part of
its Competitive Bid Note, and any such recordation shall constitute
prima facie evidence of the accuracy of
----- -----
30
<PAGE>
the information so recorded; provided, however, that the failure to
-------- --------
make any such recordation shall not affect the obligations of the
Company hereunder or under any Competitive Bid Note."
(l) The second sentence of Section 2.11 is amended in its entirety so
that as amended it shall read as follows:
"Swing Line Loans and Competitive Bid Loans shall not be deemed
outstanding Loans for purposes of determining such Commitment Fee."
(m) The last sentence of Section 3.01 is amended in its entirety so
that as amended it shall read as follows:
"NationsBank shall not be required to issue any Letter of Credit if
the Outstanding Letters of Credit when added to the face amount of any
requested Letter of Credit plus outstanding Revolving Credit Loans,
Competitive Bid Loans and Swing Line Loans exceeds the Total Revolving
Credit Commitment."
(n) Clause (f) of Section 6.03 is hereby amended in its entirety so
that as amended it shall read as follows:
"(f) immediately after giving effect to a Loan or Letter of
Credit the aggregate principal balance of all outstanding Loans and
Participations shall not exceed the Total Revolving Credit
Commitment."
3. Each Subsidiary joins in executing this Amendment Agreement for the
purpose of consenting hereto and reaffirming its guaranty of the Company's
Obligations.
4. In order to induce the Banks to enter into this Amendment Agreement,
the Company represents and warrants to the Banks as follows:
(a) The representations and warranties made by the Company in Section
5 of the Agreement are true on and as of the date hereto except that the
financial statements referred to in Section 5.03 shall be those most
recently furnished to the Banks pursuant to Section 7.01;
(b) There has been no material change in the condition, financial or
otherwise, of the Company and its Subsidiaries since the date of the most
recent financial reports of the Company received by the Banks under Section
7.01 thereof, other than changes in the ordinary course of business, none
of which has been a material adverse change;
31
<PAGE>
(c) The business and properties of the Company and its Subsidiaries
are not, and since the date of the most recent financial report of the
Company and its Subsidiaries received by the Banks under either Section
7.01 thereof have not been adversely affected in any substantial way as the
result of any fire, explosion, earthquake, accident, strike, lockout,
combination of workers, flood, embargo, riot, activities of armed forces,
war or acts of God or the public enemy, or cancellation or loss of any
major contracts; and
(d) No event has occurred and no condition exists which, upon the
consummation of the transaction contemplated hereby, constituted a Default
or an Event of Default on the part of the Company under the Agreement or
the Notes either immediately or with the lapse of time or the giving of
notice, or both.
5. As a condition precedent to the effectiveness of this Amendment
Agreement, the Agent shall have received the following:
(e) Executed counterparts of this Amendment Agreement; and
(f) An opinion of the general counsel of the Company and the
Guarantors (i) as to the enforceability of this Amendment Agreement, the
amendment of the Guaranty and (ii) such other matters as the Agent shall
reasonably request.
6. All instruments and documents incident to the consummation of the
transactions contemplated hereby shall be satisfactory in form and substance to
the Agent and its counsel; the Agent and the Banks shall have received copies of
all additional agreements, instruments and documents which they may reasonably
request in connection therewith, including copies of resolutions of the Company
authorizing the transactions contemplated by this Amendment Agreement, such
documents, when appropriate, to be certified by appropriate corporate or
governmental authorities; all proceedings of the Company relating to the matters
provided for herein shall be satisfactory to the Agent and its counsel.
7. This Amendment Agreement sets forth the entire understanding and
agreement of the parties hereto in relation to the subject matter hereof and
supersedes any prior negotiations and agreements among the parties relative to
such subject matter. No promise, conditions, representation or warranty,
express or implied, not herein set forth shall bind any party hereto, and no one
of them has relied on any such promise, condition, representation or warranty.
Each of the parties hereto acknowledges that, except as in this Amendment
Agreement otherwise
32
<PAGE>
expressly stated, no representations, warranties or commitments, express or
implied, have been made by any other party to the other. None of the terms or
conditions of this Amendment Agreement may be changed, modified, waived or
canceled orally or otherwise, except by writing, signed by all the parties
hereto, specifying such change, modification, waiver or cancellation of such
terms or conditions, or of any preceding or succeeding breach thereof.
Except as hereby specifically amended, modified or supplemented, the
Agreement and all of the other Loan Documents are hereby confirmed and ratified
in all respects and shall remain in full force and effect according to their
respective terms.
33
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement
to be duly executed by their duly authorized officers, all as of the day and
year first above written.
Company:
WITNESS: HEALTH MANAGEMENT ASSOCIATES, INC.
_______________________
_______________________
By: /s/ Robb L. Smith
________________________________
Name: Robb L. Smith
Title: Senior Vice President
34
<PAGE>
WITNESS: GUARANTORS:
HEALTH MANAGEMENT ASSOCIATES, INC.
_________________________ HEALTH MANAGEMENT ASSOCIATES OF
WEST VIRGINIA, INC.
_________________________ SEBRING HOSPITAL MANAGEMENT
ASSOCIATES, INC.
MOORESVILLE HOSPITAL MANAGEMENT
ASSOCIATES, INC.
SEBASTIAN HOSPITAL CO., INC.
MARATHON H.M.A., INC.
LOUISBURG H.M.A., INC.
NATCHEZ COMMUNITY HOSPITAL, INC.
ORLANDO H.M.A., INC.
BILOXI H.M.A., INC.
DURANT H.M.A., INC.
VAN BUREN H.M.A., INC.
HAINES CITY H.M.A., INC.
HAMLET H.M.A., INC.
GAFFNEY H.M.A., INC.
TOPEKA H.M.A., INC.
PUNTA GORDA MEDICAL CENTER, INC.
HEALTH MANAGEMENT ASSOCIATES, INC.
(a Kentucky corporation)
HOSPITAL MANAGEMENT ASSOCIATES, INC.
PAINTSVILLE HOSPITAL COMPANY
By:/s/ Robb L. Smith
__________________________________
Name: Robb L. Smith
Title: Secretary
35
<PAGE>
BANKS:
NATIONSBANK, NATIONAL ASSOCIATION
(SOUTH) Individually and as Agent
By:/s/ Allison Freeland
________________________________
Name:______________________________
Title: Vice President
36
<PAGE>
UNION BANK OF CALIFORNIA
By:/s/ Albert W. Kelly
---------------------------------
Name:Albert W. Kelly
-------------------------------
Title:Vice President
------------------------------
37
<PAGE>
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By:/s/ Joseph H. Towell
_________________________________
Name: Joseph H. Towell
______________________________
Title:Senior Vice President
______________________________
38
<PAGE>
THE SUMITOMO BANK, LIMITED
By:/s/ Allen L. Harvell
--------------------
Name:Allen Harvell, Jr.
-------------------------------
Title: Vice President and Manager
-----------------------------
By:/s/ M. Phillip Freeman
---------------------------------
Name: M. Phillip Freeman
------------------------------
Title:Vice President
------------------------------
39
<PAGE>
THE BANK OF NOVA SCOTIA
By:/s/Dana Maloney
---------------------------------
Name:Dana Maloney
-------------------------------
Title:Relationship Manager
------------------------------
40
<PAGE>
TORONTO DOMINION (TEXAS), INC.
By:/s/ Frederick Hawley
-------------------------------
Name:Frederick Hawley
-----------------------------
Title:vice President
----------------------------
41
<PAGE>
EXHIBIT 10
Form of Competitive Bid Note
PROMISSORY NOTE
$300,000,000 __________, __________
__________, 1996
FOR VALUE RECEIVED, HEALTH MANAGEMENT ASSOCIATES, INC., a Delaware
corporation (the "Company"), hereby promises to pay to the order of
________________________________ (1) (the "Bank"), for account of its
Applicable Lending Office provided for by the Credit Agreement referred to
below, at the principal office of NationsBank, National Association (South), One
Independence Center, 101 North Tryon Street, NC1-001-15-04, Charlotte, North
Carolina 28255 (or at such other place or places as the Agent may designate in
writing) at the times set forth in the Credit Agreement (as herein defined), the
aggregate unpaid principal amount of the Competitive Bid Loans made by the Bank
to the Company under the Credit Agreement, in lawful money of the United States
of America and in immediately available funds, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount of each such Competitive Bid Loan, at such office, in like
money and funds, for the period commencing on the date of such Competitive Bid
Loan until such Competitive Bid Loan shall be paid in full, at the rates per
annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and maturity date of each Competitive
Bid Loan made by the Bank to the Company, and each payment made on account of
the principal thereof, shall be recorded by the Company on its books and, prior
to any transfer of this Note, endorsed by the Bank on the schedule attached
hereto or any continuation thereof, provided that the failure of the Bank to
--------
make any such recordation or endorsement shall not affect the obligations of the
Company to make a payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Competitive Bid Loans made by the Bank.
This Note is one of the Competitive Bid Notes referred to in the Fourth
Amended and Restated Revolving Credit and Reimbursement Agreement dated as of
December 1, 1994 (as modified and supplemented from time to time, the "Credit
------
Agreement") among the Company, the Banks named therein and NationsBank, National
- ---------
Association (South), as Agent, and evidences Competitive Bid Loans made by the
Bank thereunder. Terms used but not defined in this Note have the respective
meanings assigned to them in the Credit Agreement.
42
<PAGE>
- ---------------
/1/ Insert name of Bank in capital letters.
43
<PAGE>
The Credit Agreement provides for the acceleration of the maturity of this
Note upon the occurrence of certain events and for prepayments of Competitive
Bid Loans upon the terms and conditions specified therein. In the event this
Note is not paid when due at any stated or accelerated maturity, the Company
agrees to pay, in addition to the principal and interest, all costs of
collection, including reasonable attorney's fees.
Except as permitted by Section 11.08 of the Credit Agreement, this Note may
not be assigned by the Bank to any other Person.
The Company hereby waives demand, presentment, protest, notice of
nonpayment and protest, and any other notice of any kind with respect to this
Note.
This Note shall be governed by, and construed in accordance with, the law
of the State of Florida.
WITNESS: HEALTH MANAGEMENT ASSOCIATES, INC.
____________________________
By: ________________________________
____________________________ Name: Stephen N. Ray
Title: Senior Vice President-Finance
Chief Financial Officer
44
<PAGE>
SCHEDULE OF COMPETITIVE BID LOANS
This Note evidences Competitive Bid Loans made under the within-described
Credit Agreement to the Company, on the dates, in the principal amounts, of the
Types, bearing interest at the rates and maturing on the dates set forth below,
subject to the payments and prepayments of principal set forth below:
Principal
Date Amount Type Maturity Amount Unpaid
of of of Interest Date of Paid or Principal Notation
Loan Loan Loan Rate Loan Prepaid Amount Made by
- ---- --------- ---- -------- -------- ------- -------- --------
45
<PAGE>
ACKNOWLEDGEMENT OF EXECUTION ON BEHALF OF
HEALTH MANAGEMENT ASSOCIATES, INC.
STATE OF ______________
COUNTY OF _____________
Before me, the undersigned, a Notary Public in and for said County and
State on this _____ day of __________, 1996 A.D., personally appeared Stephen N.
Ray, known to be the Senior Vice President-Finance and Chief Financial Officer
of the above-named corporation (the "Company"), who, being by me duly sworn,
says he works at 5811 Pelican Bay Boulevard, Suite 500, Naples, Florida 33963
and that by authority duly given by, and as the act of, the Company, the
foregoing and annexed Note dated __________, 1996, was signed by him as said
Senior Vice President-Finance and Chief Financial Officer on behalf of the
Company.
Witness my hand and official seal this _____ day of __________, 1996.
___________________________________
Notary Public
(SEAL)
My commission expires: ________________
46
<PAGE>
AFFIDAVIT OF ___________________
[Name of Affiant]
The undersigned, being first duly sworn, deposes and says that:
1. He/She is a _______________ of ______________________ and works at
__________________________________________________.
2. The Note of Health Management Associates, Inc. to the Bank (the
"Bank") dated __________, 1996 was executed before him/her and delivered to
him/her on behalf of the Bank in __________, __________ on __________, 1996.
This the _____ day of __________, 1996.
___________________________________
[Signature of Affiant]
Acknowledgement of Execution
STATE OF __________
COUNTY OF __________
Before me, the undersigned, a Notary Public in and for said County and
State on this _____ day of __________, 1996 A.D., personally appeared
_______________ who before me affixed his/her signature to the above Affidavit.
Witness my hand and official seal this _____ day of __________, 1996.
___________________________________
Notary Public
(SEAL)
My Commission Expires: _______________
47
<PAGE>
EXHIBIT 11
Form of Competitive Bid Quote Request
[Date]
To: NationsBank, National Association (South)
From: Health Management Associates, Inc.
Re: Competitive Bid Quote Request
Pursuant to Section 2.02 of the Fourth Amended and Restated Revolving
Credit and Reimbursement Agreement dated as of December 1, 1994 (as modified and
supplemented from time to time, the "Credit Agreement") among Health Management
Associates, Inc., the banks named therein and NationsBank, National Association
(South) as agent, we hereby give notice that we request Competitive Bid Quotes
for the following proposed Competitive Bid Borrowing(s):
Borrowing Quotation Interest
Date Date (1) Amount (2) Type (3) Period (4)
- --------- --------- ------ ---- --------
Terms used herein have the meanings assigned to them in the Credit
Agreement.
HEALTH MANAGEMENT ASSOCIATES, INC.
By:
--------------------------------
Title:
- -----------------------
(1) For use if an Absolute Rate in an Absolute Rate Auction is requested
to be submitted before the Borrowing Date.
(2) Each amount must be $10,000,000 or a larger integral multiple of
$1,000,000.
(3) Insert either "LIBOR Market" (in the case of LIBOR Market Loans) or
"Absolute Rate" (in the case of Absolute Rate Loans).
(4) One, two three or six months, in the case of a LIBOR Market Loan or,
in the case of an Absolute Rate Loan, a period of up to 180 days after the
making of such Absolute Rate Loan and ending on a Business Day.
48
<PAGE>
EXHIBIT 12
Form of Competitive Bid Quote
To: NationsBank, National Association (South), as Agent
Attention:
Re: Competitive Bid Quote to Health Management Associates, Inc. (the
"Company")
This Competitive Bid Quote is given in accordance with Section 2.02(c) of
the Fourth Amended and Restated Revolving Credit and Reimbursement Agreement
dated as of December 1, 1994 (as modified and supplemented from time to time,
the "Credit Agreement") among Health Management Associates, Inc., the banks
named therein and NationsBank, National Association (South), as Agent. Terms
defined in the Credit Agreement are used herein as defined therein.
In response to the Company's invitation dated __________, 199__, we hereby
make the following Competitive Bid Quote(s) on the following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. We hereby offer to make Competitive Bid Loan(s) in the following
principal amount[s], for the following Interest Period(s) and at the
following rate(s):
49
<PAGE>
Borrowing Quotation Interest
Date Date (1) Amount (2) Type (3) Period (4) Rate (5)
- --------- --------- ------ ---- -------- ----
- ------------------------
(1) As specified in the related Competitive Bid Quote Request.
(2) The principal amount bid for each Interest Period may not exceed the
principal amount requested. Bids must be made for at least $5,000,000 or a
larger integral multiple of $1,000,000.
(3) Indicate "LIBOR Market" (in the case of LIBOR Market Loans) or
"Absolute Rate" (in the case of Absolute Rate Loans).
(4) One, two, three or six months, in the case of a LIBOR Market Loan or,
in the case of an Absolute Rate Loan, a period of up to 180 days after the
making of such Absolute Rate Loan and ending on a Business Day, as specified in
the related Competitive Bid Quote Request.
(5) For a LIBOR Market Loan, specify the LIBOR margin over or under the
Applicable Base Rate adjusted for the Eurodollar Reserve Percentage determined
for the applicable Interest Period. Specify percentage (rounded to the nearest
1/10,000 of 1%) and specify whether "PLUS" or "MINUS". For an Absolute Rate
Loan, specify rate of interest per annum (rounded to the nearest 1/10,000 of
1%).
50
<PAGE>
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the Credit Agreement,
irrevocably obligate[s] us to make the Competitive Bid Loan(s) for which any
offer(s) (is/are) accepted, in whole or in part (subject to the third sentence
of Section 2.02(e) of the Credit Agreement).
Very truly yours,
[NAME OF BANK]
By:________________________________
Authorized Officer
Dated: __________, ____
51
<PAGE>
EXHIBIT 10.1
AMENDMENT AGREEMENT NO. 1
TO TERM LOAN AGREEMENT
THIS AMENDMENT AGREEMENT made and entered into as of this 5th day of
December, 1996 by and among:
RIVERVIEW REGIONAL MEDICAL CENTER, INC., a corporation organized and
existing under the laws of the State of Alabama and having its principal place
of business located in Gadsden, Alabama (the "Company"); and
NATIONSBANK, NATIONAL ASSOCIATION (SOUTH) ("NationsBank") (successor by
merger of NationsBank of Florida, National Association which was formerly called
NCNB National Bank of Florida) and THE BANK OF NOVA SCOTIA (collectively, the
"Banks"); and
NATIONSBANK, NATIONAL ASSOCIATION (SOUTH), a national banking association
organized and existing under the laws of the United States of America and having
a principal place of business in Miami, Florida in its capacity as agent for the
Banks (in such capacity, the "Agent"). Terms used in this Amendment Agreement
without definition shall have the meaning set forth in the Agreement.
WITNESSETH:
WHEREAS, the Company, the Banks and the Agent have entered into a Term Loan
Agreement dated July 6, 1992 (the "Agreement") whereby the Banks have made a
term loan in the original principal amount of $30,000,00 to the Company; and
WHEREAS, Health Management Associates, a Delaware corporation ("HMA"), by
Amended and Restated Parent Guaranty Agreement dated December 1, 1994 has
guaranteed payment of the Obligations of the Company, and as a condition to
making the term loan all other active Subsidiaries of HMA are required to
guarantee payment of the Obligations; and
WHEREAS, the Company and HMA have requested that the Agreement be amended
in the manner set forth herein; and
WHEREAS, as a condition to amended the Agreement the Banks have required
that HMA and its Subsidiaries who have guaranteed payment of the Obligations
join in the execution of this Amendment Agreement and that any active
Subsidiaries of HMA which have not guaranteed the Obligations execute and
deliver to the Agent a Guaranty Agreement;
NOW, THEREFORE, the Company, the Banks and the Agent do hereby agree as
follows:
1. From and after the date hereof, the term "Agreement" as used herein
and in the Loan Documents shall mean this Agreement as hereby amended and
modified.
52
<PAGE>
2. Subject to compliance with paragraph 5 hereof, the Agreement is
amended, effective as of the date hereof, as follows:
(a) A new definition "Applicable Interest Addition" is added as
Section 1.03.A. to the Agreement which new Section shall read as follows:
"1.03.A. 'Applicable Interest Addition' means for each LIBOR
Loan that percent per annum set forth below, which shall be (i)
determined as of each Determination Date (as defined in the HMA Credit
Agreement) and furnished to the Agent not later than the time set
forth in Section 4.01.(a) and (b) of the HMA Guaranty (the "Compliance
Date"), based upon the Consolidated Debt to Cash Flow Ratio (as
defined in the HMA Guaranty), as specified below:
Applicable
Consolidated Debt to Interest
Cash Flow Ratio Addition
-------------------------- -----------
(a) Greater than 2.25 to 1.00 0.60%
(b) Greater than 1.25 to 1.00 0.55%
but Equal to or less than
2.25 to 1.00
(c) Equal to or Less than 1.25 0.50%
to 1.00"
(b) The definition of "Base Rate" in Section 1.07 is hereby amended in
its entirety so that as amended it shall read as follows:
"1.07. 'Base Rate' means for the Term Loan 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 appropriately 11:00 A.M.
(London time) two Business Days prior to the first day of such
Interest Period for a term of the Interest Period. If for any reason
such rate is not available, the term Base Rate shall mean 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 of 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."
(c) The definition of "HMA Credit Agreement" in Section 1.23. is
hereby amended in its entirety so that as amended it shall read as follows:
53
<PAGE>
"1.23. 'HMA Credit Agreement' means the Fourth Amended and
Restated Credit and Reimbursement Agreement among HMA, NationsBank,
National Association (South), as Agent, and the Banks party thereto
dated December 1, 1994, as amended, restated, modified or supplemented
from time to time."
(d) The definition of "HMA Guaranty" in Section 1.24. is hereby
amended in its entirety so that as amended it shall read as follows:
"1.24. 'HMA Guaranty' means the Amended and Restated Parent
Guaranty Agreement dated as of December 1, 1994 from HMA for the
benefit of the Banks, as amended, restated, modified or supplemented,
from time to time."
(e) The definition of "LIBOR Rate" in Section 1.30. is hereby amended
in its entirety so that as amended it shall read as follows:
"1.30. 'LIBOR Rate' means, for the Interest Period for any Loan,
the rate of interest per annum determined pursuant to the following
formula:
Base Rate
LIBOR Rate = ___________________ + Applicable
1 - Reserve Requirement Interest
Addition
(f) The definition of "Principal Office" in Section 1.45 is hereby
amended in its entirety so that as amended it shall read as follows:
"1.45. 'Principal Office' means the office of the Agent at
Independence Center, 201 North Tryon Street, Charlotte, North Carolina
28255, Attention: Agency Services, or such other address as the Agent
may from time to time designate."
3. Each of HMA and its Subsidiaries heretofore delivering a Guaranty
Agreement joins in executing this Amendment Agreement for the purpose of
consenting hereto and reaffirming its respective guaranty of the Company's
Obligations.
4. In order to induce the Banks to enter into this Amendment Agreement,
the Company represents and warrants to the Banks as follows:
(a) The representations and warranties made by the Company in Section
4 of the Agreement are true on and as of the date hereto except that the
financial statements referred to in Section 4.04 shall be those most
recently furnished to the Banks pursuant to Section 6.01;
(b) There has been no material change in the condition, financial or
otherwise, of the Company and its Subsidiaries, if any, since the date of
the most recent financial reports of the Company received by the Banks
under Section 6.01 thereof, other than changes in the ordinary course of
business, none of which has been a material adverse change;
(c) The business and properties of the Company and its
54
<PAGE>
Subsidiaries, if any, are not, and since the date of the most recent
financial report of the Company and its Subsidiaries received by the Banks
under either Section 6.01 thereof have not been adversely affected in any
substantial way as the result of any fire, explosion, earthquake, accident,
strike, lockout, combination of workers, flood, embargo, riot, activities
of armed forces, war or acts of God or the public enemy, or cancellation or
loss of any major contracts; and
(d) No event has occurred and no condition exists which, upon the
consummation of the transaction contemplated hereby, constituted a Default
or an Event of Default on the part of the Company under the Agreement or
the Notes either immediately or with the lapse of time or the giving of
notice, or both.
5. As a condition precedent to the effectiveness of this Amendment
Agreement, the Agent shall have received the following:
(a) Executed counterparts of this Amendment Agreement;
(b) Guaranty Agreement duly executed by each Subsidiary of HMA
required by the terms of the Agreement to guarantee the Obligations which
have not heretofore executed and delivered to the Agent a Guaranty
Agreement; and
(c) An opinion of the general counsel of the Company and the
Guarantors (i) as to the enforceability of this Amendment Agreement and
(ii) such other matters as the Agent shall reasonably request.
6. All instruments and documents incident to the consummation of the
transactions contemplated hereby shall be satisfactory in form and substance to
the Agent and its counsel; the Agent and the Banks shall have received copies of
all additional agreements, instruments and documents which they may reasonably
request in connection therewith, including copies of resolutions of the Company
and Guarantors authorizing the transactions contemplated by this Amendment
Agreement, such documents, when appropriate, to be certified by appropriate
corporate or governmental authorities; all proceedings of the Company relating
to the matters provided for herein shall be satisfactory to the Agent and its
counsel.
7. This Amendment Agreement sets forth the entire understanding and
agreement of the parties hereto in relation to the subject matter hereof and
supersedes any prior negotiations and agreements among the parties relative to
such subject matter. No promise, conditions, representation or warranty,
express or implied, not herein set forth shall bind any party hereto, and no one
of them has relied on any such promise, condition, representation or warranty.
Each of the parties hereto acknowledges that, except as in this Amendment
Agreement otherwise expressly stated, no representations, warranties or
commitments, express or implied, have been made by any other party to the other.
None of the terms or conditions of this Amendment Agreement may be changed,
modified, waived or canceled orally or otherwise, except by writing, signed by
all the parties hereto, specifying such change, modification, waiver or
cancellation of such terms or conditions, or of any preceding or succeeding
breach thereof.
Except as hereby specifically amended, modified or supplemented, the
Agreement and all of the other Loan Documents are hereby confirmed and ratified
55
<PAGE>
in all respects and shall remain in full force and effect according to their
respective terms.
56
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement
to be duly executed by their duly authorized officers, all as of the day and
year first above written.
Company:
WITNESS: RIVERVIEW REGIONAL MEDICAL CENTER
- -------------------------------
- -------------------------------
By:/s/ Robb L. Smith
-----------------------------------
Name: Robb L. Smith
-----------------------------------
Title: Senior Vice President
-----------------------------------
57
<PAGE>
WITNESS: GUARANTORS:
HEALTH MANAGEMENT ASSOCIATES, INC.
_________________________ HEALTH MANAGEMENT ASSOCIATES OF
WEST VIRGINIA, INC.
_________________________ SEBRING HOSPITAL MANAGEMENT
ASSOCIATES, INC.
MOORESVILLE HOSPITAL MANAGEMENT
ASSOCIATES, INC.
SEBASTIAN HOSPITAL CO., INC.
MARATHON H.M.A., INC.
LOUISBURG H.M.A., INC.
NATCHEZ COMMUNITY HOSPITAL, INC.
ORLANDO H.M.A., INC.
BILOXI H.M.A., INC.
DURANT H.M.A., INC.
VAN BUREN H.M.A., INC.
HAINES CITY H.M.A., INC.
HAMLET H.M.A., INC.
GAFFNEY H.M.A., INC.
TOPEKA H.M.A., INC.
PUNTA GORDA MEDICAL CENTER, INC.
By:/s/ Robb L. Smith
_____________________________
Name:Robb L. Smith
________________________________
Title: Senior Vice President
_________________________
58
<PAGE>
BANKS:
NATIONSBANK, NATIONAL ASSOCIATION
(SOUTH) Individually and as Agent
By:/s/ Allison Freeland
________________________________
Name: Allison S. Freeland
Title: Vice President
59
<PAGE>
THE BANK OF NOVA SCOTIA
By:/s/ Dana Maloney
--------------------------------------
Name: Dana Maloney
-----------------------------------
Title: Relationship Manager
----------------------------------
60
<PAGE>
Exhibit 11.1
HEALTH MANAGEMENT ASSOCIATES, INC.
COMPUTATION OF EARNINGS PER SHARE
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended Six months ended
March 31, March 31,
------------------ -------------------
1997 1996 1997 1996
-------- ------- ------- ----------
<S> <C> <C> <C> <C>
Net income................................. $ 31,942 $ 24,970 $51,820 $40,019
======== ======== ======= =======
PRIMARY
Weighted average number of common shares
outstanding during the period........... 106,942 105,209 106,470 104,747
Exercise of options, net of assumed
purchase of treasury shares with
proceeds therefrom....................... 4,742 5,221 4,814 5,199
-------- ------- ------- -------
Weighted average number of common
shares outstanding during the
period as adjusted.................. 111,684 110,430 111,284 109,946
======== ======= ======= =======
Net income per share....................... $ .29 $ .23 $ .47 $ .36
======== ======== ======= ======
FULLY DILUTED
Weighted average number of common shares
outstanding during the period........... 106,942 105,209 106,470 104,747
Exercise of options, net of assumed
purchase of treasury shares with
proceeds therefrom....................... 4,742 5,668 4,814 5,991
-------- -------- -------- -------
Weighted average number of common
shares outstanding during the
period as adjusted.................. 111,684 110,877 111,284 110,738
======== ======== ======== =======
Net income per share...................... $ .29 $ .23 $ .47 $ .36
======== ======== ======== ======
</TABLE>
61
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements included within the Company's March 31, 1997 Form 10-Q and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> MAR-31-1997
<CASH> 27,676,000
<SECURITIES> 0
<RECEIVABLES> 124,078,000
<ALLOWANCES> 0
<INVENTORY> 22,933,000
<CURRENT-ASSETS> 188,656,000
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0
0
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</TABLE>
