Community Health Systems 2015 Annual Report Download - page 137

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The loans under the Credit Facility bear interest on the outstanding unpaid principal amount at a rate equal to
an applicable percentage plus, at CHS’ option, either (a) an Alternate Base Rate (as defined) determined by
reference to the greater of (1) the Prime Rate (as defined) announced by Credit Suisse or (2) the Federal Funds
Effective Rate (as defined) plus 0.50% or (3) the adjusted London Interbank Offered Rate (“LIBOR”) on such
day for a three-month interest period commencing on the second business day after such day plus 1% or
(b) LIBOR. Loans in respect of the Revolving Facility and the Term A Facility will accrue interest at a rate per
annum initially equal to LIBOR plus 2.75%, in the case of LIBOR borrowings, and Alternate Base Rate plus
1.75%, in the case of Alternate Base Rate borrowings. In addition, the margin in respect of the Revolving Facility
and the Term A Facility will be subject to adjustment determined by reference to a leverage-based pricing grid.
Loans in respect of the Term F Facility will accrue interest at a rate per annum equal to LIBOR plus 3.25%, in
the case of LIBOR borrowings, and Alternate Base Rate plus 2.25%, in the case of Alternate Base Rate
Borrowings. The Term G Loan and Term H Loan will accrue interest at a rate per annum equal to LIBOR plus
2.75% and 3.00%, respectively, in the case of LIBOR borrowings, and Alternate Base Rate plus 1.75% and
2.00%, respectively, in the case of Alternate Base Rate Borrowings. The Term G Loan and the Term H Loan are
subject to a 1.00% LIBOR floor and a 2.00% Alternate Base Rate floor.
The term loan facility must be prepaid in an amount equal to (1) 100% of the net cash proceeds of certain asset
sales and dispositions by the Company and its subsidiaries, subject to certain exceptions and reinvestment rights,
(2) 100% of the net cash proceeds of issuances of certain debt obligations or receivables-based financing by the
Company and its subsidiaries, subject to certain exceptions, and (3) 50%, subject to reduction to a lower
percentage based on the Company’s leverage ratio (as defined in the Credit Facility generally as the ratio of total
debt on the date of determination to the Company’s EBITDA, as defined, for the four quarters most recently
ended prior to such date), of excess cash flow (as defined) for any year, subject to certain exceptions. Voluntary
prepayments and commitment reductions are permitted in whole or in part, without any premium or penalty,
subject to minimum prepayment or reduction requirements.
The borrower under the Credit Facility is CHS. All of the obligations under the Credit Facility are
unconditionally guaranteed by the Company and certain of its existing and subsequently acquired or organized
domestic subsidiaries. All obligations under the Credit Facility and the related guarantees are secured by a
perfected first priority lien or security interest in substantially all of the assets of the Company, CHS and each
subsidiary guarantor, including equity interests held by the Company, CHS or any subsidiary guarantor, but
excluding, among others, the equity interests of non-significant subsidiaries, syndication subsidiaries,
securitization subsidiaries and joint venture subsidiaries.
CHS has agreed to pay letter of credit fees equal to the applicable percentage then in effect with respect to
Eurodollar rate loans under the Revolving Facility times the maximum aggregate amount available to be drawn
under all letters of credit outstanding under the subfacility for letters of credit. The issuer of any letter of credit
issued under the subfacility for letters of credit will also receive a customary fronting fee and other customary
processing charges. CHS is obligated to pay commitment fees of 0.50% per annum (subject to adjustment based
upon the Company’s leverage ratio) on the unused portion of the Revolving Facility.
The Credit Facility contains customary representations and warranties, subject to limitations and exceptions,
and customary covenants restricting the Company’s and its subsidiaries’ ability, subject to certain exceptions, to,
among other things (1) declare dividends, make distributions or redeem or repurchase capital stock, (2) prepay,
redeem or repurchase other debt, (3) incur liens or grant negative pledges, (4) make loans and investments and
enter into acquisitions and joint ventures, (5) incur additional indebtedness or provide certain guarantees,
(6) make capital expenditures, (7) engage in mergers, acquisitions and asset sales, (8) conduct transactions with
affiliates, (9) alter the nature of the Company’s businesses, (10) grant certain guarantees with respect to physician
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