$200,000,000
REVOLVING CREDIT AGREEMENT
DATED AS OF DECEMBER 17 1996
AMONG
FOUNDATION HEALTH CORPORATION,
AS BORROWER,
CITIBANK, N.A.
AS ADMINISTRATIVE AGENT,
AND
CITICORP SECURITIES, INC.,
AS ARRANGER,
and
THE OTHER BANKS AND
FINANCIAL INSTITUTIONS
PARTIES HERETO
T A B L E O F C O N T E N T S
- - - - - - - - - - - - - - -
SECTION PAGE
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . 1
1.02. Computation of Time Periods . . . . . . . . . . . . . . . . . . 19
1.03. Accounting Terms. . . . . . . . . . . . . . . . . . . . . . . . 19
1.04. References. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
2.01. The Revolving Advances. . . . . . . . . . . . . . . . . . . . . 19
2.02. Making the Advances . . . . . . . . . . . . . . . . . . . . . . 20
2.03. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.04. Termination or Reduction of the Commitments . . . . . . . . . . 22
2.05. Repayment of Revolving Advances . . . . . . . . . . . . . . . . 22
2.06. Interest on Revolving Advances. . . . . . . . . . . . . . . . . 22
2.07. Additional Interest on Eurodollar Rate Advances . . . . . . . . 23
2.08. Interest Rate and Facility Fee Determination. . . . . . . . . . 23
2.09. Prepayments of Revolving Advances . . . . . . . . . . . . . . . 24
2.10. Notice of Conversion/Continuation . . . . . . . . . . . . . . . 24
2.11. Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . 25
2.12. Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.13. Payments and Computations . . . . . . . . . . . . . . . . . . . 26
2.14. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.15. Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . 28
2.16. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE III
CONDITIONS OF BORROWING
3.01. Conditions Precedent to the Initial Advances. . . . . . . . . . 29
3.02. Conditions Precedent to Each Revolving Borrowing. . . . . . . . 29
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrower. . . . . . . . . 30
ARTICLE V
COVENANTS OF THE BORROWER
5.01. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . 34
5.02. Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . 36
5.03. Financial Covenants . . . . . . . . . . . . . . . . . . . . . . 40
5.04. Reporting Requirements. . . . . . . . . . . . . . . . . . . . . 40
5.05. Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE VII
THE AGENT AND THE ARRANGER
7.01. Authorization and Action. . . . . . . . . . . . . . . . . . . . 45
7.02. Agent's Reliance, Etc. . . . . . . . . . . . . . . . . . . . . 46
7.03. Citibank and Affiliates . . . . . . . . . . . . . . . . . . . . 46
7.04. Lender Credit Decision. . . . . . . . . . . . . . . . . . . . . 46
7.05. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 47
7.06. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . 47
7.07. The Arranger. . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc.. . . . . . . . . . . . . . . . . . . . . . . . 48
8.02. Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.03. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . 48
8.04. Costs, Expenses and Indemnities . . . . . . . . . . . . . . . . 49
8.05. Right of Set-off. . . . . . . . . . . . . . . . . . . . . . . . 50
8.06. Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . 50
8.07. Assignments and Participations. . . . . . . . . . . . . . . . . 50
8.08. Severability of Provisions. . . . . . . . . . . . . . . . . . . 53
8.09. Independence of Provisions. . . . . . . . . . . . . . . . . . . 53
8.10. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.11. Execution in Counterparts . . . . . . . . . . . . . . . . . . . 53
8.12. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . 53
8.13. Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . 54
8.14. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . 54
ii
8.15. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . 54
iii
SCHEDULES TO REVOLVING CREDIT AGREEMENT
Schedule 1 - Lending Offices, Addresses, Etc.
Schedule 2 - Subsidiaries
EXHIBITS TO REVOLVING CREDIT AGREEMENT
Exhibit A - Assignment and Acceptance
Exhibit B - Form of Revolving Note
Exhibit C - Notice of Revolving Borrowing
Exhibit D - Notice of Conversion/Continuation
Exhibit E - Form of Borrower Counsel's Opinion
Exhibit F - Form of Opinion of Shearman & Xxxxxxxx
xx
REVOLVING CREDIT AGREEMENT
Revolving Credit Agreement, dated as of December 17, 1996, among
Foundation Health Corporation, a Delaware corporation (the "Borrower"), the
banks (the "Banks") listed on the signature pages hereof and the Lenders (as
defined below) from time to time party hereto, Citibank, N.A. ("Citibank"),
as administrative agent (the "Agent") for the Lenders, and Citicorp
Securities, Inc., as arranger (the "Arranger").
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement (as
hereinafter defined), the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms
of the terms defined):
"ACQUISITION" means the purchase of capital stock (or options,
warrants or similar instruments convertible into capital stock) of, or
merger with, purchase of assets of, purchase of convertible debt of, a
Person not an Affiliate of the Borrower or one of its Subsidiaries on the
date of determination, or any combination thereof, in each case involving a
purchase in connection with which the acquiring Person owns 50% or more of
the equity interest of such Person after giving effect to such purchase,
substantially all of such Person's assets, or a line of business or
business of such Person, but excluding purchases of inventory, equipment
and supplies in the ordinary course of business.
"ADVANCE" means a Revolving Advance.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control
with such Person. The term "control" means the possession, directly or
indirectly, of the power, whether or not exercised, to direct or cause the
direction of the management or policies of any Person, whether through
ownership of voting securities, by contract or otherwise.
"AGENT" has the meaning specified in the introduction to this
Agreement.
"AGREEMENT" means this Revolving Credit Agreement, as hereinafter
amended, modified and supplemented from time to time.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Agent, in
substantially the form of Exhibit A hereto.
"BANKS" has the meaning specified in the introduction to this
Agreement.
"BASE RATE" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time which rate per annum shall at
all times be equal to the highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of one percent or, if
there is no nearest 1/4 of one percent, to the next higher 1/4 of one
percent) of (i) 1/2 of one percent per annum PLUS (ii) the rate per
annum obtained by dividing (A) the latest three-week moving average of
secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money
market banks, such three-week moving average (adjusted to the basis of
a year of 360 days) being determined weekly on each Monday (or, if any
such day is not a Business Day, on the next succeeding Business Day)
for the three-week period ending on the previous Friday by the Agent
on the basis of such rates reported by certificate of deposit dealers
to and published by the Federal Reserve Bank of New York or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by the Agent from three New York
certificate of deposit dealers of recognized standing selected by the
Agent, by (B) a percentage equal to 100% MINUS the average of the
daily percentages specified during such three-week period by the Board
of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, but not
limited to, any emergency, supplemental or other marginal reserve
requirement) for the Agent in respect of liabilities consisting of or
including (among other liabilities) three-month U.S. dollar
nonpersonal time deposits in the United States, PLUS (iii) the average
during such three-week period of the annual assessment rates estimated
by the Agent for determining the then current annual assessment
payable by the Agent to the Federal Deposit Insurance Corporation (or
any successor) for insuring U.S. dollar deposits of the Agent in the
United States; and
(c) 1/2 of one percent above the Federal Funds Rate.
Each change in the fluctuating interest rate hereunder shall take effect
simultaneously with the corresponding change in the Base Rate.
"BASE RATE ADVANCE" means a Revolving Advance which bears interest as
provided in Section 2.07(a)(i).
2
"BOARD OF DIRECTORS" of any corporation means the Board of Directors
of such corporation or a duly constituted committee thereof having
authority over matters to which the action proposed to be taken or
authorized relates.
"BORROWER" has the meaning specified in the introduction to this
Agreement.
"BORROWING" means an Auction Borrowing or a Revolving Borrowing.
"BUSINESS DAY" means a day of the year on which banks are not required
or authorized to close in New York City or San Francisco, California and,
if the applicable Business Day relates to any Eurodollar Rate Advances, a
day on which dealings in dollar deposits are carried on in the London
interbank market.
"CAPITAL LEASE" means any lease of property which, in accordance with
generally accepted accounting principles, should be capitalized on the
lessee's balance sheet or disclosed in a footnote thereto as a capitalized
lease.
"CAPITAL LEASE OBLIGATION" means, with respect to any lease of
property which, in accordance with generally accepted accounting
principles, should be capitalized on the lessee's balance sheet or for
which the amount of the assets and liabilities thereunder, if so
capitalized, should be disclosed in a note to such balance sheet, the
amount of the liability which should be so capitalized or disclosed as a
capitalized lease obligation.
"CASH EQUIVALENTS" means (i) United States dollar denominated
certificates of deposit, banker's acceptances and secured repurchase
agreements entered into with domestic and foreign financial institutions
having a long-term rating at the time of acquisition equivalent to BBB or
higher by any Nationally Recognized Statistical Rating Organization and
having a maturity within one year from the date of acquisition; (ii) United
States Treasury bills, notes, bonds, and securities issued by an agency of
the United States government and having a maturity within seven years from
the date of acquisition; (iii) tax-exempt securities having a long-term
rating at the time of acquisition equivalent to BBB or higher by any
Nationally Recognized Statistical Rating Organization or short-term rating
equivalent to MIG-1 by any Nationally Recognized Statistical Rating
Organization, or that are supported by a credit agreement from an
institution whose long- or short-term ratings are as set forth above, and
in each case which have a maturity within seven years from the date of
acquisition; and (iv) United States dollar denominated money market funds
that invest only in "eligible securities" as defined by Rule 2a-7 under the
Investment Company Act of 1940 and otherwise comply with the provisions of
such Rule 2a-7 as to quality, maturity and diversification standards. For
purposes of the foregoing "BBB" and "MIG-1" shall have the meanings
assigned to such ratings by Standard & Poor's Corporation and Xxxxx'x
Investors Service, respectively, as of the date hereof and the comparable
rating terms utilized by any other Nationally Recognized Statistical Rating
Organization.
3
"CHANGE OF CONTROL" means an event or series of events by which:
(i) any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, provided that in no event
shall an existing Borrower employee stock ownership plan or any other
Borrower employee benefit plan which may hereafter be established by the
Borrower be deemed a "person" or part of a "group") is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act), directly or indirectly of 50% or more of the Borrower's then
outstanding voting stock, otherwise than through a transaction consummated
with the prior approval of the Borrower's Board of Directors, a majority of
whose members are Continuing Directors (as defined below); or (ii) during
any period of two consecutive calendar years, individuals who, on the date
hereof, constitute the Borrower's Board of Directors (together with any new
director whose election by the Borrower's Board of Directors or whose
nomination for election by the Borrower's stockholders was approved by a
vote of at least a majority of the directors then still in office who
either were directors on the date hereof or whose election or nomination
for election was previously so approved) cease for any reason to constitute
a majority of the directors then in office. For the purposes of the
foregoing, the term "Continuing Directors" means, as of the date of any
such approval, (1) individuals who, on the date hereof, are members of the
Borrower's Board of Directors and (2) any new director whose election by
the Borrower's Board of Directors or whose nomination for election by the
Borrower's stockholders is approved by a vote of at least a majority of the
directors then still in office who either are directors on the date hereof
or whose election or nomination for election was previously so approved.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COMMITMENT" has the meaning specified in Section 2.01 hereof.
"COMMON STOCK" means the common stock, par value $0.01 per share, of
the Borrower.
"CONSOLIDATED", "CONSOLIDATING" and similar derivatives of each such
word refers to the consolidation of accounts in accordance with generally
accepted accounting principles.
"CONSOLIDATED NET TANGIBLE ASSETS" of any Person means, as of any
date, the sum of the Total Assets of such Person and its subsidiaries on a
Consolidated basis at such date, after deducting therefrom (i) all
liabilities of such Person and its Subsidiaries, (ii) all assets of such
Person and its Subsidiaries that would be classified as intangibles under
generally accepted accounting principles (including, without limitation,
goodwill, organizational expenses, trademarks, trade names, copyrights,
patents, licenses and any rights in any thereof) and (iii) all reserves,
intercompany items or unamortized debt discount and expense not otherwise
included in (i), each such item determined in accordance with generally
accepted accounting principles.
4
"CONVERT", "CONVERSION" and "CONVERTED" each refer to a conversion of
Advances of one Type into Advances of another Type pursuant to Section 2.11
or as is otherwise provided for herein.
"DEBT" of any Person means, without duplication, (i) all indebtedness
of such Person for borrowed money or for the deferred purchase price of
property or services (including, without limitation, all obligations,
contingent or otherwise, of such Person in connection with letter of credit
facilities, acceptance facilities or other similar facilities and in
connection with any agreement to purchase, redeem, exchange, convert or
otherwise acquire for value any capital stock of such Person or any
warrants, rights or options to acquire such capital stock, now or hereafter
outstanding), excluding payables for goods or services incurred in the
ordinary course of business and not overdue for a period of ninety days or
more and deferred compensation arrangements with officers, directors and
employees, (ii) all obligations of such Person evidenced by bonds, notes,
debentures or other similar instruments, (iii) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (iv) all
Capital Lease Obligations of such Person, (v) all obligations, contingent
or otherwise, of such Person in connection with interest rate exchange
agreements, foreign exchange rate agreements and similar agreements
(provided that the obligations under such agreements shall be recorded on a
net basis and marked to market on a current basis), (vi) all Debt of
another Person secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) any lien,
security interest or other charge or encumbrance upon or in property
(including, without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the
payment of such Debt, (vii) all Guaranteed Debt and (viii) if an ERISA
Event shall have occurred with respect to any Plan, the Insufficiency (if
any) of such Plan (or, in the case of a Plan with respect to which an ERISA
Event described in clause (iii) through (vi) of the definition of ERISA
Event shall have occurred, the liability related thereto).
"DEFAULT" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule 1 hereto or in the Assignment and Acceptance pursuant
to which it became a Lender, or such other office of such Lender as such
Lender may from time to time specify to the Borrower and the Agent.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank organized under the
laws of the United States, or any State thereof, and having a combined
capital and surplus of at least $400,000,000; (ii) a savings and loan
association or savings bank organized under the laws of the United States,
or any State thereof, and having a combined capital and surplus of at least
$400,000,000; (iii) a commercial bank organized under
5
the laws of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a political
subdivision of any such country, and having a combined capital and surplus
of at least $400,000,000, provided that such bank is acting through a branch
or agency located in the United States; (iv) a commercial finance company or
finance subsidiary of a corporation organized under the laws of the United
States or any state thereof, and having a Consolidated Net Worth of at least
$400,000,000; (v) any Bank or Lender and any Affiliate of a Bank or Lender;
(vi) any "qualified institutional buyer" as defined in Rule 144A(a)(1) of
the rules and regulations prescribed by the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended; and (vii) any
other Person mutually acceptable to the Borrower and the Agent.
"ENVIRONMENTAL LAW" means any and all statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental restrictions
of any federal, state or local governmental authority within the United
States or any state or territory thereof and which relate to the
environment or the release of any materials into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA AFFILIATE" means any Person that for the purposes of Title IV
of ERISA is a member of the Borrower's controlled group, or under common
control with the Borrower within the meaning of Section 414 of the Code and
the regulations promulgated and rulings issued thereunder.
"ERISA EVENT" means (i) the occurrence of a reportable event, within
the meaning of Section 4043 of ERISA, unless the 30-day notice requirement
with respect thereto has been waived by the PBGC; (ii) the provision by the
administrator of any Plan of a notice of intent to terminate such Plan,
pursuant to Section 4041(a)(2) of ERISA (including any such notice with
respect to a plan amendment referred to in Section 4041(e) of ERISA);
(iii) the cessation of operations at a facility in the circumstances
described in Section 4068(f) of ERISA; (iv) the withdrawal by the Borrower
or an ERISA Affiliate from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (v) the failure by the Borrower or any ERISA Affiliate to make a
payment to a Plan required under Section 302(f)(l) of ERISA, which Section
imposes a lien for failure to make required payments; (vi) the adoption of
an amendment to a Plan requiring the provision of security to such Plan,
pursuant to Section 307 of ERISA; or (vii) the institution by the PBGC of
proceedings to terminate a Plan, pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition which might constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, a Plan.
6
"EUROCURRENCY LIABILITIES" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to each Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule 1 hereto or in the Assignment and Acceptance pursuant
to which it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such Lender as such
Lender may from time to time specify to the Borrower and the Agent.
"EURODOLLAR RATE" means, for any Interest Period for each Eurodollar
Rate Advance comprising part of the same Revolving Borrowing, an interest
rate per annum equal to the rate (rounded upward to the nearest whole
multiple of 1/16 of 1% per annum, if such rate is not such a multiple) per
annum at which deposits in U.S. dollars are offered by the principal office
of the Agent to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such Interest
Period in an amount substantially equal to the Agent's Eurodollar Rate
Advance comprising part of such Revolving Borrowing and for a period equal
to such Interest Period.
"EURODOLLAR RATE ADVANCE" means a Revolving Advance which bears
interest as provided in Section 2.07(a)(ii).
"EURODOLLAR RATE RESERVE PERCENTAGE" of any Lender for any Interest
Period for any Eurodollar Rate Advance means the reserve percentage
applicable during such Interest Period (or if more than one such percentage
shall be so applicable, the daily average of such percentages for those
days in such Interest Period during which any such percentage shall be so
applicable) under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for such
Lender with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"EXEMPT ACQUISITION" means, at any date of determination, any
Acquisition by the Borrower and its Subsidiaries of Persons and/or assets
involved (or to be used) in connection with or related to the Borrower's
and its Subsidiaries' existing or related lines of business; PROVIDED, THAT
(i) the aggregate amount of consideration paid by the Borrower or any of
its Subsidiaries in connection with other Exempt Acquisitions in the
twelve-month period (or shorter period of time as may have elapsed since
the date hereof) immediately preceding such Acquisition PLUS the amount to
be paid with respect to such Acquisition at the date of determination does
not exceed the greater of (A) $100,000,000 and (B) 5% of the Borrower's
Consolidated Net Worth as at the end of the Borrower's Fiscal Quarter ended
most recently before the consummation of
7
such Acquisition, (ii) any Acquisition involving a merger to which the
Borrower is a party must provide that the Borrower is the surviving
corporation in such merger and (iii) immediately before and after giving
effect to the consummation of each such Acquisition, no Default has occurred
and is continuing or will exist.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by
it.
"FISCAL QUARTER" means, with respect to any Person, a fiscal quarter
of such Person.
"FISCAL YEAR" means, with respect to any Person, a fiscal year of such
Person.
"FIXED CHARGE COVERAGE RATIO" means, with respect to any Person as at
the end of any period, the ratio of (i) such Person's Consolidated Net
Income (the amount of such Consolidated Net Income, in the case of the
Borrower, to be calculated by adding back thereto (to the extent deducted
therefrom) up to $125,000,000 of restructuring charges incurred by the
Borrower in the Borrower's 1995 Fiscal Year) PLUS Interest Expense PLUS Tax
Expense PLUS Operating Lease Rentals, in each case for such period, to
(ii) such Person's Fixed Charges for such period.
"FIXED CHARGES" means, for any period and without duplication, the sum
of (i) Interest Expense and fees paid on, and amortization of debt discount
in respect of, all Debt (including the interest portion of rentals under
Capital Leases during such period) PLUS (ii) Operating Lease Rentals paid
during such period PLUS (iii) the aggregate principal amount of all Debt
(including the principal portion of rentals under Capital Leases) paid
during such period (excluding (a) voluntary prepayments of principal not
required under the loan documents relating to such Debt, (b) any contingent
portion of the deferred purchase price incurred in connection with any
Acquisition and (c) the principal portion of any one-time repayments of
Indebtedness required to be made as a result of a change of control in
connection with any Acquisition) PLUS (iv) the aggregate amount of all cash
dividends paid by the Borrower during such period.
"FUNDED DEBT" means (i) Debt under this Agreement with respect to
Revolving Advances and (ii) all other Debt which matures more than one year
from the date of creation or matures within one year from such date but is
renewable or extendible, at the option of the debtor, to a date more than
one year from such date or is outstanding under a revolving credit or
similar agreement which obligates the lender or lenders to extend credit
during a period of more than one year from such date.
8
"GUARANTEED DEBT" of any Person means all Debt referred to in clause
(i), (ii), (iii), (iv) or (v) of the definition of "Debt" in this Section
1.01 guaranteed directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person through an
agreement (i) to pay or purchase such Debt or to advance or supply funds
for the payment or purchase of such Debt, (ii) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily
for the purpose of enabling the debtor to make payment of such Debt or to
assure the holder of such Debt against loss, (iii) to supply funds to, or
in any other manner invest in, the debtor (including any agreement to pay
for property or services irrespective of whether such property is received
or such services are rendered) or (iv) otherwise to assure a creditor
against loss.
"HAZARDOUS MATERIALS" means any flammable materials, explosives,
radioactive materials, hazardous materials, hazardous wastes, hazardous or
toxic substances, infectious wastes, or related or similar materials,
asbestos or any material containing asbestos, or any other substance or
material as so defined and regulated by any Federal, state or local
environmental law, ordinance, rule or regulation, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (42 U.S.C. Sections 9601, ET SEQ.), the
Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections
1801, ET SEQ.), RCRA, and the regulations adopted and publications
promulgated pursuant thereto.
"HMO" means a health maintenance organization doing business as such
(or required to qualify or to be licensed as such) under HMO Regulations.
"HMO EVENT" means material non-compliance by the Borrower or any of
its Material Subsidiaries with any of the terms and provisions of the HMO
Regulations pertaining to fiscal soundness, solvency or financial
condition; or the assertion in writing, after the date hereof, by an HMO
Regulator that it intends to take administrative action against the
Borrower or any of its Material Subsidiaries to revoke or modify any
material contract of insurance, license, charter or permit, or to enforce
the fiscal soundness, solvency or financial provisions or requirements of
the HMO Regulations against any of such entities as a result of any material
non-compliance therewith.
"HMO REGULATIONS" means all laws, regulations, directives and
administrative orders applicable under federal or state law to HMO's as
such.
"HMO REGULATOR" means any Person charged with the administration,
oversight or enforcement of an HMO Regulation.
"HMO SUBSIDIARY" means any Subsidiary of the Borrower that is an HMO
at the time of determination.
"INSUFFICIENCY" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
9
"INSURANCE COMPANY" means an organization licensed under the Insurance
Regulations to conduct insurance operations (or an organization required to
be licensed as such).
"INSURANCE REGULATION" means any law, regulation, rule, directive or
order applicable to an Insurance Company as such.
"INSURANCE REGULATOR" means any Person charged with the
administration, oversight or enforcement of any Insurance Regulation.
"INSURANCE SUBSIDIARY" means any Subsidiary of the Borrower that is an
Insurance Company at the time of determination.
"INTEREST EXPENSE" of any Person for any period means the aggregate
amount of interest paid, accrued or scheduled to be paid or accrued in
respect of any Debt (including the interest portion of rentals under
Capital Leases) and all but the principal component of payments in respect
of conditional sales, equipment trust or other title retention agreements
or under a Capital Lease paid, accrued or scheduled to be paid or accrued
by such Person during such period, in each case determined in accordance
with generally accepted accounting principles and excluding periodic
maintenance, insurance, taxes and similar charges not properly
characterized as interest expense under generally accepted accounting
principles.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance comprising
part of the same Revolving Borrowing, the period commencing on the date of
such Eurodollar Rate Advance or the date of Conversion of any Base Rate
Advance into such Eurodollar Rate Advance or the date of continuation of
any Eurodollar Rate Advance as an Eurodollar Rate Advance and ending on the
last day of the period selected by the Borrower pursuant to the provisions
below, and thereafter, each subsequent period commencing on the last day of
the immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be 1, 2, 3, 4, or 6 months, in
each case as the Borrower may select in a Notice of Revolving Borrowing
and/or a Notice of Conversion/Continuation for such Eurodollar Rate
Advance; PROVIDED, HOWEVER, that:
(i) the Borrower may not select any Interest Period which ends
after the Termination Date;
(ii) Interest Periods commencing on the same date for Eurodollar
Rate Advances comprising part of the same Revolving Borrowing shall be
of the same duration;
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, PROVIDED, HOWEVER, that if such extension would cause
the last day of such Interest
10
Period to occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding Business Day;
and
(iv) the Borrower may not have more than twelve Eurodollar Rate
Borrowings outstanding at any given time.
"INVESTMENT" means, with respect to any Person, (i) any amount paid by
such Person, directly or indirectly, or any transfer of property by such
Person, directly or indirectly (such amount to be the fair market value of
such property at the time of transfer), to any other Person for capital
stock of, or as a capital contribution to any other Person, or for all or
substantially all of the assets of such Person or a line of business or
businesses owned by such Person, and (ii) any direct or indirect loan or
advance to any other Person.
"IRS" means the Internal Revenue Service or any successor thereto.
"LEASEHOLDS" means all of the right, title and interest of the
Borrower or any of its Subsidiaries in, to and under any leases, licenses
or other agreements granting rights to enter, occupy or use any land,
improvements or fixtures (to the extent interests arise therein under the
real property law of the jurisdiction where located).
"LENDERS" means the Banks listed on the signature pages hereto and
each Eligible Assignee that becomes a party hereto pursuant to Section
8.07.
"LOAN DOCUMENTS" means this Agreement and the Notes, in each case as
amended, supplemented or otherwise modified from time to time.
"MAJORITY LENDERS" means at any time Lenders owed more than 66-2/3% of
the then aggregate unpaid principal amount of the Revolving Advances owing
to Lenders, or, if no such principal amount is then outstanding, Lenders
having more than 66-2/3% of the Commitments.
"MATERIAL ADVERSE CHANGE" means a material adverse change in the
business, condition (financial or otherwise) or in the results of
operations of the Borrower and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means, when referring to the taking of an
action or the omission to take an action, that such action, if taken, or
omission, would have a material adverse effect on the business, condition
(financial or otherwise) or results of operations of the Borrower and its
Subsidiaries taken as a whole.
"MATERIAL SUBSIDIARY" means each Subsidiary that (i) for the most
recent Fiscal Year of the Borrower, accounted for more than 5% of the
Consolidated revenues of the Borrower or (ii) as at the end of such fiscal
year, was the owner, directly or indirectly, of more than 5% of the
Consolidated assets of the Borrower, all as shown on its Consolidated
financial statements for such Fiscal Year, PROVIDED that in the case of a
Subsidiary acquired during a Fiscal Year, clause (i) shall not be
applicable until
11
the following Fiscal Year and clause (ii) shall be determined on a pro forma
basis in the case of such Subsidiary, giving effect to such acquisition as
if it occurred at the end of such Fiscal Year.
"MOODY'S" means Xxxxx'x Investor Service, Inc.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any
of the preceding five plan years made or accrued an obligation to make
contributions, such plan being maintained pursuant to one or more
collective bargaining agreements.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, which (i) is maintained for employees of the
Borrower or an ERISA Affiliate and at least one Person other than the
Borrower and its ERISA Affiliates or (ii) was so maintained and in respect
of which the Borrower or any ERISA Affiliate could have liability under
Section 4064 or 4069 of ERISA in the event such plan has been or were to be
terminated.
"NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION" means Xxxxx'x,
S&P, Duff & Xxxxxx Inc., Xxxxx Investors Service Inc., International Bank
Center of Atlanta or Xxxxxxxx Bank Watch, Inc.
"NET CASH PROCEEDS" means, with respect to any sale of equity, the
cash proceeds thereof (including, without limitation, all deferred cash
proceeds) received by the Borrower, net of (i) brokerage and underwriting
commissions and other fees and expenses related thereto and (ii) provision
for all taxes payable as a result of such sale.
"NET INCOME" means, for any period, net income (or loss) after taxes
and extraordinary items determined in accordance with generally accepted
accounting principles, and, to the extent not deducted therefrom, net
income (or loss) after taxes and extraordinary items determined in
accordance with generally accepted accounting principles associated with
the portion of capital stock of any Subsidiary that is not owned, directly
or indirectly, by the Borrower.
"NET WORTH" of any Person on any date of determination means an amount
equal to the excess of Total Assets over Total Liabilities of such Person.
"NOTES" means the Revolving Notes.
"NOTICE OF REVOLVING BORROWING" has the meaning ascribed thereto in
Section 2.02 hereof.
"NOTICE OF CONVERSION/CONTINUATION" means a written notice,
substantially in the form of Exhibit D hereto, delivered in accordance
with, and within the period specified in, Section 2.10 hereof, wherein the
Borrower elects to Convert or continue
12
Revolving Advances and/or elects an Interest Period and Type for such
Converted or continued Revolving Advances.
"OBLIGATIONS" means all obligations of the Borrower now or hereafter
existing under the Loan Documents, whether for principal, interest, fees,
expenses, indemnification or otherwise, including without limitation, all
amounts accruing during a proceeding under the United States Bankruptcy
Code and the amounts payable to Agent pursuant to the letter agreement
referred to in Section 2.03(b).
"OPERATING LEASE" means any noncancellable lease of property having a
term more than one year (real, personal or mixed) which lease does not
constitute a Capital Lease.
"OPERATING LEASE RENTALS" means all rents and other amounts paid or
accrued by the Borrower and its Subsidiaries under and with respect to
Operating Leases during and for the relevant period, but excluding periodic
maintenance, insurance, taxes and similar charges not properly
characterized as rent under generally accepted accounting principles.
"OTHER TAXES" has the meaning specified in Section 2.14.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERMITTED ACQUISITIONS" means Acquisitions by the Borrower and its
Subsidiaries of Persons and/or assets involved (or to be used) in
connection with or related to the Borrower's and its Subsidiaries' existing
or related lines of business PROVIDED, that (i) any Acquisition involving a
merger to which the Borrower is a party must provide that the Borrower is
the surviving corporation in such merger, (ii) immediately before and after
giving effect to the consummation of each Acquisition, no Default has
occurred and is continuing or will exist; and (iii) the Borrower shall have
complied with the requirements of Section 5.05 if applicable.
"PERMITTED INVESTMENTS" means (i) Cash Equivalents; (ii) commercial
paper issued by companies incorporated in the United States and having a
short-term rating at the time of acquisition equivalent to A-1 or higher by
any Nationally Recognized Statistical Rating Organization and maturing
within 270 days from the date of acquisition; (iii) bonds and notes issued
by companies incorporated in the United States and having a long-term
rating at the time of acquisition equivalent to BBB or higher by any
Nationally Recognized Statistical Rating Organization and having a maturity
within seven years from the date of acquisition; (iv) auction rate
preferred stock issued by companies incorporated in the United States and
having a long-term rating at the time of acquisition equivalent to BBB or
higher by any Nationally Recognized Statistical Rating Organization;
(v) obligations of any foreign government or authority of any country in
which the Borrower or its Subsidiaries conducts business, which obligations
have a rating at the time of acquisition equivalent to A or higher by any
Nationally Recognized Statistical Rating Organization and which mature
within seven years from the date of acquisition; (vi) publicly traded
common and
13
preferred stock issued by companies incorporated in the United States and
which at the time of acquisition either (a) has outstanding a series of
bonds or notes which have a long-term rating equivalent to BBB or higher by
any Nationally Recognized Statistical Rating Organization or (b) (i) is in
the same or a related line of business as the Borrower or any of its
Material Subsidiaries; (ii) has been subject to the requirements of Section
12 or 15(d) of the Securities Exchange Act of 1934 and has filed all the
material required to be filed pursuant to Sections 13, 14 or 15(d) thereof
for the preceding twelve calendar months; and (iii) has not, nor has any of
its consolidated subsidiaries, since the end of the last fiscal year for
which certified financial statements were included in a report filed
pursuant to the Securities Exchange Act of 1934, (A) failed to pay any
dividend or sinking fund installment on preferred stock or (B) defaulted on
any Indebtedness which could, with the giving of notice or lapse of time or
both, result in an amount equal to or greater than 10% of the consolidated
net income of such company, as reported in the most recent certified
financial statements included in a report filed pursuant to the Securities
Exchange Act of 1934, becoming due and payable; PROVIDED, that no more than
4.9% of any class of outstanding equity securities of any company that is
subject to the reporting requirements of the Securities Exchange Act of 1934
may be held by the Borrower and its Subsidiaries at any one time; and (vii)
other Investments not otherwise described above acquired as a result of a
Permitted Investment, Permitted Acquisition or Exempt Acquisition so long as
such Investment was an Investment of the acquired company on the date such
company was acquired by the Borrower or any of its Subsidiaries and was not
made at the request or instigation of the Borrower or any of its
Subsidiaries. Notwithstanding the foregoing, (a) any Subsidiary licensed in
any jurisdiction to transact life, accident, health, disability or workers'
compensation insurance business may make Investments otherwise permitted
under clauses (i), (ii), (iii), and (v) above having maturity dates later
than those specified under such clauses so long as any such Investment by
any such Subsidiary is rated at the time of acquisition "A" or better by a
Nationally Recognized Statistical Rating Organization, (b) at no time may
more than 5% of the aggregate of all Investments under clauses (i), (ii),
(iii), (iv), (v), (vi) and (vii) represent the securities of any single
Person other than the United States Federal Government or agencies thereof
or issuers whose obligations are guaranteed by the United States Federal
Government or an agency thereof (provided that Investments in the securities
of mutual funds shall not be so limited as long as the mutual fund does not
invest more than 5% of its assets in the securities of any single Person),
(c) at no time may more than 15% of the aggregate of all Investments under
clauses (i), (ii), (iii), (iv), (v), (vi) and (vii) represent Investments
under clause (vi), (d) at no time may more than 5% of the aggregate of all
Investments under clauses (i), (ii), (iii), (iv), (v), (vi) and (vii)
represent Investments under clause (vii), and (e) any Investments permitted
by clause (vii) and not otherwise permitted by clauses (i), (ii), (iii),
(iv), (v) or (vi) shall be disposed of within one year of the date that such
company was acquired by the Borrower or such Subsidiary. For purposes of
xxx xxxxxxxxx, "X", "X-0" and "BBB" shall have the meanings assigned to
such terms by S&P as of the date hereof and the comparable rating terms
utilized by any other Nationally Recognized Statistical Rating Organization.
14
"PERMITTED LIEN" means any of the following:
(i) liens for taxes, assessments or governmental charges or
levies not yet due and payable;
(ii) inchoate liens imposed by law but not yet having attached to
any property, such as materialmen's, mechanics', carriers', worker's,
employees' and repairmen's liens and other similar liens arising in
the ordinary course of the Borrower's or any of its Subsidiaries'
business securing obligations which are not overdue for a period of
more than ninety (90) days;
(iii) liens imposed by law which have attached to property
but which (1) secure obligations which do not exceed $250,000 in the
aggregate for all such liens described in this clause (iii), and (2)
which in all cases are being contested in good faith and for which
adequate reserves have been made in accordance with generally accepted
accounting principles;
(iv) pledges or deposits to secure obligations under workmen's
compensation laws or similar legislation or to secure public or
statutory obligations of the Borrower or any of its Subsidiaries or
security deposits (on customary terms) to secure performance under
Leaseholds and under other contracts entered into in the ordinary
course;
(v) purchase money liens or purchase money security interests
upon or in any property; PROVIDED, HOWEVER, that no lien or security
interest referred to in this clause (v) shall extend to or cover any
property other than the related property being acquired or leased (as
the case may be) or shall have been incurred in connection with any
Acquisition or at the request or instigation of the Borrower or any of
its Subsidiaries; and PROVIDED, FURTHER, the Indebtedness or other
obligation secured by such purchase money liens or purchase money
security interests shall not, in any event, encumber any capital stock
of the Borrower or any of the Borrower's Subsidiaries;
(vi) liens and interests of the lessor of the type customarily
arising under any lease or agreement to lease with respect to property
located on the premises covered by such lease;
(vii) liens existing on the date hereof;
(viii) any lien or security interest on property or assets
acquired by the Borrower or its Subsidiaries after the date hereof,
PROVIDED, THAT, such lien or security interest existed on the date
such property or assets were acquired and was not incurred at the
request or instigation of the Borrower or any of its Subsidiaries and
PROVIDED, FURTHER, that such lien or security interest shall not, in
any event, encumber any capital stock of the Borrower or any of the
Borrower's Subsidiaries;
15
(ix) liens on the property or assets of any Subsidiary of the
Borrower granted in favor of any HMO Subsidiary or Insurance
Subsidiary to secure intercompany loans or advances made by such HMO
Subsidiary or Insurance Subsidiary to finance construction of new
facilities, where such liens are granted in order to enable such HMO
Subsidiary or Insurance Subsidiary to maintain compliance with, or to
preserve the level of its tangible net equity for purposes of, the HMO
Regulations or Insurance Regulations;
(x) liens on the property or assets of Subsidiaries of the
Borrower not otherwise described in clauses (i) through (ix) above
securing obligations not in excess of $65,000,000; and
(xi) any liens granted in connection with the refinancing or
extension of any of the indebtedness underlying the liens permitted
under clauses (i) through (x) above; PROVIDED that such liens replace
or renew such permitted liens but do not extend them to other
property.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture or other entity, or a government or any political subdivision
or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
"PREFERRED STOCK" of any Person means the capital stock of such Person
of any class or classes (however designated) that ranks prior, as to the
payment of dividends or as to the distribution of assets upon any voluntary
or involuntary liquidation, dissolution or winding up of such Person, to
shares of capital stock of any other class of such Person.
"PUBLIC NOTES" means the promissory notes issued by the Borrower
pursuant to, and as described in, the indenture referred to in the
Borrower's registration statement on Form S-3 (registration statement
number 33-61684), and on Form T-1 (registration statement number 22-24210),
in each case as amended, supplemented and modified from time to time.
"RCRA" means the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901 ET SEQ. (1976) and the regulations adopted pursuant thereto,
as amended from time to time.
"REAL PROPERTY" means all of the right, title and interest of the
Borrower and any of its Subsidiaries in and to land, improvements and
fixtures (to the extent interests therein arise under the real property law
of the jurisdiction where located).
"REGISTER" has the meaning specified in Section 8.07(c).
"RESPONSIBLE OFFICER" means, with respect to any certificate, report
or notice to be delivered or given hereunder, unless the context otherwise
requires, the
16
president, chief executive officer or chief financial officer or other
officer who in the normal performance of his or her operational duties
would have knowledge of the subject matter relating to such certificate,
report or notice.
"REVOLVING ADVANCE" means an advance by a lender to the Borrower as
part of a Revolving Borrowing and refers to a Base Rate Advance or a
Eurodollar Advance, each of which shall be a "TYPE" of Revolving Advance.
"REVOLVING BORROWING" means a borrowing consisting of simultaneous
Revolving Advances of the same Type made by each of the Lenders pursuant to
Section 2.01.
"REVOLVING NOTE" means a promissory note of the Borrower payable to
the order of any Lender, in substantially the form of Exhibit B-1 hereto,
evidencing the aggregate indebtedness of the Borrower to such Lender
resulting from the Revolving Advances made by such Lender.
"SINGLE-EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, which (i) is maintained for employees of the
Borrower or an ERISA Affiliate and no Person other than the Borrower and
its ERISA Affiliates or (ii) was so maintained and in respect of which the
Borrower or an ERISA Affiliate could have liability under Section 4069 of
ERISA in the event such plan has been or were to be terminated.
"S&P" means Standard & Poor's Corporation.
"SOLVENT" means, with respect to any Person on a particular date, that
on such date (i) the fair value of the property of such Person is greater
than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (ii) the present fair salable value
of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (iii) such Person is able to pay its debts and
other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (iv) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay as such debts and liabilities mature, (v) such
Person is not engaged in a business or a transaction, and is not about to
engage in a business or a transaction, for which such Person's property
would constitute unreasonably small capital after giving due consideration
to the prevailing practice in the industry in which such Person is engaged,
and (vi) such Person is solvent under all applicable HMO Regulations. In
computing the amount of contingent liabilities at any time, it is intended
that such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, trust or estate of which (or in which) more than 50% of:
17
(i) the outstanding capital stock having ordinary voting power
to elect a majority of the Board of Directors of such corporation
(irrespective of whether or not at the time capital stock of any other
class or classes of such corporation shall or might have voting power
upon the occurrence of any contingency),
(ii) the interest in the capital or profits of such partnership
or joint venture, or
(iii) the beneficial interest of such trust or estate,
is at the time directly or indirectly owned by such Person, by such Person
and one or more of its other Subsidiaries, or by one or more of such
Person's other Subsidiaries.
"TAX EXPENSE" of any Person for any period means the aggregate amount
of taxes (other than sales or use taxes) paid or accrued by such Person
during such period, determined in accordance with generally accepted
accounting principles.
"TERMINATION DATE" means the day 364 days after the date hereof or
such earlier date of termination in whole of the Commitments pursuant to
Section 6.01 hereof or otherwise.
"TOTAL ASSETS" of any Person means all property, whether real,
personal, tangible, intangible or otherwise, that, in accordance with
generally accepted accounting principles, should be included in determining
total assets as shown on the assets portion of a balance sheet of such
Person.
"TOTAL CAPITALIZATION" of any Person, as of the date of determination,
means the sum of such Person's Funded Debt plus Net Worth.
"TOTAL DEBT/TOTAL CAPITALIZATION RATIO" of any Person means, at any
date of determination, the ratio that such Person's Funded Debt at such
date of determination bears to such Person's Total Capitalization.
"TOTAL LIABILITIES" of any Person at any date means all obligations
that, in accordance with generally accepted accounting principles, would be
included in determining total liabilities as shown on the liabilities side
of a balance sheet of such Person at such date.
"WELFARE PLAN" means a welfare plan, as defined in Section 3(1) of
ERISA, which section covers plans, funds and programs providing (among
other things) medical, surgical, or hospital care or benefits, or benefits
in the event of sickness, accident, disability, death or unemployment,
together with plans which provide worker's compensation, unemployment
compensation or disability insurance benefits.
"WITHDRAWAL LIABILITY" has the meaning given such term under Part I of
Subtitle E of Title IV of ERISA.
18
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with United States
generally accepted accounting principles consistently applied and consistent
with those applied in the preparation of the financial statements referred to in
Section 4.01(f). If any changes in accounting principles from those used in the
preparation of the financial statements referred to in Section 4.01(f) are
hereafter occasioned by promulgation of rules, regulations, pronouncements or
opinions by or are otherwise required by the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions), and any of such changes results in
a change in the method of calculation of, or affects the results of such
calculation of, any of the financial covenants, standards or terms found herein,
then the parties hereto agree to enter into and diligently pursue negotiations
in order to amend such financial covenants, standards or terms so as to
equitably reflect such changes, with the desired result that the criteria for
evaluating the Borrower's financial condition and results of operations shall be
the same after such changes as if such changes had not been made; PROVIDED,
HOWEVER, that if the parties, after such negotiations, cannot reach agreement on
amendments to such financial covenants, standards or terms, then the Borrower's
compliance or noncompliance therewith shall be determined as if such changes in
accounting principles had not occurred.
SECTION 1.04. REFERENCES. Unless otherwise indicated, all references
to Sections, subparagraphs, subsections, headings, Exhibits and Schedules made
herein are references to the Sections, subparagraphs, subsections, headings,
Exhibits and Schedules hereof or hereto.
SECTION 1.05. FAS 115. In calculating the Borrower's Consolidated
Net Worth for the first three Fiscal Quarters of the Borrower's Fiscal Year
(including, without limitation, for the purposes of Section 5.03(a)),
fluctuations (both positive and negative) resulting from the Borrower marking to
market (the "Xxxx-to-Market Effect") its Investments as required by FAS 115
shall not be taken into account. The Xxxx-to-Market Effect shall be fully
reflected in calculating the Borrower's Consolidated Net Worth as at the end of
the Borrower's fourth Fiscal Quarter in each Fiscal Year.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. THE REVOLVING ADVANCES. Each Lender severally agrees,
on the terms and conditions hereinafter set forth, to make Revolving Advances to
the Borrower from time to time on any Business Day during the period from the
date hereof until the Termination Date in an aggregate amount not to exceed at
any time outstanding the amount set forth opposite such Lender's name on the
signature pages hereof or, if such Lender has
19
entered into an Assignment and Acceptance, set forth for such Lender in the
Register maintained by the Agent pursuant to Section 8.07(c), as such amount
may be reduced pursuant to Section 2.05 (such Lender's "Commitment"). Each
Revolving Borrowing shall be in an aggregate amount not less than $5,000,000
or an integral multiple of $1,000,000 in excess thereof and shall consist of
Revolving Advances of the same Type made on the same day by the Lenders ratably
according to their respective Commitments. Within the limits of each Lender's
Commitment, the Borrower may from time to time borrow under this Section 2.01,
prepay pursuant to Section 2.09 and reborrow under this Section 2.01.
SECTION 2.02. MAKING THE ADVANCES. (a) Each Revolving Borrowing
shall be made on notice, given not later than 1:00 P.M. (New York City time) on
the third Business Day prior to the date of the proposed Revolving Borrowing in
the case of a Revolving Advance consisting of Eurodollar Rate Advances, or the
first Business Day prior to the date of the proposed Revolving Borrowing in the
case of a Revolving Borrowing consisting of Base Rate advances, by the Borrower
to the Agent, which shall give to each Lender prompt notice thereof by facsimile
or telex. Each such notice of a Revolving Borrowing (a "Notice of Revolving
Borrowing") shall be by facsimile or telex, confirmed immediately in writing, in
substantially the form of Exhibit C-1 hereto, specifying therein the requested
(i) date of such Borrowing, (ii) Type of Advances comprising such Revolving
Borrowing, (iii) aggregate amount of such Revolving Borrowing, and (iv) in the
case of a Revolving Borrowing consisting of Eurodollar Rate Advances, initial
Interest Period for each such Advance. Each Lender shall, before 1:00 P.M. (New
York City time) on the date of such Revolving Borrowing, make available for the
account of its Applicable Lending Office to the Agent at its address referred to
in Section 8.02, in same day funds, such Lender's ratable portion of such
Revolving Borrowing. Upon the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the Agent
will make such funds available to the Borrower at the Agent's aforesaid address.
(b) Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrower may not select Eurodollar Rate Advances for any
Revolving Borrowing if the aggregate amount of such Borrowing is less than
$1,000,000 multiplied by the number of Lenders;
(ii) if any Lender shall, at least one Business Day before the
date of any requested Revolving Borrowing, notify the Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other
governmental authority asserts that it is unlawful, for such Lender or its
Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances
hereunder, the right of the Borrower to select Eurodollar Rate Advances for
such Revolving Borrowing or any subsequent Revolving Borrowing shall be
suspended until such Lender shall notify the Agent that the circumstances
causing such suspension no longer exist, and each Revolving Advance
comprising such Revolving Borrowing shall be a Base Rate Advance; and
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(iii) if the Majority Lenders shall, at least one Business
Day before the date of any requested Revolving Borrowing, notify the Agent
that the Eurodollar Rate for Eurodollar Rate Advances comprising such
Revolving Borrowing will not adequately reflect the cost to such Majority
Lenders of making, funding or maintaining their respective Eurodollar Rate
Advances for such Revolving Borrowing, the right of the Borrower to select
Eurodollar Rate Advances for such Revolving Borrowing or any subsequent
Revolving Borrowing shall be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist, and each Revolving Advance comprising such Revolving
Borrowing shall be a Base Rate Advance.
(c) Each Notice of Revolving Borrowing shall be irrevocable and
binding on the Borrower. In the case of any Revolving Borrowing which the
related Notice of Revolving Borrowing specifies is to be comprised of Eurodollar
Rate Advances, the Borrower shall indemnify each Lender against any loss
(excluding loss of anticipated profits), cost or expense incurred by such Lender
as a result of any failure to fulfill on or before the date specified in such
Notice of Revolving Borrowing for such Revolving Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss,
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Revolving Advance to
be made by such Lender as part of such Revolving Borrowing when such Revolving
Advance, as a result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Lender prior
to the date of any Revolving Borrowing that such Lender will not make available
to the Agent such Lender's ratable portion of such Revolving Borrowing, the
Agent may assume that such Lender has made such portion available to the Agent
on the date of such Revolving Borrowing in accordance with subsection (a) of
this Section 2.02 and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to the
extent that such Lender shall not have so made such ratable portion available to
the Agent, such Lender and the Borrower severally agree to repay to the Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Agent, at (i) in the case of the Borrower,
the interest rate applicable at the time to Revolving Advances comprising such
Revolving Borrowing and (ii) in the case of such Lender, the Federal Funds Rate.
If such Lender shall repay to the Agent such corresponding amount, such amount
so repaid shall constitute such Lender's Advance as part of such Revolving
Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Revolving Advance to be
made by it as part of any Revolving Borrowing shall not relieve any other Lender
of its obligation, if any, hereunder to make its Revolving Advance on the date
of such Borrowing, but no Lender shall be responsible for the failure of any
other Lender to make the Revolving Advance to be made by such other Lender on
the date of any Revolving Borrowing. Any Lender that fails to make a Revolving
Advance on the occasion of any Borrowing with respect to which all conditions to
lending have been satisfied in accordance with the terms of this Agreement shall
be in breach of this Agreement.
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SECTION 2.03. FEES. (a) FACILITY FEE. The Borrower agrees to pay
to the Agent for the account of each Lender a facility fee on the aggregate
amount of such Lender's Commitment from the date hereof in the case of each Bank
and from the effective date specified in the Assignment and Acceptance pursuant
to which it became a Lender in the case of each other Lender until the
Termination Date, at a rate per annum equal to .100%, payable in arrears on the
last day of each September, December, March and June during the term of such
Lender's Commitment, commencing December 31, 1996, and on the Termination Date.
(b) FEES. The Borrower agrees to pay to Citibank the fees and other
consideration in such amounts and payable at such times as are specified in the
letter agreement dated December , 1996 between the Borrower and Citibank.
SECTION 2.04. TERMINATION OR REDUCTION OF THE COMMITMENTS. The
Borrower shall have the right, upon at least three Business Days' notice to the
Agent, to terminate in whole or reduce ratably in part the unused portions of
the respective Commitments of the Lenders, PROVIDED that each partial reduction
shall be in the aggregate amount of $1,000,000 or an integral $1,000,000
multiple in excess thereof.
SECTION 2.05. REPAYMENT OF REVOLVING ADVANCES. The Borrower shall
repay to the Agent for the ratable account of the Lenders on the Termination
Date the principal amount of each Revolving Advance made by each Lender in
accordance with the Revolving Note to the order of such Lender.
SECTION 2.06. INTEREST ON REVOLVING ADVANCES. (a) SCHEDULED
INTEREST. The Borrower shall pay interest on the unpaid principal amount of
each Revolving Advance made by each Lender from the date of such Revolving
Advance until such principal amount shall be paid in full, at the following
rates per annum:
(i) BASE RATE ADVANCES. During such periods as such Revolving
Advance is a Base Rate Advance, a rate per annum equal at all times to the
Base Rate in effect from time to time, payable quarterly in arrears on the
last day of each September, December, March, and June during such periods
and on the date such Base Rate Advance shall be Converted or paid in full.
(ii) EURODOLLAR RATE ADVANCES. During such periods as such
Revolving Advance is a Eurodollar Rate Advance, a rate per annum equal at
all times during each Interest Period for such Revolving Advance to the sum
of (x) the Eurodollar Rate for such Interest Period for such Revolving
Advance PLUS (y) .250%, payable in arrears on the last day of such Interest
Period and, if such Interest Period has a duration of more than three
months, on each day which occurs during such Interest Period every three
months from the first day of such Interest Period. On the last day of each
Interest Period, the unpaid principal balance thereof shall automatically
become and bear interest as a Base Rate Advance, except to the extent that
the Borrower has elected to pay interest on all or any portion of such
amount for a new Interest Period commencing on such day in accordance with
Section 2.10 and by timely delivering a Notice of Conversion/Continuation
pursuant to Section 2.10.
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(b) DEFAULT INTEREST. The Borrower shall pay interest on the unpaid
principal amount of each Revolving Advance that is not paid when due and on the
unpaid amount of all interest, fees and other amounts payable hereunder that is
not paid when due, payable on demand, at a rate per annum equal at all times to
(i) in the case of any amount of principal, the greater of (x) 2% per annum
above the rate per annum required to be paid on such Revolving Advance
immediately prior to the date on which such amount became due and (y) 2% per
annum above the Base Rate in effect from time to time and (ii) in the case of
all other amounts, 2% per annum above the Base Rate in effect from time to time.
SECTION 2.07. ADDITIONAL INTEREST ON EURODOLLAR RATE ADVANCES. The
Borrower shall pay to each Lender, so long as such Lender shall be required
under regulations of the Board of Governors of the Federal Reserve System to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities, additional interest on the unpaid principal
amount of each Eurodollar Rate Advance of such Lender, from the date of such
Revolving Advance until such principal amount is paid in full, at an interest
rate per annum equal at all times to the remainder obtained by subtracting
(i) the Eurodollar Rate for the Interest Period for such Revolving Advance from
(ii) the rate obtained by dividing such Eurodollar Rate by a percentage equal to
100% minus the Eurodollar Rate Reserve Percentage of such Lender for such
Interest Period, payable on each date on which interest is payable on such
Revolving Advance. Such additional interest shall be determined by such Lender
and notified to the Borrower through the Agent and any such determination shall
be conclusive and binding for all purposes absent manifest error.
SECTION 2.08. INTEREST RATE AND FACILITY FEE DETERMINATION. (a) The
Agent shall give prompt notice to the Borrower and the Lenders of the applicable
interest rate determined by the Agent for purposes of Section 2.06(a)(i) or
(ii), which shall be binding on the Borrower and Lenders absent manifest error.
(b) If, with respect to any Eurodollar Rate Advances, the Majority
Lenders notify the Agent that the Eurodollar Rate for any Interest Period for
such Advances will not adequately reflect the cost to such Majority Lenders of
making, funding or maintaining their respective Eurodollar Rate Advances for
such Interest Period, the Agent shall forthwith so notify the Borrower and the
Lenders, whereupon
(i) each Eurodollar Rate Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base Rate
Advance, and
(ii) the obligation of the Lenders to make, or to Convert
Revolving Advances into, Eurodollar Rate Advances shall be suspended until
the Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist.
(c) If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the Agent will
forthwith so notify the
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Borrower and the Lenders and such Advances will automatically, on the last day
of the then existing Interest Period therefor, Convert into Base Rate Advances.
(d) On the date on which the aggregate unpaid principal amount of
Revolving Advances comprising any Revolving Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $1,000,000 multiplied by the
number of lenders, such Revolving Advances shall, if they are Eurodollar Rate
Advances, automatically Convert into Base Rate Advances, and on and after such
date the right of the Borrower to Convert such Revolving Advances into
Eurodollar Advances shall terminate.
SECTION 2.09. PREPAYMENTS OF REVOLVING ADVANCES. The Borrower may,
upon at least one Business Day's notice to the Agent in the case of Base Rate
Advances, and three Business Days' notice to the Agent in the case of Eurodollar
Rate Advances, stating the proposed date and aggregate principal amount of the
prepayment, and if such notice is given the Borrower shall, prepay the
outstanding principal amounts of the Advances comprising part of the same
Revolving Borrowing in whole or ratably in part, together with accrued interest
to the date of such prepayment on the principal amount prepaid; PROVIDED,
HOWEVER, that (x) each partial prepayment shall be in an aggregate principal
amount not less than $1,000,000 and in $100,000 integral multiples thereof and
(y) in the case of any such prepayment of a Eurodollar Rate Advance, the
Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant
to Section 8.04(c).
SECTION 2.10. NOTICE OF CONVERSION/CONTINUATION. (a) The Borrower
may on any Business Day, upon delivery of a Notice of Conversion/Continuation
given to the Agent not later than 12:00 P.M. (New York City time) on the third
Business Day prior to the date of the proposed Conversion or continuation and
subject to the other provisions hereof, continue Eurodollar Rate Advances
comprising part of the same Revolving Borrowing as Eurodollar Rate Advances with
the duration of the Interest Periods therefor to be specified in the Notice of
Conversion/Continuation or Convert all Revolving Advances of one Type comprising
part of the same Revolving Borrowing into Revolving Advances of another Type;
PROVIDED, HOWEVER, that any Conversion of Eurodollar Rate Advances into Base
Rate Advances shall be made on, and only on, the last day of the Interest Period
for such Eurodollar Rate Advances, any Conversion of Base Rate Advances into
Eurodollar Rate Advances shall be in an amount not less than the minimum amount
specified in Section 2.02(b) and no Conversion of Base Rate Advances into
Eurodollar Advances shall result in more separate Eurodollar Rate Borrowings
than permitted under the definition of Interest Period in Section 1.01;
PROVIDED, FURTHER, that if an Event of Default has occurred and is continuing,
the Borrower may not Convert any Base Rate Advance into a Eurodollar Rate
Advance and may not continue any Eurodollar Rate Advance as a Eurodollar Rate
Advance and each such Eurodollar Rate Advance shall automatically Convert to a
Base Rate Advance on the last day of the Interest Period for such Eurodollar
Rate Advance. Each such Notice of a Conversion/Continuation shall, within the
restrictions specified above, specify (i) the date of such Conversion, (ii) the
Revolving Advances to be Converted, (iii) if such Conversion is into Eurodollar
Rate Advances, the duration of the Interest Period for each such Revolving
Advance and (iv) the Eurodollar Rate Advances to be continued as Eurodollar Rate
Advances and the duration of the Interest Periods therefor.
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SECTION 2.11. INCREASED COSTS. (a) If, due to either (i) the
introduction of or any change (other than any change by way of imposition or
increase of reserve requirements, in the case of Eurodollar Rate Advances,
included in the Eurodollar Rate Reserve Percentage) in or in the interpretation
of any law or regulation or (ii) the compliance with any guideline or request
hereafter adopted, promulgated or made by any central bank or other governmental
authority (whether or not having the force of law), there shall be any increase
in the cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time to time, upon demand
by such Lender (with a copy of such demand to the Agent), pay to the Agent for
the account of such Lender additional amounts sufficient to compensate such
Lender for such increased cost. A certificate as to the amount of such
increased cost, submitted to the Borrower and the Agent by such Lender, shall be
conclusive and binding for all purposes, absent manifest error.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law, but in each case
promulgated or made after the date hereof) affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender's commitment to lend hereunder and other
commitments of this type or upon the Advances, then, upon demand by such Lender
(with a copy of such demand to the Agent), the Borrower shall immediately pay to
the Agent for the account of such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender or such
corporation in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder or upon the Advances. A
certificate as to such amounts submitted to the Borrower and the Agent by such
Lender shall be conclusive and binding for all purposes, absent manifest error.
(c) Without affecting its rights under Section 2.11(a) or 2.11(b) or
any other provision of this Agreement, each Lender agrees that if there is any
increase in any cost to or reduction in any amount receivable by such Lender
with respect to which the Borrower would be obligated to compensate such Lender
pursuant to Sections 2.11(a) or 2.11(b), such Lender shall use reasonable
efforts to select an alternative Applicable Lending Office which would not
result in any such increase in any cost to or reduction in any amount receivable
by such Lender; PROVIDED, HOWEVER, that no Lender shall be obligated to select
an alternative Applicable Lending Office if such Lender determines that (i) as a
result of such selection such Lender would be in violation of any applicable
law, regulation, treaty, or guideline, or would incur additional costs or
expenses or (ii) such selection would be inadvisable for regulatory reasons or
inconsistent with the interests of such Lender.
SECTION 2.12. ILLEGALITY. Notwithstanding any other provision of
this Agreement, if any Lender shall notify the Agent that the introduction of or
any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for any Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances hereunder, (i) the obligation of the Lenders to make,
or to Convert Revolving Advances into, Eurodollar Rate Advances shall be
suspended until the
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Agent shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist and (ii) the Borrower shall forthwith
prepay in full all Eurodollar Rate Advances of all Lenders then outstanding,
together with interest accrued thereon, unless the Borrower, within five
Business Days of notice from the Agent, Converts all Eurodollar Rate Advances
of all Lenders then outstanding into Base Rate Advances in accordance with
Section 2.10.
SECTION 2.13. PAYMENTS AND COMPUTATIONS. (a) The Borrower shall
make each payment hereunder and under the Notes not later than 1:00 P.M. (New
York City time) on the day when due in U.S. dollars to the Agent at its
address referred to in Section 8.02 in same day funds. The Agent will
promptly thereafter cause to be distributed like funds relating to the
payment of principal or interest or facility fees ratably (other than amounts
payable pursuant to Sections 2.03(b), 2.07, 2.11, 2.14 and 8.04(c)) to the
Lenders for the account of their respective Applicable Lending Offices, and
like funds relating to the payment of any other amount payable to any Lender
to such Lender for the account of its Applicable Lending Office, in each case
to be applied in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 8.07(d), from and after
the effective date specified in such Assignment and Acceptance, the Agent
shall make all payments hereunder and under the Notes in respect of the
interest assigned thereby to the Lender assignee thereunder, and the parties
to such Assignment and Acceptance shall make all appropriate adjustments in
such payments for periods prior to such effective date directly between
themselves.
(b) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder or under
any Note held by such Lender and after expiration of any grace period
specified herein or therein, to charge from time to time against any or all
of the Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate shall be
made by the Agent on the basis of a year of 365 or 366 days, as the case may
be, and all computations of interest based on the Eurodollar Rate or the
Federal Funds rate and of facility fees shall be made by the Agent on the
basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period
for which such interest or facility fees are payable. Each determination by
the Agent of an interest rate hereunder shall be conclusive and binding for
all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or facility
fee, as the case may be; PROVIDED, HOWEVER, that if such extension would
cause payment of interest on or principal of Eurodollar Rate Advances to be
made in the next following calendar month, such payment shall be made on the
next preceding Business Day.
26
(e) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Lenders hereunder that
the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender.
If and to the extent that the Borrower shall not have so made such payment in
full to the Agent, each Lender shall repay to the Agent forthwith on demand
such amount distributed to such Lender together with interest thereon, for
each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Agent, at the Federal Funds Rate.
SECTION 2.14. TAXES. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.13,
free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, EXCLUDING, in the case of each Lender and
the Agent, taxes imposed on its income, and franchise taxes imposed on it, as
a result of a former, present or future connection between the Lender or the
Agent (as the case may be) and the jurisdiction of the governmental authority
imposing such tax or any political subdivision or taxing authority thereof,
other than any such connection arising solely from such Lender or Agent
having executed, delivered, made Advances under or received a payment under,
or enforced, this Agreement or the Notes (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder or
under any Note to any Lender or the Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 2.15) such Lender or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been
made (and the receipt of such sum shall be deemed to satisfy the Borrower's
relevant principal, interest and other payment obligations subject to such
deductions), (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law. Without
affecting its rights under this Section 2.15 or any other provision of this
Agreement, each Lender agrees that if the Borrower is making any increased
payment pursuant to subclause (i) of the preceding sentence, such Lender
shall use reasonable efforts to select an alternative Applicable Lending
Office which would not require the Borrower to make such increased payments;
PROVIDED, HOWEVER, that no Lender shall be obligated to select an alternative
Applicable Lending Office if such Lender determines that (i) as a result of
such selection such Lender would be in violation of any applicable law,
regulation, treaty, or guideline, or would incur additional out of pocket
costs or expenses or (ii) such selection would be inadvisable for regulatory
reasons or inconsistent with the interests of such Lender.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under the Notes
or from the execution, delivery or registration of, or otherwise with respect
to, this Agreement or the Notes (hereinafter referred to as "Other Taxes").
27
(c) The Borrower will indemnify each Lender and the Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.14) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted.
(d) Within 30 days after request by the Agent, the Borrower will
furnish to the Agent, at its address referred to in Section 8.02, the
original or a certified copy of a receipt evidencing payment thereof.
(e) Each Lender organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of
this Agreement in the case of each initial Lender and on the date of the
Assignment and Acceptance pursuant to which it becomes a Lender in the case
of each other Lender, and from time to time thereafter if requested in
writing by the Borrower (but only so long as such Lender remains lawfully
able to do so), shall provide the Borrower with Internal Revenue Service form
1001 or 4224, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party which
reduces the rate of withholding tax on payments of interest or certifying
that the income receivable pursuant to this Agreement is effectively
connected with the conduct of a trade or business in the United States. If
the form provided by a Lender at the time such Lender first becomes a party
to this Agreement indicates a United States interest withholding tax rate in
excess of zero, withholding tax at such rate shall be considered excluded
from "Taxes" as defined in Section 2.14(a). Any Lender who, after having
furnished either such Internal Revenue Service form to the Borrower,
thereafter cannot certify as provided in such form, shall promptly notify the
Borrower of such fact.
(f) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained
in this Section 2.14 shall survive the payment in full of the Obligations.
SECTION 2.15. SHARING OF PAYMENTS, ETC. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the Advances owing to it (other
than pursuant to Section 2.03(d), 2.03(e), 2.07, 2.11, 2.14 and 8.04(c)) in
excess of its ratable share of payments on account of the Advances, such
Lender shall forthwith purchase from the other Lenders such participations in
the Advances owing to them, as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; PROVIDED,
HOWEVER, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each Lender shall
be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal
to such Lender's ratable share (according to the proportion of (i) the amount
of such Lender's required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable
by the purchasing Lender in respect of the total amount so recovered. The
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.15 may, to the fullest extent
28
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Lender were
the direct creditor of the Borrower in the amount of such participation.
SECTION 2.16. USE OF PROCEEDS. The proceeds of the Advances shall
be used by the Borrower for general working capital and other corporate
purposes, including Permitted Acquisitions and the construction of healthcare
facilities.
ARTICLE III
CONDITIONS OF BORROWING
SECTION 3.01. CONDITIONS PRECEDENT TO THE INITIAL ADVANCES. The
obligation of each Lender to make its initial Advance is subject to the
condition precedent that the Agent shall have received on or before the day
of the initial Borrowing the following, each dated such day, in form and
substance satisfactory to the Agent and (except for the Notes) in sufficient
copies for each Lender:
(a) The Revolving Notes payable to the order of the Lenders,
respectively.
(b) Certified copies of the resolutions of the Board of Directors of
the Borrower approving this Agreement and the Notes, and of all documents
evidencing other necessary corporate action and governmental approvals, if
any, with respect to this Agreement and the Notes.
(c) A certificate of the Secretary or an Assistant Secretary of the
Borrower certifying the names and true signatures of the officers of the
Borrower authorized to sign this Agreement and the Notes and the other
documents to be delivered hereunder.
(d) A favorable opinion of Pillsbury Madison & Sutro, counsel for the
Borrower, substantially in the form of Exhibit E hereto and as to such
other matters as any Lender through the Agent may reasonably request.
(e) A favorable opinion of Shearman & Sterling, counsel for the
Agent, substantially in the form of Exhibit F hereto.
SECTION 3.02. CONDITIONS PRECEDENT TO EACH REVOLVING BORROWING.
The obligation of each Lender to make a Revolving Advance on the occasion of
each Revolving Borrowing (including the initial Revolving Borrowing) shall be
subject to the further conditions precedent that on the date of such
Revolving Borrowing (a) the following statements shall be true (and each of
the giving of the applicable Notice of Revolving Borrowing and the acceptance
by the Borrower of the proceeds of such Revolving Borrowing shall constitute
a representation and warranty by the Borrower that on the date of such
Revolving Borrowing such statements are true):
29
(i) The representations and warranties contained in Section 4.01 are
correct on and as of the date of such Revolving Borrowing, before and after
giving effect to such Revolving Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date, and
(ii) No event has occurred and is continuing, or would result from
such Revolving Borrowing or from the application of the proceeds therefrom,
which constitutes an Event of Default or Default;
and (b) the Agent shall have received such other approvals, opinions or
documents as any Lender through the Agent may reasonably request in
connection with the satisfaction of the conditions set forth in clauses (i)
and (ii) above.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:
(a) DUE INCORPORATION, ETC. Each of the Borrower and its Material
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has
all requisite corporate power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as proposed to
be conducted. Each of the Borrower and its Material Subsidiaries is duly
qualified or licensed to do business as a foreign corporation in good
standing in all jurisdictions in which it owns or leases assets and
property or in which the conduct of its business requires it to so qualify
or be licensed, except where the failure to so qualify or be licensed would
not have a Material Adverse Effect.
(b) DUE AUTHORIZATION AND EXECUTION, ETC. The execution, delivery
and performance by the Borrower of each Loan Document to which it is or
will be a party, and the consummation of the transactions contemplated
thereby, are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, do not contravene (i) the
Borrower's certificate of incorporation or by-laws, or (ii) any law, rule,
regulation (including, without limitation, Regulation G, T, W and X of the
Board of Governors of the Federal Reserve System and the HMO Regulations),
order, writ, judgment, injunction, decree, determination or award or any
material contractual restriction binding on or affecting the Borrower or
its Subsidiaries or any of their respective properties, and do not result
in or require the creation of any lien, security interest or other charge
or encumbrance upon or with respect to any of the Borrower's or its
Subsidiaries' properties. Neither the Borrower nor any of its Subsidiaries
is in default under any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination, award or restriction, in any respect
which is likely to have a Material Adverse Effect.
30
(c) GOVERNMENT CONSENTS. No authorization, consent, approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body (including, without limitation, HMO
Regulators) is required for the due execution, delivery or performance by
the Borrower of any Loan Document.
(d) LEGAL, VALID AND BINDING NATURE. Each of this Agreement and each
of the other Loan Documents when executed and delivered hereunder will be,
the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower and in accordance with its terms, subject to the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally.
(e) SUBSIDIARIES. Set forth on Schedule 2 hereto, as supplemented in
writing to the Agent upon its request from time to time, is a complete and
accurate list of all Material Subsidiaries of the Borrower, indicating (as
to each such Subsidiary) the jurisdiction of its incorporation, the number
of shares of each class of capital stock outstanding on the date hereof
and, to the extent that such outstanding shares are not publicly owned, the
direct owner of the outstanding shares of each such class owned. Except as
set forth on Schedule 2 hereto, as supplemented in writing by the Borrower
from time to time, there are no outstanding options, warrants, rights of
conversion or purchase, or similar rights to acquire capital stock of any
Material Subsidiary that have been granted by the Borrower or one of its
Subsidiaries, and all of the outstanding capital stock of all Material
Subsidiaries owned by the Borrower or one of its Subsidiaries has been
validly issued, is fully paid and nonassessable and is owned by the
Borrower or its Subsidiaries free and clear of (i) all liens, security
interests and other charges or encumbrances and (ii) any restrictions on
the ability to vote or alienate such capital stock. Except for the effect
of any transaction permitted by Section 5.02(e), the Borrower or a wholly
owned subsidiary of the Borrower owns 100% of the issued and outstanding
capital stock of each of Foundation Health, a California Health Plan,
California Compensation Insurance Company and Intergroup Prepaid Health
Services of Arizona, in each case free and clear of (i) all liens, security
interests and other charges or encumbrances and (ii) any restrictions on
the ability to vote or alienate such capital stock,
(f) FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE. The
Consolidated balance sheet of the Borrower and its Subsidiaries, dated as
of June 30, 1996, and the related Consolidated statements of operations,
stockholders' equity and cash flows of the Borrower and its Subsidiaries
for the fiscal period then ended, fairly present the Consolidated financial
condition of the Borrower and its Subsidiaries as at such date and the
Consolidated results of the operations of the Borrower and its Subsidiaries
for the periods ended on such date, all in accordance with generally
accepted accounting principles consistently applied, and since June 30,
1996, there has been no Material Adverse Change.
31
(g) ABSENCE OF LITIGATION; LITIGATION DESCRIPTION. No judgment,
order, decree, injunction or other restraint affecting the Borrower or any
Subsidiary has been rendered or imposed by any court, governmental agency
or arbitrator, and no actions, suits, investigations, litigation or
proceedings are pending or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries or the
properties of the Borrower or any of its Subsidiaries before any court,
arbitrator or governmental agency, department, commission, board, bureau or
instrumentality, domestic or foreign, in either case (i) that would have a
Material Adverse Effect or (ii) which purports to affect the legality,
validity or enforceability of this Agreement or any other Loan Document.
(h) ABSENCE OF LIENS AND ENCUMBRANCES. There are no mortgages, deeds
of trust, trust deeds, open-end mortgages, leasehold mortgages, leasehold
deeds of trust, open-end leasehold mortgages, pledges, liens, security
interests or other charges or encumbrances (including liens or retained
security titles of conditional vendors) of any nature whatsoever on any
properties or assets of the Borrower or its Subsidiaries (including,
without limitation, the Real Property and Leaseholds) other than Permitted
Liens.
(i) SOLVENCY. The Borrower is and after receipt and application of
the Advances in accordance with the terms of this Agreement, will be,
Solvent.
(j) PAYMENT OF TAXES. The Borrower and each of its Subsidiaries have
filed or caused to be filed, or obtained extensions for filing, all tax
returns (Federal, state, local and foreign) required to be filed and paid
all amounts of taxes shown thereon to be due, including interest and
penalties, except (i) for such taxes as are being contested in good faith
and by proper proceedings and with respect to which reserves, in accordance
with generally accepted accounting principles, are being maintained by the
Borrower or any such Subsidiary, as the case may be, or (ii) where the
failure to file such returns or pay such taxes would not have a Material
Adverse Effect.
(k) ACCURACY OF INFORMATION GIVEN TO LENDERS. No written
information, exhibit or report furnished by the Borrower or any of its
Subsidiaries to the Agent or any Lender, when taken as a whole with all
other written information, exhibits and reports furnished by the Borrower
or any of its Subsidiaries to the Agent or any Lender, contains any untrue
statement of a material fact or omits to state any material fact or any
fact necessary to make the statements contained therein, in light of the
circumstances under which such information, exhibit, report or other
written information is or is to be used, not misleading. It is understood
by the Agent and the Lenders that all of the estimates and assumptions on
which any projections and forecasts are based may not prove to be correct
and that actual future financial performance may vary from that projected.
(l) NOT A PURPOSE CREDIT. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve
32
System), and no proceeds of any Revolving Advance will be used to purchase
or carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.
(m) INVESTMENT COMPANY ACT. The Borrower is not an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
(n) PROHIBITED SECURITIES TRANSACTIONS. No proceeds of any Revolving
Advance will be used by the Borrower or any of its Subsidiaries to acquire
any equity security of a class which is registered pursuant to Section 12
of the Securities Exchange Act of 1934, as amended.
(o) CASUALTIES. Neither the businesses nor the properties of the
Borrower or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other material labor dispute, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance) that would have a Material
Adverse Effect.
(p) ERISA. (i) No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan.
(ii) Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) with respect to each Plan, copies of
which have been filed with the IRS and furnished to the Agent, is
complete and accurate and fairly presents the funding status of such
Plan, and since the date of such Schedule B there has been no material
adverse change in such funding status.
(iii) Neither the Borrower nor any ERISA Affiliate has
incurred, or is reasonably expected to incur, any Withdrawal Liability
to any Multiemployer Plan.
(iv) Neither the Borrower nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been terminated, within
the meaning of Title IV of ERISA, and no Multiemployer Plan is
reasonably expected to be in reorganization or to be terminated within
the meaning of Title IV of ERISA.
(q) ENVIRONMENTAL MATTERS. Except where the failure of any of the
following to be true and correct would not have a Material Adverse Effect
(i) the Real Property and the Leaseholds and the operations conducted
thereon do not violate any applicable Environmental Law or any restrictive
covenant or deed restriction (recorded or otherwise); (ii) without
limitation of clause (i) above, the Real Property and the Leaseholds and
the operations conducted thereon by the Borrower or any of its Subsidiaries
or, to the Borrower's knowledge, any current or prior owner, lessor or
operator of such Real Property, Leasehold or operation, are not in
violation of any Environmental Law, or subject to any existing, pending or
threatened investigation,
33
inquiry or proceeding by any governmental authority or to any remedial
obligations under any Environmental Law; (iii) all notices, permits,
licenses or similar authorizations, if any, required to be obtained or
filed in connection with the use of the Real Property or the Leaseholds,
including, without limitation, past, to the best of Borrower's knowledge,
or present treatment, storage, disposal or release of any Hazardous
Materials or solid waste into the environment, have been obtained or
filed; (iv) to the Borrower's knowledge, all Hazardous Materials or solid
waste generated at the Real Property or the Leaseholds have in the past
been, and shall continue to be, transported, treated and disposed of only
by carriers maintaining valid permits under all applicable Environmental
Laws and only at treatment, storage and disposal facilities maintaining
valid permits under applicable Environmental Laws, which carriers and
facilities have been and are, to the Borrower's knowledge, operating in
compliance with such permits; (v) the Borrower and its Subsidiaries have
no material contingent liability in connection with any release of any
Hazardous Materials or solid waste into the environment; and (vi) the
use which the Borrower or any of its Subsidiaries makes or intends to
make of the Real Property and the Leaseholds will not result in the
unlawful or unauthorized disposal or other release of any Hazardous
Materials or solid waste on or to the Real Property or the Leaseholds.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. AFFIRMATIVE COVENANTS. So long as any obligation
hereunder or under any Loan Document shall remain unpaid or any Lender shall
have any Commitment hereunder, the Borrower will, unless the Majority Lenders
shall otherwise consent in writing:
(a) COMPLIANCE WITH LAWS. Perform and promptly comply and cause each
of its Subsidiaries to perform and promptly comply with, and cause all
property of the Borrower and each such Subsidiary to be maintained, used
and operated in accordance with, all present and future laws, ordinances,
rules, regulations, orders and requirements (including, without limitation,
the HMO Regulations, Insurance Regulations, and Environmental Law) of every
duly constituted governmental or quasi-governmental authority or agency
applicable to the Borrower, any such Subsidiary or any of their properties,
except where the failure to comply therewith would not have a Material
Adverse Effect.
(b) PRESERVATION OF CORPORATE EXISTENCE. Preserve and maintain, and
cause each of its Material Subsidiaries to preserve and maintain, its
corporate existence, corporate rights (charter and statutory), and
corporate franchises; PROVIDED, HOWEVER, that neither the Borrower nor any
of its Material Subsidiaries shall be required to preserve and maintain any
corporate franchise if the failure to preserve and maintain such franchise,
whether individually or together with all other franchises which have not
been preserved or maintained from and after the date hereof, would not have
a Material Adverse Effect.
34
(c) ACCESS AND VISITATION RIGHTS. Upon reasonable notice and at any
reasonable time during normal business hours and from time to time, permit
the Agent or any of the Lenders or any agents or representatives thereof to
examine and make copies of and abstracts from the records and books of
account of, and visit the properties of, the Borrower and any of its
Subsidiaries, and to discuss the affairs, finances and accounts of the
Borrower and any of its Subsidiaries.
(d) KEEPING OF BOOKS. Keep proper books of record and account for
the Borrower and each of its Subsidiaries and such other proper books of
record and account for the Borrower and its Consolidated Subsidiaries as
are necessary in order to prepare the periodic financial statements of the
Borrower and its Consolidated Subsidiaries required by the terms hereof or
by any applicable law, all in accordance with generally accepted accounting
principles consistently applied.
(e) PAYMENT OF TAXES, ETC. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent,
all taxes, assessments and governmental charges or levies imposed upon it
or upon its property, except where the failure to pay and discharge such
amounts could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect; PROVIDED, HOWEVER, that neither the Borrower nor
any such Subsidiary shall be required to pay or discharge any such tax,
assessment, charge or levy that is being contested in good faith and by
proper proceedings and with respect to which reserves, in accordance with
generally accepted accounting principles, are being maintained by the
Borrower or such Subsidiary, as the case may be.
(f) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and cause
each of its Material Subsidiaries to maintain and preserve, all of its
properties in accordance with good business practices and in good working
order and condition, ordinary wear and tear excepted, except where the
failure to so maintain and preserve would not have a Material Adverse
Effect.
(g) PLAN CONTRIBUTION. Make, and cause each Subsidiary to make, when
due, all contributions required by law to be made to all Plans, except
where the failure to make such contributions would not have a Material
Adverse Effect.
(h) MAINTENANCE OF INSURANCE. Maintain, and cause each of its
Subsidiaries to maintain, insurance (including, without limitation,
liability, hazard and casualty insurance) with responsible and reputable
insurance companies or associations having a rating of A or better from
Best's in such amounts and covering such risks as is then customarily
carried by similarly situated companies conducting business similar to that
conducted by the Borrower and its Subsidiaries. The Borrower shall be
deemed to be in compliance with the requirements of the foregoing if it
insures through a captive Insurance Subsidiary, PROVIDED, that each
re-insurer to which coverage is ceded by such captive Insurance Subsidiary
has the ratings specified above and the level of self-insurance retained by
the Borrower is substantially similar to the level the Borrower would have
maintained under the previous sentence. The Borrower may self insure
35
for workers' compensation liabilities if such self-insurance is approved
by the Borrower's board of directors and is conducted in compliance with
all applicable law.
(i) EMPLOYMENT OF TECHNOLOGY, DISPOSAL OF HAZARDOUS WASTE, ETC.
Except where the failure to comply with any of the following would not have
a Material Adverse Effect (i) employ, and cause each of its Material
Subsidiaries to employ, in connection with its use of the Real Property and
Leaseholds, appropriate technology to maintain compliance with all material
Environmental Laws, (ii) obtain and maintain, and cause each of its
Material Subsidiaries to obtain and maintain, any and all material permits
required by applicable Environmental Law in connection with the operations
of the Borrower or any of its Material Subsidiaries, (iii) dispose of, and
cause each of its Material Subsidiaries to dispose of, any and all
Hazardous Materials (including infectious wastes) generated by the Borrower
or any Material Subsidiary only at facilities and with carriers maintaining
valid permits under RCRA and any applicable Environmental Law, (iv) use
best efforts to obtain, and cause each of its Material Subsidiaries to use
its best efforts to obtain, certificates of disposal from all contractors
employed by the Borrower or any of its Material Subsidiaries in connection
with the transport or disposal of any Hazardous Materials generated at the
Premises and (v) establish and maintain a system to assure and monitor
continued compliance with all applicable Environmental Law.
(j) MAINTENANCE OF ACCREDITATION, ETC. Preserve and maintain, and
cause each of its Material Subsidiaries to preserve and maintain, all
licenses, permits, authorizations and qualifications required under the HMO
Regulations or the Insurance Regulations in connection with the ownership
or operation of HMO's or Insurance Companies, as applicable, except where
the failure to do so would not have a Material Adverse Effect.
SECTION 5.02. NEGATIVE COVENANTS. So long as any obligation
hereunder or under any Loan Document shall remain unpaid or any Lender shall
have any Commitment hereunder, the Borrower will not, without the written
consent of the Majority Lenders:
(a) LIENS, ETC/NEGATIVE PLEDGE. (i) Create or suffer to exist, or
permit any of its Subsidiaries to create or suffer to exist, any lien,
security interest or other charge or encumbrance (including the lien or
retained security title of a conditional vendor) of any kind (including,
without limitation, any lien imposed pursuant to Section 107(f) of the
Superfund Reauthorization Act of 1986 or any similar Environmental Law), or
any other type of preferential arrangement, upon or with respect to any of
its properties of any character (including, without limitation, accounts),
whether now owned or hereafter acquired, or assign any right to receive
income, or sign or file, or permit any of its Subsidiaries to sign or file,
under the Uniform Commercial Code or any comparable statute of any
jurisdiction a financing statement which names the Borrower or any of its
Subsidiaries as debtor, or permit any of its Subsidiaries to sign any
security agreement authorizing any secured party thereunder to file such
financing statement (EXCLUDING, HOWEVER, Permitted Liens from the operation
of the foregoing restrictions).
36
(ii) Agree, or permit any of its Subsidiaries to agree, with any
Person not to take any action prohibited by Section 5.02(a)(i), except with
respect to (A) such negative promises contained (on the date hereof) in any
document relating to existing Debt, leaseholds and material contracts of
the Borrower or any such Subsidiary and (B) such negative promises made by
a Subsidiary prior to the date on which such Subsidiary became a Subsidiary
of the Borrower; PROVIDED, that such promises were not made at the
instigation of the Borrower or such Subsidiary and PROVIDED, FURTHER, that
such promises were not made in anticipation of such Subsidiary becoming a
Subsidiary of the Borrower.
(b) DIVIDENDS, ETC. Declare or make, or permit any of its
Subsidiaries to declare or make, any dividend payment or other distribution
of assets, properties, cash, rights, obligations or securities on account
of any shares of any class of capital stock of the Borrower or any of its
Subsidiaries or purchase, redeem or otherwise acquire for value (or permit
any of its Subsidiaries to do so) any shares of any class of capital stock
of the Borrower or any of its Subsidiaries or any warrants, rights or
options to acquire any such shares, now or hereafter outstanding, except
that (i) the Borrower may pay dividends in the form of its capital stock,
(ii) any wholly owned Subsidiary may pay non-cash dividends or make non-
cash distributions to the Borrower or to another wholly owned Subsidiary
and (iii) the Borrower and its Subsidiaries may declare and make cash
dividend payments to their respective stockholders and purchase, redeem or
otherwise acquire shares of their capital stock or warrants, rights or
options to acquire such shares for cash PROVIDED, that the aggregate amount
of such dividends declared and paid and the aggregate purchase price paid
in connection with such purchases, redemptions or other acquisitions shall
not (excluding dividends paid pursuant to the immediately succeeding
PROVISO), in the case of the Borrower, exceed the sum of (a) 50% of the
cumulative Consolidated Net Income of the Borrower for all full Fiscal
Years of the Borrower, commencing with and including the Borrower's 1994
Fiscal Year (the amount of such consolidated Net Income to be calculated by
adding back thereto (to the extent deducted therefrom) up to $125,000,000
of any restructuring charges incurred by the Borrower in the Borrower's
1995 Fiscal Year) PLUS (b) on any date of determination after the end of
the Borrower's 1995 Fiscal Year, $25,000,000; PROVIDED, HOWEVER, that the
Borrower may in addition declare and make cash dividend payments to its
stockholders and purchase, redeem or otherwise acquire shares of its
capital stock or warrants, rights of options to acquire shares of its
capital stock for cash in an amount equal to 50% of the Net Cash Proceeds
received by the Borrower from the issuance of its Common Stock or in
connection with other capital contributions after the date hereof in each
case within the 180-day period preceding such date of determination; and
PROVIDED, FURTHER, that immediately before and after giving effect thereto,
no Default or Event of Default shall have occurred and be continuing or
exist.
(c) LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES. Suffer to exist, or permit any Subsidiary to suffer to
exist, any encumbrance or restriction (other than pursuant to law,
regulation or order) on the ability of any Subsidiary (i) to pay, directly
or indirectly, dividends or make any other distributions in respect of its
capital stock or pay any Indebtedness or other
37
obligation owed to the Borrower or any other Subsidiary; (ii) to
make loans or advances to the Borrower or any Subsidiary; or (iii) to
transfer any of its property or assets to the Borrower or any
Subsidiary, except any encumbrance or restriction (a) pursuant to any
agreement in effect on the date hereof, (b) pursuant to an agreement
entered into by such Subsidiary prior to the date on which such
Subsidiary was acquired by the Borrower and not entered into in
anticipation of becoming a Subsidiary, or (c) pursuant to an agreement
effecting a renewal, extension, refinancing or refunding of Indebtedness
incurred pursuant to an agreement referred to in clause (a) or (b)
above; PROVIDED, HOWEVER, that the provisions contained in such renewal,
extension, refinancing or refunding agreement relating to such
encumbrance or restriction are no more restrictive in any material
respect than the provisions contained in the agreement the subject
thereof.
(d) MERGERS, ETC. Merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to, or acquire all or substantially all of the
assets of, any Person, or permit any of its Subsidiaries to do so, except
that (i) any Subsidiary of the Borrower may merge into the Borrower or
another Subsidiary of the Borrower PROVIDED, that (A) after giving effect
thereto, no Default shall exist and (B) immediately before and after giving
effect to such merger each party thereto is Solvent, and (ii) the Borrower
or any its Subsidiaries may make the Permitted Acquisitions.
(e) SALES, TRANSFERS, ETC. OF ASSETS. Sell, lease, transfer or
otherwise dispose of, or permit any of its Material Subsidiaries to sell,
lease, transfer or otherwise dispose of, any assets (including, without
limitation, any portion of assets constituting the business of a division,
branch or other unit operation), except for (A) sales in the ordinary
course of business consistent with past practices; (B) sales and
dispositions of worn out, surplus or obsolete assets; (C) sales or
transfers of property during any Fiscal Year of the Borrower the aggregate
value of which (determined by the greater of the book value thereof or the
sales or transfer price thereof) does not exceed 10% of the Borrower's
Consolidated Total Assets (determined as at the end of the Fiscal Quarter
of the Borrower immediately preceding such sale or transfer); (D) sales or
transfers of property from any Material Subsidiary to the Borrower or any
other Subsidiary of the Borrower PROVIDED, that in the case of any sale or
transfer from a Material Subsidiary to a Subsidiary of the Borrower, such
sale or transfer would not cause such transferring Material Subsidiary to
cease being a Material Subsidiary unless each transferee Subsidiary thereby
becomes (or is) a Material Subsidiary; and (E) the sale of Foundation
Health Medical Services, Xxxxxx-Xxxxx Medical Centers P.C., Foundation
Health Medical Group, Inc., surgery centers and related healthcare center
assets to FPA Medical Management, Inc. or to any other Person.
(f) INVESTMENTS IN OTHER PERSONS. After the date hereof, make, or
permit any of its Subsidiaries to make, any loan or advance or gift to, or
Investment in, any other Person, or purchase or otherwise acquire, or
permit any of its Subsidiaries to purchase or otherwise acquire, any shares
of capital stock, obligations or other
38
securities, or make any capital contribution to, or otherwise Invest in
or acquire, any other Person (whether through merger, consolidation,
combination or otherwise), except for (i) Permitted Investments, (ii)
loans or advances by a Subsidiary of the Borrower to the Borrower, by
the Borrower to any Subsidiary of the Borrower or by any Subsidiary of
the Borrower to another Subsidiary of the Borrower, (iii) Permitted
Acquisitions, (iv) employee loans and advances, (v) capital
contributions by the Borrower to a Subsidiary of the Borrower or by any
Subsidiary of the Borrower; (vi) Investments in any Person whose
business is connected or related to the Borrower's (including its
Subsidiaries') existing or related line of business, PROVIDED, the
aggregate amount of Investments under this subclause (vi) made after the
date hereof does not exceed a sum equal to (1) $50,000,000 plus (2)
$50,000,000 multiplied by the number of the Borrower's Fiscal Years that
have commenced since the end of the Borrower's 1995 Fiscal Year; (vii)
tax-advantaged Investments (whether through debt, equity, partnership
interests or otherwise) in low-income housing not aggregating in excess
of $10,000,000 at any time; (viii) Investments not otherwise permitted
by clauses (i) through (vii) hereof not in excess of $10,000,000 at any
time; and (ix) loans, advances, guarantees or Investments which arise in
connection with the sale, transfer or other disposition of any business,
shares of capital stock or assets of any Subsidiary or affiliated
company or otherwise permitted by Section 5.02(e) hereof as part of the
consideration for such sale, transfer or disposition.
(g) CHANGE IN BUSINESS. Make, or permit any of its Material
Subsidiaries to make, any material change in the nature of their respective
businesses.
(h) ACCOUNTING CHANGES. Make or permit, or permit any of its
Subsidiaries to make or permit, any significant change in accounting
policies or reporting practices, except for any such change required or
permitted by generally accepted accounting principles.
(i) PLAN TERMINATIONS. Terminate, or permit any ERISA Affiliate to
terminate, any Plan so as to result in liability of the Borrower or any
ERISA Affiliate to the PBGC in excess of 5% of the Borrower's Consolidated
Net Worth, or permit to exist any event or condition which reasonably
presents a material risk of a termination by the PBGC of any Plan with
respect to which the Borrower or any ERISA Affiliate would, in the event of
such termination, incur liability to the PBGC in excess of 5% of the
Borrower's Consolidated Net Worth.
(j) EMPLOYEE BENEFIT COSTS AND LIABILITIES. Create or suffer to
exist, or permit any ERISA Affiliate to create or suffer to exist, (i) any
Insufficiency with respect to a Plan or any Withdrawal Liability with
respect to a Multiemployer Plan if, immediately after giving effect to such
Insufficiency or Withdrawal Liability, the aggregate amount of
Insufficiencies and Withdrawal Liabilities of all Plans and Multiemployer
Plans, respectively, of the Borrower and its ERISA Affiliates exceeds 5% of
the Borrower's Consolidated Net Worth or (ii) any liability with respect to
Welfare Plans if, immediately after giving effect to such liability, the
aggregate annualized cost (including, without limitation, the cost of
insurance premiums) with
39
respect to such plans of the Borrower and its ERISA Affiliates in any
Fiscal Year of the Borrower would exceed 5% of the Borrower's
Consolidated Net Worth.
(k) PREPAYMENTS OF PUBLIC NOTES. Prepay, redeem, defease (whether
actually or in substance) or purchase in any manner (or deposit or set
aside funds for the purpose of any of the foregoing), make any payment in
respect of principal of or make any payment in respect of interest (other
than regularly scheduled interest payments) on, or permit any of its
Subsidiaries to prepay, redeem, defease or purchase in any manner, make any
payment in respect of principal of or make any payment in respect of
interest on, the Public Notes; PROVIDED, that the Borrower may prepay,
redeem, defease or purchase the Public Notes so long as (i) the aggregate
amount paid or (set aside) by the Borrower to so prepay, redeem, defease or
purchase the Public Notes does not exceed the lesser of the fair market
value and 102% of the face amount of such Public Notes to be prepaid,
redeemed, defeased or purchased, together with any unpaid interest thereon
accrued as of the date of such prepayment, redemption, defeasance or
purchase, and (ii) there shall be no Default or Event of Default before or
after giving effect to such prepayment, redemption, defeasance or purchase.
(l) LIMITATION ON SUBSIDIARY INDEBTEDNESS AND PREFERRED STOCK.
Permit any of its Subsidiaries to create or suffer to exist any Debt
(including any Guaranteed Debt) of such Subsidiary, or issue any Preferred
Stock of such Subsidiary, other than (i) Debt and Preferred Stock existing
on the date hereof or the date on which such Subsidiary becomes a
Subsidiary, (ii) Debt owed to the Borrower or any of its Subsidiaries and
(iii) other Debt of such Subsidiaries PROVIDED, that the aggregate
outstanding principal balance of Debt under this subclause (iii) does not,
at any time, exceed $65,000,000.
SECTION 5.03. FINANCIAL COVENANTS. So long as any obligation
hereunder or under any Loan Document shall remain unpaid or any Lender shall
have any Commitment hereunder, the Borrower will not, without the written
consent of the Majority Lenders:
(a) NET WORTH. Permit, at any time, its Consolidated Net Worth to be
below 90% of the Borrower's Consolidated Net Worth on December 31, 1994
PLUS 50% of its cumulative Consolidated Net Income for each Fiscal Quarter
ending after December 31, 1994 (the amount of such Net Income to be
computed without regard to any net loss in any Fiscal Quarter) PLUS 100% of
accumulated Net Cash Proceeds of issuances of the Borrower's Common Stock
after the date hereof.
(b) FIXED CHARGE COVERAGE RATIO. Permit, as at the end of any Fiscal
Quarter of the Borrower, the Consolidated Fixed Charge Coverage Ratio of
the Borrower and its Subsidiaries for the four-Fiscal Quarter period ending
on the last day of such Fiscal Quarter to be less than 3.75 to 1.0.
(c) TOTAL DEBT/TOTAL CAPITALIZATION RATIO. Permit, as of the end of
any Fiscal Quarter of the Borrower, the Borrower's Consolidated Total
Debt/Total Capitalization Ratio to be greater than 0.40 to 1:00.
40
SECTION 5.04. REPORTING REQUIREMENTS. So long as any obligation
hereunder or under any Loan Document shall remain unpaid or any Lender shall
have any Commitment hereunder, the Borrower will furnish to each Lender the
following:
(a) As soon as available and in any event within 45 days after the
end of each Fiscal Quarter (except the last Fiscal Quarter in each Fiscal
Year), commencing with the Fiscal Quarter ending December 31, 1996,
Consolidated balance sheets of the Borrower and its Subsidiaries as of the
end of such Fiscal Quarter and Consolidated statements of operations,
stockholders' equity and cash flows of the Borrower and its Subsidiaries
for the period commencing at the end of the previous Fiscal Year and ending
with the end of such Fiscal Quarter, certified by the chief financial
officer of the Borrower, together with (i) a certificate of said officer
stating that, to his or her knowledge, no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as
to the nature thereof and the action that the Borrower has taken or
proposes to take with respect thereto, and (ii) a schedule in form
satisfactory to the Agent of the computations used by the Borrower in
determining compliance with the covenants contained in Section 5.03.
(b) As soon as available and in any event within 120 days after the
end of each Fiscal Year, a copy of the annual audit report for such year
for the Borrower, including therein a Consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such Fiscal Year and
Consolidated statements of operations, stockholders' equity and cash flows
of the Borrower and its Subsidiaries for such Fiscal Year certified by
nationally recognized public accountants, together with a certificate of
such accounting firm stating that in the course of the regular audit of the
business of the Borrower, which audit was conducted by such accounting firm
in accordance with generally accepted auditing standards, such accounting
firm has obtained no knowledge that a Default has occurred and is
continuing, or, if, in the opinion of such accounting firm, a Default has
occurred and is continuing, a statement as to the nature thereof.
(c) As soon as possible and in any event within five days after the
occurrence of each Default of which a Responsible Officer of the Borrower
or any of its Subsidiaries obtains knowledge, a statement of such
Responsible Officer setting forth details of such Default and the action
which the Borrower or such Subsidiary has taken and proposes to take with
respect thereto.
(d) Promptly after any material change in accounting policies or
reporting practices, notice and a description in reasonable detail of such
change.
(e) Promptly and in any event within 10 days after the commencement
thereof, notice of all actions, suits and proceedings before any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting the Borrower or any of its
Subsidiaries, of the type described in Section 4.01(g).
41
(f) Promptly and in any event within 10 days after the sending or
filing thereof, copies of all proxy statements, financial statements, and
reports that the Borrower sends to its stockholders generally or the
Borrower or any of its Subsidiaries files with the Securities and Exchange
Commission.
(g) Promptly following the receipt thereof, copies of each notice
regarding the loss or threatened loss by any Material Subsidiary or
Insurance Subsidiary of its accreditation, licensing or certification by
any HMO Regulator or any Insurance Regulator.
(h) Promptly and in any event within 10 days after the occurrence of
any event giving rise to a Material Adverse Effect.
(i) Such other information respecting the condition (financial or
otherwise), operations, business, assets and prospects of the Borrower or
any of its Subsidiaries as any Lender may from time to time reasonably
request.
SECTION 5.05. ACQUISITIONS. Prior to consummating any Permitted
Acquisition other than an Exempt Acquisition, the Borrower shall have delivered
to the Agent (in sufficient copies for each Lender) the following:
(i) At least 15 days' prior written notice of the Borrower's
intention to consummate or enter into a Permitted Acquisition, together
with a brief summary of the substantive terms thereof;
(ii) At least 10 days prior to the consummation of such Permitted
Acquisition, a certified copy of the executed purchase contract relating to
such Permitted Acquisition; and
(iii) An officer's certificate, executed by the president or chief
financial officer of the Borrower, dated the date of consummation of such
Permitted Acquisition, certifying that immediately before and after giving
effect to such Permitted Acquisition (A) no Default has occurred and is
continuing or will exist and (B) that the Borrower will be in compliance on
a pro forma basis with each of the financial ratios specified in Section
5.03 as of the end of the Fiscal Quarter immediately preceding such
Acquisition for the twelve-month period preceding such Fiscal Quarter end,
together with a reasonably detailed worksheet setting forth the calculation
of such ratios.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following events
(each an "Event of Default" and collectively "Events of Default") shall occur
and be continuing:
42
(a) The Borrower shall fail to pay any principal of any Advance or
Note when the same becomes due and payable; or shall fail to pay any
interest on any Advance or Note or any fees or other amounts payable under
any Loan Document or hereunder (including, without limitation, amounts
payable to the Agent under the letter agreement referred to in
Section 2.03(b)) within two Business Days after the same becomes due and
payable; or
(b) Any representation or warranty made by the Borrower under or in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed to have been made; or
(c) (i) The Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 5.03 or (ii) the Borrower shall
fail to perform or observe any other term, covenant or agreement contained
in this Agreement or in any other Loan Document on its part to be performed
or observed if such failure shall remain unremedied for 30 days after
written notice thereof shall have been given to the Borrower by the Agent
or any Lender; or
(d) The Borrower or any of its Subsidiaries shall fail to pay any
Debt in a principal payment amount (whether singly or in the aggregate)
equal to or in excess of $10,000,000 (but excluding Debt outstanding under
this Agreement or the Notes) of the Borrower or such Subsidiary, as the
case may be, when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise (and
inclusive of principal, interest, fees and penalties)), and such failure
shall continue after the applicable grace period, if any, specified in the
agreements or instruments relating to such Debt; or any other event shall
occur or condition shall exist under any agreements or instruments relating
to any such Debt and shall continue after the applicable grace period
(which grace period, if shorter than 30 days, shall be deemed extended to
30 days for purposes of this subsection (d) if (i) such Debt was assumed in
connection with an Acquisition and is in an aggregate principal amount of
not in excess of $20,000,000, (ii) not more than 90 days have elapsed since
the consummation of such Acquisition and (iii) the Borrower shall have
segregated cash in an amount sufficient to pay the principal amount of such
Debt plus interest and premium, if any, then due thereon within such 30 day
period), if any, specified in such agreements or instruments, if the effect
of such event or condition is to accelerate, or to permit the acceleration
of, the maturity of such Debt; or any such Debt shall be declared to be due
and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof; or
(e) The Borrower, any of its Material Subsidiaries or two or more of
the Borrower's Subsidiaries in any twelve-month period shall generally not
pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against the Borrower or any of its Subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of
43
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee, or other similar official for it or for any
substantial part of its property, and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 60 days,
or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment
of a receiver, trustee, custodian or similar official for, it or for any
substantial part of its property) shall occur; or the Borrower or any of
its Subsidiaries shall take any corporate action to authorize any of the
actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in an aggregate
amount in excess of $10,000,000 (less any payments made in respect thereof)
shall be rendered against the Borrower or any of its Subsidiaries, and
either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period of
60 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal, statutory bond or otherwise, shall
not be in effect; or
(g) Any non-monetary judgment or order shall be rendered against the
Borrower or any of its Subsidiaries that has a Material Adverse Effect, and
either (i) enforcement proceedings shall have been commenced by any Person
upon such judgment or order or (ii) there shall be any period of 60
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(h) The obligation of the Borrower to repay the Advances or to pay
any interest, fee, expense, premium or other amount owing hereunder or
under any other Loan Document shall for any reason cease to be valid and
binding on the Borrower or the Borrower shall so state in writing; or
(i) Any ERISA Event with respect to a Plan shall have occurred and,
30 days after notice thereof shall have been given to the Borrower by the
Agent, (i) such ERISA Event shall still exist and (ii) the sum (determined
as of the date of occurrence of such ERISA Event) of the Insufficiency of
such Plan and the Insufficiency of any and all other Plans with respect to
which an ERISA Event shall have occurred and then exist (or in the case of
a Plan with respect to which an ERISA Event described in clause (iii)
through (vi) of the definition of ERISA Event shall have occurred and then
exist, the liability related thereto) is equal to or greater than 5% of the
Borrower's Consolidated Net Worth; or
(j) The Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan in an amount that, when aggregated
with all other amounts required to be paid to Multiemployer Plans by the
Borrower and its ERISA Affiliates as Withdrawal Liability (determined as of
the date of such notification), exceeds 5% of the Borrower's Consolidated
Net Worth; or
44
(k) The Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, if as a result of such reorganization or termination the aggregate
annual contributions of the Borrower and its ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the respective plan year of each such Multiemployer
Plan immediately preceding the plan year in which the reorganization or
termination occurs by an amount exceeding 5% of the Borrower's Consolidated
Net Worth; or
(l) Any proceeding shall be instituted against the Borrower or any of
its Subsidiaries which is likely (taking into account the probability of an
adverse determination and the exhaustion of all appeals) to have a Material
Adverse Effect; or
(m) A Change in Control shall have occurred; or
(n) An HMO Event which, if unremedied, is reasonably likely to have a
Material Adverse Effect shall have occurred and remain unremedied for
thirty days after the occurrence thereof (or such lesser period of time, if
any, as the HMO Regulator administering the HMO Regulations shall have
imposed for the cure of such HMO Event; it being understood that if the
Borrower reaches a written agreement with such HMO Regulator during such
thirty-day (or shorter) period which cures (or provides a means for the
cure of) such HMO Event to such HMO Regulator's satisfaction, then no Event
of Default shall exist under this subsection (n));
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Majority Lenders by notice to the Borrower declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Majority Lenders by notice to the Borrower declare the Notes,
the Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Notes, the Advances,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; PROVIDED, HOWEVER, that in
the case of any Event of Default referred to in subsection (e) above, the
obligation of each Lender to make Advances shall automatically terminate and the
Advances, all such interest and all such amounts shall automatically become, and
be, due and payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENT AND THE ARRANGER
SECTION 7.01. AUTHORIZATION AND ACTION. Each Lender hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Loan Documents as are delegated to
the Agent by the terms thereof,
45
together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or collection of
the Notes), the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; PROVIDED, HOWEVER, that the Agent shall not be
required to take any action which exposes the Agent to personal liability or
which is contrary to any Loan Document or applicable law. The Agent agrees to
give to each Lender prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
SECTION 7.02. AGENT'S RELIANCE, ETC. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with any Loan
Document, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent and its
Affiliates: (i) may treat the Lender which made any Advance or the holder of
any Note as the holder of the Debt resulting from such Advance or the holder of
such Note until the Agent receives and accepts an Assignment and Acceptance
entered into by a Lender, as assignor, and an Eligible Assignee, as assignee, as
provided in Section 8.07 or until the Agent receives written notice of the
assignment or transfer of such Note signed by the payee thereof and in form
satisfactory to the Agent; (ii) may consult with legal counsel (including
counsel for the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation (whether
written or oral) to any Lender and shall not be responsible to any Lender for
any statements, warranties or representations made in or in connection with any
Loan Document; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Loan Document on the part of the Borrower or to inspect the property (including
the books and records) of the Borrower or any of its Subsidiaries; (v) shall not
be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (vi) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, cable, facsimile or
telex) believed by it to be genuine and signed or sent by the proper party or
parties.
SECTION 7.03. CITIBANK AND AFFILIATES. With respect to its
Commitment and the Advances made by it and the Notes issued to it, Citibank
shall have the same rights and powers under the Loan Documents as any other
Lender and may exercise the same as though it were not the Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include
Citibank in its individual capacity. Citibank and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, the Borrower, any of its Subsidiaries and
any Person who may do business with or own securities of the Borrower or any
such Subsidiary, all as if Citibank were not the Agent and without any duty to
account therefor to the Lenders.
46
SECTION 7.04. LENDER CREDIT DECISION. Each Lender acknowledges that
it has, independently and without reliance upon the Agent or any other Lender
and based on the financial statements referred to in Section 4.01(f) and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement and the
other Loan Documents.
SECTION 7.05. INDEMNIFICATION. The Lenders agree to indemnify the
Agent (to the extent not reimbursed by the Borrower), ratably according to the
respective principal amounts of the Revolving Advances then owing to each of
them (or if no Revolving Advances are at the time outstanding or if any
Revolving Advances are then owing to Persons which are not Lenders, ratably
according to the respective amounts of their Commitments), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the Agent
in any way relating to or arising out of the Loan Documents or any action taken
or omitted by the Agent under any Loan Document, PROVIDED that no Lender shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's gross negligence or willful misconduct. Without limitation of
the foregoing, each Lender agrees to reimburse the Agent promptly upon demand
for its ratable share of any out-of-pocket expenses (including counsel fees)
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, the Loan Documents, or any of them, to the
extent that the Agent is not reimbursed for such expenses by the Borrower.
SECTION 7.06. SUCCESSOR AGENT. The Agent may resign at any time as
Agent under the Loan Documents by giving not less than 30 days' written notice
thereof to the Lenders and the Borrower and may be removed as Agent under the
Loan Documents at any time with or without cause by the Majority Lenders. Upon
any such resignation or removal, the Majority Lenders shall have the right to
appoint a successor Agent under the Loan Documents; PROVIDED, HOWEVER, that such
successor Agent shall be reasonably acceptable to the Borrower. If no successor
Agent shall have been so appointed by the Majority Lenders, and shall have
accepted such appointment, within 45 days after the retiring Agent's giving of
notice of resignation or the Majority Lenders' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a commercial bank organized under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of at least $50,000,000. Upon the acceptance of any appointment as
Agent under the Loan Documents by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under the Loan Documents. After any retiring
Agent's resignation or removal as Agent under the Loan Documents, the provisions
of this
47
Article VII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under the Loan Documents.
SECTION 7.07. THE ARRANGER. The Arranger shall have no duties or
responsibilities in such capacities under this Agreement and the other Loan
Documents and shall incur no liability hereunder or thereunder in such
capacities.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement or any other Loan Document, nor consent to any
departure by the Borrower or any Subsidiary therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Majority Lenders
(or, with respect to the other Loan Documents (unless otherwise provided for
therein) by the Agent with the written consent of the Majority Lenders), and
then such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given and shall bind all
Lenders; PROVIDED, HOWEVER, that no amendment, waiver or consent shall, unless
in writing and signed by all the Lenders, do any of the following: (a) waive
any of the conditions specified in Article III, (b) increase the Commitments of
the Lenders or subject the Lenders to any additional monetary obligations,
(c) reduce the principal of, or interest on, the Revolving Advances or the
Revolving Notes or any fees or other amounts payable hereunder, (d) postpone any
date fixed for any payment of principal of, or interest on, the Revolving
Advances or the Revolving Notes or any fees or other amounts payable hereunder,
(e) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Revolving Advances or the Revolving Notes, or the number
or percentage of Lenders which shall be required for the Lenders or any of them
to take any action hereunder, or (f) amend this Section 8.01; and PROVIDED,
FURTHER, that (g) no amendment, waiver or consent shall, unless in writing and
signed by the Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Agent under this Agreement.
SECTION 8.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including facsimile communication)
and mailed, or delivered, if to the Borrower, at its address at 0000 Xxxx
Xxxxx, Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Chief Financial Officer; if
to any Bank, at its Lending Office specified on the signature pages hereto; if
to any other Lender, at its Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender; and if to the Agent, at its
address at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx X.
Xxxxx; or, as to each party, at such other address as shall be designated by
such party in a written notice to the other parties. All such notices and
communications shall, when mailed or sent by facsimile be effective when
deposited in the mails or confirmed received, respectively, except that notices
and communications to the Agent pursuant to Article II or to the Agent pursuant
to Article VII shall not be effective until received by the Agent.
48
SECTION 8.03. NO WAIVER; REMEDIES. No failure on the part of any
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
SECTION 8.04. COSTS, EXPENSES AND INDEMNITIES. (a) The Borrower
agrees to pay on demand all costs and expenses in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents and the other documents to be delivered hereunder and
thereunder (excluding costs associated with an assignment pursuant to Section
8.07 hereof which are to be paid by the Assignor and Assignee as stated in such
Section 8.07), including, without limitation, the reasonable fees and out-of-
pocket expenses of counsel for the Agent (including local counsel, domestic or
foreign) with respect thereto and with respect to advising the Agent as to its
rights and responsibilities under the Loan Documents in response to a request by
the Borrower for any action to be taken by the Agent or any Lender thereunder,
and all costs and expenses, if any (including, without limitation, reasonable
counsel fees and expenses), of the Agent and any Lender in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
any Loan Document or any other document to be delivered hereunder or thereunder.
(b) The Borrower agrees to indemnify and hold harmless the Agent and
each Lender and each of their respective directors, officers, employees, agents
and affiliates (each being an "Indemnified Party") from and against any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and disbursements of counsel) that may be incurred
by or asserted against such Indemnified Party (i) in connection with the
investigation of, preparation for or defense of any pending or threatened claim
or any action or proceeding (A) arising out of or relating to the transactions
described in the Loan Documents or any transaction or proposed transaction in
which any proceeds of any Advances are applied or proposed to be applied,
directly or indirectly, by the Borrower, whether or not such Indemnified Party
is a party to such transaction and whether or not the transactions contemplated
herein are consummated, or (B) arising out of or relating to the Borrower's
entering into the Loan Documents, or to any actions or omissions of the Borrower
or any of its Subsidiaries or Affiliates or any of their respective directors,
officers, employees or agents in connection therewith, or (ii) as a result of
any compliance by the Borrower, or failure by the Borrower to comply, with the
HMO Regulations, the securities law of the United States and each state or any
Environmental Laws. The obligations of the Borrower under this Section 8.04(b)
shall survive repayment of the Advances.
(c) If any payment of principal, or conversion of, of any Eurodollar
Rate Advance is made to or for the account of a Lender other than on the last
day of the Interest Period for such Revolving Advance, as a result of a
prepayment pursuant to Section 2.09, acceleration of the maturity of the Notes
pursuant to Section 6.01 or for any other reason whatsoever, the Borrower shall,
upon demand by such Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses which it may reasonably
incur as a result of such payment, including, without limitation, any loss
(excluding loss of
49
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Advance.
SECTION 8.05. RIGHT OF SET-OFF. Upon (i) the occurrence and during
the continuance of any Event of Default under this Agreement and (ii) the making
of the request or the granting of the consent specified by Section 6.01 to
authorize the Agent to declare the Notes and the Advances due and payable
pursuant to the provisions of Section 6.01, each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender or such Affiliate to or for
the credit or the account of the Borrower or any of its Subsidiaries against any
and all of the obligations of the Borrower now or hereafter existing under any
Loan Document, irrespective of whether or not such Lender shall have made any
demand under such Loan Document and although such obligations may be unmatured;
PROVIDED, HOWEVER, that the exercise of any such rights against an HMO
Subsidiary or Insurance Subsidiary (or their respective Subsidiaries) shall be
subject to compliance with applicable HMO Regulations and Insurance Regulations.
Each Lender agrees promptly to notify the Borrower after any such set-off and
application made by such Lender, PROVIDED that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Lender and its Affiliates under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which such Lender and its Affiliates may have.
SECTION 8.06. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrower, the Agent and each Bank, and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Agent, each Bank and each Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lenders.
SECTION 8.07. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender may,
and if demanded by the Borrower (following a demand by such Lender pursuant to
Section 2.11 or during a period when the Borrower is making the increased
payments contemplated by Section 2.14(a) or making indemnification for taxes
under Section 2.14(c), upon at least 20 Business Days' notice to such Lender and
the Agent) will, assign to one or more banks or other entities all or a portion
of its rights and obligations as a Lender under this Agreement and the Revolving
Notes (including, without limitation, all or a portion of its Commitment, the
Revolving Advances owing to it and the Revolving Note or Notes held by it in
respect of the Revolving Advances); PROVIDED, HOWEVER, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all of the
assigning Lender's rights and obligations under this Agreement and the Revolving
Notes , (ii) the aggregate amount of the Commitment and/or Revolving Advances of
the assigning Lender being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $10,000,000 and shall be an integral multiple of
$1,000,000 in excess thereof, (iii) each such assignment shall be to an Eligible
Assignee approved by the Borrower (which approval shall not be unreasonably
withheld), (iv) each such assignment made as a result of a demand by the
Borrower pursuant
50
to this Section 8.07(a) shall be arranged by the Borrower (at its expense,
including, without limitation, payment of the processing and recordation fee
referred to in subclause (vi) hereof) after consultation with the Agent, shall
be to an Eligible Assignee acceptable to the Majority Lenders and shall be
either an assignment of all of the rights and obligations of the assigning
Lender under this Agreement or an assignment of a portion of such rights and
obligations made concurrently with another such assignment or other such
assignments which together cover all of the rights and obligations of the
assigning Lender under this Agreement, (v) no Lender shall be obligated to make
any such assignment as a result of a demand made by the Borrower pursuant to
this Section 8.07(a) unless and until such Lender shall have received one or
more payments from either the Borrower or one or more Eligible Assignees in an
aggregate amount at least equal to the aggregate outstanding principal amount of
the Revolving Advances owing to such Lender, together with accrued interest
thereon to the date of payment of such principal amount and all other amounts
payable to such Lender under this Agreement and the Revolving Notes, (vi) the
parties to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Revolving Note or Notes subject to such assignment and a processing and
recordation fee of $2,500 and (vii) all other costs and expenses relating to
each such assignment shall be borne by the parties thereto. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, (x) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations under the Loan
Documents have been assigned to it pursuant to such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder and thereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
under the Loan Documents have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and be released from its obligations under
the Loan Documents (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement and Revolving Notes, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty (whether written or oral) and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
any Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document or any other instrument
or document furnished pursuant hereto or thereto; (ii) such assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrower or the performance or observance by
the Borrower of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant hereto or thereto; (iii) such assignee
confirms that it has received a copy of each of the Loan Documents, together
with copies of the financial statements referred to in Section 4.01(f) and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the Agent, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under
51
this Agreement or any other Loan Document; (v) such assignee confirms that it is
an Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement and the
Revolving Notes are required to be performed by it as a Lender.
(c) The Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Advances owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Revolving Note or Notes subject to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit A hereto and the assignee has been approved by
the Borrower pursuant to Section 8.07(a), (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register, and
(iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Agent in exchange for the surrendered Revolving Note
or Notes, a new Revolving Note to the order of such Eligible Assignee in an
amount equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment hereunder, a
new Revolving Note to the order of the assigning Lender in an amount equal to
the Commitment retained by it hereunder. Such new Revolving Note or Notes shall
be in an aggregate principal amount equal to the aggregate principal amount of
such surrendered Revolving Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit C hereto.
(e) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under the Loan
Documents (including, without limitation, all or a portion of its Commitment,
the Advances owing to it and the Note or Notes held by it); PROVIDED, HOWEVER,
that (i) such Lender's obligations under the Loan Documents (including, without
limitation, its Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Lender shall remain the holder
of any such Note for all purposes of the Loan Documents, and (iv) the Borrower,
the Agent and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under the
Loan Documents, PROVIDED, FURTHER, that, to the extent of any such participation
(unless otherwise stated therein and subject to the preceding PROVISO), the
assignee or purchaser of such participation shall, to
52
the fullest extent permitted by law, have the same rights and benefits hereunder
as it would have if it were a Lender hereunder; and PROVIDED, FURTHER, that
each such participation shall be granted pursuant to an agreement providing that
the purchaser thereof shall not have the right to consent or object to any
action by the selling Lender (who shall retain such right) other than an action
which would (i) reduce principal of or interest on any Advance or fees in which
such purchaser has an interest, or (ii) postpone any date fixed for payment of
principal of or interest on any such Advance or such fees.
(f) Notwithstanding any term or provision of this Section 8.07 or
this Agreement expressly or impliedly to the contrary, each Lender may assign,
as collateral or otherwise, any or all of its rights (including, without
limitation, rights to payments of principal and/or interest hereunder or under
the Notes) hereunder and the other Loan Documents to any Federal Reserve Bank or
any Affiliate of such Lender without notice to or the consent of the Borrower,
any other Lender or the Agent.
SECTION 8.08. SEVERABILITY OF PROVISIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 8.09. INDEPENDENCE OF PROVISIONS. All agreements and
covenants hereunder and under the Loan Documents shall be given independent
effect such that if a particular action or condition is prohibited by the terms
of any such agreement or covenant, the fact that such action or condition would
be permitted within the limitations of another agreement or covenant shall not
be construed as allowing such action to be taken or condition to exist.
SECTION 8.10. HEADINGS. Article and Section headings in this
Agreement are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
SECTION 8.11. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
SECTION 8.12. CONFIDENTIALITY. Each Lender and the Agent agrees that
it will not disclose to any third party any proprietary and confidential
information provided to it by the Borrower; PROVIDED, THAT, the foregoing will
not (i) restrict the ability of the Agent, the Lenders and any loan participants
from freely exchanging such information among themselves (and their respective
employees, attorneys, agents and advisors), (ii) restrict the ability to
disclose such information to a prospective Eligible Assignee or participant,
PROVIDED, THAT, such Eligible Assignee or participant executes a confidentiality
agreement with the selling Lender agreeing to be bound by the terms hereof prior
to disclosure of such information to such Eligible Assignee or participant or
(iii) prohibit the disclosure of such information to the extent such information
(a) is or becomes publicly available, (b) becomes
53
available on a non-confidential basis from a Person who has no obligation to
keep such information confidential or (c) is required to be disclosed pursuant
to court order, subpoena, other legal process, regulatory request or otherwise
by law.
SECTION 8.13. CONSENT TO JURISDICTION. (a) The Borrower hereby
irrevocably submits to the jurisdiction of any New York State or Federal court
sitting in the City of New York, New York County, in any action or proceeding
arising out of or relating to this Agreement or any other Loan Document, and the
Borrower hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State court or such
Federal court. The Borrower hereby irrevocably waives, to the fullest extent it
may effectively do so, the defense of an inconvenient forum to the maintenance
of such action or proceeding. The Borrower hereby irrevocably consents to the
service of copies of the summons and complaint and any other process which may
be served in any such action or proceeding by certified mail, return receipt
requested, or by delivering of a copy of such process to the Borrower at its
address specified in Section 8.02 or by any other method permitted by law. The
Borrower agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
by any other manner provided by law.
(b) Nothing in this Section 8.13 shall affect the right of any
Lender, the Agent or the Borrower to serve legal process in any other manner
permitted by law or affect the right of any Lender or the Agent to bring any
action or proceeding against the Borrower or its property in the courts of other
jurisdictions.
SECTION 8.14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 8.15. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT
AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS, THE ADVANCES OR THE NOTES, OR THE ACTIONS OF THE
AGENT OR ANY LENDER IN CONNECTION WITH THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
54
IN WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
THE BORROWER:
------------
FOUNDATION HEALTH CORPORATION
-----------------------------
By: _________________________
Name:
Title:
THE AGENT:
---------
CITIBANK, N.A.
--------------
By: _________________________
Name:
Title:
THE BANKS:
Commitment: $40,000,000 CITIBANK, N.A.
--------------
By: _________________________
Name:
Title:
Commitment: $35,000,000 BANK OF AMERICA, N.T. & S.A.
----------------------------
By: _________________________
Name:
Title:
Commitment: $25,000,000 THE SANWA BANK, LIMITED
-----------------------
By: _________________________
Name:
Title:
Commitment: $15,000,000 UNION BANK OF CALIFORNIA, N.A.
------------------------------
By: _________________________
Name:
Title:
55
Commitment: $20,000,000 THE CHASE MANHATTAN BANK, N.A.
------------------------------
By: _________________________
Name:
Title:
Commitment: $20,000,000 NATIONSBANK OF TEXAS, N.A.
--------------------------
By: _________________________
Name:
Title:
Commitment: $15,000,000 CREDIT LYONNAIS NEW YORK BRANCH
-------------------------------
By: _________________________
Name:
Title:
Commitment: $15,000,000 THE SUMITOMO BANK, LIMITED,
--------------------------
By: _________________________
Name:
Title:
Commitment: $15,000,000 THE BANK OF NOVA SCOTIA
-----------------------
By: _________________________
Name:
Title:
_______________________
Total: $200,000,000
56
SCHEDULE 1
----------
LENDING OFFICES, ADDRESSES, ETC.
--------------------------------
LENDER ADDRESS
------ -------
CITIBANK, N.A. 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxx
BANK OF AMERICA, N.T. & S.A. 000 Xxxxx Xxxxxx Xxxxxx
00xx Xxxxx, #0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxxx
THE SANWA BANK, LIMITED 000 X. Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
THE CHASE MANHATTAN BANK, N.A. 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
NATIONSBANK OF TEXAS, N.A. 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxxx Xxxxx
57
CREDIT LYONNAIS Healthcare Group
NEW YORK BRANCH 1301 Avenue of the Xxxxxxxx,
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Farboud Tavangar
THE SUMITOMO BANK, LIMITED 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
XXX XXXXXXXXX XXXXXX Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
THE BANK OF NOVA SCOTIA 000 Xxxxxxxxxx Xxxxxx Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxxx
58
SCHEDULE 2
----------
SUBSIDIARIES
------------
See Attached
59
