EXHIBIT 10.29
EXECUTION COPY
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CREDIT AGREEMENT
dated as of May 13, 2004
among
WELLCARE HOLDINGS, LLC
WELLCARE HEALTH PLANS, INC.
THE WELLCARE MANAGEMENT GROUP, INC.
COMPREHENSIVE HEALTH MANAGEMENT, INC.
THE LENDERS PARTY HERETO
and
CREDIT SUISSE FIRST BOSTON,
as Administrative Agent
-------------------------
CREDIT SUISSE FIRST BOSTON
and
XXXXXX XXXXXXX SENIOR FUNDING, INC.,
as Joint Bookrunners and Joint Lead Arrangers
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[CS & M Ref. No. 2162-126]
TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
SECTION 1.01. Defined Terms................................................................... 1
SECTION 1.02. Terms Generally................................................................. 28
SECTION 1.03. Pro Forma Calculations.......................................................... 29
SECTION 1.04. Classification of Loans and Borrowings.......................................... 29
ARTICLE II
The Credits
SECTION 2.01. Commitments..................................................................... 29
SECTION 2.02. Loans........................................................................... 30
SECTION 2.03. Borrowing Procedure............................................................. 32
SECTION 2.04. Evidence of Debt; Repayment of Loans............................................ 32
SECTION 2.05. Fees............................................................................ 33
SECTION 2.06. Interest on Loans............................................................... 34
SECTION 2.07. Default Interest................................................................ 34
SECTION 2.08. Alternate Rate of Interest...................................................... 35
SECTION 2.09. Termination and Reduction of Commitments........................................ 35
SECTION 2.10. Conversion and Continuation of Borrowings....................................... 35
SECTION 2.11. Repayment of Term Borrowings.................................................... 37
SECTION 2.12. Optional Prepayments............................................................ 38
SECTION 2.13. Mandatory Prepayments........................................................... 38
SECTION 2.14. Reserve Requirements; Change in Circumstances................................... 40
SECTION 2.15. Change in Legality.............................................................. 41
ii
SECTION 2.16. Indemnity....................................................................... 42
SECTION 2.17. Pro Rata Treatment.............................................................. 42
SECTION 2.18. Sharing of Setoffs.............................................................. 43
SECTION 2.19. Payments........................................................................ 43
SECTION 2.20. Taxes........................................................................... 44
SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty to Mitigate......... 45
SECTION 2.22. Swingline Loans................................................................. 46
SECTION 2.23. Letters of Credit............................................................... 47
SECTION 2.24. Increase in Term Loan Commitments............................................... 51
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers............................................................ 53
SECTION 3.02. Authorization................................................................... 54
SECTION 3.03. Enforceability.................................................................. 54
SECTION 3.04. Governmental Approvals.......................................................... 54
SECTION 3.05. Financial Statements............................................................ 55
SECTION 3.06. No Material Adverse Change...................................................... 55
SECTION 3.07. Title to Properties; Possession Under Leases.................................... 55
SECTION 3.08. Subsidiaries.................................................................... 56
SECTION 3.09. Litigation; Compliance with Laws................................................ 56
SECTION 3.10. Agreements...................................................................... 57
SECTION 3.11. Federal Reserve Regulations..................................................... 57
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act...................... 57
SECTION 3.13. Tax Returns..................................................................... 58
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SECTION 3.14. No Material Misstatements....................................................... 58
SECTION 3.15. Employee Benefit Plans.......................................................... 58
SECTION 3.16. Environmental Matters........................................................... 58
SECTION 3.17. Insurance....................................................................... 59
SECTION 3.18. Security Documents.............................................................. 59
SECTION 3.19. Location of Real Property and Leased Premises................................... 60
SECTION 3.20. Labor Matters................................................................... 60
SECTION 3.21. Solvency........................................................................ 60
SECTION 3.22. Senior Debt Status.............................................................. 60
SECTION 3.23. Licensing and Accreditation..................................................... 60
SECTION 3.24. Medicare and Medicaid Notices and Filings Related to Business................... 61
ARTICLE IV
Conditions of Lending
SECTION 4.01. All Credit Events............................................................... 62
SECTION 4.02. First Credit Event.............................................................. 62
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties............................................ 65
SECTION 5.02. Insurance....................................................................... 66
SECTION 5.03. Obligations and Taxes........................................................... 66
SECTION 5.04. Financial Statements, Reports, etc.............................................. 66
SECTION 5.05. Litigation and Other Notices.................................................... 68
SECTION 5.06. Information Regarding Collateral................................................ 69
SECTION 5.07. Maintaining Records; Access to Properties and Inspections; Maintenance of
Ratings......................................................................... 69
iv
SECTION 5.08. Use of Proceeds................................................................. 70
SECTION 5.09. Compliance with Laws............................................................ 70
SECTION 5.10. Further Assurances.............................................................. 71
SECTION 5.11. Designation of Obligations; Matters Relating to the Seller Note................. 71
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness.................................................................... 72
SECTION 6.02. Liens........................................................................... 75
SECTION 6.03. Sale and Lease-Back Transactions................................................ 76
SECTION 6.04. Investments, Loans, Advances and Guarantees..................................... 77
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions....................... 79
SECTION 6.06. Restricted Payments; Restrictive Agreements..................................... 79
SECTION 6.07. Transactions with Affiliates.................................................... 80
SECTION 6.08. Business of Parent and Subsidiaries; Ownership of Subsidiaries; Preferred Equity
Interests....................................................................... 80
SECTION 6.09. Other Indebtedness and Agreements............................................... 81
SECTION 6.10. Capital Expenditures............................................................ 81
SECTION 6.11. Fixed Charge Coverage Ratio..................................................... 82
SECTION 6.12. Leverage Ratio.................................................................. 82
SECTION 6.13. Fiscal Year..................................................................... 82
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ARTICLE VII
Events of Default
ARTICLE VIII
The Administrative Agent and the Collateral Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices......................................................................... 88
SECTION 9.02. Survival of Agreement........................................................... 88
SECTION 9.03. Binding Effect.................................................................. 89
SECTION 9.04. Successors and Assigns.......................................................... 89
SECTION 9.05. Expenses; Indemnity............................................................. 93
SECTION 9.06. Right of Setoff................................................................. 94
SECTION 9.07. Applicable Law.................................................................. 95
SECTION 9.08. Waivers; Amendment.............................................................. 95
SECTION 9.09. Interest Rate Limitation........................................................ 96
SECTION 9.10. Entire Agreement................................................................ 96
SECTION 9.11. WAIVER OF JURY TRIAL............................................................ 97
SECTION 9.12. Severability.................................................................... 97
SECTION 9.13. Counterparts.................................................................... 97
SECTION 9.14. Headings........................................................................ 97
SECTION 9.15. Jurisdiction; Consent to Service of Process..................................... 97
SECTION 9.16. Confidentiality................................................................. 98
SECTION 9.17. Release of Subsidiary Loan Parties and Collateral............................... 99
SECTION 9.18. USA Patriot Act Notice.......................................................... 99
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Exhibits
Exhibit A -- Form of Administrative Questionnaire
Exhibit B -- Form of Assignment and Acceptance
Exhibit C -- Form of Borrowing Request
Exhibit D -- Form of Guarantee and Collateral Agreement
Exhibit E -- Form of Notice of Conversion/Continuation
Exhibit F -- Form of Notice of Prepayment
Exhibit G -- Form of Closing Date Opinion of Xxxxxxxx & Xxxxx LLP
Exhibit H-1 -- Form of Intercompany Subordination Provisions
Exhibit H-2 -- Form of Third-Party Subordination Provisions
Schedules
Schedule 2.01 -- Lenders and Commitments
Schedule 3.08 -- Subsidiaries
Schedule 3.09 -- Disclosed Matters
Schedule 3.16 -- Environmental Matters
Schedule 3.17 -- Insurance
Schedule 3.18(a) -- UCC Filing Offices
Schedule 3.19(a) -- Owned Real Property
Schedule 3.19(b) -- Leased Real Property
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
CREDIT AGREEMENT dated as of May 13, 2004, among
WELLCARE HOLDINGS, LLC, a Delaware limited liability
company ("HOLDINGS"), WELLCARE HEALTH PLANS, INC., a
Delaware corporation ("WHP"), THE WELLCARE MANAGEMENT
GROUP, INC., a New York corporation ("WMG"),
COMPREHENSIVE HEALTH MANAGEMENT, INC., a Florida
corporation ("CHM" and, together with WHP and WMG, the
"BORROWERS"), the Lenders (as defined in Article I) and
CREDIT SUISSE FIRST BOSTON, as administrative agent (in
such capacity, the "ADMINISTRATIVE AGENT") and as
collateral agent (in such capacity, the "COLLATERAL
AGENT") for the Lenders.
The Borrowers have requested the Lenders to extend credit in the form of
(a) Term Loans (such term and each other capitalized term used but not defined
in this introductory statement having the meaning assigned to it in Article I)
on the Closing Date, in an aggregate principal amount not in excess of
$160,000,000, and (b) Revolving Loans at any time and from time to time prior to
the Revolving Credit Maturity Date, in an aggregate principal amount at any time
outstanding not in excess of $50,000,000. The Borrowers have also requested the
Swingline Lender to extend credit, at any time and from time to time prior to
the Revolving Credit Maturity Date, in the form of Swingline Loans, in an
aggregate principal amount at any time outstanding not in excess of $10,000,000,
and the Issuing Bank to issue Letters of Credit, in an aggregate face amount at
any time outstanding not in excess of $10,000,000.
The Lenders are willing to extend such credit to the Borrowers and the
Issuing Bank is willing to issue Letters of Credit for the account of the
Borrowers on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"ADJUSTED LIBO RATE" shall mean, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the product of (a) the LIBO Rate in
effect for such Interest Period and (b) Statutory Reserves.
"ADMINISTRATIVE AGENT FEES" shall have the meaning assigned to such term
in Section 2.05(b).
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"ADMINISTRATIVE QUESTIONNAIRE" shall mean an Administrative Questionnaire
in the form of Exhibit A, or such other form as may be supplied from time to
time by the Administrative Agent.
"AFFILIATE" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified; provided, however, that, solely for purposes of Section 6.07, the
term "Affiliate" shall also include any person that directly or indirectly owns
5% or more of any class of Equity Interests of the person specified or that is
an officer or director of the person specified (it being agreed that for
purposes of this proviso the Class A Common Units, the Class B Common Units and
the Class C Common Units of Holdings shall be deemed to be a single class of
Equity Interests).
"AGGREGATE REVOLVING CREDIT EXPOSURE" shall mean the aggregate amount of
the Lenders' Revolving Credit Exposures.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. If the Administrative
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Effective Rate
for any reason, including the inability or failure of the Administrative Agent
to obtain sufficient quotations in accordance with the terms of the definition
thereof, the Alternate Base Rate shall be determined without regard to clause
(b) of the preceding sentence until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds Effective
Rate, as the case may be.
"APPLICABLE PERCENTAGE" shall mean (except as otherwise provided in the
Incremental Term Loan Assumption Agreements with respect to any Incremental Term
Loan), for any day, (a) with respect to any Eurodollar Term Loan, 4.00%, (b)
with respect to any ABR Term Loan, 3.00%, (c) with respect to any Swingline
Loan, the applicable percentage set forth below under the caption "ABR Spread"
based upon the Leverage Ratio as of the relevant date of determination and (d)
with respect to any Eurodollar Loan or ABR Loan that is a Revolving Loan, the
applicable percentage set forth below under the caption "Eurodollar Spread" or
"ABR Spread", as the case may be, based upon the Leverage Ratio as of the
relevant date of determination:
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LEVERAGE RATIO EURODOLLAR SPREAD ABR SPREAD
Category 1 3.75% 2.75%
Greater than 2.0 to 1.0
Category 2 3.50% 2.50%
Greater than 1.5 to 1.0 but less than or equal to
2.0 to 1.0
Category 3 3.25% 2.25%
Equal to or less than 1.5 to 1.0
Each change in the Applicable Percentage resulting from a change in the
Leverage Ratio shall be effective with respect to all Revolving Loans, Swingline
Loans and Letters of Credit outstanding on and after the date of delivery to the
Administrative Agent of the financial statements required by clause (a) or (b)
of Section 5.04 and certificates required by clause (d) of such Section
indicating such change until the date immediately preceding the next date of
delivery of such financial statements and certificates indicating another such
change. Notwithstanding the foregoing, until Parent shall have delivered the
financial statements required by clause (a) of Section 5.04 and the certificates
required by clause (d) of such Section for the period ended December 31, 2004,
the Leverage Ratio shall be deemed to be in Category 1 for purposes of
determining the Applicable Percentage with respect to the Revolving Loans,
Swingline Loans and Letters of Credit. In addition, at any time after the
occurrence and during the continuance of an Event of Default, the Leverage Ratio
shall be deemed to be in Category 1 for purposes of determining the Applicable
Percentage with respect to the Revolving Loans, Swingline Loans and Letters of
Credit. Notwithstanding the foregoing, the Applicable Percentage with respect to
any Eurodollar Term Loan or ABR Term Loan shall automatically be increased by
the Yield Differential, if any, upon the making of any Other Term Loans, as
provided in Section 2.24(b).
"ARRANGERS" shall mean CSFB and Xxxxxx Xxxxxxx Senior Funding, Inc.
"ASSET SALE" shall mean the sale, transfer or other disposition (by way of
merger, casualty, condemnation or otherwise) by Parent or any of the
Subsidiaries to any person other than Parent, any Borrower or any Subsidiary
Guarantor of (a) any Equity Interests of any of the Subsidiaries (other than
directors' qualifying shares) or (b) any other assets (other than cash) of
Parent or any of the Subsidiaries (other than (i) inventory, damaged, obsolete
or worn out assets, scrap and Permitted Investments, in each case disposed of in
the ordinary course of business, (ii) dispositions between or among Subsidiaries
that are not Loan Parties or (iii) Excluded Asset Sales), provided that any
asset sale or series of related asset sales described in clause (b) above having
a value not in excess of $250,000 shall be deemed not to be an "Asset Sale" for
purposes of this Agreement.
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"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit B or such other form as shall be approved by the
Administrative Agent.
"ASSIGNMENT OF CLAIMS ACT" shall mean the Assignment of Claims Act of
1940, as amended from time to time.
"BOARD" shall mean the Board of Governors of the Federal Reserve System of
the United States of America.
"BORROWING" shall mean (a) Loans of the same Class and Type made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, or (b) a Swingline Loan.
"BORROWING REQUEST" shall mean a request by any Borrower in accordance
with the terms of Section 2.03 and substantially in the form of Exhibit C, or
such other form as shall be approved by the Administrative Agent.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or day on
which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Eurodollar Loan, the term
"BUSINESS DAY" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"CAPITAL EXPENDITURES" shall mean, for any period, without duplication,
(a) the additions to property, plant and equipment and other capital
expenditures of Parent and its consolidated Subsidiaries that are (or should be)
set forth in a consolidated statement of cash flows of Parent for such period
prepared in accordance with GAAP and (b) Capital Lease Obligations or Synthetic
Lease Obligations incurred by Parent and its consolidated Subsidiaries during
such period, but excluding in each case any such expenditure made to restore,
replace or rebuild property to the condition of such property immediately prior
to any damage, loss, destruction or condemnation of such property, to the extent
such expenditure is made with insurance proceeds, condemnation awards or damage
recovery proceeds relating to any such damage, loss, destruction or
condemnation.
"CAPITAL LEASE OBLIGATIONS" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CHAMPUS" shall mean the United States Department of Defense Civilian
Health and Medical Program of the Uniformed Services, or any successor thereto,
including TRICARE.
5
A "CHANGE IN CONTROL" shall be deemed to have occurred if (a) prior to
the IPO, Xxxxx, or one or more Affiliates of Xxxxx, shall fail to own, directly
or indirectly, beneficially and of record, Equity Interests in Parent
representing more than 50% of each of the aggregate ordinary voting power and
aggregate equity value represented by the issued and outstanding Equity
Interests in Parent; (b) after the IPO, any "person" or "group" (within the
meaning of Rule 13d-5 of the Securities Exchange Act of 1934 as in effect on the
date hereof), other than Xxxxx or any Affiliate of Xxxxx, shall own, directly or
indirectly, beneficially or of record, Equity Interests in Parent representing
more than 25% of either the aggregate ordinary voting power or the aggregate
equity value represented by the issued and outstanding Equity Interests in
Parent; (c) after the IPO, during any period of 12 consecutive months (including
any such period commencing prior to the IPO), a majority of the members of the
board of directors of Parent ceases to be composed of individuals (i) who were
members of that board of directors on the first day of such period, (ii) whose
election or nomination to that board of directors was approved by individuals
referred to in clause (i) above constituting at the time of such election or
nomination at least a majority of that board of directors or (iii) whose
election or nomination to that board of directors was approved by individuals
referred to in clauses (i) or (ii) above constituting at the time of such
election or nomination at least a majority of that board of directors
(excluding, in the case of both clause (ii) and (iii), any individual whose
initial nomination for, or assumption of office as, a member of that board of
directors occurs as a result of an actual or threatened solicitation of proxies
or consents for the election or removal of one or more directors by any person
or group other than a solicitation for the election of one or more directors by
or on behalf of the board of directors); (d) any change in control (or similar
event, however denominated, including the "Sale of the Maker" as such term is
defined in the Seller Note) with respect to Parent or any Subsidiary shall occur
under and as defined in any indenture or agreement in respect of Material
Indebtedness to which Parent or any Subsidiary is a party, or (e) Parent shall
cease to directly or indirectly own, beneficially and of record, 100% of the
issued and outstanding Equity Interests of each Borrower.
"CHANGE IN LAW" shall mean (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.14, by any lending office of such Lender or
by such Lender's or Issuing Bank's holding company, if any, but if not having
the force of law, being of a type with which such person would ordinarily
comply) with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority made or issued after the date of
this Agreement.
"CHM MANAGEMENT AGREEMENTS" shall mean the Management Agreements between
CHM and certain HMO Subsidiaries, as approved by the applicable Governmental
Authorities, as the same may be amended, supplemented or otherwise modified from
time to time.
"CLASS", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Term Loans,
6
Incremental Term Loans (with the Incremental Term Loans made on each date to
constitute a separate Class) or Swingline Loans and, when used in reference to
any Commitment, refers to whether such Commitment is a Revolving Credit
Commitment, a Term Loan Commitment, an Incremental Term Loan Commitment or a
Swingline Commitment.
"CLOSING DATE" shall mean the date of the first Credit Event.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"COLLATERAL" shall mean all the "Collateral" as defined in any Security
Document and shall also include the Mortgaged Properties.
"COMMITMENT" shall mean, with respect to any Lender, such Lender's
Revolving Credit Commitment, Term Loan Commitment, Incremental Term Loan
Commitment and, in the case of the Swingline Lender, such Lender's Swingline
Commitment.
"COMMITMENT FEE" shall have the meaning assigned to such term in Section
2.05(a).
"CONFIDENTIAL INFORMATION MEMORANDUM" shall mean the Confidential
Information Memorandum of the Borrowers dated April 2004.
"CONSOLIDATED EBITDA" shall mean, for any period, Consolidated Net Income
for such period plus (a) without duplication and to the extent deducted in
determining such Consolidated Net Income, the sum of (i) Consolidated Interest
Expense for such period, (ii) consolidated income tax expense for such period,
(iii) all amounts attributable to depreciation, amortization or write-downs of
goodwill for such period and (iv) any non-cash charges (other than the
write-down of current assets) for such period (provided, that any cash payment
made with respect to any non-cash charge in a prior period shall be subtracted
in computing Consolidated EBITDA during the period in which such cash payment is
made), (v) any extraordinary non-cash losses for such period (provided, that any
cash payment made in respect of items that are the subject of any extraordinary
non-cash loss in a prior period shall be subtracted in computing Consolidated
EBITDA during the period in which such cash payment is made), and minus (b) to
the extent included in determining such Consolidated Net Income, any
extraordinary gains and all non-cash items of income for such period, all
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED FIXED CHARGES" shall mean, for any period, the sum of (a)
Consolidated Interest Expense for such period, (b) the aggregate amount of
scheduled principal payments made during such period in respect of long-term
Indebtedness of Parent and the Subsidiaries (other than payments made by Parent
or any Subsidiary to Parent or a Subsidiary), (c) the aggregate amount of
principal payments (other than scheduled principal payments) made during such
period in respect of long-term Indebtedness of Parent and the Subsidiaries, to
the extent that such payments reduced any scheduled principal payments that
would have become due within one year after the date
7
of the applicable payment and (d) the aggregate amount of income Taxes paid in
cash by Parent and the Subsidiaries during such period.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, the sum of (a)
the interest expense (including imputed interest expense in respect of Capital
Lease Obligations and Synthetic Lease Obligations) of Parent and the
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP, plus (b) any interest accrued during such period in respect of
Indebtedness of Parent or any Subsidiary that is required to be capitalized
rather than included in consolidated interest expense for such period in
accordance with GAAP. For purposes of the foregoing, interest expense shall be
determined after giving effect to any net payments made or received by Parent or
any Subsidiary with respect to interest rate Hedging Agreements.
"CONSOLIDATED NET INCOME" shall mean, for any period, the net income or
loss of Parent and the Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded (a) the
income of any Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by the Subsidiary of that income is not at
the time permitted by operation of the terms of its organizational documents or
any agreement (other than an agreement with a Governmental Authority) to which
such Subsidiary is a party, (b) subject to Section 1.03, the income or loss of
any person accrued prior to the date it becomes a Subsidiary or is merged into
or consolidated with Parent or any Subsidiary or the date that such person's
assets are acquired by Parent or any Subsidiary, (c) the income of any person
(other than Parent) in which any other person (other than Parent or a wholly
owned Subsidiary or any director holding qualifying shares in accordance with
applicable law) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Parent or a wholly owned
Subsidiary by such person during such period, (d) any gains attributable to
sales of assets out of the ordinary course of business and (e) any non-cash
losses attributable to sales of assets out of the ordinary course of business.
"CONTROL" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a person,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "CONTROLLING" and "CONTROLLED" shall have meanings correlative
thereto.
"CREDIT EVENT" shall have the meaning assigned to such term in Section
4.01.
"CREDIT FACILITIES" shall mean the revolving credit and term loan
facilities provided for by this Agreement.
"CREDIT TRANSACTIONS" shall have the meaning assigned to such term in
Section 3.02.
"CSFB" shall mean Credit Suisse First Boston, acting through its Cayman
Islands branch.
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"DEFAULT" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"DISCOUNT NOTES" shall mean 8% Senior Discount Notes due March 5, 2009 of
WMG.
"DOLLARS" or "$" shall mean lawful money of the United States of America.
"DOMESTIC SUBSIDIARIES" shall mean all Subsidiaries incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.
"ENVIRONMENTAL LAWS" shall mean all applicable and legally binding laws,
regulations, rules, ordinances, codes, decrees, judgments, directives, orders,
and binding agreements promulgated or entered into by any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, human health and safety or the presence, management,
Release of, or exposure to Hazardous Materials.
"ENVIRONMENTAL LIABILITY" shall mean all liabilities, obligations,
damages, losses, claims, actions, suits, judgments, orders, fines, penalties,
fees, expenses and costs (including administrative oversight costs, natural
resource damages and remediation costs), whether contingent or otherwise,
arising out of or relating to (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release of
any Hazardous Materials or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.
"EQUITY INTERESTs" shall mean shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity interests in any person.
"EQUITY ISSUANCE" shall mean any issuance or sale by Parent or any
Subsidiary of any Equity Interests of Parent or any such Subsidiary, as
applicable, except in each case for (a) any issuance or sale to Parent or any
Subsidiary, (b) any issuance of directors' qualifying shares, (c) sales or
issuances of common stock or common units of Parent to management, employees or
former employees of Parent or of any Subsidiary under any employee stock or unit
option or stock or unit purchase plan or employee benefit plan in existence from
time to time and (d) sales or issuances of common stock or common units of
Parent to directors or consultants of Parent or any Subsidiary whether or not
pursuant to any plan.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA AFFILIATE" shall mean any trade or business (whether or not
incorporated) that, together with Parent, is treated as a single employer under
Section 414(b) or (c) of
9
the Code, or solely for purposes of Section 302 of ERISA and Section 412 of the
Code, is treated as a single employer under Section 414 of the Code.
"ERISA EVENT" shall mean (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder, with respect to a Plan
(other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by Parent or any of its ERISA Affiliates
of any liability under Title IV of ERISA with respect to the termination of any
Plan or the withdrawal or partial withdrawal of Parent or any of its ERISA
Affiliates from any Plan or Multiemployer Plan; (e) the receipt by Parent or any
of its ERISA Affiliates from the PBGC or a plan administrator of any notice
relating to the intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (f) the adoption of any amendment to a Plan that would
require the provision of security pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; (g) the receipt by Parent or any of its ERISA Affiliates
of any notice, or the receipt by any Multiemployer Plan from Parent or any of
its ERISA Affiliates of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA; (h) the
occurrence of a "prohibited transaction" with respect to which Parent or any of
the Subsidiaries is a "disqualified person" (within the meaning of Section 4975
of the Code) or with respect to which Parent or any such Subsidiary could
otherwise be liable; or (i) any other event or condition with respect to a Plan
or Multiemployer Plan that could result in liability of Parent or any
Subsidiary.
"EURODOLLAR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in Article
VII.
"EXCLUDED ASSET SALES" shall mean (a) any sale or other disposition of
office furniture, fixtures and equipment in connection with the headquarters
relocation, (b) any sale or other disposition of assets to be acquired as part
of the Harmony Acquisition and (c) exchange of existing computer equipment for
new computer equipment, in an aggregate amount for all of the foregoing not in
excess of $5,000,000.
"EXCLUDED TAXES" shall mean, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of any Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction described in clause (a) above, (c) in the case
10
of a Foreign Lender (other than an assignee pursuant to a request by Parent
under Section 2.21(a)), any withholding tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.20(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new (but not the initial) lending office (or assignment), to
receive additional amounts from any Borrower with respect to such withholding
tax pursuant to Section 2.20(a) and (d) any withholding tax imposed by a
jurisdiction (i) in which the applicable Borrower is not organized or resident
for tax purposes, (ii) through which no payment is made by or on behalf of the
applicable Borrower under this Agreement, and (iii) with respect to which there
is no other connection to a payment by or on behalf of the applicable Borrower
under this Agreement that would directly result in the imposition of Taxes by
such jurisdiction on that payment.
"EXCLUSION EVENT" shall mean any exclusion of Parent or any Subsidiary
from participation in any Medical Reimbursement Program.
"EXISTING CREDIT AGREEMENT" shall mean the Credit Agreement dated as of
March 13, 2003, as amended, among WHP, WMG, CHI, certain other subsidiaries of
WHP and Bank of America, N.A., as lender.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, 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 on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
the day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"FEE LETTER" shall mean the Fee Letter dated March 15, 2004, among Parent,
WHP, the Administrative Agent and the Arrangers, which was accepted by Parent
and WHP on March 16, 2004.
"FEES" shall mean the Commitment Fees, the Administrative Agent Fees, the
L/C Participation Fees and the Issuing Bank Fees.
"FINANCIAL OFFICER" of any person shall mean the chief financial officer,
principal accounting officer, treasurer or controller of such person.
"FIXED CHARGE COVERAGE RATIO" shall mean, for any period, the ratio of (a)
(i) Consolidated EBITDA for such period less (ii) Capital Expenditures for such
period to (b) Consolidated Fixed Charges for such period.
"FOREIGN LENDER" shall mean, with respect to any Borrower, any Lender that
is organized under the laws of a jurisdiction other than the United States of
America, any State thereof or the District of Columbia.
11
"FOREIGN SUBSIDIARY" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"GAAP" shall mean United States generally accepted accounting principles
applied on a consistent basis, as construed in accordance with Section 1.02.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"GRANTING LENDER" shall have the meaning assigned to such term in Section
9.04(i).
"GUARANTEE" of or by any person shall mean any obligation, contingent or
otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and including
any obligation of such person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness or other obligation, (b)
to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment of
such Indebtedness or other obligation or (c) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation; provided, however, that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business.
"GUARANTEE AND COLLATERAL AGREEMENT" shall mean the Guarantee and
Collateral Agreement, substantially in the form of Exhibit D, among Parent, the
Borrowers, the other Subsidiaries party thereto and the Collateral Agent for the
benefit of the Secured Parties.
"GUARANTEE AND COLLATERAL REQUIREMENT" shall mean the requirement that:
(a) the Administrative Agent shall have received from each Loan
Party either (i) a counterpart of the Guarantee and Collateral Agreement
duly executed and delivered on behalf of such Loan Party or (ii) in the
case of any person that becomes a Loan Party after the Closing Date, a
supplement to the Guarantee and Collateral Agreement, in the form
specified therein, duly executed and delivered on behalf of such Loan
Party;
(b) all outstanding Equity Interests of each Subsidiary (other than,
prior to release thereof from the pledge securing the Seller Note, the
Seller Note Pledged Stock) or other person owned directly by any Loan
Party shall have been pledged pursuant to the Guarantee and Collateral
Agreement (except that the Loan Parties shall not be required to pledge
any Equity Interests of any Immaterial Subsidiary or more than 65% of the
outstanding voting Equity Interests of any Foreign Subsidiary) and the
Collateral Agent shall have received certificates or other
12
instruments representing all such Equity Interests, together with undated
stock powers or other instruments of transfer with respect thereto
endorsed in blank;
(c) all Indebtedness of Parent or any Subsidiary that is owing to
any Loan Party shall be evidenced by a promissory note and shall have been
pledged pursuant to the Guarantee and Collateral Agreement and the
Collateral Agent shall have received all such promissory notes, together
with undated instruments of transfer with respect thereto endorsed in
blank;
(d) all documents and instruments, including Uniform Commercial Code
financing statements and documents necessary for compliance with the
Assignment of Claims Act, required by law or reasonably requested by the
Collateral Agent to be filed, registered or recorded to create the Liens
intended to be created by the Guarantee and Collateral Agreement and
perfect such Liens to the extent required by, and with the priority
required by, the Guarantee and Collateral Agreement, shall have been
filed, registered or recorded or delivered to the Collateral Agent for
filing, registration or recording;
(e) the Collateral Agent shall have received (i) counterparts of a
Mortgage with respect to each Mortgaged Property duly executed and
delivered by the record owner or lessee, as the case may be, of such
Mortgaged Property, (ii) a policy or policies of title insurance issued by
a nationally recognized title insurance company insuring the Lien of each
such Mortgage as a valid first Lien on the Mortgaged Property described
therein, free of any other Liens except as expressly permitted by Section
6.02, together with such endorsements, coinsurance and reinsurance as the
Collateral Agent may reasonably request, and (iii) such surveys,
abstracts, appraisals, legal opinions and other documents as the
Collateral Agent may reasonably request with respect to any such Mortgage
or Mortgaged Property; and
(f) each Loan Party shall have obtained all consents and approvals
required to be obtained by it in connection with the execution and
delivery of all Security Documents to which it is a party, the performance
of its obligations thereunder and the granting by it of the Liens
thereunder.
The foregoing definition shall not require the creation or perfection of
pledges of or security interests in, or the obtaining of title insurance or
surveys with respect to, particular assets if and for so long as, in the
judgment of the Collateral Agent, the cost of creating or perfecting such
pledges or security interests in such assets or obtaining title insurance or
surveys in respect of such assets shall be excessive in view of the benefits to
be obtained by the Lenders therefrom. The Collateral Agent may grant extensions
of time for the perfection of security interests in or the obtaining of title
insurance with respect to particular assets (including extensions beyond the
Closing Date for the perfection of security interests in the assets of the Loan
Parties on such date) where it determines that perfection cannot be accomplished
without undue effort or expense by the time or times at which it would otherwise
be required by this Agreement or the Security Documents.
13
"GUARANTORS" shall mean Parent and the Subsidiary Guarantors.
"HARMONY ACQUISITION" shall mean the acquisition by WHP, directly or
indirectly, pursuant to the Harmony Acquisition Documents, of all the capital
stock of Harmony Health Systems, Inc., a New Jersey corporation.
"HARMONY ACQUISITION CONSIDERATION" shall mean the aggregate cash payment,
not in excess of $60,000,000, to be made by WMG to the selling stockholders and
the escrow agent pursuant to the Harmony Merger Agreement on the date of the
consummation of the transactions contemplated by such agreement.
"HARMONY ACQUISITION DOCUMENTS" shall mean the Harmony Merger Agreement
and the other agreements entered into in connection with the Harmony
Acquisition, and all schedules, exhibits and annexes to each of the foregoing
and all side letters and agreements affecting the terms of the foregoing or
entered into in connection therewith.
"HARMONY MANAGEMENT AGREEMENT" shall mean the Management Agreement between
Harmony Health Plan of Illinois, Inc. and Harmony Health Management, Inc., as
approved by the applicable Governmental Authorities, as the same may be amended,
supplemented or otherwise modified from time to time.
"HARMONY MERGER AGREEMENT" shall mean the merger agreement dated as of
March 3, 2004, by and among WHP, Zephyr Acquisition Sub, Inc., Harmony Health
Systems, Inc. and the other parties named therein.
"HARMONY TRANSACTIONS" shall have the meaning assigned to such term in
Section 3.02.
"HAZARDOUS MATERIALS" shall mean (a) any petroleum products or byproducts,
coal ash, radon gas, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, chlorofluorocarbons and all other ozone-depleting
substances and (b) any chemical, material, substance or waste that is
prohibited, limited or regulated by or pursuant to any Environmental Law.
"HCFA" shall mean the United States Health Care Financing Administration
and any successor thereof, including the Centers for Medicare & Medicaid
Services.
"HEDGING AGREEMENT" shall mean any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"HHS" shall mean the United States Department of Health and Human Services
and any successor thereof.
"HMO" shall mean any health maintenance organization or managed care
organization, any person doing business as a health maintenance organization or
managed care organization, or any person required to qualify or be licensed as a
health
14
maintenance organization or managed care organization under applicable law
(including HMO Regulations).
"HMO BUSINESS" shall mean the business of operating an HMO or other
similar regulated entity or business.
"HMO EVENT" shall mean any material non-compliance by Parent or any
Subsidiary with any of the terms and provisions of the HMO Regulations
pertaining to its fiscal soundness, solvency or financial conditions; or the
assertion in writing, after the date hereof, by any HMO Regulator that it
intends to take administrative action against Parent or any Subsidiary to revoke
or modify in a manner adverse to Parent or any Subsidiary any license, charter
or permit or to enforce the fiscal soundness, solvency or financial provisions
or requirements of the HMO Regulations against Parent or any Subsidiary.
"HMO REGULATIONS" shall mean all laws, rules, regulations, directives and
administrative orders applicable under Federal or state law to any HMO
Subsidiary, including Part 422 of Chapter IV of Title 42 of the Code of Federal
Regulations and Subchapter XI of Title 42 of the United States Code Annotated
(and any regulations, orders and directives promulgated or issued pursuant
thereto, including Part 417 of Chapter IV of Title 42 of the Code of Federal
Regulations).
"HMO REGULATOR" shall mean any person charged with the administration,
oversight or enforcement of any HMO Regulation, whether primarily, secondarily
or jointly.
"HMO SUBSIDIARY" shall mean any Subsidiary that is designated as an HMO
Subsidiary on Schedule 3.08 and any other existing or future Domestic Subsidiary
that shall become capitalized or licensed as an HMO, shall conduct HMO Business
or shall provide managed care services.
"IMMATERIAL SUBSIDIARY" shall mean any Subsidiary (other than any
Borrower) that (a) does not conduct any business operations, (b) has assets with
a book value not in excess of $1,000 and (c) does not have any Indebtedness
outstanding.
"INCREMENTAL TERM LENDER" shall mean a Lender with an Incremental Term
Loan Commitment or an outstanding Incremental Term Loan.
"INCREMENTAL TERM LOAN AMOUNT" shall mean, at any time, the excess, if
any, of (a) $100,000,000 over (b) the aggregate amount of all Incremental Term
Loan Commitments established prior to such time pursuant to Section 2.24.
"INCREMENTAL TERM LOAN ASSUMPTION AGREEMENT" shall mean an Incremental
Term Loan Assumption Agreement in form and substance reasonably satisfactory to
the Administrative Agent, among Parent, one or more Borrowers, the
Administrative Agent and one or more Incremental Term Lenders.
15
"INCREMENTAL TERM LOAN COMMITMENT" shall mean the commitment of any
Lender, established pursuant to Section 2.24, to make Incremental Term Loans to
any Borrower.
"INCREMENTAL TERM LOAN MATURITY DATE" shall mean the final maturity date
of any Incremental Term Loan, as set forth in the applicable Incremental Term
Loan Assumption Agreement.
"INCREMENTAL TERM LOAN REPAYMENT DATES" shall mean the dates scheduled for
the repayment of principal of any Incremental Term Loan, as set forth in the
applicable Incremental Term Loan Assumption Agreement.
"INCREMENTAL TERM LOANS" shall mean term loans made by one or more Lenders
to the Borrowers pursuant to clause (c) of Section 2.01. Incremental Term Loans
may be made in the form of loans with terms identical to the Initial Term Loans
or, to the extent permitted by Section 2.24 and provided for in the relevant
Incremental Term Loan Assumption Agreement, in the form of Other Term Loans.
"INDEBTEDNESS" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds
(other than performance bonds), debentures, notes or similar instruments, (c)
all obligations of such person upon which interest charges are customarily paid,
(d) all obligations of such person under conditional sale or other title
retention agreements relating to property or assets purchased by such person,
(e) all obligations of such person issued or assumed as the deferred purchase
price of property or services (excluding trade accounts payable and accrued
obligations incurred in the ordinary course of business), (f) all Indebtedness
of others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such person, whether or not the obligations secured thereby
have been assumed; provided, that the amount of Indebtedness of such person
existing at any time under this clause shall be deemed to be an amount equal to
the maximum amount secured by (or with a right to be secured by) such Liens
pursuant to the terms of the instruments embodying such Indebtedness of others,
(g) all Guarantees by such person of Indebtedness of others; provided, that the
amount of such Guarantees at any time shall be deemed to be an amount equal to
the maximum amount for which such person may be liable pursuant to the terms of
the instruments embodying such Guarantees, (h) all Capital Lease Obligations and
Synthetic Lease Obligations of such person, (i) all obligations of such person
as an account party in respect of letters of credit and (j) all obligations of
such person in respect of bankers' acceptances. The Indebtedness of any person
shall include the Indebtedness of any partnership in which such person is a
general partner.
"INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.
"INTEREST PAYMENT DATE" shall mean (a) with respect to any ABR Loan
(including any Swingline Loan), the last Business Day of each March, June,
September and December, and (b) with respect to any Eurodollar Loan, the last
day of the Interest Period
16
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day that would have been an Interest Payment Date had successive
Interest Periods of three months' duration been applicable to such Borrowing.
"INTEREST PERIOD" shall mean, with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day (or, if there is no numerically corresponding day,
on the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter,
as a Borrower may elect; provided, however, that if any Interest Period would
end on a day other than a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day. Interest shall accrue from and including
the first day of an Interest Period to but excluding the last day of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.
"IPO" shall mean the initial underwritten primary public offering of
Equity Interests of Parent pursuant to an effective registration statement
(other than a public offering pursuant to a registration statement on Form S-8)
filed with the Securities and Exchange Commission in accordance with the
Securities Act of 1933, as amended.
"ISSUING BANK" shall mean, as the context may require, (a) CSFB in its
capacity as the issuer of Letters of Credit hereunder, and (b) any other Lender
that may become the Issuing Bank pursuant to Section 2.23(i). The Issuing Bank
may, in its discretion, arrange for one or more Letters of Credit to be issued
by Affiliates of the Issuing Bank, in which case the term "Issuing Bank" shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.
"ISSUING BANK FEES" shall have the meaning assigned to such term in
Section 2.05(c).
"L/C COMMITMENT" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.23.
"L/C DISBURSEMENT" shall mean a payment or disbursement made by the
Issuing Bank pursuant to a Letter of Credit.
"L/C EXPOSURE" shall mean, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time and (b) the
aggregate principal amount of all L/C Disbursements that have not yet been
reimbursed at such time. The L/C Exposure of any Revolving Credit Lender at any
time shall equal its Pro Rata Percentage of the aggregate L/C Exposure at such
time.
"L/C PARTICIPATION FEE" shall have the meaning assigned to such term in
Section 2.05(c).
17
"LENDERS" shall mean (a) the persons listed on Schedule 2.01 (other than
any such person that has ceased to be a party hereto pursuant to an Assignment
and Acceptance) and (b) any person that has become a party hereto pursuant to an
Assignment and Acceptance or an Incremental Term Loan Assumption Agreement.
Unless the context clearly indicates otherwise, the term "Lenders" shall include
the Swingline Lender.
"LETTER OF CREDIT" shall mean any letter of credit issued pursuant to
Section 2.23.
"LEVERAGE RATIO" shall mean, on any date, the ratio of Total Debt on such
date to Consolidated EBITDA for the period of four consecutive fiscal quarters
most recently ended on or prior to such date.
"LIBO RATE" shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m., London time, on the date that is two Business Days
prior to the commencement of such Interest Period by reference to the British
Bankers' Association Interest Settlement Rates for deposits in dollars (as set
forth by any service selected by the Administrative Agent that has been
nominated by the British Bankers' Association as an authorized information
vendor for the purpose of displaying such rates) for a period equal to such
Interest Period; provided that, to the extent that an interest rate is not
ascertainable pursuant to the foregoing provisions of this definition, the "LIBO
Rate" shall be the interest rate per annum determined by the Administrative
Agent to be the average of the rates per annum at which deposits in dollars are
offered for such relevant Interest Period to major banks in the London interbank
market in London, England by the Administrative Agent at approximately 11:00
a.m., London time, on the date that is two Business Days prior to the beginning
of such Interest Period.
"LIEN" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"LOAN DOCUMENTS" shall mean this Agreement, the Letters of Credit, the
Security Documents, each Incremental Term Loan Assumption Agreement, the
Post-Closing Matters Side Letter and the promissory notes, if any, executed and
delivered pursuant to Section 2.04(e).
"LOAN PARTIES" shall mean the Borrowers and the Guarantors.
"LOANS" shall mean the Revolving Loans, the Term Loans and the Swingline
Loans.
"MARGIN STOCK" shall have the meaning assigned to such term in Regulation
U.
"MATERIAL ADVERSE EFFECT" shall mean (a) a materially adverse effect, or
an event or circumstance that could reasonably be expected to result in a
material adverse effect,
18
on the business, assets, operations or financial condition of Parent and the
Subsidiaries, taken as a whole, (b) a material impairment of the ability of any
Loan Party to perform any of its obligations under any Loan Document to which it
is or will be a party or (c) a material adverse effect on the rights of or
benefits available to the Lenders under any Loan Document.
"MATERIAL INDEBTEDNESS" shall mean Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of Parent and the Subsidiaries in an aggregate principal
amount exceeding $5,000,000. For purposes of determining Material Indebtedness,
the "principal amount" of the obligations of Parent or any Subsidiary in respect
of any Hedging Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that Parent or such Subsidiary would
be required to pay if such Hedging Agreement were terminated at such time.
"MEDICAID" shall mean that means-tested entitlement program under Title
XIX, P.L. 89-87, of the Social Security Act, which provides Federal grants to
States for medical assistance based on specific eligibility criteria, as set
forth at Section 1396, et seq. of Title 42 of the United States Code, as
amended, and any statute succeeding thereto.
"MEDICAID REGULATIONS" shall mean (a) all Federal statutes (whether set
forth in Title XIX of the Social Security Act or elsewhere) affecting the
medical assistance program established by Title XIX of the Social Security Act
and any statues succeeding thereto, (b) all applicable provisions of all Federal
rules, regulations, manuals and orders of all Governmental Authorities
promulgated pursuant to or in connection with the statues described in clause
(a) above and all Federal administrative, reimbursement and other guidelines of
all Governmental Authorities having the force of law promulgated pursuant to or
in connection with the statues described in clause (a) above, (c) all state
statutes and plans for medical assistance enacted in connection with the
statutes and provisions described in clauses (a) and (b) above, and (d) all
applicable provisions of all rules, regulations, manuals and orders of all
Governmental Authorities promulgated pursuant to or in connection with the
statutes described in clause (c) above and all state administrative,
reimbursement and other guidelines of all Governmental Authorities having the
force of law promulgated pursuant to or in connection with the statutes
described in clause (b) above, in each case as may be amended, supplemented or
otherwise modified from time to time.
"MEDICAL REIMBURSEMENT PROGRAMS" shall mean, collectively, the Medicare,
Medicaid, CHAMPUS and TRICARE programs and any other health care program
operated by or financed in whole or in part by any foreign or domestic Federal,
state or local government and any other non-government funded third-party payor
programs to which Parent or any Subsidiary is subject.
"MEDICARE" shall mean that government-sponsored entitlement program under
Title XVIII, P.L. 89-87, of the Social Security Act, which provides for a health
insurance
19
system for eligible elderly and disabled individuals, as set forth at Section
1395, et seq. of Title 42 of the United States Code, as amended, and any statute
succeeding thereto.
"MEDICARE+CHOICE ORGANIZATION" shall mean a public or private entity
organized and licensed by a State as a risk-bearing entity (with the exception
of provider-sponsored organizations receiving waivers) that is certified by HCFA
as meeting the Medicare+Choice contract requirements.
"MEDICARE REGULATIONS" shall mean, collectively, (a) all Federal statues
(whether set forth in Title XVIII of the Social Security Act or elsewhere)
affecting the health insurance program for the aged and disabled established by
Title XVIII of the Social Security Act and any statues succeeding thereto and
(b) all applicable provisions of all rules, regulations, manuals and orders and
administrative, reimbursement and other guidelines having the force of law of
all Governmental Authorities (including HCFA, the OIG, HHS or any person
succeeding to the functions of any of the foregoing) promulgated pursuant to or
in connection with any of the foregoing having the force of law, as each may be
amended, supplemented or otherwise modified from time to time.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc., or any successor
thereto.
"MORTGAGED PROPERTIES" shall mean (a) each real property owned by any Loan
Party the book or fair market value of which is greater than $250,000 and (b)
each leasehold or other interest in real property held by any Loan Party with
respect to which a Mortgage is required to be granted pursuant to Section 5.10.
"MORTGAGES" shall mean the mortgages, deeds of trust, leasehold mortgages,
assignments of leases and rents, modifications and other security documents
delivered pursuant to Section 5.10, each in form and substance satisfactory to
the Collateral Agent.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NET CASH PROCEEDS" shall mean (a) with respect to any Asset Sale, the
cash proceeds (including cash proceeds subsequently received (as and when
received) in respect of noncash consideration initially received), net of (i)
selling expenses (including reasonable broker's fees or commissions, legal fees,
transfer and similar taxes and Parent's good faith estimate of income taxes paid
or payable in connection with such sale), (ii) amounts provided as a reserve, in
accordance with GAAP and SAP, as applicable, against any liabilities under any
indemnification obligations or purchase price adjustment associated with such
Asset Sale (provided that, to the extent and at the time any such amounts are
released from such reserve, such amounts shall constitute Net Cash Proceeds) and
(iii) the principal amount, premium or penalty, if any, interest and other
amounts on any Indebtedness for borrowed money (other than Indebtedness
hereunder) which is secured by the asset sold in such Asset Sale and which is
required to be repaid with such proceeds (other than any such Indebtedness
assumed by the purchaser of such asset); provided, however, that, if (x) Parent
shall deliver a certificate of a Financial Officer of Parent to the
Administrative Agent at the time of receipt of any such Net Cash
20
Proceeds setting forth Parent's intent to cause the Subsidiaries to reinvest
such proceeds in productive assets of a kind then used or usable in the business
of Parent and the Subsidiaries within 180 days of receipt of such proceeds and
(y) no Default or Event of Default shall have occurred and be continuing at the
time such certificate is delivered or at the time of the application of such
proceeds, such proceeds shall not constitute Net Cash Proceeds except to the
extent not so used at the end of such 180-day period, at which time such
proceeds shall be deemed to be Net Cash Proceeds; and (b) with respect to any
issuance or disposition of Indebtedness or any Equity Issuance, the cash
proceeds thereof, net of all taxes and customary fees, commissions, costs and
other expenses incurred in connection therewith.
"OBLIGATIONS" shall mean (a) the due and punctual payment by the Borrowers
of (i) the principal of and interest (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (ii) each payment required to be
made by any Borrower in respect of any Letter of Credit, when and as due,
including payments in respect of reimbursement of L/C Disbursements, interest
thereon (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) and obligations to provide cash
collateral, and (iii) all other monetary obligations of any Borrower to any of
the Secured Parties under this Agreement and each of the other Loan Documents,
including obligations to pay Fees, expense reimbursement obligations and
indemnification obligations, whether primary, secondary, direct, contingent,
fixed or otherwise, arising under the Loan Documents (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (b) the due and punctual payment of all the
monetary obligations of each other Loan Party under or pursuant to this
Agreement and each of the other Loan Documents, (c) the due and punctual payment
of all monetary obligations of each Loan Party under each Hedging Agreement that
(i) is in effect on the Closing Date with a counterparty that is a Lender or an
Affiliate of a Lender as of the Closing Date or (ii) is entered into after the
Closing Date with any counterparty that is a Lender or an Affiliate of a Lender
at the time such Hedging Agreement is entered into and (d) the due and punctual
payment and performance of all obligations of any Loan Party to a Lender or an
Affiliate of a Lender in respect of cash management services (other than cash
management services provided after (i) the principal of and interest on each
Loan and all Fees payable hereunder have been paid in full, (ii) the Lenders
have no further commitment to lend hereunder, (iii) the L/C Exposure has been
reduced to zero and (iv) the Issuing Bank has no further obligations to issue
Letters of Credit), including obligations in respect of overdrafts, temporary
advances, interest and fees.
"OID" shall have the meaning assigned to such term in Section 2.24(b).
"OIG" shall mean the Office of Inspector General of HHS and any successor
thereof.
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"OTHER TAXES" shall mean any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"OTHER TERM BORROWING" shall mean a Borrowing comprised of Other Term
Loans.
"OTHER TERM LOANS" shall have the meaning assigned to such term in Section
2.24(a).
"PARENT" shall mean Holdings and any successor thereto, it being
understood that it is proposed that, in connection with the IPO, (a) Holdings
shall merge with and into WellCare Group, Inc., a Delaware corporation, and
WellCare Group, Inc. shall be the successor of Holdings as a result thereof, and
(b) WHP shall change its legal name and WellCare Group, Inc. shall change its
legal name to WellCare Health Plans, Inc.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"PERFECTION CERTIFICATE" shall mean the Perfection Certificate
substantially in the form of Exhibit II to the Guarantee and Collateral
Agreement.
"PERMITTED ACQUISITION" shall have the meaning assigned to such term in
clause (i) of Section 6.04.
"PERMITTED INVESTMENTS" shall mean:
(a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America);
(b) investments in (i) commercial paper maturing within 270 days from the
date of acquisition thereof and rated, at such date of acquisition, at least
"A1" by S&P or at least "P1" by Moody's and (ii) other debt securities rated, at
the date of acquisition, at least "A" by S&P or at least "A2" by Moody's and for
which an active trading market exists and price quotations are available;
(c) investments in certificates of deposit, banker's acceptances and time
deposits maturing not more than one year from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, the Administrative Agent or any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof;
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria of clause (c) above;
22
(e) investments in "money market funds" within the meaning of Rule 2a-7 of
the Investment Company Act of 1940, as amended, substantially all of whose
assets are invested in investments of the type described in clauses (a) through
(d) above; and
(f) other short-term investments utilized by Foreign Subsidiaries in
accordance with normal investment practices for cash management in investments
of a type analogous to the foregoing.
"PERSON" shall mean any natural person, corporation, business trust, joint
venture, association, company, limited liability company, partnership,
Governmental Authority or other entity.
"PLAN" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which Parent or any
ERISA Affiliate is (or, if such plan were terminated, would under Section 4069
of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"POST-CLOSING MATTERS SIDE LETTER" shall mean the letter agreement dated
as of the date hereof among Parent, the Borrowers and the Administrative Agent.
"PRIME RATE" shall mean the rate of interest per annum determined from
time to time by Credit Suisse First Boston as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is announced as being
effective.
"PRO FORMA BASIS" shall mean, with respect to compliance with any test or
covenant hereunder, compliance with such covenant or test after giving effect to
(a) any proposed Permitted Acquisition or (b) any Asset Sale of a Subsidiary or
operating entity for which historical financial statements for the relevant
period are available (including pro forma adjustments arising out of events
which are directly attributable to the proposed Permitted Acquisition or Asset
Sale, are factually supportable and are expected to have a continuing impact, in
each case as determined on a basis consistent with Article 11 of Regulation S-X
of the Securities Act of 1933, as amended, as interpreted by the Staff of the
Securities and Exchange Commission, and as certified by a Financial Officer of
Parent) using, for purposes of determining such compliance, the historical
financial statements of all entities or assets so acquired or sold and the
consolidated financial statements of Parent and the Subsidiaries which shall be
reformulated as if such Permitted Acquisitions or Asset Sale, and all other
Permitted Acquisitions or Asset Sales that have been consummated during the
period, and any Indebtedness or other liabilities incurred in connection with
any such Permitted Acquisitions had been consummated and incurred at the
beginning of such period.
"PRO FORMA COMPLIANCE" shall mean, at any date of determination, that
Parent shall be in pro forma compliance with the covenants set forth in Sections
6.11 and 6.12 as of the date of such determination or the last day of the most
recently completed fiscal quarter, as the case may be (computed on the basis of
(a) balance sheet amounts as of
23
such date and (b) income statement amounts for the most recently completed
period of four consecutive fiscal quarters for which financial statements shall
have been delivered to the Administrative Agent and calculated on a Pro Forma
Basis in respect of the event giving rise to such determination).
"PRO RATA PERCENTAGE" of any Revolving Credit Lender at any time shall
mean the percentage of the Total Revolving Credit Commitment represented by such
Lender's Revolving Credit Commitment. In the event the Revolving Credit
Commitments shall have expired or been terminated, the Pro Rata Percentages
shall be determined on the basis of the Revolving Credit Commitments most
recently in effect, giving effect to any subsequent assignments.
"REGISTER" shall have the meaning assigned to such term in Section
9.04(d).
"REGULATION T" shall mean Regulation T of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"REGULATION U" shall mean Regulation U of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"REGULATION X" shall mean Regulation X of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"RELATED PARTIES" shall mean, with respect to any specified person, such
person's Affiliates and the respective directors, officers, employees, agents
and advisors of such person and such person's Affiliates.
"RELEASE" shall mean any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into or through the environment or within or upon any building,
structure, facility or fixture.
"REPAYMENT DATE" shall have the meaning given such term in Section 2.11.
Unless the context shall otherwise require, the term "Repayment Date" shall
include the Incremental Term Loan Repayment Dates.
"REQUIRED LENDERS" shall mean, at any time, Lenders having Loans
(excluding Swingline Loans), L/C Exposure, Swingline Exposure and unused
Revolving Credit Commitments, Term Loan Commitments and Incremental Term Loan
Commitments representing more than 50% of the sum of all Loans outstanding
(excluding Swingline Loans), L/C Exposure, Swingline Exposure and unused
Revolving Credit Commitments, Term Loan Commitments and Incremental Term Loan
Commitments at such time.
"RESPONSIBLE OFFICER" of any person shall mean any executive officer or
Financial Officer of such person and any other officer or similar official
thereof responsible for the administration of the obligations of such person in
respect of this Agreement.
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"RESTRICTED INDEBTEDNESS" shall mean Indebtedness of Parent or any
Subsidiary the payment, prepayment, repurchase or defeasance of which is
restricted under Section 6.09(b).
"RESTRICTED PAYMENT" shall mean any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in Parent or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of or otherwise with respect to any Equity Interests in Parent or
any Subsidiary or any option, warrant or other right to acquire any such Equity
Interests in Parent or any Subsidiary; provided, however, that any distribution
by Parent of the Warrant Notes (or of any cash received by Parent in
satisfaction of the Warrant Notes) to the holders of such Warrant Notes shall
not be deemed to be a Restricted Payment.
"REVOLVING CREDIT BORROWING" shall mean a Borrowing comprised of Revolving
Loans.
"REVOLVING CREDIT COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Credit Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04.
"REVOLVING CREDIT EXPOSURE" shall mean, with respect to any Revolving
Credit Lender at any time, the aggregate principal amount at such time of all
outstanding Revolving Loans of such Lender, plus the aggregate amount at such
time of such Lender's L/C Exposure, plus the aggregate amount at such time of
such Lender's Swingline Exposure.
"REVOLVING CREDIT LENDER" shall mean a Lender with a Revolving Credit
Commitment or an outstanding Revolving Loan.
"REVOLVING CREDIT MATURITY DATE" shall mean May 13, 2008.
"REVOLVING LOANS" shall mean the revolving loans made by the Lenders to
the Borrowers pursuant to clause (b) of Section 2.01.
"ROLLOVER AGREEMENT" shall mean the Agreement to Amend and Restate Note
Purchase Agreement dated as of May 11, 2004, by and among the Rollover Lenders
and WMG.
"ROLLOVER AMOUNT" shall mean $18,354,320.22.
"ROLLOVER LENDERS" shall mean, collectively, GSC Partners CDO Fund,
Limited, GSC Partners CDO Fund II, Limited, and GSC Partners CDO Fund III,
Limited.
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"SAP" shall mean, with respect to each HMO Subsidiary, the statutory
accounting principles and procedures prescribed or permitted by applicable HMO
Regulations for such HMO Subsidiary, applied on a consistent basis.
"SECURED PARTIES" shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement.
"SECURITY DOCUMENTS" shall mean the Guarantee and Collateral Agreement,
the Mortgages and each of the security agreements and other instruments and
documents executed and delivered pursuant to the Guarantee and Collateral
Agreement or pursuant to Section 5.10.
"SELLER NOTE" shall mean the Amended and Restated Senior Subordinated
Non-Negotiable Promissory Note dated February 12, 2004, made by WHP in favor of
Xxxxx X. Xxxxx, as stockholder representative, as amended pursuant to the
Prepayment and Amendment Agreement dated as of May 11, 2004, among Parent, WHP
and the other parties thereto.
"SELLER NOTE PLEDGED STOCK" shall mean all the issued and outstanding
capital stock of WHP that is pledged to secure the Seller Note pursuant to the
Pledge Agreement, dated as of July 31, 2002, as amended, between Parent and
Xxxxx X. Xxxxx, as stockholder representative (provided, that Seller Note
Pledged Stock shall not, at any time after the repayment or prepayment of a
portion of the Seller Note on the Closing Date as set forth in Section 5.08,
represent more than 51% of the issued and outstanding capital stock of WHP and
shall not include any such capital stock that is released from such pledge in
accordance with the terms of such Pledge Agreement).
"SOCIAL SECURITY ACT" shall mean the Social Security Act of 1965 as set
forth in Title 42 of the United States Code, as amended, and any successor
statute thereto, as interpreted by the rules and regulations issued thereunder,
in each case as in effect from time to time. References to sections of the
Social Security Act shall be construed to refer to any successor sections.
"XXXXX" shall mean Xxxxx Private Equity Investors LP.
"SPC" shall have the meaning assigned to such term in Section 9.04(i).
"S&P" shall mean Standard & Poor's Ratings Service, or any successor
thereto.
"STATUTORY RESERVES" shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch, Affiliate
or other fronting office making or holding a Loan) is subject for Eurocurrency
Liabilities (as defined in Regulation D of the Board). Eurodollar Loans shall be
deemed to constitute Eurocurrency Liabilities as defined in Regulation D of the
Board) and to be subject to such reserve requirements
26
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D. Statutory
Reserves shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.
"SUBSIDIARY" shall mean, with respect to any person (herein referred to as
the "PARENT"), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, Controlled or held, or (b) that is, at the time any
determination is made, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent. For purposes of Section 4.01(b), references to "subsidiaries" herein
shall be deemed, on the date of any subsequent borrowing to finance the
acquisition of any person, to include any person to be acquired on such date.
"SUBSIDIARY" shall mean any direct or indirect subsidiary of Parent.
"SUBSIDIARY GUARANTOR" shall mean each Subsidiary, other than any
Subsidiary that is a Foreign Subsidiary, an Immaterial Subsidiary or an HMO
Subsidiary (provided, that any HMO Subsidiary that has provided a Guarantee of
any Indebtedness of Parent or any other Subsidiary shall, so long as such
Guarantee remains in effect, be a Subsidiary Guarantor).
"SWINGLINE COMMITMENT" shall mean the commitment of the Swingline Lender
to make loans pursuant to Section 2.22, as the same may be reduced from time to
time pursuant to Section 2.09.
"SWINGLINE EXPOSURE" shall mean at any time the aggregate principal amount
at such time of all outstanding Swingline Loans. The Swingline Exposure of any
Revolving Credit Lender at any time shall equal its Pro Rata Percentage of the
aggregate Swingline Exposure at such time.
"SWINGLINE LENDER" shall mean CSFB, in its capacity as lender of Swingline
Loans hereunder.
"SWINGLINE LOAN" shall mean any loan made by the Swingline Lender pursuant
to Section 2.22.
"SYNTHETIC LEASE" shall mean, as to any person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) (a) that is accounted for as an operating
lease under GAAP and (b) in respect of which the lessee retains or obtains
ownership of the property so leased for U.S. federal income tax purposes, other
than any such lease under which such person is the lessor.
"SYNTHETIC LEASE OBLIGATIONS" shall mean, as to any person, an amount
equal to the capitalized amount of the remaining lease payments under any
Synthetic Lease that
27
would appear on a balance sheet of such person in accordance with GAAP if such
obligations were accounted for as Capital Lease Obligations.
"SYNTHETIC PURCHASE AGREEMENT" shall mean any swap, derivative or other
agreement or combination of agreements pursuant to which Parent or any
Subsidiary is or may become obligated to make (a) any payment in connection with
a purchase by any third party from a person other than Parent or any Subsidiary
of any Equity Interest or Restricted Indebtedness or (b) any payment (other than
on account of a permitted purchase by it of any Equity Interest or Restricted
Indebtedness) the amount of which is determined by reference to the price or
value at any time of any Equity Interest or Restricted Indebtedness; provided
that no phantom stock or similar plan providing for payments only to current or
former directors, officers or employees of Parent or the Subsidiaries (or to
their heirs or estates) shall be deemed to be a Synthetic Purchase Agreement.
"TAXES" shall mean any and all present or future taxes, levies, imposts,
duties, deductions, charges, liabilities or withholdings imposed by any
Governmental Authority.
"TERM BORROWING" shall mean a Borrowing comprised of Term Loans.
"TERM LOAN COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make Term Loans hereunder as set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Lender shall
have assumed its Term Loan Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04.
"TERM LOAN MATURITY DATE" shall mean May 13, 2009.
"TERM LOANS" shall mean the term loans made by the Lenders to the
Borrowers pursuant to clause (a) of Section 2.01. Unless the context shall
otherwise require, the term "Term Loans" shall include the Incremental Term
Loans.
"TOTAL DEBT" shall mean, at any time, the total Indebtedness of Parent and
the Subsidiaries on a consolidated basis at such time, excluding intercompany
Indebtedness.
"TOTAL REVOLVING CREDIT COMMITMENT" shall mean, at any time, the aggregate
amount of the Revolving Credit Commitments, as in effect at such time. The
initial Total Revolving Credit Commitment is $50,000,000.
"TRANSACTIONS" shall have the meaning assigned to such term in Section
3.02.
"TRICARE" shall mean the United States Department of Defense health care
program for service families, including TRICARE Prime, TRICARE Extra and TRICARE
Standard, and any successor to or predecessor thereof (including CHAMPUS).
"TYPE", when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is
28
determined. For purposes hereof, the term "RATE" shall include the Adjusted LIBO
Rate and the Alternate Base Rate.
"USA PATRIOT ACT" shall mean The Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).
"WARRANT NOTES" shall mean the promissory notes, each dated December 1,
2003, issued to Parent by certain holders of Equity Interests in Parent, in an
aggregate principal amount of $6,861,111.
"WHOLLY OWNED SUBSIDIARY" of any person shall mean a subsidiary of such
person of which securities (except for directors' qualifying shares) or other
ownership interests representing 100% of the Equity Interests are, at the time
any determination is being made, owned, Controlled or held by such person or one
or more wholly owned subsidiaries of such person or by such person and one or
more wholly owned subsidiaries of such person.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
"WMG GUARANTEE ARRANGEMENT" shall mean the guarantee arrangement by which
WMG maintains, in accordance with applicable HMO Regulations, at least
$50,000,000 in assets.
"YIELD DIFFERENTIAL" shall have the meaning assigned to such term in
Section 2.24(b).
SECTION 1.02. TERMS GENERALLY. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall"; and
the words "asset" and "property" shall be construed as having the same meaning
and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights. All
references herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any Loan
Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP or SAP, as
applicable, as in effect from time to time; provided, however, that if Parent
notifies the Administrative Agent that it wishes to amend any covenant in
Article VI or any related definition to eliminate the effect of any change in
GAAP or SAP occurring after the date of this Agreement on the operation of such
covenant (or if the
29
Administrative Agent notifies Parent that the Required Lenders wish to amend
Article VI or any related definition for such purpose), then Holding's
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP or SAP became effective, until
either such notice is withdrawn or such covenant is amended in a manner
satisfactory to Parent and the Required Lenders.
SECTION 1.03. PRO FORMA CALCULATIONS. With respect to any period during
which any Permitted Acquisition or Asset Sale of the type described in clause
(b) of the definition of the term "Pro Forma Basis" occurs as permitted pursuant
to the terms hereof, the Leverage Ratio and the Fixed Charge Coverage Ratio
shall be calculated with respect to such period (and, to the extent applicable,
subsequent periods) and such Permitted Acquisition or Asset Sale on a Pro Forma
Basis.
SECTION 1.04. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a "Revolving
Loan") or by Type (e.g., a "Eurocurrency Loan") or by Class and Type (e.g., a
"Eurocurrency Revolving Loan"). Borrowings also may be classified and referred
to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a "Eurocurrency
Borrowing") or by Class and Type (e.g., a "Eurocurrency Revolving Borrowing").
ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, (a) to make Term Loans to the Borrowers (allocated
among the Borrowers as specified in the Borrowing Requests with respect thereto)
on the Closing Date in an aggregate principal amount not to exceed its Term Loan
Commitment, (b) to make Revolving Loans to the Borrowers, at any time and from
time to time after the Closing Date, and until the earlier of the Revolving
Credit Maturity Date and the termination of the Revolving Credit Commitment of
such Lender in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding that will not result in such Lender's Revolving
Credit Exposure exceeding such Lender's Revolving Credit Commitment and (c) if
such Lender has an Incremental Term Loan Commitment, to make Incremental Term
Loans to the applicable Borrower, in an aggregate principal amount not to exceed
its Incremental Term Loan Commitment on the date or dates determined in
accordance with Section 2.24. Within the limits set forth in clause (b) of the
preceding sentence and subject to the terms, conditions and limitations set
forth herein, the Borrowers may borrow, pay or prepay and reborrow Revolving
Loans. Amounts paid or prepaid in respect of Term Loans may not be reborrowed.
Notwithstanding anything to the contrary contained herein (and without affecting
any other provision hereof), the funded portion of each Term Loan to be made on
the Closing Date (i.e., the amount advanced in cash to the Borrowers on the
Closing Date) shall be equal to 99.5% of the principal amount of such Loan (it
being agreed that the Borrowers
30
shall be obligated to pay the entire principal amount of each such Loan as
provided in Section 2.11).
SECTION 2.02. LOANS. (a) Each Loan (other than Swingline Loans) shall be
made as part of a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their applicable Commitments; provided, however, that the
failure of any Lender to make any Loan shall not in itself relieve any other
Lender of its obligation to lend hereunder (it being understood, however, that
no Lender shall be responsible for the failure of any other Lender to make any
Loan required to be made by such other Lender). Except for Loans deemed made
pursuant to Section 2.02(f), the Loans comprising any Borrowing shall be in an
aggregate principal amount that is (i) an integral multiple of $1,000,000 and
not less than $5,000,000 or (ii) equal to the remaining available balance of the
applicable Commitments.
(b) Subject to Sections 2.08 and 2.15, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the applicable Borrower may request
pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of any Borrower to repay such Loan in accordance with the terms of
this Agreement. Borrowings of more than one Type may be outstanding at the same
time; provided, however, that the Borrowers shall not be entitled to request any
Borrowing that, if made, would result in more than five Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Borrowings
having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.
(c) Except with respect to Loans made pursuant to Section 2.02(f), each
Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to such account in New
York City as the Administrative Agent may designate not later than 1:00 p.m.,
New York City time, and the Administrative Agent shall promptly credit the
amounts so received to an account designated by the applicable Borrower in the
applicable Borrowing Request or, if a Borrowing shall not occur on such date
because any condition precedent herein specified shall not have been met, return
the amounts so received to the respective Lenders. The Rollover Lenders shall be
deemed to have funded a portion of the Term Loans to be made by them hereunder
equal to the Rollover Amount through the conversion of the Discount Notes as
provided in the Rollover Agreement and Section 4.02(i), and shall not be
required to fund such portion of their Term Loans pursuant to the immediately
preceding sentence (it being agreed that such deemed funding shall not affect
the applicable Borrowers' obligation to pay the entire principal amount of the
Term Loans of the Rollover Lenders as provided in Section 2.11).
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) of
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this Section and the Administrative Agent may, in its sole discretion and in
reliance upon such assumption, make available to the applicable Borrower on such
date a corresponding amount. If the Administrative Agent shall have so made
funds available, then, to the extent that such Lender shall not have made such
portion available to the Administrative Agent, such Lender and the applicable
Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from and including the date such amount is made available to such Borrower to
but excluding the date such amount is repaid to the Administrative Agent at (i)
in the case of such Borrower, a rate per annum equal to the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Lender, (A) for the first three days following the date such amount
is made available to such Borrower, a rate determined by the Administrative
Agent to represent its cost of overnight or short-term funds (which
determination shall be conclusive absent manifest error) and (B) thereafter, at
the Alternate Base Rate. If such Lender shall repay to the Administrative Agent
such corresponding amount, such amount shall constitute such Lender's Loan as
part of such Borrowing for purposes of this Agreement.
(e) Notwithstanding any other provision of this Agreement, the Borrowers
shall not be entitled to request any Revolving Credit Borrowing if the Interest
Period requested with respect thereto would end after the Revolving Credit
Maturity Date.
(f) If the Issuing Bank shall not have received from any Borrower the
payment required to be made by Section 2.23(e) within the time specified in such
Section, the Issuing Bank will promptly notify the Administrative Agent of the
L/C Disbursement and the Administrative Agent will promptly notify each
Revolving Credit Lender of such L/C Disbursement and its Pro Rata Percentage
thereof. Each Revolving Credit Lender shall pay by wire transfer of immediately
available funds to the Administrative Agent not later than 2:00 p.m., New York
City time, on such date (or, if such Revolving Credit Lender shall have received
such notice later than 12:00 noon, New York City time, on any day, not later
than 10:00 a.m., New York City time, on the immediately following Business Day),
an amount equal to such Lender's Pro Rata Percentage of such L/C Disbursement
(it being understood that such amount shall be deemed to constitute an ABR
Revolving Loan of such Lender and such payment shall be deemed to have reduced
the L/C Exposure), and the Administrative Agent will promptly pay to the Issuing
Bank amounts so received by it from the Revolving Credit Lenders. The
Administrative Agent will promptly pay to the Issuing Bank any amounts received
by it from the applicable Borrower pursuant to Section 2.23(e) prior to the time
that any Revolving Credit Lender makes any payment pursuant to this paragraph;
any such amounts received by the Administrative Agent thereafter will be
promptly remitted by the Administrative Agent to the Revolving Credit Lenders
that shall have made such payments and to the Issuing Bank, as their interests
may appear. If any Revolving Credit Lender shall not have made its Pro Rata
Percentage of such L/C Disbursement available to the Administrative Agent as
provided above, such Lender and the applicable Borrower severally agree to pay
interest on such amount, for each day from and including the date such amount is
required to be paid in accordance with this paragraph to but excluding the date
such amount is paid, to the Administrative Agent for the account of the Issuing
Bank at (i) in the case of such Borrower, a rate per annum equal to the interest
rate applicable at the
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time to Revolving Loans pursuant to Section 2.06(a), and (ii) in the case of
such Lender, a rate per annum equal to, for the first such day, the Federal
Funds Effective Rate and, for each day thereafter, the Alternate Base Rate.
SECTION 2.03. BORROWING PROCEDURE. In order to request a Borrowing (other
than a Swingline Loan or a deemed Borrowing pursuant to Section 2.02(f), as to
which this Section shall not apply), a Borrower shall hand deliver or fax to the
Administrative Agent a duly completed Borrowing Request (a) in the case of a
Eurodollar Borrowing, not later than 12:00 noon, New York City time, three
Business Days before a proposed Borrowing, and (b) in the case of an ABR
Borrowing, not later than 12:00 noon, New York City time, one Business Day
before a proposed Borrowing. Each Borrowing Request shall be irrevocable, shall
be signed by or on behalf of the applicable Borrower and shall specify the
following information: (i) whether the Borrowing then being requested is to be a
Term Borrowing, an Other Term Borrowing or a Revolving Credit Borrowing, and
whether such Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing; (ii)
the date of such Borrowing (which shall be a Business Day); (iii) the number and
location of the account to which funds are to be disbursed; (iv) the amount of
such Borrowing; and (v) if such Borrowing is to be a Eurodollar Borrowing, the
Interest Period with respect thereto; provided, however, that, notwithstanding
any contrary specification in any Borrowing Request, each requested Borrowing
shall comply with the requirements set forth in Section 2.02. If no election as
to the Type of Borrowing is specified in any such notice, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period with respect to any
Eurodollar Borrowing is specified in any such notice, then the applicable
Borrower shall be deemed to have selected an Interest Period of one month's
duration. The Administrative Agent shall promptly advise the applicable Lenders
of any notice given pursuant to this Section, and of each Lender's portion of
the requested Borrowing.
SECTION 2.04. EVIDENCE OF DEBT; REPAYMENT OF LOANS. (a) Each Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender (i) the principal amount of each Term Loan of such Lender
as provided in Section 2.11 and (ii) the then unpaid principal amount of each
Revolving Loan of such Lender on the Revolving Credit Maturity Date. Each
Borrower hereby promises to pay to the Swingline Lender the then unpaid
principal amount of each Swingline Loan on the Revolving Credit Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of each Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type thereof and, if
applicable, the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from each
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder from any Borrower or any Guarantor and each
Lender's share thereof.
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(d) The entries made in the accounts maintained pursuant to paragraphs (b)
and (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided, however, that the failure
of any Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the Borrowers to repay
the Loans in accordance with their terms.
(e) Any Lender may request that Loans made by it hereunder be evidenced by
a promissory note. In such event, the applicable Borrower shall execute and
deliver to such Lender a promissory note payable to such Lender and its
registered assigns and in a form and substance reasonably acceptable to the
Administrative Agent and the Borrowers. Notwithstanding any other provision of
this Agreement, in the event any Lender shall request and receive such a
promissory note, the interests represented by such note shall at all times
(including after any assignment of all or part of such interests pursuant to
Section 9.04) be represented by one or more promissory notes payable to the
payee named therein or its registered assigns.
SECTION 2.05. FEES. (a) The Borrowers agree to pay to each Lender, through
the Administrative Agent, on the last Business Day of March, June, September and
December in each year and on the date on which the Revolving Credit Commitment
of such Lender shall expire or be terminated as provided herein, a commitment
fee (a "COMMITMENT FEE") equal to 0.50% per annum on the daily unused amount of
the Revolving Credit Commitment of such Lender during the preceding quarter (or
shorter period commencing with the date hereof or ending with the Revolving
Credit Maturity Date or the date on which the Revolving Credit Commitment of
such Lender shall be terminated). All Commitment Fees shall be computed on the
basis of the actual number of days elapsed in a year of 360 days. For purposes
of calculating Commitment Fees only, outstanding Swingline Loans shall not be
deemed to constitute utilization of the Revolving Credit Commitments.
(b) The Borrowers agree to pay to the Administrative Agent, for its own
account, the administrative fees set forth in the Fee Letter at the times and in
the amounts specified therein (the "ADMINISTRATIVE AGENT FEES").
(c) The Borrowers agree to pay (i) to each Revolving Credit Lender,
through the Administrative Agent, on the last Business Day of March, June,
September and December of each year and on the date on which the Revolving
Credit Commitment of such Lender shall be terminated as provided herein, a fee
(an "L/C PARTICIPATION FEE") calculated on such Lender's Pro Rata Percentage of
the daily aggregate L/C Exposure (excluding the portion thereof attributable to
unreimbursed L/C Disbursements) during the preceding quarter (or shorter period
commencing with the date hereof or ending with the Revolving Credit Maturity
Date or the date on which all Letters of Credit have been canceled or have
expired and the Revolving Credit Commitments of all Lenders shall have been
terminated) at a rate per annum equal to the Applicable Percentage from time to
time used to determine the interest rate on Revolving Credit Borrowings
comprised of Eurodollar Loans pursuant to Section 2.06, and (ii) to the Issuing
Bank, (x) on the last Business Day of March, June, September and December of
each year and on the date on
34
which all the Letters of Credit issued by it shall have been canceled or have
expired, a fronting fee equal to 0.25% per annum on the aggregate face amount of
such Letters of Credit outstanding during the preceding quarter (or shorter
period commencing on the date hereof or ending on the date on which all Letters
of Credit have been canceled or have expired) and (y) the standard issuance and
drawing fees specified from time to time by the Issuing Bank (the "ISSUING BANK
FEES"). All L/C Participation Fees and Issuing Bank Fees shall be computed on
the basis of the actual number of days elapsed in a year of 360 days.
(c) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders, except that the Issuing Bank Fees shall be paid directly to
the Issuing Bank. Once paid, none of the Fees shall be refundable under any
circumstances.
SECTION 2.06. INTEREST ON LOANS. (a) Subject to the provisions of Section
2.07, the Loans comprising each ABR Borrowing, including each Swingline Loan,
shall bear interest (computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as the case may be, when the Alternate Base Rate
is determined by reference to the Prime Rate and over a year of 360 days at all
other times and calculated from and including the date of such Borrowing to but
excluding the date of repayment thereof) at a rate per annum equal to the
Alternate Base Rate plus the Applicable Percentage in effect from time to time.
(b) Subject to the provisions of Section 2.07, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Percentage in effect from time to time.
(c) Interest on each Loan shall be payable on the Interest Payment Dates
applicable to such Loan except as otherwise provided in this Agreement. The
applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or
day within an Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.07. DEFAULT INTEREST. If any Borrower shall default in the
payment of any principal of or interest on any Loan or any other amount due
hereunder, by acceleration or otherwise, or under any other Loan Document, then,
until such defaulted amount shall have been paid in full, to the extent
permitted by law, all amounts outstanding under this Agreement and the other
Loan Documents shall bear interest (after as well as before judgment), payable
on demand, (a) in the case of principal, at the rate otherwise applicable to
such Loan pursuant to Section 2.06 plus 2% per annum and (b) in all other cases,
at a rate per annum (computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as the case may be, when determined by reference
to the Prime Rate and over a year of 360 days at all other times) equal to the
rate that would be applicable to an ABR Loan plus 2% per annum.
35
SECTION 2.08. ALTERNATE RATE OF INTEREST. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Loans comprising
such Borrowing are not generally available in the London interbank market, or
that the rates at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to any Lender of making or maintaining
its Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, the Administrative Agent shall,
as soon as practicable thereafter, give written or fax notice of such
determination to the Borrowers and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrowers
and the Lenders that the circumstances giving rise to such notice no longer
exist, any request by any Borrower for a Eurodollar Borrowing pursuant to
Section 2.03 or 2.10 shall be deemed to be a request for an ABR Borrowing. Each
determination by the Administrative Agent under this Section shall be conclusive
absent manifest error.
SECTION 2.09. TERMINATION AND REDUCTION OF COMMITMENTS. (a) The Term Loan
Commitments shall automatically terminate upon the making of the Term Loans on
the Closing Date. Unless earlier terminated pursuant to the terms hereof, the
Revolving Credit Commitments and the Swingline Commitment shall automatically
terminate on the Revolving Credit Maturity Date. The L/C Commitment shall, with
respect to issuance of Letters of Credit, automatically terminate on the earlier
to occur of (i) the date 30 days prior to the Revolving Credit Maturity Date and
(ii) the termination of the Revolving Credit Commitments. Notwithstanding the
foregoing, all Commitments shall automatically terminate at 5:00 p.m., New York
City time, on the date hereof, if the initial Credit Event shall not have
occurred by such time (other than as a result of a breach of this Credit
Agreement by any Lender).
(b) Upon at least three Business Days' prior irrevocable written or fax
notice to the Administrative Agent, Parent may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Incremental Term
Loan Commitments or the Revolving Credit Commitments; provided, however, that
(i) each partial reduction of the Incremental Term Loan Commitments or the
Revolving Credit Commitments shall be in an integral multiple of $1,000,000 and
in a minimum amount of $5,000,000 and (ii) the Total Revolving Credit Commitment
shall not be reduced to an amount that is less than the Aggregate Revolving
Credit Exposure at the time.
(c) Each reduction in the Incremental Term Loan Commitments or the
Revolving Credit Commitments hereunder shall be made ratably among the Lenders
in accordance with their respective applicable Commitments. The Borrowers shall
pay to the Administrative Agent for the account of the applicable Lenders, on
the date of each termination or reduction, the accrued but unpaid Commitment
Fees on the amount of the Revolving Credit Commitments so terminated or reduced
accrued to but excluding the date of such termination or reduction.
SECTION 2.10. CONVERSION AND CONTINUATION OF BORROWINGS. The applicable
Borrower shall have the right at any time upon prior irrevocable notice to the
36
Administrative Agent (a) not later than 12:00 noon, New York City time, one
Business Day prior to conversion, to convert any Eurodollar Borrowing into an
ABR Borrowing, (b) not later than 12:00 noon, New York City time, three Business
Days prior to conversion or continuation, to convert any ABR Borrowing into a
Eurodollar Borrowing or to continue any Eurodollar Borrowing as a Eurodollar
Borrowing for an additional Interest Period, and (c) not later than 12:00 noon,
New York City time, three Business Days prior to conversion, to convert the
Interest Period with respect to any Eurodollar Borrowing to another permissible
Interest Period, subject in each case to the following:
(i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the Loans
comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting Borrowing
shall satisfy the limitations specified in Sections 2.02(a) and (b)
regarding the principal amount and maximum number of Borrowings of the
relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new
Loan of such Lender resulting from such conversion and reducing the Loan
(or portion thereof) of such Lender being converted by an equivalent
principal amount; accrued interest on any Eurodollar Loan (or portion
thereof) being converted shall be paid by the applicable Borrower at the
time of conversion;
(iv) if any Eurodollar Borrowing is converted at a time other than
the end of the Interest Period applicable thereto, the applicable Borrower
shall pay, upon demand, any amounts due to the Lenders pursuant to Section
2.16;
(v) any portion of a Borrowing maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar
Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be converted
into or continued as a Eurodollar Borrowing by reason of the immediately
preceding clause shall be automatically converted at the end of the
Interest Period in effect for such Borrowing into an ABR Borrowing;
(vii) no Interest Period may be selected for any Eurodollar Term
Borrowing that would end later than a Repayment Date occurring on or after
the first day of such Interest Period if, after giving effect to such
selection, the aggregate outstanding amount of (A) the Eurodollar Term
Borrowings with Interest Periods ending on or prior to such Repayment Date
and (B) the ABR Term Borrowings would not be at least equal to the
principal amount of Term Borrowings to be paid on such Repayment Date; and
(viii) upon notice to the Borrowers from the Administrative Agent
given at the request of the Required Lenders, after the occurrence and
during the
37
continuance of an Event of Default, no outstanding Loan may be converted
into, or continued as, a Eurodollar Loan.
Each notice pursuant to this Section shall be irrevocable, shall be
substantially in the form of Exhibit E or such other form as shall be acceptable
to the Administrative Agent and shall refer to this Agreement and specify (i)
the identity and amount of the Borrowing that the applicable Borrower requests
be converted or continued, (ii) whether such Borrowing is to be converted to or
continued as a Eurodollar Borrowing or an ABR Borrowing, (iii) if such notice
requests a conversion, the date of such conversion (which shall be a Business
Day) and (iv) if such Borrowing is to be converted to or continued as a
Eurodollar Borrowing, the Interest Period with respect thereto. If no Interest
Period is specified in any such notice with respect to any conversion to or
continuation as a Eurodollar Borrowing, the applicable Borrower shall be deemed
to have selected an Interest Period of one month's duration. The Administrative
Agent shall advise the Lenders of any notice given pursuant to this Section and
of each Lender's portion of any converted or continued Borrowing. If any
Borrower shall not have given notice in accordance with this Section to continue
any Borrowing into a subsequent Interest Period (and shall not otherwise have
given notice in accordance with this Section to convert such Borrowing), such
Borrowing shall, at the end of the Interest Period applicable thereto (unless
repaid pursuant to the terms hereof), automatically be continued into an ABR
Borrowing.
SECTION 2.11. REPAYMENT OF TERM BORROWINGS. (a) The Borrowers shall pay to
the Administrative Agent, for the accounts of the applicable Lenders, the
aggregate principal amount of the Term Borrowings (other than Term Borrowings
comprised of Other Term Loans) in consecutive installments payable on the last
Business Day of March, June, September and December of each year, commencing, in
the case of Term Borrowings made on the Closing Date, on the last Business Day
in September 2004 and ending on the Term Loan Maturity Date (each such date
being called a "REPAYMENT DATE"). Each installment payable in respect of (i)
Term Loans made on the Closing Date shall be in an amount equal to 0.25% of the
initial aggregate principal amount of such Term Loans and (ii) Incremental Term
Loans of any Class (other than Other Term Loans) shall be in an amount equal to
0.25% of the initial aggregate principal amount of the Incremental Term Loans of
such Class (in each case as adjusted from time to time pursuant to Sections
2.12, 2.13(e) and 2.24(d)), with the balance of all Term Loans (other than Other
Term Loans) being due and payable on the Term Loan Maturity Date.
(b) The Borrowers shall pay to the Administrative Agent, for the accounts
of the applicable Lenders, on each Incremental Term Loan Repayment Date
applicable thereto, a principal amount of the Other Term Loans of each Class (as
adjusted from time to time pursuant to Sections 2.12, 2.13(e) and 2.24(d)) equal
to the amount set forth for such date in the applicable Incremental Term Loan
Assumption Agreement. To the extent not previously paid, all Other Term Loans
shall be due and payable on the Incremental Term Loan Maturity Date therefor.
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(c) All repayments pursuant to this Section shall be subject to Section
2.16, but otherwise shall be without premium or penalty, and shall be
accompanied by accrued and unpaid interest on the principal amount to be repaid
to but excluding the date of payment.
SECTION 2.12. OPTIONAL PREPAYMENTS. (a) The Borrowers shall have the right
at any time and from time to time to prepay any Borrowing, in whole or in part,
upon at least three Business Days' prior written or fax notice (or telephone
notice promptly confirmed by written or fax notice) in the case of Eurodollar
Loans, or written or fax notice (or telephone notice promptly confirmed by
written or fax notice) at least one Business Day prior to the date of prepayment
in the case of ABR Loans, to the Administrative Agent before 12:00 noon, New
York City time; provided, however, that each partial prepayment shall be in an
amount that is an integral multiple of $1,000,000 and not less than $5,000,000.
(b) Optional prepayments of Term Loans shall be allocated pro rata among
the then outstanding Term Loans of each Class and shall be applied, as to each
such Class, first, in direct order to the scheduled installments of principal
due in respect of the Term Loans of such Class under Section 2.11(a) or (b), as
applicable, on the two Repayment Dates for Term Loans of such Class next
following the date of such prepayment unless and until such installments have
been eliminated as a result of prepayments under this Section and Section 2.13,
and second, ratably to the remaining scheduled installments of principal due in
respect of the Term Loans of such Class under Section 2.11(a) or (b), as
applicable.
(c) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable (provided that the occurrence of such prepayment may be conditioned
upon the completion of replacement financing), shall commit the applicable
Borrower to prepay such Borrowing by the amount stated therein on the date
stated therein and shall be substantially in the form of Exhibit F or such other
form as shall be acceptable to the Administrative Agent. All prepayments under
this Section shall be subject to Section 2.16, but otherwise shall be without
premium or penalty, and shall be accompanied by accrued and unpaid interest on
the principal amount to be prepaid to but excluding the date of payment;
provided, however, that any prepayment of Term Loans under this Section made
prior to the first anniversary of the Closing Date shall be accompanied by a
prepayment fee equal to 1.00% of the principal amount of the Term Loans prepaid.
SECTION 2.13. MANDATORY PREPAYMENTS. (a) In the event of the termination
of all the Revolving Credit Commitments, the Borrowers shall, on the date of
such termination, repay or prepay all outstanding Revolving Credit Borrowings
and all outstanding Swingline Loans and replace or cause to be terminated (or
make other arrangements satisfactory to the Administrative Agent and the Issuing
Bank with respect to) all outstanding Letters of Credit. If, after giving effect
to any partial reduction of the Revolving Credit Commitments, the Aggregate
Revolving Credit Exposure would exceed the Total Revolving Credit Commitment,
then the Borrowers shall, on the date of such reduction, repay or prepay
Revolving Credit Borrowings or Swingline Loans (or a
39
combination thereof), and, after the Revolving Credit Borrowings and Swingline
Loans shall have been repaid or prepaid in full, replace or cause to be
terminated (or make other arrangements satisfactory to the Administrative Agent
and the Issuing Bank with respect to) Letters of Credit, in an amount sufficient
to eliminate such excess.
(b) Not later than the third Business Day following any receipt of Net
Cash Proceeds in respect of any Asset Sale, the Borrowers shall apply 100% of
such Net Cash Proceeds to prepay outstanding Term Loans in accordance with
paragraph (e) of this Section.
(c) In the event and on each occasion that an Equity Issuance occurs, the
Borrowers shall, substantially simultaneously with (and in any event not later
than the third Business Day next following) the occurrence of such Equity
Issuance, apply 50% of the Net Cash Proceeds therefrom to prepay outstanding
Term Loans in accordance with paragraph (e) of this Section; provided, however,
that no prepayment pursuant to this paragraph shall be required to be made with
respect to (i) the IPO, (ii) the underwritten primary public offering of the
Equity Interests of Parent pursuant to an effective registration statement filed
with the Securities and Exchange Commission in accordance with the Securities
Act of 1933, as amended, next following the IPO or (iii) any other Equity
Issuance if, after giving pro forma effect to such issuance and the application
of the proceeds thereof (disregarding any such application pursuant to this
paragraph), the Leverage Ratio on the date of such issuance shall be not more
than 3.25 to 1.00.
(d) In the event that Parent or any Subsidiary shall receive Net Cash
Proceeds from the issuance or other disposition of Indebtedness for money
borrowed of Parent or any Subsidiary (other than any cash proceeds from the
issuance of Indebtedness for money borrowed permitted pursuant to Section 6.01),
the Borrowers shall, substantially simultaneously with (and in any event not
later than the third Business Day next following) the receipt of such Net Cash
Proceeds by such Loan Party or such subsidiary, apply an amount equal to 100% of
such Net Cash Proceeds to prepay outstanding Term Loans in accordance with
paragraph (e) of this Section.
(e) Mandatory prepayments of Term Loans shall be allocated pro rata among
the then outstanding Term Loans of each Class and shall be applied, as to each
such Class, first, in direct order to the scheduled installments of principal
due in respect of the Term Loans of such Class under Section 2.11(a) or (b), as
applicable, on the two Repayment Dates for Term Loans of such Class next
following the date of such prepayment unless and until such installments have
been eliminated as a result of prepayments under this Section and Section 2.12,
and second, ratably to the remaining scheduled installments of principal due in
respect of the Term Loans of such Class under Section 2.11(a) or (b), as
applicable. Notwithstanding the foregoing, any Lender may elect, by notice to
the Administrative Agent in writing or by fax no later than 3:00 p.m., New York
City time, at least two Business Days prior to any prepayment of Term Loans
required to be made by the Borrowers for the account of such Lender pursuant to
this Section, to decline all (but not a portion) of such prepayment, in which
case the amounts so declined will be retained by the Borrowers.
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(f) The Borrowers shall deliver to the Administrative Agent, at the time
of each prepayment required under this Section, (i) a certificate signed by a
Financial Officer of Parent setting forth in reasonable detail the calculation
of the amount of such prepayment and (ii) to the extent practicable, at least
three days prior written notice of such prepayment. Each notice of prepayment
shall specify the prepayment date and the principal amount of each Loan (or
portion thereof) to be prepaid and shall be substantially in the form of Exhibit
F or such other form as shall be acceptable to the Administrative Agent. All
prepayments of Borrowings under this Section shall be subject to Section 2.16,
but otherwise shall be without premium or penalty, and shall be accompanied by
accrued and unpaid interest on the principal amount to be prepaid to but
excluding the date of payment.
SECTION 2.14. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES. (a)
Notwithstanding any other provision of this Agreement, if any Change in Law
shall impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or credit
extended by any Lender or the Issuing Bank (except any such reserve requirement
which is reflected in the Adjusted LIBO Rate) or shall impose on such Lender or
the Issuing Bank or the London interbank market any other condition affecting
this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit
or participation therein, and the result of any of the foregoing shall be to
increase the cost to such Lender or the Issuing Bank of making or maintaining
any Eurodollar Loan or increase the cost to any Lender of issuing or maintaining
any Letter of Credit or purchasing or maintaining a participation therein or to
reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise) by an
amount deemed by such Lender or the Issuing Bank to be material, then the
Borrowers will pay to such Lender or the Issuing Bank, as the case may be, upon
demand such additional amount or amounts as will compensate such Lender or the
Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.
(b) If any Lender or the Issuing Bank shall have determined that any
Change in Law regarding capital adequacy has or would have the effect of
reducing the rate of return on such Lender's or the Issuing Bank's capital or on
the capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made or participations in Letters of
Credit purchased by such Lender pursuant hereto or the Letters of Credit issued
by the Issuing Bank pursuant hereto to a level below that which such Lender or
the Issuing Bank or such Lender's or the Issuing Bank's holding company could
have achieved but for such Change in Law (taking into consideration such
Lender's or the Issuing Bank's policies and the policies of such Lender's or the
Issuing Bank's holding company with respect to capital adequacy) by an amount
deemed by such Lender or the Issuing Bank to be material, then from time to time
the Borrowers shall pay to such Lender or the Issuing Bank, as the case may be,
such additional amount or amounts as will compensate such Lender or the Issuing
Bank or such Lender's or the Issuing Bank's holding company for any such
reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the amount
or amounts necessary to compensate such Lender or the Issuing Bank or its
holding
41
company, as applicable, as specified in paragraph (a) or (b) of this Section
shall be delivered to the Borrowers and shall be conclusive absent manifest
error. The Borrowers shall pay such Lender or the Issuing Bank the amount shown
as due on any such certificate delivered by it within 10 days after its receipt
of the same.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
that the Borrowers shall not be under any obligation to compensate any Lender or
the Issuing Bank under paragraph (a) or (b) of this Section with respect to
increased costs or reductions with respect to any period prior to the date that
is 120 days prior to such request if such Lender or the Issuing Bank knew or
could reasonably have been expected to know of the circumstances giving rise to
such increased costs or reductions and of the fact that such circumstances would
result in a claim for increased compensation by reason of such increased costs
or reductions; provided further that the foregoing limitation shall not apply to
any increased costs or reductions arising out of the retroactive application of
any Change in Law within such 120-day period. The protection of this Section
shall be available to each Lender and the Issuing Bank regardless of any
possible contention of the invalidity or inapplicability of the Change in Law
that shall have occurred or been imposed.
SECTION 2.15. CHANGE IN LEGALITY. (a) Notwithstanding any other provision
of this Agreement, if any Change in Law shall make it unlawful for any Lender to
make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrowers and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by such Lender
hereunder (or be continued for additional Interest Periods and ABR Loans
will not thereafter (for such duration) be converted into Eurodollar
Loans), whereupon any request for a Eurodollar Borrowing (or to convert an
ABR Borrowing to a Eurodollar Borrowing or to continue a Eurodollar
Borrowing for an additional Interest Period) shall, as to such Lender
only, be deemed a request for an ABR Loan (or a request to continue an ABR
Loan as such for an additional Interest Period or to convert a Eurodollar
Loan into an ABR Loan, as the case may be), unless such declaration shall
be subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar Loans
made by it be converted to ABR Loans, in which event all such Eurodollar
Loans shall be automatically converted to ABR Loans as of the effective
date of such notice as provided in paragraph (b) of this Section.
In the event any Lender shall exercise its rights under clause (i) or (ii)
above, all payments and prepayments of principal that would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such Lender
or the converted
42
Eurodollar Loans of such Lender shall instead be applied to repay the ABR Loans
made by such Lender in lieu of, or resulting from the conversion of, such
Eurodollar Loans.
(b) For purposes of this Section, a notice to the Borrowers by any Lender
shall be effective as to each Eurodollar Loan made by such Lender, if lawful, on
the last day of the Interest Period then applicable to such Eurodollar Loan; in
all other cases such notice shall be effective on the date of receipt by the
Borrowers.
SECTION 2.16. INDEMNITY. The Borrowers shall indemnify each Lender against
any loss or expense that such Lender may sustain or incur as a consequence of
(a) any event, other than a default by such Lender in the performance of its
obligations hereunder, which results in (i) such Lender receiving or being
deemed to receive any amount on account of the principal of any Eurodollar Loan
prior to the end of the Interest Period in effect therefor, (ii) the conversion
of any Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period
with respect to any Eurodollar Loan, in each case other than on the last day of
the Interest Period in effect therefor, or (iii) any Eurodollar Loan to be made
by such Lender (including any Eurodollar Loan to be made pursuant to a
conversion or continuation under Section 2.10) not being made after notice of
such Loan shall have been given by any Borrower hereunder (any of the events
referred to in this clause (a) being called a "BREAKAGE EVENT") or (b) any
default in the making of any payment or prepayment required to be made
hereunder. In the case of any Breakage Event, such loss shall include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Eurodollar Loan that is the subject of such Breakage
Event for the period from the date of such Breakage Event to the last day of the
Interest Period in effect (or that would have been in effect) for such Loan over
(ii) the amount of interest likely to be realized by such Lender in redeploying
the funds released or not utilized by reason of such Breakage Event for such
period. A certificate of any Lender setting forth any amount or amounts which
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrowers and shall be conclusive absent manifest error.
SECTION 2.17. PRO RATA TREATMENT. Except as provided in Section 2.13(e)
with respect to mandatory prepayments and in this Section with respect to
Swingline Loans, and as required under Section 2.15, each Borrowing, each
payment or prepayment of principal of any Borrowing, each payment of interest on
the Loans, each payment of the Commitment Fees, each reduction of the Term Loan
Commitments or the Revolving Credit Commitments and each conversion of any
Borrowing to or continuation of any Borrowing as a Borrowing of any Type shall
be allocated pro rata among the Lenders in accordance with their respective
applicable Commitments (or, if such Commitments shall have expired or been
terminated, in accordance with the respective principal amounts of their
outstanding Loans). For purposes of determining the available Revolving Credit
Commitments of the Lenders at any time, each outstanding Swingline Loan shall be
deemed to have utilized the Revolving Credit Commitments of the Lenders
(including those Lenders which shall not have made Swingline Loans) pro rata in
accordance with such respective Revolving Credit Commitments. Each Lender agrees
that in computing such Lender's portion of any Borrowing to be made hereunder,
the Administrative Agent
43
may, in its discretion, round each Lender's percentage of such Borrowing to the
next higher or lower whole dollar amount.
SECTION 2.18. SHARING OF SETOFFS. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
any Borrower or any other Loan Party, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Loan or Loans or L/C Disbursement as a result of which the unpaid principal
portion of its Loans and participations in L/C Disbursements shall be
proportionately less than the unpaid principal portion of the Loans and
participations in L/C Disbursements of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and shall
promptly pay to such other Lender the purchase price for, a participation in the
Loans and L/C Exposure of such other Lender, so that the aggregate unpaid
principal amount of the Loans and L/C Exposure and participations in Loans and
L/C Exposure held by each Lender shall be in the same proportion to the
aggregate unpaid principal amount of all Loans and L/C Exposure then outstanding
as the principal amount of its Loans and L/C Exposure prior to such exercise of
banker's lien, setoff or counterclaim or other event was to the principal amount
of all Loans and L/C Exposure outstanding prior to such exercise of banker's
lien, setoff or counterclaim or other event; provided, however, that if any such
purchase or purchases or adjustments shall be made pursuant to this Section and
the payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and
the purchase price or prices or adjustment restored without interest. The
Borrowers and Parent expressly consent to the foregoing arrangements and agree
that any Lender holding a participation in a Loan or L/C Disbursement deemed to
have been so purchased may exercise any and all rights of banker's lien, setoff
or counterclaim with respect to any and all moneys owing by any Borrower or any
other Loan Party to such Lender by reason thereof as fully as if such Lender had
made a Loan directly to a Borrower in the amount of such participation.
SECTION 2.19. PAYMENTS. (a) The Borrowers shall make each payment
(including principal of or interest on any Borrowing or any L/C Disbursement or
any Fees or other amounts) hereunder and under any other Loan Document not later
than 12:00 noon, New York City time, on the date when due in immediately
available dollars, without setoff, defense or counterclaim. Each such payment
(other than (i) Issuing Bank Fees, which shall be paid directly to the Issuing
Bank, and (ii) principal of and interest on Swingline Loans, which shall be paid
directly to the Swingline Lender except as otherwise provided in Section
2.21(e)) shall be made to the Administrative Agent at its offices at Eleven
Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000.
(b) Except as otherwise expressly provided herein, whenever any payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder or under any other Loan Document shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next
44
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or Fees, if applicable.
SECTION 2.20. TAXES. (a) Any and all payments by or on account of any
obligation of any Borrower or any other Loan Party hereunder or under any other
Loan Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if any Borrower or any other
Loan Party shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) such Borrower or such Loan
Party shall make such deductions and (iii) such Borrower or such Loan Party
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) In addition, the Borrowers shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrowers shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of any Borrower or any other Loan
Party hereunder or under any other Loan Document (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrowers by a Lender or the Issuing Bank, or by the Administrative Agent
on behalf of itself or a Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by any Borrower or any other Loan Party to a Governmental Authority, such
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which the Borrowers are
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrowers (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrowers as will permit such payments to be made
without withholding or at a reduced rate.
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SECTION 2.21. ASSIGNMENT OF COMMITMENTS UNDER CERTAIN CIRCUMSTANCES; DUTY
TO MITIGATE. (a) In the event (i) any Lender or the Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.14, (ii) any Lender or
the Issuing Bank delivers a notice described in Section 2.15, (iii) any Borrower
is required to pay any additional amount to any Lender or the Issuing Bank or
any Governmental Authority on account of any Lender or the Issuing Bank pursuant
to Section 2.20 or (iv) any Lender refuses to consent to any amendment, waiver
or other modification of any Loan Document requested by Parent or the Borrowers
that requires the consent of a greater percentage of the Lenders than the
Required Lenders and such amendment, waiver or other modification is consented
to by the Required Lenders, Parent may, at its sole expense and effort
(including with respect to the processing and recordation fee referred to in
Section 9.04(b)), upon notice to such Lender or the Issuing Bank and the
Administrative Agent, require such Lender or the Issuing Bank to transfer and
assign, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04), all of its interests, rights and obligations under
this Agreement (or, in the case of clause (iv) above, all of its interests,
rights and obligation with respect to the Class of Loans or Commitments that is
the subject of the related consent, amendment, waiver or other modification) to
an assignee that shall assume such assigned obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that (x) such
assignment shall not conflict with any law, rule or regulation or order of any
court or other Governmental Authority having jurisdiction, (y) Parent shall have
received the prior written consent of the Administrative Agent (and, if a
Revolving Credit Commitment is being assigned, of the Issuing Bank and the
Swingline Lender), which consent shall not unreasonably be withheld, and (z) the
Borrowers or such assignee shall have paid to the affected Lender or the Issuing
Bank in immediately available funds an amount equal to the sum of the principal
of and interest accrued to the date of such payment on the outstanding Loans or
L/C Disbursements of such Lender or the Issuing Bank, respectively, plus all
Fees and other amounts accrued for the account of such Lender or the Issuing
Bank hereunder (including any amounts under Sections 2.14 and 2.16); provided
further that, if prior to any such transfer and assignment the circumstances or
event that resulted in such Lender's or the Issuing Bank's claim for
compensation under Section 2.14 or notice under Section 2.15 or the amounts paid
pursuant to Section 2.20, as the case may be, cease to cause such Lender or the
Issuing Bank to suffer increased costs or reductions in amounts received or
receivable or reduction in return on capital, or cease to have the consequences
specified in Section 2.15, or cease to result in amounts being payable under
Section 2.20, as the case may be (including as a result of any action taken by
such Lender or the Issuing Bank pursuant to paragraph (b) of this Section), or
if such Lender or the Issuing Bank shall waive its right to claim further
compensation under Section 2.14 in respect of such circumstances or event or
shall withdraw its notice under Section 2.15 or shall waive its right to further
payments under Section 2.20 in respect of such circumstances or event or shall
consent to the proposed amendment, waiver, consent or other modification, as the
case may be, then such Lender or the Issuing Bank shall not thereafter be
required to make any such transfer and assignment hereunder. Each Lender hereby
grants to the Administrative Agent an irrevocable power of attorney (which power
is coupled with an interest) to execute and deliver, on behalf of such Lender as
assignor, any Assignment
46
and Acceptance necessary to effectuate any assignment of such Lender's interests
hereunder in the circumstances contemplated by this paragraph.
(b) If (i) any Lender or the Issuing Bank shall request compensation under
Section 2.14, (ii) any Lender or the Issuing Bank delivers a notice described in
Section 2.15 or (iii) any Borrower is required to pay any additional amount to
any Lender or the Issuing Bank or any Governmental Authority on account of any
Lender or the Issuing Bank, pursuant to Section 2.20, then such Lender or the
Issuing Bank shall use reasonable efforts (which shall not require such Lender
or the Issuing Bank to incur an unreimbursed loss or unreimbursed cost or
expense or otherwise take any action inconsistent with its internal policies or
legal or regulatory restrictions or suffer any disadvantage or burden deemed by
it to be significant) (x) to file any certificate or document reasonably
requested in writing by any applicable Borrower or (y) to assign its rights and
delegate and transfer its obligations hereunder to another of its offices,
branches or affiliates, if such filing or assignment would reduce its claims for
compensation under Section 2.14 or enable it to withdraw its notice pursuant to
Section 2.15 or would reduce amounts payable pursuant to Section 2.20, as the
case may be, in the future. The Borrowers hereby agree to pay all reasonable
costs and expenses incurred by any Lender or the Issuing Bank in connection with
any such filing or assignment, delegation and transfer.
SECTION 2.22. SWINGLINE LOANS. (a) SWINGLINE COMMITMENT. Subject to the
terms and conditions and relying upon the representations and warranties herein
set forth, the Swingline Lender agrees to make loans to the Borrowers at any
time and from time to time after the Closing Date and until the earlier of the
Revolving Credit Maturity Date and the termination of the Revolving Credit
Commitments, in an aggregate principal amount at any time outstanding that will
not result in (i) the aggregate principal amount of all Swingline Loans
exceeding $10,000,000 or (ii) the Aggregate Revolving Credit Exposure, after
giving effect to any Swingline Loan, exceeding the Total Revolving Credit
Commitment. Each Swingline Loan shall be in a principal amount that is an
integral multiple of $500,000 and not less than $1,000,000. The Swingline
Commitment may be terminated or reduced from time to time as provided herein.
Within the foregoing limits, the Borrowers may borrow, pay or prepay and
reborrow Swingline Loans hereunder, subject to the terms, conditions and
limitations set forth herein.
(b) SWINGLINE LOANS. The applicable Borrower shall notify the
Administrative Agent by fax, or by telephone (promptly confirmed by fax), not
later than 12:00 noon, New York City time, on the day of a proposed Swingline
Loan. Such notice shall be delivered on a Business Day, shall be irrevocable and
shall refer to this Agreement and shall specify the requested date (which shall
be a Business Day) and amount of such Swingline Loan and the wire transfer
instructions for the account of such Borrower to which the proceeds of the
Swingline Loan should be transferred. The Administrative Agent will promptly
advise the Swingline Lender of any notice received from a Borrower pursuant to
this paragraph. The Swingline Lender shall make each Swingline Loan by wire
transfer to the account specified in such request.
47
(c) PREPAYMENT. The Borrowers shall have the right at any time and from
time to time to prepay any Swingline Loan, in whole or in part, upon giving
written or fax notice (or telephone notice promptly confirmed by written or fax
notice) to the Swingline Lender and to the Administrative Agent before 12:00
noon, New York City time, on the date of prepayment at the Swingline Lender's
address for notices specified on Schedule 2.01.
(d) INTEREST. Each Swingline Loan shall be an ABR Loan and, subject to the
provisions of Section 2.07, shall bear interest as provided in Section 2.06(a).
(e) PARTICIPATIONS. The Swingline Lender may by written notice given to
the Administrative Agent not later than 11:00 a.m., New York City time, on any
Business Day require the Revolving Credit Lenders to acquire participations on
such Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which Revolving
Credit Lenders will participate. The Administrative Agent will, promptly upon
receipt of such notice, give notice to each Revolving Credit Lender, specifying
in such notice such Lender's Pro Rata Percentage of such Swingline Loan or
Loans. In furtherance of the foregoing, each Revolving Credit Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of the Swingline Lender,
such Revolving Credit Lender's Pro Rata Percentage of such Swingline Loan or
Loans. Each Revolving Credit Lender acknowledges and agrees that its obligation
to acquire participations in Swingline Loans pursuant to this paragraph is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or an Event of
Default, and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. Each Revolving Credit Lender shall comply
with its obligation under this paragraph by wire transfer of immediately
available funds, in the same manner as provided in Section 2.02(c) with respect
to Loans made by such Lender (and Section 2.02(c) shall apply, mutatis mutandis,
to the payment obligations of the Lenders) and the Administrative Agent shall
promptly pay to the Swingline Lender the amounts so received by it from the
Lenders. The Administrative Agent shall notify the Borrowers of any
participations in any Swingline Loan acquired pursuant to this paragraph and
thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts received by
the Swingline Lender from any Borrower (or other party on behalf of any
Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender
of the proceeds of a sale of participations therein shall be promptly remitted
to the Administrative Agent; any such amounts received by the Administrative
Agent shall be promptly remitted by the Administrative Agent to the Lenders that
shall have made their payments pursuant to this paragraph and to the Swingline
Lender, as their interests may appear. The purchase of participations in a
Swingline Loan pursuant to this paragraph shall not relieve any Borrower (or
other party liable for obligations of any Borrower) of any default in the
payment thereof.
SECTION 2.23. LETTERS OF CREDIT. (a) GENERAL. The Borrowers may request
the issuance of Letters of Credit, in form reasonably acceptable to the
Administrative Agent
48
and the Issuing Bank, at any time and from time to time while the L/C Commitment
remains in effect. This Section shall not be construed to impose an obligation
upon the Issuing Bank to issue any Letter of Credit that is inconsistent with
the terms and conditions of this Agreement.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN CONDITIONS.
In order to request the issuance of a Letter of Credit (or to amend, renew or
extend an existing Letter of Credit), the applicable Borrower shall hand deliver
or fax to the Issuing Bank and the Administrative Agent (reasonably in advance
of the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare such Letter of Credit. A Letter of
Credit shall be issued, amended, renewed or extended only if, and upon issuance,
amendment, renewal or extension of each Letter of Credit each Borrower shall be
deemed to represent and warrant that, after giving effect to such issuance,
amendment, renewal or extension (i) the L/C Exposure shall not exceed
$10,000,000 and (ii) the Aggregate Revolving Credit Exposure shall not exceed
the Total Revolving Credit Commitment.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at the close of
business on the earlier of the date one year after the date of the issuance of
such Letter of Credit and the date that is five Business Days prior to the
Revolving Credit Maturity Date, unless such Letter of Credit expires by its
terms on an earlier date; provided, however, that a Letter of Credit may, upon
the request of the applicable Borrower, include a provision whereby such Letter
of Credit shall be renewed automatically for additional consecutive periods of
12 months or less (but not beyond the date that is five Business Days prior to
the Revolving Credit Maturity Date) unless the Issuing Bank notifies the
beneficiary thereof at least 30 days prior to the then-applicable expiration
date that such Letter of Credit will not be renewed.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Credit Lender, and each such Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Pro Rata Percentage of the aggregate amount available to be
drawn under such Letter of Credit, effective upon the issuance of such Letter of
Credit. In consideration and in furtherance of the foregoing, each Revolving
Credit Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the Issuing Bank, such Lender's Pro
Rata Percentage of each L/C Disbursement made by the Issuing Bank and not
reimbursed by any Borrower (or, if applicable, another party pursuant to its
obligations under any other Loan Document) forthwith on the date due as provided
in Section 2.02(f). Each Revolving Credit Lender acknowledges and agrees that
its obligation to acquire participations pursuant to this paragraph in respect
of Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including the occurrence and continuance of a
Default or an Event of Default, and that each such
49
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) REIMBURSEMENT. If the Issuing Bank shall make any L/C Disbursement in
respect of a Letter of Credit, the applicable Borrower shall pay to the
Administrative Agent an amount equal to such L/C Disbursement on the Business
Day on which such Borrower shall have received notice from the Issuing Bank that
payment of such draft will be made, or, if such Borrower shall have received
such notice later than 10:00 a.m., New York City time, on any Business Day, not
later than 10:00 a.m., New York City time, on the immediately following Business
Day.
(f) OBLIGATIONS ABSOLUTE. Each Borrower's obligations to reimburse L/C
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit
or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or any Loan Document;
(iii) the existence of any claim, setoff, defense or other right
that such Borrower, any other party guaranteeing, or otherwise obligated
with, such Borrower, any Subsidiary or other Affiliate thereof or any
other person may at any time have against the beneficiary under any Letter
of Credit, the Issuing Bank, the Administrative Agent or any Lender or any
other person, whether in connection with this Agreement, any other Loan
Document or any other related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Issuing Bank, any Lender, the Administrative Agent or any other person or
any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of such Borrower's obligations
hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of each
Borrower hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or willful
50
misconduct of the Issuing Bank. The foregoing shall not, however, be construed
to excuse the Issuing Bank from liability to a Borrower to the extent of any
direct damages (as opposed to consequential damages, claims in respect of which
are hereby waived by each Borrower to the extent permitted by applicable law)
suffered by such Borrower that are caused by the Issuing Bank's gross negligence
or willful misconduct in determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. It is
understood that the Issuing Bank may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary and, in making any payment under any
Letter of Credit (i) the Issuing Bank's exclusive reliance on the documents
presented to it under such Letter of Credit as to any and all matters set forth
therein, including reliance on the amount of any draft presented under such
Letter of Credit, whether or not the amount due to the beneficiary thereunder
equals the amount of such draft and whether or not any document presented
pursuant to such Letter of Credit proves to be insufficient in any respect, if
such document on its face appears to be in order, and whether or not any other
statement or any other document presented pursuant to such Letter of Credit
proves to be forged or invalid or any statement therein proves to be inaccurate
or untrue in any respect whatsoever and (ii) any noncompliance in any immaterial
respect of the documents presented under such Letter of Credit with the terms
thereof shall, in each case, be deemed not to constitute gross negligence or
willful misconduct of the Issuing Bank.
(g) DISBURSEMENT PROCEDURES. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall as promptly as possible
give telephonic notification, confirmed by fax, to the Administrative Agent and
the applicable Borrower of such demand for payment and whether the Issuing Bank
has made or will make an L/C Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not relieve such Borrower of its
obligation to reimburse the Issuing Bank and the Revolving Credit Lenders with
respect to any such L/C Disbursement.
(h) INTERIM INTEREST. If the Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, then, unless the applicable Borrower shall
reimburse such L/C Disbursement in full on such date, the unpaid amount thereof
shall bear interest for the account of the Issuing Bank, for each day from and
including the date of such L/C Disbursement to but excluding the earlier of the
date of payment by such Borrower or the date on which interest shall commence to
accrue thereon as provided in Section 2.02(f), at the rate per annum that would
apply to such amount if such amount were an ABR Revolving Loan.
(i) RESIGNATION OR REMOVAL OF THE ISSUING BANK. The Issuing Bank may
resign at any time by giving 30 days' prior written notice to the Administrative
Agent, the Lenders and the Borrowers, and may be removed at any time by Parent
by notice to the Issuing Bank, the Administrative Agent and the Lenders. Upon
the acceptance of any appointment as the Issuing Bank hereunder by a Lender that
shall agree to serve as successor Issuing Bank, such successor shall succeed to
and become vested with all the interests, rights and obligations of the retiring
Issuing Bank and the retiring Issuing Bank shall be discharged from its
obligations to issue additional Letters of Credit hereunder.
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At the time such removal or resignation shall become effective, the Borrowers
shall pay all unpaid fees accrued pursuant to clause (ii) of Section 2.05(c).
The acceptance of any appointment as the Issuing Bank hereunder by a successor
Lender shall be evidenced by an agreement entered into by such successor, in a
form satisfactory to Parent and the Administrative Agent, and, from and after
the effective date of such agreement, (i) such successor Lender shall have all
the rights and obligations of the previous Issuing Bank under this Agreement and
the other Loan Documents and (ii) references herein and in the other Loan
Documents to the term "Issuing Bank" shall be deemed to refer to such successor
or to any previous Issuing Bank, or to such successor and all previous Issuing
Banks, as the context shall require. After the resignation or removal of the
Issuing Bank hereunder, the retiring Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of the Issuing Bank
under this Agreement and the other Loan Documents with respect to Letters of
Credit issued by it prior to such resignation or removal, but shall not be
required to issue additional Letters of Credit.
(j) CASH COLLATERALIZATION. If any Event of Default shall occur and be
continuing, the Borrowers shall, on the Business Day they receive notice from
the Administrative Agent or the Required Lenders (or, if the maturity of the
Loans has been accelerated, Revolving Credit Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit) thereof and of the amount
to be deposited, deposit in an account with the Collateral Agent, for the
benefit of the Revolving Credit Lenders, an amount in cash equal to the L/C
Exposure as of such date. Such deposit shall be held by the Collateral Agent as
collateral for the payment and performance of the Obligations. The Collateral
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Other than any interest earned on the
investment of such deposits in Permitted Investments, which investments shall be
made at the option and sole discretion of the Collateral Agent, such deposits
shall not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall (i) automatically be
applied by the Administrative Agent to reimburse the Issuing Bank for L/C
Disbursements for which it has not been reimbursed, (ii) be held for the
satisfaction of the reimbursement obligations of the Borrowers for the L/C
Exposure at such time and (iii) if the maturity of the Loans has been
accelerated (but subject to the consent of Revolving Credit Lenders holding
participations in outstanding Letters of Credit representing greater than 50% of
the aggregate undrawn amount of all outstanding Letters of Credit), be applied
to satisfy the Obligations. If the Borrowers are required to provide an amount
of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to the Borrowers within three Business Days after all Events of Default have
been cured or waived.
SECTION 2.24. INCREASE IN TERM LOAN COMMITMENTS. (a) Any Borrower may, by
written notice to the Administrative Agent from time to time, request
Incremental Term Loan Commitments in an amount not to exceed the Incremental
Term Loan Amount from one or more financial institutions, which may include any
existing Lender; provided that each Incremental Term Lender, if not already a
Lender hereunder, shall be subject to the approval of the Administrative Agent
(which approval shall not be
52
unreasonably withheld). Such notice shall set forth (i) the amount of the
Incremental Term Loan Commitments being requested (which shall be in minimum
increments of $1,000,000 and a minimum amount of $5,000,000 or equal to the
remaining Incremental Term Loan Amount), (ii) the date on which Loans are to be
made pursuant to such Incremental Term Loan Commitments are requested (which
shall not be less than 10 Business Days or more than 60 days after the date of
such notice) and (iii) whether such Incremental Term Loan Commitments are to be
commitments to make loans with terms identical to the Initial Term Loans or
commitments to make term loans with terms different from the Initial Term Loans
("OTHER TERM LOANS").
(b) The applicable Borrower and each Incremental Term Lender shall execute
and deliver to the Administrative Agent an Incremental Term Loan Assumption
Agreement and such other documentation as the Administrative Agent shall
reasonably specify to evidence the Incremental Term Loan Commitment of such
Incremental Term Lender. Each Incremental Term Loan Assumption Agreement shall
specify the terms of the Incremental Term Loans to be made thereunder; provided,
however, that, without the prior written consent of Lenders holding a majority
in interest of the outstanding Loans and Commitments of each adversely affected
Class of Term Loans, (i) the final maturity date of any Other Term Loans shall
be no earlier than (x) the final maturity date of any other Class of Term Loans
and (y) if the initial yield (determined as provided below) on such Other Term
Loans exceeds the Applicable Percentage for Eurodollar Term Loans of any Class,
the date falling six months after the final maturity date of each such adversely
affected Class; (ii) the average life to maturity of any Other Term Loans shall
be no shorter than (x) the average life to maturity of any other Class of Term
Loans and (y) if the initial yield (determined as provided below) on such Other
Term Loans exceeds the Applicable Percentage at the time in effect for
Eurodollar Term Loans of any Class, six months longer than the average life to
maturity of each such adversely affected Class; and (iii) if the initial yield
on any Other Term Loans (as determined by the Administrative Agent to be equal
to the sum of (x) the Eurodollar spread on the Other Term Loans and (y) if the
Other Term Loans are initially made at a discount or the lenders making the same
receive a fee from Parent or any Subsidiary for doing so (the amount of such
discount or fee, expressed as a percentage of the Other Term Loans, being
referred to herein as "OID"), the amount of such OID divided by the lesser of
(A) the average life to maturity of such Other Term Loans and (B) four) exceeds
by more than 50 basis points (the amount of such excess above 50 basis points
being referred to herein as the "YIELD DIFFERENTIAL") the Applicable Percentages
from time to time in effect for such other Class of Term Loans, then the
Applicable Percentage for each adversely affected Class of Term Loans shall
automatically be increased by the Yield Differential, effective upon the making
of the Other Term Loans. The Administrative Agent shall promptly notify each
Lender as to the effectiveness of each Incremental Term Loan Assumption
Agreement. Each of the parties hereto hereby agrees that, upon the effectiveness
of any Incremental Term Loan Assumption Agreement, this Agreement shall be
deemed amended to the extent (but only to the extent) necessary to reflect the
existence and terms of the Incremental Term Loan Commitment evidenced thereby
and any increase to the Applicable Percentages required by the foregoing
provisions of this paragraph. If the Administrative Agent shall so elect, any
such deemed amendment shall be memorialized
53
in a writing satisfactory to the Administrative Agent and Parent and furnished
to the other parties hereto.
(c) Notwithstanding the foregoing, no Incremental Term Loan Commitment
shall become effective under this Section unless (i) on the date of such
effectiveness, the conditions set forth in paragraphs (b) and (c) of Section
4.01 shall be satisfied and the Administrative Agent shall have received a
certificate to that effect dated such date and executed by a Financial Officer
of Parent, (ii) the Administrative Agent shall have received (with sufficient
copies for each of the Incremental Term Lenders) legal opinions, board
resolutions and other closing certificates and documentation consistent with
those delivered on the Closing Date under Article IV and (iii) Parent and the
Borrowers would be in Pro Forma Compliance after giving effect to such
Incremental Term Loan Commitment and the Loans to be made thereunder and the
application of the proceeds therefrom as if made and applied on such date.
(d) Each of the parties hereto hereby agrees that the Administrative Agent
may take any and all action as may be reasonably necessary to ensure that all
Incremental Term Loans (other than Other Term Loans), when originally made, are
included in each Borrowing of outstanding Loans on a pro rata basis. This may be
accomplished at the discretion of the Administrative Agent by requiring each
outstanding Eurodollar Borrowing to be converted into an ABR Borrowing on the
date of each Incremental Term Loan, or by allocating a portion of each
Incremental Term Loan to each outstanding Eurodollar Borrowing on a pro rata
basis, even though as a result thereof such Incremental Term Loan may
effectively have a shorter Interest Period than the Loans included in the
Borrowing of which they are a part (and notwithstanding any other provision of
this Agreement that would prohibit such an initial Interest Period). Any
conversion of Eurodollar Loans to ABR Loans made pursuant to the preceding
sentence shall be subject to Section 2.16. If any Incremental Term Loan is to be
allocated to an existing Interest Period for a Eurodollar Borrowing then,
subject to Section 2.07, the interest rate applicable to such Incremental Term
Loan for the remainder of such Interest Period shall equal the Adjusted LIBO
Rate for a period approximately equal to the remainder of such Interest Period
(as determined by the Administrative Agent two Business Days before the date
such Incremental Term Loan is made) plus the Applicable Percentage.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of Parent and the Borrowers represents and warrants to the
Administrative Agent, the Collateral Agent, the Issuing Bank and each Lender
that:
SECTION 3.01. ORGANIZATION; POWERS. Parent and each Subsidiary (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority to
own its property and assets and to carry on its business as now conducted and as
proposed to be conducted, (c) is
54
qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required, except where the failure so to qualify
could not reasonably be expected to result in a Material Adverse Effect, and (d)
has the power and authority to execute, deliver and perform its obligations
under each of the Loan Documents and each other agreement or instrument
contemplated thereby to which it is or will be a party and, in the case of any
Borrower, to borrow hereunder.
SECTION 3.02. AUTHORIZATION. The execution, delivery and performance by
WHP of the Harmony Merger Agreement and the transactions contemplated thereby
(the "HARMONY TRANSACTIONS") and by each Loan Party of each of the Loan
Documents and the Rollover Agreement and the transactions contemplated thereby
(including the borrowings hereunder) (the "CREDIT TRANSACTIONS" and collectively
with the Harmony Transactions, the "TRANSACTIONS") (a) have been duly authorized
by all requisite corporate (or other organizational) and, if required,
equityholder action and (b) will not (i) violate (A) any provision of law,
statute, rule or regulation, or of the certificate or articles of incorporation,
any membership or operating agreement, or other constitutive documents or
by-laws of Parent or any Subsidiary, (B) any order of any Governmental Authority
or (C) any provision of any indenture, agreement or other instrument to which
Parent or any Subsidiary is a party or by which any of them or any of their
property is or may be bound (other than any indenture, agreement or other
instrument that will be terminated on or prior to the Closing Date), (ii) be in
conflict with, result in a breach of or constitute (alone or with notice or
lapse of time or both) a default under, or give rise to any right to accelerate
or to require the prepayment, repurchase or redemption of any obligation under
any such indenture, agreement or other instrument (other than any indenture,
agreement or other instrument that will be terminated on or prior to the Closing
Date), (iii) result in the creation or imposition of any Lien upon or with
respect to any property or assets now owned or hereafter acquired by Parent or
any Subsidiary (other than any Lien created hereunder or under the Security
Documents) or (iv) result in a suspension or revocation of, or limitation on,
any material certificate of authority, license, permit, authorization or other
approval applicable to the business, operations or properties of Parent or any
Subsidiary or adversely affect the ability of Parent or any Subsidiary to
participate in, or contract with, any Medical Reimbursement Program.
SECTION 3.03. ENFORCEABILITY. This Agreement has been duly executed and
delivered by Parent and each Borrower and constitutes, and each other Loan
Document when executed and delivered by the each Loan Party party thereto will
constitute, a legal, valid and binding obligation of such Loan Party enforceable
against such Loan Party in accordance with its terms.
SECTION 3.04. GOVERNMENTAL APPROVALS. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Credit Transactions, except for (a)
the filing of Uniform Commercial Code financing statements and filings with the
United States Patent and Trademark Office and the United States Copyright
Office, (b) recordation of the Mortgages and (c) such as have been made or
obtained and are in full force and effect.
55
SECTION 3.05. FINANCIAL STATEMENTS. (a) Parent has heretofore furnished to
the Lenders (i) its consolidated balance sheets as of December 31, 2003 and
2002, and the related consolidated statements of income, changes in members'
equity and cash flows for the year ended December 31, 2003 and the five-month
period ended December 31, 2002, and the combined statements of income, changes
in stockholders' equity and cash flows for the seven-month period ended July 31,
2002 and the year ended December 31, 2001 of WMG and its subsidiaries, Well Care
HMO, Inc., HealthEase of Florida, Inc., CHM and Comprehensive Health Management
of Florida, L.C., in each case prepared in accordance with GAAP and audited by
and accompanied by the opinion of Deloitte & Touche, LLP, independent public
accountants, and (ii) consolidating balance sheets and related statements of
income, changes in members' or stockholders' equity, as applicable, and cash
flows of each consolidated Subsidiary for the three years ended December 31,
2003, prepared in accordance with GAAP (and, in the case of financial statements
for CHM, audited by and accompanied by the opinion of said independent public
accountants) and, with respect to each HMO Subsidiary, SAP. Such financial
statements present fairly the financial condition and results of operations and
cash flows of Parent and its consolidated Subsidiaries and of such consolidated
Subsidiaries, as the case may be, as of such dates and for such periods. Such
balance sheets and the notes thereto disclose all material liabilities, direct
or contingent, of Parent and its consolidated Subsidiaries and of such
consolidated Subsidiaries, as the case may be, as of the dates thereof.
(b) Parent has heretofore delivered to the Lenders its unaudited pro forma
consolidated balance sheet as of December 31, 2003, and the related statements
of income, changes in member's equity and cash flows prepared giving effect to
the Transactions as if they had occurred, with respect to such balance sheet, on
such date and, with respect to such other financial statements, on the first day
of the twelve-month period ending on such date. Such pro forma financial
statements have been prepared in good faith by Parent, based on the assumptions
used to prepare the pro forma financial information contained in the
Confidential Information Memorandum (which assumptions are believed by Parent
and the Borrowers on the date hereof and on the Closing Date to be reasonable),
are based on the best information available to Parent and the Borrowers as of
the date of delivery thereof, accurately reflect all adjustments required to be
made to give effect to the Transactions and present fairly on a pro forma basis
the estimated consolidated financial position of Parent and its consolidated
Subsidiaries as of such date and for such period, assuming that the Transactions
had actually occurred at such date or at the beginning of such period, as the
case may be.
SECTION 3.06. NO MATERIAL ADVERSE CHANGE. No event, change or condition
has occurred that has had, or would be materially likely to have, a material
adverse effect on the business, assets, operations, financial condition or
prospects of Parent and the Subsidiaries, taken as a whole, since December 31,
2003.
SECTION 3.07. TITLE TO PROPERTIES; POSSESSION UNDER LEASES. (a) Each of
Parent and the Subsidiaries has good and marketable title to, or valid leasehold
interests in, all its material properties and assets (including all Mortgaged
Property), except for minor defects in title that do not interfere with its
ability to conduct its business as
56
currently conducted or to utilize such properties and assets for their intended
purposes. All such material properties and assets are free and clear of Liens,
other than Liens expressly permitted by Section 6.02.
(b) Each of Parent and the Subsidiaries has complied in all material
respects with all obligations under all material leases to which it is a party
and all such leases are in full force and effect. Each of Parent and the
Subsidiaries enjoys peaceful and undisturbed possession under all such material
leases.
(c) None of Parent or any Borrower has received any notice of, nor has any
knowledge of, any pending or contemplated condemnation proceeding affecting the
Mortgaged Properties or any sale or disposition thereof in lieu of condemnation.
(d) None of Parent or any Subsidiary is obligated under any right of first
refusal, option or other contractual right to sell, assign or otherwise dispose
of any Mortgaged Property or any interest therein.
SECTION 3.08. SUBSIDIARIES. Schedule 3.08 sets forth as of the Closing
Date a list of all Subsidiaries and the percentage ownership interest of Parent
and each Subsidiary therein. The Subsidiary Guarantors and the HMO Subsidiaries
listed on Schedule 3.08 are designated as such. The shares of capital stock or
other ownership interests in the Subsidiaries set forth on Schedule 3.08 are
fully paid and non-assessable and are owned by Parent or a Borrower, directly or
indirectly, free and clear of all Liens (other than Liens created under the
Security Documents and, with respect to the Seller Note Pledged Stock, if any,
Liens under the Seller Note and any documents related thereto).
SECTION 3.09. LITIGATION; COMPLIANCE WITH LAWS. (a) Except as set forth on
Schedule 3.09, there are no actions, suits or proceedings at law or in equity or
by or before any Governmental Authority now pending or, to the knowledge of
Parent or any Borrower, threatened against or affecting Parent or any Subsidiary
or any business, property or rights of any such person (i) that involve any Loan
Document or the Credit Transactions or (ii) that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect.
(b) Since the date of this Agreement, there has been no change in the
status of the matters disclosed on Schedule 3.09 that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.
(c) None of Parent or any Subsidiary or any of their respective material
properties or assets is in violation of, nor will the continued operation of
their material properties and assets as currently conducted violate, any law,
rule or regulation (including any zoning, building, ordinance, code or approval
or any building permits) or any restrictions of record or agreements affecting
the Mortgaged Property, or is in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority, where such violation
or default could reasonably be expected to result in a Material Adverse Effect.
Without limiting the foregoing, (i) none of Parent or any Subsidiary, nor, to
the
57
knowledge of Parent or any Borrower, any individual employed by any of the
foregoing, could reasonably be expected to have criminal culpability or to be
excluded from participation in any Medical Reimbursement Program for corporate
or individual act or omission to act, (ii) no officer continues to be employed
by Parent or any Subsidiary who could reasonably be expected to have individual
culpability for matters under investigation by the OIG or any other Governmental
Authority unless such officer has been, within a reasonable period of time after
discovery of such actual or potential culpability, either suspended or removed
from positions of responsibility related to those activities under challenge by
the OIG or such other Governmental Authority, and (iii) current billing
policies, arrangements, protocols and instructions of each of Parent and the
Subsidiaries comply in all material respects with requirements of Medical
Reimbursement Programs and are administered by properly trained personnel. To
the knowledge of Parent or any Borrower, none of Parent or any Subsidiary, nor
any of their respective officers, directors or employees, have engaged in any
activities that constitute prohibited acts of fraud under Medicare Regulations
or under Medicaid Regulations.
(d) All material certificates of occupancy and material permits are in
effect for each Mortgaged Property as currently constructed to the extent
required by applicable law, and true and complete copies of such certificates of
occupancy have been delivered to the Collateral Agent as mortgagee with respect
to each Mortgaged Property.
SECTION 3.10. AGREEMENTS. (a) None of Parent or any Subsidiary is a party
to any agreement or instrument or subject to any corporate restriction that has
resulted or could reasonably be expected to result in a Material Adverse Effect.
(b) None of Parent or any Subsidiary is in default in any manner under any
provision of any indenture or other agreement or instrument evidencing
Indebtedness, or any other material agreement or instrument to which it is a
party or by which it or any of its properties or assets are or may be bound,
where such default could reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.11. FEDERAL RESERVE REGULATIONS. (a) None of Parent or any
Subsidiary is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation T, U
or X.
SECTION 3.12. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT.
None of Parent or any Subsidiary is (a) an "investment company" as defined in,
or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
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SECTION 3.13. TAX RETURNS. Each of Parent and the Subsidiaries has filed
or caused to be filed all Federal, state, local and foreign tax returns or
materials required to have been filed by it and has paid or caused to be paid
all taxes due and payable by it and all assessments received by it, except taxes
that are being contested in good faith by appropriate proceedings and for which
Parent or such Subsidiary, as applicable, shall have set aside on its books
adequate reserves.
SECTION 3.14. NO MATERIAL MISSTATEMENTS. None of (a) the Confidential
Information Memorandum or (b) any other information, report, financial
statement, exhibit or schedule furnished by or on behalf of Parent or any
Borrower to the Administrative Agent or any Lender in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto contained, contains or will contain any material misstatement of fact or
omitted, omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were, are
or will be made, not misleading; provided that to the extent any such
information, report, financial statement, exhibit or schedule was based upon or
constitutes a forecast or projection, each of Parent and the Borrowers
represents only that it acted in good faith and utilized reasonable assumptions
and due care in the preparation of such information, report, financial
statement, exhibit or schedule.
SECTION 3.15. EMPLOYEE BENEFIT PLANS. Each of Parent and its ERISA
Affiliates is in compliance with the applicable provisions of ERISA and the Code
and the regulations and published interpretations thereunder, except to the
extent the failure to comply could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect. No ERISA Event
has occurred or is reasonably expected to occur that, when taken together with
all other such ERISA Events, could reasonably be expected to result in a
Material Adverse Effect. The present value of all benefit liabilities under each
Plan (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the last annual valuation date
applicable thereto, exceed by more than $3,000,000 the fair market value of the
assets of such Plan, and the present value of all benefit liabilities of all
underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the last annual valuation
dates applicable thereto, exceed by more than $8,000,000 the fair market value
of the assets of all such underfunded Plans.
SECTION 3.16. ENVIRONMENTAL MATTERS. (a) Except as set forth in Schedule
3.16 and except with respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, none of Parent or any Subsidiary (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(b) Since the date of this Agreement, there has been no change in the
status of the matters disclosed on Schedule 3.16 that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.
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SECTION 3.17. INSURANCE. Schedule 3.17 sets forth a true, complete and
correct description of all insurance maintained by or on behalf of Parent and
the Subsidiaries as of the Closing Date. As of the Closing Date, such insurance
is in full force and effect and all premiums have been duly paid. Except for
self-insurance on terms consistent with industry practice, the properties of
Parent and the Subsidiaries are insured in all material respects with
financially sound and reputable insurance companies not Affiliates of Parent, in
such amounts, and with such deductibles and covering such risks, as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where Parent or the applicable Subsidiary
operates.
SECTION 3.18. SECURITY DOCUMENTS. (a) The Guarantee and Collateral
Agreement, upon execution and delivery thereof by the parties thereto, will
create in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral (as
defined in the Guarantee and Collateral Agreement) and the proceeds thereof and
(i) when the Pledged Collateral (as defined in the Guarantee and Collateral
Agreement) is delivered to the Collateral Agent, the Guarantee and Collateral
Agreement shall constitute a fully perfected first priority Lien on, and
security interest in, all right, title and interest of the Loan Parties in such
Pledged Collateral, in each case prior and superior in right to any other
person, and (ii) when financing statements in appropriate form are filed in the
offices specified on Schedule 3.18(a), the Lien created under the Guarantee and
Collateral Agreement will constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral (other than Intellectual Property, as defined in the Guarantee and
Collateral Agreement), in each case prior and superior in right to any other
person, other than with respect to Liens expressly permitted by Section 6.02.
(b) Upon the recordation of the Guarantee and Collateral Agreement with
the United States Patent and Trademark Office and the United States Copyright
Office, together with the financing statements in appropriate form filed in the
offices specified on Schedule 3.18(a), the Guarantee and Collateral Agreement
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in the Intellectual Property (as defined
in the Guarantee and Collateral Agreement) in which a security interest may be
perfected by filing in the United States of America and its territories and
possessions, in each case prior and superior in right to any other person (it
being understood that subsequent recordings in the United States Patent and
Trademark Office and the United States Copyright Office may be necessary to
perfect a Lien on registered trademarks and patents, trademark and patent
applications and registered copyrights acquired by the Loan Parties after the
date hereof).
(c) The Mortgages, if any, are effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable Lien on all of the Loan Parties' right, title and interest in
and to the Mortgaged Property thereunder and the proceeds thereof, and when such
Mortgages are filed in the proper real estate filing offices, such Mortgages
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Mortgaged Property and the
proceeds thereof, in each case prior and superior in right to any other person,
other than
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with respect to the rights of persons pursuant to Liens expressly permitted by
Section 6.02.
SECTION 3.19. LOCATION OF REAL PROPERTY AND LEASED PREMISES. (a) Schedule
3.19(a) lists completely and correctly as of the Closing Date all real property
owned by Parent and the Subsidiaries and the addresses thereof. Parent and the
Subsidiaries own in fee all the real property set forth on Schedule 3.19(a).
(b) Schedule 3.19(b) lists completely and correctly as of the Closing Date
all real property leased by Parent and the Subsidiaries and the addresses
thereof. Parent and the Subsidiaries have valid leases in all the real property
set forth on Schedule 3.19(b).
SECTION 3.20. LABOR MATTERS. As of the date hereof and the Closing Date,
there are no strikes, lockouts or slowdowns against Parent or any Subsidiary
pending or, to the knowledge of Parent or any Borrower, threatened. The hours
worked by and payments made to employees of Parent and the Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters, where such
violation could reasonably be expected to result in a Material Adverse Effect.
All payments due from Parent or any Subsidiary, or for which any claim may be
made against Parent or any Subsidiary, on account of wages and employee health
and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of Parent or such Subsidiary, except where the failure to
do so could not reasonably be expected to result in a Material Adverse Effect.
The consummation of the Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which Parent or any Subsidiary is bound.
SECTION 3.21. SOLVENCY. Immediately after the consummation of the Credit
Transactions to occur on the Closing Date and immediately following the making
of each Loan and after giving effect to the application of the proceeds of each
Loan, (a) the fair value of the assets of each Loan Party, at a fair valuation,
will exceed its debts and liabilities, subordinated, contingent or otherwise;
(b) the present fair saleable value of the property of each Loan Party will be
greater than the amount that will be required to pay the probable liability of
its debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (c) each Loan Party
will be able to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (d)
each Loan Party will not have unreasonably small capital with which to conduct
the business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Closing Date.
SECTION 3.22. SENIOR DEBT STATUS. No Indebtedness or other obligations,
other than the Obligations and obligations under the Existing Credit Agreement,
are, or will be, designated as "Senior Indebtedness" under the Seller Note.
SECTION 3.23. LICENSING AND ACCREDITATION. Except where the failure to do
so could not reasonably be expected to have a Material Adverse Effect, each of
Parent and
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the Subsidiaries (i) has obtained and maintains accreditation from one or more
generally recognized accreditation agencies where such accreditation is
customary in the industry in which it is engaged; (ii) in the case of each HMO
Subsidiary, has entered into and maintains in good standing its contract with
Medicare to be a Medicare+Choice Organization and each other agreement with
Medicare or Medicaid to provide services to the beneficiaries of such programs;
and (iii) has taken all action to obtain, preserve and maintain each certificate
of authority, license, permit, authorization and other approval of any
Governmental Authority required for the conduct of its business, and all of such
certificates, licenses, permits, authorizations or approvals are in full force
and effect and have not been revoked or suspended or otherwise limited. In
furtherance of the foregoing, each of Parent and the Subsidiaries has taken all
action to obtain, preserve and maintain with respect to each HMO Subsidiary all
certificates of authority, licenses, permits, authorizations and other approvals
required under the HMO Regulations, including approvals required to ensure that
such HMO Subsidiary is eligible for all reimbursements available under the HMO
Regulations, and all of such certificates, licenses, permits, authorizations or
approvals are in full force and effect and have not been revoked or suspended or
otherwise limited.
SECTION 3.24. MEDICARE AND MEDICAID NOTICES AND FILINGS RELATED TO
BUSINESS. Except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect, each of Parent and the Subsidiaries has timely
filed (a) all reports and other filings required to be filed in connection with
the Medicare and Medicaid programs, and all such reports and filings are true
and complete in all material respects, and (b) all material reports, data and
other information required by any other Governmental Authority with authority to
regulate it or its business or operations in any manner. Except to the extent
any such action could not reasonably be expected to result in a Material Adverse
Effect, (i) there are no claims, actions, proceedings or appeals pending (and
none of Parent or any Subsidiary has made any filing that would result in any
claims, actions, proceedings or appeals) before any Governmental Authority with
respect to any Medicare or Medicaid reports or claims filed by Parent or any
Subsidiary on or before the date hereof, or with respect to any adjustments,
denials, recoupments or disallowances by any intermediary, carrier, other
insurer, commission, board or agency in connection with any cost reports or
claims, and (ii) no validation review, survey, inspection, audit, investigation
or program integrity review related to Parent or any Subsidiary has been
conducted by any Governmental Authority or government contractor in connection
with the Medicare or Medicaid programs, and no such reviews are scheduled,
pending or, to the knowledge of Parent or any Borrower, threatened against or
affecting Parent or any Subsidiary.
ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Lenders to make Loans and of the Issuing Bank to
issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions:
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SECTION 4.01. ALL CREDIT EVENTS. On the date of each Borrowing, including
each Borrowing of a Swingline Loan, and on the date of each issuance, amendment,
extension or renewal of a Letter of Credit (each such event being called a
"CREDIT EVENT"):
(a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03 (or such notice shall have been
deemed given in accordance with Section 2.03) or, in the case of the
issuance, amendment, extension or renewal of a Letter of Credit, the
Issuing Bank and the Administrative Agent shall have received a notice
requesting the issuance, amendment, extension or renewal of such Letter of
Credit as required by Section 2.23(b) or, in the case of the Borrowing of
a Swingline Loan, the Swingline Lender and the Administrative Agent shall
have received a notice requesting such Swingline Loan as required by
Section 2.22(b).
(b) The representations and warranties set forth in Article III and
in each other Loan Document shall be true and correct in all material
respects on and as of the date of such Credit Event with the same effect
as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.
(c) The Borrowers and each other Loan Party shall be in compliance
with all the terms and provisions set forth herein and in each other Loan
Document on its part to be observed or performed, and at the time of and
immediately after such Credit Event, no Default or Event of Default shall
have occurred and be continuing.
Each Credit Event shall be deemed to constitute a representation and
warranty by the Borrowers and Parent on the date of such Credit Event as to the
matters specified in paragraphs (b) and (c) of this Section.
SECTION 4.02. FIRST CREDIT EVENT. On the Closing Date:
(a) The Administrative Agent shall have received, on behalf of
itself, the Lenders and the Issuing Bank, a favorable written opinion of
Xxxxxxxx & Xxxxx LLP, counsel for Parent and the Borrowers, substantially
to the effect set forth in Exhibit G, such opinion to be (i) dated the
Closing Date, (ii) addressed to the Lenders, the Issuing Bank and the
Administrative Agent and (iii) covering such other matters relating to the
Loan Documents and the Credit Transactions to occur on the Closing Date as
the Administrative Agent shall reasonably request. Parent and the
Borrowers hereby request such counsel to deliver such opinions.
(b) All legal matters related to this Agreement, the Borrowings and
extensions of credit hereunder and the other Loan Documents shall be
satisfactory to the Lenders, the Issuing Bank and the Administrative
Agent.
(c) The Administrative Agent shall have received (i) a copy of the
certificate or articles of incorporation, or certificate of formation,
including all
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amendments thereto, of each Loan Party, certified as of a recent date by
the Secretary of State of the State of its organization, and a certificate
as to the good standing of each Loan Party as of a recent date, from such
Secretary of State; (ii) a certificate of the Secretary or Assistant
Secretary of each Loan Party dated the Closing Date and certifying (A) if
such Loan Party is a corporation, that attached thereto is a true and
complete copy of the by-laws of such Loan Party as in effect on the
Closing Date and at all times since a date prior to the date of the
resolutions described in clause (B) below, or if such Loan Party is a
limited liability company, that attached thereto is a true and complete
copy of the operating or limited liability company agreement of such Loan
Party as in effect on the Closing Date and at all times since the date
prior to the date of the resolutions described in clause (B) below, (B)
that attached thereto is a true and complete copy of resolutions duly
adopted by the board of directors or board of managers, as applicable, of
such Loan Party authorizing the execution, delivery and performance of the
Loan Documents to which such person is a party and, in the case of each
Borrower, the borrowings hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect, (C)
that the certificate or articles of incorporation, or certificate of
formation, of such Loan Party have not been amended since the date of the
last amendment thereto shown on the certificate of good standing furnished
pursuant to clause (i) above and (D) as to the incumbency and specimen
signature of each officer executing any Loan Document or any other
document delivered in connection herewith on behalf of such Loan Party;
(iii) a certificate of another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary executing the
certificate pursuant to clause (ii) above; and (iv) such other documents
as the Lenders, the Issuing Bank or the Administrative Agent may
reasonably request.
(d) The Administrative Agent shall have received a certificate,
dated the Closing Date and signed by a Financial Officer of each of Parent
and the Borrowers, confirming compliance with the conditions precedent set
forth in paragraphs (b) and (c) of Section 4.01 and paragraphs (f), (i),
(l) and (m) of this Section.
(e) The Administrative Agent shall have received all Fees and other
amounts due and payable on or prior to the Closing Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by Parent and the Borrowers hereunder or
under any other Loan Document.
(f) The Guarantee and Collateral Requirement shall have been
satisfied. The Collateral Agent shall have received the Perfection
Certificate with respect to the Loan Parties dated the Closing Date and
duly executed by a Responsible Officer of Parent and shall have received
the results of a search of the Uniform Commercial Code filings (or
equivalent filings) made with respect to the Loan Parties in the states
(or other jurisdictions) of formation of such persons, in which the chief
executive office of each such person is located and in the other
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jurisdictions in which such persons maintain property, in each case as
indicated on such Perfection Certificate, together with copies of the
financing statements (or similar documents) disclosed by such search, and
accompanied by evidence satisfactory to the Collateral Agent that the
Liens indicated in any such financing statement (or similar document)
would be permitted under Section 6.02 or have been or will be
contemporaneously released or terminated.
(g) The Administrative Agent shall have received a copy of, or a
certificate as to coverage under, the insurance policies required by
Section 5.02 and the applicable provisions of the Security Documents, each
of which shall be endorsed or otherwise amended to include a customary
lender's loss payable endorsement and to name the Collateral Agent as
additional insured, in form and substance satisfactory to the
Administrative Agent.
(h) The Administrative Agent shall have received copies of each of
(i) the Seller Note and the related Pledge Agreement dated as of July 31,
2002 and the Amendment and Settlement Agreement dated as of February 12,
2004, (ii) each management agreement between CHM and an HMO Subsidiary and
(iii) any management agreements between Parent or any Subsidiary and SPEP
Management, LLC or any of its Affiliates, in each case certified by a
Financial Officer of Parent as being complete and correct.
(i) All principal, interest, fees and other amounts due or
outstanding under the Existing Credit Agreement shall have been paid in
full, the commitments thereunder terminated and all guarantees and
security in support thereof discharged and released, and the
Administrative Agent shall have received reasonably satisfactory evidence
thereof. WMG shall have repaid or otherwise discharged its obligations
under, or shall substantially simultaneously with the initial funding of
Loans on the Closing Date repay or otherwise discharge its obligations
under, all of the Discount Notes, it being agreed that the conversion of
the Discount Notes into Term Loans of the Rollover Lenders pursuant to the
Rollover Agreement shall be deemed a discharge of WMG's obligations under
the Discount Notes. WHP shall have repaid or otherwise discharged, or
shall substantially simultaneously with the initial funding of Loans on
the Closing Date repay or otherwise discharge, a portion of the
outstanding Indebtedness under the Seller Note such that the condition in
clause (b) of the last sentence of this paragraph shall be satisfied.
Immediately after giving effect to the Credit Transactions to occur on the
Closing Date, Parent and the Subsidiaries shall have outstanding no
Indebtedness or preferred Equity Interests other than (a) Indebtedness
outstanding under this Agreement, (b) Indebtedness under the Seller Note
in an aggregate principal amount not to exceed $30,000,000 and (c)
Indebtedness set forth on Schedule 6.01.
(j) The Lenders shall have received the financial statements and
opinions referred to in Section 3.05, none of which shall be materially
inconsistent with the financial statements or forecasts previously
provided to the Lenders. No material adverse change shall have occurred in
the business, assets, operations financial
65
condition or prospects of Parent and the Subsidiaries, taken as a whole,
since December 31, 2003.
(k) The Lenders shall have received a detailed business plan of
Parent and the Subsidiaries for (i) the years 2004 through 2009 and (ii)
each fiscal quarter of 2004 and 2005, in form and substance satisfactory
to the Administrative Agent.
(l) The Lenders shall be satisfied that the Leverage Ratio on the
Closing Date, calculated after giving pro forma effect to the Credit
Transactions to occur on the Closing Date, shall be no more than 3.0 to
1.0.
(m) All requisite Governmental Authorities and third parties shall
have approved or consented to the Credit Transactions to occur on the
Closing Date to the extent required, all applicable appeal periods shall
have expired and there shall not be any pending or threatened litigation
or governmental, administrative or judicial action that could reasonably
be expected to restrain, prevent or impose burdensome conditions on the
Transactions or the other transactions contemplated hereby.
(n) The Post-Closing Matters Side Letter shall have been duly
executed by Parent and each of the Borrowers and shall be in full force
and effect on the Closing Date.
(o) The Lenders shall have received, to the extent requested, all
documentation and other information required by regulatory authorities
under applicable "know your customer" and anti-money laundering rules and
regulations, including the USA Patriot Act.
ARTICLE V
AFFIRMATIVE COVENANTS
Each of Parent and the Borrowers covenants and agrees with each Lender
that so long as this Agreement shall remain in effect and until the Commitments
have been terminated and the principal of and interest on each Loan, all Fees
and all other expenses or amounts payable under any Loan Document shall have
been paid in full and all Letters of Credit have been canceled or have expired
and all amounts drawn thereunder have been reimbursed in full, unless the
Required Lenders shall otherwise consent in writing, each of Parent and the
Borrowers will, and will cause each of the Subsidiaries to:
SECTION 5.01. EXISTENCE; BUSINESSES AND PROPERTIES. (a) Preserve, renew
and maintain in full force and effect its legal existence and good standing
under the laws of the jurisdiction of its organization, except as otherwise
expressly permitted under Section 6.05; provided that any wholly owned
Subsidiary (other than any Borrower) may dissolve, liquidate or wind up its
affairs at any time if such dissolution, liquidation or winding up, as
applicable, could not reasonably be expected to have a Material Adverse Effect.
66
(b) Take all action to obtain, preserve, renew and maintain in full force
and effect all rights, privileges, permits, licenses and franchises necessary or
desirable in the normal conduct of its business and to preserve, renew and
maintain all of its registered patents, trademarks, trade names and services
marks, except, in each case, to the extent the failure to do so could not
reasonably be expected to have a Material Adverse Effect; and maintain and
preserve all property material to the conduct of its business and keep such
property in good repair, working order and condition and from time to time make,
or cause to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith may be properly conducted at all times.
SECTION 5.02. INSURANCE. Maintain in full force and effect (i) except to
the extent Parent and the Subsidiaries are self-insured on terms consistent with
industry practice, insurance (including worker's compensation insurance,
liability insurance, casualty insurance and business interruption insurance)
with financially sound and reputable insurance companies, in such amounts, with
such deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
Parent or the applicable Subsidiary operates, (ii) all insurance required to be
maintained by the Security Documents and (iii) such other insurance as may be
required by law.
SECTION 5.03. OBLIGATIONS AND TAXES. Pay and discharge as the same shall
become due and payable its Indebtedness and other obligations and all material
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or in respect of its property, before the same shall
become delinquent or in default, as well as all material lawful claims that, if
unpaid, might give rise to a Lien upon such properties or any part thereof;
provided, however, that such payment and discharge shall not be required with
respect to any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings diligently conducted and Parent and the Subsidiaries shall have set
aside on their books adequate reserves with respect thereto in accordance with
GAAP and SAP, as applicable, and such contest operates to suspend collection of
the contested obligation, tax, assessment or charge and enforcement of a Lien.
SECTION 5.04. FINANCIAL STATEMENTS, REPORTS, ETC. Furnish to the
Administrative Agent, who will make it available to each Lender:
(a) within 90 days after the end of each fiscal year of Parent, its
audited consolidated balance sheet and related statements of income,
changes in members' or stockholders' equity, as applicable, and cash flows
showing the financial condition of Parent and its consolidated
Subsidiaries as of the close of such fiscal year and the results of its
operations and the operations of such Subsidiaries during such year,
together with comparative figures for the immediately preceding fiscal
year, all reported on by Deloitte & Touche, LLP, or other independent
public accountants of recognized national standing and accompanied by an
opinion of such accountants (which opinion shall be without a "going
concern" or like qualification or exception and without any qualification
67
or exception as to the scope of such audit) to the effect that such
consolidated financial statements fairly present the financial condition
and results of operations of Parent and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of Parent, its consolidated balance sheet and
related statements of income, changes in members' or stockholders' equity,
as applicable, and cash flows showing the financial condition of Parent
and its consolidated Subsidiaries as of the close of such fiscal quarter
and the results of its operations and the operations of such Subsidiaries
during such fiscal quarter and the then elapsed portion of the fiscal
year, and comparative figures for the same periods in the immediately
preceding fiscal year, all certified by a Financial Officer of Parent as
fairly presenting the financial condition and results of operations of
Parent and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP, subject to normal year-end audit adjustments and the
absence of footnotes;
(c) within 15 days after the date that such annual and quarterly
financial statements of each HMO Subsidiary are required to be filed with
any HMO Regulator, such annual and quarterly financial statements prepared
in accordance with SAP;
(d) concurrently with any delivery of financial statements under
clause (a) or (b) of this Section, a certificate of the accounting firm
(in the case of clause (a)) or a Financial Officer of Parent (in the case
of clause (b)) opining on or certifying such statements (which
certificate, when furnished by an accounting firm, may be limited to
accounting matters and disclaim responsibility for legal interpretations)
(i) certifying that no Default or Event of Default has occurred or, if
such a Default or an Event of Default has occurred, specifying the nature
and extent thereof and any corrective action taken or proposed to be taken
with respect thereto and (ii) setting forth computations in reasonable
detail satisfactory to the Administrative Agent demonstrating compliance
with the covenants contained in Sections 6.10, 6.11 and 6.12;
(e) within 30 days after the end of each fiscal year of Parent, an
annual consolidated budget for the succeeding fiscal year (including a
projected consolidated balance sheet and related statements of projected
operations and cash flows as of the end of and for such succeeding fiscal
year and each quarter thereof and setting forth the assumptions used for
purposes of preparing such budget) and, promptly when available, any
significant revisions of such budget;
(f) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
Parent or any Subsidiary with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, or distributed
to its shareholders, as the case may be;
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(g) promptly after the receipt thereof by Parent or any Subsidiary,
a copy of any "management letter" in final form received by any such
person from its certified public accountants and, promptly upon completion
thereof, the management's written response thereto;
(h) promptly after the same becomes available, and in any event
within 120 days after the end of each fiscal year of Parent, a schedule
setting forth in reasonable detail the reinsurance arrangements maintained
by each HMO Subsidiary as of the end of such fiscal year (with any changes
subsequent to the end of such fiscal described therein);
(i) promptly after the request by any Lender, all documentation and
other information that such Lender reasonably requests in order to comply
with its ongoing obligations under applicable "know your customer" and
anti-money laundering rules and regulations, including the USA Patriot
Act; and
(j) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of Parent or any
Subsidiary, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.
SECTION 5.05. LITIGATION AND OTHER NOTICES. Furnish to the Administrative
Agent, the Issuing Bank and each Lender, promptly after any Responsible Officer
of Parent or any Subsidiary obtains knowledge thereof, written notice of the
following:
(a) any Default or Event of Default, specifying the nature and
extent thereof and the corrective action, if any, taken or proposed to be
taken with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any Governmental
Authority, against Parent or any Affiliate thereof that could reasonably
be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of Parent and the Subsidiaries in an aggregate amount
exceeding $1,000,000;
(d) any development that has resulted in, or could reasonably be
expected to result in, an Exclusion Event, including any notice by the OIG
of exclusion or proposed exclusion of Parent or any Subsidiary from any
Medical Reimbursement Program, and any other development that has resulted
in, or could reasonably be expected to result in, a Material Adverse
Effect;
(e) commencement of any material audit of Parent or any Subsidiary
by any regulatory authority, including any HMO Regulator, and commencement
of
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any proceeding or other action against Parent or any Subsidiary that could
reasonably be expected to result in a suspension, revocation or
termination of any contract of Parent or any Subsidiary with respect to
Medicaid or Medicare, including any such contract to be a Medicare+Choice
Organization; and
(f) receipt by Parent or any Subsidiary of (i) any notice of
suspension or forfeiture of any certificate of authority or similar
license of any HMO Subsidiary and (ii) any other material notice of
deficiency, compliance order or adverse report issued by any regulatory
authority, including any HMO Regulator, or private insurance company
pursuant to a provider agreement that, if not promptly complied with or
cured, could reasonably be expected to result in the suspension or
forfeiture of any certification, license, permit, authorization or other
approval necessary for such HMO Subsidiary to carry on its business as
then conducted or in the termination of any insurance or reimbursement
program then available to any HMO Subsidiary.
SECTION 5.06. INFORMATION REGARDING COLLATERAL. (a) Furnish to the
Administrative Agent prompt written notice of any change (i) in any Loan Party's
corporate name, (ii) in the jurisdiction of organization or formation of any
Loan Party, (iii) in any Loan Party's identity or corporate structure or (iv) in
any Loan Party's Federal Taxpayer Identification Number. Parent and each
Borrower agree not to effect or permit any change referred to in the preceding
sentence unless all filings have been made under the Uniform Commercial Code or
otherwise that are required in order for the Collateral Agent to continue at all
times following such change to have a valid, legal and perfected security
interest in all the Collateral. Parent and each Borrower also agree promptly to
notify the Administrative Agent if any material portion of the Collateral is
damaged or destroyed.
(b) In the case of Parent, each year, at the time of delivery of the
annual financial statements with respect to the preceding fiscal year pursuant
to clause (a) of Section 5.04, deliver to the Administrative Agent a certificate
of a Financial Officer of Parent supplementing the information required pursuant
to the Perfection Certificate or confirming that there has been no change in
such information since the date of the Perfection Certificate delivered on the
Closing Date or the date of the most recent certificate delivered pursuant to
this Section.
SECTION 5.07. MAINTAINING RECORDS; ACCESS TO PROPERTIES AND INSPECTIONS;
MAINTENANCE OF RATINGS. (a) Maintain (i) proper books of record and account, in
which true, complete and correct entries in conformity with GAAP or SAP, as
applicable, shall be made of all material financial transactions and matters
involving the material assets and business of Parent and the Subsidiaries and
(ii) such books of record and account in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
Parent and the Subsidiaries.
(b) Permit representatives designated by, and independent contractors of,
the Administrative Agent or any Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts
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therefrom, and to discuss its affairs, finances and accounts with its directors,
officers and independent public accountants, all at the expense of Parent and
the Borrowers and at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to Parent
(which notice shall not be required at any time after the occurrence and during
the continuance of an Event of Default); provided, however, that so long as no
Event of Default has occurred and is continuing, Parent and the Borrowers shall
be obligated to pay the expenses of only one such visit in any calendar year.
Notwithstanding the foregoing, no Loan Party shall be required to disclose (i)
any materials subject to a confidentiality obligation binding upon such Loan
Party (provided that such Loan Party shall, at the request of the Administrative
Agent or any Lender, use commercially reasonable efforts to obtain permission
for such disclosure and, in the event permission cannot be obtained, furnish
some information regarding the matters to which such materials relate as can
reasonably be furnished without violation of such confidentiality obligations)
or (ii) any communications protected by attorney-client privilege the disclosure
or inspection of which would waive such privilege.
(c) In the case of Parent and each Borrower, use commercially reasonable
efforts to cause the Credit Facilities to be continuously rated by S&P and
Xxxxx'x.
SECTION 5.08. USE OF PROCEEDS. In the case of the Borrowers, use (a) the
proceeds of the Term Loans on and (with respect to clauses (iv) and (v) below)
after the Closing Date solely (i) to finance the repayment or other discharge of
the Discount Notes, (ii) to pay or prepay (x) all or a portion of Indebtedness
outstanding under the Seller Note such that, after giving effect to such
prepayment, the principal amount of outstanding Indebtedness under the Seller
Note shall not exceed $30,000,000 and (y) all principal, interest, fees and
other amounts due or outstanding under the Existing Credit Agreement, (iii) to
pay related fees and expenses, (iv) to finance a portion of the Harmony
Acquisition Consideration and (v) for general corporate purposes; (b) the
proceeds of the Revolving Loans solely for general corporate purposes and, if
immediately prior to and after giving effect thereto no Default or Event of
Default shall have occurred, to make required principal and interest payments on
the Seller Note; (d) the proceeds of the Swingline Loans solely for general
corporate purposes; and (e) Letters of Credit solely to support payment
obligations incurred in the ordinary course of business by the Borrowers and
their subsidiaries.
SECTION 5.09. COMPLIANCE WITH LAWS. (a) Comply with all applicable laws,
rules, regulations, orders, writs, injunctions and decrees of any Governmental
Authority (including Titles XVIII and XIX of the Social Security Act, Medicare
Regulations, Medicaid Regulations, HMO Regulations and Health Insurance
Portability and Accountability Act of 1996), whether now existing or hereafter
enacted, except where the failure to comply therewith, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(b) Obtain and maintain all material certifications, licenses, permits,
authorizations and approvals of all applicable Governmental Authorities as are
required for the conduct of its business as currently conducted and as proposed
to be conducted, including licenses and contracts with Medicare and Medicaid.
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(c) Use commercially reasonable efforts to ensure that billing policies,
arrangements, protocols and instructions comply in all material respects with
reimbursement requirements under Medicare, Medicaid and other Medical
Reimbursement Programs and are administered by properly trained personnel.
(d) Maintain a compliance program for Parent and the Subsidiaries that (i)
satisfies the requirements therefor applicable to Medicare+Choice Organizations
and (ii) is reasonably designed to provide internal controls effective to
promote adherence to, and prevent and detect any material violation of, any
applicable laws, rules and regulations and, in any event, includes regular
internal audits and monitoring to ensure compliance therewith and with all
applicable laws, rules and regulations.
SECTION 5.10. FURTHER ASSURANCES. Execute any and all further documents,
financing statements, agreements and instruments, and take all further action
(including filing Uniform Commercial Code and other financing statements,
fixture filings, mortgages and deeds of trust and preparation of all
documentation relating to filings under the Assignment of Claims Act) that may
be required under applicable law, or that the Required Lenders, the
Administrative Agent or the Collateral Agent may reasonably request, to cause
the Guarantee and Collateral Requirement to be and remain satisfied and to
effectuate the other transactions contemplated by the Loan Documents, all at the
expense of the Loan Parties. Without limiting the foregoing, Parent and each
Borrower will cause the Guarantee and Collateral Requirement to be satisfied
with respect to (a) each Subsidiary acquired or organized subsequent to the date
hereof (other than any such Subsidiary that is a Foreign Subsidiary, an
Immaterial Subsidiary or an HMO Subsidiary that has not Guaranteed any
Indebtedness of Parent or any other Subsidiary), (b) each Subsidiary that ceases
to be an Immaterial Subsidiary or an HMO Subsidiary and (c) each HMO Subsidiary
that has Guaranteed any Indebtedness of Parent or any Subsidiary (and which
Guarantee, at the time of determination, is in effect). In addition, from time
to time, Parent and each Borrower will, at their cost and expense, promptly
secure the Obligations by pledging or creating, or causing to be pledged or
created, perfected security interests with respect to such of its assets and
properties as the Administrative Agent or the Required Lenders shall designate
(it being understood that it is the intent of the parties that the Obligations
shall be secured, except to the extent set forth in the definition of the term
"Guarantee and Collateral Requirement," by substantially all the assets of
Parent and the Subsidiaries, including real and other properties acquired
subsequent to the Closing Date). Parent and each Borrower agree to provide such
evidence as the Collateral Agent shall reasonably request as to the perfection
and priority status of each security interest and Lien created or intended to be
created under the Security Documents. In furtherance of the foregoing, Parent
and each Borrower agree to give prompt notice to the Administrative Agent of the
acquisition by it or any of its subsidiaries of any real property (or any
interest in real property) having a value in excess of $250,000.
SECTION 5.11. DESIGNATION OF OBLIGATIONS; MATTERS RELATING TO THE SELLER
NOTE. (a) In the event that Parent or any Subsidiary shall at any time issue or
have outstanding any Indebtedness that by its terms is subordinated to any other
Indebtedness of Parent or such Subsidiary, take all actions as shall be
necessary to cause the
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Obligations to constitute senior indebtedness (however denominated) in respect
of such subordinated Indebtedness and to enable the Lenders to have and exercise
any payment blockage or other remedies available or potentially available to
holders of senior indebtedness under the terms of such subordinated
Indebtedness. In furtherance of the foregoing, the Obligations are hereby
designated as "senior indebtedness" and, if relevant, as "designated senior
indebtedness" in respect of all such subordinated Indebtedness (including
designation by WHP of the Obligations as "Senior Indebtedness" under the Seller
Note) and are further given all such other designations as shall be required
under the terms of any such subordinated Indebtedness in order that the Lenders
may have and exercise any payment blockage or other remedies available or
potentially available to holders of senior Indebtedness under the terms of such
subordinated Indebtedness.
(b) In the case of WHP, promptly after the date hereof provide to the
payee under the Seller Note written notice of the designation of the Obligations
as "Senior Indebtedness" under the Seller Note, which notice shall include the
address and fax number of the Administrative Agent set forth in Section 9.01
(and, in the event such address or fax number shall change as contemplated by
Section 9.01, promptly inform the payee under the Seller Note of any such
change); and promptly after obtaining knowledge thereof, provide to the
Administrative Agent notice of any change of the address, fax number or other
information set forth in the Seller Note with respect to the payee thereunder.
ARTICLE VI
NEGATIVE COVENANTS
Each of Parent and the Borrowers covenants and agrees with each Lender
that, so long as this Agreement shall remain in effect and until the Commitments
have been terminated and the principal of and interest on each Loan, all Fees
and all other expenses or amounts payable under any Loan Document have been paid
in full and all Letters of Credit have been cancelled or have expired and all
amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing, neither Parent nor any Borrower
will, nor will they cause or permit any of the Subsidiaries to:
SECTION 6.01. INDEBTEDNESS. Incur, create, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness existing on the date hereof and set forth in
Schedule 6.01 (and any refinancings, renewals and replacements of any such
Indebtedness that do not (i) increase the outstanding principal amount
thereof or (ii) result in a maturity date that is prior to, or decrease
the weighted average life thereof for the period ending before, the
earlier of (x) the 180th day following the Term Loan Maturity Date and (y)
the date on which such original Indebtedness matured);
(b) Indebtedness created hereunder and under the other Loan
Documents;
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(c) Indebtedness of Parent to any Subsidiary and of any Subsidiary
to Parent or any other Subsidiary; provided that (i) Indebtedness of any
Subsidiary that is not a Loan Party (other than an HMO Subsidiary) to any
Loan Party shall be subject to the limitation set forth in clause (a) of
Section 6.04 and (ii) Indebtedness of any Loan Party to any Subsidiary
that is not a Loan Party shall be subordinated to the Obligations on terms
no less favorable to the Lenders than the subordination terms set forth in
Exhibit H-1 hereto;
(d) Indebtedness of any Loan Party arising under any Hedging
Agreement, provided that such Hedging Agreement (i) was entered into by
such person in the ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments, investments,
assets or property held or reasonably anticipated by such person, and not
for purposes of speculation or taking a "market view", and (ii) does not
contain any provision exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the defaulting
party;
(e) Indebtedness of Parent or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
and extensions, renewals and replacements of any such Indebtedness that do
not increase the outstanding principal amount thereof; provided that (i)
such Indebtedness is incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement and (ii)
the aggregate principal amount of Indebtedness permitted by this clause
(including extensions, renewals and replacements thereof) shall not exceed
$5,000,000 at any time outstanding;
(f) Indebtedness under the Seller Note in a principal amount not to
exceed $30,000,000, as well as any and all accrued interest thereon;
(g) Indebtedness incurred in connection with the financing of
insurance premiums in an aggregate amount at any time outstanding not to
exceed $500,000;
(h) Guarantees by Parent of Indebtedness of any Subsidiary and by
any Subsidiary of Indebtedness of Parent or any other Subsidiary (other
than, in each case, Indebtedness referred to in clause (i) of this
Section); provided that (i) a Subsidiary shall not Guarantee any
obligation unless such Subsidiary also has Guaranteed the Obligations and
(ii) Guarantees by any Loan Party of Indebtedness of any Subsidiary (other
than an HMO Subsidiary) that is not a Loan Party shall be subject to the
limitation set forth in clause (a) of Section 6.04;
(i) unsecured Indebtedness incurred by any Loan Party in connection
with a Permitted Acquisition; provided that (i) at the time of the
incurrence of such Indebtedness, both before and after giving effect
thereto, no Default or Event of Default shall have occurred and be
continuing, (ii) the aggregate principal amount of the Indebtedness
permitted by this clause shall not exceed $25,000,000 at any time
outstanding, (iii) such Indebtedness shall be expressly subordinated to
the
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Obligations on terms no less favorable to the Lenders than the
subordination terms set forth on Exhibit H-2 hereto, (iv) such
Indebtedness shall have a maturity date at least 180 days after the Term
Loan Maturity Date and shall require no scheduled or other mandatory
payment of principal (including any payment at the option of the holders
of such Indebtedness and any payment pursuant to a sinking fund
obligation, but excluding any payment required upon the occurrence of a
change in control, however defined in the documents governing such
Indebtedness) prior to the 180th day following the Term Loan Maturity
Date, (v) after giving effect to the incurrence of such Indebtedness, the
Leverage Ratio as of the date of such incurrence (computed on the basis of
(x) balance sheet amounts as of such date and (y) income statement amounts
for the most recently completed period of four consecutive fiscal quarters
for which financial statements shall have been delivered to the
Administrative Agent and calculated on a Pro Forma Basis in respect of
such Permitted Acquisition) shall be at least 0.25 to 1.00 less than the
maximum Leverage Ratio then permitted by Section 6.12, (vi) in connection
with the incurrence of such Indebtedness, neither S&P nor Xxxxx'x shall
have downgraded the rating of the Credit Facilities below the respective
ratings on the Effective Date and (vii) on or prior to the date of such
incurrence, Parent shall have delivered a certificate of a Financial
Officer of Parent confirming compliance with this clause, together with
reasonably detailed calculations demonstrating satisfaction of the
requirement set forth in subclauses (ii) and (v) above; and any
refinancings, renewals and replacements of any such Indebtedness that do
not (x) increase the outstanding principal amount thereof or (y) result in
a maturity date that is prior to, or decrease the weighted average life
thereof for the period ending before, the earlier of (A) 180th day
following the Term Loan Maturity Date and (B) the date on which such
original Indebtedness matured);
(j) Indebtedness of any person that becomes a Subsidiary after the
date hereof (provided that (i) such Indebtedness exists at the time such
person becomes a Subsidiary and is not created in contemplation of or in
connection with such person becoming a Subsidiary and (ii) the aggregate
principal amount of Indebtedness permitted by this clause shall not exceed
$15,000,000 at any time outstanding) and any refinancings, renewals and
replacements of any such Indebtedness that do not (x) increase the
outstanding principal amount thereof or (y) result in a maturity date that
is prior to, or decrease the weighted average life thereof for the period
ending before, the earlier of (A) 180th day following the Term Loan
Maturity Date and (B) the date on which such original Indebtedness
matured);
(k) Indebtedness under performance bonds or with respect to workers'
compensation claims, in each case incurred in the ordinary course of
business; and
(l) other unsecured Indebtedness of any Loan Party in an aggregate
principal amount (which, in the case of any Indebtedness issued with OID
shall
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mean the accreted value of such Indebtedness) not exceeding $10,000,000 at
any time outstanding.
SECTION 6.02. LIENS. Create, incur, assume or permit to exist any Lien on
any property or assets (including Equity Interests or other securities of any
person, including any Subsidiary) now owned or hereafter acquired by it or on
any income or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of Parent and the Subsidiaries
existing on the date hereof and set forth in Schedule 6.02; provided that
such Liens (i) shall not apply to any other property or asset of Parent or
any Subsidiary and (ii) shall secure only those obligations which they
secure on the date hereof and extensions, renewals and replacements
thereof permitted hereunder;
(b) any Lien created under the Loan Documents;
(c) Liens for taxes that are not due and payable or which are being
contested in compliance with Section 5.03;
(d) statutory Liens of landlords and carriers', warehousemen's,
mechanics', materialmen's, repairmen's or other like Liens arising in the
ordinary course of business and securing obligations that are not due and
payable or which are being contested in compliance with Section 5.03;
(e) pledges or deposits in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
social security laws or regulations;
(f) deposits to secure the performance of bids, trade contracts
(other than for Indebtedness), leases (other than Capital Lease
Obligations), statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary
course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount and do not materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct
of the business of Parent or any Subsidiary;
(h) Liens securing judgments for the payment of money (or appeal or
other surety bonds relating to such judgments), provided that no such
judgment constitutes an Event of Default under clause (i) of Article VII;
(i) purchase money security interests in real property, improvements
thereto or equipment hereafter acquired (or, in the case of improvements,
constructed) by Parent or any Subsidiary; provided that (i) such security
interests secure Indebtedness permitted by clause (e) of Section 6.01,
(ii) such security interests are incurred, and the Indebtedness secured
thereby is created, within
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90 days after such acquisition (or construction), (iii) the Indebtedness
secured thereby does not exceed the cost of such real property,
improvements or equipment at the time of such acquisition (or
construction) and (iv) such security interests do not apply to any other
property or assets of Parent or any Subsidiary;
(j) any Lien existing on any property or asset prior to the
acquisition thereof by Parent or any Subsidiary or existing on any
property or asset of any person that becomes a Subsidiary after the date
hereof prior to the time such person becomes a Subsidiary; provided that
(i) such Lien is not created in contemplation of or in connection with
such acquisition or such person becoming a Subsidiary, as the case may be,
(ii) such Lien does not apply to any other property or asset of Parent or
any Subsidiary and (iii) such Lien secures only those obligations which it
secures on the date of such acquisition or the date such person becomes a
Subsidiary, as the case may be, and extensions, renewals and replacements
thereof permitted by this Agreement;
(k) licenses, leases or subleases granted to others not interfering
in any material respect with the business of Parent or any Subsidiary;
(l) any interest or title of a lessor under, and Liens arising from
UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, leases permitted by this
Agreement;
(m) normal and customary rights of setoff upon deposits of cash in
favor of banks or other depository institutions;
(n) Liens of a collection bank arising in the ordinary course of
business under Section 4-210 of the Uniform Commercial Code in effect in
the relevant jurisdiction covering only the items being collected upon;
(o) Liens of sellers of goods to Parent and any Subsidiary arising
under Article 2 of the Uniform Commercial Code in effect in the relevant
jurisdiction or similar provisions of applicable law in the ordinary
course of business, covering only the goods sold and securing only the
unpaid purchase price for such goods and related expenses;
(p) Liens in the nature of municipal ordinances, zoning,
entitlement, land use and environmental regulation; and
(q) Liens in connection with the WMG Guarantee Arrangement, provided
that such Liens attach only to the property that is subject to the WMG
Guarantee Arrangement.
SECTION 6.03. SALE AND LEASE-BACK TRANSACTIONS. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or
77
transferred unless (a) the sale of such property is permitted by Section 6.05
and (b) any Capital Lease Obligations, Synthetic Lease Obligations or Liens
arising in connection therewith are permitted by Sections 6.01 and 6.02, as the
case may be.
SECTION 6.04. INVESTMENTS, LOANS, ADVANCES AND GUARANTEES. Purchase, hold
or acquire any Equity Interests, evidences of indebtedness or other securities
of, make or permit to exist any loans or advances to, or any investment or any
other interest in, or Guarantee any obligation of, any other person, except:
(a) (i) investments by Parent and the Subsidiaries existing on the
date hereof in the Equity Interests of the Subsidiaries and (ii)
additional investments by Parent and the Subsidiaries in the Equity
Interests of persons that are Subsidiaries at the time such investments
are made (including Subsidiaries organized after the date hereof by Parent
or existing Subsidiaries); provided that (A) any such Equity Interests
held by a Loan Party shall, subject to the limitations applicable to
Equity Interests of a Foreign Subsidiary and the Seller Note Pledged Stock
referred to in the definition of the term "Guarantee and Collateral
Requirement", be pledged pursuant to the Guarantee and Collateral
Agreement and (B) the aggregate amount of investments by Loan Parties in,
loans and advances by Loan Parties to, and Guarantees by Loan Parties of
Indebtedness or other obligations of, Subsidiaries (other than HMO
Subsidiaries) that are not Loan Parties (determined without regard to any
write-downs or write-offs of such investments, loans and advances) shall
not exceed $10,000,000 at any time outstanding;
(b) Permitted Investments;
(c) loans or advances made by Parent to any Subsidiary and made by
any Subsidiary to Parent or to any other Subsidiary; provided that (i) any
such loans and advances made by a Loan Party shall be evidenced by a
promissory note pledged pursuant to the Guarantee and Collateral Agreement
and (ii) the amount of such loans and advances made by Loan Parties to
Subsidiaries (other than HMO Subsidiaries) that are not Loan Parties shall
be subject to the limitation set forth in clause (a) of this Section;
(d) investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade
credit and investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(e) Guarantees permitted by Section 6.01;
(f) Parent and the Subsidiaries may make loans and advances in the
ordinary course of business to their respective directors, officers and
employees so long as the aggregate principal amount thereof at any time
outstanding (determined without regard to any write-downs or write-offs of
such loans and advances) shall not exceed $1,000,000;
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(g) investments in the form of Hedging Agreements, provided that
such Hedging Agreements meet the requirements set forth in clause (d) of
Section 6.01;
(h) (i) any Loan Party may acquire all or substantially all the
assets of a person or line of business of such person, or not less than
100% of the Equity Interests of a person (referred to herein as the
"ACQUIRED ENTITY"); provided that (i) such acquisition was not preceded by
an unsolicited tender offer for such Equity Interests by, or proxy contest
initiated by, Parent or any Subsidiary; (ii) the Acquired Entity shall be
a going concern and its business shall constitute a business permitted by
Section 6.08(b); (iii) the Acquired Entity is organized under the laws of
the United States of America or any State thereof or the District of
Columbia and at least 80% of the consolidated gross operating revenues of
such Acquired Entity for the most recently completed period of twelve
months were derived from domestic operations in the United States of
America; and (iv) at the time of such acquisition (A) both before and
after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing; (B) Parent would be in Pro Forma Compliance;
(C) the Leverage Ratio as of the date of such acquisition, (computed on
the basis of (x) balance sheet amounts as of such date and (y) income
statement amounts for the most recently completed period of four
consecutive fiscal quarters for which financial statements shall have been
delivered to the Administrative Agent and calculated on a Pro Forma Basis
in respect of such acquisition) shall be at least 0.25 to 1.00 less than
the maximum Leverage Ratio then permitted by Section 6.12; and (D) the
consolidated EBITDA of the Acquired Entity (determined in a manner
substantially similar to the manner of determination of the Consolidated
EBITDA of Parent) for the most recently completed period of four
consecutive fiscal quarters ending prior to such acquisition shall not
exceed the amount equal to the quotient obtained by dividing (x)
Consolidated EBITDA of Parent for the most recently completed period of
four consecutive fiscal quarters for which financial statements shall have
been delivered to the Administrative Agent, calculated on a Pro Forma
Basis in respect of such acquisition, by (y) four; and (iv) Parent shall
have delivered to the Administrative Agent a certificate of a Financial
Officer of Parent confirming compliance with subclauses (i) through (iii)
above, together with all relevant financial information for the Acquired
Entity and reasonably detailed calculations demonstrating satisfaction of
the requirements set forth in subclause (iii) above (any acquisition of an
Acquired Entity meeting all the criteria of this clause being referred to
herein as a "PERMITTED ACQUISITION");
(i) the Harmony Transactions; and
(j) in addition to investments permitted by clauses (a) through (i)
of this Section, additional investments, loans and advances by Parent and
the Subsidiaries (other than investments, loans and advances to
Subsidiaries that are not Loan Parties) so long as the aggregate amount
invested, loaned or advanced pursuant to this clause (determined without
regard to any write-downs or write-
79
offs of such investments, loans and advances) does not exceed $10,000,000
in the aggregate.
SECTION 6.05. MERGERS, CONSOLIDATIONS, SALES OF ASSETS AND ACQUISITIONS.
(a) Merge into or consolidate with any other person, or permit any other person
to merge into or consolidate with it, or sell, transfer, lease or otherwise
dispose of (in one transaction or in a series of transactions) all or
substantially all the assets (whether now owned or hereafter acquired) of Parent
or any Borrower, or any Equity Interests of any Borrower, or less than all the
Equity Interests of any Subsidiary (other than a Borrower), or purchase, lease
or otherwise acquire (in one transaction or a series of transactions) all or any
substantial part of the assets of any other person, except that (i) Parent and
any Subsidiary may purchase and sell inventory in the ordinary course of
business and (ii) if at the time thereof and immediately after giving effect
thereto no Default or Event of Default shall have occurred and be continuing (v)
any wholly owned Subsidiary may merge into a Borrower in a transaction in which
such Borrower is the surviving corporation, (w) any wholly owned Subsidiary
(other than a Borrower) may merge into or consolidate with any other wholly
owned Subsidiary in a transaction in which the surviving entity is a wholly
owned Subsidiary and no person other than Parent or a wholly owned Subsidiary
receives any consideration (provided that if any party to any such transaction
is a Loan Party, the surviving entity of such transaction shall be a Loan Party)
and (x) the Loan Parties may make Permitted Acquisitions, (y) Holdings may merge
into WellCare Group, Inc., and (z) the Harmony Transactions may be consummated.
(b) Engage in any Asset Sale permitted under paragraph (a) of this Section
unless (i) such Asset Sale is for consideration at least 75% of which is cash,
(ii) such consideration is at least equal to the fair market value of the
assets being sold, transferred, leased or disposed of and (iii) the fair market
value of all assets sold, transferred, leased or disposed of pursuant to this
paragraph shall not exceed $5,000,000 in the aggregate.
SECTION 6.06. RESTRICTED PAYMENTS; RESTRICTIVE AGREEMENTS. (a) Declare or
make, or agree to declare or make, directly or indirectly, any Restricted
Payment (including pursuant to any Synthetic Purchase Agreement), or incur any
obligation (contingent or otherwise) to do so; provided, however, that (i) any
Subsidiary may declare and pay dividends or make other distributions ratably to
its equityholders, (ii) so long as no Default or Event of Default shall have
occurred and be continuing or would result therefrom, WHP may make distributions
to Parent in an aggregate amount not to exceed $1,000,000 in any fiscal year for
the purpose of allowing Parent to repurchase its Equity Interests owned by
retiring directors, officers or employees of Parent or any Subsidiary and to
make payments to directors, officers or employees of Parent or any Subsidiary
upon termination of employment in connection with the exercise of stock options,
stock appreciation rights or similar equity or equity-based incentives pursuant
to management or other incentive plans or in connection with the death or
disability of such employees and (iii) WHP may make Restricted Payments to
Parent (x) in an amount not to exceed $1,000,000 in any fiscal year, to the
extent necessary to pay general corporate and overhead expenses incurred by
Parent in the ordinary course of business and (y) in an amount necessary to pay
the tax liabilities of Parent directly attributable to (or arising as a
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result of) the operations of the Subsidiaries; provided, however, that all
Restricted Payments made to Parent pursuant to this clause (iii) are used by
Parent for the purposes specified herein within 20 days of the receipt thereof.
(b) Enter into, incur or permit to exist any agreement or other
arrangement (other than, in the case of any HMO Subsidiary, with a Governmental
Authority regulating such Subsidiary) that prohibits, restricts or imposes any
condition upon (i) the ability of any Loan Party to create, incur or permit to
exist any Lien upon any of its property or assets, or (ii) the ability of any
Subsidiary to pay dividends or other distributions with respect to any of its
Equity Interests or to make or repay loans or advances to any Loan Party or to
Guarantee Indebtedness of any Loan Party; provided that (A) the foregoing shall
not apply to restrictions and conditions imposed by law or by any Loan Document,
(B) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided such restrictions and conditions apply only to the Subsidiary that is
to be sold and such sale is permitted hereunder, (C) clause (i) above shall not
apply to (x) customary provisions in leases and other contracts restricting the
assignment thereof and (y) any Lien permitted by Section 6.02 or any document or
instrument governing any such permitted Lien if such restrictions or conditions
apply only to the property or assets subject to such permitted Lien and (D) the
foregoing shall not apply to the Seller Note and the WMG Guarantee Arrangement
as in effect on the date hereof.
SECTION 6.07. TRANSACTIONS WITH AFFILIATES. Except for transactions by or
among the Borrowers and the Subsidiary Guarantors and any intercompany
transactions expressly permitted under Sections 6.01, 6.04, 6.05 and 6.06, sell
or transfer any property or assets to, or purchase or acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except for (a) any of the foregoing transactions at prices and on
terms and conditions not less favorable to Parent or such Subsidiary than could
be obtained on an arm's-length basis from unrelated third parties, (b)
reasonable compensation and reimbursement of expenses of officers and directors,
(c) payment of management fees or similar fees under the CHM Management
Agreements or the Harmony Management Agreement and (d) payment to SPEP
Management, LLC, of management fees in an amount not to exceed $250,000 in the
aggregate in any fiscal year of Parent.
SECTION 6.08. BUSINESS OF PARENT AND SUBSIDIARIES; OWNERSHIP OF
SUBSIDIARIES; PREFERRED EQUITY INTERESTS. (a) In the case of Parent, engage in
any business activities or have any assets or liabilities other than its
ownership of the Equity Interests of WHP and WellCare Group, Inc. and
liabilities incidental thereto, including its liabilities hereunder and pursuant
to the Guarantee and Collateral Agreement; provided that notwithstanding the
foregoing, Parent shall be permitted to conduct the IPO.
(b) Engage at any time in any business or business activity other than
those lines of business conducted by Parent and the Subsidiaries on the date
hereof and any business substantially related or incidental thereto (including
establishment of a wholly-owned insurance Subsidiary).
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(c) Form or acquire any Foreign Subsidiary (other than formation of a
wholly owned insurance Subsidiary) or permit any person other than a Loan Party
to own any Equity Interests of any Subsidiary, other than the ownership of
FirstChoice HealthPlans of Connecticut, Inc. by WellCare of New York, Inc.
(d) In the case of the Borrowers and the other Subsidiaries, issue any
preferred stock or other preferred Equity Interests.
SECTION 6.09. OTHER INDEBTEDNESS AND AGREEMENTS. (a) Permit any waiver,
supplement, modification, amendment, termination or release of any indenture,
instrument or agreement pursuant to which any Material Indebtedness (including
the Seller Note) of Parent or any Subsidiary is outstanding if the effect of
such waiver, supplement, modification, amendment, termination or release would
materially increase the obligations of the obligor or confer additional material
rights on the holder of such Indebtedness in a manner adverse to Parent, any
Subsidiary or the Lenders.
(b) (i) Make any distribution, whether in cash, property, securities or a
combination thereof, other than regular scheduled payments of principal and
interest as and when due (to the extent not prohibited by applicable
subordination provisions), in respect of, or pay, or offer or commit to pay, or
directly or indirectly (including pursuant to any Synthetic Purchase Agreement)
redeem, repurchase, retire or otherwise acquire for consideration, or set apart
any sum for the aforesaid purposes, any Indebtedness (other than the Loans,
intercompany debt and the payments expressly permitted under Section 5.08), (ii)
pay in cash any amount in respect of any Indebtedness or preferred Equity
Interests that may at the obligor's option be paid in kind or in other
securities, or (iii) give any "Blockage Notice" under, and as defined in, the
Seller Note; provided that, notwithstanding the foregoing, WHP shall be allowed
to pay, prepay or otherwise discharge Indebtedness under the Seller Note if, at
the time thereof and immediately after giving effect thereto, (x) no Default or
Event of Default shall have occurred and be continuing and (y) Parent would be
in Pro Forma Compliance.
(c) Amend, modify or change (i) any of its organizational documents in a
manner adverse to the Lenders and (ii) the terms of the CHM Management
Agreements without the approval of applicable regulatory authorities and the
Administrative Agent (which approval by the Administrative Agent shall not be
unreasonably withheld and shall be deemed given unless expressly withheld within
10 Business Days after the date notice of such amendment, modification or change
was delivered to the Administrative Agent (it being agreed that any such notice
shall refer to this Section and to the deemed approval of such amendment,
modification or change in the absence of action within such 10 Business Day
period)).
SECTION 6.10. CAPITAL EXPENDITURES. Permit the aggregate amount of Capital
Expenditures made by Parent and the Subsidiaries in any period set forth below
to exceed the amount set forth below for such period:
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PERIOD AMOUNT
----------------------------------------- -----------
January 1, 2004 through December 31, 2004 $ 9,000,000
January 1, 2005 through December 31, 2005 $12,000,000
January 1, 2006 through December 31, 2006 $12,000,000
January 1, 2007 through December 31, 2007 $15,000,000
January 1, 2008 and thereafter $17,000,000
The amount of any Capital Expenditures permitted to be made in respect of any
period above shall be increased by the amount of permitted Capital Expenditures
set forth above for the immediately preceding period that were not made during
such preceding period. Capital Expenditures in any period shall be deemed to
use, first, the amount set forth above for such period and, second, any amount
carried forward to such period pursuant to this paragraph.
SECTION 6.11. FIXED CHARGE COVERAGE RATIO. Permit the Fixed Charge
Coverage Ratio for any period of four consecutive fiscal quarters, in each case
taken as one accounting period, ending on any date after the Closing Date and on
or prior to September 30, 2006, to be less than 1.25 to 1.00, or ending on any
date thereafter to be less than 1.50 to 1.00.
SECTION 6.12. LEVERAGE RATIO. Permit the Leverage Ratio at any time during
a period set forth below to be greater than the ratio set forth opposite such
period below:
PERIOD RATIO
------------------------------------------------ ------------
Closing Date to and including September 30, 2004 3.50 to 1.00
October 1, 2004 through March 31, 2005 3.25 to 1.00
April 1, 2005 through September 30, 2005 3.00 to 1.00
October 1, 2005 through March 31, 2006 2.75 to 1.00
April 1, 2006 and thereafter 2.50 to 1.00
SECTION 6.13. FISCAL YEAR. In the case of Parent and any Borrower, change
its fiscal year-end to a date other than December 31st.
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ARTICLE VII
EVENTS OF DEFAULT
In case of the happening of any of the following events ("EVENTS OF
DEFAULT"):
(a) any representation or warranty made or deemed made in or in
connection with any Loan Document or the borrowings or issuances of
Letters of Credit hereunder, or any representation, warranty, statement or
information contained in any report, certificate, financial statement or
other instrument furnished in connection with or pursuant to any Loan
Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of any
Loan or the reimbursement with respect to any L/C Disbursement when and as
the same shall become due and payable, whether at the due date thereof or
at a date fixed for prepayment thereof or by acceleration thereof or
otherwise;
(c) default shall be made in the payment of any interest on any Loan
or any Fee or any other amount (other than an amount referred to in clause
(b) of this Article) due under any Loan Document, when and as the same
shall become due and payable, and such default shall continue unremedied
for a period of three Business Days in the case of such interest or five
Business Days in the case of such Fee or other amount;
(d) default shall be made in the due observance or performance by
Parent or any Subsidiary of any covenant, condition or agreement contained
in Section 5.01(a), 5.05 or 5.08 or in Article VI;
(e) default shall be made in the due observance or performance by
Parent or any Subsidiary of any covenant, condition or agreement contained
in any Loan Document (other than those specified in clauses (b), (c) or
(d) of this Article) and such default shall continue unremedied for a
period of 15 days after notice thereof from the Administrative Agent or
any Lender to Parent;
(f) (i) Parent or any Subsidiary shall fail to pay any principal or
interest, regardless of amount, due in respect of any Material
Indebtedness, when and as the same shall become due and payable (after
giving effect to any applicable cure periods), or (ii) any other event or
condition occurs that results in any Material Indebtedness becoming due
prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or
holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; provided that this clause (ii) shall not
apply to secured Indebtedness that
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becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of Parent or any Subsidiary, or of a substantial part of
the property or assets of Parent or any Subsidiary, under Title 11 of the
United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or similar
law, (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Parent or any Subsidiary or for a
substantial part of the property or assets of Parent or any Subsidiary or
(iii) the winding-up or liquidation of Parent or any Subsidiary; and such
proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall be entered;
(h) Parent or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or similar
law, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or the filing of any petition
described in clause (g) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for Parent or any Subsidiary or for a substantial part
of the property or assets of Parent or any Subsidiary, (iv) file an answer
admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take any action for
the purpose of effecting any of the foregoing;
(i) one or more judgments shall be rendered against Parent or any
Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to levy upon assets or properties of Parent or any other
Subsidiary to enforce any such judgment and such judgment either (i) is
for the payment of money in an aggregate amount in excess of $5,000,000
(excluding (A) any amount covered by independent third-party insurance as
to which the insurer shall have acknowledged, in writing, coverage and (B)
any amount for which Parent or any Subsidiary is entitled to
indemnification or reimbursement from a creditworthy third party that has
not disputed its obligation to make such indemnification or reimbursement)
or (ii) is for injunctive relief and could reasonably be expected to
result in a Material Adverse Effect;
(j) an ERISA Event shall have occurred that, when taken together
with all other such ERISA Events, could reasonably be expected to result
in a Material Adverse Effect;
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(k) any Guarantee under the Guarantee and Collateral Agreement for
any reason shall cease to be in full force and effect (other than in
accordance with its terms), or any Guarantor shall deny in writing that it
has any further liability under the Guarantee and Collateral Agreement
(other than as a result of the discharge of such Guarantor in accordance
with the terms of the Loan Documents);
(l) any security interest purported to be created by any Security
Document shall cease to be, or shall be asserted by any Loan Party not to
be, a valid, perfected, first priority (except as otherwise expressly
provided in this Agreement or such Security Document) security interest in
the securities, assets or properties covered thereby, except to the extent
that any such loss of perfection or priority results from the failure of
the Collateral Agent to maintain possession of certificates representing
securities pledged under the Guarantee and Collateral Agreement and except
to the extent that such loss is covered by a lender's title insurance
policy and the related insurer promptly after such loss shall have
acknowledged in writing that such loss is covered by such title insurance
policy;
(m) an HMO Event shall have occurred and the same shall remain
unremedied for a period of 60 days following the occurrence thereof (or
such shorter period of time, if any, as the HMO Regulator shall have
imposed for the cure of such HMO Event);
(n) an Exclusion Event shall have occurred and such Exclusion Event
could reasonably be expected to result in a Material Adverse Effect; or
(o) there shall have occurred a Change in Control;
then, and in every such event (other than an event with respect to Parent or any
Borrower described in clause (g) or (h) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate forthwith the Commitments and (ii) declare the Loans then
outstanding to be forthwith due and payable in whole or in part, whereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrowers accrued hereunder and under any other Loan Document, shall become
forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by each Borrower,
anything contained herein or in any other Loan Document to the contrary
notwithstanding; and in any event with respect to Parent or any Borrower
described in clause (g) or (h) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of the Borrowers accrued hereunder and under any other Loan
Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by each Borrower,
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anything contained herein or in any other Loan Document to the contrary
notwithstanding.
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent and the Collateral Agent (for purposes of this Article, the
Administrative Agent and the Collateral Agent are referred to collectively as
the "AGENTS") its agent and authorizes the Agents to take such actions on its
behalf and to exercise such powers as are delegated to such Agent by the terms
of the Loan Documents, together with such actions and powers as are reasonably
incidental thereto. Without limiting the generality of the foregoing, the Agents
are hereby expressly authorized to execute any and all documents (including
releases) with respect to the Collateral and the rights of the Secured Parties
with respect thereto, as contemplated by and in accordance with the provisions
of this Agreement and the Security Documents.
The bank serving as the Administrative Agent and/or the Collateral Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not an Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with Parent, any Borrower or any other
Subsidiary or other Affiliate thereof as if it were not an Agent hereunder.
Neither Agent shall have any duties or obligations except those expressly
set forth in the Loan Documents. Without limiting the generality of the
foregoing, (a) neither Agent shall be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b)
neither Agent shall have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby that such Agent is instructed in writing to exercise by the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.08), and (c) except
as expressly set forth in the Loan Documents, neither Agent shall have any duty
to disclose, nor shall it be liable for the failure to disclose, any information
relating to Parent or any Subsidiary that is communicated to or obtained by the
bank serving as Administrative Agent and/or Collateral Agent or any of its
Affiliates in any capacity. Neither Agent shall be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 9.08) or in the absence of its own
gross negligence or willful misconduct. Neither Agent shall be deemed to have
knowledge of any Default unless and until written notice thereof is given to
such Agent by Parent, a Borrower or a Lender, and neither Agent shall be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document, (ii)
the contents of any certificate, report or other document delivered thereunder
or in connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in
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any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to such Agent.
Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper person. Each Agent may also rely
upon any statement made to it orally or by telephone and believed by it to have
been made by the proper person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be counsel for the
Borrowers), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
Each Agent may perform any and all its duties and exercise its rights and
powers by or through any one or more sub-agents appointed by it. Each Agent and
any such sub-agent may perform any and all its duties and exercise its rights
and powers by or through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of each Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a successor Agent as provided
below, either Agent may resign at any time by notifying the Lenders, the Issuing
Bank and the Borrowers. Upon any such resignation, the Required Lenders shall
have the right, subject, if no Event of Default shall have occurred and be
continuing, to the consent of the Borrowers (not to be unreasonably withheld),
to appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the retiring Agent may,
subject, if no Event of Default shall have occurred and be continuing, to the
consent of the Borrowers (not to be unreasonably withheld), on behalf of the
Lenders and the Issuing Bank, appoint a successor Agent which shall be a bank
with an office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Agent hereunder by a successor, such successor
shall 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 hereunder. The fees payable by the Borrowers to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrowers and such successor. After an Agent's
resignation hereunder, the provisions of this Article and Section 9.05 shall
continue in effect for the benefit of such retiring Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while acting as Agent.
Each Lender acknowledges that it has, independently and without reliance
upon the Agents or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this
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Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Agents or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement
or any other Loan Document, any related agreement or any document furnished
hereunder or thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by fax, as follows:
(a) if to any Borrower or Parent, to it at 0000 Xxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxx 000, Xxxxx, XX 00000, Attention of Chief Executive Officer
(Fax No. (000) 000-0000) and General Counsel (Fax No. (000) 000-0000),
with a copy to (which shall not constitute notice) Xxxxxxxx & Xxxxx LLP at
Citigroup Center, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000, Attention of
W. Xxxxx Xxxxxxx, Esq. (Fax No. (000) 000-0000);
(b) if to the Administrative Agent, to Credit Suisse First Boston,
Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention of Agency Group (Fax
No. (000) 000-0000); and
(c) if to a Lender, to it at its address (or fax number) set forth
on Schedule 2.01 or in the Assignment and Acceptance pursuant to which
such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by fax or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section or in accordance with the
latest unrevoked direction from such party given in accordance with this
Section. As agreed to among Parent, the Borrowers, the Administrative Agent and
the applicable Lenders from time to time, notices and other communications may
also be delivered by e-mail to the e-mail address of a representative of the
applicable person provided from time to time by such person.
SECTION 9.02. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by the Borrowers or Parent herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any
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investigation made by the Lenders or the Issuing Bank or on their behalf, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any Fee or any other amount payable under this
Agreement or any other Loan Document is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not been terminated.
The provisions of Sections 2.14, 2.16, 2.20 and 9.05 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the expiration
of any Letter of Credit, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent, the Collateral Agent, any
Lender or the Issuing Bank.
SECTION 9.03. BINDING EFFECT. This Agreement shall become effective when
it shall have been executed by each Borrower, Parent and the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto.
SECTION 9.04. SUCCESSORS AND ASSIGNS. (a) Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the permitted successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Borrowers, Parent, the Administrative
Agent, the Collateral Agent, the Issuing Bank or the Lenders that are contained
in this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it), with the prior
written consent of the Administrative Agent (not to be unreasonably withheld or
delayed); provided, however, that (i) in the case of an assignment of a
Revolving Credit Commitment, each of Parent, the Issuing Bank and the Swingline
Lender must also give its prior written consent to such assignment (which
consent shall not be unreasonably withheld or delayed) (provided, that the
consent of Parent shall not be required to any such assignment during the
continuance of any Event of Default), (ii) the amount of the Commitment or Loans
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $1,000,000 (or, if less, the
entire remaining amount of such Lender's Commitment or Loans of the relevant
Class), (iii) the parties to each such assignment shall (A) electronically
execute and deliver to the Administrative Agent an Assignment and Acceptance via
an electronic settlement system acceptable to the Administrative Agent (which
initially shall be ClearPar, LLC) or (B) if no such system shall then be
specified by the Administrative Agent, manually execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500, and (iv) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire and all applicable tax forms. Upon acceptance and recording
pursuant to paragraph (e) of this Section, from and after the effective date
specified in each Assignment and Acceptance, (A) the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by
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such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement and (B) the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (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, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.16,
2.20 and 9.05, as well as to any Fees accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Term Loan Commitment, Incremental Term Loan Commitment and Revolving Credit
Commitment, and the outstanding balances of its Term Loans and Revolving Loans,
in each case without giving effect to assignments thereof which have not become
effective, are as set forth in such Assignment and Acceptance, (ii) except as
set forth in clause (i) above, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement, or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto, or the financial condition of Parent or any
Subsidiary or the performance or observance by Parent or any Subsidiary of any
of its obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements referred
to in Section 3.05(a) or delivered pursuant to Section 5.04 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; (v) such
assignee will independently and without reliance upon the Administrative Agent,
the Collateral 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
this Agreement; (vi) such assignee appoints and authorizes the Administrative
Agent and the Collateral Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Administrative
Agent and the Collateral Agent, respectively, by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all the obligations which by
the terms of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an agent of the
Borrowers, shall maintain at one of its offices in The City of New York a copy
of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans
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owing to, each Lender pursuant to the terms hereof from time to time (the
"REGISTER"). The entries in the Register shall be conclusive, and Parent, the
Borrowers, the Administrative Agent, the Issuing Bank, the Collateral Agent and
the Lenders may treat each person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by Parent, the Borrowers, the Issuing Bank, the
Collateral Agent and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of, and consent to, a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) of this Section, if applicable, and, if required, the written
consent of Parent, the Swingline Lender and the Issuing Bank to such assignment
and any applicable tax forms, the Administrative Agent shall (i) accept such
Assignment and Acceptance and (ii) record the information contained therein in
the Register. No assignment shall be effective unless it has been recorded in
the Register as provided in this paragraph.
(f) Each Lender may without the consent of Parent, any Borrower, the
Swingline Lender, the Issuing Bank or the Administrative Agent sell
participations to one or more banks or other entities in all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participating banks or other entities shall be
entitled to the benefit of the cost protection provisions contained in Sections
2.14, 2.16 and 2.20 to the same extent as if they were Lenders (but, with
respect to any particular participant, to no greater extent than the Lender that
sold the participation to such participant) and (iv) Parent, the Borrowers, the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrowers relating to
the Loans or L/C Disbursements and to approve any amendment, modification or
waiver of any provision of this Agreement (other than amendments, modifications
or waivers decreasing any fees payable hereunder or the amount of principal of
or the rate at which interest is payable on the Loans, extending any scheduled
principal payment date or date fixed for the payment of interest on the Loans,
increasing or extending the Commitments or releasing any Guarantor or all or any
substantial part of the Collateral).
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section,
disclose to the assignee or participant or proposed assignee or participant any
information relating to Parent and the Borrowers furnished to such Lender by or
on behalf of Parent or the Borrowers; provided that, prior to any such
disclosure of information designated by Parent or any Borrower as confidential,
each such assignee or participant or proposed
92
assignee or participant shall execute an agreement whereby such assignee or
participant shall agree (subject to customary exceptions) to preserve the
confidentiality of such confidential information on terms no less restrictive
than those applicable to the Lenders pursuant to Section 9.16.
(h) Any Lender may at any time assign all or any portion of its rights
under this Agreement to secure extensions of credit to such Lender or in support
of obligations owed by such Lender; provided that no such assignment shall
release a Lender from any of its obligations hereunder or substitute any such
assignee for such Lender as a party hereto.
(i) Notwithstanding anything to the contrary contained herein, any Lender
(a "GRANTING LENDER") may grant to a special purpose funding vehicle (an "SPC")
of such Granting Lender, identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and Parent, the option to provide to
any Borrower all or any part of any Loan that such Granting Lender would
otherwise be obligated to make to any Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPC to
make any Loan and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPC hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior indebtedness of any SPC, it
will not institute against, or join any other person in instituting against,
such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States of America or any State thereof.
In addition, notwithstanding anything to the contrary contained in this Section,
any SPC may (i) with notice to, but without the prior written consent of, Parent
and the Administrative Agent and without paying any processing fee therefor,
assign all or a portion of its interests in any Loans to the Granting Lender or
to any financial institutions (consented to by Parent and Administrative Agent)
providing liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Loans and (ii) disclose on a confidential
basis any non-public information relating to its Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC.
(j) Neither Parent nor any Borrower shall assign or delegate any of its
rights or duties hereunder without the prior written consent of the
Administrative Agent, the Issuing Bank and each Lender, and any attempted
assignment without such consent shall be null and void.
(k) In the event that S&P, Xxxxx'x and Xxxxxxxx'x BankWatch (or
InsuranceWatch Ratings Service, in the case of Lenders that are insurance
companies (or
93
Best's Insurance Reports, if such insurance company is not rated by Insurance
Watch Ratings Service)) shall, after the date that any Lender becomes a
Revolving Credit Lender, downgrade the long-term certificate deposit ratings of
such Lender, and the resulting ratings shall be below BBB-, Baa3 and C (or BB,
in the case of a Lender that is an insurance company (or B, in the case of an
insurance company not rated by InsuranceWatch Ratings Service)), then the
Issuing Bank shall have the right, but not the obligation, at its own expense,
upon notice to such Lender and the Administrative Agent, to replace (or to
request Parent and the Borrowers to use their reasonable efforts to replace)
such Lender with an assignee (in accordance with and subject to the restrictions
contained in paragraph (b) of this Section), and such Lender hereby agrees to
transfer and assign without recourse (in accordance with and subject to the
restrictions contained in paragraph (b) of this Section) all its interests,
rights and obligations in respect of its Revolving Credit Commitment to such
assignee; provided, however, that (i) no such assignment shall conflict with any
law, rule and regulation or order of any Governmental Authority and (ii) the
Issuing Bank or such assignee, as the case may be, shall pay to such Lender in
immediately available funds on the date of such assignment the principal of and
interest accrued to the date of payment on the Loans made by such Lender
hereunder and all other amounts accrued for such Lender's account or owed to it
hereunder.
SECTION 9.05. EXPENSES; INDEMNITY. (a) The Borrowers and Parent agree,
jointly and severally, to pay all reasonable out-of-pocket expenses incurred by
the Administrative Agent, the Collateral Agent, the Issuing Bank, the Swingline
Lender and the Arrangers in connection with the syndication of the credit
facilities provided for herein and the preparation and administration of this
Agreement and the other Loan Documents or in connection with any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the
transactions hereby or thereby contemplated shall be consummated) or incurred by
the Administrative Agent, the Collateral Agent, any Lender or any Arranger in
connection with the enforcement or protection of its rights in connection with
this Agreement and the other Loan Documents or in connection with the Loans made
or Letters of Credit issued hereunder, including the reasonable fees, charges
and disbursements of Cravath, Swaine & Xxxxx LLP, counsel for the Administrative
Agent, the Collateral Agent and the Arrangers, and, in connection with any such
enforcement or protection, the reasonable fees, charges and disbursements of any
other counsel for the Administrative Agent, the Collateral Agent or any Lender.
(b) The Borrowers and Parent agree, jointly and severally, to indemnify
the Administrative Agent, the Collateral Agent, each Lender, the Issuing Bank,
each Arranger and each Related Party of any of the foregoing persons (each such
person being called an "INDEMNITEE") against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees, charges and disbursements, incurred
by or asserted against any Indemnitee arising out of, in any way connected with,
or as a result of (i) the execution or delivery of this Agreement or any other
Loan Document or any agreement or instrument contemplated thereby, the
performance by the parties thereto of their respective obligations thereunder or
the consummation of the Credit Transactions and the other transactions
contemplated thereby, (ii) the use of the proceeds of the Loans or issuance of
Letters of Credit, (iii) any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or
94
not any Indemnitee is a party thereto, or (iv) any actual or alleged presence or
Release of Hazardous Materials on any property currently or formerly owned or
operated by Parent or any Subsidiary, or any Environmental Liability related in
any way to Parent or any Subsidiary; provided that such indemnity shall not, as
to any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) To the extent that Parent and the Borrowers fail to pay any amount
required to be paid by them to the Administrative Agent, the Collateral Agent,
the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent, the
Collateral Agent, the Issuing Bank or the Swingline Lender, as the case may be,
such Lender's pro rata share (determined, in the manner provided below, as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent, the Collateral
Agent, the Issuing Bank or the Swingline Lender in its capacity as such. For
purposes hereof, a Lender's "pro rata share" shall be determined based upon its
share of the sum of the Aggregate Revolving Credit Exposure, outstanding Term
Loans and unused Commitments at the time.
(d) To the extent permitted by applicable law, neither Parent nor any
Borrower shall assert, and each hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof.
(e) The provisions of this Section shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the expiration of any Letter of
Credit, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of the Administrative Agent, the Collateral Agent, any Lender or the Issuing
Bank. All amounts due under this Section shall be payable on written demand
therefor.
SECTION 9.06. RIGHT OF SETOFF. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, except to the extent prohibited 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 to or for the
credit or the account of any Borrower or Parent against any of and all the
obligations of any Borrower or Parent now or hereafter existing under this
Agreement and other Loan Documents held by such Lender, irrespective of whether
or not such Lender shall have made any demand under this Agreement or such other
Loan Document and although such obligations may be
95
unmatured. The rights of each Lender under this Section are in addition to other
rights and remedies (including other rights of setoff) which such Lender may
have.
SECTION 9.07. APPLICABLE LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS MOST RECENTLY PUBLISHED AND IN EFFECT, ON THE
DATE SUCH LETTER OF CREDIT WAS ISSUED, BY THE INTERNATIONAL CHAMBER OF COMMERCE
(THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS,
THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. WAIVERS; AMENDMENT. (a) No failure or delay of the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank in
exercising any power or right hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or any other Loan Document or consent to any
departure by any Borrower or any other Loan Party therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or demand on any
Borrower or Parent in any case shall entitle any Borrower or Parent to any other
or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrowers, Parent and the Required Lenders; provided, however, that
no such agreement shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on any Loan or any date for reimbursement of an L/C Disbursement,
or waive or excuse any such payment or any part thereof, or decrease the rate of
interest on any Loan or L/C Disbursement, without the prior written consent of
each Lender affected thereby, (ii) increase or extend the Commitment or decrease
or extend the date for payment of any Fees of any Lender without the prior
written consent of such Lender, (iii) amend or modify the pro rata requirements
of Section 2.17, the provisions of Section 9.04(j) or the provisions of this
Section or release any Guarantor (except as expressly provided in Section 9.17)
or all or any substantial part of the Collateral, without the prior written
consent of each Lender, (iv) change the provisions of any Loan Document in a
manner that by its terms
96
adversely affects the rights in respect of payments due to Lenders holding Loans
of one Class differently from the rights of Lenders holding Loans of any other
Class without the prior written consent of Lenders holding a majority in
interest of the outstanding Loans and unused Commitments of each adversely
affected Class, (v) modify the protections afforded to an SPC pursuant to the
provisions of Section 9.04(i) without the written consent of such SPC or (vi)
reduce the percentage contained in the definition of the term "Required Lenders"
without the prior written consent of each Lender (it being understood that with
the consent of the Required Lenders, additional extensions of credit pursuant to
this Agreement may be included in the determination of the Required Lenders on
substantially the same basis as the Term Loan Commitments and Revolving Credit
Commitments on the date hereof); provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent, the Collateral Agent, the Issuing Bank or the Swingline Lender hereunder
or under any other Loan Document without the prior written consent of the
Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline
Lender, respectively. Notwithstanding the foregoing, if the terms of any
amendment to this Agreement provide that any Class of Loans will be repaid in
full and the Commitments of such Class (if any) terminated as a condition to the
effectiveness of such amendment, then so long as the Loans and Commitments (if
any) of such Class are in fact repaid and terminated upon the effectiveness of
such amendment, such Loans and Commitments shall not be included in the
determination of the Required Lenders with respect to such amendment.
SECTION 9.09. INTEREST RATE LIMITATION. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan or
participation in any L/C Disbursement, together with all fees, charges and other
amounts which are treated as interest on such Loan or participation in such L/C
Disbursement under applicable law (collectively the "CHARGES"), shall exceed the
maximum lawful rate (the "MAXIMUM RATE") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan or participation in
accordance with applicable law, the rate of interest payable in respect of such
Loan or participation hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan or
participation but were not payable as a result of the operation of this Section
shall be cumulated and the interest and Charges payable to such Lender in
respect of other Loans or participations or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Effective Rate to the date of repayment,
shall have been received by such Lender.
SECTION 9.10. ENTIRE AGREEMENT. This Agreement, the other Loan Documents,
the Fee Letter and the Rollover Agreement constitute the entire contract between
the parties relative to the subject matter hereof. Any other previous agreement
among the parties with respect to the subject matter hereof is superseded by
this Agreement and the other Loan Documents. Nothing in this Agreement or in the
other Loan Documents, expressed or implied, is intended to confer upon any
person (other than the parties hereto and thereto, their respective successors
and assigns permitted hereunder (including any Affiliate of the Issuing Bank
that issues any Letter of Credit) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent, the
97
Collateral Agent, the Issuing Bank and the Lenders) any rights, remedies,
obligations or liabilities under or by reason of this Agreement or the other
Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.12. SEVERABILITY. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 9.13. COUNTERPARTS. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 9.03.
Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
SECTION 9.14. HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15. JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) Each of
Parent and the Borrowers hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect
98
of any such action or proceeding may be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court. Each of the
parties hereto 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 in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent, the Collateral Agent, the
Issuing Bank or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against any Borrower,
Parent or their respective properties in the courts of any jurisdiction.
(b) Each of Parent and the Borrowers hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
the other Loan Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.16. CONFIDENTIALITY. Each of the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' officers, directors, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority or quasi-regulatory authority (such as the National Association of
Insurance Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) in connection with
the exercise of any remedies hereunder or under the other Loan Documents or any
suit, action or proceeding relating to the enforcement of its rights hereunder
or thereunder, (e) subject to an agreement containing provisions substantially
the same as those of this Section, to (i) any actual or prospective assignee of
or participant in any of its rights or obligations under this Agreement and the
other Loan Documents or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to Parent or any
Subsidiary or any of their respective obligations, (f) with the consent of
Parent or (g) to the extent such Information becomes publicly available other
than as a result of a breach of this Section. For the purposes of this Section,
"INFORMATION" shall mean all information received from any Borrower or Parent
and related to any Borrower or Parent or their business, other than any such
information that was available to the Administrative Agent, the Collateral
Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to its
disclosure by any Borrower or Parent; provided that, in the case of Information
received from any Borrower or Parent after the date hereof, such information is
clearly identified at the time of delivery as confidential. Information also
includes all protected
99
health information ("PHI"), as such term is defined in 45 C.F.R. 164.501,
including information that concerns an individual's past, present or future
physical or mental health or condition, the provision of care to the individual,
or the past, present or future payment for such care, and that directly or
indirectly identifies an individual or that could reasonably be used to identify
an individual. Any person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such person has exercised the same degree of
care to maintain the confidentiality of such Information as such person would
accord its own confidential information. Without limiting the generality of the
foregoing, each Lender will (i) treat all PHI as confidential, (ii) not
disseminate, disclose or otherwise use PHI in a manner inconsistent with the
Health Insurance Portability and Accountability Act Privacy Regulations codified
at 45 C.F.R. 160 et seq. (the "HIPAA PRIVACY STANDARDS"), (iii) to the extent
required by the HIPAA Privacy Standards, make PHI available to Parent and/or an
individual for review and amendment according to HIPAA Privacy Standards, comply
with applicable auditing and reporting requirements regarding the improper use
or disclosure of PHI, and require agents or subcontractors who receive PHI to
comply with the HIPAA Privacy Standards, and (iv) in accordance with the HIPAA
Privacy Standards and as mutually agreed by each Lender and Parent, retain,
destroy or return to Parent records that contain PHI.
SECTION 9.17. RELEASE OF SUBSIDIARY LOAN PARTIES AND COLLATERAL. (a)
Notwithstanding any contrary provision herein or in any other Loan Document, if
Parent shall request the release under any Security Document of any Subsidiary
(other than a Borrower) or any Collateral to be sold or otherwise disposed of
(including through the sale or disposition of any Subsidiary (other than a
Borrower) owning any such Subsidiary or Collateral) to a Person other than
Parent or a Subsidiary in a transaction permitted under the terms of this
Agreement and shall deliver to the Collateral Agent a certificate to the effect
that such sale or other disposition and the application of the proceeds thereof
will comply with the terms of this Agreement, the Collateral Agent, if satisfied
that the applicable certificate is correct, shall, without the consent of any
Lender, execute and deliver all such instruments, releases, financing statements
or other agreements, and take all such further actions, as shall be necessary to
effectuate the release of such Subsidiary or such Collateral substantially
simultaneously with or at any time after the completion of such sale or other
disposition. Any such release shall be without recourse to, or representation or
warranty by, the Collateral Agent and shall not require the consent of any
Lender.
(b) Without limiting the provisions of Section 9.05, Parent and the
Borrowers shall reimburse the Collateral Agent for all costs and expenses,
including attorneys' fees and disbursements, incurred by it in connection with
any action contemplated by this Section.
SECTION 9.18. USA PATRIOT ACT NOTICE. Each Lender and the Administrative
Agent (for itself and not on behalf of any Lender) hereby notifies Parent and
the Borrowers that pursuant to the requirements of the USA Patriot Act, it is
required to obtain, verify and record information that identifies Parent and
each Borrower, which information includes the name, address and tax
identification number of Parent and each
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Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify Parent and each Borrower in accordance with
the USA Patriot Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
WELLCARE HOLDINGS, LLC,
by
/s/ Xxxx X. Xxxxx
---------------------------
Name: Xxxx X. Xxxxx
Title: Manager
WELLCARE HEALTH PLANS, INC.,
by
/s/ Xxxx X. Xxxxx
---------------------------
Name: Xxxx X. Xxxxx
Title: President & Chief Executive
Officer
THE WELLCARE MANAGEMENT GROUP, INC.,
by
/s/ Xxxx X. Xxxxx
----------------------------------
Name: Xxxx X. Xxxxx
Title: President & Chief Executive
Officer
COMPREHENSIVE HEALTH
MANAGEMENT, INC.,
by
/s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
Title: President & Chief Executive
Officer
CREDIT SUISSE FIRST BOSTON,
acting through its Cayman
Islands Branch, individually and as
Administrative Agent, Collateral Agent,
Swingline Lender and Issuing Bank,
by
/s/ Xxxxxx Xxxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director
by
/s/ Xxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Associate
SIGNATURE PAGE TO WELLCARE
HOLDINGS, LLC, ET AL. CREDIT
AGREEMENT DATED AS OF MAY 13,
2004
Name of Institution: Xxxxxx Xxxxxxx Senior Funding, Inc.
by /s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
SIGNATURE PAGE TO WELLCARE
HOLDINGS, LLC, ET AL. CREDIT
AGREEMENT DATED AS OF
MAY 13, 2004
Name of Institution: GSC PARTNERS CDO FUND, LIMITED
By: GSCP (NJ), L.P., as its agent
By: GSCP (NJ), Inc., its General Partner
By: /s/ Xxxx Xxxxxxxxxxx
------------------------------------------------
Name: Xxxx Xxxxxxxxxxx
Title: Authorized Officer
SIGNATURE PAGE TO WELLCARE
HOLDINGS, LLC, ET AL. CREDIT
AGREEMENT DATED AS OF
MAY 13, 2004
Name of Institution: GSC PARTNERS CDO FUND II, LIMITED
By: GSCP (NJ), L.P., as its agent
By: GSCP (NJ), Inc., its General Partner
By: /s/ Xxxx Xxxxxxxxxxx
---------------------------------------------------
Name: Xxxx Xxxxxxxxxxx
Title: Authorized Officer
SIGNATURE PAGE TO WELLCARE
HOLDINGS, LLC, ET AL. CREDIT
AGREEMENT DATED AS OF
MAY 13, 2004
Name of Institution: GSC PARTNERS CDO FUND III, LIMITED
By: GSCP (NJ), L.P., as its agent
By: GSCP (NJ), Inc., its General Partner
By: /s/ Xxxx Xxxxxxxxxxx
---------------------------------------------------
Name: Xxxx Xxxxxxxxxxx
Title: Authorized Officer
SIGNATURE PAGE TO WELLCARE
HOLDINGS, LLC, ET AL. CREDIT
AGREEMENT DATED AS OF MAY 13,
2004
Name of Institution: Wachovia Bank National Association
by /s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Senior Vice President
