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Exhibit 10.43
CONFORMED COPY
AMENDMENT NO.1 TO CREDIT AGREEMENT AND AMENDED AND RESTATED SECURITY
DOCUMENTS, CONSENT AND WAIVER IN CONNECTION WITH PROPOSED TRANSACTION
WITH PRINCIPAL HEALTH CARE, INC.
AMENDMENT NO.1 TO CREDIT AGREEMENT AND AMENDED AND RESTATED SECURITY
DOCUMENTS AND WAIVER dated as of March 10, 1998 among COVENTRY CORPORATION (the
"BORROWER") COVENTRY HEALTH CARE, INC. (the "GUARANTOR") and the banks listed on
the signature pages hereof (collectively, the "BANKS") and XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK, as Agent (the "AGENT").
W I T N E S S E T H :
WHEREAS, the Borrower, the Banks and the Agent are parties to a Credit
Agreement dated as of December 29, 1997 (the "CREDIT AGREEMENT");
WHEREAS, the Pledgors (as defined in the Amended and Restated Security
Documents (as defined below)) and the Agent have heretofore entered into the
Amended and Restated Security Documents dated as of December 29, 1997 (as
amended from time to time, the "AMENDED AND RESTATED SECURITY DOCUMENTS");
WHEREAS, the Borrower has agreed, in Section 5.21 of the Credit
Agreement, that notwithstanding certain provisions thereof the Borrower may
consummate the proposed merger with Principal Health Care, Inc. if it has
obtained the prior written approval of the Required Banks; and
WHEREAS, the Borrower has requested that the Banks approve said
transaction and waive any defaults occasioned thereby; and the parties hereto
desire to amend the Credit Agreement and the Amended and Restated Security
Documents as hereinafter provided;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINITIONS; REFERENCES. Unless otherwise specifically
defined herein, each term used herein which is defined in the Credit Agreement
shall have the meaning assigned to such term in the Credit Agreement.
SECTION 2. AMENDMENT OF SECTION 1.01 OF THE CREDIT AGREEMENT. Section
1.01 of the Credit Agreement is amended by (a) adding the following new
definitions:
"GUARANTOR" means Coventry Health Care, Inc.
"PRINCIPAL HEALTH CARE TRANSACTION" means the transactions
contemplated by (a) the Capital Contribution and Merger Agreement dated as of
November 3, 1997 by and among the Borrower, Coventry Health Care, Inc.,
Principal Health Care, Inc. and Principal Mutual Life Insurance Company and
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(b) the Agreement and Plan of Merger among the Borrower, Coventry Health Care,
Inc. and Coventry Merger Corporation.; and
(b) replacing the definition of Coventry Group with the following new
definition:
"COVENTRY GROUP" means, collectively, the Borrower, its Subsidiaries,
and the Guarantor.
SECTION 3. GUARANTY. With effect from and including the date this
Amendment and Waiver becomes effective in accordance with Section 12 hereof,
Coventry Health Care, Inc. shall become a party to the Credit Agreement as the
Guarantor thereunder.
SECTION 4. GUARANTOR AS NEW PLEDGOR. The Guarantor hereby agrees to
enter into the Amended and Restated Security Documents as a Pledgor (as defined
therein) within 10 days from the date of the effectiveness hereof, agrees to be
bound thereby and confirms to the Agent the grant of security as contemplated
thereby.
SECTION 5. APPROVAL AND WAIVER. The Borrower has advised the Banks and
the Agent that the Borrower intends to consummate the Principal Health Care
Transaction (as defined in Section 2(a) above). The Banks and the Agent approve
such transaction and waive any default that may be occasioned thereby under the
Credit Agreement, including without limitation, Sections 5.07(b), 5.08(b), 5.09,
5.12, 5.14, 5.15 and 6.01(b) of the Credit Agreement to the extent necessary to
enable the Borrower to consummate such transaction provided that the Borrower
and the Guarantor are the surviving corporations.
SECTION 6. AMENDMENT OF SECTION 5.07 OF THE CREDIT AGREEMENT. Sections
5.07(a) and (b) of the Credit Agreement are hereby amended by adding "(a), "
between "5.10" and "(b)" on the third line of each of the above-referenced
sections.
SECTION 7. AMENDMENT OF SECTION 5.16 OF THE CREDIT AGREEMENT.
Section 5.16 of the Credit Agreement is hereby amended by adding ", the
Agreements entered into in connection with the Principal Health Care
Transaction" on the fourth line of such section before the word "or."
SECTION 8. AMENDMENT OF SECTION 6.01(K) OF THE CREDIT AGREEMENT.
Section 6.01(k) is hereby amended by adding the words "Principal Health Care
Transaction and the" on the first line before the words "Warburg Pincus
Transaction" in Section 6.01(k).
SECTION 9. REPRESENTATIONS AND WARRANTIES CORRECT; NO DEFAULT. The
Borrower represents and warrants that on and as of the date hereof, (a) the
representations and warranties of each Loan Party contained in each Financing
Document to which it is a party are true and (b) no Default under the Credit
Agreement exists.
SECTION 10. CONSENT BY PLEDGORS. By giving its Consent below, each
pledgor affirms its obligations under the Amended and Restated Security
Documents and acknowledges that such Consent shall not alter, release, discharge
or otherwise affect any of such obligations, all of which shall remain in full
force and effect and are hereby ratified and confirmed in all respects.
SECTION 11. GOVERNING LAW. This Amendment and Waiver shall be governed
by and construed in accordance with the laws of the State of New York.
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SECTION 12. COUNTERPARTS; EFFECTIVENESS. This Amendment and Waiver may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Amendment and Waiver shall become effective as of the date
hereof when each of the following conditions shall have been satisfied:
(i) receipt by the Agent of duly executed counterparts hereof
signed by each of the parties hereto (or, in the case of any party as to which
an executed counterpart shall not have been received, the Agent shall have
received telegraphic, telex or other written confirmation from such party of
execution of a counterpart hereof by such party); and
(ii) receipt by the Agent within 30 days of the date hereof of a
opinion of counsel for the Loan Parties covering such matters relating to the
transactions contemplated hereby as the Agent or the Required Banks may
reasonably request.
The Agent shall promptly notify the Borrower and the Banks of the effectiveness
of this Amendment and such notice shall be conclusive and binding on all parties
hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be
duly executed by their respective authorized officers as of the date first above
written.
COVENTRY CORPORATION
By: /s/ Xxxx X. Xxxx
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Title: Senior Vice President, Chief Financial
Officer & Treasurer
COVENTRY HEALTH CARE INC.
By: /s/ Xxxx X. Xxxx
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Title: President
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Vice President
NATIONSBANK, N.A.
By: /s/ Xxxxx Xxxxxx
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Title: Vice President
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EACH OF THE UNDERSIGNED PLEDGORS CONSENTS
TO THE FOREGOING AMENDMENT AND WAIVER AND CONFIRMS
ITS AGREEMENT WITH SECTION 10 OF THE AMENDMENT AND WAIVER:
COVENTRY HEALTHCARE
MANAGEMENT CORPORATION (to
be renamed COVENTRY HEALTHCARE
BENEFIT SERVICES)(Delaware)
By: /s/ Xxxxxx X. Xxxxx
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Title: President & Chief Executive
Officer
COVENTRY HEALTHCARE MANAGEMENT CORPORATION
(formerly Southern Health Management
Corporation)
By: /s/ Xxxxxx Xxxxxx
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Title: Vice President, Provider
Relations & Administration, and
Secretary
SOUTHERN HEALTH BENEFIT SERVICES, INC.
By: /s/ Xxxxxx Xxxxxx
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Title: Vice President, Provider
Relations & Administration, and
Secretary
PENNSYLVANIA-HEALTHCARE USA, INC.
By: /s/ Xxxxxx X. Xxxx
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Title: President & Chief Executive
Officer
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HEALTHPASS, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Title: Vice President & Treasurer
COVENTRY HEALTHCARE DEVELOPMENT CORPORATION
By: /s/ Xxxx X. Xxxx
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Title: Vice President
