Exhibit 10.31
XXXXXX XXXXXX & XXXXXXX LLP
EXECUTION VERSION
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$180,000,000
CREDIT AGREEMENT
DATED AS OF MARCH 1, 2005,
AMONG
NEWQUEST, INC.,
AS BORROWER,
NEWQUEST HOLDINGS, INC.
AND
THE OTHER GUARANTORS PARTY HERETO,
AS GUARANTORS,
THE LENDERS PARTY HERETO
AND
UBS SECURITIES LLC,
AS LEAD ARRANGER AND SOLE BOOKRUNNER
AND
GENERAL ELECTRIC CAPITAL CORPORATION,
AS SYNDICATION AGENT,
AND
LASALLE BANK NATIONAL ASSOCIATION,
AS DOCUMENTATION AGENT
AND
BANK OF AMERICA, N.A.,
AS DOCUMENTATION AGENT
AND
UBS AG, STAMFORD BRANCH,
AS ISSUING BANK, ADMINISTRATIVE AGENT AND COLLATERAL AGENT,
AND
UBS LOAN FINANCE LLC,
AS SWINGLINE LENDER
Xxxxxx Xxxxxx & Xxxxxxx LLP
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms................................................................................2
SECTION 1.02 Classification of Loans and Borrowings......................................................40
SECTION 1.03 Terms Generally.............................................................................40
SECTION 1.04 Accounting Terms; GAAP......................................................................40
SECTION 1.05 Resolution of Drafting Ambiguities..........................................................41
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments.................................................................................41
SECTION 2.02 Loans.......................................................................................41
SECTION 2.03 Borrowing Procedure.........................................................................42
SECTION 2.04 Evidence of Debt; Repayment of Loans........................................................43
SECTION 2.05 Fees........................................................................................44
SECTION 2.06 Interest on Loans...........................................................................45
SECTION 2.07 Termination and Reduction of Commitments....................................................46
SECTION 2.08 Interest Elections..........................................................................46
SECTION 2.09 Amortization of Term Borrowings.............................................................47
SECTION 2.10 Optional and Mandatory Prepayments of Loans.................................................47
SECTION 2.11 Alternate Rate of Interest..................................................................51
SECTION 2.12 Yield Protection............................................................................51
SECTION 2.13 Breakage Payments...........................................................................52
SECTION 2.14 Payments Generally; Pro Rata Treatment; Sharing of Setoffs..................................53
SECTION 2.15 Taxes.......................................................................................55
SECTION 2.16 Mitigation Obligations; Replacement of Lenders..............................................56
SECTION 2.17 Swingline Loans.............................................................................58
SECTION 2.18 Letters of Credit...........................................................................59
SECTION 2.19 Increase in Commitments.....................................................................65
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Organization; Powers........................................................................67
SECTION 3.02 Authorization; Enforceability...............................................................68
SECTION 3.03 No Conflicts................................................................................68
SECTION 3.04 Financial Statements; Projections...........................................................68
SECTION 3.05 Properties..................................................................................69
SECTION 3.06 Intellectual Property.......................................................................70
SECTION 3.07 Equity Interests and Subsidiaries...........................................................70
SECTION 3.08 Litigation; Compliance with Laws............................................................71
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Section Page
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SECTION 3.09 Agreements..................................................................................72
SECTION 3.10 Federal Reserve Regulations.................................................................72
SECTION 3.11 Investment Company Act; Public Utility Holding Company Act..................................72
SECTION 3.12 Use of Proceeds.............................................................................72
SECTION 3.13 Taxes.......................................................................................73
SECTION 3.14 No Material Misstatements...................................................................73
SECTION 3.15 Labor Matters...............................................................................73
SECTION 3.16 Solvency....................................................................................73
SECTION 3.17 Employee Benefit Plans......................................................................74
SECTION 3.18 Environmental Matters.......................................................................74
SECTION 3.19 Insurance...................................................................................75
SECTION 3.20 Security Documents..........................................................................76
SECTION 3.21 Acquisition Documents; Representations and Warranties in Acquisition
Agreement.................................................................................77
SECTION 3.22 Anti-Terrorism Law..........................................................................77
SECTION 3.23 Subordination of Senior Subordinated Notes..................................................77
SECTION 3.24 Fraud and Abuse.............................................................................78
SECTION 3.25 Licensing and Accreditation.................................................................78
ARTICLE IV
CONDITIONS TO CREDIT EXTENSIONS
SECTION 4.01 Conditions to Initial Credit Extension......................................................78
SECTION 4.02 Conditions to All Credit Extensions.........................................................82
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01 Financial Statements, Reports, etc..........................................................83
SECTION 5.02 Litigation and Other Notices................................................................85
SECTION 5.03 Existence; Businesses and Properties........................................................86
SECTION 5.04 Insurance...................................................................................87
SECTION 5.05 Obligations and Taxes.......................................................................88
SECTION 5.06 Employee Benefits...........................................................................88
SECTION 5.07 Maintaining Records; Access to Properties and Inspections; Annual
Meetings..................................................................................89
SECTION 5.08 Use of Proceeds.............................................................................89
SECTION 5.09 Compliance with Environmental Laws; Environmental Reports...................................90
SECTION 5.10 Interest Rate Protection....................................................................90
SECTION 5.11 Additional Collateral; Additional Guarantors................................................90
SECTION 5.12 Security Interests; Further Assurances......................................................91
SECTION 5.13 Information Regarding Collateral............................................................92
SECTION 5.14 Company Action Level........................................................................92
SECTION 5.15 [Reserved]..................................................................................92
SECTION 5.16 Compliance with Laws........................................................................92
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Section Page
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ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01 Indebtedness................................................................................93
SECTION 6.02 Liens.......................................................................................95
SECTION 6.03 Sale and Leaseback Transactions.............................................................98
SECTION 6.04 Investment, Loan and Advances...............................................................98
SECTION 6.05 Mergers and Consolidations..................................................................99
SECTION 6.06 Asset Sales................................................................................100
SECTION 6.07 Acquisitions...............................................................................101
SECTION 6.08 Dividends..................................................................................101
SECTION 6.09 Transactions with Affiliates...............................................................102
SECTION 6.10 Financial Covenants........................................................................103
SECTION 6.11 Prepayments of Other Indebtedness; Modifications of Organizational
Documents and Other Documents, etc.......................................................105
SECTION 6.12 Limitation on Certain Restrictions on Subsidiaries.........................................106
SECTION 6.13 Limitation on Issuance of Capital Stock....................................................106
SECTION 6.14 Limitation on Creation of Subsidiaries.....................................................107
SECTION 6.15 Business...................................................................................107
SECTION 6.16 Fiscal Year................................................................................107
SECTION 6.17 No Further Negative Pledge.................................................................107
SECTION 6.18 Anti-Terrorism Law; Anti-Money Laundering..................................................108
SECTION 6.19 Embargoed Person...........................................................................108
ARTICLE VII
GUARANTEE
SECTION 7.01 The Guarantee..............................................................................108
SECTION 7.02 Obligations Unconditional..................................................................109
SECTION 7.03 Reinstatement..............................................................................110
SECTION 7.04 Subrogation; Subordination.................................................................110
SECTION 7.05 Remedies...................................................................................110
SECTION 7.06 Instrument for the Payment of Money........................................................110
SECTION 7.07 Continuing Guarantee.......................................................................111
SECTION 7.08 General Limitation on Subsidiary Guarantee Obligations.....................................111
SECTION 7.09 Release of Subsidiary Guarantors...........................................................111
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01 Events of Default..........................................................................111
SECTION 8.02 Rescission.................................................................................114
SECTION 8.03 Application of Proceeds....................................................................114
SECTION 8.04 Reinstatement..............................................................................115
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Section Page
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ARTICLE IX
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 9.01 Appointment and Authority..................................................................115
SECTION 9.02 Rights as a Lender.........................................................................115
SECTION 9.03 Exculpatory Provisions.....................................................................115
SECTION 9.04 Reliance by Agent..........................................................................116
SECTION 9.05 Delegation of Duties.......................................................................116
SECTION 9.06 Resignation of Agent.......................................................................117
SECTION 9.07 Non-Reliance on Agent and Other Lenders....................................................117
SECTION 9.08 No Other Duties, etc.......................................................................117
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Notices....................................................................................118
SECTION 10.02 Waivers; Amendment.........................................................................119
SECTION 10.03 Expenses; Indemnity; Damage Waiver.........................................................122
SECTION 10.04 Successors and Assigns.....................................................................123
SECTION 10.05 Survival of Agreement......................................................................126
SECTION 10.06 Counterparts; Integration; Effectiveness; Electronic Execution.............................126
SECTION 10.07 Severability...............................................................................126
SECTION 10.08 Right of Setoff............................................................................127
SECTION 10.09 Governing Law; Jurisdiction; Consent to Service of Process.................................127
SECTION 10.10 Waiver of Jury Trial.......................................................................128
SECTION 10.11 Headings...................................................................................128
SECTION 10.12 Treatment of Certain Information; Confidentiality..........................................128
SECTION 10.13 USA PATRIOT Act Notice.....................................................................129
SECTION 10.14 Interest Rate Limitation...................................................................129
SECTION 10.15 Lender Addendum............................................................................129
ANNEXES
Annex I Applicable Margin
Annex II Amortization Table
SCHEDULES
Schedule 1.01(a) Refinancing Indebtedness to Be Repaid
Schedule 1.01(b) Subsidiary Guarantors
Schedule 3.03 Governmental Approvals; Compliance with Laws
Schedule 3.19 Insurance
Schedule 3.21 Acquisition Documents
Schedule 4.01(n)(vi) Landlord Access Agreements
Schedule 6.01(b) Existing Indebtedness
Schedule 6.02(c) Existing Liens
Schedule 6.04(b) Existing Investments
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EXHIBITS
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Assumption
Exhibit C Form of Borrowing Request
Exhibit D Form of Compliance Certificate
Exhibit E Form of Interest Election Request
Exhibit F Form of Joinder Agreement
Exhibit G Form of Landlord Access Agreement
Exhibit H Form of LC Request
Exhibit I Form of Lender Addendum
Exhibit J [Reserved]
Exhibit K-1 Form of Term Note
Exhibit K-2 Form of Revolving Note
Exhibit K-3 Form of Swingline Note
Exhibit L-1 Form of Perfection Certificate
Exhibit L-2 Form of Perfection Certificate Supplement
Exhibit M Form of Security Agreement
Exhibit N-1 Form of Opinion of External Company Counsel
Exhibit N-2 Form of Opinion of Internal Company Counsel
Exhibit O Form of Solvency Certificate
Exhibit P Form of Intercompany Note
Exhibit Q Form of Non-Bank Certificate
Exhibit R Form of Subordination Agreement
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CREDIT AGREEMENT
This CREDIT AGREEMENT (this "AGREEMENT") dated as of March 1,
2005, among NEWQUEST, INC., a Delaware corporation ("BORROWER"), NEWQUEST
HOLDINGS, INC., a Delaware corporation ("HOLDINGS"), the Subsidiary Guarantors
(such term and each other capitalized term used but not otherwise defined herein
having the meaning given to it in Article I), the Lenders, UBS SECURITIES LLC,
as lead arranger and sole bookrunner (in such capacity, "ARRANGER"), LASALLE
BANK NATIONAL ASSOCIATION and BANK OF AMERICA, N.A., each as documentation agent
(in such capacity, each a "DOCUMENTATION AGENT"), GENERAL ELECTRIC CAPITAL
CORPORATION as syndication agent (in such capacity, "SYNDICATION AGENT"), UBS
LOAN FINANCE LLC, as swingline lender (in such capacity, "SWINGLINE LENDER"),
and UBS AG, STAMFORD BRANCH, as issuing bank (in such capacity, "ISSUING Bank"),
as administrative agent (in such capacity, "ADMINISTRATIVE AGENT") for the
Lenders and as collateral agent (in such capacity, "COLLATERAL AGENT") for the
Secured Parties and the Issuing Bank.
WITNESSETH:
WHEREAS, Holdings and Borrower, a direct Wholly Owned
Subsidiary of Holdings, have entered into a purchase and exchange agreement,
dated as of November 10, 2004 (as amended, supplemented or otherwise modified
from time to time in accordance with the provisions hereof and thereof, the
"ACQUISITION Agreement"), with the persons named therein as sellers, to acquire
(the "ACQUISITION") NewQuest Health Solutions, LLC (the "ACQUIRED BUSINESS").
WHEREAS, the Acquisition will be effected by a purchase by
Borrower (or contribution to Borrower) of all the Equity Interests of the
Acquired Business pursuant to the Acquisition Agreement.
WHEREAS, the Equity Financing, the issuance of the Rollover
Equity, the issuance of the Senior Subordinated Notes in an initial aggregate
principal amount not in excess of $35,000,000 and the Refinancing shall each be
consummated simultaneously herewith.
WHEREAS, Borrower has requested the Lenders to extend credit
in the form of (a) Tranche A Loans on the Closing Date, in an aggregate
principal amount not in excess of $165,000,000, and (b) Revolving Loans at any
time and from time to time prior to the Revolving Maturity Date, in an aggregate
principal amount at any time outstanding not in excess of $15,000,000, of which
no more than $5,000,000 may be drawn on the Closing Date.
WHEREAS, Borrower has requested the Swingline Lender to make
Swingline Loans, at any time and from time to time prior to the Revolving
Maturity Date, in an aggregate principal amount at any time outstanding not in
excess of $2,500,000.
WHEREAS, Borrower has requested the Issuing Bank to issue
letters of credit, in an aggregate face amount at any time outstanding not in
excess of $5,000,000, to support payment obligations incurred in the ordinary
course of business by Borrower and its Subsidiaries.
WHEREAS, the proceeds of the Loans are to be used in
accordance with Section 3.12.
NOW, THEREFORE, the Lenders are willing to extend such credit
to Borrower and the Issuing Bank is willing to issue letters of credit for the
account of Borrower on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
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, is
used when such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"ABR BORROWING" shall mean a Borrowing comprised of ABR Loans.
"ABR LOAN" shall mean any ABR Term Loan or ABR Revolving Loan.
"ABR REVOLVING LOAN" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
"ABR TERM LOAN" shall mean any Term Loan bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ACQUIRED BUSINESS" shall have the meaning assigned to such
term in the first recital hereto.
"ACQUISITION" shall have the meaning assigned to such term in
the first recital hereto.
"ACQUISITION AGREEMENT" shall have the meaning assigned to
such term in the first recital hereto.
"ACQUISITION CONSIDERATION" shall mean the purchase
consideration (which does not include associated transaction fees, expenses or
similar costs) for any Permitted Acquisition and all other payments by Holdings
or any of its Subsidiaries in exchange for, or as part of, or in connection
with, any Permitted Acquisition, whether paid in cash or by exchange of Equity
Interests in Holdings or its Subsidiaries or of properties or otherwise and
whether payable at or prior to the consummation of such Permitted Acquisition or
deferred for payment at any future time, whether or not any such future payment
is subject to the occurrence of any contingency, and includes any and all
payments representing the purchase price and any assumptions of Indebtedness,
"earn-outs" and other agreements to make any payment the amount of which is, or
the terms of payment of which are, in any respect subject to or contingent upon
the revenues, income, cash flow or profits (or the like) of any person or
business; provided that any such future payment that is subject to a contingency
shall be considered Acquisition Consideration only to the extent of the reserve,
if any, required under GAAP at the time of such sale to be established in
respect thereof by Holdings or any of its Subsidiaries.
"ACQUISITION DOCUMENTS" shall mean the collective reference to
the Acquisition Agreement and the other documents listed on Schedule 3.21.
"ADJUSTED LIBOR RATE" shall mean, with respect to any
Eurodollar Borrowing for any Interest Period, (a) an interest rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) determined by the
Administrative Agent to be equal to the LIBOR Rate for such Eurodollar Borrow
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ing in effect for such Interest Period divided by (b) 1 minus the Statutory
Reserves (if any) for such Eurodollar Borrowing for such Interest Period.
"ADMINISTRATIVE AGENT" shall have the meaning assigned to such
term in the preamble hereto and includes each other person appointed as the
successor pursuant to Article X.
"ADMINISTRATIVE AGENT FEE" shall have the meaning assigned to
such term in Section 2.05(b).
"ADMINISTRATIVE QUESTIONNAIRE" shall mean an Administrative
Questionnaire in substantially the form of Exhibit A.
"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, for purposes of Section 6.09, the
term "Affiliate" shall also include (i) any person that directly or indirectly
owns more than 10% of any Voting Stock of the person specified or (ii) any
person that is an executive officer or director of the person specified.
"AGENTS" shall mean the Administrative Agent and the
Collateral Agent; and "AGENT" shall mean any of them.
"AGREEMENT" shall have the meaning assigned to such term in
the preamble hereto.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per
annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
greater of (a) the Base Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 0.50%. 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 Base
Rate or the Federal Funds Effective Rate shall be effective on the effective
date of such change in the Base Rate or the Federal Funds Effective Rate,
respectively.
"ANTI-TERRORISM LAWS" shall have the meaning assigned to such
term in Section 3.22.
"APPLICABLE MARGIN" shall mean, for any day, with respect to
any Tranche A Loan, 3.00% in the case of Eurodollar Loans and 2.00% in the case
of ABR Loans and with respect to any Revolving Loan, the applicable percentage
set forth in Annex I.
"APPLICABLE PERCENTAGE" shall mean, with respect to any
Lender, the percentage of the total Loans and Commitments represented by such
Lender's Loans and Commitments.
"APPROVED FUND" shall mean any Fund that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
"ARRANGER" shall have the meaning assigned to such term in the
preamble hereto.
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"ASSET SALE" shall mean (a) any conveyance, sale, lease,
sublease, assignment, transfer or other disposition (including by way of merger
or consolidation and including any Sale and Leaseback Transaction) of any
property excluding (i) sales of inventory, (ii) disposition of used, worn out,
obsolete or surplus property by any Company and the abandonment, termination or
other disposition of Intellectual Property or leasehold properties that is, in
the reasonable judgment of Borrower, no longer economically practicable or
commercially desirable to maintain or useful in the conduct of the business of
the Companies taken as a whole, (iii) discounts or forgiveness of accounts
receivable in the ordinary course of business in correction or compromise
thereof and (iv) dispositions of cash and Cash Equivalents, in each case, in the
ordinary course of business, by Holdings or any of its Subsidiaries and (b) any
issuance or sale of any Equity Interests of any Subsidiary of Holdings (except
nominal amounts of Equity Interests issued in order to comply with local law or
as permitted under Section 6.13(b)(iv)), in each case, to any person other than
(i) Borrower, (ii) any Subsidiary Guarantor or (iii) other than for purposes of
Section 6.06, any other Subsidiary.
"ASSIGNMENT AND ASSUMPTION" shall mean an assignment and
assumption entered into by a Lender and an Eligible Assignee (with the consent
of any party whose consent is required by Section 10.04(b)), and accepted by the
Administrative Agent, in substantially the form of Exhibit B, or any other form
approved by the Administrative Agent and Borrower, such approval not to be
unreasonably withheld, delayed or conditioned.
"ATTRIBUTABLE INDEBTEDNESS" shall mean, when used with respect
to any Sale and Leaseback Transaction, as at the time of determination, the
present value (discounted at a rate equivalent to Borrower's then-current
weighted average cost of funds for borrowed money as at the time of
determination, compounded on a semi-annual basis) of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in any such Sale and Leaseback Transaction.
"BAILEE LETTER" shall have the meaning assigned thereto in the
Security Agreement.
"BASE RATE" shall mean, for any day, a rate per annum that is
equal to the corporate base rate of interest established by the Administrative
Agent from time to time; each change in the Base Rate shall be effective on the
date such change is effective. The corporate base rate is not necessarily the
lowest rate charged by the Administrative Agent to its customers.
"BOARD" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"BOARD OF DIRECTORS" shall mean, with respect to any person,
(i) in the case of any corporation, the board of directors of such person, (ii)
in the case of any limited liability company, the board or committee of managers
or board of governors of such person, (iii) in the case of any partnership, the
Board of Directors of the general partner of such person and (iv) in any other
case, the functional equivalent of the foregoing.
"BORROWER" shall have the meaning assigned to such term in the
preamble hereto.
"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.
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"BORROWING REQUEST" shall mean a request by 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 ASSOCIATE AGREEMENT" shall mean a contract among the
Administrative Agent, the Collateral Agent, Borrower and each of its
Subsidiaries that is a "covered entity" or a "business associate" of a covered
entity as such is defined under HIPPA that permits disclosure of any protected
health information (as defined under HIPPA) that may be associated with the
Collateral.
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or other day on which commercial 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, with respect to any person
for any period, without duplication, the aggregate amount of all expenditures by
such person during such period for fixed or capital assets that, in accordance
with GAAP, are classified as capital expenditures in the consolidated statement
of cash flows of such person, whether such increase is due to purchase of
properties for cash or financed by the incurrence of Indebtedness, but excluding
(i) expenditures made in connection with the replacement, substitution or
restoration of property pursuant to Section 2.10(c) or (f), (ii) any portion of
such expenditures attributable to acquisitions of property, plant and equipment
in Permitted Acquisitions, (iii) expenditures made with the proceeds of Excluded
Issuances and (iv) Capital Lease Obligations and Purchase Money Indebtedness.
"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.
"CASH EQUIVALENTS" shall mean, as to any person, (a)
securities issued, or directly, unconditionally and fully guaranteed or insured,
by the United States or any agency or instrumentality thereof (provided that the
full faith and credit of the United States is pledged in support thereof) having
maturities of not more than one year from the date of acquisition by such
person; (b) time deposits and certificates of deposit of any Lender or any
commercial bank having, or which is the principal banking subsidiary of a bank
holding company organized under the laws of the United States, any state thereof
or the District of Columbia having, capital and surplus aggregating in excess of
$250.0 million and a rating of "A" (or such other similar equivalent rating) or
higher by at least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act) with maturities of not more than
one year from the date of acquisition by such person; (c) repurchase obligations
with a term of not more than 30 days for underlying securities of the types
described in clause (a) above entered into with any bank meeting the
qualifications specified in clause (b) above, which repurchase obligations are
secured by a valid perfected security interest in the underlying securities; (d)
commercial paper issued by any person incorporated in the United States rated at
least A-2 or the equivalent thereof by Standard & Poor's Rating Service ("S&P")
or at least P-2 or the equivalent thereof by Xxxxx'x Investors Service Inc.,
("MOODY'S") and in each case maturing not more than one year after the date of
acquisition by such person; (e) investments in money market funds substantially
all of whose assets are comprised of securities of the types described in
clauses (a) through (d) above; (f) demand deposit accounts maintained in the
ordinary course of business; (g) with respect to (i) Borrower, marketable debt
securities regularly traded on a national
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securities exchange or in the over-the-counter market, if and to the extent such
debt security constitutes a permitted investment under the HMO Regulations
applicable to any of the HMO Subsidiaries or (ii) any HMO Subsidiary, marketable
debt securities regularly traded on a national securities exchange or in the
over-the-counter market and any other security, if and to the extent such
security constitutes a permitted investment under the HMO Regulations applicable
to such HMO Subsidiary and (h) securities issued, or directly, unconditionally
and fully guaranteed or insured, by any state of the United States of America or
any political subdivision of any such state or any public instrumentality
thereof maturing within one year from the date of acquisition thereof and, at
the time of acquisition, having one of the two highest ratings obtainable from
either S&P or Moody's.
"CASH INTEREST EXPENSE" shall mean, for any period,
Consolidated Interest Expense for such period, less the sum of (a) interest on
any debt paid by the increase in the principal amount of such debt including by
issuance of additional debt of such kind, (b) items described in clause (c) or,
other than to the extent paid in cash, clause (g) of the definition of
"Consolidated Interest Expense", (c) gross interest income of Borrower and its
Subsidiaries for such period, (d) fees and expenses relating to the Loans,
Letters of Credit or the Senior Subordinated Notes to the extent included in
Consolidated Interest Expense and (e) any payment made to obtain Hedging
Agreements to the extent included in Consolidated Interest Expense.
"CASUALTY EVENT" shall mean any involuntary loss of title, any
involuntary loss of, any damage to or any destruction of, or any condemnation or
other taking (including by any Governmental Authority) of, any property of
Holdings or any of its Subsidiaries. "Casualty Event" shall include but not be
limited to any taking of all or any part of any Real Property of any person or
any part thereof, in or by condemnation or other eminent domain proceedings
pursuant to any Requirement of Law, or by reason of the temporary requisition of
the use or occupancy of all or any part of any Real Property of any person or
any part thereof by any Governmental Authority, civil or military, or any
settlement in lieu thereof. "Casualty Event" shall not include any Asset Sale.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq.
"CHANGE IN CONTROL" shall be deemed to have occurred if:
(a) Holdings at any time ceases to own 100% of the Equity
Interests of Borrower;
(b) at any time a change of control occurs under any Material
Indebtedness;
(c) prior to an IPO, the Permitted Holders collectively cease
to own, or to have the power to vote or direct the voting of, Voting
Stock of Holdings representing a majority of the voting power of the
total outstanding Voting Stock of Holdings;
(d) following an IPO any "person" or "group" (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act), other than
one or more Permitted Holders, is or becomes the beneficial owner (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
for purposes of this clause such person or group shall be deemed to
have "beneficial ownership" of all securities that such person or group
has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of Voting
Stock of Holdings representing more than 30% of the voting power of the
total outstanding Voting Stock of Holdings; or
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(e) following an IPO, during any one year period, individuals
who at the beginning of such period constituted the Board of Directors
of Holdings (together with any new directors who were nominated by
Sponsor or its Controlled Investment Affiliates or whose election to
such Board of Directors or whose nomination for election was approved
by a vote of a majority of the members of the Board of Directors of
Holdings, which members comprising such majority are then still in
office and were either directors at the beginning of such period or
whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of Directors
of Holdings.
For purposes of this definition, a person shall not be deemed to
have beneficial ownership of Equity Interests subject to a stock purchase
agreement, merger agreement or similar agreement until the consummation of the
transactions contemplated by such agreement.
"CHANGE IN LAW" shall mean the occurrence, after the date of
this Agreement, of any of the following: (a) the adoption or taking into effect
of any law, treaty, order, policy, rule or regulation, (b) any change in any
law, treaty, order, policy, rule or regulation or in the administration,
interpretation or application thereof by any Governmental Authority or (c) the
making or issuance of any request, guideline or directive (whether or not having
the force of law) by any Governmental Authority.
"CHARGES" shall have the meaning assigned to such term in
Section 10.14.
"CLASS," when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
Revolving Loans, Tranche A Loans, Incremental Term Loans that are not Tranche A
Loans or Swingline Loans and, when used in reference to any Commitment, refers
to whether such Commitment is a Revolving Commitment, Tranche A Commitment or
Swingline Commitment, in each case, under this Agreement as originally in effect
or pursuant to Section 2.19, or an Incremental Term Loan Commitment that is not
a Tranche A Commitment of which such Loan, Borrowing or Commitment shall be a
part.
"CLOSING DATE" shall mean the date of the initial Credit
Extension hereunder.
"CMS" shall mean the Centers for Medicare and Medicaid
Services of HHS, any successor thereof and any predecessor thereof (including
the United States Health Care Financing Administration).
"CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"COLLATERAL" shall mean, collectively, all of the Security
Agreement Collateral, any Mortgaged Property and all other property of whatever
kind and nature subject or purported to be subject from time to time to a Lien
under any Security Document.
"COLLATERAL AGENT" shall have the meaning assigned to such
term in the preamble hereto.
"COMMERCIAL LETTER OF CREDIT" shall mean any letter of credit
or similar instrument issued for the purpose of providing credit support in
connection with the purchase of materials, goods or services by Borrower or any
of its Subsidiaries in the ordinary course of their businesses.
"COMMITMENT" shall mean, with respect to any Lender, such
Lender's Revolving Commitment, Tranche A Commitment or Swingline Commitment, and
any Commitment to make Incremental Term Loans that are not Tranche A Loans
extended by such Lender as provided in Section 2.19.
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"COMMITMENT FEE" shall have the meaning assigned to such term
in Section 2.05(a).
"COMPANIES" shall mean Holdings and its Subsidiaries; and
"COMPANY" shall mean any one of them.
"COMPANY ACTION LEVEL" shall mean the Company Action Level
risk-based capital threshold, as defined by NAIC, or, in any state that has not
adopted the NAIC definition, as defined by the applicable state Governmental
Authority.
"COMPLIANCE CERTIFICATE" shall mean a certificate of a
Financial Officer substantially in the form of Exhibit D.
"CONFIDENTIAL INFORMATION MEMORANDUM" shall mean that certain
confidential information memorandum dated as of February 2005.
"CONSOLIDATED AMORTIZATION EXPENSE" shall mean, for any
period, the amortization expense of Borrower and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED CURRENT ASSETS" shall mean, as at any date of
determination, the total assets of Borrower and the Subsidiary Guarantors which
may properly be classified as current assets on a consolidated balance sheet of
Borrower and the Subsidiary Guarantors in accordance with GAAP, excluding cash
and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" shall mean, as at any date
of determination, the total liabilities of Borrower and the Subsidiary
Guarantors which may properly be classified as current liabilities (other than
the current portion of any long term Indebtedness, any accrued and unpaid
interest on such current portion of long term Indebtedness and deferred taxes
and taxes payable) on a consolidated balance sheet of Borrower and the
Subsidiary Guarantors in accordance with GAAP.
"CONSOLIDATED DEPRECIATION EXPENSE" shall mean, for any
period, the depreciation expense of Borrower and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED EBITDA" shall mean, for any period, Consolidated
Net Income for such period, adjusted by (x) adding thereto, in each case (other
than clause (m)) only to the extent (and in the same proportion) deducted in
determining such Consolidated Net Income and without duplication:
(a) Consolidated Interest Expense for such period,
(b) Consolidated Amortization Expense for such period,
(c) Consolidated Depreciation Expense for such period,
(d) Consolidated Tax Expense (including Permitted Tax
Distributions related thereto) for such period,
(e) fees, costs and expenses directly incurred in connection
with the Transactions (not to exceed $12,000,000),
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(f) the aggregate amount of all other non-cash charges
reducing Consolidated Net Income (including goodwill impairment
charges) for such period,
(g) the cumulative effect of any change in accounting
principles,
(h) management or transaction fees to Sponsor to the extent
permitted under Section 6.09(e); (i) one-time costs, fees and expenses
related to any Permitted Acquisition or Investment, Equity Issuance,
Asset Sale or incurrence of Indebtedness, in each case otherwise
permitted hereunder, including, without limitation, one-time
compensation charges, stay bonuses paid to existing management and
severance costs,
(j) expenses and charges incurred to the extent reimbursed by
third parties pursuant to indemnification provisions,
(k) Dividends paid to holders of Equity Interests (other than
Holdings or any of its Subsidiaries) of HMO Subsidiaries,
(l) fees, costs and expenses directly attributable to initial
expansion into a state where the Companies had no prior operations and
incurred during the first twelve months of such expansion, not to
exceed $2.0 million in the aggregate in any fiscal year, and
(m) the amount of cash (x) received as net proceeds of
business interruption insurance to the extent not included in
Consolidated Net Income and (y) paid as a result of a reversal of a
reserve for which a non-cash charge reduced Consolidated Net Income in
any prior Test Period,
(y) subtracting therefrom the aggregate amount of all non-cash items increasing
Consolidated Net Income (other than the accrual of revenue or recording of
receivables in the ordinary course of business) for such period.
Other than for purposes of calculating Excess Cash Flow,
Consolidated EBITDA shall be calculated on a Pro Forma Basis to give effect to
the Acquisition, any Permitted Acquisition and Asset Sales (other than any
dispositions in the ordinary course of business) consummated at any time on or
after the first day of the Test Period thereof as if the Acquisition and each
such Permitted Acquisition had been effected on the first day of such period and
as if each such Asset Sale had been consummated on the day prior to the first
day of such period.
For the purposes of Section 6.10(c) during the Test Periods
ending June 30, 2005 and September 30, 2005, Consolidated EBITDA shall be deemed
to be: (i) $32,479,000 plus actual Consolidated EBITDA for the two fiscal
quarters ending June 30, 2005 and (ii) $16,110,000 plus actual consolidated
EBITDA for the three consecutive fiscal quarters ending September 30, 2005,
respectively.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" shall mean, for any
Test Period, the ratio of (a) Consolidated EBITDA for such Test Period to (b)
Consolidated Fixed Charges for such Test Period.
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"CONSOLIDATED FIXED CHARGES" shall mean, for any period, the
sum, without duplication, of
(a) Cash Interest Expense for such period;
(b) the aggregate amount of Capital Expenditures made in cash
during such period;
(c) all cash payments in respect of income taxes made during
such period (net of any cash refund in respect of income taxes actually
received during such period); and
(d) the principal amount of all scheduled amortization
payments (as adjusted for any prepayments) on all Indebtedness
(including the principal component of all Capital Lease Obligations,
but excluding such amortization payments on Indebtedness incurred to
finance Capital Expenditures included in clause (b) above in such
period or any prior period) of Borrower and its Subsidiaries for such
period (as determined on the first day of the respective period).
For purposes of calculating the amounts specified in clauses (a) and
(d) of this definition (the "TYPE 1 FIXED CHARGES"), for each of the Test
Periods ending June 30, 2005, September 30, 2005 and December 31, 2005, the Type
1 Fixed Charges shall equal the Type 1 Fixed Charges for the period beginning
April 1, 2005 and ending on (i) June 30, 2005, multiplied by 4, (ii) September
30, 2005, multiplied by 2 and (iii) December 31, 2005, multiplied by 4/3,
respectively. For purposes of calculating the amount specified in clauses (b)
and (c) of this definition (the "TYPE 2 FIXED CHARGES") for each of the Test
Periods ending June 30, 2005, September 30, 2005 and December 31, 2005, the Type
2 Fixed Charges shall equal: (i) $16,585,000 plus the actual Type 2 Fixed
Charges for the fiscal quarter ending June 30, 2005, (ii) $11,546,000 plus the
actual Type 2 Fixed Charges for the two consecutive fiscal quarters ending
September 30, 2005 and (iii) $6,492,000 plus the actual Type 2 Fixed Charges for
the three consecutive fiscal quarters ending December 31, 2005, respectively.
"CONSOLIDATED GROUP" shall mean Holdings and its consolidated
subsidiaries, as determined in accordance with GAAP.
"CONSOLIDATED INDEBTEDNESS" shall mean, as at any date of
determination, the aggregate amount of all Indebtedness for borrowed money
(including, without limitation, Capital Lease Obligations) of Borrower and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period,
the total consolidated interest expense of Borrower and its Subsidiaries for
such period determined on a consolidated basis in accordance with GAAP plus,
without duplication:
(a) imputed interest on Capital Lease Obligations and
Attributable Indebtedness of Borrower and its Subsidiaries for such
period;
(b) commissions, discounts and other fees and charges owed by
Borrower or any of its Subsidiaries with respect to letters of credit
securing financial obligations, bankers' acceptance financing and
receivables financings for such period;
(c) amortization of debt issuance costs, debt discount or
premium and other financing fees and expenses incurred by Borrower or
any of its Subsidiaries for such period;
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(d) cash contributions to any employee stock ownership plan or
similar trust made by Borrower or any of its Subsidiaries to the extent
such contributions are used by such plan or trust to pay interest or
fees to any person (other than Borrower or a Wholly Owned Subsidiary)
in connection with Indebtedness incurred by such plan or trust for such
period;
(e) all interest paid or payable with respect to discontinued
operations of Borrower or any of its Subsidiaries for such period;
(f) the interest portion of any deferred payment obligations
of Borrower or any of its Subsidiaries for such period;
(g) all interest on any Indebtedness of Borrower or any of its
Subsidiaries of the type described in clause (f), or (j) of the
definition of "Indebtedness" for such period;
provided that (a) to the extent related to the Transactions, debt issuance
costs, debt discount or premium and other financing fees and expenses shall be
excluded from the calculation of Consolidated Interest Expense and (b)
Consolidated Interest Expense shall be calculated after giving effect to Hedging
Agreements, but excluding unrealized gains and losses with respect to Hedging
Agreements.
Consolidated Interest Expense shall be calculated on a Pro
Forma Basis to give effect to any Indebtedness incurred, assumed or permanently
repaid or extinguished during the relevant Test Period in connection with the
Acquisition, any Permitted Acquisitions and Asset Sales (other than any
dispositions in the ordinary course of business) as if such incurrence,
assumption, repayment or extinguishing had been effected on the first day of
such period.
"CONSOLIDATED NET INCOME" shall mean, for any period, the
consolidated net income (or loss) (including, without limitation, interest
income) of Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP; provided that there shall be excluded from such net income
(to the extent otherwise included therein), without duplication:
(a) the net income (or loss) of any person (other than a
Subsidiary of Borrower) in which any person other than Borrower and its
Subsidiaries has an ownership interest, except to the extent that cash
in an amount equal to any such income has actually been received by
Borrower or (subject to clause (b) below) any of its Subsidiaries
during such period;
(b) the net income of any HMO Subsidiary during such period to
the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary of that income is not permitted by
operation of the terms of its Organizational Documents or any
agreement, or instrument (other than agreements or instruments with a
Governmental Authority) applicable to that Subsidiary during such
period;
(c) any gain (or loss), together with any related provisions
for taxes on any such gain (or the tax effect of any such loss),
realized during such period by Borrower or any of its Subsidiaries upon
any Asset Sale (other than any inventory dispositions in the ordinary
course of business) by Borrower or any of its Subsidiaries;
(d) earnings and charges or losses resulting from any
reappraisal, revaluation or write-up or write-down of assets;
(e) unrealized gains and losses with respect to Hedging
Obligations for such period;
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(f) any (x) extraordinary gain (or extraordinary loss)
together with any related provision for taxes on any such gain (or the
tax effect of any such loss), recorded or recognized by Borrower or any
of its Subsidiaries during such period and (y), unusual or
non-recurring gains (or losses), including, without limitation
severance, personnel relocation and other non-recurring restructuring
costs together with any related provision for taxes on any such gain
(or the tax effect of any such loss), recorded or recognized by
Borrower or any of its Subsidiaries during such period, in the case of
any such loss, not to exceed 2.5% of Consolidated EBITDA (for such
purposes determined without giving effect to this clause (f)(y)) for
any Test Period;
(g) purchase accounting or similar adjustments required or
permitted by GAAP, in connection with a Permitted Acquisition or the
Transactions; and
(h) any gain (or loss) in respect of returned surplus assets
from any pension plans or other post-retirement benefits.
For purposes of this definition of "Consolidated Net Income,"
Consolidated Net Income shall be reduced (to the extent not already reduced
thereby) by the amount of any payments to or on behalf of Holdings made pursuant
to Sections 6.08(c) and (d).
"CONSOLIDATED TAX EXPENSE" shall mean, for any period, the tax
expense of Borrower and its Subsidiaries, for such period, determined on a
consolidated basis in accordance with GAAP.
"CONTESTED COLLATERAL LIEN CONDITIONS" shall mean, with
respect to any Permitted Lien of the type described in clauses (a), (b), (e) and
(f) of Section 6.02, the following conditions:
(a) Borrower shall cause any proceeding instituted contesting
such Lien to stay the sale or forfeiture of any portion of the
Collateral on account of such Lien; and
(b) at the option and at the request of the Administrative
Agent, to the extent such Lien is in an amount in excess of $500,000,
the appropriate Loan Party shall maintain cash reserves in an amount
sufficient to pay and discharge such Lien and a reasonable estimate of
all interest and penalties related thereto.
"CONTINGENT OBLIGATION" shall mean, as to any person, any
obligation, agreement, understanding or arrangement of such person guaranteeing
or intended to guarantee any Indebtedness, leases, dividends or other
obligations ("PRIMARY OBLIGATIONS") of any other person (the "PRIMARY OBLIGOR")
in any manner, whether directly or indirectly, including any obligation of such
person, whether or not contingent, (a) to purchase any such primary obligation
or any property constituting direct or indirect security therefor; (b) to
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor; (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation; (d) with respect
to bankers' acceptances, letters of credit and similar credit arrangements,
until a reimbursement obligation arises (which reimbursement obligation shall
constitute Indebtedness); or (e) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term "Contingent Obligation" shall not include endorsements of
instruments for deposit or collection or standard contractual indemnities in the
ordinary course of business or any product warranties. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of
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which such Contingent Obligation is made (or, if less, the maximum amount of
such primary obligation for which such person may be liable, whether singly or
jointly, pursuant to the terms of the instrument evidencing such Contingent
Obligation) or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such person is required to
perform thereunder) as determined by such person in good faith.
"CONTRACT PROVIDER" shall mean any person or any employee,
agent or subcontractor of such person who provides professional health care
services under or pursuant to any contract with any Loan Party.
"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.
"CONTROL AGREEMENT" shall have the meaning assigned to such
term in the Security Agreement. "CONTROLLED INVESTMENT
AFFILIATE" means, as to any person, any other person which
directly
or indirectly is in Control of, is Controlled by, or is under common Control
with, such person and is organized by such person (or any person Controlling
such person) primarily for making equity or debt investments in Holdings or
other portfolio companies.
"CREDIT EXTENSION" shall mean, as the context may require, (i)
the making of a Loan by a Lender or (ii) the issuance of any Letter of Credit,
or the amendment, extension or renewal of any existing Letter of Credit, by the
Issuing Bank.
"DEBT ISSUANCE" shall mean the incurrence by Holdings or any
of its Subsidiaries of any Indebtedness after the Closing Date (other than as
permitted by Section 6.01).
"DEBT SERVICE" shall mean, for any period, Cash Interest
Expense for such period plus the then scheduled principal amortization of all
Indebtedness due for such period.
"DEFAULT" shall mean any event, occurrence or condition which
is, or upon notice, lapse of time or both pursuant to Section 8.01 would
constitute, an Event of Default.
"DEFAULTED LOAN" shall have the meaning assigned to such term
in Section 2.16(c).
"DEFAULTING LENDER" shall have the meaning assigned to such
term in Section 2.16(c).
"DEFAULT PERIOD" shall have the meaning assigned to such term
in Section 2.16(c).
"DEFAULT RATE" shall have the meaning assigned to such term in
Section 2.06(c).
"DISQUALIFIED CAPITAL STOCK" shall mean any Equity Interest,
other than Holdings Preferred Stock which, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or upon
the happening of any event, (a) matures (excluding any maturity as the result of
an optional redemption by the issuer thereof) or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is redeemable at the
option of the holder thereof, in whole or in part, on or prior to the 180th day
after the Final Maturity Date or (b) is convertible into or exchangeable (unless
at
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the sole option of the issuer thereof) for (i) debt securities or (ii) any
Equity Interests referred to in (a) above, in each case at any time on or prior
to the 180th day after the Final Maturity Date, or (c) contains any repurchase
obligation which may come into effect prior to payment in full of all
Obligations; provided, however, that any Equity Interests that would not
constitute Disqualified Capital Stock but for provisions thereof giving holders
thereof (or the holders of any security into or for which such Equity Interests
is convertible, exchangeable or exercisable) the right to require the issuer
thereof to redeem such Equity Interests upon the occurrence of a change in
control or an asset sale occurring prior to the 180th day after the Final
Maturity Date shall not constitute Disqualified Capital Stock if such Equity
Interests provide that the issuer thereof will not redeem any such Equity
Interests pursuant to such provisions prior to the repayment in full of the
Obligations (other than contingent indemnity obligations).
"DIVIDEND" with respect to any person shall mean that such
person has declared or paid a dividend or returned any equity capital to the
holders of its Equity Interests or authorized or made any other distribution,
payment or delivery of property (other than Qualified Capital Stock of such
person) or cash to the holders of its Equity Interests as such, or redeemed,
retired, purchased or otherwise acquired, directly or indirectly, for
consideration any of its Equity Interests outstanding (or any options or
warrants issued by such person with respect to its Equity Interests), or set
aside in trust or escrow any funds for any of the foregoing purposes, or shall
have permitted any of its Subsidiaries to purchase or otherwise acquire for
consideration any of the Equity Interests of such person outstanding (or any
options or warrants issued by such person with respect to its Equity Interests).
Without limiting the foregoing, "Dividends" with respect to any person shall
also include all payments made or required to be made by such person with
respect to any stock appreciation rights, plans, equity incentive or achievement
plans or any similar plans or setting aside of any funds for the foregoing
purposes.
"DOCUMENTATION AGENT" shall have the meaning assigned to such
term in the preamble hereto.
"DOLLARS" or "$" shall mean lawful money of the United States.
"DOMESTIC SUBSIDIARY" shall mean any Subsidiary that is
organized or existing under the laws of the United States, any state thereof or
the District of Columbia.
"ELIGIBLE ASSIGNEE" shall mean (a) if the assignment does not
include assignment of a Revolving Commitment, (i) any Lender, (ii) an Affiliate
of any Lender, (iii) an Approved Fund and (iv) any other person approved by the
Administrative Agent and Borrower (each such approval not to be unreasonably
withheld or delayed) and (b) if the assignment includes assignment of a
Revolving Commitment, (i) any Revolving Lender, (ii) an Affiliate of any
Revolving Lender, (iii) an Approved Fund of a Revolving Lender and (iv) any
other person approved by the Administrative Agent, the Issuing Bank, the
Swingline Lender and Borrower (each such approval not to be unreasonably
withheld or delayed); provided, in each case, that no approval of Borrower shall
be required upon the occurrence and during the continuance of an Event of
Default or during the primary syndication of the Commitments and Loans by the
Arranger.
"EMBARGOED PERSON" shall have the meaning assigned to such
term in Section 6.19.
"ENVIRONMENT" shall mean ambient air, surface water and
groundwater (including potable water, navigable water and wetlands), the land
surface or subsurface strata, natural resources or as otherwise defined in any
Environmental Law.
-14-
"ENVIRONMENTAL CLAIM" shall mean any claim, notice, demand,
order, action, suit, proceeding or other communication alleging liability for
investigation, remediation, removal, cleanup, response, corrective action,
damages to natural resources, personal injury, property damage, fines, penalties
or other costs resulting from, related to or arising out of (i) the presence,
Release or threatened Release in or into the Environment of Hazardous Material
at any location or (ii) any violation of Environmental Law, and shall include
any claim seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from, related to or arising out of
the presence, Release or threatened Release of Hazardous Material or alleged
injury or threat of injury to health, safety or the Environment.
"ENVIRONMENTAL LAW" shall mean any and all applicable
treaties, laws, statutes, ordinances, regulations, rules, decrees, orders,
judgments, consent orders, consent decrees, code or other legally binding
requirements, and the common law, relating to protection of public health or the
Environment, the Release or threatened Release of Hazardous Material, natural
resources or natural resource damages, or occupational safety or health.
"ENVIRONMENTAL PERMIT" shall mean any permit, license,
approval, consent or other authorization required by or from a Governmental
Authority under Environmental Law.
"EQUIPMENT" shall have the meaning assigned to such term in
the Security Agreement.
"EQUITY FINANCING" shall mean the cash equity investment in
Holdings by the Equity Investors as the same is further invested in cash equity
in Borrower on or prior to the Closing Date, in an amount not less than $139.9
million on terms and conditions satisfactory to the Administrative Agent.
"EQUITY INTEREST" shall mean, with respect to any person, any
and all shares, interests, participations or other equivalents, including
membership interests (however designated, whether voting or nonvoting), of
equity of such person, including, if such person is a partnership, partnership
interests (whether general or limited) and any other interest or participation
that confers on a person the right to receive a share of the profits and losses
of, or distributions of property of, such partnership, whether outstanding on
the date hereof or issued after the Closing Date, but excluding debt securities
convertible or exchangeable into such equity.
"EQUITY INVESTORS" shall mean Sponsor, its Controlled
Investment Affiliates, other than Holdings and its Subsidiaries and one or more
additional investors reasonably satisfactory to the Administrative Agent.
"EQUITY ISSUANCE" shall mean, without duplication, (i) any
issuance or sale by Holdings after the Closing Date of any Equity Interests in
Holdings (including any Equity Interests issued upon exercise of any warrant or
option) or any warrants or options to purchase such Equity Interests or (ii) any
cash contribution to the capital of Holdings; provided, however, that for the
purposes of this definition, an Equity Issuance shall not include (x) any
Preferred Stock Issuance or Debt Issuance, (y) any such sale or issuance by
Holdings of not more than an aggregate amount of $3,000,000 of its Equity
Interests (including its Equity Interests issued upon exercise of any warrant or
option or warrants or options to purchase its Equity Interests but excluding
Preferred Stock), in each case, to directors, officers or employees of any
Company and (z) any Excluded Issuance.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.
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"ERISA AFFILIATE" shall mean, with respect to any person, any
trade or business (whether or not incorporated) that, together with such person,
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 by regulation); (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 failure to make by its due
date a required installment under Section 412(m) of the Code with respect to any
Plan or the failure to make any required contribution to a Multiemployer Plan;
(d) 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; (e) the incurrence by any Company or any of its ERISA Affiliates of
any liability under Title IV of ERISA with respect to the termination of any
Plan; (f) the receipt by any Company 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, or
the occurrence of any event or condition which could reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Plan; (g) the incurrence by any Company or any of its
ERISA Affiliates of any liability with respect to the withdrawal from any Plan
or Multiemployer Plan; (h) the receipt by any Company or 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; (i) the "substantial
cessation of operations" within the meaning of Section 4062(e) of ERISA with
respect to a Plan; (j) the making of any amendment to any Plan which could
result in the imposition of a lien or the posting of a bond or other security;
and (k) the occurrence of a nonexempt prohibited transaction (within the meaning
of Section 4975 of the Code or Section 406 of ERISA) which could reasonably be
expected to result in liability to any Company.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised of
Eurodollar Loans.
"EURODOLLAR LOAN" shall mean any Eurodollar Revolving Loan or
Eurodollar Term Loan.
"EURODOLLAR REVOLVING LOAN" shall mean any Revolving Loan
bearing interest at a rate determined by reference to the Adjusted LIBOR Rate in
accordance with the provisions of Article II.
"EURODOLLAR TERM LOAN" shall mean any Term Loan bearing
interest at a rate determined by reference to the Adjusted LIBOR Rate in
accordance with the provisions of Article II.
"EVENT OF DEFAULT" shall have the meaning assigned to such
term in Section 8.01.
"EXCESS AMOUNT" shall have the meaning assigned to such term
in Section 2.10(h).
"EXCESS CASH FLOW" shall mean, for any Excess Cash Flow
Period, Consolidated EBITDA attributable to Borrower and the Subsidiary
Guarantors (on a consolidated basis) for such Excess Cash Flow Period, minus,
without duplication:
(a) Debt Service of Borrower and the Subsidiary Guarantors (on
a consolidated basis) for such Excess Cash Flow Period (other than
voluntary prepayments of the Term Loans);
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(b) any voluntary prepayments of Indebtedness (or, if a
revolving facility, prepayments of Indebtedness coupled with a
corresponding reduction in commitments) other than Loans, to the extent
otherwise permitted hereunder, in each case to the extent not already
reflected in Debt Service during such Excess Cash Flow Period;
(c) Capital Expenditures of Borrower and the Subsidiary
Guarantors (on a consolidated basis) during such Excess Cash Flow
Period (excluding Capital Expenditures made in such Excess Cash Flow
Period where a certificate in the form contemplated by the following
clause (d) was previously delivered) that are paid in cash;
(d) Capital Expenditures that Borrower or any of the
Subsidiary Guarantors (on a consolidated basis) shall, during such
Excess Cash Flow Period, become obligated to make but that are not made
during such Excess Cash Flow Period; provided that Borrower shall
deliver a certificate to the Administrative Agent not later than 90
days after the end of such Excess Cash Flow Period, signed by a
Responsible Officer of Borrower and certifying that such Capital
Expenditures will be made in the following Excess Cash Flow Period;
(e) the aggregate amount of investments made in cash during
such period pursuant to Sections 6.04(e), (i), (j), (k), (l) and (t)
(other than that portion of Investments made with all or a portion of
the Retained Amount (6.04(j)), Retained Equity Proceeds (6.04(j) or
(l)) and/or Excluded Issuances (6.04 (j) or (l)));
(f) taxes of Borrower and the Subsidiary Guarantors (on a
consolidated basis) that were paid in cash during such Excess Cash Flow
Period or will be paid within six months after the end of such Excess
Cash Flow Period;
(g) Permitted Tax Distributions that are paid during the
respective Excess Cash Flow Period or will be paid within six months
after the close of such Excess Cash Flow Period;
(h) the absolute value of the difference, if negative, of the
amount of Net Working Capital at the end of the prior Excess Cash Flow
Period over the amount of Net Working Capital at the end of such Excess
Cash Flow Period;
(i) if not deducted in determining Consolidated EBITDA, the
fees paid during such Excess Cash Flow Period in compliance with
Section 6.09(e);
(j) losses excluded from the calculation of Consolidated Net
Income of Borrower and the Subsidiary Guarantors by operation of clause
(c) or (f) of the definition thereof that are paid in cash during such
Excess Cash Flow Period;
(k) to the extent added to determine Consolidated EBITDA of
Borrower and the Subsidiary Guarantors, all items that did not result
from a cash payment to Borrower or any of the Subsidiary Guarantors on
a consolidated basis during such Excess Cash Flow Period;
(l) fees, costs and expenses directly incurred in connection
with the Transactions to the extent added to determine Consolidated
EBITDA in such Excess Cash Flow Period; and
(m) the amounts specified in clauses (i) and (l) in the
definition of Consolidated EBITDA to the extent paid in cash in such
Excess Cash Flow Period;
-17-
provided that any amount deducted pursuant of any of the foregoing clauses that
will be paid after the close of such Excess Cash Flow Period shall not be
deducted again in a subsequent Excess Cash Flow Period; plus, without
duplication:
(i) the difference, if positive, of the amount of Net
Working Capital at the end of the prior Excess Cash Flow Period over
the amount of Net Working Capital at the end of such Excess Cash Flow
Period;
(ii) the Net Cash Proceeds of any Asset Sale permitted by
Section 6.06(g) or (i) in such Excess Cash Flow Period to the extent
(x) that the asset sold in such Asset Sale was originally acquired by a
Loan Party as an Investment pursuant to Section 6.04(j), (l) or (t),
and (y) of the amount included in clause (e) of this definition in
respect of such assets when they were initially acquired as
Investments;
(iii)to the extent any permitted Capital Expenditures
referred to in clause (d) above do not occur in the Excess Cash Flow
Period specified in the certificate of Borrower provided pursuant to
clause (d) above, such amounts of Capital Expenditures that were not so
made in the Excess Cash Flow Period specified in such certificates;
(iv) any return on or in respect of investments received
in cash during such Excess Cash Flow Period, which investments were
made pursuant to Section 6.04(e);
(v) to the extent subtracted in determining Consolidated
EBITDA, all items that did not result from a cash payment by Borrower
or any of its Subsidiary Guarantors on a consolidated basis during such
Excess Cash Flow Period; and
(vi) Dividends paid in cash to Borrower or any Subsidiary
Guarantor by an HMO Subsidiary during such Excess Cash Flow Period to
the extent not required to be prepaid pursuant to Sections 2.10(c) or
(f).
"EXCESS CASH FLOW PERIOD" shall mean (i) the period taken as
one accounting period from the Closing Date and ending on December 31, 2005 and
(ii) each fiscal year of Borrower thereafter.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"EXCLUDED ISSUANCE" shall mean an issuance and sale of
Qualified Capital Stock of Holdings (including, without limitation, Holdings
Preferred Stock) after the Closing Date (i) solely to the Equity Investors and
other persons (solely, with respect to such other persons, in respect of
preemptive rights granted to such other persons so long as such preemptive
rights were not granted in anticipation of, or in connection with, such issuance
or sale of Qualified Capital Stock of Holdings as distinct from preemptive
rights granted in anticipation of future issuances of Equity Interests
generally), and (ii) to any person in a private transaction to the extent such
Qualified Capital Stock is issued by Holdings and contributed to Borrower,
Borrower or any Subsidiary Guarantor to finance capital expenditures, one or
more Investments pursuant to Section 6.04(j) or (l) or one or more Dividends
pursuant to Section 6.08(b) or (g).
"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 Borrower hereunder, (a)
taxes imposed on or measured by its overall net income (however denominated),
franchise taxes imposed on it (in lieu of net income taxes) and branch profits
taxes imposed on it, by a jurisdiction (or any political subdivision thereof) as
a result of the recipient being organized or having its
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principal office or, in the case of any Lender, having its applicable lending
office in such jurisdiction and (b) in the case of a Foreign Lender, any U.S.
federal withholding tax that (i) is imposed on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party hereto (or designates a
new lending office), except (x) to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from Borrower with respect
to such withholding tax pursuant to Section 2.15(a) or (y) if such Foreign
Lender is an assignee pursuant to a request by Borrower under Section 2.16);
provided that this subclause (b)(i) shall not apply to any Tax imposed on a
Lender in connection with an interest or participation in any Loan or other
obligation that such Lender was required to acquire pursuant to Section 2.14(c),
or (ii) is attributable to such Foreign Lender's failure to comply with Section
2.15(e).
"EXCLUSION EVENT" means an event or related events resulting
in the exclusion of one or more members of the Consolidated Group from
participation in any Medical Reimbursement Program.
"EXECUTIVE ORDER" shall have the meaning assigned to such term
in Section 3.22.
"EXISTING LIEN" shall have the meaning assigned to such term
in Section 6.02(c).
"FAMILY CARE" shall mean health care programs designed for
uninsured segments of the population (other than Medicaid-eligible or
SCHIP-eligible segments of the population) that are operated by or financed in
part by federal and state government.
"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 of the United States 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 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 confidential Fee Letter, dated
November 10, 2004, among Holdings, Borrower, UBS Loan Finance LLC and UBS
Securities LLC.
"FEES" shall mean the Commitment Fees, the Administrative
Agent Fees, the LC Participation Fees and the Fronting Fees.
"FINAL MATURITY DATE" shall mean the latest of the Revolving
Maturity Date, the Tranche A Maturity Date and any Incremental Term Loan
Maturity Date applicable to existing Incremental Term Loans, as of any date of
determination.
"FINANCIAL OFFICER" of any person shall mean the chief
financial officer, principal accounting officer, vice president of finance,
treasurer or controller of such person.
"FIRREA" shall mean the Federal Institutions Reform, Recovery
and Enforcement Act of 1989, as amended.
"FOREIGN LENDER" shall mean any Lender that is not, for United
States federal income tax purposes, (i) an individual who is a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
treated as a corporation or partnership created or organized in or under the
laws of the United States, or any political subdivision thereof, (iii) an estate
whose income is subject to U.S. federal income taxation regardless of its source
or (iv) a trust if a court within the United States is able to exercise
-19-
primary supervision over the administration of such trust and one or more United
States persons have the authority to control all substantial decisions of such
trust.
"FOREIGN SUBSIDIARY" shall mean a Subsidiary that is organized
under the laws of a jurisdiction other than the United States or any state
thereof or the District of Columbia.
"FRONTING FEE" shall have the meaning assigned to such term in
Section 2.05(c).
"FUND" shall mean any person that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business.
"FUNDING DEFAULT" shall have the meaning assigned to such term
in Section 2.16(c).
"GAAP" shall mean generally accepted accounting principles in
the United States applied on a consistent basis.
"GOVERNMENTAL AUTHORITY" shall mean the government of the
United States or any other nation, or of any political subdivision thereof,
whether state, provincial or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government (including any supra-national bodies such as the
European Union or the European Central Bank).
"GOVERNMENTAL REAL PROPERTY DISCLOSURE REQUIREMENTS" shall
mean any Requirement of Law of any Governmental Authority requiring notification
of the buyer, lessee, mortgagee, assignee or other transferee of any Real
Property, facility, establishment or business, or notification, registration or
filing to or with any Governmental Authority, in connection with the sale,
lease, mortgage, assignment or other transfer (including any transfer of
control) of any Real Property, facility, establishment or business, of the
actual or threatened presence or Release in or into the Environment, or the use,
disposal or handling of Hazardous Material on, at, under or near the Real
Property, facility, establishment or business to be sold, leased, mortgaged,
assigned or transferred.
"GUARANTEED OBLIGATIONS" shall have the meaning assigned to
such term in Section 7.01.
"GUARANTEES" shall mean the guarantees issued pursuant to
Article VII by Holdings and the Subsidiary Guarantors.
"GUARANTORS" shall mean Holdings and the Subsidiary
Guarantors.
"HAZARDOUS MATERIALS" shall mean the following: hazardous
substances; hazardous wastes; polychlorinated biphenyls ("PCBS") or any
substance or compound containing PCBs; asbestos or any asbestos-containing
materials in any form or condition; radon or any other radioactive materials
including any source, special nuclear or by-product material; petroleum, crude
oil or any fraction thereof; and any other pollutant or contaminant or
chemicals, wastes, materials, compounds, constituents or substances, subject to
regulation or which can give rise to liability under any Environmental Laws.
"HEDGING AGREEMENT" shall mean any swap, cap, collar, forward
purchase or similar agreements or arrangements dealing with interest rates,
currency exchange rates or commodity prices, either generally or under specific
contingencies.
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"HEDGING OBLIGATIONS" shall mean obligations under or with
respect to Hedging Agreements.
"HHS" shall mean the United States Department of Health and
Human Services and any successor thereof.
"HIPAA" shall mean the Health Insurance Portability and
Accountability Act of 1996, Pub. L. 104-191, Aug. 21, 1996, 110 Stat. 1936.
"HMO" shall mean any health maintenance organization, 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 maintenance organization or managed care organization
under applicable federal or state law (including, without limitation, HMO
Regulations).
"HMO EVENT" shall mean any material non-compliance by Borrower
or any of its Subsidiaries with any of the terms and provisions of the HMO
Regulations pertaining to its fiscal soundness, solvency or financial condition;
or the assertion in writing, after the date hereof, by an HMO Regulator that it
intends to take administrative action against Borrower or any of its
Subsidiaries to revoke or modify any license, charter or permit or to enforce
the fiscal soundness, solvency or financial provisions or requirements of the
HMO Regulations against Borrower or any of its Subsidiaries.
"HMO REGULATIONS" shall mean all laws, regulations, directives
and administrative orders applicable under federal or state law to any HMO
Subsidiary (and any regulations, orders and directives promulgated or issued
pursuant to any of the foregoing) and Subchapter XI of Title 42 of the United
States Code.
"HMO REGULATOR" shall mean any person charged with the
administration, oversight or enforcement of an HMO Regulation, whether
primarily, secondarily or jointly.
"HMO SUBSIDIARIES" shall mean subsidiaries of Borrower that
are HMOs or other similar regulated entities or businesses.
"HOLDINGS" shall have the meaning assigned to such term in the
preamble hereto.
"HOLDINGS PREFERRED STOCK" shall mean the (x) Preferred Stock
of Holdings issued on the Closing Date as part of the Equity Financing and
Rollover Financing and (y) subsequent issuances of the same series of Preferred
Stock, in each case with such preferences, terms and conditions as in effect on
the Closing Date.
"INCREASE EFFECTIVE DATE" shall have the meaning assigned to
such term in Section 2.19(a).
"INCREASE JOINDER" shall have the meaning assigned to such
term in Section 2.19(c).
"INCREMENTAL TERM LOAN" shall have the meaning assigned to
such term in Section 2.19(c).
"INCREMENTAL TERM LOAN COMMITMENT" shall have the meaning
assigned to such term in Section 2.19(a).
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"INCREMENTAL TERM LOAN MATURITY DATE" shall have the meaning
assigned to such term in Section 2.19(c).
"INDEBTEDNESS" of any person shall mean, without duplication,
(a) all obligations of such person for borrowed money or advances; (b) all
obligations of such person evidenced by bonds, debentures, notes or similar
instruments; (c) all obligations of such person under conditional sale or other
title retention agreements relating to property purchased by such person upon
which interest charges are customarily paid or accrued; (d) all obligations of
such person issued or assumed as the deferred purchase price of property or
services to the extent required to be classified as debt under GAAP; (e) all
Indebtedness of others secured by any Lien on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed, but
limited to the fair market value of such property; (f) all Capital Lease
Obligations and Purchase Money Obligations of such person; (g) all Hedging
Obligations to the extent required to be reflected on a balance sheet of such
person; (h) all Attributable Indebtedness of such person; (i) all non-contingent
obligations of such person for the reimbursement of any obligor in respect of
letters of credit, letters of guaranty, bankers' acceptances and similar credit
transactions; and (j) all Contingent Obligations of such person in respect of
Indebtedness or obligations of others of the kinds referred to in clauses (a)
through (i) above. The Indebtedness of any person shall include the Indebtedness
of any other entity (including any partnership in which such person is a general
partner) to the extent such person is liable therefor as a result of such
person's ownership interest in or other relationship with such entity, except
(other than in the case of general partner liability) to the extent that terms
of such Indebtedness expressly provide that such person is not liable therefore;
provided that (x) Holdings Preferred Stock and Preferred Stock of Borrower and
any of its Subsidiaries shall not be Indebtedness and (y) operating lease
payments, employee consulting arrangements, accrued expenses, deferred rent,
deferred taxes, obligations under employment agreements and deferred
compensation shall not be Indebtedness, in each case of clause (y) to the extent
not required to be treated as debt under GAAP.
"INDEMNIFIED TAXES" shall mean all Taxes other than Excluded
Taxes.
"INDEMNITEE" shall have the meaning assigned to such term in
Section 10.03(b).
"INFORMATION" shall have the meaning assigned to such term in
Section 10.12.
"INSURANCE POLICIES" shall mean the insurance policies and
coverages required to be maintained by each Loan Party which is an owner of
Mortgaged Property with respect to the applicable Mortgaged Property pursuant to
Section 5.04 and all renewals and extensions thereof.
"INSURANCE REQUIREMENTS" shall mean, collectively, all
provisions of the Insurance Policies, all requirements of the issuer of any of
the Insurance Policies and all orders, rules, regulations and any other
requirements of the National Board of Fire Underwriters (or any other body
exercising similar functions) binding upon each Loan Party which is an owner of
Mortgaged Property and applicable to any Mortgaged Property or any use or
condition thereof.
"INTELLECTUAL PROPERTY" shall have the meaning assigned to
such term in Section 3.06(a).
"INTERCOMPANY NOTE" shall mean a promissory note substantially
in the form of Exhibit P.
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"INTEREST ELECTION REQUEST" shall mean a request by Borrower
to convert or continue a Revolving Borrowing or Term Borrowing in accordance
with Section 2.08(b), substantially in the form of Exhibit E.
"INTEREST PAYMENT DATE" shall mean (a) with respect to any ABR
Loan (including Swingline Loans), the last Business Day of each March, June,
September and December to occur during any period in which such Loan is
outstanding, (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurodollar Loan with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
(c) with respect to any Revolving Loan or Swingline Loan, the Revolving Maturity
Date or such earlier date on which the Revolving Commitments are terminated and
(d) with respect to any Term Loan, the Tranche A Maturity Date or the
Incremental Term Loan Maturity Date, as the case may be.
"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 in the calendar month that is one, two, three or
six months (or, if each affected Lender so agrees, nine or twelve months)
thereafter, as Borrower may elect; provided that (a) 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, and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month 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.
"INVESTMENTS" shall have the meaning assigned to such term in
Section 6.04.
"IPO" shall mean the first underwritten public offering by
Holdings of its Equity Interests after the Closing Date pursuant to a
registration statement filed with the Securities and Exchange Commission in
accordance with the Securities Act.
"ISSUING BANK" shall mean, as the context may require, (a) UBS
AG, Stamford Branch, in its capacity as issuer of Letters of Credit issued by
it; (b) any other Lender that may become an Issuing Bank pursuant to Sections
2.18(j) and (k) in its capacity as issuer of Letters of Credit issued by such
Lender; or (c) collectively, all of the foregoing.
"JOINDER AGREEMENT" shall mean a joinder agreement
substantially in the form of Exhibit F.
"LANDLORD ACCESS AGREEMENT" shall mean a Landlord Access
Agreement, substantially in the form of Exhibit G, or such other form as may
reasonably be acceptable to the Administrative Agent.
"LC COMMITMENT" shall mean the commitment of the Issuing Bank
to issue Letters of Credit pursuant to Section 2.18. The amount of the LC
Commitment shall initially be $5,000,000, but in no event exceed the Revolving
Commitment.
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"LC DISBURSEMENT" shall mean a payment or disbursement made by
the Issuing Bank pursuant to a drawing under a Letter of Credit.
"LC EXPOSURE" shall mean at any time the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit at such time plus
(b) the aggregate principal amount of all Reimbursement Obligations outstanding
at such time. The LC Exposure of any Revolving Lender at any time shall mean its
Pro Rata Percentage of the aggregate LC Exposure at such time.
"LC PARTICIPATION FEE" shall have the meaning assigned to such
term in Section 2.05(c).
"LC REQUEST" shall mean a request by Borrower in accordance
with the terms of Section 2.18(b) and substantially in the form of Exhibit H, or
such other form as shall be reasonably approved by the Administrative Agent.
"LEASES" shall mean any and all leases, subleases, tenancies,
options, concession agreements, rental agreements, occupancy agreements,
franchise agreements, access agreements and any other agreements (including all
amendments, extensions, replacements, renewals, modifications and/or guarantees
thereof), whether or not of record and whether now in existence or hereafter
entered into, affecting the use or occupancy of all or any portion of any Real
Property.
"LENDER ADDENDUM" shall mean with respect to any Lender on the
Closing Date, a lender addendum in the form of Exhibit I, to be executed and
delivered by such Lender on the Closing Date as provided in Section 10.15.
"LENDERS" shall mean (a) the financial institutions that have
become a party hereto pursuant to a Lender Addendum and (b) any financial
institution that has become a party hereto pursuant to an Assignment and
Assumption, other than, in each case, any such financial institution that has
ceased to be a party hereto pursuant to an Assignment and Assumption. Unless the
context clearly indicates otherwise, the term "Lenders" shall include the
Swingline Lender.
"LETTER OF CREDIT" shall mean any (i) Standby Letter of Credit
and (ii) Commercial Letter of Credit, in each case, issued or to be issued by an
Issuing Bank for the account of Borrower pursuant to Section 2.18.
"LETTER OF CREDIT EXPIRATION DATE" shall mean the date which
is five days prior to the Revolving Maturity Date.
"LIBOR RATE" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, the rate per annum determined by the
Administrative Agent to be the arithmetic mean of the offered rates for deposits
in dollars with a term comparable to such Interest Period that appears on the
Telerate British Bankers Assoc. Interest Settlement Rates Page (as defined
below) at approximately 11:00 a.m., London, England time, on the second full
Business Day preceding the first day of such Interest Period; provided, however,
that (i) if no comparable term for an Interest Period is available, the LIBOR
Rate shall be determined using the weighted average of the offered rates for the
two terms most nearly corresponding to such Interest Period and (ii) if there
shall at any time no longer exist a Telerate British Bankers Assoc. Interest
Settlement Rates Page, "LIBOR Rate" shall mean, with respect to each day during
each Interest Period pertaining to Eurodollar Borrowings comprising part of the
same Borrowing, the rate per annum equal to the rate at which the Administrative
Agent is offered deposits in dollars at approximately 11:00 a.m., London,
England time, two Business Days prior to the first day of such Interest Period
-24-
in the London interbank market for delivery on the first day of such Interest
Period for the number of days comprised therein and in an amount comparable to
its portion of the amount of such Eurodollar Borrowing to be outstanding during
such Interest Period. "TELERATE BRITISH BANKERS ASSOC. INTEREST SETTLEMENT RATES
PAGE" shall mean the display designated as Page 3750 on the Telerate System
Incorporated Service (or such other page as may replace such page on such
service for the purpose of displaying the rates at which dollar deposits are
offered by leading banks in the London interbank deposit market).
"LIEN" shall mean, with respect to any property, (a) any
mortgage, deed of trust, lien, pledge, encumbrance, claim, charge, assignment,
hypothecation, security interest or encumbrance of any kind or any arrangement
to provide priority or preference or any filing of any financing statement under
the UCC or any other similar notice of lien under any similar notice or
recording statute of any Governmental Authority (other than UCC financing
statements that purport to evidence voluntary liens for which no Loan Party
granted a Lien or are filed with the consent of the Collateral Agent (not to be
unreasonably withheld) in connection with a refinancing of the Loans and
Commitments in full satisfaction of this Agreement to the extent that no
security interest has attached with respect thereto), including any easement,
right-of-way or other encumbrance on title to Real Property, in each of the
foregoing cases whether voluntary or imposed by law, and any agreement to give
any of the foregoing (other than with the consent of the Collateral Agent (not
to be unreasonably withheld) in connection with a refinancing of the Loans and
Commitments in full satisfaction of this Agreement to the extent no security
interest has attached with respect thereto); (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 property; 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 Notes (if any), the Security Documents, the Subordination Agreement
and, solely for purposes of paragraph (e) of Section 8.01, the Fee Letter.
"LOAN PARTIES" shall mean Holdings, Borrower and the
Subsidiary Guarantors.
"LOANS" shall mean, as the context may require, a Revolving
Loan, a Tranche A Loan or a Swingline Loan and shall include any Incremental
Term Loans that are not Tranche A Loans contemplated by Section 2.19.
"MANAGEMENT SERVICES AGREEMENT" shall mean that certain
Management Services Agreement among Sponsor, Holdings and Borrower dated the
date hereof, as amended from time to time.
"MARGIN STOCK" shall have the meaning assigned to such term in
Regulation U.
"MATERIAL ADVERSE EFFECT" shall mean (a) a material adverse
effect on the business, results of operations, financial condition, assets or
liabilities of Borrower and its Subsidiaries, taken as a whole; (b) material
impairment of the rights of or benefits or remedies available to the Lenders or
the Collateral Agent under any Loan Document, taken as a whole; or (c) a
material adverse effect on the Collateral or the Liens in favor of the
Collateral Agent (for its benefit and for the benefit of the other Secured
Parties) on the Collateral or the priority of such Liens.
"MATERIAL INDEBTEDNESS" shall mean (a) the Senior Subordinated
Notes and (b) any other Indebtedness (other than the Loans and Letters of
Credit) or Hedging Obligations of Holdings or any of its Subsidiaries in an
aggregate outstanding principal amount exceeding $5,000,000. For purposes of
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determining Material Indebtedness, the "principal amount" in respect of any
Hedging Obligations of any Loan Party at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that such Loan Party would be
required to pay if the related Hedging Agreement were terminated at such time.
"MAXIMUM RATE" shall have the meaning assigned to such term in
Section 10.14.
"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.
"MEDICAID REGULATIONS" shall mean, collectively, (a) all
federal statutes (whether set forth in Title XIX of the Social Security Act or
elsewhere) regarding the medical assistance program established by Title XIX of
the Social Security Act and any statutes 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
statutes described in clause (a) above and all binding federal 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 (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 binding
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 a collective
reference to the Medicare, Medicaid, SCHIP and Family Care 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.
"MEDICAL REIMBURSEMENT PROGRAM PROVIDER AGREEMENTS" shall mean
an agreement entered into with a Medical Reimbursement Program to provide
services for program patients in accordance with the terms thereof and
applicable law.
"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 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.
"MEDICARE REGULATIONS" shall mean, collectively, all federal
statutes (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 statutes
succeeding thereto; together with 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,
without limitation, CMS, 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.
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"MORTGAGE" shall mean an agreement, including, but not limited
to, a mortgage, deed of trust or any other document, creating and evidencing a
Lien on a Mortgaged Property, which shall be substantially in a form reasonably
satisfactory to the Collateral Agent, in each case, with such schedules and
including such provisions as shall be necessary to conform such document to
applicable local or foreign law or as shall be customary under applicable local
or foreign law.
"MORTGAGED PROPERTY" shall mean each Real Property, if any,
which shall be subject to a Mortgage delivered after the Closing Date pursuant
to Section 5.11(c).
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan within
the meaning of Section 4001(a)(3) or Section 3(37) of ERISA (a) to which any
Company or any ERISA Affiliate is then making or accruing an obligation to make
contributions; (b) to which any Company or any ERISA Affiliate has within the
preceding five plan years made contributions; or (c) with respect to which any
Company could incur liability.
"NAIC" shall mean the National Association of Insurance
Commissioners, a national organization of insurance regulators.
"NET CASH PROCEEDS" shall mean:
(a) with respect to any Asset Sale (other than any issuance or
sale of Equity Interests), the cash proceeds received by (v) Holdings,
Borrower or any of the Subsidiary Guarantors and (w) the HMO
Subsidiaries, to the extent such amounts are dividended, distributed or
otherwise paid to Holdings, Borrower or a Subsidiary Guarantor by an
HMO Subsidiary for which Borrower shall not have delivered an Officers'
Certificate to the Administrative Agent on or prior to the date of such
dividend, distribution or payment stating that such amounts are
expected to be reinvested in an HMO Subsidiary within 180 days of the
date of such dividend, distribution or payment in accordance with
Section 6.04, (including cash proceeds subsequently received (as and
when received by Holdings or any of its Subsidiaries) in respect of
non-cash consideration initially received) net of (i) selling expenses
(including brokers' fees or commissions, legal, accounting and other
professional and transactional fees, transfer and similar taxes and
Borrower'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, against (x) any liabilities under any
indemnification obligations or purchase price adjustments associated
with such Asset Sale or (y) any other liabilities retained by Holdings
or any of its Subsidiaries associated with the properties sold in 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); (iii) Borrower's good faith estimate of payments
required to be made with respect to unassumed liabilities relating to
the properties sold within 180 days of such Asset Sale (provided that,
to the extent such cash proceeds are not used to make payments in
respect of such unassumed liabilities within 180 days of such Asset
Sale, such cash proceeds shall constitute Net Cash Proceeds); and (iv)
the principal amount, premium or penalty, if any, interest and other
amounts on any Indebtedness for borrowed money which is secured by a
Lien on the properties sold in such Asset Sale (so long as such Lien
was permitted to encumber such properties under the Loan Documents at
the time of such sale) and which is repaid with such proceeds (other
than any such Indebtedness assumed by the purchaser of such
properties);
(b) with respect to any Debt Issuance, any Equity Issuance or
any other issuance or sale of Equity Interests by Holdings or any of
its Subsidiaries, the cash proceeds thereof to
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Holdings or such Subsidiary, net of customary fees, commissions,
discounts, transfer taxes, costs and other expenses incurred in
connection therewith; and
(c) with respect to any Casualty Event, the cash insurance
proceeds, condemnation awards and other compensation received by (v)
Holdings, Borrower or any of the Subsidiary Guarantors and (w) the HMO
Subsidiaries, to the extent such amounts are dividended, distributed or
otherwise paid to Holdings, Borrower or a Subsidiary Guarantor by an
HMO Subsidiary for which Borrower shall not have delivered an Officers'
Certificate to the Administrative Agent on or prior to the date of such
dividend, distribution or payment stating that such amounts are
expected to be reinvested in an HMO Subsidiary within 180 days of the
date of such dividend, distribution or payment in accordance with
Section 6.04, in respect thereof, net of all reasonable costs and
expenses incurred in connection with the collection of such proceeds,
awards or other compensation and mandatory repayment of Indebtedness
(other than Loans) secured by a Lien on the properties subject to such
Casualty Event (so long as such Lien was permitted to encumber such
properties under the Loan Documents at the time of such Casualty
Event), in respect of such Casualty Event.
"NET WORKING CAPITAL" shall mean, at any time, Consolidated
Current Assets at such time minus Consolidated Current Liabilities at such time.
"NOTES" shall mean any promissory notes evidencing the Term
Loans, Revolving Loans or Swingline Loans issued pursuant to this Agreement, if
any, substantially in the form of Exhibit K-1, K-2 or K-3.
"OBLIGATIONS" shall mean (a) obligations of Borrower and the
other Loan Parties from time to time arising under or in respect of the due and
punctual payment of (i) the principal of and premium, if any, 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 Borrower and the other Loan
Parties under this Agreement in respect of any Letter of Credit, when and as
due, including payments in respect of Reimbursement Obligations, interest
thereon and obligations to provide cash collateral and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (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), of Borrower and the other Loan Parties under this
Agreement and the other Loan Documents, and (b) the due and punctual performance
of all covenants, agreements, obligations and liabilities of Borrower and the
other Loan Parties under or pursuant to this Agreement and the other Loan
Documents.
"OFAC" shall have the meaning assigned to such term in Section
3.22.
"OFFICERS' CERTIFICATE" shall mean a certificate executed by
the chairman of the Board of Directors (if an officer), the chief executive
officer, the president, vice president or one of the Financial Officers, each in
his or her official (and not individual) capacity.
"OIG" shall mean the Office of Inspector General of HHS and
any successor thereof.
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"ORGANIZATIONAL DOCUMENTS" shall mean, with respect to any
person, (i) in the case of any corporation, the certificate of incorporation and
by-laws (or similar documents) of such person, (ii) in the case of any limited
liability company, the certificate of formation and operating agreement (or
similar documents) of such person, (iii) in the case of any limited partnership,
the certificate of formation and limited partnership agreement (or similar
documents) of such person, (iv) in the case of any general partnership, the
partnership agreement (or similar document) of such person and (v) in any other
case, the functional equivalent of the foregoing.
"OTHER TAXES" shall mean all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or under any other Loan Document
or from the execution, delivery or enforcement of, or otherwise with respect to,
this Agreement or any other Loan Document.
"PARTICIPANT" shall have the meaning assigned to such term in
Section 10.04(d).
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"PERFECTION CERTIFICATE" shall mean a certificate in the form
of Exhibit L-1 or any other form approved by the Collateral Agent, as the same
shall be supplemented from time to time by a Perfection Certificate Supplement
or otherwise.
"PERFECTION CERTIFICATE SUPPLEMENT" shall mean a certificate
supplement in the form of Exhibit L-2 or any other form approved by the
Collateral Agent.
"PERMITTED ACQUISITION" shall mean any transaction or series
of related transactions for the direct or indirect (a) acquisition of all or
substantially all of the property of any person, or of any business or division
of any person; (b) acquisition of in excess of 50% of the Equity Interests of
any person, and otherwise causing such person to become a Subsidiary of such
person; or (c) merger or consolidation or any other combination with any person,
if each of the following conditions is met:
(i) no Default then exists or would result therefrom;
(ii) after giving effect to such transaction on a Pro
Forma Basis, Borrower shall be in compliance with all covenants set
forth in Section 6.10(a) as of the most recent Test Period (assuming,
for purposes of Section 6.10(a), that such transaction, and all other
Permitted Acquisitions consummated since the first day of the relevant
Test Period for Section 6.10(a) ending on or prior to the date of such
transaction, had occurred on the first day of such relevant Test
Period);
(iii) no Company shall, in connection with any such
transaction, assume or remain liable with respect to any Indebtedness
or other liability (including any material tax or ERISA liability) of
the related seller or the business, person or properties acquired,
except (A) to the extent permitted under Section 6.01 and (B)
obligations not constituting Indebtedness incurred in the ordinary
course of business and necessary or desirable to the continued
operation of the underlying properties, and any other such liabilities
or obligations not permitted to be assumed or otherwise supported by
any Company hereunder shall be paid in full or released as to the
business, persons or properties being so acquired on or before the
consummation of such acquisition;
(iv) the person or business to be acquired shall be, or
shall be engaged in, a business of the type that Borrower and the
Subsidiaries are permitted to be engaged in under Section 6.15,
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is located in the United States and the property acquired in connection
with any such transaction shall be made subject to the Lien of the
Security Documents to the extent required hereunder or thereunder and
shall be free and clear of any Liens, other than Permitted Liens;
(v) the Board of Directors of the person to be acquired
shall not have indicated publicly its opposition to the consummation of
such acquisition (which opposition has not been publicly withdrawn);
(vi) all transactions in connection therewith shall be
consummated in accordance with all applicable Requirements of Law in
all material respects;
(vii)with respect to any transaction involving Acquisition
Consideration of more than $10,000,000, unless the Administrative Agent
shall otherwise agree, Borrower shall have provided the Administrative
Agent (for the Lenders) with (A) historical financial statements for
the last three fiscal years (or, if less, the number of years since
formation) of the person or business to be acquired (audited if
available without undue cost or delay) and unaudited financial
statements thereof for the most recent interim period which are
available, (B) reasonably detailed projections for the succeeding five
years (or, if shorter, the period beginning with the date of the
consummation of such acquisition and ending on the Final Maturity Date)
pertaining to the person or business to be acquired and updated
projections for Borrower after giving effect to such transaction and
(C) a reasonably detailed description of all material information
relating thereto and copies of all material documentation pertaining to
such transaction;
(viii) at least 10 Business Days prior to the proposed
date of consummation of the transaction, Borrower shall have delivered
to the Agents and the Lenders an Officers' Certificate certifying that
(A) such transaction complies with this definition (which shall have
attached thereto reasonably detailed backup data and calculations
showing such compliance), and (B) such transaction could not reasonably
be expected to result in a Material Adverse Effect; and
(ix) the aggregate amount of the Acquisition Consideration
(exclusive of any amount financed with Excluded Issuances or Retained
Equity Proceeds) for all Permitted Acquisitions since the Closing Date
shall not exceed $40,000,000 plus the Retained Amount; provided that
any Equity Interests constituting all or a portion of such Acquisition
Consideration shall not have a cash dividend requirement on or prior to
the Final Maturity Date.
"PERMITTED HOLDERS" shall mean (a) Sponsor, (b) its Affiliates
(other than any of Sponsor's portfolio companies) and (c) Xxxxxxx X. Xxxxxx,
Xxxxxxx X. Xxxxxxxxxxxx, Xxxxx X. Xxxxxxxxx, X. Xxxxxx Blackshean, W. Xxxxxxx
Xxxxx and such persons' Related Parties; provided that the individuals and their
Related Persons in this clause (c) shall not be deemed to hold more than 25% in
the aggregate of all Voting Stock of Holdings or Equity Interests representing
more than 25% of the total economic interest in Holdings.
"PERMITTED LIENS" shall have the meaning assigned to such term
in Section 6.02.
"PERMITTED SUBORDINATED DEBT" shall mean unsecured
subordinated Indebtedness of Borrower having no amortization of principal and a
scheduled final maturity no earlier than the Final Maturity Date and other terms
and conditions and documentation (including subordination, interest, yield,
covenants, prepayments and events of default) as are consistent with similar
securities issued by similar issuers with comparable credit ratings in similar
markets.
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"PERMITTED SUBORDINATED DEBT INCURRENCE" shall have the
meaning assigned to such term in Section 6.01(q).
"PERMITTED TAX DISTRIBUTIONS" shall mean payments, dividends
or distributions by Borrower to Holdings in order to pay consolidated or
combined federal, state or local taxes not payable directly by Borrower or any
of its Subsidiaries which payments by Borrower are not in excess of the tax
liabilities that would have been payable by Borrower and its Subsidiaries on a
stand-alone basis.
"PERSON" shall mean any natural person, corporation, limited
liability company, trust, joint venture, association, 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 302 of ERISA which is maintained or
contributed to by any Company or its ERISA Affiliate or with respect to which
any Company could incur liability (including under Section 4069 of ERISA).
"POST-INCREASE REVOLVING LENDERS" shall have the meaning
assigned to such term in Section 2.19(d).
"PRE-INCREASE REVOLVING LENDERS" shall have the meaning
assigned to such term in Section 2.19(d).
"PREFERRED STOCK" shall mean, with respect to any person, any
and all preferred or preference Equity Interests (however designated) of such
person whether now outstanding or issued after the Closing Date.
"PREFERRED STOCK ISSUANCE" shall mean the issuance or sale by
Holdings or any of its Subsidiaries of any Preferred Stock after the Closing
Date (other than any Excluded Issuance, issuances by Subsidiaries solely to
other Loan Parties, or as expressly permitted by Section 6.01).
"PREMISES" shall have the meaning assigned thereto in any
applicable Mortgage.
"PRO FORMA BASIS" shall mean on a basis (i) in accordance with
GAAP and Regulation S-X or (ii) reflecting cost savings directly attributable to
the Transactions or Permitted Acquisition or Asset Sale or Permitted
Subordinated Debt Issuance related to actions implemented or to be implemented
and reasonably expected to be realized within one year of the date of the
Acquisition, Permitted Acquisition, Asset Sale or Permitted Subordinated Debt
Issuance that are supportable and quantifiable by the underlying accounting
records of such business, as certified by the Financial Officer and, in each
case, otherwise reasonably satisfactory to the Administrative Agent.
"PRO RATA PERCENTAGE" of any Revolving Lender at any time
shall mean the percentage of the total Revolving Commitments of all Revolving
Lenders represented by such Lender's Revolving Commitment.
"PROPERTY" shall mean any right, title or interest in or to
property or assets of any kind whatsoever, whether real, personal or mixed and
whether tangible or intangible and including Equity Interests or other ownership
interests of any person and whether now in existence or owned or hereafter
entered into or acquired, including all Real Property.
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"PROPERTY MATERIAL ADVERSE EFFECT" shall have the meaning
assigned thereto in a Mortgage.
"PURCHASE MONEY OBLIGATION" shall mean, for any person, the
obligations of such person in respect of Indebtedness (including Capital Lease
Obligations) incurred for the purpose of financing all or any part of the
purchase price of any property (including Equity Interests of any person) or the
cost of installation, construction or improvement of any property and any
refinancing thereof; provided, however, that (i) such Indebtedness is incurred
within one year after such acquisition of such property by such person and (ii)
the amount of such Indebtedness does not exceed 100% of the cost of such
acquisition, installation, construction or improvement, as the case may be.
"QUALIFIED CAPITAL STOCK" of any person shall mean any Equity
Interests of such person that are not Disqualified Capital Stock.
"REAL PROPERTY" shall mean, collectively, all right, title and
interest (including any leasehold, mineral or other estate) in and to any and
all parcels of or interests in real property owned, leased or operated by any
person, whether by lease, license or other means, together with, in each case,
all easements, hereditaments and appurtenances relating thereto, all
improvements and appurtenant fixtures and equipment, all general intangibles and
contract rights and other property and rights incidental to the ownership, lease
or operation thereof.
"REFINANCING" shall mean the repayment in full and the
termination of any commitment to make extensions of credit under all of the
outstanding indebtedness listed on Schedule 1.01(a) of Holdings or any of its
Subsidiaries.
"REGISTER" shall have the meaning assigned to such term in
Section 10.04(c).
"REGULATION D" shall mean Regulation D of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"REGULATION S-X" shall mean Regulation S-X promulgated under
the Securities Act.
"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.
"REGULATORY ACTION LEVEL" small mean the Regulatory Action
Level risk-based capital threshold, as defined by NAIC, or, in any state that
has not adopted the NAIC definition, as defined by the applicable state
Governmental Authority.
"REIMBURSEMENT OBLIGATIONS" shall mean Borrower's obligations
under Section 2.18(e) to reimburse LC Disbursements.
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"RELATED PARTIES" shall mean, with respect to any person, such
person's Affiliates and the partners, directors, officers, employees, agents and
advisors of such person and of such person's Affiliates.
"RELEASE" shall mean any spilling, leaking, seepage, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, disposing, depositing, dispersing, emanating or migrating of any
Hazardous Material in, into, onto or through the Environment.
"REQUIRED ADVANCES" means advances required by HMO Regulators
to be made by any member of the Consolidated Group to a Contract Provider.
"REQUIRED CLASS LENDERS" shall mean (i) with respect to each
Class of Term Loans, Lenders having more than 50% of all Term Loans of such
Class outstanding and (ii) with respect to Revolving Loans, Required Revolving
Lenders.
"REQUIRED LENDERS" shall mean Lenders having more than 50% of
the sum of all Loans outstanding, LC Exposure and unused Revolving and Term Loan
Commitments.
"REQUIRED REVOLVING LENDERS" shall mean Lenders having more
than 50% of all Revolving Commitments or, after the Revolving Commitments have
terminated, more than 50% of all Revolving Exposure.
"REQUIREMENTS OF LAW" shall mean, collectively, any and all
requirements of any Governmental Authority including any and all laws,
judgments, orders, decrees, ordinances, rules, regulations, statutes or case law
(including, without limitation, all applicable HMO Regulations, Medicare
Regulations and Medicaid Regulations).
"RESPONSE" shall mean (a) "response" as such term is defined
in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required by any
Governmental Authority or voluntarily undertaken to (i) clean up, remove, treat,
xxxxx or in any other way address any Hazardous Material in the environment;
(ii) prevent the Release or threat of Release, or minimize the further Release,
of any Hazardous Material; or (iii) perform studies and investigations in
connection with, or as a precondition to, clause (i) or (ii) above.
"RESPONSIBLE OFFICER" of any person shall mean any executive
officer or Financial Officer of such person and any other officer or similar
official thereof with responsibility for the administration of the obligations
of such person in respect of this Agreement.
"RETAINED AMOUNT" shall mean at any time the aggregate amount
of Excess Cash Flow that has been retained by Borrower pursuant to Section
2.10(g) minus the aggregate amounts paid pursuant to Section 6.04(j) and
designated by Borrower as being attributable to Retained Amount.
"RETAINED EQUITY PROCEEDS" shall mean at any time the
aggregate amount of Net Cash Proceeds from Equity Issuances that have not been
required to be applied by Holdings or Borrower to permanently prepay the Term
Loans or Revolving Loans (with a corresponding reduction in Revolving
Commitments) pursuant to Section 2.10(e) minus the aggregate amounts paid
pursuant to Sections 6.04(j) and (l), 6.08(b) and 6.11(a) and designated by
Borrower as being paid for such purpose, without duplication.
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"REVOLVING AVAILABILITY PERIOD" shall mean the period from and
including the Closing Date to but excluding the earlier of (i) the Business Day
preceding the Revolving Maturity Date and (ii) the date of termination of the
Revolving Commitments.
"REVOLVING BORROWING" shall mean a Borrowing comprised of
Revolving Loans.
"REVOLVING COMMITMENT" shall mean, with respect to each
Lender, the commitment, if any, of such Lender to make Revolving Loans hereunder
up to the amount set forth on Schedule I to the Lender Addendum executed and
delivered by such Lender or by an Increase Joinder, or in the Assignment and
Assumption pursuant to which such Lender assumed its Revolving Commitment, as
applicable, as the same may be (a) reduced from time to time pursuant to Section
2.07 and (b) reduced or increased from time to time pursuant to assignments by
or to such Lender pursuant to Section 10.04. The aggregate amount of the
Lenders' Revolving Commitments on the Closing Date is $15,000,000.
"REVOLVING EXPOSURE" shall mean, with respect to any 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 LC Exposure, plus the aggregate amount at such of such Lender's
Swingline Exposure.
"REVOLVING LENDER" shall mean a Lender with a Revolving
Commitment.
"REVOLVING LOAN" shall mean a Loan made by the Lenders to
Borrower pursuant to Section 2.01(b). Each Revolving Loan shall either be an ABR
Revolving Loan or a Eurodollar Revolving Loan.
"REVOLVING MATURITY DATE" shall mean the date which is five
years after the Closing Date or, if such date is not a Business Day, the first
Business Day thereafter.
"RISK-BASED CAPITAL" means, with respect to each HMO
Subsidiary, at any time, the amount of capital that an HMO Subsidiary must hold
in reserve, as determined by the risk-based capital formula promulgated by the
NAIC.
"ROLLOVER EQUITY" shall mean the continued equity interest of
certain existing stockholders (who shall include those persons listed in clause
(c) of the definition of Permitted Holders) of Borrower in Holdings in an amount
not less than $93.5 million on terms and conditions identical to the Equity
Financing or otherwise satisfactory to the Administrative Agent in its
reasonable judgment.
"SALE AND LEASEBACK TRANSACTION" has the meaning assigned to
such term in Section 6.03.
"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.
"SCHIP" shall mean the State Children's Health Insurance
Program, a federal/state matching program that provides health care coverage to
children not otherwise covered by Medicaid or other insurance programs and that
may be administered by states through their Medicaid programs.
"SECURED OBLIGATIONS" shall mean (a) the Obligations, and (b)
the due and punctual payment and performance of all obligations of Borrower and
the other Loan Parties under each Hedging
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Agreement relating to the Facilities entered into with any counterparty that is
a Secured Party at the time such Hedging Agreement is entered into.
"SECURED PARTIES" shall mean, collectively, the Administrative
Agent, the Collateral Agent, each other Agent, the Lenders and each party to a
Hedging Agreement related to the Loans if at the date of entering into such
Hedging Agreement such person was a Lender or an Affiliate of a Lender and such
person executes and delivers to the Administrative Agent a letter agreement in
form and substance reasonably acceptable to the Administrative Agent pursuant to
which such person (i) appoints the Collateral Agent as its agent under the
applicable Loan Documents and (ii) agrees to be bound by the provisions of
Sections 10.03 and 10.09.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SECURITIES COLLATERAL" shall have the meaning assigned to
such term in the Security Agreement.
"SECURITY AGREEMENT" shall mean a Security Agreement
substantially in the form of Exhibit M among the Loan Parties and Collateral
Agent for the benefit of the Secured Parties.
"SECURITY AGREEMENT COLLATERAL" shall mean all property
pledged or granted as collateral pursuant to the Security Agreement delivered
(a) on the Closing Date or (b) thereafter pursuant to Section 5.11.
"SECURITY DOCUMENTS" shall mean the Security Agreement, any
Mortgages and each other security document or pledge agreement delivered in
accordance with applicable local or foreign law to grant a valid, perfected
security interest in any property as collateral for the Secured Obligations, and
all UCC or other financing statements or instruments of perfection required by
this Agreement, the Security Agreement, any Mortgage or any other such security
document or pledge agreement to be filed with respect to the security interests
in property and fixtures created pursuant to the Security Agreement or any
Mortgage and any other document or instrument utilized to pledge or grant or
purport to pledge or grant a security interest or lien on any property as
collateral for the Secured Obligations.
"SENIOR LEVERAGE RATIO" shall mean, at any date of
determination, the ratio of (i) Consolidated Indebtedness less the aggregate
amount of Subordinated Indebtedness, in each case of Borrower and its
Subsidiaries on such date to (ii) Consolidated EBITDA for the Excess Cash Flow
Period then most recently ended.
"SENIOR SUBORDINATED NOTE AGREEMENT" shall mean any indenture,
note purchase agreement or other agreement pursuant to which the Senior
Subordinated Notes are issued as in effect on the date hereof and thereafter
amended from time to time subject to the requirements of this Agreement.
"SENIOR SUBORDINATED NOTE DOCUMENTS" shall mean the Senior
Subordinated Notes, the Senior Subordinated Note Agreement, the Senior
Subordinated Note Guarantees, the Subordinated Agreement and all other documents
executed and delivered with respect to the Senior Subordinated Notes or the
Senior Subordinated Note Agreement.
"SENIOR SUBORDINATED NOTE GUARANTEES" shall mean the
guarantees of Holdings and the Subsidiary Guarantors pursuant to the Senior
Subordinated Note Agreement.
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"SENIOR SUBORDINATED NOTES" shall mean Borrower's 15% Senior
Subordinated Notes due 2012 issued pursuant to the Senior Subordinated Note
Agreement.
"SIGNIFICANT SUBSIDIARY" shall mean any Subsidiary of Borrower
that individually, or any group of Subsidiaries of Borrower that together, would
be a "Significant Subsidiary" of Borrower within the meaning of Rule 1-02 under
Regulation S-X promulgated by the Securities and Exchange Commission; provided
that for the purposes of this Agreement, "5 percent" shall be substituted for
each use of "10 percent" in such definition.
"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
promulgated thereunder.
"SPONSOR" shall mean GTCR Xxxxxx Xxxxxx, L.L.C and GTCR Xxxxxx
Xxxxxx Fund VIII.
"STANDBY LETTER OF CREDIT" shall mean any standby letter of
credit or similar instrument issued for the purpose of supporting (a) workers'
compensation liabilities of Borrower or any of its Subsidiaries, (b) the
obligations of third-party insurers of Borrower or any of its Subsidiaries
arising by virtue of the laws of any jurisdiction requiring third-party insurers
to obtain such letters of credit, (c) performance, payment, deposit or surety
obligations of Borrower or any of its Subsidiaries if required by a Requirement
of Law or in accordance with custom and practice in the industry, (d)
Indebtedness of Borrower or any of its Subsidiaries permitted to be incurred
under Section 6.01 or such other obligations as may be agreed by the Issuing
Bank.
"XXXXX LAW" means Section 1877 of the Social Security Act as
set forth at Section 1395nn of 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.
"STATUTORY RESERVES" shall mean for any Interest Period for
any Eurodollar Borrowing in dollars, the average maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period under Regulation D by member banks of the
United States Federal Reserve System in New York City with deposits exceeding
one billion dollars against "Eurocurrency liabilities" (as such term is used in
Regulation D). Eurodollar Borrowings shall be deemed to constitute Eurodollar
liabilities and to be subject to such reserve requirements without benefit of or
credit for proration, exceptions or offsets which may be available from time to
time to any Lender under Regulation D.
"SUBORDINATED INDEBTEDNESS" shall mean Indebtedness of
Borrower or any Guarantor that is by its terms subordinated in right of payment
to the Obligations of Borrower and such Guarantor, as applicable, including the
Senior Subordinated Notes.
"SUBORDINATION AGREEMENT" shall mean the Subordination
Agreement, dated as of March 1, 2005 among the Loan Parties, American Capital
Strategies, Ltd. and the Administrative Agent, as in effect on the Closing Date
and as the same may be modified, supplemented, restated and/or amended from time
to time in accordance with the terms hereof and thereof.
"SUBSIDIARY" shall mean, with respect to any person (the
"PARENT") at any date, (i) any person the accounts of which would be
consolidated with those of the parent in the parent's consolidated
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financial statements if such financial statements were prepared in accordance
with GAAP as of such date, (ii) any other corporation, limited liability
company, association or other business entity of which securities or other
ownership interests representing more than 50% of the Voting Stock thereof are,
as of such date, owned, controlled or held by the parent and/or one or more
subsidiaries of the parent, (iii) any partnership (a) the sole general partner
or the managing general partner of which is the parent and/or one or more
subsidiaries of the parent or (b) the only general partners of which are the
parent and/or one or more subsidiaries of the parent and (iv) any other person
that is otherwise Controlled by the parent and/or one or more subsidiaries of
the parent. Unless the context requires otherwise, "Subsidiary" refers to a
Subsidiary of Borrower.
"SUBSIDIARY GUARANTOR" shall mean each Subsidiary listed on
Schedule 1.01(b), and each other Subsidiary that is or becomes a party to this
Agreement pursuant to Section 5.11(b)(ii).
"SURVEY" shall mean a survey of any Mortgaged Property (and
all improvements thereon) which is (a) (i) prepared by a surveyor or engineer
licensed to perform surveys in the jurisdiction where such Mortgaged Property is
located, (ii) dated (or redated) not earlier than six months prior to the date
of delivery thereof unless there shall have occurred within six months prior to
such date of delivery any exterior construction on the site of such Mortgaged
Property or any easement, right of way or other interest in the Mortgaged
Property has been granted or become effective through operation of law or
otherwise with respect to such Mortgaged Property which, in either case, can be
depicted on a survey, in which events, as applicable, such survey shall be dated
(or redated) after the completion of such construction or if such construction
shall not have been completed as of such date of delivery, not earlier than 20
days prior to such date of delivery, or after the grant or effectiveness of any
such easement, right of way or other interest in the Mortgaged Property, (iii)
certified by the surveyor (in a manner reasonably acceptable to the
Administrative Agent) to the Administrative Agent, the Collateral Agent and the
Title Company, (iv) complying in all material respects with the minimum detail
requirements of the American Land Title Association as such requirements are in
effect on the date of preparation of such survey and (v) sufficient for the
Title Company to remove all standard survey exceptions from the title insurance
policy (or commitment) relating to such Mortgaged Property and issue the
endorsements of the type required by Section 4.01(o)(iii) or (b) otherwise
reasonably acceptable to the Collateral Agent.
"SWINGLINE COMMITMENT" shall mean the commitment of the
Swingline Lender to make loans pursuant to Section 2.17, as the same may be
reduced from time to time pursuant to Section 2.07 or Section 2.17. The amount
of the Swingline Commitment shall initially be $2,500,000, but shall in no event
exceed the Revolving Commitment.
"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 Lender at any time shall equal its Pro Rata Percentage
of the aggregate Swingline Exposure at such time.
"SWINGLINE LENDER" shall have the meaning assigned to such
term in the preamble hereto.
"SWINGLINE LOAN" shall mean any loan made by the Swingline
Lender pursuant to Section 2.17.
"SYNDICATION AGENT" shall have the meaning assigned to such
term in the preamble hereto.
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"TAX RETURN" shall mean all returns, statements, filings,
attachments and other documents or certifications required to be filed in
respect of Taxes.
"TAXES" shall mean all present or future taxes, levies,
imposts, duties, deductions, withholdings, assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.
"TERM BORROWING" shall mean a Borrowing comprised of Term
Loans.
"TERM LOAN COMMITMENTS" shall mean the Tranche A Commitment
and any Incremental Term Loan Commitment that is not a Tranche A Commitment.
"TERM LOAN LENDER" shall mean a Lender with a Term Loan
Commitment or an outstanding Term Loan.
"TERM LOAN REPAYMENT DATE" shall have the meaning assigned to
such term in Section 2.09.
"TERM LOANS" shall mean the Tranche A Loans and any
Incremental Term Loans that are not Tranche A Loans, collectively.
"TEST PERIOD" shall mean, at any date of determination, the
four consecutive fiscal quarters of Borrower then last ended (in each case taken
as one accounting period) for which financial statements have been or are
required to be delivered pursuant to Section 5.01(a) or (b).
"TITLE COMPANY" shall mean any title insurance company as
shall be retained by Borrower and reasonably acceptable to the Administrative
Agent.
"TITLE POLICY" shall mean a policy of title insurance (or
marked up title insurance commitment having the effect of a policy of title
insurance) insuring the Lien of a Mortgage as a valid first mortgage Lien on the
Mortgaged Property and fixtures described therein in the amount equal to not
less than 100% of the fair market value of such Mortgaged Property and fixtures,
which policy (or such marked up commitment) shall (A) be issued by the Title
Company, (B) to the extent necessary, include such reinsurance arrangements
(with provisions for direct access, if necessary) as shall be reasonably
acceptable to the Collateral Agent, (C) contain a "tie in" or "cluster"
endorsement, if available under applicable law (i.e., policies which insure
against losses regardless of location or allocated value of the insured property
up to a stated maximum coverage amount), (D) have been supplemented by such
endorsements (or where such endorsements are not available, opinions of special
counsel, architects or other professionals reasonably acceptable to the
Collateral Agent) as shall be reasonably requested by the Collateral Agent
(including endorsements on matters relating to usury, first loss, last dollar,
zoning, contiguity, revolving credit, doing business, non-imputation, public
road access, survey, variable rate, environmental lien, subdivision, mortgage
recording tax, separate tax lot, revolving credit, and so-called comprehensive
coverage over covenants and restrictions), and (E) contain no exceptions to
title other than exceptions acceptable to the Collateral Agent.
"TOTAL ADJUSTED CAPITAL" means, with respect to each HMO
Subsidiary, at any time, the Total Adjusted Capital (as defined by the NAIC on
the date of determination and as determined in accordance with SAP) of such HMO
Subsidiary.
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"TOTAL LEVERAGE RATIO" shall mean, at any date of
determination, the ratio of Consolidated Indebtedness on such date to
Consolidated EBITDA for the Test Period then most recently ended.
"TRANCHE A COMMITMENT" shall mean, with respect to each
Lender, the commitment, if any, of such Lender to make a Tranche A Loan
hereunder on the Closing Date in the amount set forth on Schedule I to the
Lender Addendum executed and delivered by such Lender or by an Increase Joinder.
The initial aggregate amount of the Lenders' Tranche A Commitments is
$165,000,000.
"TRANCHE A LENDER" shall mean a Lender with a Tranche A
Commitment or an outstanding Tranche A Loan.
"TRANCHE A LOAN" shall mean the term loans made by the Lenders
to Borrower pursuant to Section 2.01(a)(i) or by an Increase Joinder. Each
Tranche A Loan shall be either an ABR Term Loan or a Eurodollar Term Loan.
"TRANCHE A MATURITY DATE" shall mean the date which is six
years after the Closing Date or, if such date is not a Business Day, the first
Business Day thereafter.
"TRANSACTION DOCUMENTS" shall mean the Acquisition Documents,
the Senior Subordinated Note Documents and the Loan Documents.
"TRANSACTIONS" shall mean, collectively, the transactions to
occur on or prior to the Closing Date pursuant to the Transaction Documents,
including (a) the consummation of the Acquisition; (b) the execution, delivery
and performance of the Loan Documents and the initial borrowings hereunder; (c)
the Refinancing; (d) the Equity Financing; (e) the issuance of the Rollover
Equity; (f) the issuance of $35,000,000 in aggregate principal amount of the
Senior Subordinated Notes; (g) the repurchase of (i) 15.234% of the outstanding
Equity Interests of Health Spring Management, Inc., a Tennessee corporation and
Health Spring USA, LLC, a Tennessee limited liability company, in each case from
Baptist Hospital System, Inc., and (ii) 18.297% of the outstanding Equity
Interests of Texas Health Spring I, LLC, a Texas limited liability company, from
the various holders thereof; and (h) the payment of all fees, costs and expenses
to be paid on or prior to the Closing Date and owing in connection with the
foregoing.
"TRANSFERRED GUARANTOR" shall have the meaning assigned to
such term in Section 7.09.
"TYPE," when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBOR Rate or the
Alternate Base Rate.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time (except as otherwise specified) in any applicable state or
jurisdiction.
"UNITED STATES" shall mean the United States of America.
"VOTING STOCK" shall mean, with respect to any person, any
class or classes of Equity Interests pursuant to which (or for purposes of the
definition of "Affiliate" only, any class or classes of Equity Interests freely
convertible at the holder's option at any time into a class of Equity Interest
pursuant to which), the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the Board of Directors of
such person.
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"WHOLLY OWNED SUBSIDIARY" shall mean, as to any person, (a)
any corporation 100% of whose capital stock (other than directors' qualifying
shares or other nominal amount of capital stock required to comply with local
laws) is at the time owned by such person and/or one or more Wholly Owned
Subsidiaries of such person and (b) any partnership, association, joint venture,
limited liability company or other entity in which such person and/or one or
more Wholly Owned Subsidiaries of such person have a 100% equity interest at
such time.
"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.
SECTION 1.02 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 "Eurodollar Loan") or by Class
and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by Class (e.g., a "Revolving Borrowing," "Borrowing
of Tranche A Loans") or by Type (e.g., a "Eurodollar Borrowing") or by Class and
Type (e.g., a "Eurodollar Revolving Borrowing").
SECTION 1.03 TERMS GENERALLY. The definitions of terms herein
shall apply equally to 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." Unless the context requires otherwise (a) any definition of or
reference to any Loan Document, agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any person shall be construed to include such
person's permitted successors and assigns, (c) the words "herein," "hereof" and
"hereunder," and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, (e) any reference to any law or regulation herein shall refer to
such law or regulation as amended, modified or supplemented from time to time,
(f) the words "asset" and "property" shall be construed to have 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, (g) "on,"
when used with respect to the Mortgaged Property or any property adjacent to the
Mortgaged Property, means "on, in, under, above or about," and (h) the phrase
"to the knowledge of" or similar phrases shall mean, where used in reference to
Holdings or any of its Affiliates, the actual or constructive knowledge of any
Responsible Officer.
SECTION 1.04 ACCOUNTING TERMS; GAAP. Except as otherwise
expressly provided herein, all financial statements to be delivered pursuant to
this Agreement shall be prepared in accordance with GAAP as in effect as set
forth in the next sentence unless otherwise agreed to by Borrower and the
Required Lenders. In the event that any "Accounting Change" (as defined below)
shall occur and such change results in a change in the method of calculation of
financial covenants, standards or terms in this Agreement, then Borrower and the
Administrative Agent agree to enter into negotiations in order to amend such
provisions of this Agreement so as to equitably reflect such Accounting Change
with the desired result that the criteria for evaluating Borrower's financial
condition shall be the same after such Accounting Change as if such Accounting
Change had not occurred. Until such time as such amendment shall have been
executed and delivered by Borrower and the Required Lenders, all financial
covenants,
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standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Change had not occurred. "ACCOUNTING CHANGE"
refers to any change in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the Securities and Exchange Commission (or successors thereto or
agencies with similar functions).
SECTION 1.05 RESOLUTION OF DRAFTING AMBIGUITIES. Each Loan
Party acknowledges and agrees that it was represented by counsel in connection
with the execution and delivery of the Loan Documents to which it is a party,
that it and its counsel reviewed and participated in the preparation and
negotiation hereof and thereof and that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation hereof or thereof.
ARTICLE II
THE CREDITS
SECTION 2.01 COMMITMENTS. Subject to the terms and conditions
and relying upon the representations and warranties herein set forth:
(a) each Tranche A Lender severally and not jointly agrees to
make a Tranche A Loan to Borrower on the Closing Date in the principal
amount not to exceed its Tranche A Commitment; and
(b) each Revolving Lender, severally and not jointly, agrees
to make Revolving Loans to Borrower, at any time and from time to time
during the Revolving Availability Period in accordance with the terms
hereof, in an aggregate principal amount at any time outstanding that
will not result in such Lender's Revolving Exposure exceeding such
Lender's Revolving Commitment; provided that no more than $5,000,000 of
Revolving Loans may be borrowed on the Closing Date.
Amounts paid or prepaid in respect of Term Loans may not be
reborrowed. Within the limits set forth in clause (b) above and subject to the
terms, conditions and limitations set forth herein, Borrower may borrow, pay or
prepay and reborrow Revolving Loans.
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 that the failure of any
Lender to make its 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
2.18(e)(ii), (x) ABR Loans comprising any Borrowing shall be in an aggregate
principal amount that is (i) an integral multiple of $250,000 and not less than
$250,000 or (ii) equal to the remaining available balance of the applicable
Commitments and (y) the Eurodollar Loans comprising any Borrowing shall be in an
aggregate principal amount that is (i) an integral multiple of $250,000 and not
less than $250,000 or (ii) equal to the remaining available balance of the
applicable Commitments.
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(b) Subject to Sections 2.11 and 2.12, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as 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 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 that Borrower shall not be entitled to request any Borrowing that, if
made, would result in more than eight Eurodollar Borrowings outstanding
hereunder at any one 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 deemed made pursuant to
Section 2.18(e)(ii), 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 12:00 noon, New York City time, and the Administrative Agent shall
promptly credit the amounts so received to an account as directed by Borrower in
the applicable Borrowing Request maintained with the Administrative Agent 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.
(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) above, and the Administrative Agent may, in
reliance upon such assumption, make available to 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, each of such Lender and Borrower
severally agrees to repay to the Administrative Agent forthwith on written
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to Borrower until the date such
amount is repaid to the Administrative Agent at (i) in the case of Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation. 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, and
Borrower's obligation to repay the Administrative Agent such corresponding
amount pursuant to this Section 2.02(d) shall cease.
(e) Notwithstanding any other provision of this Agreement,
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Revolving Maturity Date, Tranche A Maturity Date or Incremental Term
Loan Maturity Date, as applicable.
SECTION 2.03 BORROWING PROCEDURE. To request a Revolving
Borrowing or Term Borrowing, Borrower shall deliver, by hand delivery or
telecopier, a duly completed and executed Borrowing Request to the
Administrative Agent (i) in the case of a Eurodollar Borrowing, not later than
12:00 noon, New York City time, three Business Days before the date of the
proposed Borrowing or (ii) in the case of an ABR Borrowing, not later than 10:00
a.m., New York City time, on the date of the proposed Borrowing. Each Borrowing
Request shall be irrevocable and shall specify the following information in
compliance with Section 2.02:
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(a) whether the requested Borrowing is to be a Borrowing of
Revolving Loans or Tranche A Loans or Incremental Term Loans that are
not Tranche A Loans;
(b) the aggregate amount of such Borrowing;
(c) the date of such Borrowing, which shall be a Business Day;
(d) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; provided that until 5 days after the Closing
Date, all Borrowings shall be ABR Borrowings;
(e) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period";
(f) the location and number of Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.02(c); and
(g) that the conditions set forth in Sections 4.02(b)-(c) have
been satisfied as of the date of the notice.
If no election as to the Type of Borrowing is specified, then
the requested Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested Eurodollar Borrowing, then Borrower
shall be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04 EVIDENCE OF DEBT; REPAYMENT OF LOANS.
(a) Promise to Repay. Borrower hereby unconditionally promises
to pay (i) to the Administrative Agent for the account of each Term Loan Lender,
the principal amount of each Term Loan of such Term Loan Lender as provided in
Section 2.09, (ii) to the Administrative Agent for the account of each Revolving
Lender, the then unpaid principal amount of each Revolving Loan of such
Revolving Lender on the Revolving Maturity Date and (iii) to the Swingline
Lender, the then unpaid principal amount of each Swingline Loan on the earlier
of (x) the Revolving Maturity Date and (y) the first date after such Swingline
Loan is made that is the 15th or last day of a calendar month and is at least
two Business Days after such Swingline Loan is made; provided that solely in the
case of repayments pursuant to clause (iii) (y) and so long as notice is given
pursuant to Section 2.03 and the conditions in Section 4.02 are satisfied, such
repayments may be made by converting Swingline Loans into Revolving Loans;
provided further that on each date that a Revolving Borrowing is made, Borrower
shall repay all Swingline Loans that were outstanding on the date such Borrowing
was requested.
(b) Lender and Administrative Agent Records. Each Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
the Indebtedness of 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. The
Administrative Agent shall maintain accounts in which it will record (i) the
amount of each Loan made hereunder, the Type and Class thereof and the Interest
Period applicable thereto; (ii) the amount of any principal or interest due and
payable or to become due and payable from Borrower to each Lender hereunder; and
(iii) the amount of any sum received by the Administrative Agent hereunder for
the account of the Lenders and each Lender's share thereof. The entries made in
the accounts maintained pursuant to this
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paragraph shall be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided 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 Borrower to repay the Loans in accordance
with their terms.
(c) Promissory Notes. Any Lender by written notice to Borrower
(with a copy to the Administrative Agent) may request that Loans of any Class
made by it be evidenced by a Note. In such event, Borrower shall prepare,
execute and deliver to such Lender a Note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered permitted
assigns) in the applicable form. Thereafter, the Loans evidenced by such Note
and interest thereon shall at all times (including after assignment pursuant to
Section 10.04) be represented by one or more Notes in such form payable to the
order of the payee named therein (or, if such Note is a registered note, to such
payee and its registered permitted assigns).
SECTION 2.05 FEES.
(a) Commitment Fee. Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee (a
"COMMITMENT FEE") equal to 0.50% per annum on the average daily unused amount of
the Revolving Commitment of such Lender during the period from and including the
date hereof to but excluding the date on which the Revolving Commitment
terminates. Accrued Commitment Fees shall be payable in arrears (A) on the last
Business Day of March, June, September and December of each year, commencing on
the last Business Day of March 2005, and (B) on the date on which the Revolving
Commitment terminates. Commitment Fees shall be computed on the basis of a year
of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). For purposes of computing
Commitment Fees, a Revolving Commitment of a Lender shall be deemed to be used
to the extent of the outstanding Revolving Loans and LC Exposure of such Lender
(and the Swingline Exposure of such Lender shall be disregarded for such
purpose); provided that Defaulting Lenders shall not be entitled to receive any
Commitment Fee accrued and unpaid during a Default Period.
(b) Administrative Agent Fees. Borrower agrees to pay to the
Administrative Agent, for its own account, the administrative fees set forth in
the Fee Letter or such other fees payable in the amounts and at the times
separately agreed upon between Borrower and the Administrative Agent (the
"ADMINISTRATIVE AGENT FEES").
(c) LC and Fronting Fees. Borrower agrees to pay (i) to the
Administrative Agent for the account of each Revolving Lender a participation
fee ("LC PARTICIPATION FEE") with respect to its participations in Letters of
Credit, which shall accrue at a rate equal to the Applicable Margin from time to
time used to determine the interest rate on Eurodollar Revolving Loans pursuant
to Section 2.06 on the average daily amount of such Lender's LC Exposure
(excluding any portion thereof attributable to Reimbursement Obligations) during
the period from and including the Closing Date to but excluding the later of the
date on which such Lender's Revolving Commitment terminates and the date on
which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a
fronting fee ("FRONTING FEE"), which shall accrue at the rate of 0.25% per annum
on the average daily amount of the LC Exposure (excluding any portion thereof
attributable to Reimbursement Obligations) during the period from and including
the Closing Date to but excluding the later of the date of termination of the
Revolving Commitments and the date on which there ceases to be any LC Exposure,
as well as the Issuing Bank's customary and reasonable fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or processing
of drawings thereunder. Accrued LC Participation Fees and Fronting Fees shall be
payable
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in arrears (i) on the last Business Day of March, June, September and December
of each year, commencing on the last Business Day of March 2005, and (ii) on the
date on which the Revolving Commitments terminate. Any such fees accruing after
the date on which the Revolving Commitments terminate shall be payable on
demand. Any other fees payable to the Issuing Bank pursuant to this paragraph
shall be payable on the last Business Day of March, June, September or December.
All LC Participation Fees and Fronting Fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(d) Generally. All Fees shall be paid on the dates due, in
immediately available funds in dollars, to the Administrative Agent for
distribution, if and as appropriate, among the Lenders (other than Defaulting
Lenders during a Default Period with respect thereto), except that Borrower
shall pay the Fronting Fees directly to the Issuing Bank. Once paid, none of the
Fees shall be refundable under any circumstances.
SECTION 2.06 INTEREST ON LOANS.
(a) ABR Loans. Subject to the provisions of Section 2.06(c),
the Loans comprising each ABR Borrowing, including each Swingline Loan, shall
bear interest at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin in effect from time to time.
(b) Eurodollar Loans. Subject to the provisions of Section
2.06(c), the Loans comprising each Eurodollar Borrowing shall bear interest at a
rate per annum equal to the Adjusted LIBOR Rate for the Interest Period in
effect for such Borrowing plus the Applicable Margin in effect from time to
time.
(c) Default Rate. Notwithstanding the foregoing, (i) if any
principal of or interest on any Loan or any fee or other amount payable by
Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount for so long as such amount
remains overdue and (ii) upon the occurrence and during the continuation of an
Event of Default under Section 8.01(g) or (h), all Obligations, in each case
shall, to the extent permitted by applicable law, bear interest, after as well
as before judgment, at a rate per annum equal to (i) in the case of overdue
principal of or interest on any Loan, 2% plus the rate otherwise applicable to
such Loan as provided in the preceding paragraphs of this Section 2.06 or (ii)
in the case of any other amount, 2% plus the rate applicable to ABR Revolving
Loans as provided in Section 2.06(a) (in either case, the "DEFAULT RATE").
(d) Interest Payment Dates. Accrued interest on each Loan
shall be payable in arrears on each Interest Payment Date for such Loan;
provided that (i) interest accrued pursuant to Section 2.06(c) shall be payable
on demand, (ii) in the event of any repayment or prepayment of any Loan (other
than a prepayment of an ABR Revolving Loan or a Swingline Loan), accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
(e) Interest Calculation. All interest hereunder shall be
computed on the basis of a year of 360 days, except that interest computed by
reference to the Alternate Base Rate shall be computed on the basis of a year of
365 days (or 366 days in a leap year), and in each case shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day). The applicable Alternate Base Rate or Adjusted LIBOR Rate shall be
determined by the Administrative Agent in accordance with the provisions of this
Agreement and such determination shall be conclusive absent manifest error.
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SECTION 2.07 TERMINATION AND REDUCTION OF COMMITMENTS.
(a) Termination of Commitments. The Tranche A Term Loan
Commitments shall automatically terminate at 5:00 p.m., New York City time, on
the Closing Date. The Revolving Commitments, the Swingline Commitment and the LC
Commitment shall automatically terminate on the Revolving Maturity Date.
(b) Optional Terminations and Reductions. At its option,
Borrower may at any time terminate, or from time to time permanently reduce, the
Revolving Commitments; provided that (i) each reduction of the Revolving
Commitments shall be in an amount that is an integral multiple of $250,000 and
not less than $250,000 and (ii) the Revolving Commitments shall not be
terminated or reduced if, after giving effect to any concurrent prepayment of
the Revolving Loans in accordance with Section 2.10, the aggregate amount of
Revolving Exposures would exceed the aggregate amount of Revolving Commitments.
(c) Borrower Notice. Borrower shall notify the Administrative
Agent in writing of any election to terminate or reduce Revolving Commitments
under Section 2.07(b) at least three Business Days prior to the effective date
of such termination or reduction, specifying such election and the effective
date thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Revolving Lenders of the contents thereof. Each notice
delivered by Borrower pursuant to this Section shall be irrevocable; provided
that a notice of termination of Revolving Commitments delivered by Borrower may
state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by Borrower (by notice to
the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments of
any Class shall be permanent. Each reduction of Revolving Commitments shall be
made ratably among the Revolving Lenders in accordance with their respective
Revolving Commitments.
SECTION 2.08 INTEREST ELECTIONS.
(a) Generally. Each Revolving Borrowing and Term Borrowing
initially (subject to Section 2.03(d)) shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request. Ten days
after the Closing Date and thereafter, Borrower may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing. Notwithstanding anything to the contrary, Borrower shall not be
entitled to request any conversion or continuation that, if made, would result
in more than eight Eurodollar Borrowings outstanding hereunder at any one time.
This Section shall not apply to Swingline Borrowings, which may not be converted
or continued.
(b) Interest Election Notice. To make an election pursuant to
this Section, Borrower shall deliver, by hand delivery or telecopier, a duly
completed and executed Interest Election Request to the Administrative Agent not
later than the time that a Borrowing Request would be required under Section
2.03 if Borrower were requesting a Revolving Borrowing or Term Borrowing of the
Type resulting from such election to be made on the effective date of such
election. Each Interest Election Request shall be irrevocable. Each Interest
Election Request shall specify the following information in compliance with
Section 2.02:
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(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, or if outstanding Borrowings are being
combined, allocation to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below
shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to
such Interest Election Request, which shall be a Business Day;
(iii)whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar
Borrowing, the Interest Period to be applicable thereto after giving
effect to such election, which shall be a period contemplated by the
definition of the term "Interest Period."
If any such Interest Election Request requests a Eurodollar
Borrowing but does not specify an Interest Period, then Borrower shall be deemed
to have selected an Interest Period of one month's duration.
Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each Lender of the details thereof and of
such Lender's portion of each resulting Borrowing.
(c) Automatic Conversion to ABR Borrowing. If an Interest
Election Request with respect to a Eurodollar Borrowing is not timely delivered
prior to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary
provision hereof, if (x) an Event of Default of the type specified in clauses
(a), (b), (g) or (h) of Section 8.01 has occurred and is continuing, the
Administrative Agent or the Required Lenders may require, by notice to Borrower,
that (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto and (y) any Event of Default other than those specified in clauses (a),
(b), (g) or (h) of Section 8.01 has occurred and is continuing, the
Administrative Agent or the Required Lenders may require, by notice to Borrower,
that no outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing in excess of one month during the continuance of such Event of
Default.
SECTION 2.09 AMORTIZATION OF TERM BORROWINGS. Borrower shall
pay to the Administrative Agent, for the account of the Lenders, on the dates
set forth on Annex II, or if any such date is not a Business Day, on the
immediately preceding Business Day (each such date, a "TERM LOAN REPAYMENT
DATE"), a principal amount of the Tranche A Loans and any Incremental Term Loans
that are not Tranche A Loans, in each case equal to the amount set forth on
Annex II for such date (as adjusted from time to time pursuant to Sections
2.10(h) and 2.19). To the extent not previously paid, (i) all Tranche A Loans
shall be due and payable on the Tranche A Maturity Date and (ii) all Incremental
Term Loans that are not Tranche A Loans shall be due and payable on the
applicable Incremental Term Loan Maturity Date.
SECTION 2.10 OPTIONAL AND MANDATORY PREPAYMENTS OF LOANS.
(a) Optional Prepayments. Borrower shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part
(including accrued and unpaid interest thereon),
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subject to the requirements of this Section 2.10; provided that each partial
prepayment shall be in an amount that is an integral multiple of $250,000 and
not less than $250,000 or, if less, the outstanding principal amount of such
Borrowing, together with any accrued and unpaid interest thereon.
(b) Revolving Loan Prepayments.
(i) In the event of the termination of all the Revolving
Commitments, Borrower shall, on the date of such termination, repay or prepay
all its outstanding Revolving Borrowings and all outstanding Swingline Loans, in
each case including accrued and unpaid interest thereon, and replace all
outstanding Letters of Credit or cash collateralize all outstanding Letters of
Credit in accordance with the procedures set forth in Section 2.18(i).
(ii) In the event of any partial reduction of the Revolving
Commitments, then (x) at or prior to the effective date of such reduction, the
Administrative Agent shall notify Borrower and the Revolving Lenders of the sum
of the Revolving Exposures after giving effect thereto and (y) if the sum of the
Revolving Exposures would exceed the aggregate amount of Revolving Commitments
after giving effect to such reduction, then Borrower shall, on the date of such
reduction, first, repay or prepay Swingline Loans, second, repay or prepay
Revolving Borrowings and third, to the extent necessary, replace outstanding
Letters of Credit or cash collateralize outstanding Letters of Credit in
accordance with the procedures set forth in Section 2.18(i), in an aggregate
amount sufficient to eliminate such excess.
(iii)In the event that the sum of all Lenders' Revolving
Exposures exceeds the Revolving Commitments then in effect, Borrower shall,
without notice or demand, immediately first, repay or prepay Revolving
Borrowings, and second, replace outstanding Letters of Credit or cash
collateralize outstanding Letters of Credit in accordance with the procedures
set forth in Section 2.18(i), in an aggregate amount sufficient to eliminate
such excess.
(iv) In the event that the aggregate LC Exposure exceeds the
LC Commitment then in effect, Borrower shall, without notice or demand,
immediately replace outstanding Letters of Credit or cash collateralize
outstanding Letters of Credit in accordance with the procedures set forth in
Section 2.18(i), in an aggregate amount sufficient to eliminate such excess.
(c) Asset Sales. Not later than five Business Days following
the receipt of any Net Cash Proceeds of any Asset Sale by Holdings or any of its
Subsidiaries, Borrower shall make prepayments in accordance with Sections
2.10(h) and (i) in an aggregate amount equal to 100% of such Net Cash Proceeds;
provided that:
(i) no such prepayment shall be required under this
Section 2.10(c)(i) with respect to (A) any Asset Sale permitted by
Sections 6.06(c), (g) or (i), (B) the disposition of property which
constitutes a Casualty Event, or (C) Asset Sales for fair market value
resulting in no more than $250,000 in Net Cash Proceeds per Asset Sale
(or series of related Asset Sales) and less than $500,000 in Net Cash
Proceeds in any fiscal year; provided that clause (C) shall not apply
in the case of any Asset Sale described in clause (b) of the definition
thereof; and
(ii) so long as no Default shall then exist or would arise
therefrom and the aggregate of such Net Cash Proceeds of Asset Sales
shall not exceed $2,000,000 in any fiscal year of Borrower, such
proceeds shall not be required to be so applied on such date to the
extent that Borrower shall have delivered an Officers' Certificate to
the Administrative Agent on or prior to such date stating that such Net
Cash Proceeds are expected to be reinvested in fixed or capital assets
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within 270 days following the date of receipt of such Net Cash Proceeds
from such Asset Sale (which Officers' Certificate shall set forth the
estimates of the proceeds to be so expended); provided that if all or
any portion of such Net Cash Proceeds is not so reinvested within such
270-day period, such unused portion shall be applied on the last day of
such period as a mandatory prepayment as provided in this Section
2.10(c); provided, further, that if the property subject to such Asset
Sale constituted Collateral, then all property purchased with the Net
Cash Proceeds thereof pursuant to this subsection shall be made subject
to the Lien of the applicable Security Documents in favor of the
Collateral Agent, for its benefit and for the benefit of the other
Secured Parties in accordance with Sections 5.11 and 5.12.
(d) Debt Issuance or Preferred Stock Issuance. Not later than
five Business Days following the receipt of any Net Cash Proceeds of any Debt
Issuance or Preferred Stock Issuance by Holdings or any of its Subsidiaries
except as permitted by Section 6.13(b)(iv), Borrower shall make prepayments in
accordance with Sections 2.10(h) and (i) in an aggregate amount equal to 100% of
such Net Cash Proceeds.
(e) Equity Issuance. Not later than five Business Days
following the receipt of any Net Cash Proceeds of any Equity Issuance, Borrower
shall make prepayments in accordance with Sections 2.10(h) and (i) in an
aggregate amount equal to 50.0% of such Net Cash Proceeds; provided that such
percentage shall be reduced to 0% with respect to such Net Cash Proceeds (or
portion thereof) if the Total Leverage Ratio is less than 1.50:1.00 as of the
date of receipt of such Net Cash Proceeds after giving effect to the prepayment
required by this Section 2.10(e) with such Net Cash Proceeds (or smaller portion
thereof).
(f) Casualty Events. Not later than five Business Days
following the receipt of any Net Cash Proceeds in excess of $100,000 from a
Casualty Event by Holdings or any of its Subsidiaries, Borrower shall make
prepayments in accordance with Sections 2.10(h) and (i) in an aggregate amount
equal to 100% of such Net Cash Proceeds; provided that:
(i) so long as no Default shall then exist or arise
therefrom, such proceeds shall not be required to be so applied on such
date to the extent that such proceeds are used to repair, replace or
restore any property in respect of which such Net Cash Proceeds were
paid or to reinvest in other fixed or capital assets, no later than 270
days following the date of receipt of such proceeds; provided that if
the property subject to such Casualty Event constituted Collateral
under the Security Documents, then all property purchased with the Net
Cash Proceeds thereof pursuant to this subsection shall be made subject
to the Lien of the applicable Security Documents in favor of the
Collateral Agent, for its benefit and for the benefit of the other
Secured Parties in accordance with Sections 5.11 and 5.12; and
(ii) if any portion of such Net Cash Proceeds shall not be
so applied within such 270-day period, such unused portion shall be
applied on the last day of such period as a mandatory prepayment as
provided in this Section 2.10(f).
(g) Excess Cash Flow. No later than 15 days after the date on
which the financial statements with respect to such fiscal year in which such
Excess Cash Flow Period occurs are required to be delivered pursuant to Section
5.01(a), Borrower shall make prepayments in accordance with Sections 2.10(h) and
(i) in an aggregate amount equal to 50% (the "ECF PERCENTAGE") of Excess Cash
Flow for the Excess Cash Flow Period then ended minus any voluntary prepayment
of Term Loans or prepayment of Revolving Loans with a corresponding reduction in
Revolving Commitments, in each case during
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such Excess Cash Flow Period, solely, in the case of such voluntary prepayments,
to the extent that such amounts are not subtracted from Consolidated EBITDA to
calculate Excess Cash Flow; provided that the ECF Percentage for an Excess Cash
Flow Period shall be reduced to 0% with respect to such Excess Cash Flow (or
portion thereof) if the Senior Leverage Ratio on the last day of such Excess
Cash Flow Period is or after giving effect to the prepayment required by this
Section 2.10(g) with such Excess Cash Flow (or such smaller portion thereof)
would have been less than or equal to 1.50:1.00.
(h) Application of Prepayments. Prior to any optional or
mandatory prepayment hereunder, Borrower shall select the Borrowing or
Borrowings to be prepaid and shall specify such selection in the notice of such
prepayment pursuant to Section 2.10(i), subject to the provisions of this
Section 2.10(h). In the event of any optional or mandatory prepayment of Term
Borrowings made at a time when Term Borrowings of more than one Class remain
outstanding, the aggregate amount of such prepayment shall be allocated between
the Tranche A Loans and any Incremental Term Loans that are not Tranche A Loans
pro rata based on the aggregate principal amount of outstanding Borrowings of
each such Class. Any prepayments of Term Loans pursuant to Section 2.10(c), (d),
(e) or (f) shall be applied to reduce scheduled prepayments required under
Section 2.09 on a pro rata basis among the prepayments remaining to be made on
each Term Loan Repayment Date. Any optional prepayments and prepayments pursuant
to Section 2.10(g) shall be applied to prepayments remaining to be made on each
Term Loan Repayment Date as elected by Borrower. Prepayments pursuant to Section
2.10 (g) shall be required solely to reduce Term Loans.
Amounts to be applied pursuant to this Section 2.10 to the
prepayment of Term Loans and Revolving Loans shall be applied, as applicable,
first to reduce outstanding ABR Term Loans and ABR Revolving Loans,
respectively. Any amounts remaining after each such application shall be applied
to prepay Eurodollar Term Loans or Eurodollar Revolving Loans, as applicable.
Notwithstanding the foregoing, if the amount of any prepayment of Loans required
under this Section 2.10 shall be in excess of the amount of the ABR Loans at the
time outstanding (an "EXCESS AMOUNT"), only the portion of the amount of such
prepayment as is equal to the amount of such outstanding ABR Loans shall be
immediately prepaid and, at the election of Borrower, the Excess Amount shall be
either (A) deposited in an escrow account on terms satisfactory to the
Collateral Agent and applied to the prepayment of Eurodollar Loans on the last
day of the then next-expiring Interest Period for Eurodollar Loans; provided
that (i) interest in respect of such Excess Amount shall continue to accrue
thereon at the rate provided hereunder for the Loans which such Excess Amount is
intended to repay until such Excess Amount shall have been used in full to repay
such Loans and (ii) at any time while a Default has occurred and is continuing,
the Administrative Agent may, and upon written direction from the Required
Lenders shall, apply any or all proceeds then on deposit to the payment of such
Loans in an amount equal to such Excess Amount or (B) prepaid immediately,
together with any amounts owing to the Lenders under Section 2.13.
(i) Notice of Prepayment. Borrower shall notify the
Administrative Agent (and, in the case of prepayment of a Swingline Loan, the
Swingline Lender) by written notice of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of prepayment, (ii) in the case
of prepayment of an ABR Borrowing, not later than 1:00 p.m., New York City time,
one Business Day before the date of prepayment and (iii) in the case of
prepayment of a Swingline Loan, not later than 11:00 a.m., New York City time,
on the date of prepayment. Each such notice shall be irrevocable; provided that,
if a notice of prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.07, then such notice
of prepayment may be revoked if such termination is revoked in accordance with
Section 2.07. Each such notice shall specify the prepayment date, the principal
amount of each Borrowing or portion thereof to be prepaid and, in the case of a
mandatory prepayment, a
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reasonably detailed calculation of the amount of such prepayment. Promptly
following receipt of any such notice (other than a notice relating solely to
Swingline Loans), the Administrative Agent shall advise the Lenders of the
contents thereof. Each partial prepayment of any Borrowing shall be in an amount
that would be permitted in the case of a Credit Extension of the same Type as
provided in Section 2.02, except as necessary to apply fully the required amount
of a mandatory prepayment. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing and otherwise in
accordance with this Section 2.10. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.06.
SECTION 2.11 ALTERNATE RATE OF INTEREST. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be final and conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBOR Rate
for such Interest Period; or
(b) the Administrative Agent is advised in writing by the
Required Lenders that the Adjusted LIBOR Rate for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of
making or maintaining their Loans included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give written notice thereof to Borrower and
the Lenders as promptly as practicable thereafter and, until the Administrative
Agent notifies Borrower and the Lenders that the circumstances giving rise to
such notice no longer exist, (i) any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing.
SECTION 2.12 YIELD PROTECTION.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or
credit extended or participated in, by any Lender (except any reserve
requirement reflected in the Adjusted LIBOR Rate) or the Issuing Bank;
(ii) subject any Lender or the Issuing Bank to any tax of
any kind whatsoever with respect to this Agreement, any Letter of
Credit, any participation in a Letter of Credit or any Eurodollar Loan
made by it, or change the basis of taxation of payments to such Lender
or the Issuing Bank in respect thereof (except for Indemnified Taxes or
Other Taxes covered by Section 2.15 and the imposition of, or any
change in the rate of, any Excluded Tax payable by such Lender or the
Issuing Bank); or
(iii)impose on any Lender or the Issuing Bank or the
London interbank market any other condition, cost or expense 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 of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost
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to such Lender, the Issuing Bank or such Lender's or the Issuing Bank's holding
company, if any, of participating in, issuing or maintaining any Letter of
Credit (or of maintaining its obligation to participate in or to issue any
Letter of Credit), or to reduce the amount of any sum received or receivable by
such Lender or the Issuing Bank hereunder (whether of principal, interest or any
other amount), then, upon written request of such Lender or the Issuing Bank,
Borrower will 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,
as the case may be, for such additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender or the Issuing Bank
determines (in good faith, but in its reasonable discretion) that any Change in
Law affecting such Lender or the Issuing Bank or any lending office of such
Lender or such Lender's or the Issuing Bank's holding company, if any, regarding
capital requirements 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, the Commitments of such Lender or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Bank, 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), then from time
to time Borrower will 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 (it being understood that this Section 2.12 shall not impose
duplicative obligations on Borrower relative to Section 2.15).
(c) Certificates for Reimbursement. 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 company, as the case may be, as
specified in paragraph (a) or (b) of this Section 2.12 and delivered to Borrower
shall be conclusive absent manifest error. Borrower shall pay such Lender or the
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 15 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any
Lender or the Issuing Bank to demand compensation pursuant to this Section 2.12
shall not constitute a waiver of such Lender's or the Issuing Bank's right to
demand such compensation; provided that Borrower shall not be required to
compensate a Lender or the Issuing Bank pursuant to this Section for any
increased costs incurred or reductions suffered more than 180 days prior to the
date that such Lender or the Issuing Bank, as the case may be, notifies Borrower
of the Change in Law giving rise to such increased costs or reductions and of
such Lender's or the Issuing Bank's intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 180 day period referred to above shall be
extended to include the period of retroactive effect thereof) .
SECTION 2.13 BREAKAGE PAYMENTS. In the event of (a) the
payment or prepayment, whether optional or mandatory, of any principal of any
Eurodollar Loan earlier than the last day of an Interest Period applicable
thereto (including as a result of the occurrence or continuance of an Event of
Default), (b) the conversion of any Eurodollar Loan earlier than the last day of
the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Revolving Loan or Term Loan on the date specified in any
notice delivered pursuant hereto or (d) the assignment of any Eurodollar Loan
earlier than the last day of the Interest Period applicable thereto as a result
of a request by Borrower pursuant to Section 2.16(b), then, in any such event,
Borrower shall compensate each applicable Lender for the loss, cost and expense
(other than loss of anticipated profit) attributable to such event. In the case
of a
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Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBOR Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of any Lender setting forth in reasonable detail any
amount or amounts that such Lender is entitled to receive pursuant to this
Section 2.13 shall be delivered to Borrower (with a copy to the Administrative
Agent) and shall be conclusive and binding absent manifest error. Borrower shall
pay such Lender the amount shown as due on any such certificate within 10 days
after receipt thereof.
SECTION 2.14 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING
OF SETOFFS.
(a) Payments Generally. Borrower shall make each payment
required to be made by it hereunder or under any other Loan Document (whether of
principal, interest, fees or Reimbursement Obligations, or of amounts payable
under Section 2.12, 2.13, 2.15 or 10.03, or otherwise) on or before the time
expressly required hereunder or under such other Loan Document for such payment
(or, if no such time is expressly required, prior to 2:00 p.m., New York City
time), on the date when due, in immediately available funds, without setoff,
deduction or counterclaim (except as expressly provided herein). Any amounts
received after such time on any date may, in the reasonable discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 000 Xxxxxxxxxx
Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxxx, except payments to be made directly to the
Issuing Bank or Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.12, 2.13, 2.15 and 10.03 shall be made directly
to the persons entitled thereto and payments pursuant to other Loan Documents
shall be made to the persons specified therein. The Administrative Agent shall
distribute any such payments received by it for the account of any other person
to the appropriate recipient promptly following receipt thereof. If any payment
under any Loan Document shall be due on a day that is not a Business Day, unless
specified otherwise, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
under each Loan Document shall be made in dollars, except as expressly specified
otherwise.
(b) Insufficient Funds. If at any time insufficient funds are
received by and available to the Administrative Agent to pay fully all amounts
of principal, Reimbursement Obligations, interest and fees then due hereunder,
such funds shall be applied (i) first, toward payment of interest and fees then
due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, toward
payment of principal and Reimbursement Obligations then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of principal
and Reimbursement Obligations then due to such parties.
(c) Sharing of Setoff. If any Lender (and/or the Issuing Bank,
which shall be deemed a "Lender" for purposes of this Section 2.14(c)) shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans or other Obligations
resulting in such Lender's receiving payment of a proportion of the aggregate
amount of its Loans and accrued interest thereon or other Obligations greater
than its pro rata share thereof as provided
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herein, then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Loans and such other obligations of the other Lenders, or
make such other adjustments as shall be equitable, so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans
and other amounts owing them; provided that:
(i) if any such participations are purchased and all or
any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to
the extent of such recovery, without interest; and
(ii) the provisions of this paragraph shall not be
construed to apply to (x) any payment made by Borrower pursuant to and
in accordance with the express terms of this Agreement or (y) any
payment obtained by a Lender as consideration for the assignment of or
sale of a participation in any of its Loans or participations in LC
Disbursements to any assignee or participant, other than to Borrower or
any Subsidiary thereof (as to which the provisions of this paragraph
shall apply).
Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable Requirements of Law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Loan Party rights of setoff and counterclaim with respect to such
participation as fully (and subject to the same limitations regarding payroll,
tax, withholding, trust and xxxxx cash accounts) as if such Lender were a direct
creditor of such Loan Party in the amount of such participation. If under
applicable bankruptcy, insolvency or any similar law any Secured Party receives
a secured claim in lieu of a setoff or counterclaim to which this Section
2.14(c) applies, such Secured Party shall to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with the
rights to which the Secured Party is entitled under this Section 2.14(c) to
share in the benefits of the recovery of such secured claim.
(d) Borrower Default. Unless the Administrative Agent shall
have received notice from Borrower prior to the date on which any payment is due
to the Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that Borrower will not make such payment, the Administrative Agent may
assume that Borrower has made such payment on such date in accordance herewith
and may, in reliance upon such assumption, distribute to the Lenders or the
Issuing Bank, as the case may be, the amount due. In such event, if Borrower has
not in fact made such payment, then each of the Lenders or the Issuing Bank, as
the case may be, severally agrees to repay to the Administrative Agent forthwith
on demand the amount so distributed to such Lender or the Issuing Bank with
interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation.
(e) Lender Default. If any Lender shall fail to make any
payment required to be made by it pursuant to Section 2.02(c), 2.14(d), 2.17(d),
2.18(d), 2.18(e) or 10.03(c), then the Administrative Agent may, in its
reasonable discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
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SECTION 2.15 TAXES.
(a) Payments Free of Taxes. Any and all payments by or on
account of any obligation of the Loan Parties hereunder or under any other Loan
Document shall be made free and clear of and without reduction or withholding
for any Indemnified Taxes or Other Taxes; provided that if the Loan Parties
shall be required by applicable Requirements of Law to deduct any Indemnified
Taxes (including any 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) the applicable Loan Party shall make such deductions and (iii) the
applicable Loan Party shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable Requirements of Law.
(b) Payment of Other Taxes by Borrower. Without limiting the
provisions of paragraph (a) above, Borrower shall timely pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable Requirements
of Law.
(c) Indemnification by Borrower. Borrower shall indemnify the
Administrative Agent, each Lender and the Issuing Bank, within 30 days after
written demand therefor (including reasonable backup documentation supporting
such request), for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Administrative
Agent, such Lender or the Issuing Bank, as the case may be, 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; provided that if
Borrower reasonably believes that such Taxes were not correctly or legally
asserted, the Administrative Agent or such Lender, as the case may be, will use
commercially reasonable efforts to cooperate with Borrower to obtain a refund of
such Taxes at the Borrower's expense; provided further that neither the
Administrative Agent nor such Lender shall be required to take any action that
in its good faith judgment would be disadvantageous to it; provided further that
any such refund will be subject to Section 2.15(f). A certificate as to the
amount of such payment or liability delivered to Borrower by a Lender or the
Issuing Bank (with a copy to the Administrative Agent), or by the Administrative
Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be
conclusive absent manifest error.
(d) Evidence of Payments. As soon as practicable after any
payment of Indemnified Taxes or Other Taxes by a Loan Party to a Governmental
Authority, such Loan Party 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) Status of Lenders. Any Foreign Lender shall, to the extent
it may lawfully do so, deliver to Borrower and the Administrative Agent (in such
number of copies as shall be requested by the recipient) on or prior to the date
on which such Foreign Lender becomes a Lender under this Agreement (and from
time to time thereafter upon the request of Borrower or the Administrative
Agent, but only if such Foreign Lender is legally entitled to do so), whichever
of the following is applicable:
(i) duly completed copies of Internal Revenue Service
Form W-8BEN claiming eligibility for benefits of an income tax treaty
to which the United States of America is a party,
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(ii) duly completed copies of Internal Revenue Service
Form W-8ECI,
(iii)in the case of a Foreign Lender claiming the
benefits of the exemption for portfolio interest under Section 881(c)
of the Code, (x) a certificate, in substantially the form of Exhibit Q,
or any other form approved by the Administrative Agent, to the effect
that such Foreign Lender is not (A) a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, (B) a "10 percent shareholder" of
Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C)
a "controlled foreign corporation" described in Section 881(c)(3)(C) of
the Code and (y) duly completed copies of Internal Revenue Service Form
W-8BEN, or
(iv) any other form prescribed by applicable Requirements
of Law as a basis for claiming exemption from or a reduction in United
States Federal withholding tax duly completed together with such
supplementary documentation as may be prescribed by applicable
Requirements of Law to permit Borrower to determine the withholding or
deduction required to be made.
(f) Treatment of Certain Refunds. If the Administrative Agent,
a Lender or the Issuing Bank determines, in its sole good faith discretion, that
it has received a refund of any Indemnified Taxes or Other Taxes as to which it
has been indemnified by the Loan Parties or with respect to which the Loan
Parties have paid additional amounts pursuant to this Section, it shall promptly
pay the Loan Parties an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by the Loan Parties under
this Section with respect to the Indemnified Taxes or Other Taxes giving rise to
such refund), net of all out-of-pocket expenses of the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided that the Loan Parties, upon the written request of the
Administrative Agent, such Lender or the Issuing Bank, agrees to promptly repay
the amount paid over to Loan Parties (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Administrative
Agent, such Lender or the Issuing Bank in the event the Administrative Agent,
such Lender or the Issuing Bank is required to repay such refund to such
Governmental Authority. This paragraph shall not be construed to require the
Administrative Agent, any Lender or the Issuing Bank to make available its tax
returns (or any other information relating to its taxes that it deems
confidential) to Loan Parties or any other person. Notwithstanding anything to
the contrary, in no event will any Lender be required to pay any amount to Loan
Parties the payment of which would place such Lender in a less favorable net
after-tax position than such Lender would have been in if the additional amounts
giving rise to such refund of any Indemnified Taxes or Other Taxes had never
been paid in the first instance.
SECTION 2.16 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) Designation of a Different Lending Office. If any Lender
requests compensation under Section 2.12, or requires Borrower to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.15, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, or file any certificate or document with a
Government Authority to the extent reasonably requested by Borrower and not
materially adverse to such Lender if, in the reasonable judgment of such Lender,
such designation, assignment or filing (i) would eliminate or reduce amounts
payable pursuant to Section 2.12 or 2.15, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment. A certificate
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setting forth such costs and expenses shall be submitted by such Lender to
Borrower and shall be conclusive absent manifest error.
(b) Replacement of Lenders. If any Lender requests
compensation under Section 2.12, or if Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.15, or if any Lender defaults in its obligation
to fund Loans hereunder, or if Borrower exercises its replacement rights under
Section 10.02(d), then Borrower may, at its sole expense and effort, upon notice
to such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 10.04), all of its interests,
rights and obligations under this Agreement and the other Loan Documents to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that:
(i) Borrower shall have paid to the Administrative Agent
the processing and recordation fee specified in Section 10.04(b);
(ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans and participations in
LC Disbursements and Swingline Loans, accrued interest thereon, accrued
fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 2.13), assuming for
this purpose (in the case of a Lender being replaced pursuant to
Section 10.02(d)) that the Loans of such Lender were being prepaid)
from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or Borrower (in the case of all other
amounts);
(iii)in the case of any such assignment resulting from a
claim for compensation under Section 2.12 or payments required to be
made pursuant to Section 2.15, such assignment will result in a
reduction in such compensation or payments thereafter; and
(iv) such assignment does not conflict with applicable
Requirements of Law.
A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling Borrower to require such assignment and delegation cease
to apply.
(c) Defaulting Lenders. Anything contained herein to the
contrary notwithstanding, in the event that any Revolving Lender ("DEFAULTING
LENDER") defaults (a "FUNDING DEFAULT") in its obligation to fund any Revolving
Loan (a "DEFAULTED LOAN") in accordance with Section 2.02, then (i) after the
occurrence and during any Funding Default (a "DEFAULT PERIOD") with respect to
such Defaulting Lender, such Defaulting Lender shall be deemed not to be a
"Revolving Lender" for purposes of voting on any matters (including the granting
of any consents or waivers) with respect to any of the Loan Documents and (ii)
to the extent permitted by applicable law during the Default Period (A) any
voluntary prepayment of the Loans pursuant to Section 2.10 shall, if Borrower so
requests at the time of making such voluntary prepayment and if the
Administrative Agent, in its sole discretion, consents thereto, be applied to
the Loans of other Lenders as if such Defaulting Lender had no Loans outstanding
and the Revolving Exposure of such Defaulting Lender were zero, and if the
Administrative Agent does not so elect, the portion attributable to the
Defaulting Lender shall be held by the Administrative Agent for the benefit of
the Defaulting Lender, and as security (along with earnings, if any) for its
obligations (y) under this agreement to the Agents and the Lenders and (z) when
all such obligations (contingent and otherwise) have been satisfied, paid to
Borrower, and (B) any mandatory prepayment of the Revolving Loans pursuant to
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Section 2.10 shall, if Borrower so requests at the time of making such mandatory
prepayments and if the Administrative Agent, in its sole discretion, consents
thereto, be applied to the Revolving Loans of other Lenders (but not to the
Revolving Loans of such Defaulting Lender) as if such Defaulting Lender had
funded all Defaulted Loans of such Defaulting Lender, it being understood and
agreed that, if the Administrative Agent so elects, Borrower shall be entitled
to retain any portion of any mandatory prepayment of the Loans that is not paid
to such Defaulting Lender solely as a result of the operation of the provisions
of this clause (B) and if the Administrative Agent does not so elect, the
portion attributable to the Defaulting Lender shall be held by the
Administrative Agent for the benefit of the Defaulting Lender, and as security
(along with earnings, if any) for its obligations (y) under this Agreement to
the Agents and the Lenders and (z) when all such obligations (contingent and
otherwise) have been satisfied, paid to Borrower, (iii) upon the Administrative
Agent providing prior written consent such Defaulting Lender's Revolving
Commitment and outstanding Loans, and such Defaulting Lender's pro rata share of
the LC Disbursements, shall be excluded for purposes of calculating the
Commitment Fee in respect of any day during any Default Period with respect to
such Defaulting Lender, and upon the Administrative Agent providing prior
written consent, such Defaulting Lender shall not be entitled to receive any
Commitment Fee with respect to such Defaulting Lender's Revolving Commitment in
respect of any Defaulted Loan with respect to such Defaulting Lender and (iv)
any portion of the Commitment Fee allocated to the Defaulting Lender shall be
held by Administrative Agent for the benefit of the Defaulting Lender and as
security (along with earnings, if any) for its obligations owed (y) under this
Agreement to the Agents and the Lenders and (z) when all such obligations
(contingent and otherwise) have been satisfied, paid to Borrower.
SECTION 2.17 SWINGLINE LOANS.
(a) Swingline Commitment. Subject to the terms and conditions
set forth herein, the Swingline Lender agrees to make Swingline Loans to
Borrower from time to time during the Revolving Availability Period, in an
aggregate principal amount at any time outstanding that will not result in (i)
the aggregate principal amount of outstanding Swingline Loans exceeding
$2,500,000 or (ii) the sum of the total Revolving Exposures exceeding the total
Revolving Commitments; provided that the Swingline Lender shall not be required
to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the
foregoing limits and subject to the terms and conditions set forth herein,
Borrower may borrow, repay and reborrow Swingline Loans.
(b) Swingline Loans. To request a Swingline Loan, Borrower
shall deliver, by hand delivery or telecopier, a duly completed and executed
Borrowing Request to the Administrative Agent and the Swingline Lender, not
later than 2:00 p.m., New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and the amount of the requested Swingline Loan.
Each Swingline Loan shall be an ABR Loan. The Swingline Lender shall make each
Swingline Loan available to Borrower by means of a credit to the general deposit
account of Borrower with the Swingline Lender (or, in the case of a Swingline
Loan made to finance the reimbursement of an LC Disbursement as provided in
Section 2.18(e), by remittance to the Issuing Bank) by 3:00 p.m., New York City
time, on the requested date of such Swingline Loan. Borrower shall not request a
Swingline Loan if at the time of or immediately after giving effect to the
Extension of Credit contemplated by such request a Default has occurred and is
continuing or would result therefrom. Swingline Loans shall be made in minimum
amounts of $100,000 and integral multiples of $100,000 above such amount.
(c) Prepayment. Borrower shall have the right at any time and
from time to time to repay any Swingline Loan, in whole or in part, upon giving
written notice to the Swingline Lender and
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the Administrative Agent before 12:00 (noon), New York City time, on the
proposed date of repayment. Borrower may repay any Swingline Loan with the
proceeds of a Revolving Loan made in accordance with the terms of this
Agreement.
(d) Participations. The Swingline Lender may at any time in
its reasonable discretion by written notice given to the Administrative Agent
(provided such notice requirement shall not apply if the Swingline Lender and
the Administrative Agent are the same entity) not later than 1:00 p.m., New York
City time, on the next succeeding Business Day following such notice require the
Revolving Lenders to acquire participations on such Business Day in all or a
portion of the Swingline Loans then outstanding. Such notice shall specify the
aggregate amount of Swingline Loans in which Revolving Lenders will participate.
Promptly upon receipt of such notice, the Administrative Agent will give notice
thereof to each Revolving Lender, specifying in such notice such Lender's Pro
Rata Percentage of such Swingline Loan or Loans. Each Revolving 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 Lender's Pro Rata Percentage of such Swingline Loan or Loans. Each
Revolving 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 reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever (so long as such
payment shall not cause such Lender's Revolving Exposure to exceed such Lender's
Revolving Commitment). Each Revolving 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 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the Swingline Lender the amounts so received by it from the
Revolving Lenders. The Administrative Agent shall notify Borrower of any
participations in any Swingline Loan acquired by the Revolving Lenders 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 Borrower (or other party on behalf
of 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 Revolving Lenders that shall have made their payments pursuant to this
paragraph, as their interests may appear. The purchase of participations in a
Swingline Loan pursuant to this paragraph shall not relieve Borrower of any
default in the payment thereof.
SECTION 2.18 LETTERS OF CREDIT.
(a) General. Subject to the terms and conditions set forth
herein, Borrower may request the Issuing Bank, and the Issuing Bank agrees, to
issue Letters of Credit for its own account or the account of Holdings or a
Subsidiary in a form reasonably acceptable to the Administrative Agent and the
Issuing Bank, at any time and from time to time during the Revolving
Availability Period (provided that Borrower shall be a co-applicant, and be
jointly and severally liable, with respect to each Letter of Credit issued for
the account of a Subsidiary). The Issuing Bank shall have no obligation to
issue, and Borrower shall not request the issuance of, any Letter of Credit at
any time if after giving effect to such issuance, the LC Exposure would exceed
the LC Commitment or the total Revolving Exposure would exceed the total
Revolving Commitments. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by Borrower to, or entered
into by Borrower with, the Issuing Bank relating to any Letter of Credit, the
terms and conditions of this Agreement shall control.
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(b) Request for Issuance, Amendment, Renewal, Extension;
Certain Conditions and Notices. To request the issuance of a Letter of Credit or
the amendment, renewal or extension of an outstanding Letter of Credit, Borrower
shall deliver, by hand or telecopier (or transmit by electronic communication,
if arrangements for doing so have been approved by the Issuing Bank), an LC
Request to the Issuing Bank and the Administrative Agent not later than 12:00
noon on the third Business Day preceding the requested date of issuance,
amendment, renewal or extension (or such later date and time as is acceptable to
the Issuing Bank).
A request for an initial issuance of a Letter of Credit shall
specify in form and detail reasonably satisfactory to the Issuing Bank:
(i) the proposed issuance date of the requested Letter of
Credit (which shall be a Business Day);
(ii) the amount thereof;
(iii)the expiry date thereof (which shall not be later
than the close of business on the Letter of Credit Expiration Date);
(iv) the name and address of the beneficiary thereof;
(v) whether the Letter of Credit is to be issued for its
own account or for the account of one of its Subsidiary Guarantors
(provided that Borrower shall be a co-applicant, and therefore jointly
and severally liable, with respect to each Letter of Credit issued for
the account of a Subsidiary Guarantor);
(vi) the documents to be presented by such beneficiary in
connection with any drawing thereunder;
(vii)the full text of any certificate to be presented by
such beneficiary in connection with any drawing thereunder; and
(viii) such other matters as the Issuing Bank may
reasonably require.
A request for an amendment, renewal or extension of any
outstanding Letter of Credit shall specify in form and detail reasonably
satisfactory to the Issuing Bank:
(i) the Letter of Credit to be amended, renewed or
extended;
(ii) the proposed date of amendment, renewal or extension
thereof (which shall be a Business Day);
(iii)the nature of the proposed amendment, renewal or
extension; and
(iv) such other matters as the Issuing Bank may
reasonably require.
If requested by the Issuing Bank, Borrower also shall submit a letter of credit
application on the Issuing Bank's standard form in connection with any request
for a Letter of Credit; provided that to the extent such standard form is
inconsistent with the Loan Documents, such Loan Documents shall supercede. A
Letter of Credit shall be issued, amended, renewed or extended only if (and,
upon issuance, amendment,
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renewal or extension of each Letter of Credit, Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension, (i) the LC Exposure shall not exceed the LC Commitment,
(ii) the total Revolving Exposures shall not exceed the total Revolving
Commitments and (iii) the conditions set forth in Article IV in respect of such
issuance, amendment, renewal or extension shall have been satisfied. Unless the
Issuing Bank shall agree otherwise, no Letter of Credit shall be in an initial
amount less than $100,000.
Upon the issuance of any Letter of Credit or amendment,
renewal, extension or modification to a Letter of Credit, the Issuing Bank shall
promptly notify the Administrative Agent, who shall promptly notify each
Revolving Lender, thereof, which notice shall be accompanied by a copy of such
Letter of Credit or amendment, renewal, extension or modification to a Letter of
Credit and the amount of such Lender's respective participation in such Letter
of Credit pursuant to Section 2.18(d). On the first Business Day of each
calendar month, the Issuing Bank shall provide to the Administrative Agent a
report listing all outstanding Letters of Credit and the amounts and
beneficiaries thereof and the Administrative Agent shall promptly provide such
report to each Revolving Lender.
Expiration Date. (1) Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) in the case of a Standby
Letter of Credit, (x) the date which is one year after the date of the issuance
of such Standby Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (y) the Letter of Credit
Expiration Date and (ii) in the case of a Commercial Letter of Credit, (x) the
date that is 180 days after the date of issuance of such Commercial Letter of
Credit (or, in the case of any renewal or extension thereof, 180 days after such
renewal or extension) and (y) the Letter of Credit Expiration Date.
(2) If Borrower so requests in any Letter of Credit Request,
the Issuing Bank may, in its sole and absolute discretion, agree to
issue a Letter of Credit that has automatic renewal provisions (each,
an "AUTO RENEWAL LETTER OF CREDIT"); provided that any such Auto
Renewal Letter of Credit must permit the Issuing Bank to prevent any
such renewal at least once in each twelve month period (commencing with
the date of issuance of such Letter of Credit) by giving prior notice
to the beneficiary thereof not later than a day in each such twelve
month period to be agreed upon at the time such Letter of Credit is
issued. Unless otherwise directed by the Issuing Bank, Borrower shall
not be required to make a specific request to the Issuing Bank for any
such renewal. Once an Auto Renewal Letter of Credit has been issued,
the Revolving Lenders shall be deemed to have authorized (but may not
require) the Issuing Bank to permit the renewal of such Letter of
Credit at any time to an expiry date not later than the earlier of (i)
one year from the date of such renewal and (ii) the Letter of Credit
Expiration Date; provided that the Issuing Bank shall not permit any
such renewal if (x) the Issuing Bank has determined that it would have
no obligation at such time to issue such Letter of Credit in its
renewed form under the terms hereof (by reason of the provisions of
Section 2.18(l), 4.02 or otherwise), or (y) it has received notice on
or before the day that is two Business Days before the date which has
been agreed upon pursuant to the proviso of the first sentence of this
paragraph from the Administrative Agent that any Revolving Lender
directly affected thereby has elected not to permit such renewal.
(d) Participations. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby irrevocably grants to each Revolving Lender, and each Revolving
Lender hereby acquires from the Issuing Bank, a participation in such Letter of
Credit equal to such Revolving Lender's Pro Rata Percentage of the aggregate
amount available to be drawn under such Letter of Credit. In consideration and
in furtherance of the foregoing, each Revolving Lender hereby absolutely
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and unconditionally agrees to pay to the Administrative Agent, for the account
of the Issuing Bank, such Revolving Lender's Pro Rata Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by Borrower on the date
due as provided in Section 2.18(e), or of any reimbursement payment required to
be refunded to Borrower for any reason. Each Revolving 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 any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance of a Default
or reduction or termination of the Commitments, or expiration, termination or
cash collateralization of any Letter of Credit and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement.
(i) If the Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, Borrower shall reimburse such LC Disbursement by
paying to the Issuing Bank an amount equal to such LC Disbursement not later
than 3:00 p.m., New York City time, on the date that such LC Disbursement is
made if Borrower shall have received notice of such LC Disbursement prior to
11:00 a.m., New York City time, on such date, or, if such notice has not been
received by Borrower prior to such time on such date, then not later than 3:00
p.m., New York City time, on the Business Day immediately following the day that
Borrower receives such notice; provided that Borrower may, subject to the
conditions to borrowing set forth herein, request in accordance with Section
2.03 that such payment be financed with ABR Revolving Loans or Swingline Loans
in an equivalent amount and, to the extent so financed, Borrower's obligation to
make such payment shall be discharged and replaced by the resulting ABR
Revolving Loans or Swingline Loans.
(ii) If Borrower fails to make such payment when due or the
amount due is not refunded pursuant to clause (i) above, the Issuing Bank shall
notify the Administrative Agent and the Administrative Agent shall notify each
Revolving Lender of the applicable LC Disbursement, the payment then due from
Borrower in respect thereof and such Revolving Lender's Pro Rata Percentage
thereof. Each Revolving 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 Lender shall have received such
notice later than 12:00 noon, New York City time, on any day, not later than
11:00 a.m., New York City time, on the immediately following Business Day), an
amount equal to such Revolving Lender's Pro Rata Percentage of the unreimbursed
LC Disbursement in the same manner as provided in Section 2.02(c) with respect
to Revolving Loans made by such Revolving Lender, and the Administrative Agent
will promptly pay to the Issuing Bank the amounts so received by it from the
Revolving Lenders. The Administrative Agent will promptly pay to the Issuing
Bank any amounts received by it from Borrower pursuant to the above paragraph
prior to the time that any Revolving Lender makes any payment pursuant to the
preceding sentence and any such amounts received by the Administrative Agent
from Borrower thereafter will be promptly remitted by the Administrative Agent
to the Revolving Lenders that shall have made such payments and to the Issuing
Bank, as appropriate.
(iii)If any Revolving Lender shall not have made its Pro Rata
Percentage of such LC Disbursement available to the Administrative Agent as
provided above, each of such Revolving Lender and Borrower severally agrees to
pay interest on such amount, for each day from and including the date such
amount is required to be paid in accordance with the foregoing 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 Borrower, the rate per annum set forth in
Section 2.18(h) and (ii) in the case of such Lender, at a rate
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determined by the Administrative Agent in accordance with banking industry rules
or practices on interbank compensation.
(f) Obligations Absolute. The Reimbursement Obligation of
Borrower as provided in Section 2.18(e) shall be absolute, unconditional and
irrevocable, and shall be paid and 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 this Agreement, or any term or provision therein; (ii) any draft or
other document presented under a Letter of Credit being proved to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; (iii) payment by the Issuing Bank
under a Letter of Credit against presentation of a draft or other document that
fails to comply with the terms of such Letter of Credit; (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section 2.18, constitute a legal or
equitable discharge of, or provide a right of setoff against, the obligations of
Borrower hereunder; (v) the fact that a Default shall have occurred and be
continuing; or (vi) any material adverse change in the business, property,
results of operations, prospects or condition, financial or otherwise, of
Borrower and its Subsidiaries. None of the Agents, the Lenders, the Issuing Bank
or any of their Affiliates shall have any liability or responsibility by reason
of or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived
by Borrower to the extent permitted by applicable Requirements of Law) suffered
by Borrower that are caused by the Issuing Bank's failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(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 promptly
give written notice to the Administrative Agent and Borrower of such demand for
payment and whether the Issuing Bank has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve Borrower of its Reimbursement Obligation to the Issuing Bank
and the Revolving Lenders with respect to any such LC Disbursement (other than
with respect to the timing of such Reimbursement Obligation set forth in Section
2.18(e)).
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless Borrower shall reimburse such LC Disbursement in full
on the date such LC Disbursement is made, the unpaid amount thereof shall bear
interest payable on demand, for each day from and including
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the date such LC Disbursement is made to but excluding the date that Borrower
reimburses such LC Disbursement, at the rate per annum determined pursuant to
Section 2.06(c). Interest accrued pursuant to this paragraph shall be for the
account of the Issuing Bank, except that interest accrued on and after the date
of payment by any Revolving Lender pursuant to Section 2.18(e) to reimburse the
Issuing Bank shall be for the account of such Lender to the extent of such
payment.
(i) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that Borrower receives notice from
the Administrative Agent or the Required Lenders (or, if the maturity of the
Loans has been accelerated, Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure) reasonably demanding the deposit of
cash collateral pursuant to this paragraph, Borrower shall deposit on terms and
in accounts reasonably satisfactory to the Collateral Agent, in the name of the
Collateral Agent and for the benefit of the Revolving Lenders, an amount in cash
equal to the LC Exposure as of such date plus any accrued and unpaid interest
thereon; provided that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to Borrower described in Section 8.01(g) or (h).
Funds so deposited shall be applied by the Collateral Agent to reimburse the
Issuing Bank for LC Disbursements for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of outstanding
Reimbursement Obligations or, if the maturity of the Loans has been accelerated
(but subject to the consent of Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure), be applied to satisfy other
Obligations of Borrower under this Agreement. If Borrower is required to provide
an amount of cash collateral hereunder as a result of the occurrence of an Event
of Default, such amount plus any accrued interest or realized profits with
respect to such amounts (to the extent not applied as aforesaid) shall be
returned to Borrower within three Business Days after all Events of Default have
been cured or waived.
(j) Additional Issuing Banks. Borrower may, at any time and
from time to time, designate one or more additional Revolving Lenders to act as
an issuing bank under the terms of this Agreement, with the consent of the
Administrative Agent (which consent shall not be unreasonably withheld or
delayed), the Issuing Bank and such Revolving Lender(s). Any Lender designated
as an issuing bank pursuant to this paragraph (j) shall be deemed (in addition
to being a Revolving Lender) to be the Issuing Bank with respect to Letters of
Credit issued or to be issued by such Revolving Lender, and all references
herein and in the other Loan Documents to the term "Issuing Bank" shall, with
respect to such Letters of Credit, be deemed to refer to such Revolving Lender
in its capacity as Issuing Bank, as the context shall require.
(k) Resignation or Removal of the Issuing Bank. The Issuing
Bank may resign as Issuing Bank hereunder at any time upon at least 30 days'
prior notice to the Lenders, the Administrative Agent and Borrower. The Issuing
Bank may be replaced at any time by written agreement among Borrower, each
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank or any such additional Issuing Bank. At the time any such
resignation or replacement shall become effective, Borrower shall pay all unpaid
and invoiced fees accrued for the account of the replaced Issuing Bank pursuant
to Section 2.05(c). From and after the effective date of any such resignation or
replacement or addition, as applicable, (i) the successor or additional Issuing
Bank shall have all the rights and obligations of the Issuing Bank under this
Agreement with respect to Letters of Credit to be issued by it thereafter and
(ii) references herein to the term "Issuing Bank" shall be deemed to refer to
such successor or such addition or to any previous Issuing Bank, or to such
successor or such addition and all previous Issuing Banks, as the context shall
require. After the resignation or replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain
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a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such resignation or replacement, but shall not be required to issue
additional Letters of Credit. If at any time there is more than one Issuing Bank
hereunder, Borrower may, in its discretion, select which Issuing Bank is to
issue any particular Letter of Credit.
(l) Other. The Issuing Bank shall be under no obligation to
issue any Letter of Credit if
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or
restrain the Issuing Bank from issuing such Letter of Credit, or any
Requirement of Law applicable to the Issuing Bank or any request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Bank shall
prohibit, or request that the Issuing Bank refrain from, the issuance
of letters of credit generally or such Letter of Credit in particular
or shall impose upon the Issuing Bank with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which the
Issuing Bank is not otherwise compensated hereunder) not in effect on
the Closing Date, or shall impose upon the Issuing Bank any
unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which the Issuing Bank in good xxxxx xxxxx material to
it; or
(ii) the issuance of such Letter of Credit would violate one
or more policies of the Issuing Bank.
The Issuing Bank shall be under no obligation to amend any Letter of Credit if
(A) the Issuing Bank would have no obligation at such time to issue such Letter
of Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.
SECTION 2.19 INCREASE IN COMMITMENTS.
(a) Borrower Request. Borrower may by written notice to the
Administrative Agent elect to request (x) prior to the Revolving Maturity Date,
an increase to the existing Revolving Commitments and/or (y) the establishment
of one or more new Term Loan Commitments (each, an "INCREMENTAL TERM LOAN
COMMITMENT") by an amount not in excess of $25,000,000 in the aggregate and not
less than $5,000,000 individually. Each such notice shall specify (i) the date
(each, an "INCREASE EFFECTIVE DATE") on which Borrower proposes that the
increased or new Commitments shall be effective, which shall be a date not less
than 10 Business Days after the date on which such notice is delivered to the
Administrative Agent and (ii) the identity of each Eligible Assignee to whom
Borrower proposes any portion of such increased or new Commitments be allocated
and the amounts of such allocations; provided that any existing Lender
approached to provide all or a portion of the increased or new Commitments may
elect or decline, in its sole discretion, to provide such increased or new
Commitment.
(b) Conditions. The increased or new Commitments shall become
effective, as of such Increase Effective Date; provided that:
(i) each of the conditions set forth in Section 4.02
shall be satisfied (or waived);
(ii) no Default shall have occurred and be continuing or
would result from the borrowings to be made on the Increase Effective
Date;
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(iii) after giving effect to the borrowings to be made on
the Increase Effective Date and to any change in Consolidated EBITDA
and any increase or decrease in Indebtedness resulting from the
consummation of any Permitted Acquisition concurrently with such
borrowings on a Pro Forma Basis as of the date of the most recent
financial statements delivered pursuant to Section 5.01(a) or (b),
Borrower shall be in compliance with (A) Section 6.10(a) and (c) to the
extent the increased commitments are comprised in whole or in part of
Incremental Term Loan Commitments and Borrowings thereunder are not
being made in connection with a Permitted Acquisition and (B) in all
other cases, Section 6.10(a), in each case for the applicable Test
Period;
(iv) Borrower shall make any payments required pursuant
to Section 2.13 in connection with any adjustment of Revolving Loans
pursuant to Section 2.19(d); and
(v) Borrower shall deliver or cause to be delivered any
legal opinions or other documents reasonably requested by the
Administrative Agent in connection with any such transaction.
(c) Terms of New Loans and Commitments. The terms and
provisions and documentation in respect of Loans made pursuant to the new
Commitments shall be reasonably satisfactory to the Administrative Agent and
shall be as follows:
(i) terms and provisions of Loans made pursuant to
Incremental Term Loan Commitments ("INCREMENTAL TERM LOANS") shall be
as set forth herein or in the Increase Joinder (it being understood
that Incremental Term Loans may be Tranche A Loans);
(ii) the terms and provisions of Revolving Loans and
additional Tranche A Loans made pursuant to new Commitments shall be
identical to the Revolving Loans or Tranche A Loans, as the case may
be;
(iii) any principal amount payable on an Incremental Term
Loan that is not a Tranche A Loan prior to the Tranche A Maturity Date
shall be payable on a Term Loan Repayment Date and shall not exceed on
any such Term Loan Repayment Date, on a percentage of Loan basis
(without giving effect to any prepayments), the principal amount of
Tranche A Loan payable on such Term Loan Repayment Date;
(iv) the maturity date of Incremental Term Loans that are
not Tranche A Loans (the "INCREMENTAL TERM LOAN MATURITY DATE") shall
not be earlier than the Final Maturity Date;
(v) the Applicable Margins for Incremental Term Loans
that are not Tranche A Loans shall be determined by Borrower and the
applicable new Lenders; provided, however, that the Applicable Margins
(calculated for the purpose of this clause to give effect to any
original issue discount or LIBOR Rate floor) for the new Term Loans
shall not be greater than the highest Applicable Margins that may,
under any circumstances, be payable with respect to Tranche A Loans
plus 50 basis points; and
(vi) any mandatory prepayment provisions and related
rights in respect of any Incremental Term Loan that is not a Tranche A
Loan shall be no more than pro rata with those applicable to the
Tranche A Loans;
The increased or new Commitments shall be effected by a joinder agreement (the
"INCREASE JOINDER") executed by Borrower, the Administrative Agent and each
Lender making such increased or new Commitment, in form and substance reasonably
satisfactory to each of them. The Increase Joinder may,
without the consent of any other Lenders, effect such amendments to this
Agreement and the other Loan Documents as may be necessary or appropriate, in
the reasonable opinion of the Administrative Agent, to effect the provisions of
this Section 2.19; provided that such amendment or amendments shall be otherwise
in compliance with Section 10.02.
(d) Adjustment of Revolving Loans. To the extent the
Commitments being increased on the relevant Increase Effective Date are
Revolving Commitments, then each of the Revolving Lenders having a Revolving
Commitment prior to such Increase Effective Date (the "PRE-INCREASE REVOLVING
LENDERS") shall assign to any Revolving Lender which is acquiring a new or
additional Revolving Commitment on the Increase Effective Date (the
"POST-INCREASE REVOLVING LENDERS"), and such Post-Increase Revolving Lenders
shall purchase from each Pre-Increase Revolving Lender, at the principal amount
thereof, such interests in the Revolving Loans and participation interests in LC
Exposure and Swingline Loans outstanding on such Increase Effective Date as
shall be necessary in order that, after giving effect to all such assignments
and purchases, such Revolving Loans and participation interests in LC Exposure
and Swingline Loans will be held by Pre-Increase Revolving Lenders and
Post-Increase Revolving Lenders ratably in accordance with their Revolving
Commitments after giving effect to such increased Revolving Commitments.
(e) Making of New Term Loans. On any Increase Effective Date
on which new Commitments for Term Loans are effective, subject to the
satisfaction (or waiver) of the foregoing terms and conditions, each Lender of
such new Commitment shall make a Term Loan to Borrower in an amount equal to its
new Commitment.
(f) Equal and Ratable Benefit. The Loans and Commitments
established pursuant to this paragraph shall constitute Loans and Commitments
under, and shall be entitled to all the benefits afforded by, this Agreement and
the other Loan Documents, and shall, without limiting the foregoing, benefit
equally and ratably from the Guarantees and security interests created by the
Security Documents. The Loan Parties shall take any actions reasonably required
by the Administrative Agent to ensure and/or demonstrate that the Lien and
security interests granted by the Security Documents continue to be perfected
under the UCC or otherwise after giving effect to the establishment of any such
Class of Term Loans or any such new Commitments. In addition, unless otherwise
specifically provided herein, all references in Loan Documents to Revolving
Loans or Tranche A Loans shall be deemed, unless the context otherwise requires,
to include references to Revolving Loans made pursuant to new Commitments and
Incremental Term Loans that are Tranche A Loans, respectively, made pursuant to
this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Administrative
Agent, the Collateral Agent, the Issuing Bank and each of the Lenders (with
references to the Companies being references thereto after giving effect to the
Transactions unless otherwise expressly stated) that:
SECTION 3.01 ORGANIZATION; POWERS. Each Company (a) is a
corporation, limited partnership or limited liability company duly organized or
formed and, with respect to each Company that is a corporation or limited
liability company, validly existing, under the laws of the jurisdiction of its
organization, (b) has all requisite organizational power and authority and all
requisite governmental licenses, authorizations, consents and approvals to carry
on its business as now conducted and to own and lease its property and (c) is
registered or qualified and in good standing (to the extent such concept is
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applicable in the applicable jurisdiction) to do business in every jurisdiction
where such registered or qualification is required, except in such jurisdictions
where the failure to so qualify or be in good standing, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. There is no existing default under any Organizational Document of any
Company or any event which, with the giving of notice or passage of time or
both, would constitute a default by any party thereunder that could reasonably
be expected to result in a Material Adverse Effect.
SECTION 3.02 AUTHORIZATION; ENFORCEABILITY. The Transactions
to be entered into by each Loan Party are within such Loan Party's
organizational powers and have been duly authorized by all necessary
organizational action on the part of such Loan Party. This Agreement has been
duly executed and delivered by each Loan Party and constitutes, and each other
Loan Document to which any Loan Party is to be a party, when executed and
delivered by such Loan Party, will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03 NO CONFLICTS. Except as set forth on Schedule
3.03, the Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority,
except (i) such as have been obtained or made and are in full force and effect,
(ii) filings necessary to perfect Liens created by the Loan Documents and (iii)
consents, approvals, registrations, filings, permits or actions the failure to
obtain or perform which could not reasonably be expected to result in a Material
Adverse Effect, (b) will not violate the Organizational Documents of any
Company, (c) will not violate any Requirement of Law except to the extent such
violation could not be reasonably expected to result in a Material Adverse
Effect, (d) will not violate or result in a default or require any consent or
approval under any indenture, agreement or other instrument binding upon any
Company or its property, or give rise to a right thereunder to require any
payment to be made by any Company, except for violations, defaults or the
creation of such rights that could not reasonably be expected to result in a
Material Adverse Effect, and (e) will not result in the creation or imposition
of any Lien on any property of any Company, except Liens created by the Loan
Documents and Permitted Liens.
SECTION 3.04 FINANCIAL STATEMENTS; PROJECTIONS.
(a) Historical Financial Statements. Borrower has heretofore
delivered to the Lenders (i) the consolidated balance sheets and related
statements of income, stockholders' equity and cash flows of the Acquired
Business (A) as of and for the fiscal years ended 2003 and 2002, audited by and
accompanied by the unqualified (other than a qualification regarding a change in
method of accounting for goodwill and other intangible assets in accordance with
SFAS 142 in 2002) opinion of KPMG, LLP, independent public accountants, and (B)
the unaudited consolidated balance sheets and related statements of income,
stockholders' equity and cash flows of the Acquired Business (with respect to
which KPMG, LLP shall have performed an SAS 100 review or comparable level of
review with respect to entities whose securities are not registered with the
Securities and Exchange Commission) as of and for the nine-month period ended
September 30, 2004, and for the comparable period of the preceding fiscal year,
in each case, certified by a Financial Officer of Borrower, (ii) stand-alone
unaudited balance sheets and related statements of income, stockholders'
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equity and cash flows of each of the Subsidiary Guarantors for the fiscal
quarter ended September 30, 2004 and for the comparable period of the preceding
fiscal year, (iii) the interim monthly and year-to-date consolidated and
consolidating unaudited financial statements of the Acquired Business for each
fiscal month ending after September 30, 2004 and prior to 30 days prior to the
Closing Date and (iv) the balance sheets and related statements of income,
stockholders' equity and cash flows for each HMO Subsidiary (A) as of and for
the fiscal years ended 2003 and 2002 and (B) as of and for each fiscal quarter
ending after the fiscal year ended 2003 and prior to 30 days prior to the
Closing Date, and for the comparable periods of the preceding fiscal year. Such
financial statements and all financial statements delivered pursuant to Sections
5.01(a), (b) and (c) have been prepared in accordance with GAAP (or, as
applicable with respect to HMO Subsidiaries, SAP) and present fairly and
accurately the financial condition and results of operations and cash flows of
the Acquired Business, the Subsidiary Guarantors or the HMO Subsidiaries in all
material respects as of the dates and for the periods to which they relate.
(b) No Material Adverse Effect. Since December 31, 2003 there
has been no event, change, circumstance or occurrence that, individually or in
the aggregate, has had or could reasonably be expected to result in a Material
Adverse Effect.
(c) Pro Forma Financial Statements. Borrower has heretofore
delivered to the Lenders Borrower's unaudited pro forma consolidated balance
sheet and statements of income and cash flows and pro forma EBITDA, for the
fiscal year ended December 31, 2003, and as of and for the nine-month period
ended September 30, 2004, in each case after giving effect to the Transactions
as if they had occurred on such date in the case of the balance sheet and as of
the beginning of all periods presented in the case of the statements of income
and cash flows. Such pro forma financial statements have been prepared on a Pro
Forma Basis.
(d) Forecasts. On or prior to the Closing Date, Borrower has
delivered to the Lenders forecasts of the financial performance of Holdings and
its subsidiaries for the period ending December 31, 2009 prepared by each
Sponsor. The forecasts of financial performance of Holdings and its subsidiaries
furnished to the Lenders have been prepared in good faith by Borrower and based
on assumptions believed by Borrower to be reasonable when made, it being
understood by the Lenders, however, that forecasts as to the future events are
not historical facts and that the actual results during the period or periods
covered by the forecasts may differ from the forecasted results and that the
differences may be material.
SECTION 3.05 PROPERTIES.
(a) Generally. Each Company has legal title to, or valid
leasehold interests in, all its property material to its business, free and
clear of all Liens except for Permitted Liens and minor irregularities or
deficiencies in title that, individually or in the aggregate, do not interfere
in any material way with its ability to conduct its business as currently
conducted or to utilize in any material way such property for its intended
purpose. The property of the Companies, taken as a whole, (i) is in good
operating order, condition and repair (ordinary wear and tear and damage by
casualty excepted) except to the extent that failure to be in such condition
could not be reasonably expected to result in a Material Adverse Effect and (ii)
constitutes all the property which is required for the business and operations
of the Companies as presently conducted.
(b) Real Property. Schedules 8(a) and 8(b) to the Perfection
Certificate dated the Closing Date contain a true and complete list of each
parcel of Real Property leased, subleased or otherwise occupied or utilized by
any Company, as lessee, sublessee, franchisee or licensee, as of the Closing
Date and whether any Lease requires the consent of the landlord or tenant
thereunder, or other party thereto, to the Transactions. No Company owns in fee
any Real Property as of the Closing Date.
(c) No Casualty Event. No Company has received any written
notice of, nor has any knowledge of, the occurrence or pendency or contemplation
of any Casualty Event affecting all or any
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portion of its property which could reasonably be expected to result in a
Material Adverse Effect. No Mortgage encumbers improved Real Property that is
located in an area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards within the meaning of
the National Flood Insurance Act of 1968 unless flood insurance available under
such Act has been obtained in accordance with Section 5.04.
(d) Collateral. Each Loan Party owns or has rights to use all
of the Collateral and all rights with respect to any of the foregoing necessary
for or material to each Loan Party's business as currently conducted. The use by
each Loan Party of such Collateral and all such rights with respect to the
foregoing do not infringe on the rights of any person other than such
infringement which could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect. To Borrower's knowledge, no
claim has been made and remains outstanding that any Loan Party's use of any
Collateral does or may violate the rights of any third party that could,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.
SECTION 3.06 INTELLECTUAL PROPERTY.
(a) Ownership/No Claims. Each Loan Party owns, or is licensed
to use, all patents, patent applications, trademarks, trade names, servicemarks,
copyrights, technology, trade secrets, proprietary information, domain names,
know-how and processes necessary for the conduct of its business as currently
conducted (the "INTELLECTUAL PROPERTY"), except for those the failure to own or
have a license to use, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No claim has been asserted and
is pending by any person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does any Loan Party know of any valid basis for any such claim.
The use of such Intellectual Property by each Loan Party does not infringe the
rights of any person, except for such claims of infringement that could not
reasonably be expected to result in a Material Adverse Effect.
(b) Registrations. Except pursuant to licenses and other user
agreements entered into by each Loan Party that are listed in Schedule 12(a) or
12(b) to the Perfection Certificate or could otherwise not be reasonably
expected to result in a Material Adverse Effect, on and as of the date hereof
each Loan Party owns and possesses the right to use, and has done nothing to
authorize or enable any other person to use, any copyright, patent or trademark
(as such terms are defined in the Security Agreement) listed in Schedule 12(a)
or 12(b) to the Perfection Certificate. Each Loan Party has taken commercially
reasonable action to maintain and protect all patent, copyright and trademark
registrations listed in Schedule 12(a) or 12(b) to the Perfection Certificate.
(c) No Violations or Proceedings. To each Loan Party's
knowledge, on and as of the date hereof, there is no material violation by
others of any right of such Loan Party with respect to any copyright, patent or
trademark listed in Schedule 12(a) or 12(b) to the Perfection Certificate,
pledged by it under the name of such Loan Party.
SECTION 3.07 EQUITY INTERESTS AND SUBSIDIARIES.
(a) Equity Interests. Schedules 1(a) and 10(a) to the
Perfection Certificate dated the Closing Date set forth a list of (i) all the
Subsidiaries of Holdings, their jurisdictions of organization as of the Closing
Date and whether such Subsidiary is an HMO Subsidiary and (ii) the number of
each class of its Equity Interests authorized, and the number outstanding, on
the Closing Date and the number of units or shares covered by all outstanding
options, warrants, rights of conversion or purchase and similar rights
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at the Closing Date. All Equity Interests of each Company that are owned by
Holdings or any of its Subsidiaries are duly and validly issued and are fully
paid (except as to the general partner interests of GulfQuest, L.P.) and
non-assessable (except, in the case of (1) GulfQuest, L.P., as assessments could
be required on its outstanding limited partnership interests in respect of the
matters described in Sections 3.03(a) and 6.07 of the Texas Revised Limited
Partnership Act (the "TRLPA"), as nonassessability of its outstanding general
partner interests may be affected by the matters referred to in Section 4.03(b)
of the TRLPA and GulfQuest L.P.'s Limited Partnership Agreement dated as of
November 30, 2002 (the "PARTNERSHIP AGREEMENT") and (2) each Company that is a
limited liability company, as assessments could be required on its outstanding
limited liability company interests in respect of the matters referred to in
Section 5.09 of the Texas Limited Liability Company Act, Section 00-000-000 of
the Tennessee Limited Liability Company Act, Section 18-607 of the Delaware
Limited Liability Company Act, Section 10-12-29 of the Alabama Limited Liability
Company Act and Section 25-30 of the Illinois Limited Liability Company Act),
and, other than the Equity Interests of Borrower, are owned by Borrower,
directly or indirectly through Wholly Owned Subsidiaries. As of the Closing
Date, contributions on the outstanding Equity Interests of any Company that is a
limited liability company could not be required under the applicable Limited
Liability Company Act. All Equity Interests of Borrower are owned directly by
Holdings. Each Loan Party is the record and beneficial owner of, and has good
and marketable title to, the Equity Interests pledged by it under the Security
Agreement, free of any and all Liens, rights or claims of other persons, except
the security interest created by the Security Agreement and Permitted Liens, and
there are no outstanding warrants, options or other rights to purchase, or
shareholder, voting trust or similar agreements outstanding with respect to, or
property that is convertible into, or that requires the issuance or sale of, any
such Equity Interests (except for rights of first refusal under the Partnership
Agreement).
(b) No Consent of Third Parties Required. Except for consents
obtained on or prior to the Closing Date, no consent of any person including any
other general or limited partner, any other member of a limited liability
company, any other shareholder or any other trust beneficiary is necessary (from
the perspective of a secured party) in connection with the creation, perfection
or first priority status of the security interest of the Collateral Agent in any
Equity Interests pledged to the Collateral Agent for the benefit of the Secured
Parties under the Security Agreement or the exercise by the Collateral Agent of
the voting or other rights provided for in the Security Agreement or the
exercise of remedies in respect thereof.
(c) Organizational Chart. An accurate organizational chart,
showing the ownership structure of Holdings, Borrower and each Subsidiary on the
Closing Date, and after giving effect to the Transactions, is set forth on
Schedule 10(a) to the Perfection Certificate dated the Closing Date.
SECTION 3.08 LITIGATION; COMPLIANCE WITH LAWS. There are no
actions, suits or proceedings at law or in equity by or before any Governmental
Authority now pending or, to the knowledge of any Company, threatened against
any Company or any business, property or rights of any Company or any of
Holdings' Responsible Officers (i) that involve any Loan Document or any of the
Transactions or (ii) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect. No
Company or any of its property is in violation of, nor will the continued
operation of its property as currently conducted violate, any Requirements of
Law (including any zoning or building ordinance, code or approval or any
building permits) any requirements of a Medical Reimbursement Program or is in
default with respect to any Requirement of Law, where in each case such
violation or default, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
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Without limiting the generality of the foregoing, with respect
to each member of the Consolidated Group:
(i) there is (A) no member of the Consolidated Group or
individual employed by any member of the Consolidated Group that would
reasonably be expected to have criminal culpability or to be excluded
from participation in any Medical Reimbursement Program for corporate
or individual actions or failures to act where such culpability or
exclusion has resulted or could reasonably be expected to result in an
Exclusion Event; and (B) no officer continuing to be employed by the
Consolidated Group who may reasonably be expected to have individual
culpability for matters under investigation by the OIG or 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 other Governmental Authority;
(ii) current billing policies, arrangements, protocols
and instructions comply with requirements of Medical Reimbursement
Programs and are administered by properly trained personnel, except
where any such failure to comply would not reasonably be expected to
result in an Exclusion Event; and
(iii) current medical director compensation arrangements
comply with state and federal anti-kick back, fraud and abuse, and
Xxxxx Law requirements, except where any such failure to comply would
not reasonably be expected to result in an Exclusion Event.
SECTION 3.09 AGREEMENTS. No Company is in default in any
manner under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other agreement or instrument to which it is a
party or by which it or any of its property is or may be bound, where such
default could reasonably be expected to result in a Material Adverse Effect, and
no condition exists which, with the giving of notice or the lapse of time or
both, would constitute such a default.
SECTION 3.10 FEDERAL RESERVE REGULATIONS. No Company 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. 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 in contravention of the provisions of the regulations of the Board,
including Regulation T, Regulation U or Regulation X. The pledge of the
Securities Collateral pursuant to the Security Agreement does not violate such
regulations.
SECTION 3.11 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT. No Company is (a) registered or required to be registered as an
"investment company" or a company "controlled" by an "investment company," as
defined in the Investment Company Act of 1940, as amended, or (b) a "holding
company," an "affiliate" of a "holding company" or a "subsidiary company" of a
"holding company," as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935, as amended.
SECTION 3.12 USE OF PROCEEDS. Borrower will use the proceeds
of (a) the Tranche A Loan (together with the proceeds of the Equity Financing,
Rollover Equity and Senior Subordinated Notes issued on the date hereof) to
effect, without duplication, the Transactions and pay related fees, costs and
expenses and (b) the Revolving Loans and Swingline Loans on the Closing Date to
effect the Transactions in an amount not to exceed $5,000,000 and after the
Closing Date for general corporate
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purposes (including to effect Permitted Acquisitions, working capital and other
purposes not prohibited by applicable Requirements of Law).
SECTION 3.13 TAXES. Each Company has (a) timely filed or
caused to be timely filed all federal Tax Returns and all material Tax Returns
or materials required to have been filed by it and all such Tax Returns are true
and correct in all material respects and (b) duly and timely paid, collected or
remitted or caused to be duly and timely paid, collected or remitted all Taxes
(whether or not shown on any Tax Return) due and payable, collectible or
remittable by it and all assessments received by it, except Taxes that are being
contested in good faith by appropriate proceedings and for which such Company
has set aside on its books adequate reserves in accordance with GAAP. Each
Company has made adequate provision in accordance with GAAP for all Taxes not
yet due and payable. Each Company is unaware of any proposed or pending tax
assessments, deficiencies or audits that could be reasonably expected to,
individually or in the aggregate, result in a Material Adverse Effect. No
Company has ever been a party to any understanding or arrangement constituting a
"tax shelter" within the meaning of Section 6662(d)(2)(C)(iii) of the Code or
within the meaning of Section 6111(c) or Section 6111(d) of the Code as in
effect immediately prior to the enactment of the American Jobs Creation of 2004,
or has ever "participated" in a "reportable transaction" within the meaning of
Treasury Regulation Section 1.6011-4, except as could not be reasonably expected
to, individually or in the aggregate, result in a Material Adverse Effect.
SECTION 3.14 NO MATERIAL MISSTATEMENTS. No written
information, report, financial statement, certificate, Borrowing Request, LC
Request, exhibit or schedule furnished by or on behalf of any Company to the
Administrative Agent or any Lender in connection with the negotiation of any
Loan Document or included therein or delivered pursuant thereto, taken as a
whole (including the Confidential Information Memorandum), contained or contains
any untrue statement of a material fact or omitted or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were or are made, not materially misleading as of
the date such information is dated or certified; provided that to the extent any
such information, report, financial statement, exhibit or schedule was based
upon or constitutes a forecast or projection, each Company represents only that
it acted in good faith and utilized assumptions it believed to be reasonable at
the time of the preparation of such information, report, financial statement,
exhibit or schedule, it being understood by the Lenders, however, that forecasts
as to the future events are not historical facts and that the actual results
during the period or periods covered by the forecasts may differ from the
forecasted results and that the differences may be material.
SECTION 3.15 LABOR MATTERS. As of the Closing Date, there are
no strikes, lockouts or slowdowns against any Company pending or, to the
knowledge of any Company, threatened. The hours worked by and payments made to
employees of any Company have not been in violation of the Fair Labor Standards
Act of 1938, as amended, or any other applicable federal, state, local or
foreign law dealing with such matters in any manner which could reasonably be
expected to result in a Material Adverse Effect. All payments due from any
Company, or for which any claim may be made against any Company, 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 such Company 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 any Company is bound.
SECTION 3.16 SOLVENCY. Immediately after the consummation of
the Transactions to occur on the Closing Date and immediately following, the
making of each Loan and after, giving effect
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to the application of the proceeds of each Loan, (a) the fair value of the
properties of Holdings (on a consolidated basis with its Subsidiaries) on a
going concern basis will exceed its debts and liabilities, subordinated,
contingent or otherwise; (b) the present fair saleable value of the property of
Holdings (on a consolidated basis with its Subsidiaries) on a going concern
basis 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)
Holdings (on a consolidated basis with its Subsidiaries) will be able to pay its
debts and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) Holdings (on a consolidated
basis with its Subsidiaries) will not have unreasonably small capital with which
to conduct its business in which it is engaged as such business is now conducted
and is proposed to be conducted following the Closing Date.
SECTION 3.17 EMPLOYEE BENEFIT PLANS. Except as could not be
reasonably expected to result in a Material Adverse Effect, each Plan is in
compliance in all material respects with the applicable provisions of ERISA and
the Code and the regulations and published interpretations thereunder. 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
material liability of any Company or any of its ERISA Affiliates or the
imposition of a Lien on any of the property of any Company. The present value of
all accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed the fair market value of the property of all such
underfunded Plans except where such underfunding could not be reasonably
expected to result in a Material Adverse Effect. Using actuarial assumptions and
computation methods consistent with subpart I of subtitle E of Title IV of
ERISA, the aggregate liabilities of each Company or its ERISA Affiliates to all
Multiemployer Plans in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Multiemployer Plan, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.18 ENVIRONMENTAL MATTERS.
(a) Except as, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect:
(i) The Companies and their businesses, operations and
Real Property are and in the last six years have been in compliance
with, and the Companies have no liability under, Environmental Laws;
(ii) The Companies have obtained all Environmental
Permits required for the conduct of their businesses and operations,
and the ownership, operation and use of their property, under
Environmental Law, all such Environmental Permits are valid and in good
standing and, under the currently effective business plan of the
Companies, no expenditures or operational adjustments will be required
in order to renew or modify such Environmental Permits during the next
five years;
(iii) There has been no Release or threatened Release of
Hazardous Material on, at, under or from any Real Property or facility
presently or formerly owned, leased or operated by the Companies or
their predecessors in interest that could reasonably be expected to
result in liability by the Companies under Environmental Law;
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(iv) There is no Environmental Claim pending or, to the
knowledge of the Companies, threatened against the Companies, or
relating to the Real Property currently or formerly owned, leased or
operated by the Companies or relating to the operations of the
Companies, and there are no actions, activities, circumstances,
conditions, events or incidents that could form the basis of such an
Environmental Claim; and
(v) No person with an indemnity or contribution obligation to
the Companies relating to compliance with or liability under
Environmental Law is in default with respect to such obligation.
(b) (i) Except as, individually or in the aggregate, could not
be reasonably expected to result in a Material Adverse Effect, no Company is
obligated to perform any action or otherwise incur any expense under
Environmental Law pursuant to any written and binding order, decree, judgment or
agreement by which it is bound or has assumed by contract or agreement, and no
Company is conducting or financing any Response pursuant to any Environmental
Law with respect to any Real Property or any other location;
(ii) Except as, individually or in the aggregate, could not be
reasonably expected to result in a Material Adverse Effect, no Real Property or
facility owned, operated or leased by the Companies and, to the knowledge of the
Companies, no Real Property or facility formerly owned, operated or leased by
the Companies or any of their predecessors in interest is (i) listed or proposed
for listing on the National Priorities List promulgated pursuant to CERCLA or
(ii) listed on the Comprehensive Environmental Response, Compensation and
Liability Information System promulgated pursuant to CERCLA or (iii) included on
any similar list maintained by any Governmental Authority including any such
list relating to petroleum;
(iii) Except as, individually or in the aggregate, could not be
reasonably expected to result in a Material Adverse Effect, no Lien has been
recorded or, to the knowledge of any Company, threatened under any Environmental
Law with respect to any Real Property or other assets of the Companies;
(iv) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not require
any notification, registration, filing, reporting, disclosure, investigation,
remediation or cleanup pursuant to any Governmental Real Property Disclosure
Requirements or any other Environmental Law; and
(v) The Companies have made available to the Lenders all
material records and files in the possession, custody or control of, or
otherwise reasonably available to, the Companies concerning compliance with or
liability under Environmental Law, including, without limitation those
concerning the existence of Hazardous Material at, on, under or from Real
Property or facilities currently or formerly owned, operated, leased or used by
the Companies.
This Section 3.18 sets forth the sole representations and
warranties of the Companies with respect to matters generally applicable to
Environmental Laws.
SECTION 3.19 INSURANCE. Schedule 3.19 sets forth a true,
complete and correct description in all material respects of all insurance
maintained by each Company as of the Closing Date. All insurance maintained by
the Companies is in full force and effect, all premiums have been duly paid, no
Company has received notice of violation or cancellation thereof, any Premises,
and the use, occupancy
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and operation thereof, comply in all material respects with all Insurance
Requirements, and there exists no material default under any Insurance
Requirement. Each Company has insurance in such amounts and covering such risks
and liabilities as are customary for companies of a similar size engaged in
similar businesses in similar locations with similar risks and liabilities.
SECTION 3.20 SECURITY DOCUMENTS.
(a) Security Agreement. The Security Agreement is effective to
create in favor of the Collateral Agent for the benefit of the Secured Parties,
legal and valid Liens on, and security interests in, the Security Agreement
Collateral and, when (i) financing statements and other filings in appropriate
form are filed in the offices specified on Schedule 7 to the Perfection
Certificate and (ii) upon the taking of possession or control by the Collateral
Agent of the Security Agreement Collateral with respect to which a security
interest may be perfected only by possession or control (which possession or
control shall be given to the Collateral Agent to the extent possession or
control by the Collateral Agent is required by each Security Agreement), the
Liens created by the Security Agreement shall constitute fully perfected Liens
on, and security interests in, all right, title and interest of the grantors
thereunder in the Security Agreement Collateral (other than such Security
Agreement Collateral in which a security interest cannot be perfected under the
UCC as in effect at the relevant time in the relevant jurisdiction), in each
case subject to no Liens other than Permitted Liens. Notwithstanding anything to
the contrary, the Collateral does not include any rights or Intellectual
Property or intent-to-use trademark applications in each case solely to the
extent that any law applicable to such rights or Intellectual Property prohibits
the creation of a security interest or would otherwise result in a loss of
rights from the creation of security interests therein.
(b) Intellectual Property Filing. When the Security Agreement
or a short form thereof is filed in the United States Patent and Trademark
Office and the United States Copyright Office, together with the filings
referred to in (a) above, the Liens created by such Security Agreement shall
constitute fully perfected Liens on, and security interests in, all right, title
and interest of the grantors thereunder in the Patents, Trademarks, Registered
Copyrights and Registered Copyright Licenses (each as defined in such Security
Agreement), in each case to the extent perfection can be so accomplished and
subject to no Liens other than Permitted Liens.
(c) Mortgages. Each Mortgage, if any, when filed in the office
identified in the local counsel opinion delivered with respect thereto, is
effective to create, in favor of the Collateral Agent, for its benefit and the
benefit of the Secured Parties, legal and valid first priority Liens on, and
security interests in, all of the Loan Parties' right, title and interest in and
to the Mortgaged Properties thereunder and the proceeds thereof, subject only to
Permitted Liens or other Liens reasonably acceptable to the Collateral Agent,
and when the Mortgages are filed in the offices specified in the local counsel
opinion delivered with respect thereto in accordance with the provisions of
Sections 5.11 and 5.12, the Mortgages shall constitute fully perfected Liens on,
and security interests in, all right, title and interest of the Loan Parties in
any Mortgaged Properties and the proceeds thereof, in each case prior and
superior in right to any other person, other than Permitted Liens.
(d) Valid Liens. Each Security Document delivered pursuant to
Sections 5.11 and 5.12 will, upon execution and delivery thereof, be effective
to create in favor of the Collateral Agent, for the benefit of the Secured
Parties, legal and valid Liens on, and security interests in, all of the Loan
Parties' right, title and interest in and to the Collateral thereunder, and (i)
when all appropriate filings or recordings are made in the appropriate offices
as may be required under applicable law and (ii) upon the taking of possession
or control by the Collateral Agent of such Collateral with respect to which a
security
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interest may be perfected only by possession or control (which such possession
or control shall be given to the Collateral Agent to the extent possession or
control by the Collateral Agent is required by each Security Document), such
Security Document will constitute fully perfected Liens on, and security
interests in, all right, title and interest of the Loan Parties in such
Collateral, in each case subject to no Liens other than the applicable Permitted
Liens.
SECTION 3.21 ACQUISITION DOCUMENTS; REPRESENTATIONS AND
WARRANTIES IN ACQUISITION AGREEMENT. Schedule 3.21 lists, and the Lenders have
been furnished true and complete copies of, each material Acquisition Document
to the extent executed and delivered on or prior to the Closing Date.
SECTION 3.22 Anti-Terrorism Law. No Loan Party and, to the
knowledge of the Loan Parties, none of its Affiliates is in violation of any
Requirement of Law relating to terrorism or money laundering ("ANTI-TERRORISM
LAWS"), including Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001 (the "EXECUTIVE ORDER"), and the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, Public Law 107-56.
No Loan Party and to the knowledge of the Loan Parties, no
Affiliate or broker or other agent of any Loan Party acting or benefiting in any
capacity in connection with the Loans is any of the following:
(i) a person that is listed in the annex to, or is
otherwise subject to the provisions of, the Executive Order;
(ii) a person owned or controlled by, or acting for or on
behalf of, any person that is listed in the annex to, or is otherwise
subject to the provisions of, the Executive Order;
(iii) a person with which any Lender is prohibited from
dealing or otherwise engaging in any transaction by any Anti-Terrorism
Law;
(iv) a person that commits, threatens or conspires to
commit or supports "terrorism" as defined in the Executive Order; or
(v) a person that is named as a "specially designated
national and blocked person" on the most current list published by the
U.S. Treasury Department Office of Foreign Assets Control ("OFAC") at
its official website or any replacement website or other replacement
official publication of such list.
No Loan Party and, to the knowledge of the Loan Parties, no
broker or other agent of any Loan Party acting in any capacity in connection
with the Loans (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any person
described in paragraph (b) above, (ii) deals in, or otherwise engages in any
transaction relating to, any property or interests in property blocked pursuant
to the Executive Order, or (iii) engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law.
SECTION 3.23 SUBORDINATION OF SENIOR SUBORDINATED NOTES. The
Secured Obligations are "Senior Debt," the Guaranteed Obligations are "Guarantor
Senior Debt" and the Secured Obligations
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and Guaranteed Obligations are "Designated Senior Debt," in each case, within
the meaning of the Senior Subordinated Note Documents.
SECTION 3.24 FRAUD AND ABUSE. To the knowledge of the
Responsible Officers of the Loan Parties, no Loan Party or any of their
respective officers, directors or Contract Providers with respect to their
relationships with Holdings or any of its Subsidiaries have engaged in any
activities that are prohibited under any applicable provision of the Social
Security Act and the regulations promulgated thereunder, including HIPAA,
Medicare Regulations and Medicaid Regulations that could reasonably be expected
to result in a Material Adverse Effect.
SECTION 3.25 LICENSING AND ACCREDITATION. Except to the extent
it could not reasonably be expected to result in a Material Adverse Effect, each
Loan Party and each HMO Subsidiary: (i) has obtained and maintains in good
standing without restriction, all required licenses and certificates of
authority, (ii) to the extent prudent and customary in the industry, has
obtained and maintains in good standing without restriction, accreditation from
applicable recognized accrediting agencies, (iii) has entered into and maintains
in good standing without restriction its status under each Medical Reimbursement
Program Provider Agreement to which it is a party, (iv) has implemented and
maintains a compliance program designed to provide effective internal controls
to promote adherence to, and to prevent and detect material violations of, any
applicable HMO Regulations, Medicaid Regulations and Medicare Regulations, and
(v) had implemented and maintains policies consistent with HIPPA on or before
the date that any provision thereof becomes applicable to any HMO Subsidiary.
The Loan Parties require each Contract Provider to provide evidence , in
accordance with re-credentialing requirements, that such Contract Provider is
duly licensed by each Governmental Authority having jurisdiction over the
provision of such service by such person in the locations where the Loan Parties
and HMO Subsidiaries conduct business, to the extent such licensing is required
to enable such person to provide the professional services provided by such
person. To the knowledge of the Loan Parties all such required licenses are in
full force and effect on the date hereof and have not been revoked or suspended
or otherwise limited.
ARTICLE IV
CONDITIONS TO CREDIT EXTENSIONS
SECTION 4.01 CONDITIONS TO INITIAL CREDIT EXTENSION. The
obligation of each Lender and, if applicable, each Issuing Bank to fund the
initial Credit Extension requested to be made by it shall be subject to the
prior or concurrent satisfaction or deemed satisfaction of each of the
conditions precedent set forth in this Section 4.01.
(a) Loan Documents. All legal matters incident to this
Agreement, the Credit Extensions hereunder and the other Loan Documents shall be
reasonably satisfactory to the Lenders, to the Issuing Bank and to the
Administrative Agent and there shall have been delivered to the Administrative
Agent an executed counterpart of each of the Loan Documents and the Perfection
Certificate.
(b) Corporate Documents. The Administrative Agent shall have
received:
(i) a certificate of the secretary or assistant secretary
of each Loan Party dated the Closing Date, certifying (A) that attached
thereto is a true and complete copy of each Organizational Document of
such Loan Party certified (to the extent applicable) as of a recent
date by the Secretary of State of the state of its organization, (B)
that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors
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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 Borrower, the borrowings hereunder, and that such resolutions have
not been modified, rescinded or amended and are in full force and
effect and (C) 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 (together with a
certificate of another officer as to the incumbency and specimen
signature of the secretary or assistant secretary executing the
certificate in this clause (i));
(ii) a certificate of the secretary or assistant
secretary of each HMO Subsidiary of any Loan Party dated the Closing
Date, certifying that attached thereto is a true and complete copy of
each Organizational Document of such HMO Subsidiary certified (to the
extent applicable) as of a recent date by the Secretary of State of the
state of its organization;
(iii) a certificate as to the good standing of each Loan
Party and each of their HMO Subsidiaries (in so-called "long-form" if
available) as of a recent date, from such Secretary of State (or other
applicable Governmental Authority); and
(iv) such other organizational documents as the Lenders,
the Issuing Bank or the Administrative Agent may reasonably request.
(c) Officers' Certificate. The Administrative Agent shall have
received a certificate, dated the Closing Date and signed by a Responsible
Officer of Borrower, confirming compliance with the conditions precedent set
forth in this Section 4.01 and Sections 4.02(b) and (c).
(d) Financings and Other Transactions, Etc. (i) The
Transactions shall have been consummated or shall be consummated
contemporaneously on the Closing Date, in each case in all material respects in
accordance with the terms hereof and the terms of the Transaction Documents,
without the waiver or amendment of any such terms not approved by the
Administrative Agent other than any waiver or amendment thereof that is not
materially adverse to the interests of the Lenders.
(ii) Borrower shall have received not less than $35,000,000 in
gross proceeds from the issuance and sale of the Senior Subordinated
Notes, and the Senior Subordinated Note Documents shall be in full
force and effect and in form and substance reasonably satisfactory to
the Arranger.
(iii) The Equity Financing and the issuance of the Rollover
Equity shall have been consummated. The terms of the Equity Financing
and the Rollover Equity shall be reasonably satisfactory to the
Arranger and shall not require any payments or other distributions of
cash or property (other than like-kind capital stock) in respect
thereof, or any purchases, redemptions or other acquisitions thereof
for cash or property other than payments in kind, in each case prior to
the payment in full of all Obligations (other than indemnities) except
as permitted by the Loan Documents.
(iv) The Lenders shall be satisfied with any changes to
(compared with the information provided in the Confidential Information
Memorandum) the capitalization, the terms and conditions of any equity
arrangements and the corporate or other organizational structure of the
Companies.
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(v) The Refinancing shall have been consummated in full with
all liens in favor of the existing lenders being repaid in connection
with the Refinancing being unconditionally released; the Administrative
Agent shall have received a "pay-off" letter in form and substance
reasonably satisfactory to the Administrative Agent with respect to all
debt being refinanced in the Refinancing; and the Administrative Agent
shall have received from any person holding any Lien securing any such
debt, such UCC termination statements, mortgage releases, releases of
assignments of leases and rents, releases of security interests in
Intellectual Property and other instruments, in each case in proper
form for recording, as the Administrative Agent shall have reasonably
requested to release and terminate of record the Liens securing such
debt.
(e) Financial Statements; Pro Forma Balance Sheet;
Projections. The Lenders shall have received and shall be satisfied with the
financial statements described in Section 3.04 and with the forecasts of the
financial performance of Holdings and its Subsidiaries.
(f) Indebtedness. After giving effect to the Transactions and
the other transactions contemplated hereby, no Company shall have outstanding
any Indebtedness and none of Borrower or any of its Subsidiaries shall have
outstanding any Preferred Stock other than (i) the Loans and Credit Extensions
hereunder, (ii) the Senior Subordinated Notes, (iii) the Indebtedness listed on
Schedule 6.01(b); (iv) Indebtedness owed to Borrower or any Guarantor and (v)
the Preferred Stock listed on Schedule 10 to the Perfection Certificate.
(g) Opinions of Counsel. The Administrative Agent shall have
received, on behalf of itself, the other Agents, the Arranger, the Lenders and
the Issuing Bank, a written opinion of (i) Xxxxxxxx & Xxxxx LLP, special counsel
for the Loan Parties, substantially to the effect set forth in Exhibit N-1, and
(ii) the general counsel of Borrower and its Subsidiaries substantially to the
effect set forth in Exhibit N-2, in each case (A) dated the Closing Date, (B)
addressed to the Agents, the Issuing Bank and the Lenders and (C) covering such
other matters relating to the Loan Documents and the Transactions as the
Administrative Agent shall reasonably request, and (iv) a copy of each legal
opinion delivered under the other Transaction Documents, accompanied by reliance
letters (or appropriate reliance language in such legal opinion) from the party
delivering such opinion authorizing the Agents, Lenders and the Issuing Bank to
rely thereon as if such opinion were addressed to them.
(h) Solvency Certificate. The Administrative Agent shall have
received a solvency certificate in the form of Exhibit O, dated the Closing Date
and signed by the chief financial officer of Borrower.
(i) Requirements of Law. The Lenders shall be reasonably
satisfied that Holdings, its Subsidiaries and the Transactions shall be in
compliance with all material Requirements of Law, including Regulations T, U and
X of the Board.
(j) Consents. The Lenders shall be reasonably satisfied that
all requisite Governmental Authorities and third parties shall have approved or
consented to the Transactions, and there shall be no governmental or judicial
action, actual or threatened, that has or would have, singly or in the
aggregate, a reasonable likelihood of restraining, preventing or imposing
burdensome conditions on the Transactions or the other transactions contemplated
hereby.
(k) Litigation. There shall be no litigation, public or
private, or administrative proceedings (private or governmental), governmental
investigation (to the knowledge of the Companies) or other legal or regulatory
developments, actual or to the knowledge of the Companies, threatened, that,
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singly or in the aggregate, has a reasonable likelihood of an adverse result and
if adversely decided could reasonably be expected to result in a Material
Adverse Effect, or could materially and adversely affect the ability of
Holdings, Borrower and the Subsidiaries to fully and timely perform their
respective obligations under the Transaction Documents, or the ability of the
parties to consummate the financings contemplated hereby or the other
Transactions.
(l) Sources and Uses. The sources and uses of the Loans shall
be as set forth in Section 3.12.
(m) Fees. The Arranger and 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 (including the legal fees and expenses of Xxxxxx Xxxxxx &
Xxxxxxx LLP, special counsel to the Agents, and the fees and expenses of any
local counsel, foreign counsel, appraisers, consultants and other advisors)
required to be reimbursed or paid by Borrower hereunder or under any other Loan
Document. The fees and expense of the Transactions shall not exceed $12,000,000
of which no more than $4,500,000 shall be payable, to Sponsor or its Affiliates.
(n) Personal Property Requirements. The Collateral Agent shall
have received:
(i) all certificates, agreements or instruments
representing or evidencing the Securities Collateral accompanied by
instruments of transfer and stock powers undated and endorsed in blank;
(ii) the Intercompany Note executed by and among
Holdings, Borrower and each of the Subsidiary Guarantors, accompanied
by instruments of transfer undated and endorsed in blank;
(iii) all other certificates, agreements, including
Control Agreements, or instruments necessary to perfect the Collateral
Agent's security interest in all Chattel Paper, all Instruments, all
Deposit Accounts and all Investment Property of each Loan Party (as
each such term is defined in the Security Agreement and to the extent
required by the Security Agreement);
(iv) UCC financing statements in appropriate form for
filing under the UCC, filings with the United States Patent and
Trademark Office and United States Copyright Office and such other
documents under applicable Requirements of Law in each jurisdiction as
may be necessary or appropriate or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the Liens created, or purported
to be created, by the Security Documents;
(v) certified copies of UCC, United States Patent and
Trademark Office and United States Copyright Office, tax and judgment
lien searches, bankruptcy and pending lawsuit searches or equivalent
reports or searches, each of a recent date listing all effective
financing statements, lien notices or comparable documents that name
any Loan Party as debtor and that are filed in those state and county
jurisdictions in which any property of any Loan Party is located and
the state and county jurisdictions in which any Loan Party is organized
or maintains its principal place of business and such other searches
that the Collateral Agent deems necessary or appropriate, none of which
encumber
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the Collateral covered or intended to be covered by the Security
Documents (other than Permitted Liens or any other Liens acceptable to
the Collateral Agent);
(vi) with respect to each location set forth on Schedule
4.01(n)(vi), a Landlord Access Agreement; provided that no such
Landlord Access Agreement shall be required with respect to any Real
Property that could not be obtained after the Loan Party that is the
lessee shall have used all commercially reasonable efforts to do so;
and
(vii) evidence reasonably acceptable to the Collateral
Agent of payment or arrangements for payment by the Loan Parties of all
applicable recording taxes, fees, charges, costs and expenses required
for the recording of the Security Documents.
(o) Insurance. The Administrative Agent shall have received a
copy of, or a certificate as to coverage under, the insurance policies required
by Section 5.04 and the applicable provisions of the Security Documents, each of
which shall be endorsed or otherwise amended to include a "standard" or "New
York" lender's loss payable or mortgagee endorsement (as applicable) and shall
name the Collateral Agent, on behalf of the Secured Parties, as additional
insured, in form and substance reasonably satisfactory to the Administrative
Agent.
(p) HIPAA. The Business Associate Agreement shall have been
executed and delivered by each party thereto.
SECTION 4.02 CONDITIONS TO ALL CREDIT EXTENSIONS. The
obligation of each Lender and each Issuing Bank to make any Credit Extension
(including the initial Credit Extension) shall be subject to, and to the
satisfaction of, each of the conditions precedent set forth below.
(a) Notice. The Administrative Agent shall have received a
notice or a Borrowing Request as required by Section 2.03 (or such notice shall
have been deemed given in accordance with Section 2.03) if Loans are being
requested or, in the case of the issuance, substantive amendment, extension or
renewal of a Letter of Credit, the Issuing Bank and the Administrative Agent
shall have received notice or a LC Request as required by Section 2.18(b) or, in
the case of the Borrowing of a Swingline Loan, the Swingline Lender and the
Administrative Agent shall have received a Borrowing Request as required by
Section 2.17(b).
(b) No Default. Borrower and each other Loan Party shall be in
compliance in all material respects 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 giving effect to such Credit Extension
and the application of the proceeds thereof, no Default shall have occurred and
be continuing on such date.
(c) Representations and Warranties. Each of the
representations and warranties made by any Loan Party set forth in Article III
hereof or in any other Loan Document shall be true and correct in all material
respects (except that any representation and warranty that is qualified as to
"materiality" or "Material Adverse Effect" shall be true and correct in all
respects) on and as of the date of such Credit Extension 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.
Each of the delivery of a Borrowing Request or an LC Request
and the acceptance by Borrower of the proceeds of such Credit Extension shall
constitute a representation and warranty by
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Borrower and each other Loan Party that on the date of such Credit Extension
(both immediately before and after giving effect to such Credit Extension and
the application of the proceeds thereof) the conditions contained in Sections
4.02(b) - (c) have been satisfied (or waived).
ARTICLE V
AFFIRMATIVE COVENANTS
Each Loan Party warrants, covenants and agrees with each
Lender that, so long as this Agreement shall remain in effect (excluding
contingent indemnification obligations for which no claim has been asserted) 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 canceled or
have expired and all amounts drawn thereunder have been reimbursed in full or
cash collateralized (in an amount reasonably satisfactory to the Administrative
Agent), unless the Required Lenders shall otherwise consent in writing, each
Loan Party will, and will cause each of its Subsidiaries to:
SECTION 5.01 FINANCIAL STATEMENTS, REPORTS, ETC. Furnish to
the Administrative Agent and each Lender (via Intralinks or any other method
reasonably acceptable to the Administrative Agent):
(a) Annual Reports. As soon as available and in any event
within 120 days after the end of each fiscal year beginning with the fiscal year
ending December 31, 2004 (90 days subsequent to the consummation of an IPO), (i)
the audited consolidated balance sheet of Borrower and its Subsidiaries as of
the end of such fiscal year and related consolidated statements of income, cash
flows and stockholders' equity for such fiscal year, in comparative form with
such financial statements as of the end of, and for, the preceding fiscal year,
and notes thereto (including a note with a consolidating balance sheet and
statements of income and cash flows for the Loan Parties on a consolidated
basis), and accompanied by an opinion of KPMG, LLP or other independent public
accountants of recognized national standing reasonably satisfactory to the
Administrative Agent (which opinion shall not be qualified as to scope or
contain any going concern or other qualification), stating that such financial
statements fairly present, in all material respects, the consolidated financial
condition, results of operations and cash flows of Borrower as of the dates and
for the periods specified in accordance with GAAP, (ii) a management report in a
form reasonably satisfactory to the Administrative Agent setting forth (A)
statement of income items and Consolidated EBITDA of Borrower and its
Subsidiaries for such fiscal year, showing variance, by dollar amount and
percentage, from amounts for the previous fiscal year and budgeted amounts and
(B) key operational information and statistics for such fiscal year consistent
with internal and industry-wide reporting standards, and (iii) a narrative
report and management's discussion and analysis, in a form reasonably
satisfactory to the Administrative Agent, of the financial condition and results
of operations of Borrower and its Subsidiaries for such fiscal year, as compared
to amounts for the previous fiscal year and budgeted amounts (it being
understood that the information required by clause (i) may be furnished in the
form of a Form 10-K);
(b) Quarterly Reports. As soon as available and in any event
within 45 days after the end of each of the first three fiscal quarters of each
fiscal year, beginning with the fiscal quarter ending March 31, 2005, (i) the
unaudited consolidated balance sheet of Borrower and its Subsidiaries as of the
end of such fiscal quarter and related consolidated statements of income and
cash flows for such fiscal quarter and for the then elapsed portion of the
fiscal year, in comparative form with the consolidated statements of income and
cash flows for the comparable periods in the previous fiscal year, and
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accompanied by a certificate of a Financial Officer stating that such financial
statements fairly present, in all material respects, the consolidated financial
condition, results of operations and cash flows of Borrower and its Subsidiaries
as of the date and for the periods specified in accordance with GAAP
consistently applied, and on a basis consistent with audited financial
statements referred to in clause (a) of this Section, subject to the absence of
footnote disclosure and normal year-end audit adjustments, (ii) a management
report in a form reasonably satisfactory to the Administrative Agent setting
forth (A) statement of income items and Consolidated EBITDA of Borrower and its
Subsidiaries for such fiscal quarter and for the then elapsed portion of the
fiscal year, showing variance, by dollar amount and percentage, from amounts for
the comparable periods in the previous fiscal year and budgeted amounts and (B)
key operational information and statistics for such fiscal quarter and for the
then elapsed portion of the fiscal year consistent with internal and
industry-wide reporting standards, and (iii) a narrative report and management's
discussion and analysis, in a form reasonably satisfactory to the Administrative
Agent, of the financial condition and results of operations for such fiscal
quarter and the then elapsed portion of the fiscal year, as compared to the
comparable periods in the previous fiscal year and budgeted amounts (it being
understood that the information required by clause (i) may be furnished in the
form of a Form 10-Q);
(c) HMO Subsidiary Reports. Within 15 Business Days after the
date that such annual and quarterly financial statements of each HMO Subsidiary
are required to be filed pursuant to any HMO Regulation, such annual and
quarterly financial statements prepared in accordance with SAP;
(d) Financial Officer's Certificate. (i) Concurrently with any
delivery of financial statements under Section 5.01(a) or (b), a Compliance
Certificate (A) certifying that to their knowledge no Default has occurred or,
if such a Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto, (B)
beginning with the fiscal quarter ending June 30, 2005, setting forth
computations in reasonable detail satisfactory to the Administrative Agent
demonstrating compliance with the covenants contained in Sections 6.07(f) and
6.10 (including the aggregate amount of any Excluded Issuances for such period
and the uses therefor, any Equity Issuances and Retained Equity Proceeds
including a description of the application of Retained Equity Proceeds and a
description of the application of any Retained Amount) and, concurrently with
any delivery of financial statements under Section 5.01(a) above, setting forth
Borrower's calculation of Excess Cash Flow, (C) showing a reconciliation of
Consolidated EBITDA to the net income set forth on the statement of income and
(D) stating whether there have been any changes to Schedule 1(a) to the
Perfection Certificate (as supplemented); (ii) concurrently with any delivery of
financial statements under Section 5.01(a) above, beginning with the fiscal year
ending December 31, 2005, a report of the accounting firm opining on or
certifying such financial statements stating that in the course of its regular
audit of the financial statements of Holdings and its Subsidiaries, which audit
was conducted in accordance with generally accepted auditing standards, such
accounting firm obtained no knowledge that any Default insofar as it relates to
financial or accounting matters has occurred or, if in the opinion of such
accounting firm such a Default has occurred, specifying the nature and extent
thereof and (iii) concurrently with the delivery of financial statements under
Section 5.01(b), (A) written notification of Investments during such fiscal
quarter by any member of the Consolidated Group in any HMO Subsidiary that,
individually or in the aggregate in any fiscal year of the Borrower, exceed 10%
of the Company Action Level or, in any state that has not adopted the NAIC
definition, the relevant state's reserve requirements, as applicable, (in each
case as determined in accordance with SAP at the immediately preceding
fiscal-year-end determination thereof) of such HMO Subsidiary; provided that, to
the extent such Investments, individually or in the aggregate, materially
deviate from the business plan and budget delivered pursuant to Section 5.01(h),
written notification of such Investments shall be provided not later than
fifteen days following the end of the calendar month during which such
Investments are made and (B) evidence of any requirement by an
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HMO Regulator for any member of the Consolidated Group to make a Required
Advance in excess of $100,000;
(e) Financial Officer's Certificate Regarding Collateral.
Concurrently with any delivery of financial statements under Section 5.01(a), a
certificate of a Financial Officer setting forth the information required
pursuant to the Perfection Certificate Supplement or confirming that there has
been no change in such information since the date of the Perfection Certificate
or latest Perfection Certificate Supplement;
(f) Public Reports. Promptly after the same become publicly
available, copies of all periodic and other reports, proxy statements and other
materials filed by any Company 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 holders
of its Material Indebtedness pursuant to the terms of the documentation
governing such Indebtedness (or any trustee, agent or other representative
therefor), as the case may be;
(g) Management Letters. Promptly after the receipt thereof by
any Company, a copy of any final "management letter" received by any such person
from its certified public accountants and the management's responses thereto;
(h) Budgets. Within 30 days after the beginning of each fiscal
year starting in 2006, a budget for Holdings in form reasonably satisfactory to
the Administrative Agent including balance sheets, statements of income and
sources and uses of cash, for each quarter of such fiscal year prepared in
detail with appropriate presentation and discussion of the principal assumptions
upon which such budget is based;
(i) Reinsurance. Within 120 days after the end of each fiscal
year of Borrower, a schedule setting forth in reasonable detail the reinsurance
arrangements maintained by each of the HMO Subsidiaries as of the end of such
fiscal year (with any subsequent changes described therein); and
(j) Other Information. Promptly, from time to time, such other
information regarding the operations, business affairs and financial condition
of any Company, or compliance with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request (other than privileged
information or confidential information relating to individual patients).
SECTION 5.02 LITIGATION AND OTHER NOTICES. Furnish to the
Administrative Agent (for each Lender) written notice of the following promptly
(and, in any event, within five Business Days of Borrower obtaining knowledge
thereof):
(a) any 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 known threat or
notice of intention of any person to file or commence, any action, suit,
litigation or proceeding, whether at law or in equity by or before any
Governmental Authority, (i) against any Company or any Affiliate thereof that
could reasonably be expected to result in a Material Adverse Effect or (ii) with
respect to any Loan Document;
(c) any development that has resulted in, or could reasonably
be expected to result in a Material Adverse Effect;
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(d) the occurrence of a material Casualty Event;
(e) of the institution of any investigation or proceeding
against such person to terminate (or that may result in the termination of) the
contract of any of the HMO Subsidiaries to be a Medicare Advantage Program
contractor or state Medicaid Program contractor or its status under any Medical
Reimbursement Program or any investigation or proceeding that may result in an
Exclusion Event;
(f) of its receipt of any notice of intent to exclude, any
notice of proposal to exclude issued by the OIG (together with a copy of any
such notice);
(g) of its receipt of any notice of, compliance order or
adverse reporting regarding loss or threatened loss of accreditation, loss of
participation under any reimbursement program or loss of applicable health care
license or certificate of authority of any HMO Subsidiary, and any other
material deficiency notices, compliance orders or adverse reports issued by any
HMO Regulator or other Governmental Authority or private insurance company
pursuant to a provider agreement that, if not promptly complied with or cured,
could result in the suspension or forfeiture of any license, certification, or
accreditation necessary for such HMO Subsidiary to carry on its business as then
conducted or the termination of any insurance or reimbursement program available
to any HMO Subsidiary (in each case together with a copy of any such notice);
(h) of its receipt of any correspondence from an HMO Regulator
asserting that the Borrower or any of its Subsidiaries is not in compliance in
all material respects with HMO Regulations or threatening action against the
Borrower or any of its Subsidiaries under the HMO Regulations (together with a
copy of such correspondence);
(i) the incurrence of any material Lien (other than Permitted
Liens) on, or claim asserted against any of the Collateral; and
(j) any HMO Subsidiary operating in a state that has adopted
the NAIC definition of Company Action Level, such HMO Subsidiary failing to
maintain its capital reserve requirements at or above the Company Action Level.
SECTION 5.03 EXISTENCE; BUSINESSES AND PROPERTIES.
(a) Do or cause to be done all things necessary to preserve,
renew and maintain in full force and effect its legal existence, except as
otherwise expressly permitted under Section 6.05 or Section 6.06 or, in the case
of Borrower or any Subsidiary, where the failure to perform such obligations,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
(b) Do or cause to be done all things reasonably necessary to
obtain, preserve, renew, extend and keep in full force and effect the rights,
licenses, certifications, permits, privileges, franchises, authorizations,
patents, copyrights, trademarks and trade names material to the conduct of its
business; except as permitted by Section 6.15 maintain and operate such business
in substantially the manner in which it is presently conducted and operated;
comply with all applicable Requirements of Law (including any and all zoning,
building, Environmental Law, ordinance, code or approval or any building permits
or any restrictions of record or agreements affecting the Real Property) and
decrees and orders of any Governmental Authority, whether now in effect or
hereafter enacted, except, in each case, where the failure to comply,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect; and at all times maintain, preserve and protect all
property material to the conduct of such business
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and keep such property in good repair, working order and condition (other than
wear and tear occurring in the ordinary course of business and damage by
casualty) and from time to time make, or cause to be made, all needful 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; provided that nothing in this Section 5.03(b) shall prevent (i)
sales of property, consolidations or mergers by or involving any Company in
accordance with Section 6.05 or Section 6.06; (ii) the withdrawal by any Company
of its qualification as a foreign corporation in any jurisdiction where such
withdrawal, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect; or (iii) the abandonment by any Company
of any rights, franchises, licenses, trademarks, trade names, copyrights or
patents that such person reasonably determines are not necessary to the conduct
of the Companies' business, taken as a whole to its business or no longer
commercially desirable or economically practical to maintain.
SECTION 5.04 INSURANCE.
(a) Generally. Keep its insurable property adequately insured
at all times by financially sound and reputable insurers; maintain such other
insurance as is reasonably prudent in the good faith judgment of the Responsible
Officers of Borrower or otherwise, to such extent and against such risks as is
customary with companies in the same or similar businesses operating in the same
or similar locations and with similar risk factors, including insurance with
respect to any Mortgaged Properties and other properties material to the
business of the Companies against such casualties and contingencies and of such
types and in such amounts with such deductibles as is customary in the case of
similar businesses operating in the same or similar locations, including (i)
physical hazard insurance on an "all risk" basis, (ii) commercial general
liability against claims for bodily injury, death or property damage covering
any and all insurable claims, (iii) explosion insurance in respect of any
boilers, machinery or similar apparatus constituting Collateral, (iv) business
interruption insurance and (v) worker's compensation insurance and such other
insurance as may be required by any Requirement of Law; provided that with
respect to physical hazard insurance, neither the Collateral Agent nor the
applicable Company shall agree to the adjustment of any claim thereunder in
excess of $1,000,000 without the consent of the other (such consent not to be
unreasonably withheld or delayed); provided, further, that no consent of any
Company shall be required during the continuance of an Event of Default.
(b) Requirements of Insurance. All such insurance shall (i)
provide that no cancellation, material reduction in amount or material change in
coverage thereof shall be effective until at least 30 days after receipt by the
Collateral Agent of written notice thereof to the extent available on
commercially reasonable terms, (ii) name the Collateral Agent as mortgagee (in
the case of property insurance) or additional insured on behalf of the Secured
Parties (in the case of liability insurance) or loss payee (in the case of
property insurance but excluding business interruption insurance), as applicable
and (iii) if reasonably requested by the Collateral Agent, include a breach of
warranty clause.
(c) Notice to Agents. Notify the Administrative Agent and the
Collateral Agent immediately whenever any separate insurance concurrent in form
or contributing in the event of loss with that required to be maintained under
this Section 5.04 is taken out by any Company; and promptly deliver to the
Administrative Agent and the Collateral Agent a duplicate original copy of such
policy or policies.
(d) Flood Insurance. With respect to any Mortgaged Property,
obtain flood insurance in such total amount as the Administrative Agent or the
Required Lenders may from time to time require, if at any time the area in which
any improvements located on any Mortgaged Property is designated a "flood hazard
area" in any Flood Insurance Rate Map published by the Federal Emergency
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Management Agency (or any successor agency), and otherwise comply with the
National Flood Insurance Program as set forth in the Flood Disaster Protection
Act of 1973, as amended from time to time.
(e) Broker's Report. Deliver to the Administrative Agent and
the Collateral Agent a report of a reputable insurance broker with respect to
such insurance and such supplemental reports with respect thereto as the
Administrative Agent or the Collateral Agent may from time to time reasonably
request (absent the occurrence and continuation of an Event of Default, no more
than once in any fiscal year).
(f) Mortgaged Properties. No Loan Party that is an owner of
Mortgaged Property, if any, shall take any action that is reasonably likely to
be the basis for termination, revocation or denial of any insurance coverage
required to be maintained under such Loan Party's respective Mortgage or that
could be the basis for a defense to any claim under any Insurance Policy
maintained in respect of the Premises, and each Loan Party shall otherwise
comply in all material respects with all Insurance Requirements in respect of
the Premises; provided, however, that each Loan Party may, at its own expense
and with written notice to the Administrative Agent, (i) contest the
applicability or enforceability of any such Insurance Requirements by
appropriate legal proceedings, the prosecution of which does not constitute a
basis for cancellation or revocation of any insurance coverage required under
this Section 5.04 or (ii) cause the Insurance Policy containing any such
Insurance Requirement to be replaced by a new policy complying with the
provisions of this Section 5.04.
SECTION 5.05 OBLIGATIONS AND TAXES.
(a) Payment of Obligations. Discharge promptly when due 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 lawful claims for labor,
services, materials and supplies or otherwise that, if unpaid, might give rise
to a Lien other than a Permitted Lien upon such properties or any part thereof;
provided that such payment and discharge shall not be required with respect to
any such Tax, assessment, charge, levy or claim so long as (x)(i) the validity
or amount thereof shall be contested in good faith by appropriate proceedings
timely instituted and diligently conducted and the applicable Company shall have
set aside on its books adequate reserves or other appropriate provisions with
respect thereto in accordance with GAAP and (ii) such contest operates to
suspend collection of the contested obligation, Tax, assessment or charge and
enforcement of a Lien other than a Permitted Lien.
(b) Filing of Returns. Timely file all material Tax Returns
required to be filed by it. Withhold, collect and remit all Taxes that it is
required to collect, withhold or remit except to the extent the failure to
withhold, collect and remit could not be reasonably expected to result in a
Material Adverse Effect.
(c) Tax Shelter Reporting. Borrower does not intend to treat
the Loans as being a "reportable transaction" within the meaning of Treasury
Regulation Section 1.6011-4. In the event Borrower determines to take any action
inconsistent with such intention, it will promptly notify the Administrative
Agent thereof.
SECTION 5.06 EMPLOYEE BENEFITS. (a) Comply with the applicable
provisions of ERISA and the Code except to the extent any non-compliance could
not be reasonably expected to result in a Material Adverse Effect and (b)
furnish to the Administrative Agent (x) as soon as possible after, and in any
event within 10 days after any Responsible Officer of any Company or any ERISA
Affiliates of
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any Company knows or has reason to know that, any ERISA Event has occurred that,
alone or together with any other ERISA Event could reasonably be expected to
result in liability of the Companies in an aggregate amount that could
reasonably be expected to result in a Material Adverse Effect or the imposition
of a Lien, a statement of a Financial Officer of Borrower setting forth details
as to such ERISA Event and the action, if any, that the Companies propose to
take with respect thereto, and (y) upon the reasonable request by the
Administrative Agent, copies of (i) each Schedule B (Actuarial Information) to
the annual report (Form 5500 Series) filed by any Company or any ERISA Affiliate
with the Employee Benefits Security Administration with respect to each Plan;
(ii) the most recent actuarial valuation report for each Plan; (iii) all written
notices received by any Company or any ERISA Affiliate from a Multiemployer Plan
sponsor or any governmental agency concerning an ERISA Event; and (iv) such
other documents or governmental reports or filings relating to any Plan (or
employee benefit plan sponsored or contributed to by any Company) as the
Administrative Agent shall reasonably request.
SECTION 5.07 MAINTAINING RECORDS; ACCESS TO PROPERTIES AND
INSPECTIONS; ANNUAL MEETINGS.
(a) Keep proper books of record and account in which full,
true and correct entries in conformity with GAAP and in all material respects
with all Requirements of Law are made of all dealings and transactions in
relation to its business and activities. Each Company will permit any
representatives designated by the Administrative Agent or any Lender (through
the Administrative Agent) to visit and inspect the financial records and the
property of such Company at reasonable times during normal business hours with
reasonable prior notice and as often as reasonably requested and to make
extracts from and copies of such financial records, and permit any
representatives designated by the Administrative Agent or any Lender (through
the Administrative Agent) to discuss (other than privileged information or
confidential information about individual patients) the affairs, finances,
accounts and condition of any Company with the officers and employees thereof
and advisors therefor (including independent accountants); provided that (i)
this Section 5.07(a) shall not apply to HMO Subsidiaries to the extent
prohibited by any Requirements of Law, (ii) a representative of Borrower shall
be given the opportunity to be present for any communication with the Borrower's
independent accountants, (iii) the Loan Parties shall not be required to pay the
expenses of more than one such visit and inspection during any fiscal year
unless any Event of Default has occurred and is continuing and (iv) each Lender
shall at times coordinate with Administrative Agent the frequency and timing of
any such visits and inspections so as to reasonably minimize the burden imposed
on the Loan Parties.
(b) Within 150 days after the end of each fiscal year of the
Companies, at the reasonable request of the Administrative Agent or Required
Lenders, use commercially reasonable efforts to hold a meeting (at a mutually
agreeable location, venue and time or, at the option of the Administrative Agent
in consultation with the Borrower by conference call, the costs of such venue or
call to be paid by Borrower) with all Lenders who choose to attend such meeting,
at which meeting shall be reviewed the financial results of the previous fiscal
year and the financial condition of the Companies and the budgets presented for
the current fiscal year of the Companies. The Administrative Agent shall use
commercially reasonable efforts to provide Lenders reasonable notice of any such
meeting.
SECTION 5.08 USE OF PROCEEDS. Use the proceeds of the Loans
only for the purposes set forth in Section 3.12 and request the issuance of
Letters of Credit only for the purposes set forth in the definition of
Commercial Letter of Credit or Standby Letter of Credit, as the case may be.
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SECTION 5.09 COMPLIANCE WITH ENVIRONMENTAL LAWS; ENVIRONMENTAL
REPORTS.
(a) Comply, and cause all lessees and other persons occupying
Real Property of any Company to comply, in all material respects with all
Environmental Laws and Environmental Permits applicable to its operations and
Real Property; obtain and renew all material Environmental Permits applicable to
its operations and Real Property; and conduct, in all material respects, all
Responses required by, and in accordance with, Environmental Laws; provided that
no Company shall be required to undertake any Response to the extent that its
obligation to do so is being contested in good faith and by proper proceedings
and appropriate reserves are being maintained with respect to such circumstances
in accordance with GAAP.
(b) If a Default caused by reason of a breach of Section 3.18
or Section 5.09(a) shall have occurred and be continuing for more than 20 days
without the Companies commencing activities reasonably likely to cure such
Default in accordance with Environmental Laws, at the reasonable written request
of the Administrative Agent or the Required Lenders through the Administrative
Agent, provide to the Lenders within 45 days after such reasonable request, at
the expense of Borrower, an environmental assessment report regarding the
matters which are the subject of such Default, including, where appropriate,
soil and/or groundwater sampling, prepared by an environmental consulting firm
and, in the form and substance, reasonably acceptable to the Administrative
Agent and indicating where appropriate in light of the subject matter of the
request the presence or absence of Hazardous Materials and the estimated cost of
any compliance or Response to address them.
SECTION 5.10 INTEREST RATE PROTECTION. No later than the 90th
day after the Closing Date, Borrower shall enter into, and for a minimum of one
year thereafter maintain, Hedging Agreements with terms and conditions
reasonably acceptable to the Administrative Agent that result in 30% of the
aggregate principal amount of Borrower's Consolidated Indebtedness being
effectively subject to a fixed or maximum interest rate acceptable to the
Administrative Agent.
SECTION 5.11 ADDITIONAL COLLATERAL; ADDITIONAL GUARANTORS.
(a) Subject to this Section 5.11, with respect to any personal
property (other than real property leasehold interests) acquired after the
Closing Date by any Loan Party that is intended to be subject to the Lien
created by any of the Security Documents but is not so subject, promptly (and in
any event within 30 days after the acquisition thereof) (i) execute and deliver
to the Administrative Agent and the Collateral Agent such amendments or
supplements (prepared by the applicable Agent or its counsel) to the relevant
Security Documents or such other documents as the Administrative Agent or the
Collateral Agent shall deem necessary or advisable to grant to the Collateral
Agent, for its benefit and for the benefit of the other Secured Parties, a Lien
on such property subject to no Liens other than Permitted Liens, and (ii) take
all actions necessary to cause such Lien to be duly perfected to the extent
required by such Security Document in accordance with all applicable
Requirements of Law, including the filing of financing statements in such
jurisdictions as may be reasonably requested by the Administrative Agent.
Borrower shall otherwise take such actions and execute and/or deliver to the
Collateral Agent such documents as the Administrative Agent or the Collateral
Agent shall reasonably require to confirm the validity, perfection and priority
of the Lien of the Security Documents against such after-acquired properties.
(b) With respect to any person that is or becomes a Subsidiary
after the Closing Date in accordance with Section 6.14, promptly (and in any
event within 30 days after such person becomes a Subsidiary) (i) the applicable
Loan Party shall deliver to the Collateral Agent the certificates, if any,
representing all of such Subsidiary's Equity Interests such Loan Party holds,
together with undated stock
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powers or other appropriate instruments of transfer executed and delivered in
blank by a duly authorized officer of the holder(s) of such Equity Interests,
and all intercompany notes owing from such Subsidiary to any Loan Party together
with instruments of transfer executed and delivered in blank by a duly
authorized officer of such Loan Party and (ii) cause such new Domestic
Subsidiary (A) to execute a Joinder Agreement or such comparable documentation
to become a Subsidiary Guarantor and a joinder agreement to the applicable
Security Agreement, substantially in the form annexed thereto, (B) to take all
actions necessary or advisable in the reasonable opinion of the Administrative
Agent or the Collateral Agent to cause the Lien created by the applicable
Security Agreement to be duly perfected to the extent required by such agreement
in accordance with all applicable Requirements of Law, including the filing of
financing statements in such jurisdictions as may be reasonably requested by the
Administrative Agent or the Collateral Agent and (C) execute a Business
Associate Agreement. Notwithstanding the foregoing, (1) the Equity Interests
required to be delivered to the Collateral Agent pursuant to clause (i) of this
Section 5.11(b) shall not include more than 65% of any Voting Stock of a "first
tier" Foreign Subsidiary created or acquired after the Closing Date, (2) no
Foreign Subsidiary shall be required to take the actions specified in clause
(ii) of this Section 5.11(b) and (3) no HMO Subsidiary shall be required to take
the actions specified in clause (ii) of this Section 5.11(b).
(c) Promptly (and in any event, within 60 days of the
acquisition thereof), (i) grant to the Collateral Agent a security interest in
and Mortgage on each Real Property owned in fee by such Loan Party as is
acquired by such Loan Party after the Closing Date and that, together with any
improvements thereon, individually has a fair market value of at least
$1,000,000, and (ii) use its commercially reasonable efforts to grant to the
Collateral Agent a security interest in and Mortgage on, unless the Collateral
Agent otherwise consents, each leased Real Property of such Loan Party which
lease individually has a fair market value of at least $2,500,000 in each case,
as additional security for the Secured Obligations (unless the subject property
is already mortgaged to a third party to the extent permitted by Section 6.02).
Such Mortgages shall be granted pursuant to documentation reasonably
satisfactory in form and substance to the Collateral Agent and shall constitute
legal and valid perfected Liens subject only to Permitted Liens or other Liens
reasonably acceptable to the Collateral Agent. The Mortgages or instruments
related thereto shall be duly recorded or filed in such manner and in such
places as are required by law to establish, perfect, preserve and protect the
Liens in favor of the Collateral Agent required to be granted pursuant to the
Mortgages and all taxes, fees and other charges payable in connection therewith
shall be paid in full. Such Loan Party shall otherwise take such actions and
execute and/or deliver to the Collateral Agent such documents as the
Administrative Agent or the Collateral Agent shall reasonably require to confirm
the validity, perfection and priority of the Lien of any existing Mortgage or
new Mortgage against such after-acquired Real Property (including a Title
Policy, a Survey and local counsel opinion (in form and substance reasonably
satisfactory to the Administrative Agent and the Collateral Agent) in respect of
such Mortgage).
SECTION 5.12 Security Interests; Further Assurances. Promptly,
upon the reasonable request of the Administrative Agent or the Collateral Agent,
at Borrower's expense, execute, acknowledge and deliver, or cause the execution,
acknowledgment and delivery of, and thereafter register, file or record, or
cause to be registered, filed or recorded, in an appropriate governmental
office, any document or instrument supplemental to or confirmatory of the
Security Documents or otherwise deemed by the Administrative Agent or the
Collateral Agent reasonably necessary or desirable for the continued validity,
perfection and priority of the Liens on the Collateral covered thereby subject
to no other Liens except as permitted by the applicable Security Document or
Permitted Liens, or use commercially reasonable efforts to obtain any consents
or waivers as may be necessary or appropriate in connection therewith. Deliver
or cause to be delivered to the Administrative Agent and the Collateral Agent
from time to time such other documentation, consents, authorizations, approvals
and orders in form and substance
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reasonably satisfactory to the Administrative Agent and the Collateral Agent as
the Administrative Agent and the Collateral Agent shall reasonably deem
necessary to perfect or maintain the Liens on the Collateral pursuant to the
Security Documents. Notwithstanding anything to the contrary herein, for
purposes of Intellectual Property, no Loan Party shall have any obligation to
perfect the Collateral Agent's or the Secured Parties' interest in Intellectual
Property outside the United States under any Security Documents. Upon the
exercise by the Administrative Agent, the Collateral Agent or any Lender of any
power, right, privilege or remedy pursuant to any Loan Document which requires
any consent, approval, registration, qualification or authorization of any
Governmental Authority execute and deliver all applications, certifications,
instruments and other documents and papers that the Administrative Agent, the
Collateral Agent or such Lender may reasonably require. If the Administrative
Agent, the Collateral Agent or the Required Lenders determine that they are
required by a Requirement of Law to have appraisals prepared in respect of the
Real Property of any Loan Party constituting Collateral, Borrower shall provide
to the Administrative Agent appraisals that satisfy the applicable requirements
of the Real Estate Appraisal Reform Amendments of FIRREA and are otherwise in
form and substance reasonably satisfactory to the Administrative Agent and the
Collateral Agent.
SECTION 5.13 INFORMATION REGARDING COLLATERAL. Not effect any
change (i) in any Loan Party's legal name (including as a result of a changing
identity or organizational structure), (ii) in any Loan Party's Federal Taxpayer
Identification Number or organizational identification number, if any, or (iii)
in any Loan Party's jurisdiction of organization (in each case, including by
merging with or into any other entity, reorganizing, dissolving, liquidating,
reorganizing or organizing in any other jurisdiction), until (A) it shall have
given the Collateral Agent not less than 15 days' prior written notice, or such
lesser notice period agreed to by the Collateral Agent, of its intention so to
do, clearly describing such change and providing such other information in
connection therewith as the Collateral Agent may reasonably request and (B) it
shall have taken all action reasonably satisfactory to the Collateral Agent to
maintain the perfection and priority of the security interest of the Collateral
Agent for the benefit of the Secured Parties in the Collateral, if applicable,
to the extent required under any Loan Document. Each Loan Party agrees to
promptly provide the Collateral Agent with certified Organizational Documents
reflecting any of the changes described in the preceding sentence. Each Loan
Party also agrees to promptly notify the Collateral Agent of any change in the
location of any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral is located
(including the establishment of any such new office or facility), other than
changes in location to a Mortgaged Property or a leased property subject to a
Landlord Access Agreement.
SECTION 5.14 COMPANY ACTION LEVEL. Any HMO Subsidiary
operating in a state that has adopted the NAIC definition of Company Action
Level that has capital reserves below such Company Action Level shall comply
with all requirements under applicable HMO Regulations with respect to providing
information to the applicable Governmental Authority.
SECTION 5.15 [RESERVED].
SECTION 5.16 COMPLIANCE WITH LAWS.
(a) Comply with all applicable laws, rules, regulations,
orders, writs, injunctions and decrees of any Governmental Authority (including
Titles XVII and XIX of the Social Security Act, Medicare Regulations, Medicaid
Regulations, HMO Regulations and HIPAA), 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.
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(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, except where the failure to comply therewith, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
ARTICLE VI
NEGATIVE COVENANTS
Each Loan Party warrants, covenants and agrees with each
Lender that, so long as this Agreement shall remain in effect (excluding
contingent indemnification obligations for which no claim has been asserted) 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 canceled or
have expired and all amounts drawn thereunder have been reimbursed in full or
cash collateralized (in an amount reasonably satisfactory to the Administrative
Agent), unless the Required Lenders shall otherwise consent in writing, no Loan
Party will, nor will they cause or permit any Subsidiaries to:
SECTION 6.01 INDEBTEDNESS. Incur, create, assume or permit to
exist, directly or indirectly, any Indebtedness, except:
(a) Indebtedness incurred under this Agreement and the other
Loan Documents;
(b) (i) Indebtedness outstanding on the Closing Date and
listed on Schedule 6.01(b), (ii) Senior Subordinated Notes in aggregate
principal amount not to exceed $35,000,000 (plus the aggregate amount of
pay-in-kind interest thereon) and (without duplication) the related Senior
Subordinated Note Guarantee and (iii) refinancings and renewals of the
Indebtedness described in clauses (i) and (ii); provided that (A) any such
refinancing Indebtedness is in an aggregate principal amount not greater than
the aggregate principal amount of the Indebtedness being renewed or refinanced,
plus the amount of any premiums required to be paid thereon and reasonable fees
and expenses associated therewith, (B) such refinancing Indebtedness has a later
or equal final maturity and longer or equal weighted average life than the
Indebtedness being renewed or refinanced; (C) the covenants, events of default,
subordination and other provisions thereof (including any guarantees thereof)
shall be, in the aggregate, no less favorable to the Lenders than those
contained in the Indebtedness being renewed or refinanced and (D) any
refinancing or renewal of Indebtedness of Borrower or any Subsidiary Guarantor
shall be Indebtedness of Borrower or any Subsidiary Guarantor;
(c) Indebtedness of Borrower or any Subsidiary Guarantor under
Hedging Obligations with respect to interest rates, foreign currency exchange
rates or commodity prices, in each case not entered into for speculative
purposes; provided that if such Hedging Obligations relate to interest rates,
(i) such Hedging Obligations relate to payment obligations on Indebtedness
otherwise permitted to be incurred by the Loan Documents and (ii) the notional
principal amount of such Hedging Obligations at the time incurred does not
exceed the principal amount of the Indebtedness to which such Hedging
Obligations relate;
(d) Indebtedness permitted by Section 6.04(f);
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(e) Indebtedness in respect of Purchase Money Obligations and
Capital Lease Obligations, and refinancings or renewals thereof, in an aggregate
amount not to exceed $5,000,000 at any time outstanding;
(f) Indebtedness incurred by HMO Subsidiaries owed to
third-parties in an aggregate amount not to exceed $2,000,000 at any time
outstanding;
(g) Indebtedness in respect of appeal, bid, performance or
surety or similar bonds, workers' compensation claims, self-insurance
obligations and bankers acceptances issued for the account of any Company in the
ordinary course of business, including guarantees or obligations of any Company
with respect to letters of credit supporting such bid, performance or surety
bonds, workers' compensation claims, self-insurance obligations and bankers
acceptances (in each case other than for an obligation for money borrowed);
(h) Contingent Obligations of any Loan Party in respect of
Indebtedness otherwise permitted under this Section 6.01;
(i) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient funds in
the ordinary course of business; provided, however, that such Indebtedness is
extinguished within ten days of incurrence;
(j) Indebtedness arising in connection with endorsement of
instruments for deposit in the ordinary course of business;
(k) other Indebtedness of Borrower or any Subsidiary Guarantor
in an aggregate amount not to exceed $15,000,000 at any time outstanding;
(l) subordinated (on terms reasonably satisfactory to the
Administrative Agent) Indebtedness of Borrower or any Subsidiary Guarantor
issued to sellers in connection with Permitted Acquisitions not to exceed
$10,000,000 in aggregate principal amount at any one time outstanding;
(m) subordinated (on terms reasonably satisfactory to the
Administrative Agent) Indebtedness of Borrower or any Subsidiary Guarantor
consisting of promissory notes issued to current or former directors,
consultants, managers, officers and employees or their spouses or estates to
purchase or redeem Equity Interest of Holdings issued to such person not to
exceed $5.0 million in aggregate principal amount per fiscal year and $10.0
million in aggregate principal amount prior to the Final Maturity Date; provided
that such amount shall be reduced dollar-for-dollar by payments made pursuant to
Section 6.08(b) (other than payments made with proceeds from Excluded Issuances
or out of Retained Equity Proceeds attributed thereto);
(n) Indebtedness incurred in connection with the financing of
insurance premiums in an aggregate amount at any time outstanding not to exceed
the premiums owed under such policy;
(o) Indebtedness of a person that is acquired in a Permitted
Acquisition which Indebtedness was in existence at the time of such Permitted
Acquisition and not incurred in contemplation thereof in an aggregate principal
amount not to exceed $10,000,000 at any time outstanding;
(p) Contingent Obligations to financial institutions, in each
case to the extent in the ordinary course of business and on terms and
conditions which are within the general parameters
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customary in the banking industry, entered into the obtain cash management
services or deposit account overdraft protection services (in amount similar to
those offered for comparable services in the financial industry) or other
services in connection with the management or opening of deposit accounts or
incurred as a result of endorsement of negotiable instruments for deposit or
collection purposes and other customary, Contingent Obligations of Borrower and
its Subsidiaries incurred in the ordinary course of business;
(q) Permitted Subordinated Debt and (without duplication)
related guarantees not to exceed $50,000,000 in aggregate principal amount at
any one time outstanding; provided, however that after giving effect to any
incurrence of such Permitted Subordinated Debt (a "PERMITTED SUBORDINATED DEBT
INCURRENCE") on a Pro Forma Basis, Borrower shall be in compliance with Section
6.10(a) as of the most recent Test Period (assuming, for purposes of Section
6.10(a), that such Permitted Subordinated Debt Incurrence, and all other
Permitted Subordinated Debt Incurrences consummated since the first day of the
relevant Test Period for Section 6.10(a) ending on or prior to the date of such
Permitted Subordinated Debt Incurrence, had occurred on the first day of such
relevant Test Period);
(r) unsecured guarantees by Borrower or any Subsidiary
Guarantor of facility leases of any Company; and
(s) Indebtedness arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations or from
guarantee obligations, in each case in connection with acquisitions,
dispositions or Investments, in each case permitted hereunder.
SECTION 6.02 LIENS. Create, incur, assume or permit to exist,
directly or indirectly, any Lien on any property now owned or hereafter acquired
by it or on any income or revenues or rights in respect of any thereof, except
the following (collectively, the "PERMITTED LIENS"):
(a) Liens for taxes, assessments or governmental charges or
levies not yet due and payable or delinquent and Liens for taxes, assessments or
governmental charges or levies, which (i) are being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP, which proceedings (or orders entered in connection with
such proceedings) have the effect of preventing the forfeiture or sale of the
property subject to any such Lien, or (ii) in the case of any such charge or
claim which has or may become a Lien against any of the Collateral, such Lien
and the contest thereof shall satisfy the Contested Collateral Lien Conditions;
(b) Liens in respect of property of any Company imposed by
Requirements of Law, which were incurred in the ordinary course of business and
do not secure Indebtedness for borrowed money, such as carriers',
warehousemen's, materialmen's, landlords', workmen's, suppliers', repairmen's
and mechanics' Liens and other similar Liens arising in the ordinary course of
business, and (i) which do not in the aggregate materially detract from the
value of the property of the Companies, taken as a whole, and do not materially
impair the use thereof in the operation of the business of the Companies, taken
as a whole, (ii) which, if they secure obligations that are then due and unpaid,
are being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP, which proceedings (or
orders entered in connection with such proceedings) have the effect of
preventing the forfeiture or sale of the property subject to any such Lien, and
(iii) in the case of any such Lien which has or may become a Lien against any of
the Collateral, such Lien and the contest thereof shall satisfy the Contested
Collateral Lien Conditions;
(c) any Lien in existence on the Closing Date and set forth on
Schedule 6.02(c) and any Lien granted as a replacement or substitute therefor;
provided that any such replacement or substitute
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Lien (i) except as permitted by Section 6.01(b)(ii)(A), does not secure an
aggregate amount of Indebtedness, if any, greater than that secured on the
Closing Date and (ii) does not encumber any property other than the property
subject thereto on the Closing Date (any such Lien, an "EXISTING LIEN");
(d) easements, rights-of-way, restrictions (including zoning
restrictions), covenants, licenses, encroachments, protrusions and other similar
charges or encumbrances, and minor title deficiencies on or with respect to any
Real Property, in each case whether now or hereafter in existence, not (i)
securing Indebtedness or (ii) individually or in the aggregate materially
impairing the value or marketability of such Real Property;
(e) Liens arising out of judgments, attachments or awards not
resulting in an Event of Default and in respect of which such Company shall in
good faith be prosecuting an appeal or proceedings for review in respect of
which there shall be secured a subsisting stay of execution pending such appeal
or proceedings and, in the case of any such Lien which has or may become a Lien
against any of the Collateral, such Lien and the contest thereof shall satisfy
the Contested Collateral Lien Conditions;
(f) Liens (x) imposed by Requirements of Law or deposits made
in connection therewith in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social security
legislation, (y) incurred in the ordinary course of business to secure the
performance of tenders, statutory obligations (other than excise taxes), surety,
stay, customs and appeal bonds, statutory bonds, bids, leases, government
contracts, trade contracts, performance and return of money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed money)
or (z) arising by virtue of deposits made in the ordinary course of business to
secure liability for premiums to insurance carriers; provided that (i) with
respect to clauses (x), (y) and (z) of this paragraph (f), such Liens are for
amounts not yet due and payable or delinquent or, to the extent such amounts are
so due and payable, such amounts are being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP, which proceedings for orders entered in connection with
such proceedings have the effect of preventing the forfeiture or sale of the
property subject to any such Lien, (ii) to the extent such Liens are not imposed
by Requirements of Law, such Liens shall in no event encumber any property other
than cash and Cash Equivalents (other than clause (g) of the definition of Cash
Equivalents), (iii) in the case of any such Lien against any of the Collateral,
such Lien and the contest thereof shall satisfy the Contested Collateral Lien
Conditions and (iv) in the case of Liens in respect of surety bonds as permitted
under clause (y) of this paragraph (f) such Liens shall only secure the project
for which such surety bonds were obtained;
(g) Leases, licenses or sublicenses of the assets or
properties of any Company, in each case entered into in the ordinary course of
such Company's business;
(h) Liens securing Indebtedness incurred pursuant to Section
6.01(e); provided that any such Liens attach only to the property being financed
pursuant to such Indebtedness and do not encumber any other property of any
Company;
(i) bankers' Liens, rights of setoff and other similar Liens
existing solely with respect to cash and Cash Equivalents on deposit in one or
more accounts maintained by any Company, in each case granted in the ordinary
course of business in favor of the bank or banks with which such accounts are
maintained, securing amounts owing to such bank with respect to cash management
and operating account arrangements, including those involving pooled accounts
and netting arrangements; provided that, unless such Liens are non-consensual
and arise by operation of law, in no case shall any such Liens secure (either
directly or indirectly) the repayment of any Indebtedness for borrowed money;
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(j) Liens on property of a person existing at the time such
person is acquired or merged with or into or consolidated with any Company to
the extent permitted hereunder (and not created in anticipation or contemplation
thereof); provided that such Liens do not extend to property not subject to such
Liens at the time of acquisition (other than improvements thereon) and are no
more favorable to the lienholders than such existing Lien;
(k) Liens granted pursuant to the Security Documents to secure
the Secured Obligations;
(l) licenses or sublicenses of Intellectual Property granted
by any Company in the ordinary course of business and not interfering in any
material respect with the ordinary conduct of business of the Companies;
(m) the filing of UCC financing statements solely as a
precautionary measure in connection with operating leases or consignment of
goods;
(n) Liens incurred in the ordinary course of business of the
Borrower or any Subsidiary with respect to obligations that do not in the
aggregate exceed $15,000,000 at any time outstanding, so long no more than
$5,000,000 of such Liens, to the extent covering any Collateral, are not junior
to the Liens granted pursuant to the Security Documents;
(o) Liens for the benefit of a seller deemed to attach solely
to xxxx xxxxxxx money deposits in connection with a letter of intent or
acquisition agreement with respect to a Permitted Acquisition;
(p) Liens deemed to exist in connection with Investments
permitted under Section 6.04 that constitute repurchase obligations and in
connection with related set-off rights;
(q) Liens in favor of any Loan Party and in favor of any HMO
Subsidiary (other than on assets of a Loan Party);
(r) Liens of a collection bank arising in the ordinary course
of business under Section 4-210 of the UCC in effect in the relevant
jurisdiction covering only the items being collected upon;
(s) Liens of sellers of goods to Holdings or any of its
Subsidiaries arising under Article 2 of the UCC in effect in the relevant
jurisdiction in the ordinary course of business, covering only the goods sold
and covering only the unpaid purchase price for such goods and related expenses;
(t) any interest or title of a lessor, sublessor, licensor or
licensee under any lease or license entered into by Borrower or any of its
Subsidiaries in the ordinary course of business; and
(u) Liens on an insurance policy of Holdings or any of its
Subsidiaries and the identifiable cash proceeds thereof in favor of the issuer
of such policy and securing Indebtedness permitted under Section 6.01(n);
provided, however, that no consensual Liens shall be permitted
to exist, directly or indirectly, on any Securities Collateral issued by
Borrower or any of its Subsidiaries, other than Liens granted pursuant to the
Security Documents.
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SECTION 6.03 SALE AND LEASEBACK 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 transferred (a "SALE AND LEASEBACK
TRANSACTION") unless (i) the sale of such property is permitted by Section 6.06,
(ii) any Liens arising in connection with its use of such property are permitted
by Section 6.02 and (iii) any related Capital Lease Obligation is permitted by
Section 6.01(e).
SECTION 6.04 INVESTMENT, LOAN AND ADVANCES. Directly or
indirectly, lend money or credit (by way of guarantee or otherwise) or make
advances to any person, or purchase or acquire any stock, bonds, notes,
debentures or other obligations or securities of, or any other interest in, or
make any capital contribution to, any other person, or purchase or own a futures
contract or otherwise become liable for the purchase or sale of currency or
other commodities at a future date in the nature of a futures contract (all of
the foregoing, collectively, "INVESTMENTS"), except that the following shall be
permitted:
(a) the Companies may consummate the Transactions in
accordance with the provisions of the Transaction Documents;
(b) Investments outstanding on the Closing Date and identified
on Schedule 6.04(b);
(c) the Companies may (i) acquire and hold accounts
receivables owing to any of them if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary terms,
(ii) invest in, acquire and hold cash and Cash Equivalents, (iii) endorse
negotiable instruments held for collection in the ordinary course of business or
(iv) make lease, utility and other similar deposits or any other deposits
permitted under Section 6.02, in each case in the ordinary course of business;
(d) Hedging Obligations incurred pursuant to Section 6.01(c);
(e) loans and advances to directors, employees and officers of
Borrower and the Subsidiaries for bona fide business purposes and to purchase
Equity Interests of Holdings, in aggregate amount not to exceed $5,000,000 at
any time outstanding;
(f) Investments (i) by Borrower in any Subsidiary Guarantor,
(ii) by any Company in Borrower or any Subsidiary Guarantor, (iii) by a
Subsidiary Guarantor in another Subsidiary Guarantor, (iv) by a Subsidiary that
is not a Subsidiary Guarantor in any other Subsidiary that is not a Subsidiary
Guarantor and (v) by Holdings in Borrower; provided that any Investment in the
form of a loan or advance owed by a Loan Party shall be evidenced by the
Intercompany Note and, in the case of a loan or advance by a Loan Party, pledged
by such Loan Party as Collateral pursuant to the Security Documents;
(g) Investments in securities of trade creditors or customers
in the ordinary course of business received in settlement of a bona fide dispute
or judgment or upon foreclosure or pursuant to any plan of reorganization or
liquidation or similar arrangement upon the bankruptcy or insolvency of such
trade creditors or customers;
(h) Investments made by Borrower or any Subsidiary Guarantor
as a result of consideration received in connection with an Asset Sale made in
compliance with Section 6.06;
(i) Investments made by Borrower or any Subsidiary Guarantor
in HMO Subsidiaries in an aggregate amount not to exceed $20,000,000 plus the
amount dividended, distributed or
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otherwise paid to any Loan Party by an HMO Subsidiary that are reinvested in a
different HMO Subsidiary within 180 days of such dividend, distribution or other
payment; provided that such amount may be increased solely to the extent an
additional Investment would be required by applicable Requirements of Law
(including, without limitation, minimum capital requirements);
(j) Permitted Acquisitions (and Investments owned by the
acquired person at the time of such Permitted Acquisition), to the extent
permitted by Section 6.07(f);
(k) (A) Required Advances and (B) other advances to Contract
Providers in an amount not to exceed $1,000,000 at any time outstanding;
(l) other Investments for less than 50% of the assets or
Equity Interests of any person made by Borrower or any Subsidiary Guarantor in
an aggregate amount not to exceed the amount of any Excluded Issuance made in
connection therewith plus any Retained Equity Proceeds attributed therefor, at
any time outstanding;
(m) guarantees permitted under Section 6.01;
(n) Investments that constitute an increase in value of
existing Investments;
(o) Loan Parties may cancel, forgive, set-off or accept
prepayments with respect to Indebtedness or other obligations owed to them
and/or its Equity Interests to the extent not otherwise prohibited hereunder;
(p) any Company may capitalize or forgive any Indebtedness
owed to it by a Loan Party;
(q) Borrower and its Subsidiaries may make pledges and
deposits permitted under Section 6.02;
(r) Investments consisting of xxxxxxx money required in
connection with a Permitted Acquisition;
(s) Investments in deposit accounts; and
(t) other Investments made by Borrower or any Subsidiary
Guarantor in an aggregate amount not to exceed $10,000,000 at any time
outstanding.
SECTION 6.05 MERGERS AND CONSOLIDATIONS. Wind up, liquidate or
dissolve its affairs or enter into any merger or consolidation (or enter into a
definitive written agreement to merge or consolidate at a future time without
any material conditions to closing), except that the following shall be
permitted:
(a) the Transactions as contemplated by the Transaction
Documents;
(b) Asset Sales in compliance with Section 6.06;
(c) acquisitions in compliance with Section 6.07;
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(d) any Subsidiary Guarantor may merge or consolidate with or
into Borrower or any other Subsidiary Guarantor (as long as Borrower is the
surviving person in the case of any merger or consolidation involving Borrower
and a Subsidiary Guarantor is the surviving person and remains a Wholly Owned
Subsidiary of Borrower in any other case); provided that the Lien on and
security interest in such property granted or to be granted in favor of the
Collateral Agent under the Security Documents shall be maintained or created in
accordance with the provisions of Section 5.11 or Section 5.12, as applicable;
and
(e) any Subsidiary may dissolve, liquidate or wind up its
affairs at any time; provided that such dissolution, liquidation or winding up,
as applicable, could not reasonably be expected to have a Material Adverse
Effect.
To the extent the Required Lenders waive the provisions of
this Section 6.05 with respect to the sale of any Collateral, or any Collateral
is sold as permitted by this Section 6.05, such Collateral (unless sold to a
Loan Party) shall be sold free and clear of the Liens created by the Security
Documents, and the Agents shall take all actions they deem appropriate or
reasonably requested by Borrower in order to effect the foregoing.
SECTION 6.06 ASSET SALES. Effect any Asset Sale (or enter into
a definitive written agreement to effect any Asset Sale at a future time without
any material conditions to closing), except that the following shall be
permitted:
(a) [Reserved];
(b) Asset Sales; provided that the aggregate consideration
received in respect of all Asset Sales pursuant to this clause (b) shall not
exceed $2,000,000 in the aggregate after the Closing Date;
(c) leases or subleases of real or personal property in the
ordinary course of business and in accordance with the applicable Security
Documents;
(d) the Transactions as contemplated by the Transaction
Documents;
(e) mergers and consolidations in compliance with Section
6.05;
(f) Investments in compliance with Section 6.04;
(g) sales of non-core assets acquired in a Permitted
Acquisition; provided that such sales shall be consummated within 270 days of
the Permitted Acquisition;
(h) Permitted Liens; and
(i) any sale or other disposition (including cancellation of
Indebtedness) of any Investment permitted hereunder.
To the extent the Required Lenders waive the provisions of
this Section 6.06 with respect to the sale of any Collateral, or any Collateral
is sold as permitted by this Section 6.06, such Collateral (unless sold to a
Loan Party) shall be sold free and clear of the Liens created by the Security
Documents, and the Agents shall take all actions they deem appropriate or
reasonably requested by Borrower in order to effect the foregoing.
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SECTION 6.07 ACQUISITIONS. Purchase or otherwise acquire (in
one or a series of related transactions) any part of the property (whether
tangible or intangible) of any other person (or agree to do any of the foregoing
at any future time), except that the following shall be permitted:
(a) Capital Expenditures by Borrower and the Subsidiaries
shall be permitted to the extent permitted by Section 6.10(e);
(b) purchases and other acquisitions of inventory, materials,
equipment and intangible property in the ordinary course of business;
(c)Investments in compliance with Section 6.04;
(d) leases or licenses of real or personal property in the
ordinary course of business and in accordance with the applicable Security
Documents;
(e) the Transactions as contemplated by the Transaction
Documents;
(f) Borrower and the Subsidiary Guarantors may consummate
Permitted Acquisitions; and
(g) mergers and consolidations in compliance with Section
6.05;
provided that the Lien on and security interest in such property granted or to
be granted in favor of the Collateral Agent under the Security Documents shall
be maintained or created in accordance with the provisions of Section 5.11 or
Section 5.12, as applicable.
SECTION 6.08 DIVIDENDS. Authorize, declare or pay, directly or
indirectly, any Dividends with respect to any Company, except that the following
shall be permitted:
(a) Dividends by any Company to Borrower or any Subsidiary
Guarantor that is a Wholly Owned Subsidiary of Borrower;
(b) payments to Holdings to permit Holdings, and the
subsequent use of such payments by Holdings, to repurchase or redeem Qualified
Capital Stock of Holdings held by officers, directors or employees or former
officers, directors or employees (or their transferees, estates or beneficiaries
under their estates) of any Company, upon their death, disability, retirement,
severance or termination of employment or service; provided that the aggregate
cash consideration paid for all such redemptions and payments shall not exceed,
in any fiscal year, $5,000,000 plus any proceeds from Excluded Issuances made in
connection therewith plus Retained Equity Proceeds attributed thereto and, in
the aggregate since the Closing Date, $10,000,000 plus any proceeds from
Excluded Issuances made in connection therewith plus Retained Equity Proceeds
attributed thereto plus the proceeds of any "key-man" life insurance policies;
provided that such amount shall be reduced dollar-for-dollar by payments made in
respect of Indebtedness incurred pursuant to Section 6.01(m);
(c) (A) to the extent actually used by Holdings to pay such
taxes, costs and expenses, payments by Borrower to or on behalf of Holdings in
an amount sufficient to pay franchise taxes and other fees required to maintain
the legal existence of Holdings and (B) payments by Borrower to or on behalf of
Holdings in an amount sufficient to pay out-of-pocket legal, accounting and
filing costs, directors' fees and expenses and other expenses in the nature of
overhead in the ordinary course of business of
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Holdings, in the case of clauses (A) and (B) in an aggregate amount not to
exceed $1,000,000 in any fiscal year; and
(d) Permitted Tax Distributions by Borrower to Holdings, so
long as Holdings uses such distributions to pay its taxes;
(e) Dividends by any HMO Subsidiary to the holders of its
Equity Interest; provided that any such Dividends shall be made on a pro rata
basis;
(f) cashless exercise of stock options;
(g) Dividends by Borrower and Holdings so long as no Default
or Event of Default shall have occurred and be continuing or would occur as a
result thereof, in an aggregate amount not to exceed the Net Cash Proceeds from
Excluded Issuances made in connection with such Dividend; and
(h) the Transactions.
SECTION 6.09 TRANSACTIONS WITH AFFILIATES. Enter into,
directly or indirectly, any transaction or series of related transactions,
whether or not in the ordinary course of business, with any Affiliate of any
Company (other than between or among Borrower and one or more of its
Subsidiaries), other than on terms and conditions taken as a whole at least as
favorable to such Company as would reasonably be obtained by such Company at
that time in a comparable arm's-length transaction with a person other than an
Affiliate, except that the following shall be permitted:
(a) Dividends permitted by Section 6.08;
(b) Investments permitted by Sections 6.04(e), (f) and (i);
(c) director, officer and employee compensation (including
bonuses) and other benefits (including retirement, health, stock option and
other benefit plans) and indemnification arrangements, in each case approved by
the Board of Directors of Borrower;
(d) transactions with customers, clients, suppliers, joint
venture partners or purchasers or sellers of goods and services, in each case in
the ordinary course of business and otherwise not prohibited by the Loan
Documents;
(e) so long as no Event of Default specified in Section
8.01(a), (b), (g) or (h) shall have occurred and be continuing or would result
therefrom, the payment of (i) management fees to Sponsor in the amounts and the
times specified in the Management Services Agreement not exceed $500,000 in any
fiscal year and (ii) one-time consulting, advisory or similar fees to Sponsor,
in each case payable upon consummation of and in connection with certain
Permitted Acquisitions, debt financings and equity financings described in the
Management Services Agreement as in effect on the date hereof and permitted
hereunder in an amount not to exceed 1.0% of the total consideration for such
Permitted Acquisitions or (without duplication) the gross amount (or in the case
of a revolving facility, the maximum committed amount) of such financings
received by (or made available to) Loan Parties; provided that the Management
Services Agreement may be amended or replaced in any manner, that, taken as a
whole, is not more adverse to the interests of the Lenders in any material
respect that such agreement as it was in effect on the Closing Date; provided
further that at such time as any such Event of Default prohibiting the payments
in clause
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(i) is cured, any amounts accrued shall become immediately payable and may, as a
result, exceed $500,000 in a particular fiscal year;
(f) the existence of, and the performance by any Company of
its obligations under the terms of, any limited liability company, limited
partnership or other Organizational Document or securityholders agreement
(including any registration rights agreement or purchase agreement related
thereto) to which it is a party on the Closing Date and which has been disclosed
to the Lenders as in effect on the Closing Date, and similar agreements that it
may enter into thereafter; provided, however, that the existence of, or the
performance by any Company of obligations under, any amendment to any such
existing agreement or any such similar agreement entered into after the Closing
Date shall only be permitted by this Section 6.09(f) to the extent not more
adverse to the interest of the Lenders in any material respect, when taken as a
whole, than any of such documents and agreements as in effect on the Closing
Date;
(g) sales of Qualified Capital Stock of Holdings to Affiliates
of Holdings not otherwise prohibited by the Loan Documents and the granting of
registration and other customary rights in connection therewith;
(h) any transaction with an Affiliate where the only
consideration paid by any Loan Party is Qualified Capital Stock of Holdings;
(i) the Transactions as contemplated by the Transaction
Documents; and
(j) indemnities and reimbursement of out-of-pocket expenses
and costs of Sponsor in connection with its performance of the Management
Services Agreement.
SECTION 6.10 FINANCIAL COVENANTS.
(a) Maximum Total Leverage Ratio. Permit the Total Leverage
Ratio, at the last day of any Test Period during any period set forth in the
table below, to exceed the ratio set forth opposite such period in the table
below:
TEST PERIOD LEVERAGE RATIO
June 30, 2005 - September 29, 2005 3.25 to 1.0
September 30, 2005 - December 30, 2005 3.00 to 1.0
December 31, 2005 - March 30, 2006 2.75 to 1.0
March 31, 2006 - June 29, 2006 2.50 to 1.0
June 30, 2006 - December 30, 2006 2.25 to 1.0
December 31, 2006 - June 29, 2007 2.00 to 1.0
June 30, 2007 - December 30, 2007 1.75 to 1.0
December 31, 2007 - March 30, 2009 1.50 to 1.0
March 31, 2009 and thereafter 1.25 to 1.0
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(b) Risk-Based Capital Ratio. As of the end of each of
Holdings' fiscal quarters:
(i) With respect to each HMO Subsidiary operating in a state
that statutorily applies a Risk-Based Capital methodology (each such
HMO Subsidiary being an "RBC HMO"), each such RBC HMO shall maintain a
Total Adjusted Capital amount equal to or greater than 10% above the
upper limit of the Regulatory Action Level in such state; and
(ii) With respect to each HMO Subsidiary that is not an RBC
HMO (each such HMO Subsidiary being a "NON-RBC HMO"), each such Non-RBC
HMO shall maintain a capital reserve at a level equal to or greater
than 10% of the applicable capital reserve requirement as determined by
the state Governmental Authority; provided, that: (A) during the first
year after the Closing Date, the Non-RBC HMO operating in Tennessee
shall maintain a capital reserve at a level equal to or greater than
105% of the applicable capital reserve requirement as determined by the
Tennessee Governmental Authority and (B) in no event will the amount
required pursuant to this clause (ii) for Non-RBC HMOs be greater than
the amount that would be required if clause (i) were applicable to such
Non-RBC HMO;
provided in each case that, so long as each HMO Subsidiary maintains at least
the applicable minimum risk-based capital threshold of the state in which it
operates, (A) unrestricted cash-on-hand held by Borrower and the Subsidiary
Guarantors and (B) any of the aggregate amount of unused Revolving Commitment at
such date may be included in the computation of Total Adjusted Capital if
necessary to comply with the Risk-Based Capital Ratio. Compliance with the
Risk-Based Capital Ratio will be determined at the end of each fiscal quarter
(using as the denominator in each case, for the first three fiscal quarters of
each year, the prescribed level as of the end of the preceding fiscal year, and
for the last fiscal quarter of each year, the prescribed level as of the end of
such fiscal year).
(c) Minimum Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio, at the last day of any Test Period
ending during any period in the table set forth below, to be less than the ratio
set forth opposite such period in the table below:
FIXED CHARGE
TEST PERIOD COVERAGE RATIO
June 30, 2005 - December 30, 2005 1.10 to 1.0
December 31, 2005 - June 29, 2006 1.15 to 1.0
June 30, 2006 - December 30, 2006 1.20 to 1.0
December 31, 2006 - September 29, 2007 1.25 to 1.0
September 30, 2007 and thereafter 1.35 to 1.0
(d) Limitation on Capital Expenditures. Permit the aggregate
amount of Capital Expenditures made in any period set forth below, to exceed the
amount set forth opposite such period below:
PERIOD AMOUNT (IN MILLIONS)
Closing Date - December 31, 2005 $4,000,000
January 1, 2006 - December 31, 2006 $6,000,000
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PERIOD AMOUNT (IN MILLIONS)
January 1, 2007 - December 31, 2007 $5,000,000
January 1, 2008 - December 31, 2008 $5,000,000
January 1, 2009 - December 31, 2009 $5,000,000
January 1, 2010 - December 31, 2010 $5,000,000
January 1, 2011 - March 1, 2011 $1,000,000
; provided, however, that (x) if the aggregate amount of Capital Expenditures
made in any fiscal year shall be less than the maximum amount of Capital
Expenditures permitted under this Section 6.10(d) for such fiscal year (before
giving effect to any carryover), then an amount of such shortfall not exceeding
50% of such maximum amount (without giving effect to clause (z) below) may be
added to the amount of Capital Expenditures permitted under this Section 6.10(d)
for the immediately succeeding (but not any other) fiscal year, (y) in
determining whether any amount is available for carryover, the amount expended
in any fiscal year shall first be deemed to be from the amount allocated to such
fiscal year (before giving effect to any carryover), and (z) the aggregate
amount of Capital Expenditures made in any fiscal year by HMO Subsidiaries shall
not exceed 20% of the maximum aggregate amount of Capital Expenditures permitted
hereunder.
SECTION 6.11 Prepayments of Other Indebtedness; Modifications
of Organizational Documents and Other Documents, etc. Directly or indirectly:
(a) make (or give any irrevocable notice in respect thereof)
any voluntary or optional payment or prepayment on or redemption or acquisition
for value of, or any prepayment or redemption as a result of any asset sale,
change of control or similar event of, any Indebtedness outstanding under any
Subordinated Indebtedness, except (1) as not otherwise prohibited by this
Agreement and (2) (i) pay cash interest that on a current basis is in excess of
12% per annum (plus 2% default interest to the extent required under the Senior
Subordinated Note Documents and not otherwise prohibited hereunder), (ii) pay
reasonable out-of-pocket costs and expenses, (iii) pay "AHYDO" catch-up payments
after the fifth anniversary of the Closing Date as required under the Senior
Subordinated Note Documents and (iv) prepayments, redemptions or acquisition for
value of Senior Subordinated Notes in accordance with Section 6.01(b) or with
any Retained Equity Proceeds attributed thereto, in the case of clauses (i),
through (iv) in accordance with the terms of the Senior Subordinated Note
Documents;
(b) amend or modify, or permit the amendment or modification
of, any provision of any Transaction Document (other than Loan Documents) in any
manner that is adverse in any material respect to the interests of the Lenders
(except in the case of a Senior Subordinated Note Document in accordance with
Section 4 of the Subordination Agreement);
(c) terminate, amend, modify (including electing to treat any
Pledged Interests (as defined in the Security Agreement) as a "security" under
Section 8-103 of the UCC) or change any of its Organizational Documents
(including by the filing or modification of any certificate of designation) or
any agreement to which it is a party with respect to its Equity Interests
(including any stockholders' agreement), or enter into any new agreement with
respect to its Equity Interests, other than any such amendments, modifications
or changes or such new agreements which are not adverse in any material respect
to the interests of the Lenders; provided that Holdings may issue such Equity
Interests, so long as
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such issuance is not prohibited by Section 6.13 or any other provision of this
Agreement, and may amend its Organizational Documents to authorize any such
Equity Interests; or
(d) cause or permit any other obligation (other than the
Secured Obligations and the Guaranteed Obligations) to constitute Designated
Senior Debt (as defined in the Subordination Agreement).
SECTION 6.12 Limitation on Certain Restrictions on
Subsidiaries. Directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary to (a) pay dividends or make any other distributions
on its capital stock or any other interest or participation in its profits owned
by Borrower or any Subsidiary, or pay any Indebtedness owed to any Loan Party,
(b) make loans or advances to any Loan Party or (c) transfer any of its
properties to any Loan Party, except for such encumbrances or restrictions
existing under or by reason of (i) applicable Requirements of Law; (ii) this
Agreement and the other Loan Documents; (iii) the Senior Subordinated Note
Documents as in effect on the Closing Date or as amended in accordance with the
terms of the Subordination Agreement; (iv) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest of a
Subsidiary; (v) customary provisions restricting assignment of any agreement
entered into by a Subsidiary in the ordinary course of business; (vi) any holder
of a Lien permitted by Section 6.02 restricting the transfer of the property
subject thereto; (vii) customary restrictions and conditions contained in any
agreement relating to the sale of any property permitted under Section 6.06
pending the consummation of such sale; (viii) any agreement in effect at the
time such Subsidiary becomes a Subsidiary of Borrower, so long as such agreement
was not entered into in connection with or in contemplation of such person
becoming a Subsidiary of Borrower; (ix) without affecting the Loan Parties'
obligations under Section 5.11, customary provisions in partnership agreements,
limited liability company organizational governance documents, asset sale and
stock sale agreements and other similar agreements entered into in the ordinary
course of business that restrict the transfer of ownership interests in such
partnership, limited liability company or similar person; (x) restrictions on
cash or other deposits or net worth imposed by suppliers or landlords under
contracts entered into in the ordinary course of business; (xi) any instrument
governing Indebtedness assumed in connection with any Permitted Acquisition,
which encumbrance or restriction is not applicable to any person, or the
properties or assets of any person, other than the person or the properties or
assets of the person so acquired; (xii) in the case of any joint venture which
is not a Loan Party in respect of any matters referred to in clauses (b) and (c)
above, restrictions in such person's Organizational Documents or pursuant to any
joint venture agreement or stockholders agreements solely to the extent of the
Equity Interests of or property held in the subject joint venture or other
entity; or (xiii) any encumbrances or restrictions imposed by any amendments or
refinancings that are otherwise permitted by the Loan Documents of the
contracts, instruments or obligations referred to in clauses (iii) or (viii)
above; provided that such amendments or refinancings are no more materially
restrictive with respect to such encumbrances and restrictions than those prior
to such amendment or refinancing.
SECTION 6.13 Limitation on Issuance of Capital Stock.
(a) With respect to Holdings, issue any Equity Interest that
is not Qualified Capital Stock.
(b) With respect to Borrower or any Subsidiary, issue any
Equity Interest (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, any Equity Interest,
except (i) for stock splits, stock dividends and additional issuances of
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Equity Interests which do not decrease the percentage ownership of Borrower or
any Subsidiaries in any class of the Equity Interest of such Subsidiary; (ii)
Subsidiaries of Borrower formed after the Closing Date in accordance with
Section 6.14 may issue Equity Interests to Borrower or the Subsidiary of
Borrower which is to own such Equity Interests; (iii) Borrower may issue common
stock that is Qualified Capital Stock to Holdings; and (iv) issuances of Equity
Interests of an HMO Subsidiary to certain Contract Providers affiliated with
such HMO Subsidiary; provided that each HMO Subsidiary shall remain at least 80%
owned (in terms of both Voting Stock and the economic interest of Equity
Interests) at all times. All Equity Interests issued in accordance with this
Section 6.13(b) shall, to the extent required by Sections 5.11 and 5.12 or any
Security Agreement, be delivered to the Collateral Agent for pledge pursuant to
the applicable Security Agreement.
SECTION 6.14 Limitation on Creation of Subsidiaries.
Establish, create or acquire any additional Subsidiaries without the prior
written consent of the Required Lenders; provided that, without such consent,
Borrower or any Subsidiary Guarantor may (i) establish or create one or more
direct Wholly Owned Subsidiaries that are Domestic Subsidiaries or domiciled in
Puerto Rico, (ii) establish, create or acquire one or more Domestic Subsidiaries
or Puerto Rican Subsidiary in connection with an Investment permitted to be made
pursuant to Section 6.04 (other than a Permitted Acquisition) or (iii) acquire
one or more direct Domestic Subsidiaries or Puerto Rican Subsidiaries in
connection with a Permitted Acquisition, so long as, in each case, Section
5.11(b) shall be complied with. Notwithstanding anything to the contrary, no HMO
Subsidiary shall establish, create or acquire any Subsidiary without the prior
written consent of the Required Lenders.
SECTION 6.15 Business.
(a) With respect to Holdings, engage in any business
activities or have any properties or Indebtedness (other than as permitted by
Section 6.01), other than (i) its ownership of the Equity Interests of Borrower,
(ii) obligations under the Loan Documents and the Senior Subordinated Note
Documents and (iii) activities and properties incidental to the foregoing
clauses (i) and (ii) and those otherwise permitted hereunder.
(b) With respect to Borrower and the Subsidiaries, engage
(directly or indirectly) in any business other than those businesses in which
Borrower and its Subsidiaries are engaged on the Closing Date as described in
the Confidential Information Memorandum (or, in the good faith judgment of the
Board of Directors, which are substantially related thereto or are reasonable
extensions thereof).
SECTION 6.16 Fiscal Year. Change its fiscal year-end to a date
other than December 31.
SECTION 6.17 No Further Negative Pledge. Enter into any
agreement, instrument, deed or lease which prohibits or limits the ability of
any Loan Party to create, incur, assume or suffer to exist any Lien upon any of
their respective properties or revenues, whether now owned or hereafter
acquired, or which requires the grant of any security for an obligation if
security is granted for another obligation, except the following: (1) this
Agreement and the other Loan Documents; (2) covenants in documents creating
Liens permitted by Section 6.02 prohibiting further Liens on the properties
encumbered thereby; (3) the Senior Subordinated Note Documents as in effect on
the Closing Date; (4) any other agreement that does not restrict in any manner
(directly or indirectly) Liens created pursuant to the Loan Documents on any
Collateral securing the Secured Obligations and does not require the direct or
indirect granting of any Lien securing any Indebtedness or other obligation by
virtue of the granting of Liens on or pledge of property of any Loan Party to
secure the Secured Obligations; and (5) any prohibition or limitation that (a)
exists pursuant to applicable Requirements of Law, (b) consists of customary
restrictions and
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conditions contained in any agreement relating to the sale of any property
permitted under Section 6.06 pending the consummation of such sale, (c)
restricts subletting or assignment of any lease governing a leasehold interest
of Borrower or a Subsidiary, (d) exists in any agreement in effect at the time
such Subsidiary becomes a Subsidiary of Borrower, so long as such agreement was
not entered into in contemplation of such person becoming a Subsidiary or (e) is
imposed by any amendments or refinancings that are otherwise permitted by the
Loan Documents of the contracts, instruments or obligations referred to in
clause (3) or (5)(d); provided that such amendments and refinancings are no more
materially restrictive with respect to such prohibitions and limitations than
those prior to such amendment or refinancing.
SECTION 6.18 Anti-Terrorism Law; Anti-Money Laundering.
(a) Directly or indirectly, (i) knowingly conduct any business
or engage in making or receiving any contribution of funds, goods or services to
or for the benefit of any person described in Section 3.22, (ii) knowingly deal
in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order or any other
Anti-Terrorism Law, or (iii) knowingly engage in or conspire to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law
(and the Loan Parties shall deliver to the Lenders any certification or other
evidence requested from time to time by any Lender in its reasonable discretion,
confirming the Loan Parties' compliance with this Section 6.18).
(b) Cause or permit any of the funds of such Loan Party that
are used to repay the Loans to be derived from any unlawful activity with the
result that the making of the Loans would be in violation of any Requirement of
Law.
SECTION 6.19 Embargoed Person. Cause or permit (a) any of the
funds or properties of the Loan Parties that are used to repay the Loans to
constitute property of, or be beneficially owned directly or indirectly by, any
person subject to sanctions or trade restrictions under United States law
("EMBARGOED PERSON" or "EMBARGOED PERSONS") that is identified on (1) the "List
of Specially Designated Nationals and Blocked Persons" maintained by OFAC and/or
on any other similar list maintained by OFAC pursuant to any authorizing statute
including, but not limited to, the International Emergency Economic Powers Act,
50 U.S.C. Sections 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App.
1 et seq., and any Executive Order or Requirement of Law promulgated thereunder,
with the result that the investment in the Loan Parties (whether directly or
indirectly) is prohibited by a Requirement of Law, or the Loans made by the
Lenders would be in violation of a Requirement of Law, or (2) the Executive
Order, any related enabling legislation or any other similar Executive Orders or
(b) any Embargoed Person to have any direct or indirect interest, of any nature
whatsoever in the Loan Parties, with the result that the investment in the Loan
Parties (whether directly or indirectly) is prohibited by a Requirement of Law
or the Loans are in violation of a Requirement of Law.
ARTICLE VII
GUARANTEE
SECTION 7.01 The Guarantee. The Guarantors hereby jointly and
severally guarantee, as a primary obligor and not as a surety to each Secured
Party and their respective successors and assigns, the prompt payment in full
when due (whether at stated maturity, by required prepayment, declaration,
demand, by acceleration or otherwise) of the principal of and interest
(including any interest, fees, costs or charges that would accrue but for the
provisions of the Title 11 of the United States Code after
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any bankruptcy or insolvency petition under Title 11 of the United States Code)
on the Loans made by the Lenders to, and the Notes held by each Lender of,
Borrower, and all other Secured Obligations from time to time owing to the
Secured Parties by any Loan Party under any Loan Document or any Hedging
Agreement related to the Facilities and entered into with a counterparty that is
a Secured Party, in each case strictly in accordance with the terms thereof
(such obligations being herein collectively called the "GUARANTEED
OBLIGATIONS"). The Guarantors hereby jointly and severally agree that if
Borrower or other Guarantor(s) shall fail to pay in full when due (whether at
stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations, the Guarantors will promptly pay the same in cash, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.
SECTION 7.02 OBLIGATIONS UNCONDITIONAL. The obligations of the
Guarantors under Section 7.01 shall constitute a guaranty of payment and to the
fullest extent permitted by applicable Requirements of Law, are absolute,
irrevocable and unconditional, joint and several, irrespective of the value,
genuineness, validity, regularity or enforceability of the Guaranteed
Obligations of Borrower under this Agreement, the Notes, if any, or any other
agreement or instrument referred to herein or therein, or any substitution,
release or exchange of any other guarantee of or security for any of the
Guaranteed Obligations, and, irrespective of any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a
surety or Guarantor (except for payment in full). Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or more
of the following shall not alter or impair the liability of the Guarantors
hereunder which shall remain absolute, irrevocable and unconditional under any
and all circumstances as described above:
(i) at any time or from time to time, without notice to
the Guarantors, the time for any performance of or compliance with any
of the Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions
of this Agreement or the Notes, if any, or any other agreement or
instrument referred to herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations
shall be accelerated, or any of the Guaranteed Obligations shall be
amended in any respect, or any right under the Loan Documents or any
other agreement or instrument referred to herein or therein shall be
amended or waived in any respect or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with;
(iv) any Lien or security interest granted to, or in
favor of, Issuing Bank or any Lender or Agent as security for any of
the Guaranteed Obligations shall fail to be perfected; or
(v) the release of any other Guarantor pursuant to
Section 7.09.
To the extent not prohibited by applicable law, the Guarantors
hereby expressly waive diligence, presentment, demand of payment, protest and
all notices whatsoever, and any requirement that any Secured Party exhaust any
right, power or remedy or proceed against Borrower under this Agreement or the
Notes, if any, or any other agreement or instrument referred to herein or
therein, or against any other person under any other guarantee of, or security
for, any of the Guaranteed Obligations. To the extent not prohibited by
applicable law, the Guarantors waive any and all notice of the creation,
renewal,
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extension, waiver, termination or accrual of any of the Guaranteed Obligations
and notice of or proof of reliance by any Secured Party upon this Guarantee or
acceptance of this Guarantee, and the Guaranteed Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred in
reliance upon this Guarantee, and all dealings between Borrower and the Secured
Parties shall likewise be conclusively presumed to have been had or consummated
in reliance upon this Guarantee. This Guarantee shall be construed as a
continuing, absolute, irrevocable and unconditional guarantee of payment without
regard to any right of offset with respect to the Guaranteed Obligations at any
time or from time to time held by Secured Parties, and the obligations and
liabilities of the Guarantors hereunder shall not be conditioned or contingent
upon the pursuit by the Secured Parties or any other person at any time of any
right or remedy against Borrower or against any other person which may be or
become liable in respect of all or any part of the Guaranteed Obligations or
against any collateral security or guarantee therefor or right of offset with
respect thereto. This Guarantee shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon the Guarantors
and the successors and assigns thereof, and shall inure to the benefit of the
Lenders, and their respective successors and assigns, notwithstanding that from
time to time during the term of this Agreement there may be no Guaranteed
Obligations outstanding.
SECTION 7.03 REINSTATEMENT. The obligations of the Guarantors
under this Article VII shall be automatically reinstated if and to the extent
that for any reason any payment by or on behalf of Borrower or other Loan Party
in respect of the Guaranteed Obligations is rescinded or must be otherwise
restored by any holder of any of the Guaranteed Obligations, whether as a result
of any proceedings in bankruptcy or reorganization or otherwise.
SECTION 7.04 SUBROGATION; SUBORDINATION. Each Guarantor hereby
agrees that until the payment and satisfaction in full of all Guaranteed
Obligations (other than unasserted, contingent indemnification obligations) and
the expiration and termination of the Commitments of the Lenders under this
Agreement it shall waive any claim and shall not exercise any right or remedy,
direct or indirect, arising by reason of any performance by it of its guarantee
in Section 7.01, whether by subrogation or otherwise, against Borrower or any
other Guarantor of any of the Guaranteed Obligations or any security for any of
the Guaranteed Obligations. Any Indebtedness of any Loan Party permitted
pursuant to Section 6.01(d) shall be subordinated to such Loan Party's Secured
Obligations in the manner set forth in the Intercompany Note evidencing such
Indebtedness.
SECTION 7.05 REMEDIES. The Guarantors jointly and severally
agree that, as between the Guarantors and the Lenders, the obligations of
Borrower under this Agreement and the Notes, if any, may be declared to be
forthwith due and payable as provided in Section 8.01 (and shall be deemed to
have become automatically due and payable in the circumstances provided in
Section 8.01) for purposes of Section 7.01, notwithstanding any stay, injunction
or other prohibition preventing such declaration (or such obligations from
becoming automatically due and payable) as against Borrower and that, in the
event of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and payable
by Borrower) shall forthwith become due and payable by the Guarantors for
purposes of Section 7.01.
SECTION 7.06 INSTRUMENT FOR THE PAYMENT OF MONEY. Each
Guarantor hereby acknowledges that the guarantee in this Article VII constitutes
an instrument for the payment of money, and consents and agrees that any Lender
or Agent, at its sole option, in the event of a dispute by such Guarantor in the
payment of any moneys due hereunder, shall have the right to bring a
motion-action under New York CPLR Section 3213.
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SECTION 7.07 CONTINUING GUARANTEE. The guarantee in this
Article VII is a continuing guarantee of payment, and shall apply to all
Guaranteed Obligations whenever arising.
SECTION 7.08 GENERAL LIMITATION ON SUBSIDIARY GUARANTEE
OBLIGATIONS. In any action or proceeding involving any state corporate limited
partnership or limited liability company law, or any applicable state, federal
or foreign bankruptcy, insolvency, reorganization or other law affecting the
rights of creditors generally, if the obligations of any Subsidiary Guarantor
under Section 7.01 would otherwise be held or determined to be void, voidable,
invalid or unenforceable, or subordinated to the claims of any other creditors,
on account of the amount of its liability under Section 7.01, then,
notwithstanding any other provision to the contrary, the amount of such
liability shall, without any further action by such Subsidiary Guarantor, any
Loan Party or any other person, be automatically limited and reduced to the
highest amount that is valid and enforceable and not subordinated to the claims
of other creditors as determined in such action or proceeding.
SECTION 7.09 RELEASE OF SUBSIDIARY GUARANTORS. If, in
compliance with the terms and provisions of the Loan Documents, all or
substantially all of the Equity Interests or property of any Subsidiary
Guarantor are sold or otherwise transferred (a "TRANSFERRED GUARANTOR") to a
person or persons, none of which is Borrower or a Subsidiary, such Transferred
Guarantor shall, upon the consummation of such sale or transfer, be
automatically released from its obligations under this Agreement (including
under Section 10.03 hereof) and its obligations to pledge and grant any
Collateral owned by it pursuant to any Security Document and, in the case of a
sale of all or substantially all of the Equity Interests of the Transferred
Guarantor, the pledge of such Equity Interests to the Collateral Agent pursuant
to the Security Agreements shall be automatically released, and the Collateral
Agent shall take such actions as are necessary or reasonably requested by
Borrower to effect each release described in this Section 7.09 in accordance
with the relevant provisions of the Security Documents.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01 EVENTS OF DEFAULT. Upon the occurrence and during
the continuance of the following events ("EVENTS OF DEFAULT"):
(a) default shall be made in the payment of any principal of
any Loan or any Reimbursement Obligation when and as the same shall become due
and payable, whether at the due date thereof (including a Term Loan Repayment
Date) or at a date fixed for prepayment (whether voluntary or mandatory) thereof
or by acceleration thereof or otherwise;
(b) 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
paragraph (a) above) 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 five Business Days;
(c) 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 pursuant to any Loan Document, shall prove to have been false or
misleading in any material respect when so made, deemed made or furnished;
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(d) default shall be made in the due observance or performance
by any Company of any covenant, condition or agreement contained in Section
5.02, 5.03(a) or 5.08 or in Article VI;
(e) default shall be made in the due observance or performance
by any Company of any covenant, condition or agreement contained in any Loan
Document (other than those specified in paragraphs (a), (b) or (d) immediately
above) and such default shall continue unremedied or unwaived or shall not be
waived for a period of 30 days after receipt of written notice thereof from the
Administrative Agent or any Lender to Borrower;
(f) any Company shall (i) fail to pay any principal or
interest, regardless of amount, due in respect of any Indebtedness (other than
the Obligations), when and as the same shall become due and payable beyond any
applicable grace period, or (ii) fail to observe or perform any other term,
covenant, condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness if the effect of any failure
referred to in this clause (ii) is to cause, or to permit the holder or holders
of such Indebtedness or a trustee or other representative on its or their behalf
(with or without the giving of notice, the lapse of time or both) to cause, such
Indebtedness to become due prior to its stated maturity or become subject to a
mandatory offer purchase by the obligor; provided that it shall not constitute
an Event of Default pursuant to this paragraph (f) unless the aggregate amount
of all such Indebtedness referred to in clauses (i) and (ii) exceeds $5,000,000
at any one time (provided that, in the case of Hedging Obligations, the amount
counted for this purpose shall be the amount owed by all Companies if such
Hedging Obligations were terminated at such time);
(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 Holdings, Borrower or any Significant Subsidiary, or of
a substantial part of the property of Holdings, Borrower or any Significant
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 Holdings,
Borrower or any Significant Subsidiary or for a substantial part of the property
of Holdings, Borrower or any Significant Subsidiary; or (iii) the winding-up or
liquidation of Holdings, Borrower or any Significant Subsidiary; and such
proceeding or petition shall continue undismissed for 90 days or an order or
decree approving or ordering any of the foregoing shall be entered;
(h) Holdings, Borrower or any Significant 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 paragraph (g) above; (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
Holdings, Borrower or any Significant Subsidiary or for a substantial part of
the property of Holdings, Borrower or any Significant 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; (vii) take any action for the purpose of effecting any
of the foregoing; or (viii) wind up or liquidate;
(i) one or more judgments, orders or decrees for the payment
of money in an aggregate amount in excess of $5,000,000 (in excess of insurance
therefor for which coverage is not denied) shall be rendered against any Company
or any combination thereof and the same shall remain undischarged, unvacated or
unbonded for a period of 60 consecutive days during which execution shall not be
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effectively stayed, or any action shall be legally taken by a judgment creditor
to levy upon properties of any Company to enforce any such judgment;
(j) one or more ERISA Events shall have occurred that, when
taken together with all other such ERISA Events, could reasonably be expected to
result in a Material Adverse Effect;
(k) other than with respect to de minimis items of Collateral
not to exceed $100,000 in the aggregate, the security interest and Lien
purported to be created by any Security Document shall cease to be in full force
and effect, or shall cease to give the Collateral Agent, for the benefit of the
Secured Parties, the Liens, rights, powers and privileges purported to be
created and granted under such Security Document (including a perfected first
priority security interest in and Lien on all of the Collateral thereunder
(except as otherwise expressly provided hereunder or in such Security Document,
including Permitted Liens)) in favor of the Collateral Agent, or shall be
asserted by Borrower or any other Loan Party not to be a valid, perfected, first
priority (except as otherwise expressly provided in this Agreement or such
Security Document, including Permitted Liens) security interest in or Lien on
the Collateral covered thereby;
(l) any Loan Document or any material provisions thereof shall
at any time and for any reason be declared by a court of competent jurisdiction
to be null and void, or a proceeding shall be commenced by any Loan Party or any
other person, or by any Governmental Authority, seeking to establish the
invalidity or unenforceability thereof (exclusive of questions of interpretation
of any provision thereof), or any Loan Party shall repudiate or deny any portion
of its liability or obligation for the Obligations;
(m) there shall have occurred a Change in Control;
(n) (i) there shall have occurred an HMO Event with respect to
any member of the Consolidated Group that would reasonably be expected to
materially and adversely affect such person and the circumstances that triggered
such HMO Event shall remain unremedied and/or such order shall remain
unsatisfied for 90 days after the occurrence thereof (or such lesser period of
time, if any, as the HMO Regulator administering the HMO Regulations shall have
imposed for the cure of such HMO Event), or (ii) any HMO Subsidiary shall suffer
the loss of 25% or more of the enrolled recipients for which it is responsible
(other than as the result of any Asset Sale permitted hereunder) as measured
from the beginning of the previous month or from the close of its immediately
preceding fiscal year-end that would result in a Material Adverse Effect; or
(o) there shall occur any Exclusion Event that would result in
a Material Adverse Effect;
then, and in every such event (other than an event with respect to Holdings or
Borrower described in paragraph (g) or (h) above), 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 written notice to 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 and Reimbursement
Obligations then outstanding to be forthwith due and payable in whole or in
part, whereupon the principal of the Loans and Reimbursement Obligations so
declared to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other Obligations of Borrower 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 Borrower and the Guarantors, anything contained
herein or in any
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other Loan Document to the contrary notwithstanding; and in any event, with
respect to Holdings or Borrower described in paragraph (g) or (h) above, the
Commitments shall automatically terminate and the principal of the Loans and
Reimbursement Obligations then outstanding, together with accrued interest
thereon and any unpaid accrued Fees and all other Obligations of Borrower
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 Borrower and the Guarantors,
anything contained herein or in any other Loan Document to the contrary
notwithstanding.
SECTION 8.02 RESCISSION. If at any time after termination of
the Commitments or acceleration of the maturity of the Loans, Borrower shall pay
all arrears of interest and all payments on account of principal of the Loans
and Reimbursement Obligations owing by it that shall have become due otherwise
than by acceleration (with interest on principal and, to the extent permitted by
law, on overdue interest, at the rates specified herein) and all Defaults (other
than non-payment of principal of and accrued interest on the Loans due and
payable solely by virtue of acceleration) shall be remedied or waived pursuant
to Section 10.02, then upon the written consent of the Required Lenders and
written notice to Borrower, the termination of the Commitments or the
acceleration and their consequences may be rescinded and annulled; but such
action shall not affect any subsequent Default or impair any right or remedy
consequent thereon. The provisions of the preceding sentence are intended merely
to bind the Lenders and the Issuing Bank to a decision that may be made at the
election of the Required Lenders, and such provisions are not intended to
benefit Borrower and do not give Borrower the right to require the Lenders to
rescind or annul any acceleration hereunder, even if the conditions set forth
herein are met.
SECTION 8.03 APPLICATION OF PROCEEDS. The proceeds received by
the Collateral Agent in respect of any realization upon all or any part of the
Collateral pursuant to the exercise by the Collateral Agent of its remedies in
accordance with the terms of the Loan Documents shall be applied, in full or in
part, together with any other sums then held by the Collateral Agent pursuant to
this Agreement, promptly by the Collateral Agent as follows:
(a) First, to the payment of all reasonable out-of-pocket
costs and expenses, fees, commissions and taxes of such sale, collection or
other realization including compensation to the Collateral Agent and its agents
and counsel, and all expenses, liabilities and advances made or incurred by the
Collateral Agent in connection therewith and all amounts for which the
Collateral Agent is entitled to indemnification pursuant to the provisions of
any Loan Document, together with interest on each such amount at the highest
rate then in effect under this Agreement from and after the date such amount is
due, owing or unpaid until paid in full;
(b) Second, to the payment of all other reasonable costs
out-of-pocket and expenses of such sale, collection or other realization
including compensation to the other Secured Parties and their agents and counsel
and all costs, liabilities and advances made or incurred by the other Secured
Parties in connection therewith, together with interest on each such amount at
the highest rate then in effect under this Agreement from and after the date
such amount is due, owing or unpaid until paid in full;
(c) Third, without duplication of amounts applied pursuant to
clauses (a) and (b) above, to the payment in full, pro rata, of interest and
other amounts constituting Obligations (other than principal and Reimbursement
Obligations) and any fees, premiums and scheduled periodic payments due under
Hedging Agreements constituting Secured Obligations and any interest accrued
thereon, in each case equally and ratably in accordance with the respective
amounts thereof then due and owing;
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(d) Fourth, to the payment in full, pro rata, of principal
amount of the Obligations (including Reimbursement Obligations) and any
breakage, termination or other payments under Hedging Agreements constituting
Secured Obligations and any interest accrued thereon; and
(e) Fifth, the balance, if any, to the person lawfully
entitled thereto (including the applicable Loan Party or its successors or
assigns) or as a court of competent jurisdiction may direct.
In the event that any such proceeds are insufficient to pay in
full the items described in clauses (a) through (e) of this Section 8.03, the
Loan Parties shall remain liable, jointly and severally, for any deficiency.
SECTION 8.04 REINSTATEMENT. The obligations of Borrower under
this Agreement shall be automatically reinstated if and to the extent that for
any reason any payment by or on behalf of Borrower or another Loan Party in
respect of the Obligations is rescinded or must be otherwise restored by any of
the Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise.
ARTICLE IX
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 9.01 APPOINTMENT AND AUTHORITY. Each of the Lenders
and the Issuing Bank hereby irrevocably appoints UBS AG, Stamford Branch, to act
on its behalf as the Administrative Agent and the Collateral Agent hereunder and
under the other Loan Documents and authorizes such Agents to take such actions
on its behalf and to exercise such powers as are delegated to such Agents by the
terms hereof or thereof, together with such actions and powers as are reasonably
incidental thereto. The provisions of this Article are solely for the benefit of
the Administrative Agent, the Collateral Agent, the Lenders and the Issuing
Bank, and neither Borrower nor any other Loan Party shall have rights as a third
party beneficiary of any of such provisions.
SECTION 9.02 RIGHTS AS A LENDER. Each person serving as an
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 the term "Lender" or "Lenders" shall, unless otherwise expressly
indicated or unless the context otherwise requires, include each person serving
as an Agent hereunder in its individual capacity. Such person and its Affiliates
may accept deposits from, lend money to, act as the financial advisor or in any
other advisory capacity for and generally engage in any kind of business with
Borrower or any Subsidiary or other Affiliate thereof as if such person were not
an Agent hereunder and without any duty to account therefor to the Lenders.
SECTION 9.03 EXCULPATORY PROVISIONS. No Agent shall have
any duties or obligations except those expressly set forth herein and in the
other Loan Documents. Without limiting the generality of the foregoing, no
Agent:
(i) shall be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred
and is continuing;
(ii) shall have any duty to take any discretionary
action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby
or by the other Loan Documents that such Agent is required to
exercise as directed in writing by the Required
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Lenders (or such other number or percentage of the Lenders as
shall be expressly provided for herein or in the other Loan
Documents); provided that such Agent shall not be required to
take any action that, in its reasonable judgment or the
reasonable judgment of its counsel, may expose such Agent to
liability or that is contrary to any Loan Document or
applicable Requirements of Law; and
(iii) shall, except as expressly set forth herein and
in the other Loan Documents, have any duty to disclose, and
shall not be liable for the failure to disclose, any
information relating to Borrower or any of its Affiliates that
is communicated to or obtained by the person serving as such
Agent or any of its Affiliates in any capacity.
No Agent shall be liable for any action taken or not taken by it (x) with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as such Agent shall believe
in good faith shall be necessary, under the circumstances as provided in Section
10.02) or (y) in the absence of its own gross negligence or willful misconduct.
No Agent shall be deemed to have knowledge of any Default unless and until
notice describing such Default is given to such Agent by Borrower, a Lender or
the Issuing Bank.
No 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 this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to such Agent.
Without limiting the generality of the foregoing, the use of the term "agent" in
this Agreement with reference to the Administrative Agent or the Collateral
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such
term us used merely as a matter of market custom and is intended to create or
reflect only an administrative relationship between independent contracting
parties.
SECTION 9.04 RELIANCE BY 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
(including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper person. Each Agent also may 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. In
determining compliance with any condition hereunder to the making of a Loan, or
the issuance of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or the Issuing Bank, the Administrative Agent may
presume that such condition is satisfactory to such Lender or the Issuing Bank
unless the Administrative Agent shall have received notice to the contrary from
such Lender or the Issuing Bank prior to the making of such Loan or the issuance
of such Letter of Credit. Each Agent may consult with legal counsel (who may be
counsel for Borrower), 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.
SECTION 9.05 DELEGATION OF DUTIES. Each Agent may perform any
and all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any
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one or more sub-agents appointed by such Agent. Each Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and
powers by or through their respective Related Parties. The exculpatory
provisions of this Article 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.
SECTION 9.06 RESIGNATION OF AGENT. Each Agent may at any time
give notice of its resignation to the Lenders, the Issuing Bank and Borrower.
Upon receipt of any such notice of resignation, the Required Lenders shall have
the right, with the consent (not to be unreasonably withheld, delayed or
conditioned) of Borrower except after and during the continuance of an Event of
Default, to appoint a successor, which shall be a bank with an office in the
United States, or an Affiliate of any such bank with an office in the United
States. If no such 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 on
behalf of the Lenders and the Issuing Bank, appoint a successor Agent meeting
the qualifications set forth above with Borrower's consent (not to be
unreasonably withheld, delayed or conditioned) except after and during the
continuance of any Event of Default; provided that if the Agent shall notify
Borrower and the Lenders that no qualifying person has accepted such appointment
or Borrower has not consented, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Collateral Agent on behalf of the Lenders or the Issuing Bank under any of the
Loan Documents, the retiring Collateral Agent shall continue to hold such
collateral security as nominee until such time as a successor Collateral Agent
is appointed) and (2) all payments, communications and determinations provided
to be made by, to or through an Agent shall instead be made by or to each Lender
and the Issuing Bank directly, until such time as the Required Lenders, with the
consent (not to be unreasonably withheld, delayed or conditioned) of Borrower
except after and during the continuance of an Event of Default, appoint a
successor Agent as provided for above in this paragraph. Upon the acceptance of
a successor's appointment as Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Agent, and the retiring Agent shall be discharged from all
of its duties and obligations hereunder or under the other Loan Documents (if
not already discharged therefrom as provided above in this paragraph). The fees
payable by Borrower to a successor Agent shall be the same as those payable to
its predecessor unless otherwise agreed between Borrower and such successor.
After the retiring Agent's resignation hereunder and under the other Loan
Documents, the provisions of this Article IX and Section 10.03 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 the retiring Agent was acting as Agent.
SECTION 9.07 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each
Lender and the Issuing Bank acknowledges that it has, independently and without
reliance upon any Agent 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 Agreement. Each Lender and the Issuing Bank also
acknowledges that it will, independently and without reliance upon any Agent 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, any other Loan Document or
any related agreement or any document furnished hereunder or thereunder.
SECTION 9.08 NO OTHER DUTIES, ETC. Anything herein to the
contrary notwithstanding, none of the Bookrunner, Arranger, Syndication Agent or
Documentation Agents listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other
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Loan Documents, except in its capacity, as applicable, as the Administrative
Agent, the Collateral Agent, a Lender or the Issuing Bank hereunder.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 NOTICES.
(a) Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in paragraph (b) below), all 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 telecopier as
follows:
(i) if to any Loan Party, to Borrower at:
NewQuest, Inc.
00 Xxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
(ii) if to the Administrative Agent, the Collateral
Agent, Swingline Lender or Issuing Bank, to it at:
UBS AG, Stamford Branch
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telecopier No.: (000) 000-0000
Email: xxxx.xxxxxx@xxx.xxx
(iii) if to a Lender, to it at its address (or telecopier
number) set forth in its Administrative Questionnaire; and
(iv) if to the Swingline Lender, to it at:
UBS Loan Finance LLC
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Xxxxxx
Telecopier No.: (000) 000-0000
Email: xxxx.xxxxxx@xxx.xxx
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in paragraph (b) below, shall be effective as provided in said
paragraph (b).
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(b) Electronic Communications. Notices and other
communications to the Administrative Agent, Collateral Agent or Lenders and the
Issuing Bank hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices to any Lender or the Issuing Bank pursuant to Article II if
such Lender or the Issuing Bank, as applicable, has notified the Administrative
Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent, the Collateral Agent or Borrower may,
in its reasonable discretion, agree to accept notices and other communications
to it hereunder by electronic communications pursuant to procedures approved by
it; provided that approval of such procedures may be limited to particular
notices or communications.
Unless the Administrative Agent otherwise prescribes, (i)
notices and other communications sent to an e-mail address shall be deemed
received upon the sender's receipt of an acknowledgement from the intended
recipient (such as by the "return receipt requested" function, as available,
return e-mail or other written acknowledgement); provided that if such notice or
other communication is not sent during the normal business hours of the
recipient, such notice or communication shall be deemed to have been sent at the
opening of business on the next business day for the recipient, and (ii) notices
or communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the foregoing clause (i) of notification that such notice or
communication is available and identifying the website address therefor.
(c) Change of Address, Etc. Any party hereto may change its
address or telecopier number for notices and other communications hereunder by
notice to the other parties hereto.
SECTION 10.02 WAIVERS; AMENDMENT.
(a) Generally. No failure or delay by any Agent, the Issuing
Bank or any Lender in exercising any right or power 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
each 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 any Loan Document or
consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be permitted by this Section 10.02, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. Without limiting the generality of the foregoing,
the making of a Loan or issuance of a Letter of Credit shall not be construed as
a waiver of any Default, regardless of whether any Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time. No
notice or demand on Borrower in any case shall entitle Borrower to any other or
further notice or demand in similar or other circumstances.
(b) Required Consents. Subject to Sections 10.02(c) and (d),
neither this Agreement nor any other Loan Document nor any provision hereof or
thereof may be waived, amended, supplemented or modified except, in the case of
this Agreement, pursuant to an agreement or agreements in writing entered into
by Borrower and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent, the Collateral Agent (in the case of any Security
Document) and the Loan Party or Loan Parties that are party thereto, in each
case with the written consent of the Required Lenders; provided that no such
agreement shall be effective if the effect thereof would:
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(i) increase the Commitment of any Lender without the
written consent of such Lender (it being understood that no amendment,
modification, termination, waiver or consent with respect to any
condition precedent, covenant or Default shall constitute an increase
in the Commitment of any Lender);
(ii) reduce the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon (other than
interest pursuant to Section 2.06(c)) (other than waiver of default
interest), or reduce any Fees payable hereunder, or change the form or
currency of payment of any Obligation, without the written consent of
each Lender directly affected thereby (it being understood that any
amendment or modification to the financial definitions in this
Agreement shall not constitute a reduction in the rate of interest for
purposes of this clause (ii));
(iii) (A) change the scheduled final maturity of any
Loan, or any scheduled date of payment of or the installment otherwise
due on the principal amount of any Term Loan under Section 2.09, (B)
postpone the date for payment of any Reimbursement Obligation or any
interest or fees payable hereunder, (C) change the amount of, waive or
excuse any such payment (other than waiver of any increase in the
interest rate pursuant to Section 2.06(c)), or (D) postpone the
scheduled date of expiration of any Commitment or any Letter of Credit
beyond the Revolving Maturity Date, in any case, without the written
consent of each Lender directly affected thereby;
(iv) increase the maximum duration of Interest Periods
hereunder, without the written consent of each Lender directly affected
thereby;
(v) permit the assignment or delegation by Borrower of
any of its rights or obligations under any Loan Document, without the
written consent of each Lender;
(vi) release Holdings or all or substantially all of the
Subsidiary Guarantors from their Guarantee (except as expressly
provided in Article VII), or limit their liability in respect of such
Guarantee, without the written consent of each Lender;
(vii) release all or substantially all or a portion of
the Collateral from the Liens of the Security Documents, in each case
without the written consent of each Lender (it being understood that
additional Classes of Loans pursuant to Section 2.19 or consented to by
the Required Lenders may be equally and ratably secured by the
Collateral with the then existing Secured Obligations under the
Security Documents);
(viii) change any provision of this Section 10.02(b) or
Section 10.02(c) or (d), without the written consent of each Lender
directly affected thereby (except for additional restrictions on
amendments or waivers for the benefit of Lenders of additional Classes
of Loans pursuant to Section 2.19 or consented to by the Required
Lenders);
(ix) reduce the percentage set forth in the definition of
"Required Lenders," "Required Class Lenders," "Required Revolving
Lenders" or any other provision of any Loan Document (including this
Section) specifying the number or percentage of Lenders (or Lenders of
any Class) required to waive, amend or modify any rights thereunder or
make any determination or grant any consent thereunder, without the
written consent of each Lender (or each Lender of such Class, as the
case may be), other than to increase such percentage or number or to
give any additional Lender or group of Lenders such right to waive,
amend or modify or make any such determination or grant any such
consent;
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(x) change or waive any provision of Article X as the
same applies to any Agent, or any other provision hereof as the same
applies to the rights or obligations of any Agent, in each case without
the written consent of such Agent;
(xi) change or waive any obligation of the Lenders
relating to the issuance of or purchase of participations in Letters of
Credit, without the written consent of the Administrative Agent and the
Issuing Bank; or
(xii) change or waive any provision hereof relating to
Swingline Loans (including the definition of "Swingline Commitment"),
without the written consent of the Swingline Lender;
provided, further, that any waiver, amendment or modification prior to the
achievement of a successful syndication may not be effected without the written
consent of the Arranger.
(c) Collateral. Without the consent of any other person, the
applicable Loan Party or Parties and the Administrative Agent and/or Collateral
Agent may (in its or their respective sole discretion, or shall, to the extent
required by any Loan Document) enter into any amendment or waiver of any Loan
Document, or enter into any new agreement or instrument, to effect the granting,
perfection, protection, expansion or enhancement of any security interest in any
Collateral or additional property to become Collateral for the benefit of the
Secured Parties, or as required by local law to give effect to, or protect any
security interest for the benefit of the Secured Parties, in any property or so
that the security interests therein comply with applicable Requirements of Law.
(d) Dissenting Lenders. If, in connection with any proposed
change, waiver, discharge or termination of the provisions of this Agreement as
contemplated by Section 10.02(b), the consent of the Required Lenders is
obtained but the consent of one or more of such other Lenders whose consent is
required is not obtained, then Borrower shall have the right to replace all, but
not less than all, of such non-consenting Lender or Lenders (so long as all
non-consenting Lenders are so replaced) with one or more persons pursuant to
Section 2.16 so long as at the time of such replacement each such new Lender
consents to the proposed change, waiver, discharge or termination.
(e) Refinanced Term Loans. In addition, notwithstanding the
foregoing, this Agreement may be amended with the written consent of the
Administrative Agent, Holdings, Borrower and the Lenders providing the relevant
Replacement Term Loans (as defined below) to permit the refinancing of all
outstanding Tranche A Loans ("REFINANCED TERM LOANS") with a replacement "A"
term loan tranche hereunder which shall constitute Tranche A Loans hereunder
("REPLACEMENT TERM LOANS"); provided that (a) the aggregate principal amount of
Replacement Term Loans shall not exceed the aggregate principal amount of
Refinanced Term Loans, (b) the Applicable Margin for Replacement Term Loans
shall not be higher than the Applicable Margin for Refinanced Term Loans, (c)
the weighted average life to maturity of Replacement Term Loans shall not be
shorter than the weighted average life to maturity of Refinanced Term Loans at
the time of such refinancing and (d) all other terms applicable to Replacement
Term Loans shall be substantially similar to, or not materially less favorable
to the Lenders providing Replacement Term Loans than, those applicable to
Refinanced Term Loans, except to the extent necessary to provide for covenants
and other terms applicable to any period after the Final Maturity Date in effect
immediately prior to such refinancing.
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SECTION 10.03 EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) Costs and Expenses. Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent, the Collateral
Agent, UBS Securities LLC and UBS Loan Finance LLC (including the reasonable
fees, charges and disbursements of counsel for the Administrative Agent and/or
the Collateral Agent) in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution and
delivery, amendment, waiver or modification (including proposed amendments,
waivers or modifications) of this Agreement and the other Loan Documents or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated or such amendments or modifications become effective), (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder, (iii) all out-of-pocket expenses incurred by
the Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank
(including the reasonable fees, charges and disbursements of one counsel (plus
any local and/or special regulatory counsel), unless the interests of the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank are
sufficiently divergent, and one third-party workout consultant for the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank), in
connection with the enforcement or protection of its rights (A) in connection
with this Agreement and the other Loan Documents, including its rights under
this Section 10.03, or (B) in connection with the Loans made or Letters of
Credit issued hereunder, including all such reasonable out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit and (iv) all documentary and similar taxes and
charges in respect of the Loan Documents.
(b) Indemnification by Borrower. Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), the Collateral Agent (and any
sub-agent thereof), each Lender and the Issuing Bank, and each Related Party of
any of the foregoing persons (each such person being called an "INDEMNITEE")
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the reasonable fees,
charges and disbursements of one counsel (plus any local and/or special
regulatory counsel) for all Indemnitees unless the interests of such Indemnitees
are sufficiently divergent) incurred by any Indemnitee or asserted against any
Indemnitee by any third party or by Borrower or any other Loan Party arising out
of or relating to (i) the execution or delivery of this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or Release or threatened Release
of Hazardous Materials on, at, under or from any property owned, leased or
operated by any Company at any time, or any Environmental Claim related in any
way to any Company, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by
Borrower or any other Loan Party, and regardless of whether any Indemnitee is a
party thereto; 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 been incurred primarily by reason of the
gross negligence or willful misconduct of such Indemnitee or of such
Indemnitee's directors, officers, employees, advisors or agents. No Loan Party
shall be liable for any settlement of any such proceeding effected without its
written consent, but if settled with such consent or if there shall be a final
judgment for the plaintiff, such Loan Party shall indemnify the Indemnitee from
and against any loss or liability by reason of such settlement or judgment,
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subject to such Loan Party's rights in this paragraph to claim exemption from
its indemnity obligations. No Loan Party shall, without the prior written
consent of any Indemnitee, effect any settlement of any pending or threatened
proceeding in respect of which such Indemnitee is or could have been a party and
indemnity could have been sought hereunder by such Indemnitee, unless such
settlement (i) includes an unconditional release of such Indemnitee from all
liability or claims that are the subject matter of such proceeding and (ii) does
not include a statement as to or an admission of fault, culpability, or a
failure to act by or on behalf of any Indemnitee.
(c) Reimbursement by Lenders. To the extent that Borrower for
any reason fails to indefeasibly pay any amount required under paragraph (a) or
(b) of this Section 10.03 to be paid by it to the Administrative Agent (or any
sub-agent thereof), the Collateral Agent, the Issuing Bank, the Swingline Lender
or any Related Party of any of the foregoing, each Lender severally agrees to
pay to the Administrative Agent (or any such sub-agent), the Collateral Agent
(or any sub-agent thereof), the Issuing Bank, the Swingline Lender or such
Related Party, as the case may be, such Lender's pro rata share (determined 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 (or any such
sub-agent), the Collateral Agent (or any sub-agent thereof), the Swingline
Lender or the Issuing Bank in its capacity as such, or against any Related Party
of any of the foregoing acting for the Administrative Agent (or any such
sub-agent), the Collateral Agent (or any sub-agent thereof), the Swingline
Lender or Issuing Bank in connection with such capacity. The obligations of the
Lenders under this paragraph (c) are subject to the provisions of Section 2.14.
For purposes hereof, a Lender's "pro rata share" shall be determined based upon
its share of the sum of the total Revolving Exposure, outstanding Term Loans and
unused Commitments at the time.
(d) Waiver of Consequential Damages, Etc. To the fullest
extent permitted by applicable Requirements of Law, no party hereto shall
assert, and each party hereto hereby waives, any claim against any other party
hereto, 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, any other Loan Document or
any agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Loan or Letter of Credit or the use of the proceeds
thereof. No Indemnitee referred to in paragraph (b) above shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby.
(e) Payments. All amounts due under this Section shall be
payable not later than 10 Business Days after written demand therefor.
SECTION 10.04 Successors and Assigns.
(a) Successors and Assigns Generally. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Administrative Agent, the
Collateral Agent, the Issuing Lender, the Swingline Lender and each Lender and
no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of paragraph (b) of this Section 10.04, (ii) by way of participation in
accordance with the provisions of paragraph (d) of this Section 10.04 or (iii)
by way of pledge or assignment of a security interest subject
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to the restrictions of paragraph (f) of this Section (and any other attempted
assignment or transfer by Borrower or any Lender shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in paragraph (d)
of this Section and, to the extent expressly contemplated hereby, the other
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign
to one or more Eligible Assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
at the time owing to it); provided that
(i) except in the case of any assignment made in connection
with the primary syndication of the Commitment and Loans by the
Arranger or an assignment of the entire remaining amount of the
assigning Lender's Commitment and the Loans at the time owing to it or
in the case of an assignment to a Lender or an Affiliate of a Lender or
an Approved Fund with respect to a Lender, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding
thereunder) or, if the applicable Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender
subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent or, if "Trade Date" is specified in the
Assignment and Assumption, as of the Trade Date) shall not be less than
$2.5 million, in the case of any assignment in respect of Revolving
Loans and/or Revolving Commitments, or $1.0 million (treating multiple,
contemporaneous assignments by or to Approved Funds of a single Lender
as a single assignment for such purpose), in the case of any assignment
in respect of Term Loans and/or Term Loan Commitments, and unless in
each case, each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, Borrower otherwise consent
(each such consent not to be unreasonably withheld or delayed);
(ii) each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Loan or the
Commitment assigned, except that this clause (ii) shall not prohibit
any Lender from assigning all or a portion of its rights and
obligations among separate tranches on a non-pro rata basis; and
(iii) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500 (treating multiple,
contemporaneous assignments by or to Approved Funds of a single Lender
as a single assignment for such purpose), and the Eligible Assignee, if
it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section 10.04, from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the 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 2.12, 2.13, 2.15 and 10.03 with
respect to facts and circumstances occurring prior to the effective date of such
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assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (d) of this Section
10.04.
(c) Register. The Administrative Agent, acting solely for this
purpose as an agent of Borrower, shall maintain at one of its offices in
Stamford, Connecticut a copy of each Assignment and Assumption delivered to it
and a register for the recordation of the names and addresses of the Lenders,
and the Commitments of, and principal amounts of the Loans and LC Disbursements
owing to, each Lender pursuant to the terms hereof from time to time (the
"REGISTER"). The entries in the Register shall be conclusive (absent manifest
error), and Borrower, the Administrative Agent, the Issuing Bank and the Lenders
shall 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 Borrower, the Issuing Bank, the Collateral Agent, the Swingline
Lender and any Lender (with respect to its own interest only), at any reasonable
time and from time to time upon reasonable prior notice.
(d) Participations. Any Lender may at any time, without the
consent of, or notice to, Borrower, the Administrative Agent, the Issuing Bank
or the Swingline Lender sell participations to any person (other than a natural
person or Borrower or any of Borrower's Affiliates or Subsidiaries) (each, a
"PARTICIPANT") in all or a portion of such Lender's rights and/or obligations
under this Agreement (including all or a portion of its Commitment and/or the
Loans owing to it); provided 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
and (iii) Borrower, the Administrative Agent and the Lenders and Issuing Bank
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement.
Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce the Loan Documents and to approve any amendment, modification or
waiver of any provision of the Loan Documents; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in clause
(i), (ii) or (iii) of the first proviso to Section 10.02(b) that affects such
Participant. Subject to paragraph (e) of this Section, Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.12, 2.13 and 2.15
(subject to the requirements of those Sections) to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to paragraph (b)
of this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a Lender; provided
such Participant agrees to be subject to Section 2.14 as though it were a
Lender.
(e) Limitations on Participant Rights. A Participant shall not
be entitled to receive any greater payment under Sections 2.12, 2.13 and 2.15
than the applicable Lender would have been entitled to receive with respect to
the participation sold to such Participant, unless the sale of the participation
to such Participant is made with Borrower's prior written consent.
(f) Certain Pledges. Any Lender may at any time pledge or
assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto (or entitle any such pledgee to vote as a Lender). In the case
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of any Lender that is a fund that invests in bank loans, such Lender may,
without the consent of Borrower or the Administrative Agent, collaterally assign
or pledge all or any portion of its rights under this Agreement, including the
Loans and Notes or any other instrument evidencing its rights as a Lender under
this Agreement, to any holder of, trustee for, or any other representative of
holders of, obligations owed or securities issued, by such fund, as security for
such obligations or securities.
SECTION 10.05 SURVIVAL OF AGREEMENT. All covenants,
agreements, representations and warranties made by the Loan Parties in the Loan
Documents and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any
Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that the
Agents, the Issuing Bank or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, 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 is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or terminated.
The provisions of Sections 2.12, 2.14, 2.15 and Article X shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the replacement of
the Lender, the payment of the Reimbursement Obligations, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof (other than Section 10.12 which shall
solely survive and remain in full force and effect for a period of two years
thereafter).
SECTION 10.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS;
ELECTRONIC EXECUTION.
(a) Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents, and any separate letter agreements with respect to fees payable
to the Administrative Agent, constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopier or Adobe PDF file shall be effective as delivery of a manually
executed counterpart of this Agreement.
(b) Electronic Execution of Assignments. The words
"execution," "signed," "signature," and words of like import in any Assignment
and Assumption shall be deemed to include electronic signatures or the keeping
of records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable Requirement of Law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.
SECTION 10.07 SEVERABILITY. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the
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remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08 RIGHT OF SETOFF. If an Event of Default shall
have occurred and be continuing, each Lender, the Issuing Bank, and each of
their respective Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by applicable Requirements of Law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) but excluding payroll, tax,
withholding, trust and xxxxx cash accounts at any time held and other
obligations (in whatever currency) at any time owing by such Lender, the Issuing
Bank or any such Affiliate to or for the credit or the account of Borrower or
any other Loan Party against any and all of the obligations of Borrower or such
Loan Party now or hereafter existing under this Agreement or any other Loan
Document to such Lender or the Issuing Bank, irrespective of whether or not such
Lender or the Issuing Bank shall have made any demand under this Agreement or
any other Loan Document and although such obligations of Borrower or such Loan
Party may be unmatured. The rights of each Lender, the Issuing Bank and their
respective Affiliates under this Section are in addition to other rights and
remedies (including other rights of setoff) that such Lender, the Issuing Bank
or their respective Affiliates may have. Each Lender and the Issuing Bank agrees
to notify Borrower and the Administrative Agent promptly after any such setoff
and application; provided that the failure to give such notice shall not affect
the validity of such setoff and application.
SECTION 10.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE
OF PROCESS.
(a) Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York, without regard
to conflicts of law principles that would require the application of the laws of
another jurisdiction.
(b) Submission to Jurisdiction. Each party hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to any Loan Document, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State court
or, to the fullest extent permitted by applicable 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 or any other Loan Document shall affect any right that the
Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or any other Loan Document
against any Loan Party or its properties in the courts of any jurisdiction.
(c) Waiver of Venue. Each party hereto hereby irrevocably and
unconditionally waives, to the fullest extent permitted by applicable
Requirements of Law, 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 any other Loan Document in any court referred to in Section
10.09(b). Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by applicable Requirements of Law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) Service of Process. Each party hereto irrevocably consents
to service of process in any action or proceeding arising out of or relating to
any Loan Document, in the manner provided for
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notices (other than telecopier) in Section 10.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party hereto to serve
process in any other manner permitted by applicable Requirements of Law.
SECTION 10.10 WAIVER OF JURY TRIAL. Each party hereto hereby
waives, to the fullest extent permitted by applicable Requirements of Law, any
right it may have to a trial by jury in any legal proceeding directly or
indirectly arising out of or relating to this Agreement, any other Loan Document
or the transactions contemplated hereby (whether based on contract, tort or any
other theory). 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 by, among other things, the mutual waivers
and certifications in this Section.
SECTION 10.11 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 shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 10.12 TREATMENT OF CERTAIN INFORMATION;
CONFIDENTIALITY. Each of the Administrative Agent, the Lenders and the Issuing
Bank agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and to
its and its Affiliates' respective partners, directors, officers, employees,
agents, advisors and other representatives (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 purporting to have jurisdiction
over it (including any self-regulatory authority, such as the NAIC; provided
that to the extent practicable and permitted by applicable Requirements of Law,
the party requested to disclose the Information will provide prompt written
notice of such request to Borrower, will allow Borrower a reasonable opportunity
to seek appropriate protective measures prior to disclosure, and will disclose
the minimum amount of Information required by applicable law), (c) to the extent
required by applicable Requirements of Law or by any subpoena or similar legal
process, (d) to any other party hereto, (e) in connection with the exercise of
any remedies hereunder or under any other Loan Document or any action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section 10.12, to
(i) any assignee of or Participant in, or any bona fide prospective assignee of
or Participant in, any of its rights or obligations under this Agreement, (ii)
any actual or bona fide prospective counterparty (or its advisors) to any swap
or derivative transaction relating to Borrower and its obligations or (iii) any
rating agency for the purpose of obtaining a credit rating applicable to any
Lender, (g) with the prior consent of Borrower or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of
this Section or (y) becomes available to the Administrative Agent, any Lender,
the Issuing Bank or any of their respective Affiliates on a nonconfidential
basis from a source other than Borrower. For purposes of this Section,
"INFORMATION" means all information received from Borrower or any of its
Subsidiaries relating to Borrower or any of its Subsidiaries or any of their
respective businesses, other than any such information that is available to the
Administrative Agent, any Lender or the Issuing Bank on a nonconfidential basis
prior to disclosure by Borrower or any of its Subsidiaries (other than
information received from a third party who was known by the recipient of such
information to be in breach of a confidentiality obligation. 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 to its own confidential information,
which in any event shall be a commercially reasonable standard.
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SECTION 10.13 USA PATRIOT ACT NOTICE. Each Lender that is
subject to the Act (as hereinafter defined) and the Administrative Agent (for
itself and not on behalf of any Lender) hereby notifies Borrower that pursuant
to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the "Act"), it is required to obtain, verify and
record information that identifies Borrower, which information includes the
name, address and tax identification number of Borrower and other information
regarding Borrower that will allow such Lender or the Administrative Agent, as
applicable, to identify Borrower in accordance with the Act. This notice is
given in accordance with the requirements of the Act and is effective as to the
Lenders and the Administrative Agent.
SECTION 10.14 INTEREST RATE LIMITATION. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable Requirements of 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 in accordance with applicable Requirements of Law, the rate of
interest payable in respect of such Loan 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 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 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 10.15 LENDER ADDENDUM. Each Lender to become a party
to this Agreement on the date hereof shall do so by delivering to the
Administrative Agent a Lender Addendum duly executed by such Lender, Borrower
and the Administrative Agent.
[Signature Pages Follow]
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.
NEWQUEST, INC.
By: ________________________
Name:
Title:
NEWQUEST HOLDINGS, INC.
By: ________________________
Name:
Title:
GULFQUEST, LP
By: TexQuest, L.L.C., its General Partner
HEALTH SPRING EMPLOYER SERVICES, INC.
HEALTHSPRING MANAGEMENT, INC.
HEALTHSPRING USA, LLC
HOUQUEST, L.L.C.
NEWQUEST, LLC
NEWQUEST MANAGEMENT OF ALABAMA, LLC
NEWQUEST MANAGEMENT OF ILLINOIS, LLC
SIGNATURE HEALTH ALLIANCE, INC.
TEXQUEST, L.L.C.
By: ________________________
Name:
Title:
S-1
UBS SECURITIES LLC, as Arranger and Bookrunner
By: ________________________
Name:
Title:
By: ________________________
Name:
Title:
UBS AG, STAMFORD BRANCH, as Issuing Bank,
Administrative Agent and Collateral Agent
By: ________________________
Name:
Title:
By: ________________________
Name:
Title:
UBS LOAN FINANCE LLC, as Swingline Lender
By: ________________________
Name:
Title:
By: ________________________
Name:
Title:
S-2
GENERAL ELECTRIC CAPITAL CORPORATION,
as Syndication Agent
By: ________________________
Name:
Title:
S-3
LASALLE BANK NATIONAL ASSOCIATION,
as Documentation Agent
By: ________________________
Name:
Title:
S-4
BANK OF AMERICA, N.A.
as Documentation Agent
By: ________________________
Name:
Title:
S-5
ANNEX I
APPLICABLE MARGIN
TOTAL REVOLVING LOANS
------------------------
LEVERAGE RATIO EURODOLLAR ABR
-------------- ---------- ---
LEVEL I 3.00% 2.00%
(greater than
or equal to) 2.5:1.0
LEVEL II 2.75% 1.75%
(less than) 2.5:1.0 BUT
(greater than
or equal to) 2.0:1.0
LEVEL III 2.50% 1.50%
(less than) 2.0:1.0
Each change in the Applicable Margin resulting from a change
in the Total Leverage Ratio shall be effective with respect to all Loans and
Letters of Credit outstanding on and after the date of delivery to the
Administrative Agent of the financial statements and certificates required by
Section 5.01(a) or (b) and Section 5.01(d), respectively, 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, the Total Leverage Ratio shall be deemed to be in Level I (i) from
the Closing Date to the date of delivery to the Administrative Agent of the
financial statements and certificates required by Section 5.01(a) or (b) and
Section 5.01(d) for the first full fiscal period ended after the Closing Date,
(ii) at any time during which Borrower has failed to deliver the financial
statements and certificates required by Section 5.01(a) or (b) and Section
5.01(d), respectively, and (iii) at any time during the existence of an Event of
Default.
ANNEX II
AMORTIZATION TABLE
TRANCHE A LOAN
DATE AMOUNT
---------------------- ---------------
June 30, 2005 $4,125,000
September 30, 2005 $4,125,000
December 31, 2005 $4,125,000
March 31, 2006 $4,125,000
June 30, 2006 $4,125,000
September 30, 2006 $4,125,000
December 31, 2006 $4,125,000
March 31, 2007 $4,125,000
June 30, 2007 $4,125,000
September 30, 2007 $4,125,000
December 31, 2007 $4,125,000
March 31, 2008 $4,125,000
June 30, 2008 $4,125,000
September 30, 2008 $4,125,000
December 31, 2008 $4,125,000
March 31, 2009 $4,125,000
June 30, 2009 $8,250,000
September 30, 2009 $8,250,000
December 31, 2009 $8,250,000
March 31, 2010 $8,250,000
June 30, 2010 $16,500,000
September 30, 2010 $16,500,000
December 31, 2010 $16,500,000
Tranche A Maturity Date $16,500,000
EXHIBIT D
[Form of]
COMPLIANCE CERTIFICATE
I, [ ], the [Financial Officer] of NewQuest, Inc. (in such
capacity and not in my individual capacity), hereby certify that, with respect
to that certain Credit Agreement dated as of March 1, 2005 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT") among NEWQUEST, INC., a Delaware corporation ("BORROWER"), NEWQUEST
HOLDINGS, INC., a Delaware corporation ("HOLDINGS"), the Subsidiary Guarantors
(such term and each other capitalized term used but not defined herein having
the meaning given it in Article I of the Credit Agreement), the Lenders, UBS
SECURITIES LLC, as lead arranger and sole bookrunner (in such capacity,
"ARRANGER"), LASALLE BANK NATIONAL ASSOCIATION and BANK OF AMERICA, N.A., each
as documentation agent (in such capacity, each a "DOCUMENTATION AGENT"), GENERAL
ELECTRIC CAPITAL CORPORATION as syndication agent (in such capacity,
"SYNDICATION AGENT"), UBS LOAN FINANCE LLC, as swingline lender (in such
capacity, "SWINGLINE LENDER"), and UBS AG, STAMFORD BRANCH, as issuing bank (in
such capacity, "ISSUING BANK"), as administrative agent (in such capacity,
"ADMINISTRATIVE AGENT") for the Lenders and as collateral agent (in such
capacity, "COLLATERAL AGENT") for the Secured Parties and the Issuing Bank:
a. Attached hereto as Schedule 1 are detailed calculations(1)
demonstrating compliance by each of the Loan Parties with the financial
covenants contained in Section 6.10 of the Credit Agreement. Borrower
and its Subsidiaries are in compliance with such covenants as of the
date hereof. Attached hereto as Schedule 2 are detailed calculations
setting forth Borrower's calculation of Excess Cash Flow.(2) Attached
hereto as Schedule 3 is the report of [accounting firm] certifying the
financial statements delivered under Section 5.01(a) of the Credit
Agreement and opining on or certifying such financial statements
stating that in the course of its regular audit of the financial
statements of Holdings and its Subsidiaries, which audit was conducted
in accordance with generally accepted auditing standards, it obtained
no knowledge that any Default insofar as it relates to financial or
accounting matters has occurred or, if in the opinion of [accounting
firm] such a Default has occurred, specifying the nature and extent
thereof.(3)
b. Borrower was in compliance with each of the covenants set
forth in Sections 6.07(f) and 6.10 of the Credit Agreement at all times
during and since [ ] (including the aggregate amount of Excluded
Issuances for this period and the uses therefor, any Equity Issuances
and Retained Equity Proceeds, including a description of the
application of Retained Equity Proceeds and a description of the
application of any Retained Amount).
------------------
(1) To accompany annual and quarterly financial statements only. Which
calculations shall be in reasonable detail satisfactory to the
Administrative Agent.
(2) To accompany annual financial statements only.
(3) To accompany annual financial statements only.
c. To my knowledge, no Default has occurred under the Credit
Agreement which has not been previously disclosed, in writing, to the
Administrative Agent pursuant to a Compliance Certificate.(4)
d. There have not been any changes that would require any
update to Schedule 1(a) to the Perfection Certificate (as supplemented
through the date hereof) [other than [ ]](5).
------------------
(4) If a Default shall have occurred, an explanation specifying the nature
and extent of such Default shall be provided on a separate page
together with an explanation of the corrective action taken or proposed
to be taken with respect thereto (include, as applicable, information
regarding actions, if any, taken since prior certificate).
(5) Bracketed language to be excluded if there is no updated information.
-2-
Dated this ____ day of ____________, 20___.
NEWQUEST, INC.
By:
-------------------------------
Name:
Title: [Financial Officer]
-3-
SCHEDULE 1
Financial Covenants
(A) MAXIMUM TOTAL LEVERAGE RATIO: CONSOLIDATED INDEBTEDNESS TO
CONSOLIDATED EBITDA
(1) Consolidated Indebtedness as of [ ], 20[ ]:
At any date of determination, the aggregate amount of
all Indebtedness for borrowed money (including,
without limitation, Capitalized Lease Obligations) of
Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP. _________________
(2) Consolidated EBITDA(6) for the four quarter period ended
[ ], 20[ ]: _________________
Consolidated Net Income for such period, adjusted by
adding thereto(7): _________________
Consolidated Interest Expense (see C(2) below) for
such period _________________
Consolidated Amortization Expense for such period _________________
Consolidated Depreciation Expense for such period _________________
Consolidated Tax Expense (including Permitted Tax
Distributions related thereto) for such period _________________
Fees, costs and expenses directly incurred in
connection with the Transactions (not to exceed
$[14,000,000]) _________________
The aggregate amount of all other non-cash charges _________________
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(6) Other than for purposes of calculating Excess Cash Flow, Consolidated
EBITDA shall be calculated on a Pro Forma Basis to give effect to the
Acquisition, any Permitted Acquisition and Asset Sales (other than any
dispositions in the ordinary course of business consummated at any time
on or after the first day of the Test Period thereof as if the
Acquisition and each such Permitted Acquisition had been effected on
the first day of such period and as if each such Asset Sale had been
consummated on the day prior to the first day of such period.
(7) In each case (other than the amount of cash (a) received as net
proceeds of business interruption insurance to the extent not included
in Consolidated Net Income and (b) paid as a result of a reversal of a
reserve for which a non-cash charge reduced Consolidated Net Income in
any prior Test Period) only to the extent (and in the same proportion)
deducted in determining such Consolidated Net Income and without
duplication.
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reducing Consolidated Net Income (including goodwill
impairment charges) for such period _________________
The cumulative effect of any change in accounting
principles _________________
(a) management fees to Sponsor in the amounts and the
times specified in the Management Services Agreement
not to exceed $500,000 in any fiscal year(8) and (b)
one-time consulting, advisory or similar fees to
Sponsor, in each case payable upon consummation of
and in connection with certain Permitted
Acquisitions, debt financings and equity financings
described in the Management Services Agreement as in
effect on the date hereof and permitted hereunder in
an amount not to exceed 1.0% of the total
consideration for such Permitted Acquisitions or
(without duplication) the gross amount (or in the
case of a revolving facility, the maximum committed
amount) of such financings received by (or made
available to) Loan Parties _________________
One-time costs, fees and expenses related to any
Permitted Acquisition or Investment, Equity Issuance,
Asset Sale or incurrence of Indebtedness, in each case
otherwise permitted hereunder, including, without
limitation, one- time compensation charges, stay
bonuses paid to existing management and severance
costs _________________
Expenses and charges incurred to the extent
reimbursed by third parties pursuant to
indemnification provisions _________________
Dividends paid to holders of Equity Interests (other
than Holdings or any of its Subsidiaries) of HMO
Subsidiaries _________________
Fees, costs and expenses directly attributable to
initial expansion into a state where the Companies
had no prior operations and incurred during the first
twelve months of such expansion, not to exceed
$2.0 million in the aggregate in any fiscal year _________________
The amount of cash (a) received as net proceeds of
business interruption insurance to the extent not
included in Consolidated Net Income and (b) paid as a
result of a reversal of a reserve for which a non-cash
charge reduced Consolidated Net Income in any prior
Test Period _________________
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(8) May be increased in accordance with Section 6.09(e).
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and subtracting therefrom:
The aggregate amount of all non-cash items increasing
Consolidated Net Income (other than the accrual of
revenue or recording of receivables in the ordinary
course of business) for such period. _________________
(3) Covenant Requirement: The ratio of (A)(1) to (A)(2): No more than [ ]:1.0
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(B) RISK-BASED CAPITAL RATIO(9)
(1) RBC HMOS
(a) [Name of RBC HMO]
Regulatory Action Level $ _________________
Total Adjusted Capital(10) $ _________________
Percentage by which Total Adjusted Capital exceeds
Regulatory Action Level % _________________
(b) [Name of RBC HMO]
Regulatory Action Level $ _________________
Total Adjusted Capital(10) $ _________________
Percentage by which Total Adjusted Capital exceeds
Regulatory Action Level % _________________
(2) Non-RBC HMO(11)
(a) [Name of Non-RBC HMO]
State Governmental Authority capital reserve
requirement $ _________________
capital reserve $ _________________
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(9) Compliance with the Risk-Based Capital Ratio will be determined at the
end of each fiscal quarter (using as the denominator in each case, for
the first three fiscal quarters of each year, the prescribed level as
of the end of the preceding fiscal year, and for the last fiscal
quarter of each year, the prescribed level as of the end of such fiscal
year).
(10) So long as each HMO Subsidiary maintains at least the applicable
minimum risk-based capital threshold of the state in which it operates,
(a) unrestricted cash-on-hand held by Borrower and the Subsidiary
Guarantors and (b) any aggregate amount of unused Revolving Commitment
at such date may be included in the computation of Total Adjusted
Capital if necessary to comply with the Risk-Based Capital Ratio.
(11) Provided, that: (a) during the first year after the Closing Date, the
Non-RBC HMO operating in Tennessee shall maintain a capital reserve at
a level equal to or greater than 105% of the applicable capital reserve
requirement as determined by the Tennessee Governmental Authority and
(b) in no event will the amount required for Non-RBC HMOs be greater
than the amount that would be required if the Risk-Based Capital Ratio
for RBC HMOs were applicable to such Non-RBC HMO.
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Percentage by which capital reserve
exceeds the state Governmental Authority capital
reserve requirement % _________________
(b) [Name of Non-RBC HMO]
State Governmental Authority capital reserve
requirement $ _________________
capital reserve $ _________________
Percentage by which capital reserve
exceeds the state Governmental Authority capital
reserve requirement % _________________
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(C) MINIMUM CONSOLIDATED FIXED CHARGE COVERAGE RATIO:
CONSOLIDATED EBITDA TO CONSOLIDATED FIXED CHARGES
(1) Consolidated EBITDA for the four quarter period ended
[ ], 20[ ]: _________________
See (A)(2) above for a detailed calculation of
Consolidated EBITDA.
(2) Consolidated Fixed Charges for the four quarter
period ended [ ], 20[ ]:
The sum, without duplication, of:
(a) Cash Interest Expense for such period _________________
Consolidated Interest Expense,(12) which is
calculated as follows:
(i) The total consolidated interest expense of
Borrower and its Subsidiaries for such
period determined on a consolidated basis in
accordance with GAAP plus, without
duplication _________________
(ii) Commissions, discounts and other fees and
charges owed by Borrower or any of its
Subsidiaries with respect to letters of
credit securing financial obligations,
borrowers' acceptance financings, and
receivables financing for such period. _________________
(iii) Imputed interest on Capital Lease Obligations
and Attributable Indebtedness of Borrower and
its Subsidiaries for such period _________________
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(12) Provided that (a) to the extent related to the Transactions, debt
issuance costs, debt discount or premium and other financing fees and
expenses shall be excluded from the calculation of Consolidated
Interest Expense and (b) Consolidated Interest Expense shall be
calculated after giving effect to Hedging Agreements, but excluding
unrealized gains and losses with respect to Hedging Agreements.
Consolidated Interest Expense shall be calculated on a Pro Forma Basis
to give effect to any Indebtedness incurred, assumed or permanently
repaid or extinguished during the relevant Test Period in connection
with the Acquisition, any Permitted Acquisitions and Asset Sales (other
than any dispositions in the ordinary course of business as if such
incurrence, assumption, repayment or extinguishing had been effected on
the first day of such period.
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(iv) Amortization of debt issuance costs, debt
discount or premium and other financing fees
and expenses incurred by Borrower or any of
its Subsidiaries for such period _________________
(v) Cash contributions to any employee stock
ownership plan or similar trust made by
Borrower or any of its Subsidiaries to the
extent such contributions are used by such plan
or trust to pay interest or fees to any person
(other than Borrower or a Wholly Owned
Subsidiary) in connection with Indebtedness
incurred by such plan or trust for such period _________________
(vi) All interest paid or payable with respect to
discontinued operations of Borrower or any of
its Subsidiaries for such period _________________
(vii) The interest portion of any deferred payment
obligations of Borrower or any of its
Subsidiaries for such period and _________________
(viii) All interest on any Indebtedness of Borrower
or any of its Subsidiaries of the type described
in clause (f) or (j) of the definition of
"Indebtedness" in the Credit Agreement for
such period minus the sum of: _________________
(A) Interest on any debt paid by the increase
in the principal amount of such debt
including by issuance of additional debt
of such kind _________________
(B) Items described in clause (iii) above
or, other than to the extent paid in cash,
clause (viii) above _________________
(C) Gross interest income of Borrower and its
Subsidiaries for such period _________________
(D) Fees and expenses relating to the
Loans, Letters of Credit or the Senior
Subordinated Notes to the extent
included in Consolidated Interest
Expense and _________________
(E) Any payment made to obtain Hedging
Agreements to the extent included in
Consolidated Interest Expense _________________
(b) The aggregate amount of Capital Expenditures (see
(D) below) made in cash during such period _________________
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(c) All cash payments in respect of income taxes made
during such period (net of any cash refund in
respect of income taxes actually received during
such period) and _________________
(d) The principal amount of all scheduled amortization
payments (as adjusted for any prepayments) on all
Indebtedness (including the principal component of
all Capital Lease Obligations, but excluding such
amortization payments on Indebtedness incurred to
finance Capital Expenditures included in clause
(b) above in such period or any prior period)
of Borrower and its Subsidiaries for such period (as
determined on the first day of the respective
period) _________________
(3) Covenant Requirement: The ratio of (C)(1) to (C)(2): No less than [ ]:1.0
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(D) LIMITATION ON CAPITAL EXPENDITURES
Capital Expenditures(13):
(1) For any period, without duplication, the aggregate amount of all
expenditures by such person during such period for fixed or
capital assets that, in accordance with GAAP, are classified as
capital expenditures in the consolidated statement of cash flows
of such Person, whether such increase is due to purchase of
properties for cash or financed by the incurrence of
Indebtedness, but excluding (i) expenditures made in connection
with the replacement, substitution or restoration of property
pursuant to Section 2.10(c) or (f) of the Credit Agreement,
(ii) any portion of such expenditures attributable to acquisitions
of property, plant and equipment in Permitted Acquisitions, (iii)
expenditures made with the proceeds of Excluded Issuances and
(iv) Capitalized Lease Obligations and Purchase Money
Indebtedness _________________
Covenant Requirement: No more than $[ ]
million
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(13) Provided, however, that (x) if the aggregate amount of Capital
Expenditures made in any fiscal year shall be less than the maximum
amount of Capital Expenditures permitted under Section 6.10(d) of the
Credit Agreement for such fiscal year (before giving effect to any
carryover), then an amount of such shortfall not exceeding 50% of such
maximum amount (without giving effect to clause (z) below) may be added
to the amount of Capital Expenditures permitted under Section 6.10(d)
of the Credit Agreement for the immediately succeeding (but not any
other) fiscal year, (y) in determining whether any amount is available
for carryover, the amount expended in any fiscal year shall first be
deemed to be from the amount allocated to such fiscal year (before
giving effect to any carryover), and (z) the aggregate amount of
Capital Expenditures made in any fiscal year by HMO Subsidiaries shall
not exceed 20% of the maximum aggregate amount of Capital Expenditures
permitted hereunder.
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SCHEDULE 2
Excess Cash Flow Calculation:
Consolidated EBITDA (see (A)(2) above) for fiscal year ended [ ],
20[ ] minus, without duplication: _________________
(a) Debt Service of Borrower and the Subsidiary Guarantors
(on a consolidated basis) for such Excess Cash Flow
Period (other than voluntary prepayments of the Term
Loans) _________________
(b) Any voluntary prepayments of Indebtedness (or, if a
revolving facility, prepayments of Indebtedness coupled
with a corresponding reduction in commitments) other
than Loans, to the extent otherwise permitted hereunder,
in each case to the extent not already reflected in Debt
Service during such Excess Cash Flow Period _________________
(c) Capital Expenditures (see (D) to Schedule 1 above) of
Borrower and the Subsidiary Guarantors (on a
consolidated basis) during such Excess Cash Flow Period
(excluding Capital Expenditures made in such Excess Cash
Flow Period where a certificate in the form contemplated
by the following clause (d) below was previously
delivered) that are paid in cash _________________
(d) Capital Expenditures (see (D) to Schedule 1 above) that
Borrower or any of the Subsidiary Guarantors (on a
consolidated basis) shall, during such Excess Cash Flow
Period, become obligated to make but that are not made during
such Excess Cash Flow Period; provided that Borrower shall
deliver a certificate to the Administrative Agent not later
than 90 days after the end of such Excess Cash Flow Period,
signed by a Responsible Officer of Borrower and certifying
that such Capital Expenditures will be made in the following
Excess Cash Flow Period _________________
(e) The aggregate amount of investments made in cash during
such period pursuant to Sections 6.04(e), (i), (j), (k),
(l) and (t) (other than that portion of Investments made
with all or a portion of the Retained Amount, Retained
Equity Proceeds and/or Excluded Issuances) of the Credit
Agreement _________________
(f) Taxes of Borrower and the Subsidiary Guarantors (on a
consolidated basis) that were paid in cash during such
Excess Cash Flow Period or will be paid within six
months after the end of such Excess Cash Flow Period _________________
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(g) Permitted Tax Distributions that are paid during the
respective Excess Cash Flow Period or will be paid
within six months after the close of such Excess Cash
Flow Period _________________
(h) The absolute value of the difference, if negative, of
the amount of Net Working Capital at the end of the
prior Excess Cash Flow Period over the amount of Net
Working Capital at the end of such Excess Cash Flow
Period _________________
(i) If not deducted in determining Consolidated EBITDA, the
fee paid during such Excess Cash Flow Period in
compliance with Section 6.09(e) of the Credit Agreement _________________
(j) Losses excluded from the calculation of Consolidated Net
Income of Borrower and the Subsidiary Guarantors by
operation of clause (c) or (f) of the definition thereof
that are paid in cash during such Excess Cash Flow
Period _________________
(k) To the extent added to determine Consolidated EBITDA of
Borrower and the Subsidiary Guarantors, all items that
did not result from a cash payment to Borrower or any of
the Subsidiary Guarantors on a consolidated basis during
such Excess Cash Flow Period _________________
(l) Fees, costs and expenses directly incurred in connection
with the Transactions to the extent added to determine
Consolidated EBITDA in such Excess Cash Flow Period and _________________
(m) The amounts specified in clauses (i) and (l) in the
definition of Consolidated EBITDA in such Excess Cash Flow
Period _________________
Provided that any amount deducted pursuant of any of the
foregoing clauses that will be paid after the close of such
Excess Cash Flow Period shall not be deducted again in a
subsequent Excess Cash Flow Period, plus, without duplication:
(1) The difference, if positive, of the amount of Net
Working Capital at the end of the prior Excess Cash Flow
Period over the amount of Net Working Capital at the end
of such Excess Cash Flow Period _________________
(2) The Net Cash Proceeds of any Asset Sale permitted by
Section 6.06(g) or (i) of the Credit Agreement in such
Excess Cash Flow Period to the extent (x) that the asset
sold in such Asset Sale was originally acquired by a
Loan Party as an Investment pursuant to Section 6.04(j),
(l) or (t) of the Credit Agreement, and (y) of the
amount included in clause (e) above in respect of such
assets when they were initially acquired as Investments _________________
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(3) To the extent any permitted Capital Expenditures
referred to in clause (d) above do not occur in the
Excess Cash Flow Period specified in the certificate of
Borrower provided pursuant to clause (d) above, such
amounts of Capital Expenditures that were not so made in
the Excess Cash Flow Period specified in such
certificates _________________
(4) Any return on or in respect of investments received in
cash during such period, which investments were made
pursuant to Section 6.04(e) of the Credit Agreement _________________
(5) To the extent subtracted in determining Consolidated
EBITDA, all items that did not result from a cash
payment by Borrower or any of its Subsidiary Guarantors
on a consolidated basis during such Excess Cash Flow
Period and _________________
(6) Dividends paid in cash to Borrower or any Subsidiary
Guarantor by an HMO Subsidiary during such Excess Cash
Flow Period to the extent not required to be prepaid
pursuant to Sections 2.10(c) or (f) of the Credit
Agreement _________________
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SCHEDULE 3
Report of [Accounting Firm]
[See attached.]
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