EXHIBIT 4.2
$70,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of May 4, 2001
among
AMERICHOICE CORPORATION
as Parent
and
AMERICHOICE HEALTH SERVICES, INC.
as Borrower
and
THE INITIAL LENDERS AND INITIAL ISSUING BANK
NAMED HEREIN
as Initial Lenders and Initial Issuing Bank
and
BANK OF AMERICA, N.A.
as Administrative Agent and Collateral Agent,
FIRST UNION NATIONAL BANK
as Syndication Agent
and
BANC OF AMERICA SECURITIES LLC
as Arranger
TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS ........................................ 1
SECTION 1.01. CERTAIN DEFINED TERMS ............................................ 1
SECTION 1.02. COMPUTATION OF TIME PERIODS ...................................... 27
SECTION 1.03. ACCOUNTING TERMS ................................................. 28
SECTION 1.04. CURRENCY EQUIVALENTS GENERALLY ................................... 28
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT ............ 28
SECTION 2.01. THE ADVANCES ..................................................... 28
SECTION 2.02. MAKING THE ADVANCES .............................................. 29
SECTION 2.03. ISSUANCE OF AND DRAWINGS AND REIMBURSEMENT UNDER LETTERS OF CREDIT 31
SECTION 2.04. REPAYMENT OF ADVANCES ............................................ 32
SECTION 2.05. TERMINATION OR REDUCTION OF THE COMMITMENTS ...................... 34
SECTION 2.06. PREPAYMENTS ...................................................... 35
SECTION 2.07. INTEREST ......................................................... 36
SECTION 2.08. FEES ............................................................. 37
SECTION 2.09. CONVERSION OF ADVANCES ........................................... 38
SECTION 2.10. INCREASED COSTS, ETC ............................................. 39
SECTION 2.11. PAYMENTS AND COMPUTATIONS ........................................ 41
SECTION 2.12. TAXES ............................................................ 43
SECTION 2.13. SHARING OF PAYMENTS, ETC ......................................... 45
SECTION 2.14. USE OF PROCEEDS .................................................. 46
SECTION 2.15. DEFAULTING LENDERS ............................................... 46
SECTION 2.16. REMOVAL OF A LENDER PARTY ........................................ 48
ARTICLE III CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT .............. 49
SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL EXTENSION OF CREDIT .............. 49
SECTION 3.02. CONDITIONS PRECEDENT TO EACH BORROWING AND ISSUANCE AND RENEWAL .. 52
SECTION 3.03. DETERMINATIONS UNDER SECTION 3.01 ................................ 53
ARTICLE IV REPRESENTATIONS AND WARRANTIES ......................................... 53
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER ................... 53
ARTICLE V COVENANTS OF THE PARENT AND THE BORROWER ................................ 57
SECTION 5.01. AFFIRMATIVE COVENANTS ............................................ 57
SECTION 5.02. NEGATIVE COVENANTS ............................................... 61
SECTION 5.03. REPORTING REQUIREMENTS ........................................... 69
SECTION 5.04. FINANCIAL COVENANTS .............................................. 72
ARTICLE VI EVENTS OF DEFAULT ...................................................... 73
SECTION 6.01. EVENTS OF DEFAULT ................................................ 73
SECTION 6.02. ACTIONS IN RESPECT OF THE LETTERS OF CREDIT UPON DEFAULT ......... 75
ARTICLE VII THE AGENTS ............................................................ 76
SECTION 7.01. AUTHORIZATION AND ACTION ......................................... 76
SECTION 7.02. AGENTS' RELIANCE, ETC ............................................ 77
SECTION 7.03. BANK OF AMERICA, BAS AND AFFILIATES .............................. 77
SECTION 7.04. LENDER PARTY CREDIT DECISION ..................................... 77
SECTION 7.05. INDEMNIFICATION .................................................. 78
SECTION 7.06. SUCCESSOR AGENTS ................................................. 79
ARTICLE VIII PARENT GUARANTY ...................................................... 79
SECTION 8.01. PARENT GUARANTY .................................................. 79
SECTION 8.02. GUARANTY ABSOLUTE ................................................ 80
SECTION 8.03. WAIVERS AND ACKNOWLEDGMENTS ...................................... 82
SECTION 8.04. SUBROGATION ...................................................... 82
SECTION 8.05. CONTINUING GUARANTY; ASSIGNMENTS ................................. 83
ARTICLE IX MISCELLANEOUS .......................................................... 83
SECTION 9.01. AMENDMENTS, ETC .................................................. 83
SECTION 9.02. NOTICES, ETC ..................................................... 84
SECTION 9.03. NO WAIVER; REMEDIES .............................................. 84
SECTION 9.04. COSTS AND EXPENSES ............................................... 85
SECTION 9.05. RIGHT OF SETOFF .................................................. 86
SECTION 9.06. BINDING EFFECT ................................................... 86
SECTION 9.07. ASSIGNMENTS AND PARTICIPATIONS ................................... 86
SECTION 9.08. EXECUTION IN COUNTERPARTS ........................................ 89
SECTION 9.09. NO LIABILITY OF THE ISSUING BANK ................................. 89
SECTION 9.10. CONFIDENTIALITY .................................................. 90
SECTION 9.11. RELEASE OF COLLATERAL ............................................ 90
SECTION 9.12. JURISDICTION, ETC ................................................ 90
SECTION 9.13. GOVERNING LAW .................................................... 90
SECTION 9.14. WAIVER OF JURY TRIAL ............................................. 91
ii
SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule II - Subsidiary Guarantors
Schedule III - Equity Investors
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Governmental Approvals
Schedule 4.01(f) - Disclosed Litigation
Schedule 4.01(p) - Existing Debt
Schedule 4.01(q) - Surviving Debt
Schedule 4.01(r) - Liens
Schedule 4.01(s) - Leased Real Property
Schedule 4.01(t) - Investments
Schedule 4.01(u) - Intellectual Property
Schedule 4.01(v) - Material Contracts
Schedule 5.02(f) - Pending Acquisitions
EXHIBITS
Exhibit A-1 - Form of Term Note
Exhibit A-2 - Form of Working Capital Note
Exhibit B-1 - Form of Notice of Borrowing
Exhibit B-2 - Form of Notice of Conversion
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Security and Pledge Agreement
Exhibit E - Form of Subsidiary Guaranty
Exhibit F-1 - Form of Opinion of Borrower's Counsel
Exhibit F-2 - Form of Opinion of Meyer, Suozzi, English & Xxxxx, P.C.
Exhibit F-3 - Form of Opinion of Blank Rome Xxxxxxx & XxXxxxxx LLP
Exhibit F-4 - Form of Opinion of Xxxxxx Xxxxxxx, P.A.
Exhibit F-5 - Form of Opinion of Xxxxx Xxxx LLP
Exhibit G - Form of Solvency Certificate
Exhibit H - Form of Intercompany Subordination Agreement
iii
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 4, 2001 (this
"Credit Agreement") among AMERICHOICE CORPORATION, a Delaware corporation (the
"Parent"), AMERICHOICE HEALTH SERVICES, INC., a Delaware corporation (the
"Borrower"), the banks, financial institutions and other institutional lenders
listed on the signature pages hereof under the caption "Initial Lenders" (the
"Initial Lenders"), BANK OF AMERICA, N.A. ("Bank of America"), as the initial
issuer of Letters of Credit (as hereinafter defined) (the "Initial Issuing
Bank") and as the administrative agent (together with any successor thereto
appointed pursuant to Article VII, the "Administrative Agent") and collateral
agent (together with any successor thereto appointed pursuant to Article VII,
the "Collateral Agent") for the Lender Parties (as hereinafter defined), FIRST
UNION NATIONAL BANK, as syndication agent (the "Syndication Agent") and BANC OF
AMERICA SECURITIES LLC ("BAS"), as arranger for the Facilities (as hereinafter
defined).
PRELIMINARY STATEMENTS:
WHEREAS, a $55 million term loan and working capital revolving credit
facility (the "Existing Credit Facility") was established in favor of the
Borrower pursuant to the terms of that credit agreement dated as of November 13,
1998 (as amended and modified, the "Existing Credit Agreement") among the
Parent, the Borrower, the lenders identified therein and NationsBank, N.A., a
national banking association now known as Bank of America, N.A., as
Administrative Agent and Collateral Agent;
WHEREAS, the Borrower has requested certain modifications, including,
among other things, an increase in commitments under the Existing Credit
Facility;
WHEREAS, the Lenders have agreed to the requested modifications on the
terms and conditions provided herein;
WHEREAS, this Credit Agreement is given in amendment to, restatement of
and substitution for the Existing Credit Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms.
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and the
plural forms of the terms defined):
"Acquisition" means any transaction, or any series of related
transactions, by which any Person, in the transaction or as of the most
recent transactions in a series of transactions, directly or indirectly
acquires any going concern or all or a substantial part of the assets of
any corporation, partnership or other entity or any division of any such
entity, or any such entity or
any division of such an entity becomes a Subsidiary of such Person.
"Administrative Agent" has the meaning specified in the recital of
parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with Bank of
America at its office at 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000, Account No. 136621-22506, Attention: Corporate
Credit Services, or such other account maintained by the Administrative
Agent and designated by the Administrative Agent as such in a written
notice to the Borrower and each of the Lender Parties.
"Administrative Services Agreements" means any and all
administrative services, consulting, corporate allocation, management, tax
allocation and similar agreements between or among the Parent, the
Borrower and the HMO Subsidiaries.
"Advance" means a Term Advance, a Working Capital Advance or a
Letter of Credit Advance, as the context may require.
"Affiliate" means, with respect to any Person, any other Person
that, directly or indirectly, controls, is controlled by or is under
common control with such Person or is a director or officer of such
Person. For purposes of this definition, the term "control" (including the
terms "controlling", "controlled by" and "under common control with") of a
Person means the possession, direct or indirect, of the power to vote 5%
or more of the Voting Interests of such Person or to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of Voting Interests, by contract or otherwise.
"Affiliate Employment Agreement" means any agreement between an
Affiliate of the Parent, on the one hand, and the Parent or any Subsidiary
of the Parent, on the other hand, providing for the provision of
employment, consulting or management services by such Affiliate.
"Agents" means, collectively, the Administrative Agent, the
Collateral Agent, the Syndication Agent and each co-agent or sub-agent
appointed by the Collateral Agent from time to time pursuant to Section
7.01(b).
"Agreement Value" means, for each Hedge Agreement, on any date of
determination, an amount determined by the Administrative Agent equal to:
(a) in the case of a Hedge Agreement documented pursuant to the Master
Agreement (Multicurrency-Cross Border) published by the International Swap
and Derivatives Association, Inc. (the "Master Agreement"), the amount, if
any, that would be payable by any Loan Party or any of its Subsidiaries to
its counterparty to such Hedge Agreement, as if (i) such Hedge Agreement
were being terminated early on such date of determination, (ii) such Loan
Party or Subsidiary were the sole "Affected Party" and (iii) the
Administrative Agent were the sole party determining such payment amount
(with the Administrative Agent making such determination pursuant to the
provisions of the form of Master Agreement); or (b) in the case of a Hedge
Agreement traded on an exchange, the xxxx-to-market value of such Hedge
Agreement, which will be the unrealized loss on such Hedge Agreement to
the Loan Party or Subsidiary of a Loan Party party to such Hedge Agreement
determined by the Administrative Agent based on the settlement price of
such Hedge Agreement on such date of determination; or (c) in all other
cases, the xxxx-to-market value of such Hedge
2
Agreement, which will be the unrealized loss on such Hedge Agreement to
the Loan Party or Subsidiary of a Loan Party party to such Hedge Agreement
determined by the Administrative Agent as the amount, if any, by which (i)
the present value of the future cash flows to be paid by such Loan Party
or such Subsidiary exceeds (ii) the present value of the future cash flows
to be received by such Loan Party or such Subsidiary pursuant to such
Hedge Agreement; capitalized terms used and not otherwise defined in this
definition shall have the respective meanings set forth in the Master
Agreement.
"Applicable Lending Office" means (a) with respect to the Issuing
Bank, the Issuing Bank's Base Rate Lending Office for all purposes of this
Agreement and (b) and with respect to each other Lender Party, such Lender
Party's Base Rate Lending Office in the case of a Base Rate Advance and
such Lender Party's Eurodollar Lending Office in the case of a Eurodollar
Rate Advance.
"Applicable Margin" means (i) from the date hereof and for a period
of six months therefrom, 1.25% per annum for Base Rate Advances and 2.25%
per annum for Eurodollar Rate Advances, and (ii) thereafter, a percentage
per annum determined by reference to the Consolidated Debt/EBITDA Ratio as
set forth below:
Base Rate Advances Eurodollar Rate Advances
------------------ ------------------------
Level I
less than 1.5:1.0 1.00% 2.00%
Level II
1.5:1.0 or greater,
but less than 2.0:1.0 1.25% 2.25%
Level III
2.0:1.0 or greater 1.50% 2.50%
The Applicable Margin for each Base Rate Advance shall be determined by
reference to the ratio in effect from time to time and the Applicable
Margin for each Eurodollar Rate Advance shall be determined by reference
to the ratio in effect on the first day of each Interest Period for such
Advance; provided, however, that (A) no change in the Applicable Margin
shall be effective until three Business Days after the date on which the
Administrative Agent receives the financial statements required to be
delivered pursuant to Section 5.03(b) or (c), as the case may be, and a
certificate of a Responsible Officer of the Borrower demonstrating such
ratio and (B) the Applicable Margin shall be at Level III for so long as
the Borrower has not submitted to the Administrative Agent the information
described in clause (A) of this proviso within 5 days after the date
required under Section 5.03(b) or (c), as the case may be.
"Applicable Percentage" means, with respect to the Commitment Fee,
(i) from the date hereof and for a period of six months therefrom, 0.425%
per annum and (ii) thereafter, a percentage per annum determined by
reference to the Consolidated Debt/EBITDA Ratio as set
3
forth below:
Commitment Fee
--------------
Level I
less than 1.5:1.0 0.375%
Level II
1.5:1.0 or greater,
but less than 2.0:1.0 0.425%
Level III
2.0:1.0 or greater 0.500%
The Applicable Percentage shall be determined by reference to the ratio in
effect from time to time; provided, however, that (A) no change in the
Applicable Percentage shall be effective until three Business Days after
the date on which the Administrative Agent receives the financial
statements required to be delivered pursuant to Section 5.03(b) or (c), as
the case may be, and a certificate of a Responsible Officer of the
Borrower demonstrating such ratio and (B) the Applicable Percentage shall
be at Level III for so long as the Borrower has not submitted to the
Administrative Agent the information described in clause (A) of this
proviso within 5 days after the date required under Section 5.03(b) or
(c), as the case may be.
"Approved Fund" means, with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans and
is advised or managed by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender Party and an Eligible Assignee, and accepted by
the Administrative Agent, in accordance with Section 9.07 and in
substantially the form of Exhibit C hereto.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such
time (assuming compliance at such time with all conditions to drawing).
"Bank Hedge Agreement" means any interest rate Hedge Agreement
required or permitted under Article V that is entered into by and between
the Borrower and any Hedge Bank.
"Bank of America" has the meaning specified in the recital of
parties to this Agreement.
"BAS" has the meaning specified in the recital of parties to this
Agreement.
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to the
higher of:
(a) the rate of interest established by Bank of America from
time to time as its prime rate (which rate of interest may not be
the lowest rate of interest charged by Bank of America to its
customers); and
4
(b) the Federal Funds Rate plus 0.50%.
"Base Rate Advance" means an Advance that bears interest as provided
in Section 2.07(a)(i).
"Base Rate Lending Office" means, with respect to each of the Lender
Parties, the office of such Lender Party specified as its "Base Rate
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender Party, as
the case may be, or such other office of such Lender Party as such Lender
Party may from time to time specify to the Borrower and the Administrative
Agent for such purpose.
"Borrower" has the meaning specified in the recital of parties to
this Agreement.
"Borrower's Account" means the account of the Borrower maintained by
the Borrower with Bank of America at its office at 000 Xxxxx Xxxxx Xxxxxx,
00xx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Account No. 3751229690,
Attention: Corporate Credit Services, or such other account of the
Borrower as is agreed from time to time in writing between the Borrower
and the Administrative Agent.
"Borrowing" means a Term Borrowing or a Working Capital Borrowing,
as the context may require.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York, New York or Charlotte,
North Carolina and, if the applicable Business Day relates to any
Eurodollar Rate Advances, on which dealings are carried on in the London
interbank market.
"Capital Assets" means, with respect to any Person, all equipment,
fixed assets and real property or improvements of such Person, or
replacements or substitutions therefor or additions thereto, that, in
accordance with GAAP, have been or should be reflected as additions to
property, plant or equipment on the balance sheet of such Person or that
have a useful life of more than one year.
"Capital Stock" means (i) in the case of a corporation, its capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of its capital stock, (iii) in the case of a partnership, its
partnership interests (whether general or limited), (iv) in the case of a
limited liability company, its membership interests and (v) 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 assets of, the
issuing Person.
"Capitalized Lease" means any lease with respect to which the lessee
is required to recognize concurrently the acquisition of property or an
asset and the incurrence of a liability in accordance with GAAP.
"Cash Equivalents" means any of the following types of Investments,
to the extent owned by the Parent or any of its Subsidiaries free and
clear of all Liens (other than Liens created under the Collateral
Documents):
5
(a) readily marketable obligations issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof having maturities of not more than
360 days from the date of acquisition thereof; provided that the
full faith and credit of the United States of America is pledged in
support thereof;
(b) time deposits with, or insured certificates of deposit or
bankers' acceptances of, any commercial bank that (i) (A) is a
Lender Party or (B) is organized under the laws of the United States
of America, any state thereof or the District of Columbia or is the
principal banking subsidiary of a bank holding company organized
under the laws of the United States of America, any state thereof or
the District of Columbia, and is a member of the Federal Reserve
System, (ii) issues (or the parent of which issues) commercial paper
rated as described in clause (c) of this definition and (iii) has
combined capital and surplus of at least $1,000,000,000, in each
case with maturities of not more than 180 days from the date of
acquisition thereof;
(c) commercial paper issued by any Person organized under the
laws of any State of the United States of America and rated at least
"Prime-1" (or the then equivalent grade) by Xxxxx'x or at least
"A-1" (or the then equivalent grade) by S&P, in each case with
maturities of not more than 270 days from the date of acquisition
thereof;
(d) Investments, classified in accordance with GAAP as current
assets of the Parent or any of its Subsidiaries, in money market
investment programs registered under the Investment Company Act of
1940, as amended, and the portfolios of which are limited solely to
Investments of the character and quality described in clauses (a),
(b), (c) and (k) of this definition;
(e) with respect to any HMO Subsidiary, marketable debt
securities regularly traded on a national securities exchange or in
the over-the-counter market if and to the extent that any such debt
security constitutes a permitted investment under the HMO
Regulations applicable to such HMO Subsidiary;
(f) with respect to the Parent and the Borrower, marketable
debt securities regularly traded on a national securities exchange
or in the over-the-counter market if and to the extent that any such
debt security constitutes a permitted investment under the HMO
Regulations applicable to any of the HMO Subsidiaries;
(g) repurchase agreements related to an Investment of the type
described in clause (a) of this definition, provided that the
counterparty thereto is a government securities dealer designated by
the Federal Reserve Bank of New York as a "Reporting Dealer" and
whose financial statements indicate that it has a capital of at
least $50,000,000 and that the Investment that is the subject of
such repurchase agreement shall be at all times during the term of
such repurchase agreement in the possession of the Parent, the
Borrower or the Collateral Agent, or the interest of the Parent or
the Borrower therein shall be appropriately recorded in accordance
with the United States Federal Regulations regarding book-entry
treasury securities;
(h) bankers acceptances issued by banks that qualify for the
Bank of America, N.A. Federal Funds List, not to exceed $500,000 per
issuer and with a
6
maximum maturity of 180 days;
(i) Eurodollar time deposits with banks having a minimum
rating by Xxxxx Bankwatch of A for domestic banks and I for foreign
banks;
(j) state and municipal general obligation bonds rated A or
better by S&P or Xxxxx'x for long-term issues and Xxxxx'x MIG-1 for
short term issues;
(k) money market nonconvertible Preferred Stock having the
highest rating by S&P and Xxxxx'x; and
(l) "lower-floater" revenue bonds having one of the three
highest ratings obtainable from S&P or Xxxxx'x (whether or not
credit enhanced).
"Change of Control" means, at any time:
(a) The Parent shall cease to own and control legally and
beneficially, either directly or indirectly, 100% of the Voting
Interests in the Borrower;
(b) any "person" or "group" (each as used in Sections 13(d)(3)
and 14(d)(2) of the Securities Exchange Act of 1934, as amended)
becomes the "beneficial owner" (as defined in Rule 13d-3 of the
Securities Exchange Act of 1934, as amended), directly or
indirectly, of Voting Interests in the Parent (including through
securities convertible into or exchangeable for such Voting
Interests) representing 30% or more of the combined voting power of
all of the Voting Interests in the Parent;
(c) any Person or two or more Persons acting in concert other
than the Equity Investors shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement
that, upon consummation thereof, will result in its or their
acquisition of, or control over, securities of the Parent (or other
securities convertible into such securities) representing 30% or
more of the combined voting power of all securities of the Parent
entitled to vote in the election of directors; or
(d) with respect to any pledge or other security agreement
covering all or any portion of the Equity Interests that are owned
beneficially and of record by any of the Equity Investors or their
nominees, any secured party or pledgee thereunder shall become the
holder of record of 30% or more of such Equity Interests (except in
the case of a registration of the pledge of such Equity Interests to
such secured party or pledgee solely in its capacity as a pledgee)
or shall receive dividends or other cash or cash equivalent
distributions (including, without limitation, stock repurchases) in
respect thereof, or shall proceed to exercise voting or other
consensual rights in respect thereof (whether by proxy, voting or
other similar arrangement or otherwise), or shall otherwise commence
to realize upon such shares.
"Claims Liabilities" means, with respect to any Person, incurred
(whether or not reported) medical related liabilities, including claims
received but not paid and estimated claims, determined in accordance with
GAAP.
"Collateral" means all of the "Collateral" referred to in the
Collateral Documents and all
7
of the other property and assets that are or are intended under the terms
of the Collateral Documents to be subject to Liens in favor of the
Collateral Agent for the benefit of the Secured Parties.
"Collateral Agent" has the meaning specified in the recital of
parties to this Agreement.
"Collateral Documents" means, collectively, the Security Agreement,
and each of the other agreements that creates or purports to create a Lien
in favor of the Collateral Agent for the benefit of the Secured Parties.
"Commitment" means a Term Commitment, a Working Capital Commitment
or a Letter of Credit Commitment, as the context may require.
"Commitment Fee" has the meaning specified in Section 2.08(a).
"Confidential Information" means information that is furnished to
the Administrative Agent or any Lender Party by or on behalf of any Loan
Party in a writing, but does not include any such information that (a) is
or becomes generally available to the public other than as a result of a
breach by the Administrative Agent or any Lender Party of its obligations
hereunder or (b) is or becomes available to the Administrative Agent or
any such Lender Party from a source other than a Loan Party.
"Consolidated Capital Expenditures" means, for any period for the
Consolidated Group, without duplication (a) all expenditures made directly
or indirectly during such period for Capital Assets (whether paid in cash
or other consideration or accrued as a liability and including, without
limitation, all expenditures for maintenance and repairs which are
required, in accordance with GAAP, to be capitalized on the books of any
member of the Consolidated Group) and (b) solely to the extent not
otherwise included in clause (a) of this definition, the aggregate
principal amount of all Debt (including, without limitation, Obligations
in respect of Capitalized Leases) assumed or incurred during such period
in connection with any such expenditures for Capital Assets. For purposes
of this definition, (i) Permitted Acquisitions shall not be included in
Consolidated Capital Expenditures, and (ii) the purchase price of
equipment that is purchased simultaneously with the trade-in of existing
equipment or with insurance proceeds shall be included in Consolidated
Capital Expenditures only to the extent of the gross amount by which such
purchase price exceeds the credit granted by the seller of such equipment
for the equipment being traded in at such time or the amount of such
insurance proceeds, as the case may be.
"Consolidated Current Assets" means, for the Consolidated Group,
without duplication, with respect to any Person, all assets that, in
accordance with GAAP, would be classified as current assets on the balance
sheet of a company conducting a business the same as or similar to that of
such Person, after deducting appropriate and adequate reserves therefrom
in each case in which a reserve is proper in accordance with GAAP.
"Consolidated Current Liabilities" means, for the Consolidated
Group, without duplication, with respect to any Person, (a) all amounts of
Funded Debt of such Person required to be paid or prepaid within one year
after such date and (b) all other Debt and other items (including, without
limitation, taxes accrued as estimated and trade payables) that, in
accordance with GAAP, would be classified on the balance sheet of such
Person as current liabilities of such Person.
8
"Consolidated Debt/EBITDA Ratio" means, at any date of
determination, after giving Pro Forma Effect to any Permitted Acquisition
made and any Debt incurred in connection therewith as of the date of
determination, the ratio of Funded Debt of the Consolidated Group as at
the end of the most recently ended fiscal quarter of the Parent for which
financial statements are required to be delivered to the Lender Parties
pursuant to Section 5.03(b) or (c), as the case may be, to Consolidated
EBITDA for such fiscal quarter and the immediately preceding three fiscal
quarters.
"Consolidated EBITDA" means, for any period of determination for the
Consolidated Group, the sum of (a) Consolidated Net Income for such
period, plus (b) Consolidated Interest Expense for such period deducted in
the determination of Consolidated Net Income, plus (c) federal and state
taxes for such period deducted in the determination of Consolidated Net
Income, plus (d) depreciation for such period, plus (e) amortization for
such period, plus (f) all non-recurring losses that were deducted in
arriving at Consolidated Net Income, minus (g) all non-recurring gains
that were added in arriving at Consolidated Net Income, all as determined
for such period in accordance with GAAP.
"Consolidated EBITDAR" means, for any period of determination for
the Consolidated Group, Consolidated EBITDA for such period, plus
Consolidated Rental Expense for such period to the extent deducted in the
determination of Consolidated Net Income, all as determined for such
period in accordance with GAAP.
"Consolidated Fixed Charges" means, for any period for the
Consolidated Group, the sum of (i) the aggregate amount of taxes paid in
cash, plus (ii) interest payable on all Debt for Borrowed Money, plus
(iii) rentals payable under leases of real, personal, or mixed, property,
plus (iv) principal amounts of all Debt for Borrowed Money payable, plus
(v) the aggregate amount of all dividends and other distributions on
Equity Interests (other than Equity Interests consisting of common stock)
in the Parent paid in cash, in each case, of or by the Consolidated Group
during the four consecutive fiscal quarters most recently ended for which
financial statements are required to be delivered to the Lender Parties
pursuant to Section 5.03(b) or (c), as the case may be.
"Consolidated Fixed Charge Coverage Ratio" means, at any date of
determination, after giving Pro Forma Effect to any Permitted Acquisition,
the ratio of (a) Consolidated EBITDAR to (b) Consolidated Fixed Charges.
"Consolidated Group" means the Parent and its consolidated
Subsidiaries (including the Borrower), as determined in accordance with
GAAP.
"Consolidated Interest Expense" means, for any period of
determination for the Consolidated Group, the gross interest expenses of
the Consolidated Group, determined in accordance with GAAP, as shown on
the consolidated statement of income of the Consolidated Group.
"Consolidated Net Income" means, for any period of determination for
the Consolidated Group, the after tax net income (or deficit), determined
on a consolidated basis in accordance with GAAP.
9
"Consolidated Rental Expense" means, for any period of determination
for the Consolidated Group, the gross real estate rental expenses for such
period determined on a consolidated basis in accordance with GAAP,
excluding all personal property rental expense.
"Constitutive Documents" means, with respect to any Person, the
certificate of incorporation or registration (including, if applicable,
certificate of change of name), articles of incorporation or association,
memorandum of association, charter, bylaws, partnership agreement, trust
agreement, joint venture agreement, limited liability company operating or
members agreement, joint venture agreement or one or more similar
agreements, instruments or documents constituting the organization or
formation of such Person.
"Contingent Obligation" means, with respect to any Person, any
obligation of such Person to guarantee or intended to guarantee any Debt,
leases, dividends or other obligations ("primary obligations") of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, (a) the direct or indirect
guarantee, endorsement (other than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale
with recourse by such Person of the obligation of a primary obligor, (b)
the obligation to make take-or-pay or similar payments, if required,
regardless of nonperformance by any other party or parties to an agreement
or (c) any obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (A) for the
purchase or payment of any such primary obligation or (B) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, assets, 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
or (iv) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof. 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 which such
Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable 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.
"Conversion", "Convert" and "Converted" each refers to a conversion
of Advances of one Type into Advances of the other Type, or to the
selection of a new, or the renewal of the same, Interest Period for
Eurodollar Rate Advances, pursuant to Section 2.09 or 2.10.
"Debt" means, with respect to any Person (without duplication), (a)
all indebtedness of such Person for borrowed money, (b) all Obligations of
such Person for the deferred purchase price of property or services, (c)
all Obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments, or upon which interest payments are customarily
made, (d) all Obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all Obligations of
such Person as lessee under Capitalized Leases, (f) all Obligations,
contingent or otherwise, of such Person under acceptance, letter of credit
or similar facilities, (g) all Obligations of such Person to purchase,
redeem, retire,
10
defease or otherwise make any payment in respect of any Equity Interests
in such Person or any other Person, valued, in the case of Redeemable
Preferred Interests, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends, (h) all
Obligations of such Person in respect of Hedge Agreements, take-or-pay
agreements or other similar arrangements, valued, in the case of Hedge
Agreements, at the Agreement Value thereof, (i) all Obligations of such
Person under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing if the
transaction giving rise to such Obligation is considered indebtedness for
borrowed money for tax purposes but is classified as an operating lease in
accordance with GAAP, (j) all Contingent Obligations, and (k) all Debt
referred to in clauses (a) through (j) above of another Person secured by
(or for which the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of
such Debt.
"Debt for Borrowed Money" of any Person means all items that, in
accordance with GAAP, would be classified as indebtedness on a
consolidated balance sheet of such Person.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Defaulted Advance" means, with respect to any Lender Party at any
time, the portion of any Advance required to be made by such Lender Party
to the Borrower pursuant to Section 2.01 or 2.02 at or prior to such time
which has not been made by such Lender Party or by the Administrative
Agent for the account of such Lender Party pursuant to Section 2.02(d) as
of such time. In the event that a portion of a Defaulted Advance shall be
deemed made pursuant to Section 2.15(a), the remaining portion of such
Defaulted Advance shall be considered a Defaulted Advance originally
required to be made pursuant to Section 2.01 on the same date as the
Defaulted Advance so deemed made in part.
"Defaulted Amount" means, with respect to any Lender Party at any
time, any amount required to be paid by such Lender Party to the
Administrative Agent or any other Lender Party hereunder or under any
other Loan Document at or prior to such time which has not been so paid as
of such time, including, without limitation, any amount required to be
paid by such Lender Party to (a) the Issuing Bank pursuant to Section
2.03(c) to purchase a portion of a Letter of Credit Advance made by the
Issuing Bank, (b) the Administrative Agent pursuant to Section 2.02(d) to
reimburse the Administrative Agent for the amount of any Advance made by
the Administrative Agent for the account of such Lender Party, (c) any
other Lender Party pursuant to Section 2.13 to purchase any participation
in Advances owing to such other Lender Party and (d) the Administrative
Agent or the Issuing Bank pursuant to Section 7.05 to reimburse the
Administrative Agent or the Issuing Bank for such Lender Party's ratable
share of any amount required to be paid by the Lender Parties to the
Administrative Agent or the Issuing Bank as provided therein. In the event
that a portion of a Defaulted Amount shall be deemed paid pursuant to
Section 2.15(b), the remaining portion of such Defaulted Amount shall be
considered a Defaulted Amount originally required to be paid hereunder or
under any other Loan Document on the same date as the Defaulted Amount so
deemed paid in part.
"Defaulting Lender" means, at any time, any Lender Party that, at
such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b) shall
take any action or be the subject of any action or proceeding of a type
described in Section 6.01(f).
11
"Domestic Loan Party" means a Loan Party that is incorporated or
organized under the laws of the District of Columbia or any state of the
United States.
"Domestic Subsidiary" means any Subsidiary that is incorporated or
organized under the laws of the District of Columbia or any state of the
United States.
"Disclosed Litigation" has the meaning specified in Section 3.01(c).
"EBITDA" means, for any period of determination, the sum of (a)
after tax net income (or deficit) for such period, plus (b) interest
expense for such period deducted in the determination of after tax net
income (or deficit), plus (c) federal and state taxes for such period
deducted in the determination of after tax net income (or deficit), plus
(d) depreciation for such period, plus (e) amortization for such period,
plus (f) all non-recurring losses that were deducted in arriving at after
tax net income (or deficit), minus (g) all non-recurring gains that were
added in arriving at after tax net income (or deficit), all as determined
for such period in accordance with GAAP.
"EBITDAR" means, for any period of determination, EBITDA for such
period, plus rental expense for such period to the extent deducted in the
determination of after tax net income (or deficit), all as determined for
such period in accordance with GAAP.
"Eligible Assignee" means (a) with respect to any Facility (other
than the Letter of Credit Facility) (i) a Lender; (ii) an Affiliate of a
Lender; or (iii) any other Person approved by the Administrative Agent
and, so long as no Event of Default has occurred and is continuing at the
time the related assignment is effected pursuant to Section 9.07, the
Borrower (in either case such approval not to be unreasonably withheld or
delayed and, in the case of the Borrower, such approval to be deemed to
have been given if no objection thereto is received by the Administrative
Agent and the assigning Lender within three Business Days after the date
on which notice of the proposed assignment is provided to the Borrower);
and (b) with respect to the Letter of Credit Facility, a Person that is an
Eligible Assignee under clause (a) of this definition and is a commercial
bank organized under the laws of the United States of America; provided,
however, that neither any Loan Party nor any Affiliate of a Loan Party
shall qualify as an Eligible Assignee under this definition.
"Eligible Domestic Subsidiaries" means Domestic Subsidiaries of the
Parent and/or the Borrower other than Subsidiaries that are restricted by
HMO Regulations from giving a guaranty of the loans and obligations owing
under this Credit Agreement.
"Environmental Action" means any action, suit, demand, demand
letter, claim, notice of noncompliance or violation, notice of liability
or potential liability, investigation, proceeding, consent order or
consent agreement relating in any way to any Environmental Law, any
Environmental Permit or Hazardous Material or arising from alleged injury
or threat to health, safety or the environment, including, without
limitation, (a) by any Governmental Authority for enforcement, cleanup,
removal, response, remedial or other actions or damages and (b) by any
Governmental Authority or any other Person for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance,
12
rule, regulation, code, order, writ, judgment, injunction, permit,
approval, identification number, license or other authorization, decree or
judicial or agency interpretation, policy or guidance relating to
pollution or protection of the environment, health, safety or natural
resources, including, without limitation, those relating to the use,
handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Materials.
"Equipment" means all "Equipment" referred to in Section 1(a) of the
Security Agreement.
"Equity Interests" means, with respect to any Person, shares of
Capital Stock of (or other ownership or profit interests in) such Person,
warrants, options or other rights for the purchase or acquisition from
such Person of shares of Capital Stock of (or other ownership or profit
interests in) such Person, securities convertible into or exchangeable for
shares of Capital Stock of (or other ownership or profit interests in)
such Person or warrants, rights or options for the purchase or acquisition
from such Person of such shares (or such other interests), and other
ownership or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein), whether
voting or nonvoting, and whether or not such shares, warrants, options,
rights or other interests are outstanding on any date of determination.
"Equity Investors" means those Persons listed on Schedule III
attached hereto.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and the
rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Loan Party, or under
common control with any Loan Party, within the meaning of Section 414 of
the Internal Revenue Code.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to each of the
Lenders, the office of such Lender specified as its "Eurodollar Lending
Office" opposite its name on Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender, as the case may be (or,
if no such office is specified, its Base Rate Lending Office), or such
other office of such Lender as such Lender may from time to time specify
to the Borrower and the Administrative Agent for such purpose.
"Eurodollar Rate" means, for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing, an interest rate per
annum equal to the rate per annum at which deposits in U.S. dollars appear
on page 3750 (or any successor page thereto) of the Dow Xxxxx Telerate
Screen two Business Days before the first day of such Interest Period and
for a term comparable to such Interest Period or, if such rate does not so
appear on the Dow Xxxxx Telerate Screen on any date of determination, on
the Reuters Screen LIBO Page two Business Days before the first day of
such Interest Period and for a term comparable to such Interest Period;
provided, however, that, if the Reuters Screen LIBO Page is being used to
determine the Eurodollar Rate at any date of determination and more than
one rate is specified thereon from deposits in U.S. dollars, the
applicable rate shall be the average of all such rates (rounded upward, if
necessary, to the nearest whole multiple of 1/100 of 1% per annum).
13
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" of any Lender for each Interest
Period for each Eurodollar Rate Advance means the reserve percentage
applicable during such Interest Period (or if more than one such
percentage shall be so applicable, the daily average of such percentages
for those days in such Interest Period during which any such percentage
shall be so applicable) under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) of such Lender with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect to
any other category of liabilities that includes deposits by reference to
which the interest rate on Eurodollar Rate Advances is determined) having
a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Existing Debt" means Debt for Borrowed Money of the Borrower and
its Subsidiaries outstanding immediately before giving effect to the
Transaction.
"Extraordinary Receipt" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business,
including, without limitation, tax refunds, pension plan reversions,
proceeds of insurance (other than proceeds of (a) business interruption
insurance to the extent such proceeds constitute compensation for lost
earnings, (b) directors' and officers' liability insurance, (c) errors and
omissions insurance and (d) reinsurance), condemnation awards (and
payments in lieu thereof) and indemnity payments.
"Facility" means the Term Facility, the Working Capital Facility or
the Letter of Credit Facility, as the context may require.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates (rounded upward, if necessary, to the nearest whole
multiple of 1/100 of 1% per annum) on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds
brokers, as published for such day (or, if such day is not a Business Day,
for the immediately preceding 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 such day for such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it.
"Fiscal Year" means, with respect to the Parent or any of its
Subsidiaries, the period commencing on January 1 in any calendar year and
ending on the next succeeding December 31 or, if any such Subsidiary was
not in existence on January 1 in any calendar year, the period commencing
on the date on which such Subsidiary is incorporated, organized, formed or
otherwise created and ending on the next succeeding December 31.
"Foreign Loan Party" means a Loan Party that is not a Domestic Loan
Party.
"Foreign Subsidiary" means a Subsidiary that is not a Domestic
Subsidiary.
14
"Funded Debt" of any Person means Debt in respect of the Advances,
in the case of the Borrower, and all other Debt (other than (i) Debt in
respect of Hedge Agreements and (ii) Debt consisting of surety bonds on
behalf of any Loan Party or any of its Subsidiaries in the ordinary course
of business in an aggregate principal amount not to exceed $15,000,000) of
such Person that by its terms matures more than one year after the date of
determination or matures within one year from such date but is renewable
or extendible, at the option of such Person, to a date more than one year
after such date or arises under a revolving credit or similar agreement
that obligates the lender or lenders to extend credit during a period of
more than one year after such date; provided, however, that the term
"Funded Debt" shall not include any Contingent Obligations of such Person
(if and to the extent such Contingent Obligations would otherwise be
included in such term on any date of determination) that are incurred
solely to support Debt of one or more Subsidiaries of such Person to the
extent such Contingent Obligations are otherwise expressly permitted to be
incurred under Section 5.02(b).
"GAAP" has the meaning specified in Section 1.03.
"Governmental Authority" means any nation or government, any state,
province, city, municipal entity or other political subdivision thereof,
and any governmental, executive, legislative, judicial, administrative or
regulatory agency, department, authority, instrumentality, commission,
board or similar body, whether federal, state, provincial, territorial,
local or foreign.
"Guaranteed Obligations" means, without duplication, (i) all of the
loans and obligations of the Borrower and the other Loan Parties owing to
the Lender Parties (including the Issuing Lender), the Administrative
Agent and the Collateral Agent, whenever arising, under or in respect of
the Loan Documents (including interest accruing after the occurrence of an
event of bankruptcy or insolvency whether or not allowed as a claim),
whether direct or indirect, absolute or contingent, and whether for
principal, interest, premium, fees, indemnification payments, contract
causes of action, costs, expenses, or otherwise, and (ii) all liabilities
and obligations, whenever arising, owing by any Loan Party to any Lender
or any Affiliate of a Lender under any Hedge Agreement relating to the
loans and obligations owing hereunder to the extent permitted hereunder.
"Guaranty Supplement" has the meaning specified in Section 8(b) of
the Subsidiary Guaranty.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminant under any
Environmental Law.
"Hedge Agreements" means, collectively, interest rate swap, cap or
collar agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"Hedge Bank" means any Person that is a Lender Party or an Affiliate
of a Lender Party, in its capacity as a party to a Bank Hedge Agreement.
15
"HMO" means a health maintenance organization doing business as such
(or required to qualify or to be licensed as such) under the HMO
Regulations.
"HMO Business" means the business of owning and operating an HMO.
"HMO Event" means any material non-compliance by the Parent or any
of its Subsidiaries with any of the terms and provisions of the HMO
Regulations pertaining to fiscal soundness, solvency or financial
condition of the Parent or any of its Subsidiaries; or the assertion in
writing, after the date hereof, by an HMO Regulator that it intends to
take administrative action against the Parent or any of its Subsidiaries
to revoke or modify any contract of insurance, license, charter or permit
or to enforce the fiscal soundness, solvency or financial provisions or
requirements of the HMO Regulations against the Parent or any of its
Subsidiaries.
"HMO Regulations" means all laws, regulations, directives and
administrative orders applicable under federal or state law to the HMO
Subsidiaries, including, without limitation, the Pennsylvania Health
Maintenance Organization Act, the New York Health Maintenance Organization
Act, the New Jersey Health Maintenance Organizations Act (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
Annotated (and any regulations, orders and directives promulgated or
issued pursuant thereto, including, without limitation, Part 417 of
Chapter IV of 42 Code of Federal Regulations (1990)).
"HMO Regulator" means any Person charged with the administration,
oversight or enforcement of an HMO Regulation, whether primarily,
secondarily or jointly.
"HMO Subsidiary" means each of AmeriChoice of Pennsylvania, Inc.
(formerly known as Healthcare Management Alternatives, Inc.), AmeriChoice
of New Jersey, Inc. (formerly known as Managed Healthcare Systems of New
Jersey, Inc.), AmeriChoice of New York, Inc. (formerly known as Healthcare
Management Systems of New York, Inc.), and any other Subsidiary from time
to time that is capitalized or licensed as an HMO, and conducting HMO
Business and/or providing managed care services.
"Indemnified Party" has the meaning specified in Section 9.04(b).
"Information Memorandum" means the information memorandum dated
September 1998 used by the Syndication Agent in connection with the
syndication of the Commitments.
"Initial Extension of Credit" means the earlier to occur of (a) the
initial Borrowing and (b) the initial issuance of a Letter of Credit.
"Initial Issuing Bank" has the meaning specified in the recital of
parties to this Agreement.
"Initial Lenders" has the meaning specified in the recital of
parties to this Agreement.
"Intercompany Subordination Agreement" means an intercompany
subordination agreement in substantially the form of Exhibit H hereto
among the Parent, the Borrower and each of their respective Subsidiaries,
as the same may be amended, supplemented or otherwise
16
modified from time to time.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance, and ending on the last day of
the period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six
months, as the Borrower may, upon notice received by the Administrative
Agent not later than 11:00 A.M. (Charlotte, North Carolina time) on the
third Business Day prior to the first day of such Interest Period, select;
provided, however, that:
(a) the Borrower may not select any Interest Period with
respect to any Eurodollar Rate Advance under a Facility that ends
after any principal repayment installment date for such Facility
unless, after giving effect to such selection, the aggregate
principal amount of Base Rate Advances and of Eurodollar Rate
Advances having Interest Periods that end on or prior to such
principal repayment installment date for such Facility shall be at
least equal to the aggregate principal amount of Advances under such
Facility due and payable on or prior to such date;
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing shall
be of the same duration;
(c) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that, if such extension
would cause the last day of such Interest Period to occur in the
next following calendar month, the last day of such Interest Period
shall occur on the immediately preceding Business Day; and
(d) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder.
"Inventory" means all "Inventory" referred to in Section 1(b) of the
Security Agreement.
"Investment" means, with respect to any Person, any loan or advance
to such Person, any Acquisition in respect of such Person, any purchase or
other acquisition of any Equity Interests or Debt of such Person, any
capital contribution to such Person or any other direct or indirect
investment in such Person, including, without limitation, any arrangement
pursuant to which the investor incurs indebtedness of the types referred
to in clause (j) or (k) of the definition of "Debt" set forth in this
Section 1.01 in respect of such Person.
17
"Issuing Bank" means the Initial Issuing Bank and each other Person
to which the Letter of Credit Commitment hereunder has been assigned
pursuant to Section 9.07.
"L/C Cash Collateral Account" has the meaning specified in
Preliminary Statement (3) to the Security Agreement.
"L/C Related Documents" has the meaning specified in Section
2.03(c)(ii)(A).
"Lender Party" means any Lender or the Issuing Bank.
"Lenders" means, collectively, the Initial Lenders and each Person
that becomes a Lender pursuant to Section 9.07.
"Letter of Credit Advance" means an advance made by the Issuing Bank
or any Lender pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in Section
2.03(a).
"Letter of Credit Commitment" means, with respect to the Issuing
Bank at any time, the amount set forth opposite the Issuing Bank's name on
Schedule I hereto under the caption "Letter of Credit Commitment" or, if
the Issuing Bank has entered into one or more Assignments and Acceptances,
the amount set forth for the Issuing Bank in the Register maintained by
the Administrative Agent pursuant to Section 9.07(d) as the Issuing Bank's
"Letter of Credit Commitment", as such amount may be reduced at or prior
to such time pursuant to Section 2.05.
"Letter of Credit Facility" means, at any time, an amount equal to
the amount of the Issuing Bank's Letter of Credit Commitment at such time,
as such amount may be reduced at or prior to such time pursuant to Section
2.05.
"Letters of Credit" has the meaning specified in Section 2.01(c);
provided that "Letters of Credit" hereunder may include letters of credit
issued by Bank of America (and its predecessors) issued under the Existing
Credit Agreement, as referenced in Schedule 4.01(p) attached hereto.
"Lien" means, with respect to any Person, (a) any mortgage, lien
(statutory or other), pledge, hypothecation, security interest, charge or
other preference or encumbrance of any kind (including, without
limitation, any agreement to give any of the foregoing), (b) any sale of
accounts receivable or chattel paper, or any assignment, deposit
arrangement or lease intended as, or having the effect of, security, (c)
any easement, right of way or other encumbrance on title to real property
or (d) any other interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or other
title retention agreement or any Capitalized Lease or upon or with respect
to any property or asset of such Person (including, in the case of Equity
Interests, voting trust agreements and other similar arrangements).
"Loan Documents" means, collectively, (a) for purposes of this
Agreement and the Notes and any amendment, supplement or other
modification hereof or thereof and for all other purposes other than for
purposes of the Subsidiary Guaranty and the Collateral Documents, (i) this
Agreement (including, without limitation, the Parent Guaranty), (ii) the
Notes, (iii) the Subsidiary Guaranty, (iv) the Collateral Documents, (v)
each Letter of Credit Agreement and (vi) the Intercompany Subordination
Agreement and (b) for purposes of the Subsidiary Guaranty and
18
the Collateral Documents, (i) this Agreement (including, without
limitation, the Parent Guaranty), (ii) the Notes, (iii) the Subsidiary
Guaranty, (iv) the Collateral Documents, (v) each Letter of Credit
Agreement, (vi) the Intercompany Subordination Agreement and (vii) each
Bank Hedge Agreement, in each case as amended, supplemented or otherwise
modified hereafter from time to time in accordance with the terms thereof
and Section 9.01.
"Loan Parties" means, collectively, the Parent, the Borrower and
each Subsidiary Guarantor.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Consolidated Group, taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Consolidated Group, taken as a whole, (b)
the rights and remedies of any Agent or any Lender Party under any Loan
Document or (c) the ability of any Loan Party to perform its Obligations
under any Loan Document to which it is or is to be a party.
"Material Contract" means, with respect to the Parent or any of its
Subsidiaries, (i) the Material Contracts set forth on Schedule 4.01(v) and
(ii) any other contract to which any such Person is a party involving
aggregate consideration payable to or by such Person of $25,000,000 or
more in any year or otherwise material to the business, condition
(financial or otherwise), operations, performance, properties or prospects
of the Consolidated Group, taken as a whole.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan (as defined in
Section 4001(a)(3) of ERISA) to which any Loan Party or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan (as defined in
Section 4001(a)(15) of ERISA) that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and at least one Person other than the
Loan Parties and the ERISA Affiliates or (b) was so maintained and in
respect of which any Loan Party or any ERISA Affiliate could reasonably be
expected to have liability under Section 4064 or 4069 of ERISA in the
event such plan has been or were to be terminated.
"NAIC" means the National Association of Insurance Commissioners, a
national organization of insurance regulators.
"Net Cash Proceeds" means, with respect to (I) any sale, lease,
transfer or other disposition of any property or asset, or (II) the
incurrence or issuance of any Debt, or (III) the sale or issuance of any
Equity Interests in any Person, or (IV) any Extraordinary Receipt received
by or paid to or for the account of any Person, as the case may be, the
aggregate amount of cash received from time to time (whether as initial
consideration or through payment or disposition of
19
deferred consideration) by or on behalf of such Person for its own account
in connection with any such transaction, after deducting therefrom only
(without duplication):
(a) reasonable and customary brokerage commissions,
underwriting fees and discounts, legal fees, finder's fees and other
similar fees and commissions;
(b) the amount of taxes payable in connection with or as a
result of such transaction; and
(c) in the case of any sale, lease, transfer or other
disposition of any property or asset, the outstanding principal
amount of, the premium or penalty, if any, on, and any accrued and
unpaid interest on, any Debt (other than the Debt outstanding under
the Loan Documents) that is secured by a Lien on the property and
assets subject to such sale, lease, transfer or other disposition
and is required to be repaid under the terms thereof as a result of
such sale, lease, transfer or other disposition;
in each case to the extent, but only to the extent, that the amounts so
deducted are properly attributable to such transaction or to the property
or asset that is the subject thereof and (i) in the case of clauses (a)
and (c) of this definition, are actually paid (or reserved for prompt
payment) at the time of receipt of such cash to a Person that is not an
Affiliate of such Person or any Loan Party or of any Affiliate of any Loan
Party and (ii) in the case of clause (b) of this definition, are actually
paid at the time of receipt of such cash to a Person that is not an
Affiliate of such Person or any Loan Party or of any Affiliate of any Loan
Party or, so long as such Person is not otherwise indemnified therefor,
are reserved for in accordance with GAAP at the time of receipt of such
cash based upon such Person's reasonable estimate of such taxes; provided,
however, that if, at the time such taxes are actually paid or otherwise
satisfied, the amount of the reserve therefor exceeds the amount paid or
otherwise satisfied, then the Borrower shall reduce the Commitments in
accordance with the terms of Section 2.05(c), and shall prepay the
outstanding Advances in accordance with the terms of Section 2.06(b), in
an amount equal to the amount of such excess reserve. Notwithstanding the
foregoing, the definition of "Net Cash Proceeds" shall not include amounts
received as a result of any transaction described in clause (I) or (IV)
above to the extent that such amounts are applied within one year after
the date of receipt of such amounts to replace the property or asset that
is the subject of such transaction with similar property or assets.
"Note" means a Term Note or a Working Capital Note, as the context
may require.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Conversion" has the meaning specified in Section 2.09(a).
"Notice of Issuance" has the meaning specified in Section 2.03(a).
"Notice of Renewal" has the meaning specified in Section
2.01(c)(ii).
"Notice of Termination" has the meaning specified in Section
2.01(c)(ii).
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person
20
on any claim, whether or not the right of any creditor to payment in
respect of such claim is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, disputed, undisputed, legal, equitable,
secured or unsecured, and whether or not such claim is discharged, stayed
or otherwise affected by any proceeding referred to in Section 6.01(f).
Without limiting the generality of the foregoing, the Obligations of the
Loan Parties under the Loan Documents include (a) the obligation to pay
principal, interest, Letter of Credit commissions, charges, expenses,
fees, attorneys' fees and disbursements, indemnities and other amounts
payable by any Loan Party under any Loan Document and (b) the obligation
of any Loan Party to reimburse any amount in respect of any of the
foregoing that any Lender Party, in its sole discretion, may elect to pay
or advance on behalf of such Loan Party.
"Other Taxes" has the meaning specified in Section 2.12(b).
"Parent" has the meaning specified in the recital of parties to this
Agreement.
"Parent Guaranty" has the meaning specified in Section 8.01.
"Parent Stockholders' Agreement" means the Amended and Restated
Stockholders' Agreement dated as of May 2, 1995, as amended, supplemented
or otherwise modified from time to time, among the Parent and its
stockholders.
"Permitted Acquisition" means any business, enterprise or operation
of any Person that is the subject of an Acquisition permitted under
Section 5.02(f)(vii) or 5.02(f)(viii).
"Permitted Acquisition Debt" means Debt incurred or assumed by the
Parent, the Borrower or any of their Subsidiaries in connection with a
Permitted Acquisition.
"Permitted Acquisition Price" means the purchase price of any
Permitted Acquisition, including, without limitation, the value of any
Equity Interests, notes, assumed Debt, amounts allocated to non-compete
agreements and the minimum amounts reasonably expected to be paid under
any earn-out agreements, less the value of any Equity Interests in the
Parent issued to the seller.
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced:
(a) Liens for taxes, assessments and governmental charges or
levies to the extent not required to be paid under Section 5.01(b);
(b) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar Liens
arising in the ordinary course of business securing obligations
(other than Debt for borrowed money) (i) that are not overdue for a
period of more than 30 days or (ii) the amount, applicability or
validity of which are being contested in good faith and by
appropriate proceedings diligently conducted and with respect to
which the Parent or any of its Subsidiaries, as the case may be, has
established reserves in accordance with GAAP;
(c) pledges or deposits to secure obligations under workers'
compensation laws or similar legislation (other than in respect of
employee benefit plans subject to
21
ERISA) or to secure public or statutory obligations;
(d) Liens securing the performance of, or payment in respect
of, bids, tenders, government contracts (other than for the
repayment of borrowed money), surety and appeal bonds and other
obligations of a similar nature incurred in the ordinary course of
business;
(e) any interest or title of a lessor or sublessor and any
restriction or encumbrance to which the interest or title of such
lessor or sublessor may be subject that is incurred in the ordinary
course of business and, either individually or when aggregated with
all other Permitted Liens in effect on any date of determination,
could not be reasonably expected to have a Material Adverse Effect;
(f) Liens in favor of customs and revenue authorities arising
as a matter of law or pursuant to a bond to secure payment of
customs duties in connection with the importation of goods;
(g) Liens arising out of judgments or awards that do not
constitute an Event of Default under Section 6.01(g) or 6.01(h) and
in respect of which the Borrower or any of its Subsidiaries subject
thereto shall be prosecuting an appeal or proceedings for review in
good faith and, pending such appeal or proceedings, shall have
secured within ten days after the entry thereof a subsisting stay of
execution and shall be maintaining reserves, in accordance with
GAAP, with respect to any such judgment or award;
(h) good faith pledges or deposits made in the ordinary course
of business to secure performance of bids, tenders, contracts (other
than for the repayment of borrowed money) or leases, not in excess
of 10% of the aggregate amount due thereunder, or to secure
statutory obligations, or surety, appeal, indemnity, performance or
other similar bonds required in the ordinary course of business; and
(i) landlord's Liens on fixtures retained in any lease.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, unlimited liability company,
joint stock company, trust, unincorporated association, joint venture or
other entity, or a government or any political subdivision or agency
thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pledged Debt" has the meaning specified in Preliminary Statement
(2) to the Security Agreement.
"Pledged Shares" has the meaning specified in Preliminary Statement
(2) to the Security Agreement.
"Preferred Interests" means, with respect to any Person, Equity
Interests issued by such Person that are entitled to a preference or
priority over any other Equity Interests issued by such Person upon any
distribution of such Person's property and assets, whether by dividend or
upon liquidation.
22
"Preferred Stock" means the 3,300 shares of preferred stock, $.01
par value per share, of the Parent, issued and outstanding as of the date
hereof.
"Pro Forma Effect" means that, in making any calculation to
determine if the Consolidated Group is in compliance with Section 5.04 or
to determine if the conditions precedent to a Permitted Acquisition under
Section 5.02(f)(viii) have been met, the calculation will be made assuming
that (a) any Permitted Acquisition made during the 12-month period ending
on the date of determination (the "Reference Period"), and (b) any Debt
associated with such Permitted Acquisition incurred during the Reference
Period or to be incurred as of the date of determination, were made or
incurred on the first day of the Reference Period. Any funds to be used by
the Parent, the Borrower or any of their Subsidiaries in consummating a
Permitted Acquisition will be assumed to have been used for that purpose
as of the first day of the Reference Period. EBITDA and EBITDAR for the
Reference Period associated with the assets acquired or to be acquired in
any Permitted Acquisition will be included in the calculation of
Consolidated EBITDA and Consolidated EBITDAR. Any Debt to be incurred by
the Parent or any of its Subsidiaries in connection with the consummation
of any Permitted Acquisition will be assumed to have been incurred on the
first day of the Reference Period. The gross interest expenses, determined
in accordance with GAAP, with respect to such Debt assumed to have been
incurred on the first day of the Reference Period that bears interest at a
floating rate shall be calculated at the current rate under the agreement
governing such Debt (including this Agreement if the Debt is incurred
hereunder). Any gross interest expense, determined in accordance with
GAAP, incurred during the Reference Period that was or is to be refinanced
with proceeds of Debt assumed to have been incurred as of the first day of
the Reference Period will be excluded from the calculation for which a Pro
Forma Effect is being given.
"Pro Rata Share" of any amount means, with respect to any Lender at
any time in relation to a Facility, the product of (a) a fraction the
numerator of which is the amount of such Lender's Commitment under such
Facility at such time and the denominator of which is the aggregate amount
of such Facility at such time multiplied by (b) such amount.
"Records" means correspondence, memoranda, tapes, books, discs,
paper, magnetic storage and other documents or information of any type,
whether expressed in ordinary or machine language.
"Redeemable" means, with respect to any Capital Stock or other
ownership or profit interest, Debt or other right or Obligation, any such
right or Obligation that (a) the issuer has undertaken to redeem at a
fixed or determinable date or dates, whether by operation of a sinking
fund or otherwise, or upon the occurrence of a condition not solely within
the control of the issuer or (b) is redeemable at the option of the
holder.
"Reduction Amount" has the meaning specified in Section 2.06(b)(iv).
"Register" has the meaning specified in Section 9.07(d).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Related Documents" means the Tax Sharing Agreement and the Parent
Stockholders'
23
Agreement.
"Required Lenders" means, at any time, Lenders holding at least
sixty-six and two-thirds percent (66 2/3%) in interest of the sum of:
(i) the Working Capital Commitments, or if such commitments
have been terminated, the sum of (A) the aggregate principal amount
of the Working Capital Advances and Letter of Credit Advances
outstanding at such time, and (B) the aggregate Available Amount of
all Letters of Credit outstanding at such time; and
(ii) the sum of (A) the aggregate principal amount of the Term
Advances outstanding at such time, or if no such principal amount is
outstanding at such time, the Term Commitments, and (B) the
aggregate principal amount of the Unused Term Commitments;
provided, however, that, if any Lender shall be a Defaulting Lender at
such time, there shall be excluded from the determination of Required
Lenders at such time (i) the aggregate principal amount of the Commitments
of and Advances owing to such Lender (in its capacity as a Lender) and
outstanding at such time, and (B) such Lender's Pro Rata Share of the
aggregate Available Amount of all Letters of Credit issued by such Lender
and outstanding at such time. For purposes of this definition, the
aggregate principal amount of Letter of Credit Advances owing to the
Issuing Bank and the Available Amount of each Letter of Credit shall be
considered to be owed to the Lenders ratably in accordance with their
respective Working Capital Commitments.
"Requirements of Law" means, with respect to any Person, all laws,
constitutions, statutes, treaties, ordinances, rules and regulations, all
orders, writs, decrees, injunctions, judgments, determinations or awards
of an arbitrator, a court or any other Governmental Authority, and all
governmental authorizations, binding upon or applicable to such Person or
to any of its properties, assets or businesses.
"Responsible Officer" means, with respect to the Borrower, any of
its Subsidiaries, the Chief Operating Officer, the President, the
Principal Financial Officer, the principal accounting officer or the
Treasurer (or the equivalent of any of the foregoing) or any other
officer, partner or member (or person performing similar functions) of the
Borrower or any such Subsidiary responsible for overseeing the
administration of, or reviewing compliance with, all or any portion of
this Agreement or any of the other Loan Documents.
"Risk-Based Capital" means, with respect to each HMO Subsidiary, at
any time, the Company Action Level Risk-Based Capital (as defined by the
NAIC on the date of determination and as determined in accordance with
SAP) of such HMO Subsidiary.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"SAP" means, with respect to each HMO Subsidiary, the statutory
accounting principles and procedures prescribed or permitted by applicable
HMO Regulations for such HMO Subsidiary, applied on a consistent basis.
"Secured Obligations" has the meaning specified in Section 2 of the
Security Agreement.
24
"Secured Parties" means, collectively, the Agents, the Lender
Parties and the Hedge Banks.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Security Agreement" has the meaning specified in Section
3.01(a)(ii).
"Security Agreement Supplement" has the meaning specified in Section
20(b) of the Security Agreement.
"Single Employer Plan" means a single employer plan (as defined in
Section 4001(a)(15) of ERISA) that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and no Person other than the Loan
Parties and the ERISA Affiliates or (b) was so maintained and in respect
of which any Loan Party or any ERISA Affiliate could have liability under
Section 4069 of ERISA in the event such plan has been or were to be
terminated.
"Solvent" and "Solvency" mean, with respect to any Person on any
date of determination, that on such date (a) the fair value of the
property of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person, (b)
the present fair salable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured, (c) such
Person does not intend to, and does not believe that it will, incur debts
or liabilities beyond such Person's ability to pay such debts and
liabilities as they mature and (d) such Person is not engaged in business
or a transaction, and is not about to engage in business or a transaction,
for which such Person's property would constitute an unreasonably small
capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Standby Letter of Credit" means any Letter of Credit issued under
the Letter of Credit Facility, other than a Trade Letter of Credit.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, unlimited liability company, trust or
estate of which (or in which) more than 50% of (a) the issued and
outstanding shares of Capital Stock having ordinary voting power to elect
a majority of the board of directors of such corporation (irrespective of
whether at the time Capital Stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such
partnership, joint venture, limited liability company or unlimited
liability company or (c) the beneficial interest in such trust or estate
is at the time directly or indirectly owned or controlled by such Person,
by such Person and one or more of its other Subsidiaries or by one or more
of such Person's other Subsidiaries; provided, however, that "Subsidiary"
shall not include any such Person if such Person has been capitalized with
less than $100,000 or has substantially no assets or liabilities.
"Subsidiary Guarantors" means the Subsidiaries of the Parent listed
on Schedule II hereto and each other Subsidiary that shall be required to
execute and deliver a guaranty pursuant
25
to Section 5.01(j).
"Subsidiary Guaranty" has the meaning specified in Section
3.01(a)(iii).
"Surviving Debt" has the meaning specified in Section 3.01(b).
"Syndication Agent" has the meaning specified in the recital of
parties to this Agreement.
"Tax Sharing Agreement" means the Tax Allocation Agreement dated
January 1, 1997, as amended, supplemented or otherwise modified from time
to time, among the Parent and each of its Subsidiaries from time to time
party thereto.
"Taxes" has the meaning specified in Section 2.12(a).
"Term Advance" has the meaning specified in Section 2.01(a).
"Term Borrowing" means a borrowing consisting of simultaneous Term
Advances of the same Type made by the Lenders.
"Term Commitment" means, with respect to any Lender at any time, the
amount set forth opposite such Lender's name on Schedule I hereto under
the caption "Term Commitment" or, if such Lender has entered into one or
more Assignments and Acceptances, the amount set forth for such Lender in
the Register maintained by the Administrative Agent pursuant to Section
9.07(d) as such Lender's "Term Commitment", as such amount may be reduced
at or prior to such time pursuant to Section 2.05.
"Term Facility" means, at any time, the aggregate Term Commitments
of all Lenders at such time.
"Term Note" means a promissory note of the Borrower payable to the
order of any Lender, in substantially the form of Exhibit A-1 hereto,
evidencing the indebtedness of the Borrower to such Lender resulting from
the Term Advance made by such Lender.
"Termination Date" means the earlier of (a) May 4, 2004 and (b) the
date of termination in whole of the Term Commitments, the Letter of Credit
Commitments and the Working Capital Commitments pursuant to Section 2.05
or 6.01.
"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.
"Trade Letter of Credit" means any Letter of Credit that is issued
under the Letter of Credit Facility for the benefit of a supplier of
Inventory to the Borrower or any of its Subsidiaries to effect payment for
such Inventory, the conditions to drawing under which include the
presentation to the Issuing Bank of negotiable bills of lading, invoices
and related documents sufficient, in the judgment of the Issuing Bank, to
create a valid and perfected lien on or security interest in such
Inventory, bills of lading, invoices and related documents in favor of the
Issuing Bank.
26
"Transaction" means, collectively, (a) the entering into by the Loan
Parties and their applicable Subsidiaries of the Loan Documents and the
Related Documents to which they are or are intended to be a party, (b) the
refinancing of certain outstanding Debt of the Borrower and its
Subsidiaries and the termination of all commitments thereunder and (c) the
payment of the fees and expenses incurred in connection with the
consummation of the foregoing.
"Type" refers to the distinction between Advances bearing interest
at the Base Rate and Advances bearing interest at the Eurodollar Rate.
"Unused Term Commitment" means, with respect to any Lender at any
time, (a) such Lender's Term Commitment at such time, minus (b) the
aggregate principal amount of all Term Advances made by such Lender (in
its capacity as a Lender) and outstanding at such time.
"Unused Working Capital Commitment" means, with respect to any
Lender at any time, (a) such Lender's Working Capital Commitment at such
time minus (b) the sum of (i) the aggregate principal amount of all
Working Capital Advances and Letter of Credit Advances made by such Lender
(in its capacity as a Lender) and outstanding at such time and (ii) such
Lender's Pro Rata Share of (A) the aggregate Available Amount of all
Letters of Credit outstanding at such time and (B) the aggregate principal
amount of all Letter of Credit Advances made by the Issuing Bank pursuant
to Section 2.03(c) and outstanding at such time.
"Voting Interests" means shares of Capital Stock issued by a
corporation, or equivalent Equity Interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies, entitled
to vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been suspended
by the happening of such a contingency.
"Working Capital Advance" has the meaning specified in Section
2.01(b).
"Working Capital Borrowing" means a borrowing consisting of
simultaneous Working Capital Advances of the same Type made by the
Lenders.
"Working Capital Commitment" means, with respect to any Lender at
any time, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption "Working Capital Commitment" or, if such Lender
has entered into one or more Assignments and Acceptances, the amount set
forth for such Lender in the Register maintained by the Administrative
Agent pursuant to Section 9.07(d) as such Lender's "Working Capital
Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.05.
"Working Capital Facility" means, at any time, the aggregate amount
of the Lenders' Working Capital Commitments at such time.
"Working Capital Note" means a promissory note of the Borrower
payable to the order of any Lender, in substantially the form of Exhibit
A-2 hereto, evidencing the aggregate indebtedness of the Borrower to such
Lender resulting from the Working Capital Advances made by such Lender.
SECTION 1.02. Computation of Time Periods.
27
In this Agreement in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including" and
the words "to" and "until" each mean "to but excluding".
SECTION 1.03. Accounting Terms.
All accounting terms not specifically defined herein shall be construed in
accordance with generally accepted accounting principles consistent with those
applied in the preparation of the financial statements of the Consolidated Group
referred to in Section 4.01(g) ("GAAP").
SECTION 1.04. Currency Equivalents Generally.
Any amount specified in this Agreement (other than in Articles II, VII and
IX) or any of the other Loan Documents to be in U.S. dollars shall also include
the equivalent of such amount in any currency other than U.S. dollars, such
equivalent amount to be determined at the rate of exchange quoted by Bank of
America in Charlotte, North Carolina at the close of business on the Business
Day immediately preceding any date of determination thereof, to prime banks in
New York, New York for the spot purchase in the New York foreign exchange market
of such amount in U.S. dollars with such other currency.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances.
(a) The Term Advances. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make up to six advances (each a "Term
Advance") in U.S. dollars to the Borrower from time to time on any Business Day
during the period from the date hereof until December 31, 2001, in each case in
an amount not to exceed the Unused Term Commitment of such Lender at such time.
Each Term Borrowing shall be in an aggregate amount of $1,000,000 or an integral
multiple of $500,000 in excess thereof or, if less, the amount of the aggregate
Unused Term Commitment at such time. Each Term Borrowing shall consist of Term
Advances made simultaneously by the Lenders in accordance with their respective
Pro Rata Shares of the Term Facility. Amounts borrowed under this Section
2.01(a) and repaid or prepaid may not be reborrowed.
(b) The Working Capital Advances. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make advances (each a "Working
Capital Advance") in U.S. dollars to the Borrower from time to time on any
Business Day during the period from the date hereof until the Termination Date,
in each case in an amount not to exceed the Unused Working Capital Commitment of
such Lender at such time. Each Working Capital Borrowing shall be in an
aggregate amount of $1,000,000 or an integral multiple of $500,000 in excess
thereof (other than a Borrowing the proceeds of which shall be used solely to
repay or prepay in full outstanding Letter of Credit Advances) or, if less, the
amount of the aggregate Unused Working Capital Commitments at such time. Each
Working Capital Borrowing shall consist of Working Capital Advances made
simultaneously by the Lenders in accordance with their respective Pro Rata
Shares of the Working Capital Facility. Within the limits of each Lender's
Unused Working Capital Commitment in effect from time to time, the Borrower may
borrow under this
28
Section 2.01(b), prepay pursuant to Section 2.06(a) and reborrow under this
Section 2.01(b).
(c) Letters of Credit. (i) The Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue letters of credit (the "Letters of
Credit") in U.S. dollars for the account of the Borrower from time to time on
any Business Day during the period from the date hereof until 15 days before the
scheduled Termination Date (A) in an aggregate Available Amount for all Letters
of Credit not to exceed at any time the Issuing Bank's Letter of Credit
Commitment at such time and (B) in an Available Amount for each such Letter of
Credit not to exceed the lesser of (1) the Letter of Credit Facility at such
time and (2) the aggregate Unused Working Capital Commitments of the Lenders at
such time. No Trade Letter of Credit shall have an expiration date later than
the earlier of (A) 180 days after the issuance thereof and (B) 15 days prior to
the scheduled Termination Date. No Standby Letter of Credit shall have an
expiration date (including all rights of the Borrower or the beneficiary of such
Standby Letter of Credit to require renewal) later than the earlier of (x) 15
days prior to the scheduled Termination Date and (y) one year after the date of
issuance thereof, but any such Standby Letter of Credit may by its terms be
renewable annually on the terms set forth in Section 2.01(c)(ii). Within the
limits of the Letter of Credit Facility, and subject to the limits referred to
above, the Borrower may request the issuance of Letters of Credit under this
Section 2.01(c)(i), repay any Letter of Credit Advances resulting from drawings
thereunder pursuant to Section 2.03(c) and request the issuance of additional
Letters of Credit under this Section 2.01(c)(i).
(ii) Each Standby Letter of Credit may by its terms be renewable
annually upon notice (a "Notice of Renewal") given to the Issuing Bank and the
Administrative Agent on or prior to any date for notice of renewal set forth in
such Letter of Credit but in any event at least three Business Days prior to the
date of the proposed renewal of such Standby Letter of Credit and upon
fulfillment of the applicable conditions set forth in Article III unless such
Issuing Bank has notified the Borrower (with a copy to the Administrative Agent)
on or prior to the date for notice of termination set forth in such Letter of
Credit but in any event at least 30 Business Days prior to the date of automatic
renewal of its election not to renew such Standby Letter of Credit (a "Notice of
Termination"); provided that the terms of each Standby Letter of Credit that is
automatically renewable annually (A) shall require the Issuing Bank to give the
beneficiary of such Standby Letter of Credit notice of any Notice of
Termination, (B) shall permit such beneficiary, upon receipt of such notice, to
draw under such Standby Letter of Credit prior to the date such Standby Letter
of Credit otherwise would have been automatically renewed and (C) shall not
permit the expiration date (after giving effect to any renewal) of such Standby
Letter of Credit in any event to be extended to a date later than 15 days prior
to the scheduled Termination Date. If either a Notice of Renewal is not given by
the Borrower or a Notice of Termination is given by the Issuing Bank pursuant to
the immediately preceding sentence, such Standby Letter of Credit shall expire
on the date on which it otherwise would have been automatically renewed;
provided, however, that in the absence of receipt of a Notice of Renewal the
Issuing Bank may in its discretion, unless instructed to the contrary by the
Administrative Agent or the Borrower, deem that a Notice of Renewal had been
timely delivered and, in such case, a Notice of Renewal shall be deemed to have
been so delivered for all purposes under this Agreement.
SECTION 2.02. Making the Advances.
(a) Except as otherwise provided in Section 2.03 or in respect of any
Borrowing requested to be made on the date of the Initial Extension of Credit,
in which case notice will be given on the date of the Initial Extension of
Credit, each Borrowing shall be made on notice, given not later than 11:00 A.M.
(Charlotte, North Carolina time) on the third Business Day prior to the date of
the proposed Borrowing in the case of a Borrowing comprised of Eurodollar Rate
Advances, or on the first Business Day prior to the
29
date of the proposed Borrowing in the case of a Borrowing comprised of Base Rate
Advances, by the Borrower to the Administrative Agent, which shall give prompt
notice thereof to each Lender by telecopier. Each notice of a Borrowing (a
"Notice of Borrowing") shall be by telephone, confirmed immediately in writing
or by telecopier, in substantially the form of Exhibit B-1 hereto, shall be duly
executed by a Responsible Officer of the Borrower, and shall specify therein:
(i) the requested date of such Borrowing (which shall be a Business Day); (ii)
the Facility under which such Borrowing is requested to be made; (iii) the Type
of Advances requested to comprise such Borrowing; (iv) the requested aggregate
amount of such Borrowing; and (v) in the case of a Borrowing comprised of
Eurodollar Rate Advances, the requested duration of the initial Interest Period
for each such Advance. Each Lender shall, before 11:00 A.M. (Charlotte, North
Carolina time) on the date of such Borrowing, make available for the account of
its Applicable Lending Office to the Administrative Agent at the Administrative
Agent's Account, in same day funds, such Lender's Pro Rata Share of such
Borrowing. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent shall make such funds available to the Borrower by
crediting the Borrower's Account; provided, however, that, in the case of any
Working Capital Borrowing, the Administrative Agent shall first make a portion
of such funds equal to the aggregate principal amount of any Letter of Credit
Advances made by the Issuing Bank and by any Lender and outstanding on the date
of such Working Capital Borrowing, plus accrued and unpaid interest thereon to
and as of such date, available to the Issuing Bank and such other Lenders for
repayment of such Letter of Credit Advances.
(b) Anything in Section 2.02(a) to the contrary notwithstanding, the
Borrower may not select Eurodollar Rate Advances (i) for the initial Borrowing
hereunder (ii) if the obligation of the Lenders to make Eurodollar Rate Advances
shall then be suspended pursuant to Section 2.09 or 2.10. In addition, the Term
Advances may not be outstanding as part of more than six separate Borrowings and
the Working Capital Advances may not be outstanding as part of more than seven
separate Borrowings.
(c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Lender against any loss, cost or expense reasonably incurred by
such Lender as a result of any failure to fulfill on or before the date
specified in such Notice of Borrowing for such Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss
(excluding loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part of such Borrowing
when such Advance, as a result of such failure, is not made on such date.
(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 Pro Rata Share of such
Borrowing, the Administrative Agent may assume that such Lender has made the
amount of such Pro Rata Share available to the Administrative Agent on the date
of such Borrowing in accordance with Section 2.02(a), and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Lender shall
not have so made the amount of such Pro Rata Share available to the
Administrative Agent, such Lender and the Borrower severally agree to repay or
to pay to the Administrative Agent forthwith on demand such corresponding
amount, together with interest thereon, for each day from the date such amount
is made available to the Borrower until the date such amount is repaid or paid
to the Administrative Agent, at (i) in the case of the Borrower, the interest
rate applicable at such time under Section 2.07 to Advances comprising such
Borrowing and (ii) in the case of such
30
Lender, the Federal Funds Rate. If such Lender shall pay to the Administrative
Agent such corresponding amount, such amount so paid shall constitute such
Lender's Advance as part of such Borrowing for all purposes under this
Agreement.
(e) The failure of any Lender to make the Advance to be made by it as part
of any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of
Credit.
(a) Request for Issuance. Each Letter of Credit shall be issued upon
notice, given not later than 11:00 A.M. (Charlotte, North Carolina time) on the
third Business Day prior to the date of the proposed issuance of such Letter of
Credit (or such later day as the Issuing Bank in its sole discretion shall
agree), by the Borrower to the Issuing Bank, which shall give to the
Administrative Agent and each Lender prompt notice thereof by telecopier. Each
notice of issuance of a Letter of Credit (a "Notice of Issuance") shall be by
telephone, confirmed immediately in writing or by telecopier, shall be duly
executed by a Responsible Officer of the Borrower, and shall specify therein:
(i) the requested date of such issuance (which shall be a Business Day); (ii)
the requested Available Amount of such Letter of Credit; (iii) the requested
expiration date of such Letter of Credit (which shall comply with the
requirements of Section 2.01(c)); (iv) the name and address of the proposed
beneficiary of such Letter of Credit; and (v) the proposed form of such Letter
of Credit, and shall be accompanied by such application and agreement for
letters of credit as the Issuing Bank may specify to the Borrower for use in
connection with such requested Letter of Credit (a "Letter of Credit
Agreement"). If the requested form of such Letter of Credit is acceptable to the
Issuing Bank in its sole discretion, the Issuing Bank shall, upon fulfillment of
the applicable conditions set forth in Article III, make such Letter of Credit
available to the Borrower at its office referred to in Section 9.02 or as
otherwise agreed with the Borrower in connection with the issuance of such
Letter of Credit. If and to the extent that the provisions of any Letter of
Credit Agreement shall conflict with this Agreement, the provisions of this
Agreement shall govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish (i) to the
Administrative Agent and each Lender on the first Business Day of each month a
written report summarizing issuance and expiration dates of all Letters of
Credit issued during the immediately preceding month and drawings during such
month under each such Letter of Credit and (ii) the Administrative Agent and
each Lender on the first Business Day of each calendar quarter a written report
setting forth the average daily aggregate Available Amount during the
immediately preceding calendar quarter of all Letters of Credit.
(c) Drawing and Reimbursement. (i) The payment by the Issuing Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the Issuing Bank of a Letter of Credit Advance, which
shall be a Base Rate Advance, in the amount of such draft. Upon demand by the
Issuing Bank, with a copy of such demand to the Administrative Agent, each
Lender shall purchase from the Issuing Bank, and the Issuing Bank shall sell and
assign to each such Lender, such Lender's Pro Rata Share of such outstanding
Letter of Credit Advance as of the date of such purchase, by making available
for the account of its Applicable Lending Office to the Administrative Agent for
the account of the Issuing Bank, at the Administrative Agent's Account, in same
day funds, an amount equal to the portion of the outstanding principal amount of
such Letter of Credit Advance to be purchased by such Lender. Promptly after
receipt thereof, the Administrative Agent shall transfer such funds to the
Issuing Bank. The Borrower hereby agrees to each such sale and assignment. Each
Lender agrees to purchase its Pro Rata Share of an outstanding Letter of Credit
Advance on (A) the Business Day
31
on which demand therefor is made by the Issuing Bank so long as notice of such
demand is given not later than 11:00 A.M. (Charlotte, North Carolina time) on
such Business Day or (B) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment by the
Issuing Bank to any other Lender of a portion of a Letter of Credit Advance, the
Issuing Bank represents and warrants to such other Lender that the Issuing Bank
is the legal and beneficial owner of such interest being assigned by it, free
and clear of any Liens, but makes no other representation or warranty and
assumes no responsibility with respect to such Letter of Credit Advance, the
Loan Documents or any Loan Party. If and to the extent that any Lender shall not
have so made the amount of such Letter of Credit Advance available to the
Administrative Agent, such Lender agrees to pay to the Administrative Agent
forthwith on demand such amount, together with interest thereon, for each day
from the date of demand by the Issuing Bank until the date such amount is paid
to the Administrative Agent, at the Federal Funds Rate, for its account or the
account of the Issuing Bank, as applicable. If such Lender shall pay to the
Administrative Agent such amount for the account of the Issuing Bank on any
Business Day, such amount so paid in respect of principal shall constitute a
Letter of Credit Advance made by such Lender on such Business Day for all
purposes of this Agreement, and the outstanding principal amount of the Letter
of Credit Advance made by the Issuing Bank shall be reduced by such amount on
such Business Day.
(ii) The Obligation of each Lender to purchase its Pro Rata Share of
each outstanding Letter of Credit Advance upon demand by the Issuing Bank
therefor pursuant to Section 2.03(c)(i) shall be absolute, unconditional
and irrevocable, and shall be made strictly in accordance with the terms
of Section 2.03(c)(i) under all circumstances, including, without
limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit or
any other agreement or instrument relating thereto (collectively,
the "L/C Related Documents");
(B) the existence of any claim, setoff, defense or other right
that such Lender may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank,
the Borrower or any other Person, whether in connection with the
transactions contemplated by the L/C Related Documents or any
unrelated transaction;
(C) the occurrence and continuance of any Default; or
(D) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing.
(d) Failure to Make Letter of Credit Advances. The failure of any Lender
to make the Letter of Credit Advance to be made by it on the date specified in
Section 2.03(c) shall not relieve any other Lender of its obligation hereunder
to make its Letter of Credit Advance on such date, but no Lender shall be
responsible for the failure of any other Lender to make the Letter of Credit
Advance to be made by such other Lender on such date.
SECTION 2.04. Repayment of Advances.
(a) Term Advances. The Borrower shall repay to the Administrative Agent
for the ratable account of the Lenders the aggregate principal amount of all
Term Advances outstanding on the
32
following dates in the respective amounts set forth opposite such dates (which
amounts shall be reduced as a result of the application of prepayments in
accordance with the order of priority set forth in Section 2.06):
If the aggregate draws If the aggregate draws
under the Term Loan under the Term Loan are
Quarterly Payment Date are $40 million or less more than $40 million
---------------------- ----------------------- ---------------------
September 30, 2001 $2,000,000 $2,500,000
December 31, 2001 $2,000,000 $2,500,000
March 31, 2002 $2,000,000 $2,500,000
June 30, 2002 $2,000,000 $2,500,000
September 30, 2002 $2,000,000 $2,500,000
December 31, 2002 $2,000,000 $2,500,000
March 31, 2003 $2,000,000 $2,500,000
June 30, 2003 $2,000,000 $2,500,000
September 30, 2003 $2,000,000 $2,500,000
December 31, 2003 $2,000,000 $2,500,000
Termination Date Remaining Balance Remaining Balance
provided, however, that the final principal repayment installment of the Term
Advances shall be repaid on the Termination Date and in any event shall be in an
amount equal to the aggregate principal amount of all Term Advances outstanding
on such date.
(b) Working Capital Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Lenders on the Termination
Date the aggregate principal amount of all Working Capital Advances outstanding
on such date.
(c) Letter of Credit Advances. (i) The Borrower shall repay (from the
proceeds of Term Advances, Working Capital Advances or other sources) to the
Administrative Agent for the account of the Issuing Bank and each Lender that
has made a Letter of Credit Advance the principal amount of each Letter of
Credit Advance made by it and outstanding on the earlier of (A) the fifth
Business Day after the date on which such Letter of Credit Advance was made and
(B) the Termination Date.
(ii) The Obligations of the Borrower under this Agreement, any
Letter of Credit Agreement and any other agreement or instrument relating
to any Letter of Credit shall be absolute, unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement,
such Letter of Credit Agreement or such other agreement or instrument
under all circumstances, including, without limitation, the following
circumstances:
(A) any lack of validity or enforceability of any L/C Related
Document;
(B) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the Borrower
in respect of any L/C Related Document or any other amendment or
waiver of or any consent to departure from all or any of the L/C
Related Documents;
(C) the existence of any claim, setoff, defense or other right
that the Borrower may have at any time against any beneficiary or
any transferee of a Letter of
33
Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), the Issuing Bank or any other Person,
whether in connection with the transactions contemplated by the L/C
Related Documents or any unrelated transaction;
(D) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(E) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not
strictly comply with the terms of such Letter of Credit;
(F) any exchange, release or nonperfection of any Collateral
or other collateral, or any release or amendment or waiver of or
consent to departure from the Subsidiary Guaranty or any other
guarantee, for all or any of the Obligations of the Borrower in
respect of the L/C Related Documents; or
(G) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including, without limitation,
any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or a guarantor.
SECTION 2.05. Termination or Reduction of the Commitments.
(a) Optional. The Borrower may, upon at least three Business Days' notice
to the Administrative Agent, terminate in whole or reduce in part the Unused
Term Commitments, the unused portion of the Letter of Credit Facility or the
Unused Working Capital Commitments; provided, however, that each partial
reduction of a Facility (i) shall be in an aggregate amount of $1,000,000 or an
integral multiple of $500,000 in excess thereof or, if less, the aggregate
amount of such Facility and (ii) shall be applied as the Borrower may determine,
so long as any such reduction shall be made ratably among the Lenders in
accordance with their Commitments with respect to such Facility.
(b) Mandatory. (i) The Term Facility shall be automatically and
permanently reduced on the earlier of (A) December 31, 2001 and (B) the date of
the sixth Term Borrowing (after giving effect to such Term Borrowing), and from
time to time thereafter upon each repayment or prepayment of the outstanding
Term Advances, by an amount equal to the amount by which (x) the Term Facility
immediately prior to such reduction exceeds (y) the aggregate principal amount
of all Term Advances outstanding at such time.
(ii) The Working Capital Facility shall be automatically and
permanently reduced on each date on which the prepayment of Working
Capital Advances outstanding thereunder is required to be made pursuant to
Section 2.06(b)(i) or 2.06(b)(ii) by an amount equal to the applicable
Reduction Amount.
(iii) The Letter of Credit Facility shall be automatically and
permanently reduced on the date of each reduction in the Working Capital
Facility by an amount equal to the amount, if any, by which (A) the Letter
of Credit Facility on such date exceeds (B) the Working Capital Facility
on such date, after giving effect to such reduction of the Working Capital
Facility.
34
(c) Application of Commitment Reductions. Upon each reduction of a
Facility (other than the Letter of Credit Facility) pursuant to this Section
2.05, the Commitment of each Lender under such Facility shall be reduced by such
Lender's Pro Rata Share of the amount by which such Facility is reduced.
SECTION 2.06. Prepayments.
(a) Optional. The Borrower may, upon at least three Business Days' notice
to the Administrative Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given the Borrower shall, prepay
the aggregate principal amount of the Advances comprising part of the same
Borrowing and outstanding on such date, in whole or ratably in part; provided,
however, that (i) each partial prepayment shall be in an aggregate principal
amount of $1,000,000 or an integral multiple of $100,000 in excess thereof and
(ii) if any such prepayment of a Eurodollar Rate Advance is made on a date other
than the last day of an Interest Period therefor, the Borrower shall also pay
any amounts owing in respect of such Eurodollar Rate Advance pursuant to Section
9.04(c). Each prepayment of the outstanding Term Advances pursuant to this
Section 2.06(a) shall be applied to the principal installments thereof on a pro
rata basis.
(b) Mandatory. (i) The Borrower shall, on the date of receipt of the Net
Cash Proceeds by any Loan Party or any of its Subsidiaries from (A) the sale,
lease, transfer or other disposition of any property or assets of any Loan Party
or any of its Subsidiaries in an aggregate amount in excess of $1,000,000 in any
Fiscal Year (other than any property or assets expressly permitted to be sold,
leased, transferred or otherwise disposed of pursuant to clause (i), (ii) or
(iv) of Section 5.02(e)), (B) the incurrence or issuance by any Loan Party or
any of its Subsidiaries of any Debt (other than Debt expressly permitted to be
incurred or issued pursuant to Section 5.02(b)), (C) the issuance or sale by any
Loan Party or any of its Subsidiaries of any Equity Interests therein through an
offering under Rule 144A of the Securities Act, an offering registered under, or
exempt from, the Securities Act or an offering of a similar nature and (D) any
Extraordinary Receipt in excess of $1,000,000 for any Fiscal Year received by or
paid to or for the account of any Loan Party or any of its Subsidiaries and not
otherwise included in subclause (A), (B) or (C) of this Section 2.06(b)(i),
prepay an aggregate principal amount of the Advances equal to 100% of the amount
of such Net Cash Proceeds. Each prepayment of Advances pursuant to this Section
2.06(b)(i) shall be applied first to the Term Facility and to the principal
installments thereof on a pro rata basis and, thereafter, to the Working Capital
Facility in the manner set forth in Section 2.06(b)(iv).
(ii) The Borrower shall, on each Business Day, prepay an aggregate
principal amount of the Working Capital Advances comprising part of the
same Borrowings and Letter of Credit Advances equal to the amount by which
(A) the sum of (1) the aggregate principal amount of all Working Capital
Advances and Letter of Credit Advances outstanding on such Business Day
and (2) the aggregate Available Amount of all Letters of Credit
outstanding on such Business Day exceeds (B) the Working Capital Facility
on such Business Day (after giving effect to any permanent reduction
thereof pursuant to Section 2.05 on such Business Day).
(iii) The Borrower shall, on each Business Day, pay to the
Administrative Agent for deposit into the L/C Cash Collateral Account an
amount sufficient to cause the aggregate amount on deposit in the L/C Cash
Collateral Account on such Business Day to equal the amount by which (A)
the sum of (1) the aggregate principal amount of all Letter of Credit
Advances outstanding on such Business Day and (2) the aggregate Available
Amount of all Letters of Credit outstanding on such Business Day exceeds
(B) the Letter of Credit Facility on such
35
Business Day (after giving effect to any permanent reduction thereof
pursuant to Section 2.05 on such Business Day).
(iv) Prepayments of the Working Capital Facility made pursuant to
clause (i), (ii) or (iii) of this Section 2.06(b), first, shall be applied
to prepay Letter of Credit Advances outstanding at such time until all
such Letter of Credit Advances are paid in full, second, shall be applied
to prepay Working Capital Advances comprising part of the same Borrowings
and outstanding at such time until all such Working Capital Advances are
paid in full and, third, shall be deposited into the L/C Cash Collateral
Account to cash collateralize 100% of the Available Amount of all Letters
of Credit outstanding at such time; and, in the case of prepayments of the
Working Capital Facility required pursuant to clause (i) or (ii) of this
Section 2.06(b), the amount remaining, if any, after the prepayment in
full of all Advances outstanding at such time and the 100% cash
collateralization of the aggregate Available Amount of all Letters of
Credit outstanding at such time (the sum of such prepayment amounts, cash
collateralization amounts and remaining amount being, collectively, the
"Reduction Amount") may be retained by the Borrower for use in the
ordinary course of its business, and the Working Capital Facility shall be
automatically and permanently reduced as set forth in Section 2.05(b)(ii).
Upon the drawing of any Letter of Credit for which funds are on deposit in
the L/C Cash Collateral Account, such funds shall be applied (without any
further action by or notice to or from, the Borrower or any other Loan
Party) to reimburse the Issuing Bank or the Lenders, as applicable.
(c) Prepayments to Include Accrued Interest, Etc. All prepayments under
this Section 2.06 shall be made together with (i) accrued and unpaid interest to
the date of such prepayment on the principal amount so prepaid and (ii) in the
case of any such prepayment of a Eurodollar Rate Advance on a date other than
the last day of an Interest Period therefor, any amounts owing in respect of
such Eurodollar Rate Advance pursuant to Section 9.04(c). Notwithstanding any of
the other provisions of clause (i) or (ii) of Section 2.06(b), so long as no
Event of Default shall have occurred and be continuing, if any prepayment of
Eurodollar Rate Advances is required to be made under clause (i) or (ii) of
Section 2.06(b) other than on the last day of the Interest Period therefor, the
Borrower may, in its sole discretion, deposit the amount of any such prepayment
otherwise required to be made thereunder into a cash collateral account (such
cash collateral account to be under the sole dominion and control of the
Collateral Agent and otherwise on terms and conditions acceptable to the
Collateral Agent) until the last day of such Interest Period, at which time the
Administrative Agent shall be authorized (without any further action by or
notice to or from the Borrower or any other Loan Party) to apply such amount to
the prepayment of such Advances in accordance with Section 2.06(b). Upon the
occurrence of an Event of Default, the Administrative Agent shall also be
authorized (without any further action by or notice to or from the Borrower or
any other Loan Party) to apply such amount to the prepayment of the outstanding
Advances in accordance with Section 2.06(b).
SECTION 2.07. Interest.
(a) Scheduled Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance owing to each Lender Party from the date of
such Advance until such principal amount shall be paid in full, at the following
rates per annum:
(i) Base Rate Advances. During such periods as such Advance is a
Base Rate Advance, a rate per annum equal at all times to the sum of (A)
the Base Rate in effect from time to time and (B) the Applicable Margin
for such Advance in effect from time to time, payable in arrears quarterly
on the last day of each March, June, September and December during such
36
periods and on the date such Base Rate Advance shall be Converted or paid
in full.
(ii) Eurodollar Rate Advances. (A) During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all times
during each Interest Period for such Advance to the sum of (1) the
Eurodollar Rate for such Advance for such Interest Period and (2) the
Applicable Margin for such Advance in effect on the first day of such
Interest Period, payable in arrears on the last day of such Interest
Period and, if such Interest Period has a duration of more than three
months, on each day that occurs during such Interest Period every three
months from the first day of such Interest Period and on the date such
Eurodollar Rate Advance shall be Converted or paid in full.
(B) The Borrower shall pay to any Lender, if and so long as such
Lender shall be required under regulations of the Board of Governors of
the Federal Reserve System to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
additional interest on the unpaid principal amount of each Eurodollar Rate
Advance, from the date of such Advance until such principal amount is paid
in full, at an interest rate per annum equal at all times to the remainder
obtained by subtracting (1) the Eurodollar Rate for the Interest Period
from (2) the rate obtained by dividing the Eurodollar Rate by a percentage
equal to 100% minus the Eurodollar Rate Reserve Percentage for such
Interest Period, payable on each date on which interest is payable. Such
additional interest shall be determined by such Lender, which shall notify
the Borrower thereof.
(b) Default Interest. Upon the occurrence and during the continuance of an
Event of Default, the Borrower shall pay interest on (i) the unpaid principal
amount of each Advance owing to each Lender Party, payable in arrears on the
dates referred to in clause (i) or (ii) of Section 2.07(a), as applicable, and
on demand, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid on such Advance pursuant to clause (i) or (ii) of
Section 2.07(a), as applicable, and (ii) to the fullest extent permitted by
applicable law, the amount of any interest, fee or other amount payable under
this Agreement or any other Loan Document to any Agent or any Lender Party that
is not paid when due, from the date such amount shall be due until such amount
shall be paid in full, payable in arrears on the date such amount shall be paid
in full and on demand, at a rate per annum equal at all times to 2% per annum
above the rate per annum required to be paid, in the case of interest, on the
Type of Advance on which such interest has accrued pursuant to clause (i) or
(ii) of Section 2.07(a), as applicable, and, in all other cases, on Base Rate
Advances pursuant to Section 2.07(a)(i).
(c) Notice of Interest Rate. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.02(a), the Administrative Agent shall give
notice to the Borrower and each Lender of the applicable interest rate
determined by the Administrative Agent for purposes of clause (i) or (ii) of
Section 2.07(a), as applicable.
SECTION 2.08. Fees.
(a) Commitment Fee. The Borrower shall pay to the Administrative Agent for
the account of the Lenders a commitment fee (the "Commitment Fee") from the date
hereof in the case of each Initial Lender and from the effective date specified
in the Assignment and Acceptance pursuant to which it became a Lender in the
case of each other Lender until, in each case, the Termination Date, payable in
arrears quarterly on the last Business Day of each March, June, September and
December, commencing with the first such date to occur after the date hereof,
and on the Termination Date, at the Applicable Percentage in effect from time to
time on the average daily Unused Term Commitment of each Lender
37
and on the average daily Unused Working Capital Commitment of each Lender;
provided, however, that any Commitment Fee accrued with respect to any of the
Commitments of a Defaulting Lender during the period prior to the time such
Lender became a Defaulting Lender and unpaid at such time shall not be payable
by the Borrower so long as such Lender shall be a Defaulting Lender except to
the extent that such Commitment Fee shall otherwise have been due and payable by
the Borrower prior to such time; and provided further that no Commitment Fee
shall accrue on any of the Commitments of a Defaulting Lender so long as such
Lender shall be a Defaulting Lender.
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to the
Administrative Agent for the account of each Lender a commission, payable in
arrears quarterly on the last Business Day of each March, June, September and
December, commencing with the first such date to occur after the date hereof,
and on the earliest to occur of the full drawing, expiration, termination or
cancellation of any such Letter of Credit and on the Termination Date, on such
Lender's Pro Rata Share of the average daily aggregate Available Amount of all
Letters of Credit outstanding from time to time during such quarter at the
Applicable Margin for Eurodollar Rate Advances under the Working Capital
Facility; provided, however, that any commission accrued with respect to any of
the Commitments of a Defaulting Lender during the period prior to the time such
Lender became a Defaulting Lender and unpaid at such time shall not be payable
by the Borrower so long as such Lender shall be a Defaulting Lender except to
the extent that such commission shall otherwise have been due and payable by the
Borrower prior to such time; and provided further that no such commission shall
accrue on any of the Commitments of a Defaulting Lender so long as such Lender
shall be a Defaulting Lender.
(ii) The Borrower shall pay to the Issuing Bank, for its own
account, an issuance fee for each Letter of Credit in an amount equal to
0.125% of the Available Amount of such Letter of Credit on the date of
issuance of such Letter of Credit, payable on such date, and such other
commissions, fronting fees, transfer fees and other fees and charges in
connection with the issuance or administration of each Letter of Credit as
the Borrower and the Issuing Bank shall agree.
(c) Agents' Fees. The Borrower shall pay to each Agent for its own account
such fees as may from time to time be agreed between the Borrower and such
Agent.
SECTION 2.09. Conversion of Advances.
(a) Optional. The Borrower may on any Business Day, upon notice given to
the Administrative Agent not later than 11:00 A.M. (Charlotte, North Carolina
time) on the third Business Day prior to the date of the proposed Conversion in
the case of a Conversion into or in respect of Eurodollar Rate Advances, or
11:00 A.M. (Charlotte, North Carolina time) on the Business Day immediately
preceding the date of the proposed Conversion in the case of a Conversion of
Eurodollar Rate Advances into Base Rate Advances, and subject to the provisions
of Sections 2.07 and 2.10, Convert all or any portion of the Advances of one
Type comprising the same Borrowing into Advances of the other Type or having a
new Interest Period; provided, however, that:
(i) any Conversion of Eurodollar Rate Advances into Base Rate
Advances shall be made only on the last day of an Interest Period for such
Eurodollar Rate Advances;
(ii) any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be made only if no Default shall have occurred and be
continuing and shall be in an amount not less than the minimum amount
specified in Section 2.01;
38
(iii) no Conversion of any Advances shall result in more separate
Borrowings than permitted under Section 2.02(b); and
(iv) each Conversion of Advances comprising part of the same
Borrowing under any Facility shall be made among the Lenders in accordance
with their respective Pro Rata Shares of such Borrowing.
Each notice of a Conversion (a "Notice of Conversion") shall be delivered by
telephone, confirmed immediately in writing or by telecopier, in substantially
the form of Exhibit B-2 hereto, shall be duly executed by a Responsible Officer
of the Borrower, and shall, within the restrictions set forth in the immediately
preceding sentence, specify therein:
(A) the requested date of such Conversion (which shall be a Business
Day);
(B) the Advances requested to be Converted; and
(C) if such Conversion is into or in respect of Eurodollar Rate
Advances, the requested duration of the Interest Period for such
Eurodollar Rate Advances.
The Administrative Agent shall give each of the Lenders prompt notice of each
Notice of Conversion received by it by telecopier. Each Notice of Conversion
shall be irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $1,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" set forth in
Section 1.01, the Administrative Agent shall forthwith so notify the
Borrower and the Lenders, whereupon each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance.
(iii) Upon the occurrence and during the continuance of any Event of
Default, (A) each Eurodollar Rate Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base
Rate Advance and (B) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.10. Increased Costs, Etc.
(a) If, due to either (i) the introduction of or any change (other than
any change by way of the imposition of or increase in reserve requirements
included in the Eurodollar Rate Reserve Percentage) in or in the interpretation
or application of any Requirement of Law after the date of this Agreement or
(ii) the compliance with any directive, guideline or request from any central
bank or other Governmental Authority or any change therein or in the
interpretation, application, implementation, administration or enforcement
thereof, that, in any case under this clause (ii), becomes effective or is
issued or made after the date of this Agreement (whether or not having the force
of law), there shall be any increase in the cost to any of the Lender Parties of
agreeing to make or making, agreeing to participate in or participating in,
39
agreeing to renew or renewing or funding or maintaining any Advances of either
Type, or of agreeing to issue or of issuing or maintaining Letters of Credit or
of agreeing to make or of making or maintaining Letter of Credit Advances, or
any reduction in the amount owing to any of the Lender Parties or their
respective Applicable Lending Offices under this Agreement in respect of any
Advances of either Type (excluding, for purposes of this Section 2.10, any such
increased costs resulting from (A) Taxes or Other Taxes (as to which Section
2.12 shall govern), and (B) changes in the basis of taxation of overall net
income or overall gross income by the United States of America or the
jurisdiction under the laws of which such Lender Party is organized or has
either of its Applicable Lending Offices or any political subdivision thereof),
then the Borrower hereby agrees to pay, from time to time upon demand by such
Lender Party (with a copy of such demand to the Administrative Agent), to the
Administrative Agent for the account of such Lender Party additional amounts
sufficient to compensate or to reimburse such Lender Party for all such
increased costs or reduced amounts. A certificate of the Lender Party requesting
such additional compensation pursuant to this Section 2.10(a), submitted to the
Borrower by such Lender Party and specifying therein the amount of such
additional compensation, shall be conclusive and binding for all purposes,
absent manifest error. In determining any such additional compensation, such
Lender Party may use reasonable averaging and attribution methods. If any of the
Lenders requests additional compensation from the Borrower under this Section
2.10(a) in respect of its making, participating in or renewing Eurodollar Rate
Advances, the Borrower may, upon notice to such Lender (with a copy of such
notice to the Administrative Agent), suspend the obligation of such Lender to
make, participate in and/or renew Eurodollar Rate Advances until the
circumstances giving rise to such request no longer exist and, during such time,
all Eurodollar Rate Advances that would otherwise be made by such Lender as part
of any Borrowing shall be made instead as Base Rate Advances and all payments of
principal of and interest on such Base Rate Advances shall be made at the same
time as payments on the Eurodollar Rate Advances otherwise comprising part of
such Borrowing.
(b) If any of the Lender Parties determines that compliance with any
Requirement of Law or any directive, guideline or request from any central bank
or other Governmental Authority (whether or not having the force of law), or any
change therein or in the interpretation, application, implementation,
administration or enforcement thereof, that is enacted or becomes effective, or
is implemented or is first required or expected to be complied with, after the
date of this Agreement, affects the amount of capital required or expected to be
maintained by such Lender Party (or either of the Applicable Lending Offices of
such Lender Party) or by any Person controlling such Lender Party and that the
amount of such capital is increased by or is based upon the existence of the
commitment of such Lender Party to lend or to issue Letters of Credit hereunder
and other commitments of such type or the issuance or maintenance of the Letters
of Credit (or similar contingent obligations), then the Borrower hereby agrees
to pay, upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), to the Administrative Agent for the account of such
Lender Party, from time to time as specified by such Lender Party, additional
amounts sufficient to compensate such Lender Party or such Person in light of
such circumstances, to the extent that such Lender Party or such Person
reasonably determines such increase in capital to be allocable to the existence
of the commitment of such Lender Party to lend or to issue Letters of Credit
hereunder or to the issuance or maintenance of any Letter of Credit. A
certificate of the Lender Party requesting such additional compensation pursuant
to this Section 2.10(b), submitted to the Borrower by such Lender Party and
specifying therein the amount of such additional compensation, shall be
conclusive and binding for all purposes, absent manifest error. In determining
any such additional compensation, such Lender Party may use reasonable averaging
and attribution methods.
(c) If, with respect to any Eurodollar Rate Advances, the Required Lenders
at any time notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Lenders of making, participating in or renewing, or funding or
40
maintaining, their Eurodollar Rate Advances for such Interest Period, the
Administrative Agent shall forthwith so notify the Borrower and the Lenders,
whereupon (i) each such Eurodollar Rate Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base Rate
Advance and (ii) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended until the Administrative Agent
shall notify the Borrower (promptly following notice from the Lenders) that such
Lenders have determined that the circumstances causing such suspension no longer
exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other Governmental
Authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, upon notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance of such
Lender will automatically, on the last day of the then existing Interest Period
therefor, if permitted by applicable law, or otherwise upon demand Convert into
a Base Rate Advance and (ii) the obligation of the Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower that such Lender has determined
that the circumstances causing such suspension no longer exist. If the
obligation of a Lender to make Eurodollar Rate Advances is suspended pursuant to
this Section 2.10(d), then until the circumstances that gave rise to such
suspension no longer apply to such Lender, all Eurodollar Rate Advances that
would otherwise be made by such Lender as part of any Borrowing shall be made
instead as Base Rate Advances and all payments of principal of and interest on
such Base Rate Advances shall be made at the same time as payments on the
Eurodollar Rate Advances otherwise comprising part of such Borrowing.
(e) Each of the Lender Parties hereby agrees that, upon the occurrence of
any circumstances entitling such Lender Party to additional compensation or to
cease making, participating in or renewing, or funding or maintaining, Advances
of either Type under any of the foregoing provisions of this Section 2.10, such
Lender Party shall use reasonable efforts (consistent with its internal policy
and with legal and regulatory restrictions) to designate a different Applicable
Lending Office for any Advances affected by such circumstances if the making of
such designation, in the case of subsection (a) or (b) of this Section 2.10,
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue or, in the case of subsection (c) or (d) of this
Section 2.10, would allow such Lender Party to continue to perform its
obligations to make, to participate in or renew, or to fund or maintain,
Advances of such Type, and, in any such case, would not, in the reasonable
judgment of such Lender Party, be otherwise disadvantageous to such Lender
Party.
SECTION 2.11. Payments and Computations.
(a) The Borrower shall make each payment hereunder and under the Notes,
irrespective of any right of counterclaim or setoff (except as otherwise
provided in Section 2.15), not later than 12:00 Noon (Charlotte, North Carolina
time) on the day when due in U.S. dollars to the Administrative Agent at the
Administrative Agent's Account in same day funds. The Administrative Agent shall
promptly thereafter cause like funds to be distributed (i) if such payment by
the Borrower is in respect of principal, interest, Commitment Fees or any other
Obligation then payable hereunder and under the Notes to more than one Lender
Party, to such Lender Parties for the accounts of their respective Applicable
Lending Offices in accordance with their respective Pro Rata Shares of the
amounts of such respective Obligations payable to such Lender Parties at such
time and (ii) if such payment by the Borrower is in respect of any Obligation
then payable hereunder solely to one Lender Party, to such Lender Party for the
account of its
41
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 9.07(d), from and after the effective date of such Assignment and
Acceptance, the Administrative Agent shall make all payments hereunder and under
the Notes in respect of the interest assigned thereby to the Lender Party
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender Party, if and to the extent
payment owed to such Lender Party is not made when due hereunder or, in the case
of a Lender, under the Note held by such Lender, to charge from time to time
against any or all of the Borrower's accounts with such Lender Party any amount
so due.
(c) All computations of interest, fees and Letter of Credit commissions
shall be made by the Administrative Agent on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by the Administrative Agent of an
interest rate, fee or commission hereunder shall be conclusive and binding for
all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, that if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
succeeding calendar month, such payment shall be made on the immediately
preceding Business Day.
(e) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to any Lender Party
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the amount due such Lender Party on such
date. If and to the extent the Borrower shall not have so made such payment in
full to the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party, together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
(f) Whenever any payment received by the Administrative Agent under this
Agreement or any of the other Loan Documents is insufficient to pay in full all
amounts due and payable to the Agents and the Lender Parties under or in respect
of this Agreement and the other Loan Documents on any date, such payment shall
be distributed by the Administrative Agent and applied by the Agents and the
Lender Parties in the following order of priority:
(i) first, to the payment of all of the fees, indemnification
payments, costs and expenses that are due and payable to the Agents
(solely in their respective capacities as Agents) under or in respect of
this Agreement or any of the other Loan Documents on such date, ratably
based upon the respective aggregate amounts of all such fees,
indemnification payments, costs and expenses owing to the Agents on such
date;
42
(ii) second, to the payment of all of the fees, indemnification
payments, costs and expenses that are due and payable to the Issuing Bank
(solely in its capacity as such) under or in respect of this Agreement or
any of the other Loan Documents on such date, ratably based upon the
respective aggregate amounts of all such fees, indemnification payments,
costs and expenses owing to the Issuing Bank on such date;
(iii) third, to the payment of all of the indemnification payments,
costs and expenses that are due and payable to the Lenders under Section
9.04, Section 12 of the Subsidiary Guaranty, Section 19 of the Security
Agreement or the applicable Section of any of the other Loan Documents on
such date, ratably based upon the respective aggregate amounts of all such
indemnification payments, costs and expenses owing to the Lenders on such
date;
(iv) fourth, to the payment of all of the amounts that are due and
payable to the Administrative Agent and the Lender Parties under Sections
2.10 and 2.12 or Section 5 of the Subsidiary Guaranty on such date,
ratably based upon the respective aggregate amounts thereof owing to the
Administrative Agent and the Lender Parties on such date;
(v) fifth, to the payment of all of the Commitment Fees that are due
and payable to the Lenders under Section 2.08(a) on such date, ratably
based upon the respective aggregate Commitments of the Lenders under the
Facilities on such date;
(vi) sixth, to the payment of all of the accrued and unpaid interest
on the Obligations of the Borrower under or in respect of the Loan
Documents that is due and payable to the Administrative Agent and the
Lender Parties under Section 2.07(b) on such date, ratably based upon the
respective aggregate amounts of all such interest owing to the
Administrative Agent and the Lender Parties on such date;
(vii) seventh, to the payment of all of the accrued and unpaid
interest on the Advances that is due and payable to the Administrative
Agent and the Lender Parties under Section 2.07(a) on such date, ratably
based upon the respective aggregate amounts of all such interest owing to
the Administrative Agent and the Lender Parties on such date;
(viii) eighth, to the payment of the principal amount of all of the
outstanding Advances that is due and payable to the Administrative Agent
and the Lender Parties on such date, ratably based upon the respective
aggregate amounts of all such principal owing to the Administrative Agent
and the Lender Parties on such date; and
(ix) ninth, to the payment of all other Obligations of the Loan
Parties owing under or in respect of the Loan Documents that are due and
payable to the Administrative Agent and the other Secured Parties on such
date, ratably based upon the respective aggregate amounts of all such
Obligations owing to the Administrative Agent and the other Secured
Parties on such date.
SECTION 2.12. Taxes.
(a) Any and all payments by the Borrower hereunder or under the Notes
shall be made, in accordance with Section 2.11, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender Party and each Agent, taxes that are imposed on its
overall net income by the United States and taxes that are imposed on its
overall net income (and franchise taxes
43
imposed in lieu thereof) by the state or foreign jurisdiction under the laws of
which such Lender Party or such Agent, as the case may be, is organized or is a
resident, or has a fixed place of business or a permanent establishment, or any
political subdivision of any of the foregoing, and, in the case of each Lender
Party, taxes that are imposed on its overall net income (and franchise taxes
imposed in lieu thereof) by the state or foreign jurisdiction of either of its
Applicable Lending Offices or any political subdivision thereof (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes being,
collectively, "Taxes"). If the Borrower shall be required under applicable
Requirements of Law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Lender Party or any Agent, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.12) such Lender Party or such Agent, as the case may be, receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall
pay the full amount deducted to the relevant taxation authority or other
Governmental Authority in accordance with applicable Requirements of Law.
(b) In addition, the Borrower shall pay any present or future stamp,
recording, documentary, excise, property or similar taxes, charges or levies
that arise from any payment made hereunder or under the Notes or from the
execution, delivery or registration of, any performance under, or otherwise with
respect to, this Agreement or the Notes (collectively, "Other Taxes").
(c) The Borrower shall indemnify each Lender Party and each Agent for the
full amount of Taxes and Other Taxes, and for the full amount of taxes of any
kind imposed by any jurisdiction on amounts payable under this Section 2.12,
imposed on or paid by such Lender Party or such Agent, as the case may be, and
any liability (including penalties, additions to tax, interest and expenses)
arising therefrom or with respect thereto. The indemnity by the Borrower
provided for in this Section 2.12(c) shall apply and be made whether or not the
Taxes or Other Taxes for which indemnification hereunder is sought have been
correctly or legally asserted; provided, however, that such Lender or such Agent
seeking such indemnification shall take all reasonable actions (consistent with
its internal policy and legal and regulatory restrictions) requested by the
Borrower to assist the Borrower in recovering the amounts paid thereby pursuant
to this Section 2.12(c) from the relevant taxation authority or other
Governmental Authority. Amounts payable by the Borrower under the indemnity set
forth in this Section 2.12(c) shall be paid within 30 days from the date on
which the applicable Lender or Agent, as the case may be, makes written demand
therefor.
(d) Within 30 days after the date of any payment of Taxes, the Borrower
shall furnish to the Administrative Agent, at its address referred to in Section
9.02, the original or a certified copy of a receipt evidencing payment thereof,
to the extent such a receipt is issued therefor, or other written proof of
payment thereof that is reasonably satisfactory to the Administrative Agent. In
the case of any payment hereunder or under the Notes by or on behalf of the
Borrower through an account or branch outside the United States, or on behalf of
the Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Administrative Agent, at
its address referred to in Section 9.02, an opinion of counsel reasonably
acceptable to the Administrative Agent stating that such payment is exempt from
Taxes. For purposes of this Section 2.12(d) and Section 2.12(e), the terms
"United States" and "United States person" shall have the meanings specified in
Section 7701 of the Internal Revenue Code.
(e) Each Lender Party organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date of its execution and delivery
of this Agreement in the case of each Initial
44
Lender or Initial Issuing Bank, as the case may be, and on the date of the
Assignment and Acceptance pursuant to which it becomes a Lender Party in the
case of each other Lender Party, and from time to time thereafter as reasonably
requested in writing by the Borrower (but only so long thereafter as such Lender
Party remains lawfully able to do so), provide each of the Administrative Agent
and the Borrower with two original Internal Revenue Service forms 1001 or 4224,
or any successor or other form prescribed by the Internal Revenue Service,
certifying that such Lender Party is exempt from or entitled to a reduced rate
of United States withholding tax on payments pursuant to this Agreement or the
Notes. If the forms provided by a Lender Party at the time such Lender Party
first becomes a party to this Agreement indicate a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from Taxes unless and until such Lender Party provides the
appropriate form certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Taxes for periods
governed by such form; provided, however, that, if at the date of the Assignment
and Acceptance pursuant to which a Lender Party becomes a party to this
Agreement, the Lender Party assignor was entitled to payments under Section
2.12(a) in respect of United States withholding tax with respect to interest
paid at such date, then, to such extent, the term "Taxes" shall include (in
addition to withholding taxes that may be imposed in the future or other amounts
otherwise includable in Taxes) United States withholding tax, if any, applicable
with respect to the Lender Party assignee on such date. If any form or document
referred to in this Section 2.12(e) requires the disclosure of information,
other than information necessary to compute the tax payable and information
required on the date hereof by Internal Revenue Service form 1001 or 4224, that
the Lender Party reasonably considers to be confidential, the Lender Party shall
give notice thereof to the Borrower and shall not be obligated to include in
such form or document such confidential information.
(f) For any period with respect to which a Lender Party has failed to
provide the Borrower with the appropriate form, certificate or other document
described in Section 2.12(e) (other than if such failure is due to a change in
the applicable Requirements of Law, or in the interpretation or application
thereof, occurring after the date on which a form, certificate or other document
originally was required to be provided or if such form, certificate or other
document otherwise is not required under Section 2.12(e)), such Lender Party
shall not be entitled to indemnification under subsection (a) or (c) of this
Section 2.12 with respect to Taxes imposed by the United States by reason of
such failure; provided, however, that should a Lender Party become subject to
Taxes because of its failure to deliver a form, certificate or other document
required hereunder, the Borrower shall take such steps as such Lender Party
shall reasonably request to assist such Lender Party in recovering such Taxes.
(g) Each of the Lender Parties hereby agrees that, upon the occurrence of
any circumstances entitling such Lender Party to additional amounts pursuant to
this Section 2.12, such Lender Party shall use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such a change would avoid
the need for, or reduce the amount of, any such additional amounts that may
thereafter accrue and would not, in the reasonable judgment of such Lender
Party, be otherwise disadvantageous to such Lender Party.
SECTION 2.13. Sharing of Payments, Etc.
If any Lender Party shall obtain at any time any payment (whether
voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) (a) on account of Obligations due and payable to such Lender Party
under or in respect of this Agreement or any of the other Loan Documents at such
time in excess of its ratable share (according to the proportion of (i) the
amount of such Obligations due and payable to such Lender Party at such time
(other than pursuant to Section 2.10, 2.12, 9.04 or 9.07) to (ii) the aggregate
amount of the Obligations due and payable to all Lender Parties at such time) of
payments
45
on account of the Obligations due and payable to all Lender Parties under or in
respect of this Agreement and the other Loan Documents at such time obtained by
all the Lender Parties at such time or (b) on account of Obligations owing (but
not due and payable) to such Lender Party under or in respect of this Agreement
or any of the other Loan Documents at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations owing to such
Lender Party at such time (other than pursuant to Section 2.10, 2.12, 9.04 or
9.07) to (ii) the aggregate amount of the Obligations owing (but not due and
payable) to all Lender Parties under or in respect of this Agreement and the
other Loan Documents at such time) of payments on account of the Obligations
owing (but not due and payable) to all Lender Parties under or in respect of
this Agreement and the other Loan Documents at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such participations in the Obligations due and payable or
owing to them, as the case may be, as shall be necessary to cause such
purchasing Lender Party to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender Party, such purchase from each
other Lender Party shall be rescinded and such other Lender Party shall repay to
the purchasing Lender Party the purchase price to the extent of such Lender
Party's ratable share (according to the proportion of (A) the purchase price
paid to such Lender Party to (B) the aggregate purchase price paid to all Lender
Parties) of such recovery, together with an amount equal to such Lender Party's
ratable share (according to the proportion of (1) the amount of such other
Lender Party's required repayment to (2) the total amount so recovered from the
purchasing Lender Party) of any interest or other amount paid or payable by the
purchasing Lender Party in respect of the total amount so recovered. The
Borrower hereby agrees that any Lender Party so purchasing a participation from
another Lender Party pursuant to this Section 2.13 may, to the fullest extent
permitted under applicable Requirements of Law, exercise all its rights of
payment (including the right of setoff) with respect to such participation as
fully as if such Lender Party were the direct creditor of the Borrower in the
amount of such participation.
SECTION 2.14. Use of Proceeds.
The proceeds of the Advances and issuances of Letters of Credit shall be
available (and the Borrower agrees that it shall use such proceeds and Letters
of Credit) solely to refinance certain Debt of the Parent, the Borrower and the
Parent's other Subsidiaries outstanding on the date of the Initial Extension of
Credit, to finance Permitted Acquisitions, to pay fees and expenses incurred in
connection with the consummation of the Transaction and to provide working
capital from time to time to the Parent, the Borrower and the Parent's other
Subsidiaries.
SECTION 2.15. Defaulting Lenders.
(a) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Advance to
the Borrower and (iii) the Borrower shall be required to make any payment
hereunder or under any other Loan Document to or for the account of such
Defaulting Lender, then the Borrower may, so long as no Default shall occur or
be continuing at such time and to the fullest extent permitted by applicable
law, set off and otherwise apply the Obligation of the Borrower to make such
payment to or for the account of such Defaulting Lender against the obligation
of such Defaulting Lender to make such Defaulted Advance. In the event that, on
any date, the Borrower shall so set off and otherwise apply its Obligation to
make any such payment against the obligation of such Defaulting Lender to make
any such Defaulted Advance on or prior to such date, the amount so set off and
otherwise applied by the Borrower shall constitute for all purposes of this
Agreement and the other Loan Documents an Advance by such Defaulting Lender made
on the date under the Facility pursuant to which such Defaulted Advance was
originally required to have been made
46
pursuant to Section 2.01. Such Advance shall be a Base Rate Advance and shall be
considered, for all purposes of this Agreement, to comprise part of the
Borrowing in connection with which such Defaulted Advance was originally
required to have been made pursuant to Section 2.01, even if the other Advances
comprising such Borrowing shall be Eurodollar Rate Advances on the date such
Advance is deemed to be made pursuant to this Section 2.15(a). The Borrower
shall notify the Administrative Agent at any time the Borrower exercises its
right of setoff pursuant to this Section 2.15(a) and shall set forth in such
notice (A) the name of the Defaulting Lender and the Defaulted Advance required
to be made by such Defaulting Lender and (B) the amount set off and otherwise
applied in respect of such Defaulted Advance pursuant to this Section 2.15(a).
Any portion of such payment otherwise required to be made by the Borrower to or
for the account of such Defaulting Lender which is paid by the Borrower, after
giving effect to the amount set off and otherwise applied by the Borrower
pursuant to this Section 2.15(a), shall be applied by the Administrative Agent
as specified in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
the Administrative Agent or any of the other Lender Parties and (iii) the
Borrower shall make any payment hereunder or under any other Loan Document to
the Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Lender
Parties and to the fullest extent permitted by applicable law, apply at such
time the amount so paid by the Borrower to or for the account of such Defaulting
Lender to the payment of each such Defaulted Amount to the extent required to
pay such Defaulted Amount. In the event that the Administrative Agent shall so
apply any such amount to the payment of any such Defaulted Amount on any date,
the amount so applied by the Administrative Agent shall constitute for all
purposes of this Agreement and the other Loan Documents payment, to such extent,
of such Defaulted Amount on such date. Any such amount so applied by the
Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Lender Parties, ratably in
accordance with the respective portions of such Defaulted Amounts payable at
such time to the Administrative Agent and such other Lender Parties and, if the
amount of such payment made by the Borrower shall at such time be insufficient
to pay all Defaulted Amounts owing at such time to the Administrative Agent and
the other Lender Parties, in the following order of priority:
(i) first, to the Administrative Agent for any Defaulted Amount then
owing to the Administrative Agent; and
(ii) second, to any other Lender Parties for any Defaulted Amounts
then owing to such other Lender Parties, ratably in accordance with such
respective Defaulted Amounts then owing to such other Lender Parties.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining after giving effect to the amount applied by the
Administrative Agent pursuant to this Section 2.15(b) shall be applied by the
Administrative Agent as specified in Section 2.15(c).
(c) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance
or a Defaulted Amount and (iii) the Borrower, the Administrative Agent or any
other Lender Party shall be required to pay or distribute any amount hereunder
or under any other Loan Document to or for the account of such Defaulting
Lender, then the Borrower or such other Lender Party shall pay such amount to
the Administrative Agent to be held by the Administrative Agent, to the fullest
extent permitted by applicable law, in escrow or the Administrative Agent shall,
to the fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Administrative Agent in escrow under
this Section 2.15(c)
47
shall be deposited by the Administrative Agent in an account with Bank of
America, in the name and under the control of the Administrative Agent, but
subject to the provisions of this Section 2.15(c). The terms applicable to such
account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be Bank of America's standard
terms applicable to escrow accounts maintained with it. Any interest credited to
such account from time to time shall be held by the Administrative Agent in
escrow under, and applied by the Administrative Agent from time to time in
accordance with the provisions of, this Section 2.15(c). The Administrative
Agent shall, to the fullest extent permitted by applicable law, apply all funds
so held in escrow from time to time to the extent necessary to make any Advances
required to be made by such Defaulting Lender and to pay any amount payable by
such Defaulting Lender hereunder and under the other Loan Documents to the
Administrative Agent or any other Lender Party, as and when such Advances or
amounts are required to be made or paid and, if the amount so held in escrow
shall at any time be insufficient to make and pay all such Advances and amounts
required to be made or paid at such time, in the following order of priority:
(i) first, to the Administrative Agent for any amount then due and
payable by such Defaulting Lender to the Administrative Agent hereunder;
(ii) second, to any other Lender Parties for any amount then due and
payable by such Defaulting Lender to such other Lender Parties hereunder,
ratably in accordance with such respective amounts then due and payable to
such other Lender Parties; and
(iii) third, to the Borrower for any Advance then required to be
made by such Defaulting Lender pursuant to a Commitment of such Defaulting
Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such time under
this Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under this Section
2.15 are in addition to other rights and remedies that the Borrower may have
against such Defaulting Lender with respect to any Defaulted Advance and that
the Administrative Agent or any Lender Party may have against such Defaulting
Lender with respect to any Defaulted Amount.
SECTION 2.16. Removal of a Lender Party.
In the event that any Lender Party (a) demands payment of costs or
additional amounts pursuant to Section 2.10 or Section 2.12 or (b) notifies the
Borrower that such Lender Party is entitled to additional interest pursuant to
and in accordance with the provisions of Section 2.07(ii)(B), then (subject to
such Lender Party's right to rescind such demand within 10 days after the notice
from the Borrower referred to below) the Borrower may, upon 20 days prior
written notice to such Lender Party and the Administrative Agent, elect to cause
such Lender Party to assign its Advances and Commitments in full to an assignee
institution selected by the Borrower that meets the criteria of an Eligible
Assignee and is reasonably satisfactory to the Administrative Agent, so long as
such Lender Party receives payment in full in cash of the outstanding principal
amount of all Advances made by it and all accrued and unpaid interest thereon
and all other amounts then due and payable to such Lender Party as of the date
of such assignment (including, without limitation, amounts owing pursuant to
Section 2.10 or Section 2.12), and in such case
48
such Lender Party agrees to make such assignment and assume all obligations of
such Lender Party hereunder, in accordance with Section 9.07.
ARTICLE III
CONDITIONS OF LENDING AND
ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01. Conditions Precedent to Initial Extension of Credit.
The obligation of each Lender to make an Advance or of the Issuing Bank to
issue a Letter of Credit on the occasion of the Initial Extension of Credit
hereunder is subject to the satisfaction of the following conditions precedent
before or concurrently with the Initial Extension of Credit:
(a) The Administrative Agent shall have received on or before the
day of the Initial Extension of Credit the following, each dated such day
(unless otherwise specified), in form and substance satisfactory to the
Administrative Agent (unless otherwise specified) and (except for the
Notes) in sufficient copies for each Lender Party:
(i) The Notes payable to the order of the Lenders.
(ii) An amended and restated security agreement in
substantially the form of Exhibit D hereto (together with each other
security agreement and security agreement supplement delivered
pursuant to Section 5.01(j), in each case as amended, the "Security
Agreement"), duly executed by each Loan Party, together with:
(A) certificates representing the Pledged Shares
referred to therein, accompanied by undated stock powers
executed in blank, and instruments evidencing the Pledged Debt
referred to therein, indorsed in blank,
(B) executed copies of Uniform Commercial Code financing
statements, or amendments thereto, to be filed under the
Uniform Commercial Code of all jurisdictions that the
Administrative Agent may deem necessary or desirable in order
to perfect and protect the first priority liens and security
interests created under the Security Agreement, covering the
Collateral described in the Security Agreement,
(C) completed requests for information, dated on or
before the date of the Initial Extension of Credit, listing
the financing statements referred to in clause (B) above and
all other effective financing statements filed in the
jurisdictions referred to in clause (B) above that name any
Loan Party as debtor, together with copies of such other
financing statements,
(D) evidence of the completion of all other recordings
and filings of or with respect to the Security Agreement that
the Administrative Agent may deem necessary or desirable in
order to perfect and protect the Liens created thereby, and
49
(E) evidence that all other action that the
Administrative Agent may deem necessary or desirable in order
to perfect and protect the first priority liens and security
interests created under the Security Agreement has been taken
(including, without limitation, receipt of duly executed
payoff letters, UCC-3 termination statements and landlords'
and bailees' waiver and consent agreements.
(iii) An amended and restated guaranty in substantially the
form of Exhibit E hereto (together with each other guaranty and
guaranty supplement delivered pursuant to Section 5.01(j), in each
case as amended, the "Subsidiary Guaranty"), duly executed by each
Subsidiary Guarantor.
(iv) Certified copies of the resolutions of the Board of
Directors of each Loan Party approving the Transaction and the other
transactions contemplated by the Loan Documents and each Loan
Document to which it is or is to be a party, and of all documents
evidencing other necessary corporate action and governmental and
other third party approvals and consents, if any, with respect to
the Transaction and the other transactions contemplated by the Loan
Documents and each Loan Document to which it is or is to be a party.
(v) A copy of a certificate of the Secretary of State of the
jurisdiction of incorporation of each Loan Party, dated reasonably
near the date of the Initial Extension of Credit, certifying (A) as
to a true and correct copy of the charter of such Loan Party and
each amendment thereto on file in such Secretary's office and (B)
that (1) such amendments are the only amendments to such Loan
Party's charter on file in such Secretary's office, (2) such Loan
Party has paid all franchise taxes to the date of such certificate
and (C) such Loan Party is duly incorporated and in good standing or
presently subsisting under the laws of the state of the jurisdiction
of its incorporation.
(vi) A copy of a certificate of the Secretary of State of
each jurisdiction in which a Loan Party has qualified as a foreign
corporation, dated reasonably near the date of the Initial Extension
of Credit, stating that such Loan Party is duly qualified and in
good standing as a foreign corporation in such state and has filed
all annual reports required to be filed to the date of such
certificate.
(vii) A certificate of each Loan Party, signed on behalf of
such Loan Party by a Responsible Officer of such Loan Party, dated
the date of the Initial Extension of Credit (the statements made in
which certificate shall be true on and as of the date of the Initial
Extension of Credit), certifying as to (A) the absence of any
amendments to the charter of such Loan Party since the date of the
Secretary of State's certificate referred to in Section 3.01(a)(v),
(B) a true and correct copy of the bylaws of such Loan Party as in
effect on the date on which the resolutions referred to in Section
3.01(a)(iv) were adopted and on the date of the Initial Extension of
Credit or, if the bylaws of such Loan Party are unchanged from the
bylaws previously provided to the Administrative Agent in connection
with the Existing Credit Agreement, a statement so certifying, (C)
the due incorporation and good standing or valid existence of such
Loan Party as a corporation organized under the laws of the
jurisdiction of its incorporation, and the absence of any proceeding
for the dissolution or liquidation of such Loan Party, (D) the truth
of the representations and warranties contained in the Loan
Documents as though made on and
50
as of the date of the Initial Extension of Credit and (E) the
absence of any event occurring and continuing, or resulting from the
Initial Extension of Credit, that constitutes a Default.
(viii) A certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying the names and true
signatures of the officers of such Loan Party authorized to sign
each Loan Document to which it is or is to be a party and the other
documents to be delivered hereunder and thereunder.
(ix) Certified copies of each of the Related Documents, duly
executed by the parties thereto and in form and substance
satisfactory to the Lender Parties, or, if the Related Documents are
unchanged from the Related Documents provided to the Administrative
Agent in connection with the Existing Credit Agreement, a statement
so certifying, together with all agreements, instruments and other
documents delivered in connection therewith as the Administrative
Agent shall request.
(x) Certificates, in substantially the form of Exhibit G
hereto, respectively, attesting to the Solvency of each Loan Party
before and after giving effect to the Transaction and the other
transactions contemplated by the Loan Documents, from its Principal
Financial Officer.
(xi) Such financial, business and other information regarding
each Loan Party and its Subsidiaries as the Lender Parties shall
have requested, including, without limitation, information as to
possible contingent liabilities, tax matters, environmental matters,
obligations under collective bargaining agreements and other
arrangements with employees, audited annual financial statements
dated December 31, 2000, and interim financial statements dated the
end of the most recent fiscal quarter for which financial statements
are available (or, in the event the Lender Parties' due diligence
review reveals material changes since such financial statements, as
of a later date within 45 days of the date of the Initial Extension
of Credit).
(xii) Evidence of insurance naming the Collateral Agent as
additional insured and loss payee with such responsible and
reputable insurance companies or associations, and in such amounts
and covering such risks, as is satisfactory to the Lender Parties.
(xiii) Certified copies of all Material Contracts of each Loan
Party and its Subsidiaries as the Administrative Agent shall
request.
(xiv) A favorable opinion of King & Spalding, counsel for the
Loan Parties, in substantially the form of Exhibit F-1 hereto and as
to such other matters as any Lender Party through the Administrative
Agent may reasonably request.
(xv) A favorable opinion of Meyer, Suozzi, English & Xxxxx,
P.C., Blank Rome Xxxxxxx & XxXxxxxx LLP, Xxxxxx Xxxxxxx, P.A., and
Xxxxx Xxxx LLP, local counsel to the Lender Parties in New York, New
Jersey and Pennsylvania, Arizona, and Virginia, respectively, in
substantially the forms of Exhibits F-2, F-3, F-4, and F-5, hereto,
respectively, and as to such other matters as any Lender Party
through the Administrative Agent may reasonably request.
51
(b) The Lender Parties shall be satisfied that, upon application
of the proceeds of the Initial Extension of Credit, all Existing Debt,
other than the Debt identified on Schedule 4.01(s) hereto (the "Surviving
Debt"), has been repaid, redeemed or defeased in full or otherwise
satisfied and extinguished and that all Surviving Debt shall be on terms
and conditions satisfactory to the Lender Parties.
(c) There shall exist no action, suit, investigation, litigation
or proceeding affecting any Loan Party or any of its Subsidiaries pending
or threatened before any court, governmental agency or arbitrator that (i)
could be reasonably likely to have a Material Adverse Effect other than
the matters described on Schedule 4.01(f) hereto (the "Disclosed
Litigation") or (ii) purports to affect the legality, validity or
enforceability of any Loan Document or the consummation of the Transaction
or the other transactions contemplated by the Loan Documents, and there
shall have been no adverse change in the status, or financial effect on
any Loan Party or any of its Subsidiaries, of the Disclosed Litigation
from that described on Schedule 4.01(f) hereto.
(d) All governmental and third party consents and approvals
necessary in connection with the Transaction and the other transactions
contemplated by the Loan Documents shall have been obtained (without the
imposition of any conditions that are not acceptable to the Lender
Parties) and shall remain in effect; all applicable waiting periods in
connection with the Transaction and the other transactions contemplated by
the Loan Documents shall have expired without any action being taken by
any competent authority, and no law or regulation shall be applicable in
the judgment of the Lender Parties, in each case that restrains, prevents
or imposes materially adverse conditions upon the Transaction or the other
transactions contemplated by the Loan Documents or the rights of the Loan
Parties or their Subsidiaries freely to transfer or otherwise dispose of,
or to create any Lien on, any properties now owned or hereafter acquired
by any of them.
(e) The Borrower shall have paid, or shall pay with the proceeds
of the Initial Extension of Credit, all accrued fees of the Agents and the
Lender Parties and all accrued expenses of the Agents (including the
accrued fees and expenses of counsel to the Administrative Agent and local
counsel to the Lender Parties).
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance and
Renewal.
The obligation of each Lender to make an Advance (other than a Letter of
Credit Advance made by the Issuing Bank or a Lender pursuant to Section 2.03(c),
on the occasion of each Borrowing (including the initial Borrowing), and the
obligation of the Issuing Bank to issue a Letter of Credit (including the
initial issuance) or renew a Letter of Credit, shall be subject to the further
conditions precedent that on the date of such Borrowing or issuance or renewal
(a) the following statements shall be true (and each of the giving of the
applicable Notice of Borrowing, Notice of Issuance or Notice of Renewal and the
acceptance by the Borrower of the proceeds of such Borrowing or of such Letter
of Credit or the renewal of such Letter of Credit shall constitute a
representation and warranty by the Borrower that both on the date of such notice
and on the date of such Borrowing or issuance or renewal such statements are
true):
(i) the representations and warranties contained in each Loan
Document are correct, in all material respects, on and as of such date,
before and after giving effect to such Borrowing or issuance or renewal
and to the application of the proceeds therefrom, as though made on and as
of such date, other than any such representations or warranties that, by
their terms, refer to a
52
specific date other than the date of such Borrowing or issuance or
renewal, in which case as of such specific date; and
(ii) no Default has occurred and is continuing, or would result
from such Borrowing or issuance or renewal or from the application of the
proceeds therefrom;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Lender Party through the Administrative Agent may
reasonably request.
SECTION 3.03. Determinations Under Section 3.01.
For purposes of determining compliance with the conditions specified in
Section 3.01, each Lender Party shall be deemed to have consented to, approved
or accepted or to be satisfied with each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to
the Lender Parties unless an officer of the Administrative Agent responsible for
the transactions contemplated by the Loan Documents shall have received notice
from such Lender Party prior to the Initial Extension of Credit specifying its
objection thereto and, if the Initial Extension of Credit consists of a
Borrowing, such Lender Party shall not have made available to the Administrative
Agent such Lender Party's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:
(a) Each Loan Party and each of its Subsidiaries (i) is a
corporation, partnership or limited liability company duly organized,
validly existing and in good standing under the laws of the jurisdiction
of its incorporation or organization, (ii) is duly qualified and in good
standing as a foreign corporation, partnership or limited liability
company in each other jurisdiction in which it owns or leases property or
in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed could not
be reasonably likely to have a Material Adverse Effect and (iii) has all
requisite power (corporate or otherwise) and authority (including, without
limitation, all governmental licenses, permits and other approvals) to own
or lease and operate its properties and to carry on its business as now
conducted and as proposed to be conducted. All of the outstanding Pledged
Shares of the Borrower have been validly issued, are fully paid and
non-assessable and are owned by the Parent free and clear of all Liens,
except those created under the Collateral Documents.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of each of the Parent's Subsidiaries, showing as of the date
hereof (as to each such Subsidiary) the jurisdiction of its incorporation,
the number of shares of each class of its Equity Interests authorized, and
the number outstanding on the date hereof and the percentage of each such
class of its Equity Interests owned by each direct and indirect parent of
such Subsidiary and the number of shares covered by all outstanding
options, warrants, rights of conversion or purchase and similar rights at
the date hereof. All of the outstanding Pledged Shares of each such
Subsidiary (other than
53
Main Line MSO, Ltd.) have been validly issued and are fully paid and
non-assessable; the Pledged Shares constituting the partnership interest
in Main Line MSO, Ltd. have been duly issued and validly created and are
validly existing. All such Pledged Shares are owned by one or more Loan
Parties free and clear of all Liens, except (i) those created under the
Collateral Documents, (ii) restrictions on transfer of common stock of
Main Line MSO, Inc. contained in the Shareholders' Agreement dated July
16, 1997 among Main Line MSO, Inc., Main Line MSO, Ltd., The Main Line
Multispecialty Group, P.C. and the Parent and (iii) restrictions on
transfer of partnership interests in Main Line MSO, Ltd. contained in the
Agreement of Limited Partnership of Main Line MSO, Ltd. dated as of July
16, 1997 among Main Line MSO, Inc., The Main Line Specialty Group, P.C.
and the Parent.
(c) The execution, delivery and performance by each Loan Party of
each Loan Document to which it is or is to be a party, and the
consummation of the Transaction and the other transactions contemplated by
the Loan Documents, are within such Loan Party's powers (corporate or
otherwise), have been duly authorized by all necessary action (corporate
or otherwise), and do not (i) contravene such Loan Party's charter or
bylaws or similar organizational documents, (ii) violate any law, rule,
regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree, determination or award, (iii) conflict with or result
in the breach of, or constitute a default under, any material contract,
loan agreement, indenture, mortgage, deed of trust, material lease or
other material instrument binding on or affecting any Loan Party, any of
its Subsidiaries or any of their properties or (iv) except for the Liens
created under the Loan Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of
any Loan Party or any of its Subsidiaries. No Loan Party or any of its
Subsidiaries is in violation of any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or in breach of
any such contract, loan agreement, indenture, mortgage, deed of trust,
lease or other instrument, the violation or breach of which could be
reasonably likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no notice
to or filing with, any Governmental Authority or regulatory body or any
other third party is required for (i) the due execution, delivery,
recordation, filing or performance by any Loan Party of any Loan Document
to which it is or is to be a party, or for the consummation of the
Transaction or the other transactions contemplated by the Loan Documents,
(ii) the grant by any Loan Party of the Liens granted by it pursuant to
the Collateral Documents, (iii) the perfection or maintenance of the Liens
created under the Collateral Documents (including the first priority
nature thereof) or (iv) the exercise by any Agent or any Lender Party of
its rights under the Loan Documents or the remedies in respect of the
Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings listed on Schedule
4.01(d) hereto, all of which have been duly obtained, taken, given or made
and are in full force and effect.
(e) This Agreement has been, and each other Loan Document when
delivered hereunder will have been, duly executed and delivered by each
Loan Party party thereto. This Agreement is, and each other Loan Document
when delivered hereunder will be, the legal, valid and binding obligation
of each Loan Party party thereto, enforceable against such Loan Party in
accordance with its terms.
(f) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries, including
any Environmental Action, pending or threatened
54
before any court, governmental agency or arbitrator that (i) could be
reasonably likely to have a Material Adverse Effect (other than the
Disclosed Litigation) or (ii) purports to affect the legality, validity or
enforceability of any Loan Document or the consummation of the Transaction
or the other transactions contemplated by the Loan Documents, and there
has been no adverse change in the status, or financial effect on any Loan
Party or any of its Subsidiaries, of or pursuant to the Disclosed
Litigation from that described on Schedule 4.01(f) hereto.
(g) The consolidated and consolidating balance sheets of the
Consolidated Group as at December 31, 2000, and the related consolidated
and consolidating statements of income and consolidated statement of cash
flows of the Consolidated Group for the Fiscal Year then ended,
accompanied by an unqualified opinion of Deloitte & Touche, independent
public accountants, and the consolidated and consolidating balance sheets
of the Consolidated Group as at March 31, 2001, and the related
consolidated and consolidating statements of income and consolidated
statement of cash flows of the Consolidated Group for the period then
ended, duly certified by a Responsible Officer of the Borrower, copies of
which have been furnished to each Lender Party, fairly present, subject,
in the case of said balance sheet as at March 31, 2001 and said statements
of income and cash flows for the period then ended, to year-end audit
adjustments, the consolidated and consolidating financial condition of the
Consolidated Group as at such dates and the consolidated and consolidating
results of operations of the Consolidated Group for the periods ended on
such dates, all in accordance with generally accepted accounting
principles applied on a consistent basis; and since December 31, 2000,
there has been no Material Adverse Change.
(h) Neither the Information Memorandum nor any other information,
exhibit or report furnished by or on behalf of any Loan Party to any Agent
or any Lender Party in connection with the negotiation and syndication of
the Loan Documents or pursuant to the terms of the Loan Documents
contained any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements made therein not misleading
in any material respect.
(i) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance or drawings under any Letter of Credit will be
used to purchase or carry any Margin Stock or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock.
(j) Neither any Loan Party nor any of its Subsidiaries is an
"investment company", or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended. Neither the
making of any Advances, nor the issuance of any Letters of Credit, nor the
application of the proceeds or repayment thereof by the Borrower, nor the
consummation of the other transactions contemplated by the Loan Documents,
will violate any provision of such Act or any rule, regulation or order of
the Securities and Exchange Commission thereunder.
(k) The Collateral Documents create a valid and perfected first
priority security interest in the Collateral (subject to any Permitted
Liens), securing the payment of the Secured Obligations, and, upon
compliance, as applicable, with the provisions of Section 5.01(j), all
filings and other actions necessary or desirable to perfect and protect
such security interest will have been duly taken. The Loan Parties are the
legal and beneficial owners of the Collateral free and clear of any Lien,
except for the Liens and security interests created or permitted under the
55
Loan Documents.
(l) The Parent and each of its Subsidiaries is Solvent.
(m) Neither any Loan Party nor any ERISA Affiliate has any Plan
or Multiemployer Plan.
(n) The operations and properties of each Loan Party and each of
its Subsidiaries comply in all material respects with all applicable
Environmental Laws; all past noncompliance with such Environmental Laws
has been resolved without ongoing obligations or costs; no Hazardous
Material has been released, discharged or disposed of on any property
currently owned or operated by any Loan Party or any of its Subsidiaries
or, during the period of such ownership or operation, any property
formerly owned or operated by any Loan Party or any of its Subsidiaries;
there is no Environmental Action pending against any Loan Party or any of
its Subsidiaries or any of their properties; and no circumstances exist
that could be reasonably likely to (A) form the basis of such an
Environmental Action that could have a Material Adverse Effect or (B)
cause any such property to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law.
(o) (i) Each Loan Party and each of its Subsidiaries and
Affiliates has filed, has caused to be filed or has been included in all
tax returns (federal, state, local and foreign) required to be filed and
has paid all taxes shown thereon to be due, together with applicable
interest and penalties.
(ii) No issues have been raised by the Internal Revenue
Service that, in the aggregate, could be reasonably likely to have a
Material Adverse Effect.
(p) Set forth on Schedule 4.01(p) hereto is a complete and
accurate list of all Existing Debt (other than Surviving Debt), showing as
of the date hereof the obligor and the principal amount outstanding
thereunder.
(q) Set forth on Schedule 4.01(q) hereto is a complete and
accurate list of all Surviving Debt, showing as of the date hereof the
obligor and the principal amount outstanding thereunder, the maturity date
thereof and the amortization schedule therefor.
(r) Set forth on Schedule 4.01(r) hereto is a complete and
accurate list of all Liens (other than Permitted Liens) on the property or
assets of any Loan Party or any of its Subsidiaries, showing as of the
date hereof the lienholder thereof and the property or assets of such Loan
Party or such Subsidiary subject thereto.
(s) Set forth on Schedule 4.01(s) hereto is a complete and
accurate list of all leases of real property under which any Loan Party or
any of its Subsidiaries is the lessee, showing as of the date hereof the
street address, county or other relevant jurisdiction, state, lessor,
lessee, expiration date and annual rental cost thereof.
(t) Set forth on Schedule 4.01(t) hereto is a complete and
accurate list of all Investments (other than Cash Equivalents and other
than Equity Interests owned by any Loan Party in any of its Subsidiaries)
held by any Loan Party or any of its Subsidiaries on the date hereof,
showing as of the date hereof the obligor or issuer and maturity, if any,
thereof.
56
(u) Set forth on Schedule 4.01(u) hereto is a complete and
accurate list of all patents, trademarks, trade names, service marks and
copyrights, and all applications therefor and licenses thereof, of each
Loan Party or any of its Subsidiaries, showing as of the date hereof the
jurisdiction in which registered, the registration number, the date of
registration and the expiration date.
(v) Set forth on Schedule 4.01(v) hereto is a complete and
accurate list of all Material Contracts of each Loan Party and its
Subsidiaries, showing as of the date hereof the parties, subject matter
and term thereof. Each such Material Contract is in full force and effect
and is binding upon and enforceable against all parties thereto in
accordance with its terms, and there exists no material default under any
Material Contract by any Loan Party or any of its Subsidiaries or, to the
best of the Borrower's knowledge, by any other party thereto.
ARTICLE V
COVENANTS OF THE PARENT AND THE BORROWER
SECTION 5.01. Affirmative Covenants.
So long as any Advance or any other Obligation of any Loan Party under any
Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or
any Lender Party shall have any Commitment hereunder, each of the Parent and the
Borrower shall:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include, without
limitation, compliance with HMO Regulations applicable to them in the
operation of their HMO Businesses, ERISA and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of
its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful claims that, if
unpaid, might by law become a Lien upon its property; provided, however,
that neither the Parent nor any of its Subsidiaries shall be required to
pay or discharge any such tax, assessment, charge or claim that is being
contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
(c) Compliance with Environmental Laws. Comply, and cause each of
its Subsidiaries and all lessees and other Persons operating or occupying
its properties to comply, in all material respects, with all applicable
Environmental Laws; and conduct, and cause each of its Subsidiaries to
conduct, any investigation, study, sampling and testing, and undertake any
cleanup, removal, remedial or other action necessary to remove and clean
up all Hazardous Materials from any of its properties, in accordance with
the requirements of all Environmental Laws; provided, however, that
neither the Parent nor any of its Subsidiaries shall be required to
undertake any such cleanup, removal, remedial or other action to the
extent that its obligation to do so is being contested in good faith and
by proper proceedings and appropriate reserves are
57
being maintained with respect to such circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Parent or
such Subsidiary operates; and maintain, and cause each of its Subsidiaries
to maintain, medical and pharmaceutical benefits reinsurance policies in
the form of either individual stop-loss or aggregate policies providing
for coverage in such form and in amounts as are (i) consistent with
industry practices and generally available on commercially reasonable
terms and (ii) with such reinsurers as may be satisfactory to the
Administrative Agent.
(e) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries (other than AmeriChoice
Behavioral Healthcare, Inc., a Delaware corporation, Main Line MSO, Inc.,
a Delaware corporation, and Main Line MSO, Ltd., a Pennsylvania limited
partnership) to preserve and maintain, its existence, legal structure,
legal name, rights (charter and statutory), permits, licenses, approvals,
privileges and franchises; provided, however, that the Borrower and its
Subsidiaries may consummate any merger or consolidation permitted under
Section 5.02(d); provided further that neither the Parent nor any of its
Subsidiaries shall be required to preserve any right, permit, license,
approval, privilege or franchise if the board of directors of the Parent
or such Subsidiary shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Parent or such
Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to the Parent, such Subsidiary or
the Lender Parties.
(f) Visitation Rights. At any reasonable time and from time to
time, permit any of the Agents or any of the Lender Parties, or any agents
or representatives thereof, to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of, the
Parent and any of its Subsidiaries, and to discuss the affairs, finances
and accounts of the Parent and any of its Subsidiaries with any of their
officers or directors and with their independent certified public
accountants.
(g) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Parent and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.
(h) Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
(i) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with (x) any of their Affiliates (other than any (i)
director, officer or stockholder of the Parent or any of its Subsidiaries
or (ii) any Loan Party) on terms that are fair and reasonable and no less
favorable to the Parent or such Subsidiary than it would obtain in a
comparable arm's-length transaction with a Person not an Affiliate or (y)
any Affiliate that is an Affiliate solely as a result of being a director,
officer or shareholder of the Parent or any of its Subsidiaries on terms
comparable to those that the majority of disinterested directors of the
Parent or such Subsidiary determines
58
(such determination to be evidenced by a duly adopted resolution) would be
available to the Parent or such Subsidiary on an arm's-length basis;
provided, however, that the Consolidated Group may engage in transactions
with the CNA Insurance Companies and AV Consultants Inc. in a manner
consistent with past practices as historically conducted; notwithstanding
the foregoing, other than in connection with transactions with the CNA
Insurance Companies and AV Consultants Inc. and other than pursuant to the
Administrative Services Agreements, the Affiliate Employment Agreements or
any management incentive compensation program adopted by the stockholders
of the Parent after the date hereof, the Parent shall not, and shall not
permit any of its Subsidiaries to enter into any transaction with an
Affiliate if the amount to be paid to such Affiliate pursuant to such
transaction, whether immediately or over time, exceeds $500,000 in the
aggregate. For purposes of this Section 5.01(i), in addition to any
interpretation of the requirements of a "disinterested director" under
Delaware law, reference shall be made to the type of transaction
contemplated and the effect or likelihood of similar transactions
involving one or more otherwise disinterested directors in the foreseeable
future.
(j) Covenant to Guaranty Obligations and Give Security.
(i) Eligible Domestic Subsidiaries. If Eligible Domestic
Subsidiaries that are not Subsidiary Guarantors (the "Non-Guarantor
Subsidiaries") shall at any time exceed (the "Threshold Requirement") in
the aggregate for all such Non-Guarantor Subsidiaries, five percent (5%)
of the consolidated assets for the Consolidated Group as of the end of the
immediately preceding fiscal quarter or generate more than five percent
(5%) of consolidated revenues for the Consolidated Group for the period of
four consecutive fiscal quarters ending as of the end of the immediately
preceding fiscal quarter; then the Parent shall (i) notify the
Administrative Agent within ten (10) days after a Responsible Officer
becomes aware thereof, and (ii) within 45 days thereafter, cause each such
Eligible Domestic Subsidiary (x) to become a Subsidiary Guarantor
hereunder by execution and delivery of a joinder agreement, to the extent
that, immediately after such joinder, the Threshold Requirement is not
exceeded, (y) to deliver, with the joinder agreement (to the extent a
joinder agreement is required under (x) hereof), a joinder to the
Collateral Documents and the Intercompany Subordination Agreement and such
supporting financing statements, resolutions, incumbency certificates,
corporate formation and organizational documentation and opinions of
counsel as the Administrative Agent may reasonably request, and (z) to
deliver, with the joinder agreement (to the extent a joinder agreement is
required under (x) hereof), stock certificates and related pledge
agreements or pledge joinder agreements evidencing the pledge of 100% of
the Capital Stock of each Domestic Subsidiary of such Eligible Domestic
Subsidiary and 66% (or such greater percentage which would not result in
material adverse tax consequences) of the issued and outstanding Capital
Stock entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) and 100% of the issued and outstanding Capital Stock not
entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2))
of each Foreign Subsidiary directly owned by each such Eligible Domestic
Subsidiary to secure the obligations of the Loan Parties under the Loan
Documents, together with undated stock transfer powers executed in blank
and any other items reasonably requested by the Administrative Agent in
connection with such joinder.
(ii) Foreign Subsidiaries. No Loan Party will form or
acquire, or otherwise permit to exist, any Foreign Subsidiary.
(iii) Pledge of Collateral. Each Loan Party will cause all of
its owned personal property located in the United States to be subject at
all times to first priority, perfected
59
Liens in favor of the Administrative Agent to secure the loans and
obligations hereunder pursuant to the terms and conditions of the
Collateral Documents or, with respect to any such property acquired
subsequent to the Initial Extension of Credit, such other additional
security documents as the Administrative Agent shall reasonably request,
subject in any case to Permitted Liens and liens permitted by Section
5.02(a). Without limiting the generality of the above, the Loan Parties
will cause (i) 100% of the issued and outstanding Capital Stock of each
Domestic Subsidiary and (ii) 65% (or such greater percentage which would
not result in material adverse tax consequences) of the issued and
outstanding Capital Stock entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Capital
Stock not entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) of each Foreign Subsidiary directly owned by any Domestic
Loan Party to be subject at all times to a first priority, perfected Lien
in favor of the Administrative Agent pursuant to the terms and conditions
of the Collateral Documents or such other security documents as the
Administrative Agent shall reasonably request. The Loan Parties will at
any time and from time to time promptly execute and deliver any and all
further instruments and documents and take all such other action as the
Collateral Agent may deem necessary or desirable in obtaining the full
benefits of, or in the case of perfecting and preserving the Liens of,
such guaranties, pledges, assignments, security agreement supplements and
security agreements.
(k) Further Assurances. (i) Promptly upon request by any Agent, or
any Lender Party through the Administrative Agent, correct, and cause each
of its Subsidiaries promptly to correct, any material defect or error that
may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof; and
(ii) Promptly upon request by any Agent, or any Lender Party
through the Administrative Agent, do, execute, acknowledge, deliver,
record, re-record, file, re-file, register and re-register any and
all such further acts, conveyances, pledge agreements, assignments,
financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates,
assurances and other instruments as any Agent, or any Lender Party
through the Administrative Agent, may reasonably require from time
to time in order to (A) carry out more effectively the purposes of
the Loan Documents, (B) to the fullest extent permitted by
applicable law, subject any Loan Party's or any of its Subsidiaries'
properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Collateral Documents,
(C) perfect and maintain the validity, effectiveness and priority of
any of the Collateral Documents and any of the Liens intended to be
created thereunder and (D) assure, convey, grant, assign, transfer,
preserve, protect and confirm more effectively unto the Secured
Parties the rights granted or now or hereafter intended to be
granted to the Secured Parties under any Loan Document or under any
other instrument executed in connection with any Loan Document to
which any Loan Party or any of its Subsidiaries is or is to be a
party, and cause each of its Subsidiaries to do so.
(l) Performance of Related Documents. Perform and observe, and
cause each of its Subsidiaries to perform and observe, all of the terms
and provisions of each Related Document to be performed or observed by it,
maintain each such Related Document in full force and effect, enforce such
Related Document in accordance with its terms, take all such action to
such end as may be from time to time requested by the Administrative Agent
and, upon request of the Administrative Agent, make to each other party to
each such Related Document such demands and requests for information and
reports or for action as any Loan Party or any of its Subsidiaries
60
is entitled to make under such Related Document, except, in any case,
where the failure to do so, either individually or in the aggregate, could
not be reasonably likely to have a Material Adverse Effect.
(m) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real
property to which the Borrower or any of its Subsidiaries is a party, keep
such leases in full force and effect and not allow such leases to lapse or
be terminated or any rights to renew such leases to be forfeited or
canceled, notify the Administrative Agent of any default by any party with
respect to such leases and cooperate with the Administrative Agent in all
respects to cure any such default, and cause each of its Subsidiaries to
do so, except, in any case, where the failure to do so, either
individually or in the aggregate, could not be reasonably likely to have a
Material Adverse Effect.
(n) Interest Rate Hedging. Maintain at all times interest rate
Hedge Agreements with Persons acceptable to the Administrative Agent,
covering a notional amount of not less than $20,000,000 and providing for
such Persons to make payments thereunder for a period of no less than one
year to the extent of increases in interest rates greater than 2.0% above
the weighted average Eurodollar Rate for an Interest Period of one month
on the date hereof.
(o) Performance of Material Contracts. Perform and observe all the
terms and provisions of each Material Contract to be performed or observed
by it, maintain each such Material Contract in full force and effect,
enforce each such Material Contract in accordance with its terms, take all
such action to such end as may be from time to time requested by the
Administrative Agent and, upon request of the Administrative Agent, make
to each other party to each such Material Contract such demands and
requests for information and reports or for action as any Loan Party or
any of its Subsidiaries is entitled to make under such Material Contract,
and cause each of its Subsidiaries to do so, except, in any case, where
the failure to do so, either individually or in the aggregate, could not
be reasonably likely to have a Material Adverse Effect.
(p) Maintenance of Accreditation, Etc. Preserve and maintain and
cause each of the HMO Subsidiaries to preserve and maintain (i) the
licensing and certification of each HMO Subsidiary pursuant to the HMO
Regulations, (ii) all certifications and authorizations necessary to
ensure that the HMO Subsidiaries are eligible for all reimbursements
available under the HMO Regulations to the extent applicable to HMOs of
the type owned by the Parent and (iii) all licenses, permits,
authorizations and qualifications required under the HMO Regulations in
connection with the ownership or operation of HMOs.
SECTION 5.02. Negative Covenants.
So long as any Advance or any other Obligation of any Loan Party under any
Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or
any Lender Party shall have any Commitment hereunder, the Parent shall not, at
any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now owned or
hereafter acquired, or sign or file or suffer to exist, or permit any of
its Subsidiaries to sign or file or suffer to exist, under the Uniform
Commercial Code of any jurisdiction, a financing statement that names the
Parent or any of its Subsidiaries as debtor, or sign or suffer to exist,
or permit any
61
of its Subsidiaries to sign or suffer to exist, any security agreement
authorizing any secured party thereunder to file such financing statement,
or assign, or permit any of its Subsidiaries to assign, any accounts or
other right to receive income, except:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described on
Schedule 4.01(r) hereto;
(iv) purchase money Liens upon or in real property or
equipment acquired or held by the Parent or any of the other Loan
Parties in the ordinary course of business to secure the purchase
price of such property or equipment or to secure Debt incurred
solely for the purpose of financing the acquisition, construction or
improvement of any such property or equipment to be subject to such
Liens, or Liens existing on any such property or equipment at the
time of acquisition (other than any such Liens created in
contemplation of such acquisition that do not secure the purchase
price), or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount; provided, however, that
no such Lien shall extend to or cover any property other than the
property or equipment being acquired, constructed or improved, and
no such extension, renewal or replacement shall extend to or cover
any property not theretofore subject to the Lien being extended,
renewed or replaced; and provided further that the aggregate
principal amount of the Debt secured by Liens permitted by this
clause (iv) shall not exceed the amount permitted under Section
5.02(b)(iii)(B) at any time outstanding;
(v) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(iii)(C); provided that no such Lien
shall extend to or cover any Collateral or assets other than the
assets subject to such Capitalized Leases;
(vi) other Liens affecting property with an aggregate fair
market value not to exceed $2,000,000, provided that no such Lien
shall extend to or cover any Collateral that is subject to a
first-priority perfected security interest under all applicable
Requirements of Law in accordance with the terms of the Loan
Documents; and
(vii) the replacement, extension or renewal of any Lien
permitted by clause (iii) of this Section 5.02(a) upon or in the
same property theretofore subject thereto or the replacement,
extension or renewal (without increase in the amount or change in
any direct or contingent obligor) of the Debt secured thereby.
(b) Debt. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume or suffer to exist, any Debt,
except:
(i) in the case of the Borrower,
(A) Debt in respect of (1) Hedge Agreements required
pursuant to Section 5.01(n) and (2) Hedge Agreements designed
to hedge against fluctuations in interest rates incurred in
the ordinary course of business and consistent with prudent
business practice with the aggregate Agreement Value
62
thereof not to exceed $10,000,000 at any time outstanding, and
(B) Debt owed to any other Loan Party, provided that
such Debt (x) shall constitute Pledged Debt, (y) shall be on
terms acceptable to the Administrative Agent and (z) shall, if
evidenced by promissory notes, be pledged as security for the
Obligations of the holder thereof under the Loan Documents to
which such holder is a party and delivered to the Collateral
Agent pursuant to the terms of the Security Agreement;
(ii) in the case of any Subsidiary of the Parent, Debt owed
to the Parent or to any other Loan Party, provided that, in each
case, such Debt (x) shall constitute Pledged Debt, (y) shall be on
terms acceptable to the Administrative Agent and (z) shall, if
evidenced by promissory notes, be pledged as security for the
Obligations of the holder thereof under the Loan Documents to which
such holder is a party and delivered to the Collateral Agent
pursuant to the terms of the Security Agreement; and
(iii) in the case of the Consolidated Group,
(A) in the case of the Loan Parties, Debt under the
Loan Documents,
(B) in the case of the Loan Parties, Debt secured by
Liens permitted by Section 5.02(a)(iv) not to exceed in the
aggregate $5,000,000 at any time outstanding,
(C) in the case of the Loan Parties, (x) Capitalized
Leases not to exceed in the aggregate $15,000,000 at any time
outstanding, and (y) in the case of Capitalized Leases to
which any Subsidiary of the Parent is a party, Debt of the
Parent of the type described in clause (k) of the definition
of "Debt" guaranteeing the Obligations of such Subsidiary
under such Capitalized Leases,
(D) the Surviving Debt, and any Debt extending the
maturity of, or refunding or refinancing, in whole or in part,
any Surviving Debt, provided that the terms of any such
extending, refunding or refinancing Debt, and of any agreement
entered into and of any instrument issued in connection
therewith, are otherwise permitted by the Loan Documents,
provided further that the principal amount of such Surviving
Debt shall not be increased above the principal amount thereof
outstanding immediately prior to such extension, refunding or
refinancing, and the direct and contingent obligors therefor
shall not be changed, as a result of or in connection with
such extension, refunding or refinancing, provided still
further that the terms relating to principal amount,
amortization, maturity, collateral (if any) and subordination
(if any), and other material terms taken as a whole, of any
such extending, refunding or refinancing Debt, and of any
agreement entered into and of any instrument issued in
connection therewith, are no less favorable in any material
respect to the Loan Parties or the Lender Parties than the
terms of any agreement or instrument governing the Surviving
Debt being extended, refunded or refinanced and the interest
rate applicable to any such extending, refunding or
refinancing Debt does not exceed the then applicable market
interest rate,
63
(E) in the case of the Loan Parties, unsecured Debt
incurred in the ordinary course of business for the deferred
purchase price of property or services, and aggregating, on a
consolidated basis, not more than $5,000,000 at any one time
outstanding,
(F) in the case of the Loan Parties, guarantees of
loans made by third-party financial institutions to doctors or
other medical staff employed by or affiliated with the Parent
or any of its Subsidiaries not to exceed at any time
outstanding an aggregate of $3,000,000 for all such
guarantees, and
(G) Permitted Acquisition Debt.
(c) Change in Nature of Business. Make, or permit any of its
Subsidiaries (other than AmeriChoice Behavioral Healthcare, Inc., a
Delaware corporation, Main Line MSO, Inc., a Delaware corporation, and
Main Line MSO, Ltd., a Pennsylvania limited partnership) to make, any
material change in the nature of its business as carried on at the date
hereof.
(d) Mergers, Etc. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to
do so, except that:
(i) any Subsidiary of the Parent may merge into or
consolidate with any other Subsidiary of the Parent, provided that,
in the case of any such merger or consolidation, the Person formed
by such merger or consolidation shall be a wholly owned Subsidiary
of the Parent, provided further that, in the case of any such merger
or consolidation to which a Subsidiary Guarantor is a party, the
Person formed by such merger or consolidation shall be a Subsidiary
Guarantor;
(ii) in connection with any acquisition permitted under
Section 5.02(f), any Subsidiary of the Parent may merge into or
consolidate with any other Person or permit any other Person to
merge into or consolidate with it; provided that the Person
surviving such merger shall be a wholly owned Subsidiary of the
Parent, provided further that, in the case of any such merger or
consolidation to which a Subsidiary Guarantor is a party, the Person
formed by such merger or consolidation shall be a Subsidiary
Guarantor;
(iii) in connection with any sale or other disposition
permitted under Section 5.02(e) (other than clause (ii) thereof),
any Subsidiary of the Parent may merge into or consolidate with any
other Person or permit any other Person to merge into or consolidate
with it;
(iv) any of the Parent's Subsidiaries may merge into the
Parent; and
(v) any Subsidiary of the Parent may merge with or into or
consolidate with any other Person, provided that (A) such Subsidiary
is the surviving entity, (B) in the case of any such merger or
consolidation to which a Subsidiary Guarantor is a party, the Person
formed by such merger or consolidation shall be a Subsidiary
Guarantor and (C) each of the conditions described in the proviso to
Section 5.02(f)(viii) shall have been satisfied.
provided, however, that in each case, immediately after giving effect
thereto, no event shall occur
64
and be continuing that constitutes a Default and, in the case of any such
merger to which the Borrower is a party, the Borrower is the surviving
corporation.
(e) Sales, Etc., of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of, any assets, or grant any option or other right to
purchase, lease or otherwise acquire any assets other than Inventory to be
sold in the ordinary course of its business, except:
(i) sales of Inventory and sales and redemptions of Cash
Equivalents, in each case, in the ordinary course of its business;
(ii) in a transaction authorized by Section 5.02(d);
(iii) sales of assets for cash and for fair value in an
aggregate amount not to exceed $5,000,000 in any Fiscal Year; and
(iv) sales or other dispositions of obsolete or worn
Equipment in the ordinary course of business to the extent that such
Equipment is replaced with Equipment of similar value and use;
provided that to the extent that sales of assets in any Fiscal Year
pursuant to clause (iii) of this Section 5.02(e) plus dividends and other
distributions paid or payable in cash in respect of any Pledged Shares
pursuant to Section 12(a)(ii)(B) of the Security Agreement, exceed
$1,000,000, the Borrower shall, on the date of receipt by any Loan Party
or any of its Subsidiaries of the Net Cash Proceeds from such sale, prepay
the Advances pursuant to, and in the amount and order of priority set
forth in, Section 2.06(b)(i), as specified therein.
(f) Investments in Other Persons. Make or hold, or permit any of
its Subsidiaries to make or hold, any Investment in any Person, except:
(i) (A) Investments by members of the Consolidated Group in
their Subsidiaries existing as of the date hereof, (B) Investments
by members of the Consolidated Group in and to Domestic Loan Parties
(other than the Parent), (C) Investments in HMO Subsidiaries in an
aggregate amount of up to $25 million at any time outstanding (on a
cost basis), and (D) other additional Investments not contemplated
in this clause (i) or in the other clauses of this subsection in an
aggregate amount of up to $5 million at any time outstanding;
(ii) loans and advances to employees in the ordinary course
of the business of the Consolidated Group as presently conducted in
an aggregate principal amount not to exceed $1,000,000 at any time
outstanding;
(iii) Investments by the Loan Parties in Cash Equivalents;
(iv) Investments existing on the date hereof and described on
Schedule 4.01(v) hereto;
(v) Investments by the Borrower in Hedge Agreements
permitted under Section 5.02(b)(i)(A);
65
(vi) Investments consisting of intercompany Debt permitted
under Section 5.02(b)(i)(B) or 5.02(b)(ii);
(vii) Acquisitions (A) described on Schedule 5.02(f) hereto or
(B) to which the Required Lenders have consented in writing in
advance of such Acquisition; and
(viii) Acquisitions by any Loan Party of either the majority
of the stock of or any of the assets of any other Person; provided
that, with respect to Investments made under this clause (viii): (A)
not less than 30 Business Days prior to making any Permitted
Acquisition, the Borrower shall submit to each of the Lender Parties
the following information: (1) a copy of the signed letter of intent
and a current draft or a signed copy, as the case may be, of the
acquisition agreement with any prepared exhibits, (2) a written
description of the Person to be acquired, including, without
limitation, the location and type of operations, key management and
HMO assets of such Person, if any, (3) if available, historical
financial statements of such Person for the prior two years and the
most recent interim financial statements of such Person, and (4)
consolidated financial statements and projections for both the
Consolidated Group giving Pro Forma Effect to the Debt associated
with the Acquisition and the Consolidated EBITDA and Consolidated
EBITDAR associated with such Person or the assets that are the
subject of the Acquisition, and indicating (I) compliance on a
joint, consolidated basis with the financial covenants set forth in
Section 5.04 as of the closing of the Acquisition and (II) projected
compliance for the ensuing 12 months after the closing of the
Acquisition with each financial covenant in Section 5.04, (B) the
Permitted Acquisition Price, together with the Permitted Acquisition
Prices of all other Acquisitions occurring in the immediately
preceding 12-month period does not exceed $40,000,000 in the
aggregate, (C) the business of the Person to be acquired is in the
HMO Business or healthcare related business and is located in the
United States of America, (D) no Default has occurred and is
continuing, or would otherwise occur as a result of or in connection
with the Permitted Acquisition, (E) the provisions of Section
5.01(j) shall be complied with in connection with the Permitted
Acquisition, and (F) the Permitted Acquisition Price for each such
Acquisition shall not exceed $25,000,000.
(g) Restricted Payments. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its Equity
Interests now or hereafter outstanding, return any capital to its
stockholders, partners or members (or the equivalent Persons thereof) as
such, make any distribution of assets, Equity Interests, obligations or
securities to its stockholders, partners or members (or the equivalent
Persons thereof) as such or issue or sell any Equity Interests or accept
any capital contributions, or permit any of its Subsidiaries to do any of
the foregoing, or permit any of its Subsidiaries to purchase, redeem,
retire, defease or otherwise acquire for value any Equity Interests in the
Borrower or to issue or sell any Equity Interests therein, except that, so
long as no Default shall have occurred and be continuing at the time of
any action described in clause (i), (ii) or (iii) below or would result
therefrom:
(i) the Borrower may (A) declare and pay dividends and
distributions payable only in common stock of the Borrower and (B)
except to the extent the Net Cash Proceeds thereof are required to
be applied to the prepayment of the Advances pursuant to Section
2.06(b), purchase, redeem, retire, defease or otherwise acquire
shares of its Capital Stock with the proceeds received
contemporaneously from the issue of new
66
shares of its Capital Stock with equal or inferior voting powers,
designations, preferences and rights,
(ii) any Subsidiary of the Parent may (A) declare and pay
cash dividends to its equity owners on a pro rata basis and (B)
accept capital contributions from its parent to the extent permitted
under Section 5.01(f)(i),
(iii) the Parent may declare and pay cash dividends on its
Preferred Stock in accordance with the terms thereof and may declare
and pay distributions payable in common stock of the Parent,
(iv) the Parent may redeem stock owned by terminated or
deceased employees, provided that the amounts expended for such
redemption shall not exceed $250,000 in the aggregate, and provided
further that at the time of any such expenditure no Default has
occurred and is continuing, and
(v) the Parent may implement a stock option plan in which
the only stock to be offered under such plan would be the Capital
Stock of the Parent, and the Parent may also split its stock, to be
effected as a stock dividend, to accomplish the foregoing stock
option plan.
(h) Amendments of Constitutive Documents. Amend, or permit any of
its Subsidiaries to amend, its certificate of incorporation or bylaws or
other constitutive documents in any manner that could reasonably be
expected to result in a Material Adverse Effect, except that the Parent
may amend its certificate of incorporation to increase the authorized
number of shares of Capital Stock to effectuate the stock option plan
referred to in Section 5.02(g)(v).
(i) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices, except as required by generally accepted accounting
principles, or (ii) Fiscal Year.
(j) Prepayments, Etc., of Debt. Prepay, redeem, purchase, defease
or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of,
any Debt, except the prepayment of the Advances in accordance with the
terms of this Agreement, or permit any of its Subsidiaries to do any of
the foregoing other than to prepay any Debt payable to the Borrower or the
Parent.
(k) Amendment, Etc., of Related Documents. Cancel or terminate any
Related Document or consent to or accept any cancellation or termination
thereof, amend, modify or change in any manner any term or condition of
any Related Document or give any consent, waiver or approval thereunder,
waive any default under or any breach of any term or condition of any
Related Document, or take any other action in connection with any Related
Document, in each case, that could reasonably be expected to result in a
Material Adverse Effect or permit any of its Subsidiaries to do any of the
foregoing, except that the Parent may amend and/or waive certain
provisions of the Parent Stockholders' Agreement to the extent that such
amendments and/or waivers effectuate the stock option plan referred to in
Section 5.02(g)(v).
(l) Negative Pledge. Enter into or suffer to exist, or permit any
of its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption
67
of any Lien upon any of its property or assets in favor of the Secured
Parties, except in connection with (i) any purchase money Debt permitted
by Section 5.02(b)(iii)(B) solely to the extent that the agreement or
instrument governing such Debt prohibits a Lien on the property acquired
with the proceeds of such Debt or (ii) any Capitalized Lease permitted by
Section 5.02(b)(iii)(C) solely to the extent that such Capitalized Lease
prohibits a Lien on the property subject thereto.
(m) Partnerships, Etc. Become a general partner in any general or
limited partnership or joint venture, or permit any of its Subsidiaries to
do so, other than any Subsidiary the sole assets of which consist of its
interest in such partnership or joint venture.
(n) Speculative Transactions. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or any similar speculative transactions.
(o) Consolidated Capital Expenditures. Make, or permit any of its
Subsidiaries to make, any capital expenditures that would cause the
aggregate of all such Consolidated Capital Expenditures made by the
Consolidated Group during the period shown to exceed:
Consolidated Capital
Period Expenditures
------ ------------
Closing Date through December 31, 2001 $6 million
January 1, 2002 through December 31, 2002 $11 million
January 1, 2003 through December 31, 2003 $7 million
January 1, 2004 through the Termination Date $4 million
(p) Payment Restrictions Affecting Subsidiaries. Directly or
indirectly, enter into or suffer to exist, or permit any of its
Subsidiaries to enter into or suffer to exist, any agreement or
arrangement limiting the ability of any of its Subsidiaries to declare or
pay dividends or other distributions in respect of its Equity Interests or
repay or prepay any Debt owed to, make loans or advances to, or otherwise
transfer assets to or invest in, the Parent or any Subsidiary of the
Parent (whether through a covenant restricting dividends, loans, asset
transfers or investments, a financial covenant or otherwise), except (i)
the Loan Documents and (ii) any agreement in effect at the time such
Subsidiary becomes a Subsidiary of the Parent, so long as such agreement
was not entered into solely in contemplation of such Person becoming a
Subsidiary of the Parent.
(q) Amendment, Etc., of Material Contracts. Cancel or terminate
any Material Contract or consent to or accept any cancellation or
termination thereof, amend or otherwise modify any Material Contract or
give any consent, waiver or approval thereunder, waive any default under
or breach of any Material Contract, or take any other action in connection
with any Material Contract, in each case that could reasonably be expected
to result in a Material Adverse Effect.
(r) ERISA. Have, or permit any other Loan Party or any ERISA
Affiliate to have, any Plan or Multiemployer Plan.
68
SECTION 5.03. Reporting Requirements.
So long as any Advance or any other Obligation of any Loan Party under any
Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or
any Lender Party shall have any Commitment hereunder, the Borrower shall furnish
to the Agents and the Lender Parties:
(a) Default Notice. As soon as possible and in any event within
two days after the occurrence of each Default continuing on the date of
such statement, a statement of a Responsible Officer of the Borrower
setting forth details of such Default and the action that the Borrower has
taken and proposes to take with respect thereto.
(b) Annual Financials. As soon as available and in any event
within 120 days after the end of each Fiscal Year, a copy of the annual
audit report for such Fiscal Year for the Consolidated Group, including
therein consolidated and consolidating balance sheets of the Consolidated
Group as of the end of such Fiscal Year and consolidated and consolidating
statements of income and a consolidated statement of cash flows of the
Consolidated Group for such Fiscal Year, in each case accompanied by an
opinion acceptable to the Required Lenders of Deloitte & Touche or other
independent public accountants of recognized standing acceptable to the
Required Lenders, together with (i) a certificate of such accounting firm
to the Lender Parties stating that in the course of the regular audit of
the business of the Consolidated Group, which audit was conducted by such
accounting firm in accordance with generally accepted auditing standards,
such accounting firm has obtained no knowledge that a Default has occurred
and is continuing, or if, in the opinion of such accounting firm, a
Default has occurred and is continuing, a statement as to the nature
thereof, (ii) a schedule in form satisfactory to the Administrative Agent
of the computations used by such accountants in determining, as of the end
of such Fiscal Year, compliance with the covenants contained in Section
5.04, provided that in the event of any change in GAAP used in the
preparation of such financial statements, the Borrower shall also provide,
if necessary for the determination of compliance with Section 5.04, a
statement of reconciliation conforming such financial statements to GAAP
and (iii) a certificate of a Responsible Officer of the Borrower stating
that (A) such officer has individually reviewed the provisions of this
Agreement; (B) a review of the activities of the Consolidated Group during
such year or quarterly period, as the case may be, has been made by such
officer or under such officer's supervision, with a view to determining
whether the Borrower and the Parent have fulfilled all of their
obligations under this Agreement; and (C) to the best of such officer's
knowledge, the Borrower and the Parent have observed and performed each
undertaking contained in this Agreement and are not in default in the
observance or performance of any of the provisions hereof or, if in
default, specifying all such defaults and events of which such officer may
have knowledge.
(c) Quarterly Financials. As soon as available and in any event
within 45 days after the end of each of the first three quarters of each
Fiscal Year, consolidated and consolidating balance sheets of the
Consolidated Group as of the end of such quarter and consolidated and
consolidating statements of income and a consolidated statement of cash
flows of the Consolidated Group for the period commencing at the end of
the previous fiscal quarter and ending with the end of such fiscal quarter
and consolidated and consolidating statements of income and a consolidated
statement of cash flows of the Consolidated Group for the period
commencing at the end of the previous Fiscal Year and ending with the end
of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding date or period of the
preceding Fiscal Year, all in reasonable detail and duly certified
(subject to normal year-end audit adjustments) by a Responsible Officer of
the Borrower as having been prepared in accordance with GAAP, together
with (i) a certificate of said officer stating that (A)
69
such officer has individually reviewed the provisions of this Agreement;
(B) a review of the activities of the Consolidated Group during such year
or quarterly period, as the case may be, has been made by such officer or
under such officer's supervision, with a view to determining whether the
Borrower and the Parent have fulfilled all of their obligations under this
Agreement; and (C) to the best of such officer's knowledge, the Borrower
and the Parent have observed and performed each undertaking contained in
this Agreement and are not in default in the observance or performance of
any of the provisions hereof or, if in default, specifying all such
defaults and events of which such officer may have knowledge and (ii) a
schedule in form satisfactory to the Administrative Agent of the
computations used by the Borrower in determining compliance with the
covenants contained in Section 5.04, provided that in the event of any
change in GAAP used in the preparation of such financial statements, the
Borrower shall also provide, if necessary for the determination of
compliance with Section 5.04, a statement of reconciliation conforming
such financial statements to GAAP.
(d) Monthly Financials. As soon as available and in any event
within 30 days after the end of each month, a consolidated balance sheet
of the Consolidated Group as of the end of such month and consolidated and
consolidating statements of income of the Consolidated Group for the
period commencing at the end of the previous month and ending with the end
of such month and consolidated and consolidating statements of income,
setting forth in each case in comparative form the corresponding figures
for the corresponding month of the preceding Fiscal Year, all in
reasonable detail, subject to year-end adjustments, and duly certified by
a Responsible Officer of the Borrower.
(e) Annual Budget. On or before January 31 of each year, a pro
forma budget (including projected Consolidated Capital Expenditures) for
the ensuing Fiscal Year, in a form similar to that provided by the Parent
to its stockholders for Fiscal Year 1996 pursuant to the Parent
Stockholders' Agreement or otherwise in a form reasonably satisfactory to
the Administrative Agent.
(f) Litigation or Loss of Accreditation. (i) Promptly after the
commencement thereof, notice of all actions, suits, investigations,
litigation and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting any Loan Party or any of its Subsidiaries of the type described
in Section 4.01(f), (ii) promptly after the occurrence thereof, notice of
any adverse change in the status or the financial effect on any Loan Party
or any of its Subsidiaries of the Disclosed Litigation from that described
on Schedule 4.01(f) hereto, (iii) promptly after receipt thereof, all
notices of loss of accreditation, loss of participation under any
reimbursement program or loss of applicable health care license or
certificate of authority at any HMO Subsidiary, and (iv) promptly after
receipt thereof, all other material deficiency notices, compliance orders
or adverse reports issued by any 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.
(g) Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and reports
that the Parent sends to its stockholders, and copies of all regular,
periodic and special reports, and all registration statements, that any
Loan Party or any of its Subsidiaries files with the Securities and
Exchange Commission or any other
70
Governmental Authority that may be substituted therefor, with any national
securities exchange or with HMO Regulators (other than routine, periodic
non-material reports filed with such HMO Regulators).
(h) Environmental Conditions. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could (i) reasonably be
expected to have a Material Adverse Effect or (ii) cause any property
described in any mortgages securing the loans and obligations hereunder to
be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law.
(i) Insurance. As soon as available and in any event within 60
days after the end of each Fiscal Year, a report summarizing the insurance
coverage (specifying type, amount and carrier) in effect for each Loan
Party and each of its Subsidiaries and containing such additional
information as any Agent, or any Lender Party through the Administrative
Agent, may reasonably specify.
(j) Management Letters. Immediately upon receipt thereof by the
Parent or any of its Subsidiaries, copies of all management letters and
any other reports that are submitted to the Parent or such Subsidiary by
its independent accountants in connection with any annual or interim audit
of the Records of the Parent or such Subsidiary by such accountants.
(k) Reserves Adequacy. Within 60 days of the Administrative
Agent's request and explanation therefor, a report in form and scope
satisfactory to the Administrative Agent of the adequacy of reserves of
any HMO Subsidiary or of any other matter that the Administrative Agent
may deem necessary, prepared by an independent actuarial or accounting
firm (including the Parent's independent accounting firm) acceptable to
the Required Lenders; provided that any particular type of report shall
not be requested more often than once during any Fiscal Year and then only
as of mid-year or fiscal year-end.
(l) Reinsurance Arrangements. As soon as available, and in event
within 120 days after the end of each Fiscal Year of the Parent, a
schedule setting forth in reasonable detail the reinsurance arrangements
maintained, as required by Section 5.01(d), by each of the HMO
Subsidiaries of the Parent as of the end of such Fiscal Year (with any
changes subsequent to the end of such Fiscal Year described therein).
(m) Loss of License, Etc. Promptly following receipt thereof,
copies of each notice regarding the loss or threatened loss by any HMO
Subsidiary of its accreditation, licensing or certification by any HMO
Regulator.
(n) Non-Compliance with HMO Regulations. Promptly following
receipt thereof, all correspondence received by the Parent or any of its
Subsidiaries from an HMO Regulator that asserts that the Parent or any of
its Subsidiaries is not in compliance in all material respects with any
HMO Regulation or threatens the taking of action against the Parent or any
of its Subsidiaries under the HMO Regulations.
(o) HMO Reports. Promptly following each request by the
Administrative Agent therefor, specifying in reasonable detail the types
of documents to be provided, copies of any and all statements, audits,
studies or reports submitted by or on behalf of the Parent or any of its
71
Subsidiaries to any governmental or regulatory authority charged with the
regulation or oversight of HMOs.
(p) HMO Investments. Promptly, and in any event within 10 Business
Days of the occurrence thereof, written notification of Investments by any
member of the Consolidated Group in any HMO Subsidiary that, individually
or in the aggregate in any Fiscal Year of the Parent, exceed 10% of the
Company Action Level (as defined by the NAIC and as determined in
accordance with SAP at the immediately preceding fiscal year-end
determination thereof) of such HMO Subsidiary.
(q) Other Information. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries as
any Agent, or any Lender Party through the Administrative Agent, may from
time to time reasonably request.
SECTION 5.04. Financial Covenants.
So long as any Advance or any other Obligation of any Loan Party under any
Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or
any Lender Party shall have any Commitment hereunder, the Parent shall:
(a) Consolidated Debt/EBITDA Ratio. Maintain at all times a
Consolidated Debt/EBITDA Ratio of not more than 1.5:1.0.
(b) Consolidated Fixed Charge Coverage Ratio. Maintain at all
times a Consolidated Fixed Charge Coverage Ratio of not less than 1.5:1.0.
(c) Consolidated Net Worth. Maintain at all times an excess of
total assets over total liabilities, in each case of the Consolidated
Group, of not less than $100,000,000, plus, as of the last day of each
fiscal quarter, an amount equal to 50% of Consolidated Net Income for the
quarter then ended (but not less than zero), such increase to be
cumulative.
(d) Minimum Surplus/Statutory Surplus. At the end of each fiscal
quarter of the Parent,
(i) AmeriChoice of New Jersey, Inc. shall maintain "net
worth" (as defined in the New Jersey HMO Regulations as the
difference between statutory assets and statutory liabilities) at
least equal to 150% of the amount thereof required to be maintained
under the New Jersey HMO Regulations;
(ii) AmeriChoice of New York, Inc. shall maintain "net worth"
(as defined in the New York HMO Regulations as the difference
between statutory assets and statutory liabilities) at least equal
to 150% of the amount thereof required to be maintained under the
New York HMO Regulations;
(iii) AmeriChoice of Pennsylvania, Inc. shall maintain "net
worth" (as defined in the Pennsylvania HMO Regulations as the
difference between statutory assets and statutory liabilities) at
least equal to 150% of the amount thereof required to be maintained
under the Pennsylvania HMO Regulations; and
72
(iv) upon becoming an HMO Subsidiary, each other HMO
Subsidiary shall maintain "net worth" (as defined in its applicable
state HMO Regulations as the difference between statutory assets and
statutory liabilities) at least equal to 150% of the amount thereof
required to be maintained under the applicable HMO Regulations.
(e) Risk-Based Capital Ratio. At the end of each Fiscal Year of
the Parent,
(i) AmeriChoice of New Jersey, Inc. shall maintain (A) at
the end of Fiscal Year 2001 of the Parent, a ratio of Total Adjusted
Capital to Risk-Based Capital at a level equal to or greater than
1.0:1.0 and (B) thereafter, a ratio of Total Adjusted Capital to
Risk-Based Capital at a level equal to or greater than 1.25:1.0;
(ii) AmeriChoice of New York, Inc. shall maintain a ratio of
Total Adjusted Capital to Risk-Based Capital at a level equal to or
greater than 1.25:1.0;
(iii) AmeriChoice of Pennsylvania, Inc. shall maintain a ratio
of Total Adjusted Capital to Risk-Based Capital at a level equal to
or greater than 1.25:1.0; and
(iv) upon becoming an HMO Subsidiary, each other HMO
Subsidiary shall maintain a ratio of Total Adjusted Capital to
Risk-Based Capital at a level equal to or greater than 1.25:1.0.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default.
If any of the following events ("Events of Default") shall occur and be
continuing:
(a) (i) the Borrower shall fail to pay any principal of any
Advance or interest on any Advance, or any Loan Party shall fail to make
any other payment (other than any fees) under any Loan Document, in each
case under this clause (i) within five days after the same becomes due and
payable or (ii) the Borrower shall fail to pay any fee payable hereunder
within ten days after written notice thereof; or
(b) any representation or warranty made by any Loan Party (or any
of its officers) under or in connection with any Loan Document shall prove
to have been incorrect in any material respect when made; or
(c) (i) the Parent or the Borrower shall fail to perform or
observe any term, covenant or agreement contained in Xxxxxxx 0.00,
0.00(x), (x), (x) or (o), 5.02 or 5.04, or (ii) the Parent or the Borrower
shall fail to perform or observe any term, covenant or agreement contained
in Section 5.03 if such failure shall remain unremedied for 5 days after
written notice thereof shall have been given to the Borrower by any Agent
or any Lender Party; or
(d) any Loan Party shall fail to perform or observe any other
term, covenant or
73
agreement contained in any Loan Document on its part to be performed or
observed if such failure shall remain unremedied for 15 days after written
notice thereof shall have been given to the Borrower by any Agent or any
Lender Party; or
(e) any Loan Party or any of its Subsidiaries shall fail to pay
any principal of, premium or interest on or any other amount payable in
respect of any Debt that is outstanding in a principal amount (or, in the
case of any Hedge Agreement, an Agreement Value) of at least $5,000,000
either individually or in the aggregate (but excluding Debt outstanding
hereunder) of such Loan Party or such Subsidiary (as the case may be),
when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and such failure
shall continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument relating
to any such Debt and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the effect of such
event or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt or otherwise to cause, or to permit the holder
thereof to cause, such Debt to mature; or any such Debt shall be declared
to be due and payable or required to be prepaid or redeemed (other than by
a regularly scheduled required prepayment or redemption), purchased or
defeased, or an offer to prepay, redeem, purchase or defease such Debt
shall be required to be made, in each case prior to the stated maturity
thereof; or
(f) any Loan Party or any of its Subsidiaries shall generally not
pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against any Loan Party or any of its Subsidiaries seeking to adjudicate it
a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property and,
in the case of any such proceeding instituted against it (but not
instituted by it) that is being diligently contested by it in good faith,
either such proceeding shall remain undismissed or unstayed for a period
of 60 days or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official
for, it or any substantial part of its property) shall occur; or any Loan
Party or any of its Subsidiaries shall take any corporate action to
authorize any of the actions set forth above in this Section 6.01(f); or
(g) any judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against any Loan Party or any of its
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 30 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; or
(h) any non-monetary judgment or order shall be rendered against
any Loan Party or any of its Subsidiaries that could be reasonably likely
to have a Material Adverse Effect, and there shall be any period of 30
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(i) any provision of any Loan Document after delivery thereof
pursuant to Section
74
3.01 or 5.01(j) shall for any reason cease to be valid and binding on or
enforceable against any Loan Party party to it, or any such Loan Party
shall so state in writing; or
(j) any Collateral Document after delivery thereof pursuant to
Section 3.01 or 5.01(j) shall for any reason (other than pursuant to the
terms thereof) cease to create a valid and perfected first priority Lien
on and security interest in the Collateral purported to be covered
thereby; or
(k) Within 30 days after either Xxxxxxx Xxxxxxx or Xxxx Xxxxxx
shall at any time for any reason cease to be active in the management of
the Borrower, the Borrower shall have failed to deliver to the
Administrative Agent a management succession plan acceptable to the
Required Lenders; or
(l) a Change of Control shall occur; or
(m) an HMO Event shall have occurred and remain unremedied for 30
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
(n) any HMO Subsidiary shall suffer the loss of 25% or more of the
enrolled recipients for which it is responsible as measured from the
beginning of the previous month or from the close of its immediately
preceding Fiscal Year end.
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Commitments of each Lender Party and the obligation of each Lender
Party to make Advances (other than Letter of Credit Advances by the Issuing Bank
or a Lender pursuant to Section 2.03(c)) and of the Issuing Bank to issue
Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the
Required Lenders, (A) by notice to the Borrower, declare the Notes, all interest
thereon and all other amounts payable under this Agreement and the other Loan
Documents to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower, (B) by notice to each party
required under the terms of any agreement in support of which a Standby Letter
of Credit is issued, request that all Obligations under such agreement be
declared to be due and payable and (C) by notice to the Issuing Bank, direct the
Issuing Bank to deliver a Default Termination Notice to the beneficiary of each
Standby Letter of Credit issued by it, and the Issuing Bank shall deliver such
Default Termination Notices; provided, however, that in the event of an actual
or deemed entry of an order for relief with respect to the Borrower under the
Federal Bankruptcy Code, (x) the Commitments of each Lender Party and the
obligation of each Lender Party to make Advances (other than Letter of Credit
Advances by the Issuing Bank or a Lender pursuant to Section 2.03(c)) and of the
Issuing Bank to issue Letters of Credit shall automatically be terminated and
(y) the Notes, all such interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon Default.
If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions
75
described in Section 6.01 or otherwise, make demand upon the Borrower to, and
forthwith upon such demand the Borrower shall, pay to the Collateral Agent on
behalf of the Lender Parties in same day funds at the Collateral Agent's office
designated in such demand, for deposit in the L/C Cash Collateral Account, an
amount equal to the aggregate Available Amount of all Letters of Credit then
outstanding. If at any time the Administrative Agent or the Collateral Agent
determines that any funds held in the L/C Cash Collateral Account are subject to
any right or claim of any Person other than the Agents and the Lender Parties or
that the total amount of such funds is less than the aggregate Available Amount
of all Letters of Credit, the Borrower shall, forthwith upon demand by the
Administrative Agent or the Collateral Agent, pay to the Collateral Agent, as
additional funds to be deposited and held in the L/C Cash Collateral Account, an
amount equal to the excess of (a) such aggregate Available Amount over (b) the
total amount of funds, if any, then held in the L/C Cash Collateral Account that
the Administrative Agent or the Collateral Agent, as the case may be, determines
to be free and clear of any such right and claim. Upon the drawing of any Letter
of Credit for which funds are on deposit in the L/C Cash Collateral Account,
such funds shall be applied to reimburse the Issuing Bank or Lenders, as
applicable, to the extent permitted by applicable law.
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action.
(a) Each Lender Party (in its capacities as a Lender, the Issuing
Bank (if applicable) and on behalf of itself and its Affiliates as
potential Hedge Banks) hereby appoints and authorizes each Agent to take
such action as agent on its behalf and to exercise such powers and
discretion under this Agreement and the other Loan Documents as are
delegated to such Agent by the terms hereof and thereof, together with
such powers and discretion as are reasonably incidental thereto. As to any
matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Notes), no Agent
shall be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the
Required Lenders, and such instructions shall be binding upon all Lender
Parties and all holders of Notes; provided, however, that no Agent shall
be required to take any action that exposes such Agent to personal
liability or that is contrary to this Agreement or applicable law. Each
Agent agrees to give to each Lender Party prompt notice of each notice
given to it by the Borrower pursuant to the terms of this Agreement.
(b) Each of the Secured Parties (in its capacities as a Lender,
the Issuing Bank (if applicable) and a potential Hedge Bank) hereby
appoints and authorizes the Collateral Agent to act as the agent of such
Secured Party for purposes of acquiring, holding and enforcing any and all
Liens on Collateral granted by any of the Loan Parties to secure any of
the Secured Obligations, together with such powers and discretion as are
reasonably incidental thereto. The Collateral Agent may from time to time
in its discretion appoint any of the other Lender Parties or any of the
Affiliates of a Lender Party to act as its co-agent or sub-agent for
purposes of holding or enforcing any Lien on the Collateral (or any
portion thereof) granted under the Collateral Documents or of exercising
any rights and remedies thereunder at the direction of the Collateral
Agent. In this connection, such co-agents and sub-agents shall be entitled
to the benefits of all provisions of this Article VII (including, without
limitation, Section 7.05, as
76
though such co-agents or sub-agents were the Collateral Agent under the
Loan Documents) as if set forth in full herein with respect thereto.
(c) The Syndication Agent shall not have any powers or discretion
under this Agreement or any of the other Loan Documents other than those
bestowed upon it as a co-agent or sub-agent from time to time by the
Collateral Agent pursuant to Section 7.01(b), and each of the Lender
Parties hereby acknowledges that the Syndication Agent shall not have any
liability under this Agreement or any of the other Loan Documents.
SECTION 7.02. Agents' Reliance, Etc.
Neither any Agent nor any of their respective directors, officers, agents
or employees shall be liable for any action taken or omitted to be taken by it
or them under or in connection with the Loan Documents, except for its or their
own gross negligence or willful misconduct. Without limitation of the generality
of the foregoing, each Agent: (a) may treat the payee of any Note as the holder
thereof until, in the case of the Administrative Agent, the Administrative Agent
receives and accepts an Assignment and Acceptance entered into by the Lender
that is the payee of such Note, as assignor, and an Eligible Assignee, as
assignee, or, in the case of any other Agent, such Agent has received notice
from the Administrative Agent that it has received and accepted such Assignment
and Acceptance, in each case as provided in Section 9.07; (b) may consult with
legal counsel (including counsel for any Loan Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender Party and shall not be responsible to any Lender
Party for any statements, warranties or representations (whether written or
oral) made in or in connection with the Loan Documents; (d) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of any Loan Document on the part of any Loan
Party or to inspect the property (including the books and records) of any Loan
Party; (e) shall not be responsible to any Lender Party for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with, any Loan Document or any other
instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopy)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. Bank of America, BAS and Affiliates.
With respect to its Commitments, the Advances made by it and the Notes
issued to it, Bank of America shall have the same rights and powers under the
Loan Documents as any other Lender Party and may exercise the same as though it
were not an Agent; and the term "Lender Party" or "Lender Parties" shall, unless
otherwise expressly indicated, include Bank of America in its individual
capacity. Bank of America and BAS and their respective Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, any Loan Party, any of its Subsidiaries and any Person that may do
business with or own securities of any Loan Party or any such Subsidiary, all as
if Bank of America and BAS were not Agents and without any duty to account
therefor to the Lender Parties.
SECTION 7.04. Lender Party Credit Decision.
Each Lender Party acknowledges that it has, independently and without
reliance upon any Agent
77
or any other Lender Party and based on the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon any Agent or any other Lender Party and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
SECTION 7.05. Indemnification.
(a) Each Lender Party severally agrees to indemnify each Agent (to
the extent not promptly reimbursed by the Borrower) from and against such Lender
Party's ratable share (determined as provided in Section 7.05(c)) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against such Agent in any way relating to
or arising out of the Loan Documents or any action taken or omitted by such
Agent under the Loan Documents; provided, however, that no Lender Party shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Agent's gross negligence or willful misconduct as found in a final,
non-appealable judgment by a court of competent jurisdiction. Without limitation
of the foregoing, each Lender Party agrees to reimburse each Agent promptly upon
demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrower under Section
9.04, to the extent that such Agent is not promptly reimbursed for such costs
and expenses by the Borrower.
(b) Each Lender Party severally agrees to indemnify the Issuing
Bank (to the extent not promptly reimbursed by the Borrower) from and against
such Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Issuing Bank in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by the Issuing Bank under the Loan Documents; provided, however, that no Lender
Party shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Issuing Bank's gross negligence or willful misconduct as
found in a final, non-appealable judgment by a court of competent jurisdiction.
Without limitation of the foregoing, each Lender Party agrees to reimburse the
Issuing Bank promptly upon demand for its ratable share of any costs and
expenses (including, without limitation, fees and expenses of counsel) payable
by the Borrower under Section 9.04, to the extent that the Issuing Bank is not
promptly reimbursed for such costs and expenses by the Borrower.
(c) For purposes of this Section 7.05, the Lender Parties'
respective ratable shares of any amount shall be determined, at any time,
according to the sum of (i) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lender Parties, (ii) their
respective Pro Rata Shares of the aggregate Available Amount of all Letters of
Credit outstanding at such time, (iii) their respective Unused Term Commitments
at such time and (iv) their respective Unused Working Capital Commitments at
such time; provided that the aggregate principal amount of Letter of Credit
Advances owing to the Issuing Bank shall be considered to be owed to the Lenders
ratably in accordance with their respective Working Capital Commitments. The
failure of any Lender Party to reimburse any Agent or the Issuing Bank, as the
case may be, promptly upon demand for its ratable share of any amount required
to be paid by the Lender Parties to such Agent or the Issuing Bank, as the case
may be, as provided herein shall not relieve any other Lender Party of its
obligation hereunder to reimburse such Agent or the Issuing Bank, as the case
may be, for its ratable share of such amount, but no Lender Party
78
shall be responsible for the failure of any other Lender Party to reimburse such
Agent or the Issuing Bank, as the case may be, for such other Lender Party's
ratable share of such amount. Without prejudice to the survival of any other
agreement of any Lender Party hereunder, the agreement and obligations of each
Lender Party contained in this Section 7.05 shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the other
Loan Documents.
SECTION 7.06. Successor Agents.
Any Agent may resign at any time by giving written notice thereof to the
Lender Parties and the Borrower and may be removed at any time with or without
cause by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right, with the consent of the Borrower (such
consent not to be unreasonably withheld or delayed), to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lender Parties, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States or of any State thereof and having
a combined capital and surplus of at least $250,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent and, in the case of a
successor Collateral Agent, upon the execution and filing or recording of such
financing statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, such successor Agent shall succeed to
and become vested with all the rights, powers, discretion, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under the Loan Documents. If within 45 days after written
notice is given of the retiring Agent's resignation or removal under this
Section 7.06 no successor Agent shall have been appointed and shall have
accepted such appointment, then on such 45th day (i) the retiring Agent's
resignation or removal shall become effective, (ii) the retiring Agent shall
thereupon be discharged from its duties and obligations under the Loan Documents
and (iii) the Required Lenders shall thereafter perform all duties of the
retiring Agent under the Loan Documents until such time, if any, as the Required
Lenders appoint a successor Agent as provided above. After any retiring Agent's
resignation or removal hereunder as Agent shall have become effective, the
provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
ARTICLE VIII
PARENT GUARANTY
SECTION 8.01. Parent Guaranty.
(a) The Parent hereby absolutely, unconditionally and irrevocably
guarantees (the undertaking by the Parent under this Article VIII being the
"Parent Guaranty") the punctual payment when due, whether at scheduled maturity
or at a date fixed for prepayment or by acceleration, demand or otherwise under
the terms of the Loan Documents, of all of the Guaranteed Obligations and agrees
to pay any and all expenses (including, without limitation, reasonable fees and
expenses of counsel) incurred by any of the Agents or any of the other Secured
Parties in enforcing any rights under this Parent Guaranty and the other Loan
Documents. Without limiting the generality of the foregoing, the Parent's
liability shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by any of the other Loan Parties to any of the
Agents or any of the other Secured Parties under or in respect of the Loan
79
Documents but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
such other Loan Party.
(b) The Parent, and by its acceptance of this Parent Guaranty,
each of the Agents and each of the other Secured Parties, hereby confirms that
it is the intention of all such Persons that this Parent Guaranty and the
Obligations of the Parent hereunder not constitute a fraudulent transfer or
conveyance for purposes of the United States Federal Bankruptcy Code, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar federal or state law relating to the protection of creditors' rights or
the relief of debtors to the extent applicable to this Parent Guaranty and the
Obligations of the Parent hereunder. To effectuate the foregoing intention, the
Parent, each of the Agents and each of the other Secured Parties hereby
irrevocably agree that the Guaranteed Obligations and all of the other
liabilities of the Parent under this Parent Guaranty shall be limited to the
maximum amount as will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of the Parent that are relevant under such
laws, and after giving effect to any collections from, any rights to receive
contributions from, or payments made by or on behalf of, any of the Subsidiaries
of the Parent in respect of the Obligations of such Subsidiary under the
Subsidiary Guaranty and, in the case of the Parent, this Parent Guaranty, result
in the Guaranteed Obligations and all other liabilities of the Parent under this
Parent Guaranty not constituting a fraudulent transfer or conveyance.
(c) The Parent hereby unconditionally and irrevocably agrees that,
in the event any payment shall be required to be made to the Secured Parties
under this Parent Guaranty, the Subsidiary Guaranty or any other guarantee, the
Parent shall contribute, to the maximum extent permitted by applicable law, such
amounts to each of the Subsidiaries of the Parent party to the Subsidiary
Guaranty and each other guarantor so as to maximize the aggregate amount paid to
the Secured Parties under or in respect of the Loan Documents.
SECTION 8.02. Guaranty Absolute.
(a) The Parent guarantees that all of the Guaranteed Obligations
will be paid strictly in accordance with the terms of the Loan Documents,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of any of the Agents or
any of the other Secured Parties with respect thereto. The Obligations of the
Parent under this Parent Guaranty are independent of the Guaranteed Obligations
or any other Obligations of any of the other Loan Parties under or in respect of
the Loan Documents, and a separate action or actions may be brought and
prosecuted against the Parent to enforce this Parent Guaranty, irrespective of
whether any action is brought against the Borrower or any of the other Loan
Parties or whether the Borrower or any of the other Loan Parties is joined in
any such action or actions. The liability of the Parent under this Parent
Guaranty shall be absolute, unconditional and irrevocable irrespective of, and
the Parent hereby irrevocably waives (to the fullest extent permitted by
applicable law) any defenses it may now have or may hereafter acquire in any way
relating to, any and all of the following:
(i) any lack of validity or enforceability of any of the
Loan Documents or any other agreement or instrument relating
thereto;
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations or
any other Obligations of any of the Loan Parties under or in respect
of the Loan Documents, or any other amendment or waiver of or any
consent to departure from any of the Loan Documents (including,
without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to the Borrower or
any
80
of the other Loan Parties or any of their respective Subsidiaries or
otherwise);
(iii) any taking, exchange, release or nonperfection of any of
the Collateral, or any taking, release or amendment or waiver of, or
consent to departure from, the Subsidiary Guaranty or any other
guarantee, for all or any of the Guaranteed Obligations;
(iv) any manner of application of Collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner
of sale or other disposition of any Collateral for all or any of the
Guaranteed Obligations or any other Obligations of any of the other
Loan Parties under or in respect of the Loan Documents, or any other
property and assets of any of the other Loan Parties or any of their
respective Subsidiaries;
(v) any change, restructuring or termination of the
corporate structure or existence of any of the other Loan Parties or
any of their respective Subsidiaries;
(vi) any failure of any of the Secured Parties to disclose to
any of the Loan Parties any information relating to the business,
condition (financial or otherwise), operations, performance,
properties or prospects of any of the other Loan Parties now or
hereafter known to such Secured Party (the Parent waiving any duty
on the part of the Secured Parties to disclose such information);
(vii) the failure of any Person to execute the Subsidiary
Guaranty or any other guarantee or agreement or the release or
reduction of liability of any Subsidiary Guarantor or other
guarantor or surety with respect to the Guaranteed Obligations; or
(viii) any other circumstance (including, without limitation,
any statute of limitations or any existence of or reliance on any
representation by any of the Agents or any of the other Secured
Parties) that might otherwise constitute a defense available to, or
a discharge of, the Parent, the Borrower, any of the other Loan
Parties or any other guarantor or surety.
This Parent Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by any of the Agents or any of the other
Secured Parties or by any other Person upon the insolvency, bankruptcy or
reorganization of the Borrower or any of the other Loan Parties or otherwise,
all as though such payment had not been made, and the Parent hereby
unconditionally and irrevocably agrees that it will indemnify each of the Agents
and each of the other Secured Parties, upon demand, for all of the costs and
expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred by such Agent or such other Secured Party in connection with
any such rescission or restoration, including any such costs and expenses
incurred in defending against any claim alleging that such payment constituted a
preference, a fraudulent transfer or a similar payment under any bankruptcy,
insolvency or similar law, regulation or order.
(b) The Parent hereby further agrees that (i) the Guaranteed
Obligations of the Parent may be declared to be forthwith due and payable as
provided in Section 6.01 (and shall be deemed to have become automatically due
and payable in the circumstances provided in Section 6.01) for purposes of this
Article VIII, notwithstanding any stay, injunction or other prohibition
preventing such declaration in respect of the Obligations of any of the Loan
Parties guaranteed hereunder (or preventing such Guaranteed Obligations from
becoming automatically due and payable) as against any other Person and (ii) in
the event of any declaration of acceleration of such Guaranteed Obligations (or
such
81
Guaranteed Obligations being deemed to have become automatically due and
payable) as provided in Section 6.01, such Guaranteed Obligations (whether or
not due and payable by any other Person) shall forthwith become due and payable
by the Parent for all purposes of this Parent Guaranty.
SECTION 8.03. Waivers and Acknowledgments.
(a) The Parent hereby unconditionally and irrevocably waives
promptness, diligence, notice of acceptance, presentment, demand for
performance, notice of nonperformance, default, acceleration, protest or
dishonor and any other notice with respect to any of the Guaranteed Obligations
and this Parent Guaranty, and any requirement that any of the Agents or any of
the other Secured Parties protect, secure, perfect or insure any Lien or any
property or assets subject thereto or exhaust any right or take any action
against any of the other Loan Parties or any other Person or any Collateral.
(b) The Parent hereby unconditionally and irrevocably waives (i)
any defense arising by reason of any claim or defense based upon an election of
remedies by the Agents or the other Secured Parties that in any manner impairs,
reduces, releases or otherwise adversely affects the subrogation, reimbursement,
exoneration, contribution or indemnification rights of the Parent or any other
rights of the Parent to proceed against the Borrower, any Subsidiary Guarantor,
any of the other Loan Parties, any other guarantor or any other Person or any
Collateral, and (ii) any defense based on any right of setoff or counterclaim
against or in respect of the Obligations of the Parent under this Parent
Guaranty.
(c) The Parent hereby unconditionally and irrevocably waives any
duty on the part of any of the Agents or any of the other Secured Parties to
disclose to the Parent any matter, fact or thing relating to the business,
condition (financial or otherwise), operations, performance, properties or
prospects of any of the other Loan Parties or any of their respective
Subsidiaries now or hereafter known by such Agent or such Secured Party.
(d) The Parent hereby unconditionally and irrevocably waives any
right to revoke this Parent Guaranty, and acknowledges that this Parent Guaranty
is continuing in nature and applies to all Guaranteed Obligations, whether
existing now or in the future.
(e) The Parent hereby acknowledges that it will receive
substantial direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waivers set forth in Section
8.02 and in this Section 8.03 are knowingly made in contemplation of such
benefits.
SECTION 8.04. Subrogation.
The Parent hereby unconditionally and irrevocably agrees not to exercise
any rights that it may now have or may hereafter acquire against the Borrower,
any of the other Loan Parties or any other insider guarantor that arise from the
existence, payment, performance or enforcement of the Obligations of the Parent
under this Parent Guaranty or any of the other Loan Documents, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of any of the Agents or any of the other Secured Parties against the
Borrower, such other Loan Party or any other insider guarantor or any
Collateral, whether or not such claim, remedy or right arises in equity or under
contract, statute or common law, including, without limitation, the right to
take or receive from the Borrower, such other Loan Party or any other insider
guarantor, directly or indirectly, in cash or other property or by setoff or in
any other manner, payment or security on account of such claim, remedy or right,
unless and until such time as all of the Guaranteed Obligations and all of the
other amounts payable under this Parent Guaranty shall have been
82
paid in full in cash, all of the Bank Hedge Agreements shall have expired or
been terminated and the Commitments shall have expired or terminated. If any
amount shall be paid to the Parent in violation of the immediately preceding
sentence at any time prior to the latest of (a) the payment in full in cash of
all of the Guaranteed Obligations and all of the other amounts payable under
this Parent Guaranty, (b) the expiration or termination of all of the Bank Hedge
Agreements and (c) the Termination Date, such amount shall be received and held
in trust for the benefit of the Agents and the other Secured Parties, shall be
segregated from the other property and funds of the Parent and shall be
delivered forthwith to the Administrative Agent in the same form as so received
(with any necessary endorsement or assignment) to be credited and applied to the
Guaranteed Obligations and the other amounts payable under this Parent Guaranty,
whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as Collateral for any of the Guaranteed Obligations or
any of the other amounts payable under this Parent Guaranty thereafter arising.
If (i) the Parent shall pay to any of the Agents or any of the other Secured
Parties all or any part of the Guaranteed Obligations, (ii) all of the
Guaranteed Obligations and all of the other amounts payable under this Parent
Guaranty shall have been paid in full in cash, (iii) all of the Bank Hedge
Agreements shall have expired or been terminated and (iv) the Termination Date
shall have occurred, the Agents and the other Secured Parties shall, at the
Parent's request and expense, execute and deliver to the Parent appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer of subrogation to the Parent of an interest in the
Guaranteed Obligations resulting from the payment made by the Parent under this
Parent Guaranty.
SECTION 8.05. Continuing Guaranty; Assignments.
This Parent Guaranty is a continuing guarantee and shall (a) remain in
full force and effect until the latest of (i) the payment in full in cash of all
of the Guaranteed Obligations and all of the other amounts payable under this
Parent Guaranty, (ii) the expiration or termination of all of the Bank Hedge
Agreements and (iii) the Termination Date, (b) be binding upon the Parent and
its successors and assigns and (c) inure to the benefit of, and be enforceable
by, the Agents and the other Secured Parties and their respective successors,
transferees and assigns. Without limiting the generality of clause (c) of the
immediately preceding sentence, any of the Secured Parties may assign or
otherwise transfer all or any portion of its rights and obligations under this
Agreement (including, without limitation, all or any portion of its Commitments,
the Advances owing to it and the Notes held by it) to any other Person, and such
other Person shall thereupon become vested with all of the benefits in respect
thereof granted to such Secured Party under this Article VIII or otherwise, in
each case as and to the extent provided in Section 9.07. Neither Parent nor the
Borrower shall have the right to assign its rights hereunder or any interest
herein without the prior written consent of all of the Secured Parties.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc.
No amendment or waiver of any provision of this Agreement or the Notes or
any other Loan Document, nor consent to any departure by any Loan Party
therefrom, shall in any event be effective unless the same shall be in writing
and signed (or, in the case of the Collateral Documents, consented to) by the
Required Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by each of the Lenders (other than any Lender Party that is, at such
83
time, a Defaulting Lender) directly affected thereby, do any of the following at
any time: (i) waive any of the conditions specified in Section 3.01 or, in the
case of the Initial Extension of Credit, Section 3.02, (ii) change the number of
Lenders or the percentage of (x) the Commitments, (y) the aggregate unpaid
principal amount of the Advances or (z) the aggregate Available Amount of
outstanding Letters of Credit that, in each case, shall be required for the
Lenders or any of them to take any action hereunder, (iii) except in connection
with a sale or disposition permitted hereunder, release the Parent from its
guaranty obligations hereunder or release all or substantially all of the
Subsidiary Guarantors from their guaranty obligations under the Subsidiary
Guaranty, (iv) release all or substantially all of the Collateral in any
transaction or series of related transactions, (v) amend this Section 9.01, (vi)
increase the Commitments of the Lenders or subject the Lenders to any additional
obligations, (vii) reduce the principal of, or interest on, the Notes or any
fees or other amounts payable hereunder, (viii) postpone any date fixed for any
payment of principal of, or interest on, the Notes or any fees or other amounts
payable hereunder or amend Section 2.06, or (ix) release the Borrower from or
consent to the assignment or transfer by the Borrower of its obligations
hereunder or under the other Loan Documents; provided further that no amendment,
waiver or consent shall, unless in writing and signed by the Issuing Bank, in
addition to the Lenders required above to take such action, affect the rights or
obligations of the Issuing Bank under this Agreement; and provided further that
no amendment, waiver or consent shall, unless in writing and signed by an Agent
in addition to the Lenders required above to take such action, affect the rights
or duties of such Agent under this Agreement or the other Loan Documents.
SECTION 9.02. Notices, Etc.
All notices and other communications provided for hereunder shall be in
writing (including telecopy communication) and mailed, telecopied or delivered,
if to the Parent or the Borrower, at its address at 0000 Xxxxxxxx Xxxx, Xxxxx
000, Xxxxxx, Xxxxxxxx 00000, Attention: Xx. Xxxx Xxxxxx, Chief Operating
Officer; if to any Initial Lender or the Initial Issuing Bank, at its Domestic
Lending Office specified opposite its name on Schedule I hereto; if to any other
Lender Party, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender Party; if to the Collateral
Agent, at its address at Bank of America Corporate Center, 000 X. Xxxxx Xxxxxx,
00xx Xxxxx, Xxxxxxxxx, XX 00000, Attention: Xxxxxxx X. Xxxx, Vice President; and
if to the Administrative Agent, at its address at Bank of America Corporate
Center, 000 X. Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, XX 00000, Attention: Xxxxxxx
X. Xxxx, Vice President; or, as to the Parent, the Borrower or the
Administrative Agent, at such other address as shall be designated by such party
in a written notice to the other parties and, as to each other party, at such
other address as shall be designated by such party in a written notice to the
Borrower and the Administrative Agent. All such notices and communications
shall, when mailed or telecopied, be effective when deposited in the mails or
transmitted by telecopier, respectively, except that notices and communications
to any Agent pursuant to Article II, III or VII shall not be effective until
received by such Agent. Manual delivery by telecopier of an executed counterpart
of any amendment or waiver of any provision of this Agreement or the Notes or of
any Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of an original executed counterpart thereof.
SECTION 9.03. No Waiver; Remedies.
No failure on the part of any Lender Party or any Agent to exercise, and
no delay in exercising, any right hereunder or under any Note shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
84
SECTION 9.04. Costs and Expenses.
(a) The Borrower agrees to pay on demand (i) all reasonable costs
and expenses of each Agent in connection with the preparation, execution,
delivery, administration, modification and amendment of the Loan Documents
(including, without limitation, (A) all due diligence, collateral review,
syndication, transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses and (B) the
reasonable fees and expenses of counsel for each Agent with respect thereto,
with respect to advising such Agent as to its rights and responsibilities, or
the perfection, protection or preservation of rights or interests, under the
Loan Documents, with respect to negotiations with any Loan Party or with other
creditors of any Loan Party or any of its Subsidiaries arising out of any
Default or any events or circumstances that may give rise to a Default and with
respect to presenting claims in or otherwise participating in or monitoring any
bankruptcy, insolvency or other similar proceeding involving creditors' rights
generally and any proceeding ancillary thereto) and (ii) all costs and expenses
of each Agent and each Lender Party in connection with the enforcement of the
Loan Documents, whether in any action, suit or litigation, or any bankruptcy,
insolvency or other similar proceeding affecting creditors' rights generally
(including, without limitation, the reasonable fees and expenses of counsel for
the Administrative Agent and each Lender Party with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless each Agent,
each Lender Party and each of their Affiliates and their respective officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) (i) the Facilities (except as
otherwise expressly provided for in this Agreement and the other Loan Documents)
or the actual or proposed use of the proceeds of the Advances or the Letters of
Credit, or (ii) the actual or alleged presence of Hazardous Materials on any
property of any Loan Party or any of its Subsidiaries or any Environmental
Action relating in any way to any Loan Party or any of its Subsidiaries, except
to the extent such claim, damage, loss, liability or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
In the case of an investigation, litigation or other proceeding to which the
indemnity in this Section 9.04(b) applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by any
Loan Party, its directors, shareholders or creditors or an Indemnified Party or
any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated by the Loan Documents are consummated.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender Party other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.06, 2.09(b)(i) or
2.10(d), acceleration of the maturity of the Notes pursuant to Section 6.01 or
for any other reason, or if the Borrower fails to make any payment or prepayment
of an Advance for which a notice of prepayment has been given or that is
otherwise required to be made, whether pursuant to Section 2.04, 2.06 or 6.01 or
otherwise, the Borrower shall, upon demand by such Lender Party (with a copy of
such demand to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender Party any amounts required to compensate such Lender
Party for any additional losses, costs or expenses that it may reasonably incur
as a result of such payment or Conversion or such failure to pay or prepay, as
the case may be, including, without limitation, any loss (excluding loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any
85
Lender Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Administrative Agent or any Lender
Party, in its sole discretion.
(e) Without prejudice to the survival of any other agreement of
any Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
9.04 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
SECTION 9.05. Right of Setoff.
Upon (a) the occurrence and during the continuance of any Event of Default
and (b) the making of the request or the granting of the consent specified by
Section 6.01 to authorize the Administrative Agent to declare the Notes due and
payable pursuant to the provisions of Section 6.01, each Agent and each Lender
Party and each of their respective Affiliates is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
otherwise apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Agent, such Lender Party or such Affiliate to or for the credit or the
account of the Borrower against any and all of the Obligations of the Borrower
now or hereafter existing under the Loan Documents, irrespective of whether such
Agent or such Lender Party shall have made any demand under this Agreement or
such Note or Notes and although such obligations may be unmatured. Each Agent
and each Lender Party agrees promptly to notify the Borrower after any such
setoff and application; provided, however, that the failure to give such notice
shall not affect the validity of such setoff and application. The rights of each
Agent and each Lender Party and their respective Affiliates under this Section
9.05 are in addition to other rights and remedies (including, without
limitation, other rights of setoff) that such Agent, such Lender Party and their
respective Affiliates may have.
SECTION 9.06. Binding Effect.
This Agreement shall become effective when it shall have been executed by
the Parent, the Borrower and each Agent and the Administrative Agent shall have
been notified by each Initial Lender and the Initial Issuing Bank that such
Initial Lender and the Initial Issuing Bank has executed it and thereafter shall
be binding upon and inure to the benefit of the Parent, the Borrower, each Agent
and each Lender Party and their respective successors and assigns, except that
neither the Parent nor the Borrower shall have the right to assign its rights
hereunder or any interest herein without the prior written consent of the Lender
Parties.
SECTION 9.07. Assignments and Participations.
(a) Each Lender may and, so long as no Default shall have occurred
and be continuing, if demanded by the Borrower (following a demand by such
Lender pursuant to Section 2.16) upon at least five Business Days' notice to
such Lender and the Administrative Agent, shall assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment or
Commitments, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) each such assignment shall be of a uniform, and not
a varying, percentage of all rights and obligations under and in respect of all
of the Facilities, (ii) except in
86
the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender, an Affiliate of any Lender or an Approved Fund
of any Lender or an assignment of all of a Lender's rights and obligations
under this Agreement, the aggregate amount of the Commitments being
assigned to such Eligible Assignee pursuant to such assignment (determined
as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $1,000,000, (iii) each such
assignment shall be to an Eligible Assignee, (iv) each such assignment
made as a result of a demand by the Borrower pursuant to this Section
9.07(a) shall be arranged by the Borrower after consultation with the
Administrative Agent and shall be either an assignment of all of the
rights and obligations of the assigning Lender under this Agreement or an
assignment of a portion of such rights and obligations made concurrently
with another such assignment or other such assignments that together cover
all of the rights and obligations of the assigning Lender under this
Agreement, (v) no Lender shall be obligated to make any such assignment as
a result of a demand by the Borrower pursuant to this Section 9.07(a)
unless and until such Lender shall have received one or more payments from
either the Borrower or one or more Eligible Assignees in an aggregate
amount at least equal to the aggregate outstanding principal amount of the
Advances owing to such Lender, together with accrued interest thereon to
the date of payment of such principal amount and all other amounts payable
to such Lender under this Agreement, (vi) no such assignments shall be
permitted without the consent of the Administrative Agent until the
Administrative Agent shall have notified the Lender Parties that
syndication of the Commitments hereunder has been completed and (vii) the
parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,500.
(b) Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in such Assignment and Acceptance,
(i) the assignee thereunder shall be a party hereto and, to the extent
that rights and obligations hereunder have been assigned to it pursuant to
such Assignment and Acceptance, have the rights and obligations of a
Lender or Issuing Bank, as the case may be, hereunder and (ii) the Lender
or Issuing Bank assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights (other than its rights under
Sections 2.10, 2.12 and 9.04 to the extent any claim thereunder relates to
an event arising prior to such assignment) and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the remaining portion of an assigning Lender's
or Issuing Bank's rights and obligations under this Agreement, such Lender
or Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, each
Lender Party assignor thereunder and each assignee thereunder confirm to
and agree with each other and the other parties thereto and hereto as
follows: (i) other than as provided in such Assignment and Acceptance,
such assigning Lender Party makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any Lien or security interest
created or purported to be created under or in connection with, any Loan
Document or any other instrument or document furnished pursuant thereto;
(ii) such assigning Lender Party makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any
Loan Party or the performance or observance by any Loan Party of any of
its Obligations under any Loan Document or any other instrument or
document furnished pursuant thereto; (iii) such assignee confirms that it
has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon any Agent,
such assigning
87
Lender Party or any other Lender Party and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement;
(v) such assignee confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes each Agent to take such action as agent
on its behalf and to exercise such powers and discretion under the Loan
Documents as are delegated to such Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender or Issuing Bank,
as the case may be.
(d) The Administrative Agent shall maintain at its address
referred to in Section 9.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the
names and addresses of the Lender Parties and the Commitment under each
Facility of, and principal amount of the Advances owing under each
Facility to, each Lender Party from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Parent, the Borrower, the Agents and the
Lender Parties may treat each Person whose name is recorded in the
Register as a Lender Party hereunder for all purposes of this Agreement.
The Register shall be available for inspection by the Borrower or any
Agent or any Lender Party at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender Party and an assignee, together with any Note or Notes
subject to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the
form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give
prompt notice thereof to the Borrower and each other Agent. In the case of
any assignment by a Lender, within five Business Days after its receipt of
such notice, the Borrower, at its own expense, shall execute and deliver
to the Administrative Agent in exchange for the surrendered Note or Notes
a new Note to the order of such Eligible Assignee in an amount equal to
the Commitment assumed by it under each Facility pursuant to such
Assignment and Acceptance and, if any assigning Lender has retained a
Commitment hereunder under such Facility, a new Note to the order of such
assigning Lender in an amount equal to the Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the effective date of such Assignment and Acceptance
and shall otherwise be in substantially the form of Exhibit A-1 or A-2
hereto, as the case may be.
(f) The Issuing Bank may assign to an Eligible Assignee all of its
rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; provided, however, that (i) each such assignment
shall be to an Eligible Assignee and (ii) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance,
together with a processing and recordation fee of $3,500.
(g) Each Lender Party may sell participations to one or more
Persons (other than any Loan Party or any of its Affiliates) in or to all
or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the
Advances owing to it and the Note or Notes (if any) held by it); provided,
however, that (i) such Lender Party's obligations under this Agreement
(including, without limitation, its Commitments) shall remain unchanged,
(ii) such Lender Party shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender
Party shall remain the holder of any such Note for all purposes of this
Agreement, (iv) the Parent, the Borrower, the Agents and the other Lender
Parties shall continue to deal solely and directly with such Lender Party
in connection with such Lender Party's rights and obligations under this
88
Agreement and (v) no participant under any such participation shall have any
right to approve any amendment or waiver of any provision of any Loan Document,
or any consent to any departure by any Loan Party therefrom, except to the
extent that such amendment, waiver or consent would reduce the principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, postpone any date fixed for
any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, or release all or substantially all of the Collateral.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.07, disclose to the assignee or participant or proposed assignee or
participant any information relating to any Loan Party furnished to such Lender
Party by or on behalf of any Loan Party; provided, however, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party.
(i) Notwithstanding any other provision set forth in this
Agreement, any Lender Party may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
the Advances owing to it and the Note or Notes held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
SECTION 9.08. Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Manual delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be
effective as delivery of an original executed counterpart of this Agreement.
SECTION 9.09. No Liability of the Issuing Bank.
The Borrower assumes all risks of the acts or omissions of any beneficiary
or transferee of any Letter of Credit with respect to its use of such Letter of
Credit. Neither the Issuing Bank nor any of its officers or directors shall be
liable or responsible for: (a) the use that may be made of any Letter of Credit
or any acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by the Issuing
Bank against presentation of documents that do not comply with the terms of a
Letter of Credit, including failure of any documents to bear any reference or
adequate reference to the Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under any Letter of Credit,
except that the Borrower shall have a claim against the Issuing Bank, and the
Issuing Bank shall be liable to the Borrower, to the extent of any direct, but
not consequential, damages suffered by the Borrower that the Borrower proves
were caused by (i) the Issuing Bank's willful misconduct or gross negligence as
determined in a final, non-appealable judgment by a court of competent
jurisdiction in determining whether documents presented under any Letter of
Credit comply with the terms of the Letter of Credit or (ii) the Issuing Bank's
willful failure to make lawful payment under a Letter of Credit after the
presentation to it of a draft and certificates strictly complying with the terms
and conditions of the Letter of Credit. In furtherance and not in limitation of
the foregoing, the Issuing Bank may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any
89
notice or information to the contrary.
SECTION 9.10. Confidentiality.
Neither any Agent nor any Lender Party shall disclose any Confidential
Information to any Person without the consent of the Borrower, other than (a) to
such Agent's or such Lender Party's Affiliates and their officers, directors,
employees, agents and advisors and to actual or prospective Eligible Assignees
and participants, and then only on a confidential basis, (b) as required by any
law, rule or regulation or judicial process, (c) as requested or required by any
state, federal or foreign authority or examiner regulating such Lender Party and
(d) to any rating agency when required by it, provided that, prior to any such
disclosure, such rating agency shall undertake to preserve the confidentiality
of any Confidential Information relating to the Loan Parties received by it from
such Lender Party.
SECTION 9.11. Release of Collateral.
Upon the sale, lease, transfer or other disposition of any item of
Collateral of any Loan Party (including, without limitation, as a result of the
sale, in accordance with the terms of the Loan Documents, of the Loan Party that
owns such Collateral) in accordance with the terms of the Loan Documents, the
Collateral Agent shall, at the Borrower's expense, execute and deliver to such
Loan Party such documents as such Loan Party may reasonably request to evidence
the release of such item of Collateral from the assignment and security interest
granted under the Collateral Documents in accordance with the terms of the Loan
Documents.
SECTION 9.12. Jurisdiction, Etc.
(a) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or federal court of the United States
of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or any
of the other Loan Documents to which it is a party, 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 any such New York State court or, to
the extent permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or any of the other Loan Documents in the courts of
any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that 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 of the
other Loan Documents to which it is a party in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
SECTION 9.13. Governing Law.
This Agreement and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York.
90
SECTION 9.14. Waiver of Jury Trial.
Each of the Parent, the Borrower, the Agents and the Lender Parties
irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to any of the Loan Documents, the Advances or the actions of any Agent
or any Lender Party in the negotiation, administration, performance or
enforcement thereof.
91
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
AMERICHOICE CORPORATION
By
----------------------------------------
Name:
Title:
AMERICHOICE HEALTH SERVICES, INC.
By
----------------------------------------
Name:
Title:
AMERICHOICE HEALTH SERVICES, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
BANK OF AMERICA, N.A.,
as Administrative Agent, Collateral
Agent, a Lender, and Initial Issuing Bank
By
----------------------------------------
Name:
Title:
BANC OF AMERICA SECURITIES LLC,
as Arranger
By
----------------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK,
as Syndication Agent and a Lender
By
----------------------------------------
Name:
Title:
COMERICA BANK,
as a Lender
By
----------------------------------------
Name:
Title:
AMERICHOICE HEALTH SERVICES, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
WORKING LETTER OF BASE RATE AND
COMMITMENT TERM CAPITAL CREDIT EURODOLLAR
NAME OF INITIAL LENDER PERCENTAGE COMMITMENT COMMITMENT COMMITMENT LENDING OFFICE
-----------------------------------------------------------------------------------------------------------------------
Bank of America, N.A. 42.857143% $19,285,714.30 $10,714,285.70 $ 4,285,714.30 000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx
00000
Attention: Xxxxx Xxxxxx
First Union National Bank 35.714286% $16,071,428.70 $ 8,928,571.30 $ 3,571,428.60 000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Comerica Bank 21.428571% $ 9,642,857.00 $ 5,357,143.00 $ 2,142,857.10 000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxx
---------- -------------- -------------- --------------
100% $45,000,000.00 $25,000,000.00 $10,000,000.00
SCHEDULE II
SUBSIDIARY GUARANTORS
Information Network Corporation
SCHEDULE III
EQUITY INVESTORS
AMENDMENT NO. 1 & CONSENT
THIS AMENDMENT NO. 1 & CONSENT dated as of February __, 2002 (this
"Amendment") relating to the Credit Agreement referenced below is by and among
AMERICHOICE HEALTH SERVICES, INC., a Delaware corporation (the "Borrower"),
AMERICHOICE CORPORATION, a Delaware parent corporation (the "Parent"), certain
subsidiaries and affiliates identified on the signature pages hereto (together
with the Parent, the "Guarantors"), the Lenders and BANK OF AMERICA, N.A. (the
"Administrative Agent"). Capitalized terms used but not otherwise defined herein
shall have the meanings provided in the Credit Agreement.
W I T N E S S E T H
WHEREAS, a $70 million term loan and working capital revolving credit
facility has been established in favor of the Borrower pursuant to the terms of
that Amended and Restated Credit Agreement dated as of May 4, 2001 (as amended
and modified, the "Credit Agreement") among the Borrower, the Guarantors, the
Lenders and the Administrative Agent;
WHEREAS, the Borrower has requested an increase of $15 million to the
Working Capital Facility and certain other modifications to the Credit
Agreement; and
WHEREAS, the Lenders have agreed to the requested increase and
modifications on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
SECTION 1 Consent. In anticipation of an initial public offering of its
capital stock, the Parent plans to make certain redemptions and enter into
certain other transactions more particularly described on Schedule 5.02(f)(i)
hereto. The planned redemptions and other transactions will be financed, in
part, by a Working Capital Advance to the Borrower under the Credit Agreement
and, in turn, an intercompany loan by the Borrower to the Parent (the
"Intercompany Loan") of the proceeds thereof. Subject to the other terms and
conditions of this Amendment and the Credit Agreement as amended hereby, the
Lenders hereby consent to the Intercompany Loan and the redemptions and other
transactions set forth on Schedule 5.02(f)(i).
SECTION 2 Amendments. The Credit Agreement is hereby amended and
modified in the following respects:
2.1 Working Capital Facility. The Working Capital Facility is increased
by $15 million in the aggregate, and Schedule I to the Credit Agreement is
amended and restated to reflect the increased Working Capital Commitments of the
Lenders to read as Schedule I hereto.
2.2 Definitions.
(a) The following new definitions are added to Section 1.01 to
read as follows:
"Amendment No. 1" means that certain Amendment No. 1 & Consent
to the Credit Agreement, dated as of February __, 2002, by and among
the Borrower, the Guarantors, the Lenders and the Administrative
Agent.
"Fixed Charges" means, for any period for the Borrower, the
sum of (i) the cash portion of interest expense, plus (ii) current
maturities of Funded Debt, in each case determined in accordance
with GAAP.
"Fixed Charge Coverage Ratio" means, for any period, the ratio
of (i) the sum of the Borrower's EBITDA plus EBITDA of the
Borrower's non-HMO Subsidiaries plus Net Dividends to (ii) Fixed
Charges.
"Net Dividends" means, for any period, dividends from HMO
Subsidiaries to the Borrower minus cash Investments made by the
Borrower in the HMO Subsidiaries.
(b) Clause (i) of the definition of "Applicable Margin" in Section
1.01 is amended and restated to read as follows:
(i) from the date of Amendment No. 1 (February __, 2002) and for a
period of three months therefrom, 1.25% per annum for Base Rate
Advances and 2.25% per annum for Eurodollar Rate Advances, and
(c) Clause (i) of the definition of "Applicable Percentage" in
Section 1.01 is amended and restated to read as follows:
(i) from the date of Amendment No. 1 (February __, 2002) and for a
period of three months therefrom, 0.425% per annum and
(d) The following definition in Section 1.01 is amended and
restated to read as follows:
"Letter of Credit Commitment" means, with respect to the
Issuing Bank at any time, the total amount set forth on Schedule I
hereto under the caption "Letter of Credit Commitment", as such
amount may be reduced pursuant to Section 2.05.
2.3 Mandatory Commitment Reductions. Subsection (iii) of Section 2.05(b)
is renumbered as subsection (iv), and a new subsection (iii) is added to read as
follows:
(iii) The Working Capital Facility shall be automatically and
permanently reduced in the following amounts on each of the following
dates:
Date of Reduction Amount of Reduction
----------------- -------------------
September 30, 2002 $1.5 million
December 31, 2002 $1.5 million
March 31, 2003 $1.5 million
June 30, 2003 $1.5 million
September 30, 2003 $1.5 million
December 31, 2003 $1.5 million
March 31, 2004 $1.5 million
2.4 Use of Proceeds. The following proviso is added to the end of
Section 2.14 to read as follows:
; provided that up to $33 million may be used to finance the redemptions
and other transactions by the Parent set forth on Schedule 5.02(f)(i)
hereto.
2
2.5 Investments. Clauses (C) and (D) of Section 5.02(f)(i) are
relettered as clauses (D) and (E) respectively, and a new clause (C) is added to
read as follows:
(C) up to $33 million in Investments and intercompany loans by the
Borrower in and to the Parent to finance certain redemptions and other
transactions by the Parent set forth on Schedule 5.02(f)(i) hereto,
2.6 Restricted Payments. A new clause (vi) is added at the end of
Section 5.02(g) to read as follows:
(vi) so long as no Default shall have occurred and be continuing or
result therefrom, the Parent may make the redemptions and enter into the
transactions set forth on Schedule 5.02(f)(i) hereto in an amount not to
exceed $33 million in the aggregate.
2.7 Minimum Surplus Covenant. Each reference to "150%" in clauses (i),
(ii), (iii) and (iv) of Section 5.04(d) is amended to read "110%".
2.8 Risk-Based Capital Ratio. Each reference to a ratio "equal to or
greater than 1.25:1.0" in clauses (i), (ii), (iii) and (iv) of Section 5.04(e)
is amended to read "equal to or greater than 1.1:1.0".
2.9 Fixed Charge Coverage Ratio. A new subsection (f) is added at the
end of Section 5.04 to read as follows:
(f) Fixed Charge Coverage Ratio. As of the end of each fiscal year
of the Borrower, cause the Borrower to maintain a Fixed Charge Coverage
Ratio of not less than:
Fiscal Year Ending Fixed Charge Coverage Ratio
------------------ ---------------------------
December 31, 2002 1.5:1.0
December 31, 2003 1.25:1.0
2.10 Schedule 5.02(f)(i). A new Schedule 5.02(f)(i) describing the
redemptions and other transactions of the Parent in anticipation of an initial
public offering of its capital stock is hereby added to the Credit Agreement to
read as Schedule 5.02(f)(i) hereto.
SECTION 3 Conditions Precedent. This Amendment shall be effective
immediately upon receipt by the Agent of all of the following, each in form and
substance satisfactory to the Agent:
(i) counterparts of this Amendment duly executed by the Loan
Parties and the Lenders;
(ii) resolutions of the Loan Parties;
(iii) legal opinions from counsel to the Loan Parties;
(iv) a fee of 62.5 basis points (0.625%) on the increase in Working
Capital Commitments, which fee shall be deemed fully earned and due and
payable on the effective date of this Amendment; and
(v) any and all other fees due in connection herewith, which fees
shall be deemed fully earned and due and payable on the effective date of
this Amendment.
3
SECTION 4 Miscellaneous.
4.1 The Loan Parties hereby affirm that, after giving effect to this
Amendment, the representations and warranties set forth in the Credit Agreement
and the other Loan Documents are true and correct in all material respects as of
the date hereof (except those which expressly relate to an earlier period).
4.2 Except as modified hereby, all of the terms and provisions of the
Credit Agreement and the other Loan Documents (including schedules and exhibits
thereto) shall remain in full force and effect.
4.3 The Borrower agrees to pay all reasonable costs and expenses of the
Administrative Agent in connection with the preparation, execution and delivery
of this Amendment, including the reasonable fees and expenses of Xxxxx & Xxx
Xxxxx, PLLC.
4.4 This Amendment may be executed in any number of counterparts, each
of which when so executed and delivered shall be deemed an original, and it
shall not be necessary in making proof of this Amendment to produce or account
for more than one such counterpart.
4.5 This Amendment shall be deemed to be a contract made under, and for
all purposes shall be construed in accordance with the laws of, the State of New
York.
[remainder of page intentionally left blank]
4
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Amendment to be duly executed and delivered as of the date first above
written.
BORROWER: AMERICHOICE HEALTH SERVICES, INC.,
a Delaware corporation
By:
---------------------------
Name:
Title:
GUARANTORS: AMERICHOICE CORPORATION,
a Delaware corporation
By:
---------------------------
Name:
Title:
INFORMATION NETWORK CORPORATION,
an Arizona corporation
By:
---------------------------
Name:
Title:
AMERICHOICE HEALTH SERVICES, INC.
AMENDMENT NO. 1 & CONSENT
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,
as Administrative Agent
By:
---------------------------
Name:
Title:
LENDERS: BANK OF AMERICA, N.A.
By:
---------------------------
Name:
Title:
FIRST UNION NATIONAL BANK
By:
---------------------------
Name:
Title:
COMERICA BANK
By:
---------------------------
Name:
Title:
AMERICHOICE HEALTH SERVICES, INC.
AMENDMENT NO. 1 & CONSENT
Schedule I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Working
Term Capital Letter of
Commitment Term Commitment Working Capital Credit Base Rate and Eurodollar
Lender Percentage Commitment Percentage Commitment Commitment Lending Office
------ ---------- ---------- ---------- ---------- ---------- --------------
Bank of America, N.A. 42.857143% $19,285,714.30 39.28571425% $15,714,285.70 $ 4,285,714.30 000 Xxxxx Xxxxx Xxxxxx,
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx
00000
Attn: Xxxxx Xxxxxx
First Union National Bank 35.714286% $16,071,428.70 34.82142825% $13,928,571.30 $ 3,571,428.60 000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxx
Comerica Bank 21.428571% $ 9,642,857.00 25.8928575% $10,357,143.00 $ 2,142,857.10 000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxx
-------------------------------------------------------------------------
Total: 100% $45,000,000.00 100% $40,000,000.00 $10,000,000.00
Schedule 5.02(f)(i)
REDEMPTIONS AND OTHER TRANSACTIONS
[1. REPURCHASE OF EXISTING SHARES FROM NON-INSTITUTIONAL SHAREHOLDERS IN
AN ESTIMATED AMOUNT OF $30.4 MILLION IN THE AGGREGATE.
2. TENDER OFFER TO OPTION HOLDERS HOLDING VESTED OPTIONS IN AN
ESTIMATED AMOUNT OF $2.1 MILLION IN THE AGGREGATE.]
