EXHIBIT 10.15
EXECUTION COPY
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CREDIT AGREEMENT
Dated as of March 19, 2003
among
XXXXXX HEALTHCARE, INC.,
a California corporation,
as the Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent
and
L/C Issuer,
CIBC WORLD MARKETS CORP.,
as Syndication Agent,
and
THE OTHER LENDERS PARTY HERETO
==================================
BANC OF AMERICA SECURITIES LLC,
and
CIBC WORLD MARKETS CORP.,
as
Co-Lead Arrangers
==================================
SOCIETE GENERALE,
as
Documentation Agent
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TABLE OF CONTENTS
Section Page
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS...............................................................1
Section 1.01 Defined Terms.......................................................................1
Section 1.02 Other Interpretive Provisions......................................................27
Section 1.03 Accounting Terms...................................................................28
Section 1.04 Rounding...........................................................................29
Section 1.05 References to Agreements and Laws..................................................29
Section 1.06 Times of Day.......................................................................29
Section 1.07 Letter of Credit Amounts...........................................................29
ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS........................................................29
Section 2.01 Loans..............................................................................29
Section 2.02 Borrowings, Conversions and Continuations of Loans.................................30
Section 2.03 Letters of Credit..................................................................31
Section 2.04 [Intentionally Omitted]............................................................38
Section 2.05 Prepayments........................................................................38
Section 2.06 Termination or Reduction of Commitments............................................39
Section 2.07 Repayment of Loans.................................................................40
Section 2.08 Interest...........................................................................40
Section 2.09 Fees...............................................................................40
Section 2.10 Computation of Interest and Fees...................................................41
Section 2.11 Evidence of Debt...................................................................41
Section 2.12 Payments Generally.................................................................42
Section 2.13 Sharing of Payments................................................................44
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY......................................................45
Section 3.01 Taxes..............................................................................45
Section 3.02 Illegality.........................................................................46
Section 3.03 Inability to Determine Rates.......................................................46
Section 3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves
on Eurodollar Rate Loans...........................................................46
Section 3.05 Funding Losses.....................................................................47
Section 3.06 Matters Applicable to all Requests for Compensation................................48
Section 3.07 Survival...........................................................................48
ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS....................................................48
Section 4.01 Conditions of Initial Credit Extension.............................................48
Section 4.02 Conditions to all Credit Extensions................................................51
ARTICLE V REPRESENTATIONS AND WARRANTIES................................................................52
Section 5.01 Existence, Qualification and Power.................................................52
Section 5.02 Authorization; No Contravention....................................................52
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Section 5.03 Governmental Authorization; Other Consents.........................................53
Section 5.04 Binding Effect.....................................................................53
Section 5.05 Financial Statements; No Material Adverse Effect...................................53
Section 5.06 Litigation.........................................................................54
Section 5.07 No Default.........................................................................54
Section 5.08 Subsidiaries.......................................................................54
Section 5.09 Ownership of Personal Property; Liens..............................................54
Section 5.10 Intellectual Property; Licenses, Etc...............................................55
Section 5.11 Real Estate, Lease.................................................................55
Section 5.12 Environmental Matters..............................................................56
Section 5.13 Security Documents.................................................................57
Section 5.14 Insurance..........................................................................57
Section 5.15 Taxes..............................................................................57
Section 5.16 ERISA Compliance...................................................................58
Section 5.17 Margin Regulations; Investment Company Act; Public Utility Holding Company Act.....58
Section 5.18 Disclosure.........................................................................59
Section 5.19 Compliance with Laws...............................................................59
Section 5.20 Labor Matters......................................................................60
Section 5.21 Fraud And Abuse....................................................................61
Section 5.22 Licensing..........................................................................61
Section 5.23 Solvency...........................................................................61
Section 5.24 Material Contracts.................................................................61
ARTICLE VI AFFIRMATIVE COVENANTS........................................................................62
Section 6.01 Financial Statements...............................................................62
Section 6.02 Certificates; Other Information....................................................63
Section 6.03 Notices............................................................................64
Section 6.04 Payment of Obligations.............................................................65
Section 6.05 Preservation of Existence, Etc.....................................................66
Section 6.06 Maintenance of Properties..........................................................66
Section 6.07 Maintenance of Insurance...........................................................66
Section 6.08 Reinsurance Arrangements...........................................................67
Section 6.09 Compliance with Laws...............................................................67
Section 6.10 Books and Records..................................................................67
Section 6.11 Inspection Rights..................................................................67
Section 6.12 Use of Proceeds....................................................................68
Section 6.13 Further Assurances with Respect to Eligible Subsidiaries...........................68
Section 6.14 Further Assurances with Respect to HMO Subsidiaries................................68
Section 6.15 Further Assurances with Respect to other Collateral................................69
Section 6.16 Performance of Material Contracts..................................................72
Section 6.17 Maintenance of Licensing, Etc......................................................73
Section 6.18 Environmental......................................................................73
ARTICLE VII NEGATIVE COVENANTS..........................................................................74
Section 7.01 Liens..............................................................................74
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Section 7.02 Investments........................................................................75
Section 7.03 Indebtedness.......................................................................76
Section 7.04 Fundamental Changes and Acquisitions...............................................77
Section 7.05 Dispositions.......................................................................78
Section 7.06 Restricted Payments................................................................79
Section 7.07 Amendment, Etc. of Indebtedness, Other Material Contracts and Constitutive
Documents and Payments in respect of Indebtedness..................................79
Section 7.08 Change in Nature of Business.......................................................80
Section 7.09 Transactions with Affiliates.......................................................80
Section 7.10 Limitations on Restricted Actions..................................................80
Section 7.11 Operating Lease Obligations........................................................81
Section 7.12 Use of Proceeds....................................................................81
Section 7.13 Impairment of Security Interests...................................................81
Section 7.14 Ownership of Subsidiaries, Foreign Subsidiaries and Other
Restrictions Relating to Subsidiaries..............................................81
Section 7.15 Fiscal Year........................................................................82
Section 7.16 Partnerships, etc..................................................................82
Section 7.17 Capital Expenditures...............................................................82
Section 7.18 Financial Covenants................................................................82
Section 7.19 Risk-Based Capital Ratio...........................................................83
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES.............................................................83
Section 8.01 Events of Default..................................................................83
Section 8.02 Remedies Upon Event of Default.....................................................86
Section 8.03 Application of Funds...............................................................87
ARTICLE IX ADMINISTRATIVE AGENT.........................................................................88
Section 9.01 Appointment and Authorization of Administrative Agent..............................88
Section 9.02 Delegation of Duties...............................................................88
Section 9.03 Liability of Agent-Related Persons.................................................88
Section 9.04 Reliance by Administrative Agent...................................................89
Section 9.05 Notice of Default..................................................................89
Section 9.06 Credit Decision; Disclosure of Information by Administrative Agent.................90
Section 9.07 Indemnification of Administrative Agent............................................90
Section 9.08 Administrative Agent in its Individual Capacity....................................91
Section 9.09 Successor Administrative Agent.....................................................91
Section 9.10 Administrative Agent May File Proofs of Claim......................................92
Section 9.11 Collateral and Guaranty Matters....................................................93
Section 9.12 Other Agents; Arrangers and Managers...............................................93
ARTICLE X MISCELLANEOUS.................................................................................93
Section 10.01 Amendments, Etc....................................................................93
Section 10.02 Notices and Other Communications; Facsimile Copies.................................95
Section 10.03 No Waiver; Cumulative Remedies.....................................................96
Section 10.04 Attorney Costs, Expenses and Taxes.................................................96
Section 10.05 Indemnification by the Borrower....................................................97
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Section 10.06 Payments Set Aside.................................................................98
Section 10.07 Successors and Assigns.............................................................98
Section 10.08 Confidentiality...................................................................101
Section 10.09 Set-off...........................................................................102
Section 10.10 Interest Rate Limitation..........................................................102
Section 10.11 Counterparts......................................................................102
Section 10.12 Integration.......................................................................102
Section 10.13 Survival of Representations and Warranties........................................103
Section 10.14 Severability......................................................................103
Section 10.15 Tax Forms.........................................................................103
Section 10.16 [Intentionally omitted.]..........................................................105
Section 10.17 Governing Law.....................................................................105
Section 10.18 Waiver of Right to Trial by Jury..................................................106
Section 10.19 Replacement of Lenders............................................................106
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SCHEDULES
2.01 Commitments and Pro Rata Shares
5.03 Third Party Consents
5.08 Subsidiaries and Other Equity Investments
5.11 Fee Properties, Leased Properties
5.14 Insurance
5.20 Labor Matters
5.24 Material Contracts
7.01 Existing Liens
7.02 Existing Investments
7.03 Existing Indebtedness
7.04 Reincorporation Merger Documents
7.09 Transactions with Affiliates
10.02 Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
FORM OF
A Loan Notice
B Note
C Compliance Certificate
D Assignment and Assumption
E Joinder Agreement
F Opinion Matters
G Pledge Agreement
H Security Agreement
I Subsidiary Guaranty
J Mortgage
v
CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of March 19,
2003, among XXXXXX HEALTHCARE, INC., a California corporation (the "Borrower"),
each lender from time to time party hereto (collectively, the "Lenders" and
individually, a "Lender"), BANK OF AMERICA, N.A., as Administrative Agent and
L/C Issuer and CIBC WORLD MARKETS CORP., as Syndication Agent.
WITNESSETH:
WHEREAS, the Borrower has requested that the Lenders provide a
revolving credit facility in the aggregate principal amount of $75 million, and
the Lenders are willing to do so on the terms and conditions set forth herein;
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Defined Terms. As used in this Agreement, the
following terms shall have the meanings set forth below:
"Account Control Agreements" means, collectively, the Account Control
Agreements each substantially in the form of Exhibits B-1 and B-2, as
applicable, to the Security Agreement.
"Acquiring Party" has the meaning specified within the definition of
Permitted Acquisitions.
"Acquisition", by any Person, means the purchase or acquisition by such
Person of any capital stock of another Person other than a Loan Party or all or
any substantial portion of the Property (other than the capital stock) of
another Person other than a Loan Party, whether involving a merger or
consolidation with such other Person.
"Administrative Agent" means Bank of America in its capacity as
administrative agent and collateral agent, as applicable, under any of the Loan
Documents, or any successor administrative agent.
"Administrative Agent's Office" means the Administrative Agent's
address and, as appropriate, account as set forth on Schedule 10.02, or such
other address or account as to which the Administrative Agent may from time to
time notify the Borrower and the Lenders pursuant to Section 10.02 hereof.
"Administrative Services Agreements" means any and all administrative
services, consulting, corporate allocation, management, tax allocation and
similar agreements between or among the Borrower and any of its HMO
Subsidiaries.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
means the power to direct or cause the direction of the management or policies
of a Person, whether through the ability to exercise voting power, by contract
or otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
Without limiting the generality of the foregoing, a Person shall be deemed to be
Controlled by another Person if such other Person possesses, directly or
indirectly, power to vote 10% or more of the securities having ordinary voting
power for the election of directors, managing general partners or the
equivalent.
"Agent-Related Persons" means the Administrative Agent, together with
its Affiliates (including, in the case of Bank of America in its capacity as the
Administrative Agent, Banc of America Securities in its capacity as a Co-Lead
Arranger), and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.
"Aggregate Commitments" means the Commitments of all the Lenders.
"Agreement" means this Credit Agreement, as it may be amended, amended
and restated, supplemented or otherwise modified from time to time.
"Applicable Rate" means the following percentages per annum, based upon
the Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 6.02(b):
APPLICABLE RATE
PRE-SUCCESSFUL IPO
-----------------------------------------------------
EURODOLLAR
RATE +
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PRICING CONSOLIDATED LETTERS OF
LEVEL LEVERAGE RATIO CREDIT BASE RATE +
-----------------------------------------------------
1 * 1.5 2.75% 1.75%
2 * 1.0 but ** 1.5 2.5% 1.5%
3 ** 1.0 2.25% 1.25%
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* greater than
** less than
2
APPLICABLE RATE
POST-SUCCESSFUL IPO
-----------------------------------------------------
EURODOLLAR
RATE +
----------
PRICING CONSOLIDATED LETTERS OF
LEVEL LEVERAGE RATIO CREDIT BASE RATE +
-----------------------------------------------------
1 * 1.5 2.5% 1.5%
2 * 1.0 but ** 1.5 2.25% 1.25%
3 ** 1.0 2.0% 1.0%
-----------------------------------------------------
Any increase or decrease in the Applicable Rate resulting from a change
in the Consolidated Leverage Ratio shall become effective as of the first
Business Day immediately following the date a Compliance Certificate is
delivered pursuant to Section 6.02(b); provided, however, that if a Compliance
Certificate is not delivered when due in accordance with such Section, then
Pricing Level 1 shall apply for the period beginning on the first Business Day
after the date on which such Compliance Certificate was required to have been
delivered and continue until the date five Business Days after such Compliance
Certificate is delivered, whereupon the Applicable Rate shall be adjusted based
on the information contained in such Compliance Certificate. The Applicable Rate
in effect from the Closing Date through and for a period of six months therefrom
shall be determined based upon Pricing Xxxxx 0 of the Applicable Rate
Pre-Successful IPO.
"Approved Fund" has the meaning specified in Section 10.07(g).
"Assignment and Assumption" means an Assignment and Assumption,
substantially in the form of Exhibit D hereto.
"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel.
"Attributable Indebtedness" means, on any date, in respect of any
Capitalized Lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP.
"Audited Financial Statements" means the audited consolidated balance
sheets of the Borrower and the Subsidiaries for the fiscal years ended December
31, 2002, December 31, 2001 and December 31, 2000, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for each
such fiscal years of the Borrower and the Subsidiaries, including the notes
thereto.
"Availability Period" means the period from and including the Closing
Date to the earliest of (a) the Maturity Date, (b) the date of termination of
the Aggregate Commitments pursuant to Section 2.06, and (c) the date of
termination of the Commitment of each Lender to
* greater than
** less than
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make Loans and of the obligation of the of the L/C Issuer to make L/C Credit
Extensions pursuant to Section 8.02.
"Banc of America Securities" means Banc of America Securities LLC and
its successors.
"Bank of America" means Bank of America, N.A. and its successors.
"Base Rate" means, for any day a fluctuating rate per annum equal to
the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of
interest in effect for such day as publicly announced from time to time by Bank
of America as its "prime rate." The "prime rate" is a rate set by Bank of
America based upon various factors including Bank of America's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such rate announced by Bank of America shall
take effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
"Borrower" has the meaning specified in the introductory paragraph
hereto.
"Borrowing" means a borrowing consisting of simultaneous Loans of the
same Type and, in the case of Eurodollar Rate Loans, having the same Interest
Period made by each of the Lenders pursuant to Section 2.01.
"Building Finance Loan" means a loan to Xxxxxx Healthcare of California
by California Federal Bank in a principal amount of $3.4 million used in 1999 to
purchase the Borrower's corporate headquarters building located at Xxx Xxxxxx
Xxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxxxxx 00000, which loan is secured by a Lien on
such building.
"Businesses" has the meaning specified in Section 5.12(a).
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.
"Capital Assets" means, with respect to any Person, all equipment,
fixed assets and real property or improvements, 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 Expenditures" means, for any period for any Person, 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 such Person) and (b) solely to the extent not otherwise included in
clause (a) of this definition, the aggregate principal amount of all
Indebtedness (including,
4
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 Capital Expenditures, and (ii) the purchase price of equipment that
is purchased simultaneously with the trade-in of existing assets, equipment or
other property or with insurance proceeds, condemnation awards or other
settlements in respect of lost, destroyed, damaged or condemned assets,
equipment or other property shall be included in Capital Expenditures only to
the extent of the gross amount by which such purchase price exceeds the credit
granted by the seller of such asset, equipment or other property for the asset,
equipment or other property being traded in at such time or the amount of such
insurance proceeds, as the case may be.
"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 Collateralize" has the meaning specified in Section 2.03(g).
"CHAMPUS" means the United States Department of Defense Civilian Health
and Medical Program of the Uniformed Services.
"Change of Control" means, with respect to any Person, an event or
series of events by which:
(a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding any employee benefit plan of such person or its subsidiaries
and any person or entity acting in its capacity as trustee, agent or
other fiduciary or administrator of any such plan) becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 promulgated
under the Securities Exchange Act of 1934, except that a person or
group shall be deemed to have "beneficial ownership" of all securities
that such person or group has the right to acquire (such right, an
"option right"), whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of 30% or more of
the equity securities of such Person entitled to vote for members of
the board of directors or equivalent governing body of such Person on a
fully-diluted basis (and taking into account all such securities that
such person or group has the right to acquire pursuant to any option
right); or
(b) during any period of 12 consecutive months, a
majority of the members of the board of directors or other equivalent
governing body of such Person cease to be composed of individuals (i)
who were members of that board or equivalent governing body on the
first day of such period, (ii) whose election or nomination to that
board or equivalent governing body was approved by individuals referred
to in clause (i) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing
body (excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a
member of
5
that board or equivalent governing body occurs as a result of an actual
or threatened solicitation of proxies or consents for the election or
removal of one or more directors by any person or group other than a
solicitation for the election of one or more directors by or on behalf
of the board of directors); or
(c) any Person or two or more Persons acting in concert
shall have acquired by contract or otherwise, or shall have entered
into a contract or arrangement that, upon the consummation thereof,
will result in its or their acquisition of power to exercise, directly
or indirectly, a controlling influence over the management or policies
of the Borrower or control over the equity Securities of the Borrower
entitled to vote for members of the board of directors or equivalent
governing body of the Borrower on a fully diluted basis (and taking
into account all such securities that such Person or group has the
right to acquire pursuant to any option right) representing 30% or more
of the combined voting power of such securities; provided, however,
that notwithstanding any of the foregoing, transfers of equity
securities among members of the Molina Family and/or trusts
beneficially owned by any member of the Molina Family shall not be
considered a Change of Control hereunder.
"Closing Date" means the first date all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in the
case of Section 4.01(d), waived by the Person entitled to receive the applicable
payment).
"CIBC Inc." means CIBC Inc. and its successors.
"CMS" means the Centers for Medicare and Medicaid Services and any
successor thereof.
"Code" means the Internal Revenue Code of 1986.
"Co-Lead Arrangers" means Banc of America Securities, in its capacity
as a co-lead arranger, and CIBC World Markets Corp., in its capacity as a
co-lead arranger.
"Collateral" means all the "Collateral" referred to in the Collateral
Documents.
"Collateral Documents" means, collectively, the Security Agreement, the
Pledge Agreement, each Account Control Agreement, each Waiver Agreement, each
Mortgage and any other security agreements, pledge agreements or similar
instruments delivered to the Administrative Agent as collateral agent from time
to time pursuant to Sections 6.13, 6.14 and 6.15 and each other agreement,
instrument or document that creates or purports to create a Lien in favor of the
Administrative Agent, as collateral agent, for the benefit of the Secured
Parties.
"Commitment" means, as to each Lender, its obligation to (a) make Loans
to the Borrower pursuant to Section 2.01, and (b) purchase participations in L/C
Obligations, in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite such Lender's name on Schedule 2.01 or in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.
6
"Commitment Letter" means the commitment letter agreement, dated
February 1, 2003 among the Borrower, Bank of America, CIBC Inc. and the Co-Lead
Arrangers.
"Company Action Level" means the Company Action Level risk-based
capital threshold, as defined by the HMO Model Act.
"Compensation Period" has the meaning specified in Section 2.12(c)(ii).
"Compliance Certificate" means a certificate substantially in the form
of Exhibit C hereto.
"Consolidated EBITDA" means, for any period for the Borrower and the
Subsidiaries on a consolidated basis in accordance with GAAP, an amount equal to
Consolidated Net Income for such period, plus the following to the extent
deducted in calculating such Consolidated Net Income: (i) Consolidated Interest
Charges for such period; (ii) the provision for federal, state, local and
foreign income taxes for such period; and (iii) the amount of depreciation and
amortization expense deducted in determining such Consolidated Net Income.
"Consolidated Funded Indebtedness" means, for the Borrower and the
Subsidiaries determined on a consolidated basis in accordance with GAAP, as of
any date of determination, the sum of (a) the outstanding principal amount of
all obligations, whether current or long-term, for borrowed money (including
Obligations hereunder) and all obligations evidenced by bonds, debentures,
notes, loan agreements or other similar instruments, (b) all purchase money
Indebtedness, (c) all direct obligations arising under letters of credit
(including standby and commercial), bankers' acceptances, bank guaranties,
surety bonds and similar instruments, (d) all obligations in respect of the
deferred purchase price of property or services (other than trade accounts
payable in the ordinary course of business), (e) Attributable Indebtedness in
respect of Capitalized Leases, (f) the attributed principal amount of
Securitization Transactions, (g) all preferred stock or comparable equity
interests providing for mandatory redemption, sinking fund or other like
payments, (h) without duplication, all Guarantees with respect to outstanding
Indebtedness of the types specified in clauses (a) through (g) above, and (i)
all Indebtedness of the types referred to in clauses (a) through (h) above of
any partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person is a general
partner or joint venturer, unless such Indebtedness is expressly made
non-recourse to such Person.
"Consolidated Interest Charges" means, for any period, for the Borrower
and the Subsidiaries on a consolidated basis, all consolidated interest expense
in accordance with GAAP with respect to Indebtedness for borrowed money
(including capitalized interest) or in connection with the deferred purchase
price of assets.
"Consolidated Leverage Ratio" means, as of any date of determination,
the ratio of (a) Consolidated Funded Indebtedness as of such date to (b)
Consolidated EBITDA for the period of the four fiscal quarters most recently
ended for which the Borrower has delivered financial statements pursuant to
Section 6.01(a) or (b).
7
"Consolidated Net Income" means, for any period, on a consolidated
basis, the Net Income of the Borrower and the Subsidiaries on a consolidated
basis for that period.
"Consolidated Net Worth" means, as of any date of determination, for
the Borrower and the Subsidiaries on a consolidated basis, Shareholders' Equity
of the Borrower and the Subsidiaries on a consolidated basis on that date as
determined in accordance with GAAP.
"Contract Provider" means any Person or any employee, agent or
subcontractor of such Person who provides professional health care services
under or pursuant to any contract with the Borrower or any of the Subsidiaries.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" has the meaning specified in the definition of "Affiliate."
"Credit Extension" means each of the following: (a) a Borrowing; and
(b) an L/C Credit Extension.
"Debtor Relief Laws" means the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"Default Rate" means an interest rate equal to (a) in the case of
Eurodollar Rate Loans, the sum of (i) the Eurodollar Rate for such Loans, plus
(ii) the Applicable Rate applicable to such Loans, plus (iii) 2% per annum, and
(b) in the case of Base Rate Loans and for all other purposes, the sum of (i)
the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate
Loans plus (iii) 2% per annum.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Loans or participations in L/C Obligations required to be funded
by it hereunder within one Business Day of the date required to be funded by it
hereunder, (b) has otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within one
Business Day of the date when due, unless the subject of a good faith dispute,
or (c) has been deemed insolvent or become the subject of a bankruptcy or
insolvency proceeding.
"Disposition" or "Dispose" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
8
"Dollar" and "$" mean lawful money of the United States.
"EBITDA" means, for any period for any Person, an amount equal to Net
Income for such period, plus the following to the extent deducted in calculating
such Net Income: (i) Interest Charges for such period; (ii) the provision for
federal, state, local and foreign income taxes payable for such period; and
(iii) the amount of depreciation and amortization expense deducted in
determining such Net Income.
"EBITDAR" means for any period for any Person, EBITDA for such period
plus Rental Expense.
"Eligible Assignee" has the meaning specified in Section 10.07(g).
"Eligible Subsidiary" means any Subsidiary, other than a Subsidiary
that is restricted by HMO Regulations from giving a guaranty of the Loans and
other Obligations under this Agreement pursuant to a Subsidiary Guaranty.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment
9
as a termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which constitutes grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan or Multiemployer Plan; or (f) the imposition of any liability under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, upon the Borrower or any ERISA Affiliate.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan:
(a) the rate per annum equal to the rate determined by
the Administrative Agent to be the offered rate that appears on the
page of the Telerate screen (or any successor thereto) that displays an
average British Bankers Association Interest Settlement Rate for
deposits in Dollars (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period; or
(b) if the rate referenced in the preceding subsection
(a) does not appear on such page or service or such page or service
shall not be available, the rate per annum equal to the rate determined
by the Administrative Agent to be the offered rate on such other page
or other service that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the
first day of such Interest Period) with a term equivalent to such
Interest Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period;
or
(c) if the rates referenced in the preceding subsections
(a) and (b) are not available, the rate per annum determined by the
Administrative Agent as the rate of interest at which deposits in
Dollars for delivery on the first day of such Interest Period in same
day funds in the approximate amount of the Eurodollar Rate Loan being
made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of
America's London branch to major banks in the London interbank
eurodollar market at their request at approximately 4:00 p.m. (London
time) two Business Days prior to the first day of such Interest Period.
"Eurodollar Rate Loan" means a Loan that bears interest at a rate based
on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.01.
"Exclusion Event" means the exclusion of the Borrower or any of the
Subsidiaries from participation in any Medical Reimbursement Program.
"Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal
10
Reserve Bank on the Business Day next succeeding such day; provided that (a) if
such day is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate (rounded upward, if necessary, to a whole multiple
of 1/100 of 1%) charged to Bank of America on such day on such transactions as
determined by the Administrative Agent.
"Fee Letter" means the fee letter agreement, dated February 1, 2003
among the Borrower, Bank of America, CIBC Inc. and the Co-Lead Arrangers.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of (i)
the sum of the Borrower's unconsolidated EBITDAR, plus EBITDAR of any other Loan
Party, plus Net Dividends, to (ii) the sum of Fixed Charges of the Borrower and
any other Loan Party, plus Capital Expenditures of the Borrower and any other
Loan Party.
"Fixed Charges" means, for any period for any Person, the sum of (i)
the aggregate amount of taxes paid in cash, plus (ii) interest payable on all
Indebtedness for borrowed money, plus (iii) rent payable under leases of real,
personal, or mixed property, plus (iv) scheduled principal payments on all
Indebtedness for borrowed money.
"Foreign Lender" has the meaning specified in Section 10.15(a)(i).
"Foreign Subsidiary" means a subsidiary that is not organized under the
Laws of a political subdivision of the United States.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
"Fund" has the meaning set forth in Section 10.07(g).
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board, that are
applicable to the circumstances as of the date of determination, consistently
applied.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Governmental Reimbursement Program Cost" means with respect to and
payable by the Borrower and the Subsidiaries, the sum of:
(a) all amounts (including punitive and other similar
amounts) agreed to be paid or payable (i) in settlement of claims made
pursuant to any litigation, suit, arbitration, investigation or other
legal or administrative proceeding relating to a dispute
11
or (ii) as a result of a final, non-appealable judgment, award or
similar order, in each case, relating to participation in Medical
Reimbursement Programs;
(b) all final, non-appealable fines, penalties,
forfeitures or other amounts rendered pursuant to criminal indictments
or other criminal proceedings relating to participation in Medical
Reimbursement Programs; and
(c) the amount of final, non-appealable recovery,
damages, awards, penalties, forfeitures or similar amounts rendered in
any litigation, suit, arbitration, investigation or other legal or
administrative proceeding of any kind relating to participation in
Medical Reimbursement Programs.
"Guarantor" means each Eligible Subsidiary identified as a "Guarantor"
on the signature pages to the Subsidiary Guaranty and each other Person that
joins as a Guarantor pursuant to Section 6.13, together with their successors
and permitted assigns.
"Guarantee" means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person; provided that Guarantee shall not include
endorsements for collection or deposits in the ordinary course of business. The
amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof, in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term "Guarantee" as a verb has a
corresponding meaning.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HHS" means the United States Department of Health and Human Services
and any successor thereof.
12
"HMO" means any health maintenance organization or similar managed care
organization, or any health service plan under California Law, any Person doing
business as a health maintenance organization or similar managed care
organization, or a health care service plan under California Law, or any Person
required to qualify or be licensed as a health maintenance organization or
similar managed care organization under applicable federal or state Law or a
health care service plan under California Law (including, without limitation, in
each case, HMO Regulations).
"HMO Business" means the business of owning and operating an HMO.
"HMO Event" means (a) any material non-compliance by the Borrower or
any of the Subsidiaries to the extent subject to HMO Regulations with any of the
terms and provisions of the HMO Regulations pertaining to its fiscal soundness,
solvency or financial condition, or (b) the assertion in writing, after the date
hereof, by an HMO Regulator that it intends to take administrative action
against the Borrower or any of the Subsidiaries to revoke or modify in a
material and adverse manner any license, charter or permit or (c) the
commencement of proceedings against the Borrower or any of its Subsidiaries in
which an HMO Regulator asserts that the Borrower or any Subsidiary has failed to
comply with the soundness, solvency or financial provisions or requirements of
the HMO Regulations.
"HMO Model Act" means the Health Maintenance Organization Model Act
adopted by the National Association of Insurance Commissioners.
"HMO Regulations" means all laws, regulations, directives and
administrative orders applicable under federal or state law or the law of the
District of Columbia to any HMO Subsidiary (and any regulations, orders and
directives promulgated or issued pursuant to any of the foregoing) and
Subchapter XI of Chapter 6A 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 Governmental Authority charged with the
administration, oversight or enforcement of an HMO Regulation, whether
primarily, secondarily or jointly.
"HMO Subsidiary" means each of the Subsidiaries identified as an HMO
Subsidiary on Schedule 5.08 hereto, and any other existing or future Subsidiary
that is licensed as an HMO, conducting HMO Business and/or providing managed
care services.
"Honor Date" has the meaning specified in Section 2.03(c)(i).
"Improvements" shall mean, with respect to any Mortgaged Property, all
buildings, structures and other improvements now or hereafter existing, erected
or placed on or under the Mortgaged Property or any portion thereof, and all
fixtures of every kind and nature whatsoever now or hereafter owned and used or
procured for use in connection with the Mortgaged Property.
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
13
(a) all obligations of such Person for borrowed money and
all obligations of such Person evidenced by bonds, debentures, notes,
loan agreements or other similar instruments;
(b) all direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial),
bankers' acceptances, bank guaranties, surety bonds and similar
instruments;
(c) the net obligations of such Person under any Swap
Contract;
(d) all obligations of such Person to pay the deferred
purchase price of property or services (other than trade accounts
payable in the ordinary course of business;
(e) indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse;
(f) Capitalized Leases;
(g) all obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any equity
interests in such Person or any other Person or any warrants, rights or
options to acquire such equity interests, 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 Indebtedness in respect of any of the foregoing
of another Person secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on the property (including, without limitation,
accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for such Indebtedness; and
(i) all Guarantees of such Person in respect of any of
the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any Capitalized Lease as of any date
shall be deemed to be the amount of Attributable Indebtedness in respect thereof
as of such date.
"Indemnified Liabilities" has the meaning specified in Section 10.05.
"Indemnitees" has the meaning specified in Section 10.05.
"Information" has the meaning specified in Section 10.08.
14
"Intellectual Property Collateral" has the meaning specified in the
Security Agreement.
"Intercompany Note" means the promissory notes issued as contemplated
by Section 7.02(d), substantially in the form of Exhibit A to the Pledge
Agreement.
"Interest Charges" means, for any period for any Person, the sum of (a)
all interest, premium payments, debt, discount, fees, charges and related
expenses in connection with Indebtedness for borrowed money (including
capitalized interest) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP,
and (b) the portion of rent expense with respect to such period under
Capitalized Leases that is treated as interest in accordance with GAAP.
"Interest Payment Date" means (a) as to any Eurodollar Rate Loan, the
last day of each Interest Period applicable to such Loan and the Maturity Date;
provided, however, that if any Interest Period for a Eurodollar Rate Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan, the last Business Day of each March, June,
September and December and the Maturity Date.
"Interest Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, as selected by the Borrower in its Loan Notice; provided
that:
(i) any Interest Period that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month,
in which case such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Maturity
Date.
"Investment" means, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of capital stock or other securities of another Person, (b)
a loan, advance or capital contribution to, Guarantee or assumption of debt of,
or purchase or other acquisition of, any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance at the
particular time in question, the amount of any Investment shall be the amount
actually invested, without adjustment for subsequent increases or decreases in
the value of such Investment.
15
"IP Rights" has the meaning set forth in Section 5.10.
"IRS" means the United States Internal Revenue Service.
"Joinder Agreement" means a joinder agreement executed and delivered in
accordance with the provisions of Sections 6.13 and 6.14, substantially in the
form of Exhibit E hereto.
"Laws" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of any Governmental Authority.
"L/C Advance" means, with respect to each Lender, such Lender's funding
of its participation in any L/C Borrowing in accordance with its Pro Rata Share.
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed by the Borrower on the
Honor Date or refinanced as a Borrowing.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C Issuer" means Bank of America in its capacity as issuer of Letters
of Credit hereunder, or any successor issuer of Letters of Credit hereunder.
"L/C Obligations" means, as at any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.
"Lender" has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes each Lender with a commitment to make
Loans as designated in Section 2.01 or in an Assignment and Assumption Agreement
or a joinder pursuant to which such Lender becomes a party hereto and the L/C
Issuer.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as to which a Lender may from time to time notify the
Borrower and the Administrative Agent.
"Letter of Credit" means a commercial letter of credit or a standby
letter of credit issued hereunder.
"Letter of Credit Application" means an application and agreement for
the issuance or amendment of a Letter of Credit in the form from time to time in
use by the L/C Issuer.
16
"Letter of Credit Expiration Date" means the day that is seven days
prior to the Maturity Date then in effect (or, if such day is not a Business
Day, the immediately preceding Business Day).
"Letter of Credit Sublimit" means an amount equal to the lesser of (a)
$10 million and (b) the unused amount of the Aggregate Commitments at such time.
The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate
Commitments.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing).
"Loan" means an extension of credit by a Lender to the Borrower under
Article II in the form of a Loan.
"Loan Documents" means this Agreement, the Notes, the Fee Letter, each
Letter of Credit Application, the Subsidiary Guaranty, Secured Swap Contract,
the Collateral Documents and all other documents delivered to the Administrative
Agent or any Lender in connection herewith or therewith.
"Loan Notice" means a notice of (a) a Borrowing, (b) a conversion of
Loans from one Type to the other, or (c) a continuation of Eurodollar Rate
Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially
in the form of Exhibit A hereto.
"Loan Parties" means, collectively, the Borrower and each Guarantor.
"Master Agreement" has the meaning specified in the definition of "Swap
Contract".
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect on, (a) the operations, business, properties,
liabilities (actual or contingent) or condition (financial or otherwise) of the
Borrower or Subsidiaries taken as a whole, (b) the ability of any Loan Party to
perform its obligations under any Loan Document to which it is a party, (c) the
Lien of any Collateral Document, or (d) the material rights, powers, or remedies
of the Administrative Agent or any Lender under any Loan Document.
"Material Contract" means, with respect to the Borrower and the
Subsidiaries, (a) the contracts set forth on Schedule 5.24, (b) each credit
agreement, capital lease or other agreement related to any Indebtedness of the
Borrower and the Subsidiaries in an amount greater than $5 million (other than
the Loan Documents), (c) each Swap Contract to which the Borrower or any of the
Subsidiaries is a party, (d) any voting or shareholder's agreement related to
the equity interest in any Person to which the Borrower or any of the
Subsidiaries is a party, and (e) any other contract to which any such Person is
a party involving aggregate consideration payable to or by such Person of $5
million or more in any year or otherwise material to the business, condition
(financial or otherwise), operations, performance, properties of the Borrower
and the
17
Subsidiaries, taken as a whole; provided, however, that agreements entered into
in connection with a Permitted Acquisition shall be excluded from this
definition.
"Maturity Date" means March 20, 2006.
"Medicaid" means that means-tested entitlement program under Title XIX,
P.L. 89-87 of the Social Security Act, which provides federal grants to states
for medical assistance based on specific eligibility criteria, as set forth on
Section 1396, et seq. of Title 42 of the United States Code, as amended.
"Medicaid Regulations" means, collectively, (a) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical assistance program established by Title XIX of the Social
Security Act and any statutes succeeding thereto, (b) all applicable provisions
of all federal rules, regulations, manuals and orders of all Governmental
Authorities promulgated pursuant to or in connection with the statutes described
in subsection (a) above and all federal administrative, reimbursement and other
guidelines of all Governmental Authorities having the force of law promulgated
pursuant to or in connection with the statutes described in subsection (a)
above, (c) all state or other political subdivision statutes and regulations for
medical assistance enacted in connection with the statutes and provisions
described in subsections (a) and (b) above, and (d) all applicable provisions of
all rules, regulations, manuals and orders of all Governmental Authorities
promulgated pursuant to or in connection with the statutes described in clause
(iii) above and all state administrative, reimbursement and other guidelines of
all Governmental Authorities having the force of law promulgated pursuant to or
in connection with the statutes described in subsection (b) above, in each case
as may be amended, supplemented or otherwise modified from time to time.
"Medical Reimbursement Programs" means a collective reference to the
Medicare, Medicaid and CHAMPUS programs and any other health care program
operated by or financed in whole or in part by any Governmental Authority.
"Medicare" means that government-sponsored entitlement program under
Title XVIII, P.L. 89-87, of the Social Security Act, which provides for a health
insurance system for eligible elderly and disabled individuals, as set forth at
Section 1395, et seq. of Title 42 of the United States Code, as amended.
"Medicare Regulations" means, collectively, all federal statutes
(whether set forth in Title XVIII of the Social Security Act or elsewhere)
affecting the health insurance program for the aged and disabled established by
Title XVIII of the Social Security Act and any statutes succeeding thereto,
together with all applicable provisions of all rules, regulations, manuals and
orders and administrative, reimbursement and other guidelines having the force
of law of all applicable provisions of all rules, regulations, manuals and
orders and administrative, reimbursement and other guidelines having the force
of law of all Governmental Authorities (including, without limitation, CMS, the
OIG, HHS, or any person succeeding to the functions of the foregoing)
promulgated pursuant to or in connection with any of the foregoing having the
force of law, as each may be amended, supplemented or otherwise modified from
time to time.
18
"Molina Family" means Xxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxx Xxxxxx
Xxxxxxxxx, M.D., Xxxx X. Xxxxxx, Xxxxx X. Xxxx and Xxxxxxxxx X. Xxxxxxxx, and
the spouses, natural and legal issue and other descendants and the stepchildren
(including the natural and legal issue of the stepchildren) of any of the
above-named persons.
"Xxxxxx Healthcare of California" means Xxxxxx Healthcare of
California, a California corporation.
"Xxxxxx Healthcare of Michigan" means Xxxxxx Healthcare of Michigan,
Inc., a Michigan corporation.
"Xxxxxx Healthcare of Utah" means Xxxxxx Healthcare of Utah, Inc.,
d.b.a. American Family Care of Utah, a Utah corporation.
"Xxxxxx Healthcare of Washington" means Xxxxxx Healthcare of
Washington, Inc., a Washington corporation.
"Mortgage" means a mortgage, deed of trust, assignment of leases and
rents, leasehold mortgage or other security document granting a security
interest to the Administrative Agent on the Mortgaged Property, substantially in
the form of Exhibit J hereto or in such form as is suitable for filing in the
applicable jurisdiction.
"Mortgaged Property" means (a) all Real Property Assets identified on
Schedule 5.11 that are identified as Mortgaged Property and (b) all other Real
Property Assets with respect to which a Mortgage is granted pursuant to Section
6.15.
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or has been obligated to make contributions.
"NAIC" means the National Association of Insurance Commissioners, a
national organization of insurance regulators.
"Net Dividends" means, for any period, dividends paid by the HMO
Subsidiaries to the Borrower, minus cash Investments made by the Borrower in the
HMO Subsidiaries.
"Net Income" means, for any period, net income of any Person (excluding
extraordinary gains but including extraordinary cash losses) for that period.
"Note" means a promissory note made by the Borrower in favor of a
Lender evidencing Loans made by such Lender, substantially in the form of
Exhibit B hereto.
"Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Loan Party arising under any Loan
Document (including any Secured Swap Contract entered into after the date of
this Agreement) or otherwise with respect to any Loan or Letter of Credit,
whether direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and
19
fees that accrue after the commencement by or against any Loan Party or any
Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding. Without limiting the generality of
the foregoing, the Obligations of the Borrower under the Loan Documents include
(a) the obligation to pay principal, interest, Letter of Credit commissions,
charges, expenses, fees, Attorney Costs and disbursements, indemnities and other
amounts payable by the Borrower under any Loan Document and (b) the obligations
of the Borrower to reimburse any amount in respect of any of the foregoing that
any Lender, in its reasonable discretion, may elect to pay or advance on behalf
of the Borrower.
"OIG" means the Office of Inspector General of HHS and any successor
thereof.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any Property that is not a Capitalized Lease other than any such
lease in which that Person is the lessor.
"Organization Documents" means (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws, (b) with respect to any
limited liability company, the certificate or articles of formation or
organization and operating agreement, and (c) with respect to any partnership,
joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation or organization and any
agreement, instrument, filing or notice with respect thereto filed in connection
with its formation or organization with the applicable Governmental Authority in
the jurisdiction of its formation or organization and, if applicable, any
certificate or articles of formation or organization of such entity.
"Other Taxes" has the meaning specified in Section 3.01(b).
"Outstanding Amount" means (a) with respect to Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of Loans occurring on such date, and
(b) with respect to any L/C Obligations on any date, the amount of such L/C
Obligations on such date after giving effect to any L/C Credit Extension
occurring on such date and any other changes in the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements of
outstanding unpaid drawings under any Letters of Credit or any reductions in the
maximum amount available for drawing under Letters of Credit taking effect on
such date.
"Participant" has the meaning specified in Section 10.07(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
20
"Permitted Acquisitions" means any Acquisition by the Borrower, any
other Loan Party or any wholly-owned Subsidiary of the Borrower whose stock is
pledged pursuant to the Pledge Agreement (for purposes hereof, an "Acquiring
Party"); provided that (a) the Person to be acquired is a direct or indirect
wholly-owned Subsidiary of the Borrower and is in the HMO Business or a
healthcare services-related business, (b) the Property acquired (or the Property
of the Person acquired) in such Acquisition shall be used or useful in the same
or similar line of business as the Borrower and the Subsidiaries on the Closing
Date, (c) all Property to be acquired in connection with such Acquisition shall
be located in the United States of America, (d) in the case of an Acquisition of
the capital stock of another Person, the board of directors (or other comparable
governing body) of such other Person shall have duly approved such Acquisition,
(e) no Default shall exist immediately after giving effect to such Acquisition
on a Pro Forma Basis, (f) the Acquisition shall not involve an interest in a
partnership or have a requirement that the Borrower or any other Loan Party be a
general partner or involve a partial interest in any entity or joint venture
interest, (g) the Acquiring Party shall, and shall cause the party that is the
subject of the Acquisition to, execute and deliver such joinder and pledge
agreements, security agreements and intercompany notes and take such other
actions as may be necessary for compliance with the provisions of Sections 6.13,
6.14 and 6.15, (h)(i) for each Acquisition (or a series of related Acquisitions)
the aggregate consideration (including for purposes of consideration (A) cash
consideration, (B) non-cash consideration (including any assumed debt) and (C)
for such Person to be acquired, an amount determined by the Acquiring Party in
good faith at the time of the Acquisition of projected capital infusions
required by Governmental Authorities or necessary in order to maintain
compliance by such Person with the provisions of this Agreement as of the end of
that fiscal year) (excluding for purposes of such calculation, the fair market
value of any capital stock or other equity interest of the Borrower issued as
part of the consideration for any such Acquisition) is less than or equal to the
amount determined pursuant to the table below, (ii) for all Acquisitions, the
aggregate consideration in a fiscal year (including for purposes of
consideration (A) cash consideration, (B) non-cash consideration (including any
assumed debt) and (C) for such Person to be acquired, an amount determined by
the Acquiring Party in good faith at the time of the Acquisition of projected
capital infusions required by Governmental Authorities or necessary in order to
maintain compliance by such Person with the provisions of this Agreement as of
the end of that fiscal year) (excluding for purposes of such calculation, the
fair market value of any capital stock or other equity interest of the Borrower
issued as part of the consideration for any such Acquisition) is less than or
equal to the amount determined pursuant to the table below, and (i) the Borrower
shall have delivered to the Administrative Agent (A) a Compliance Certificate
signed by Responsible Officers of the Borrower demonstrating compliance with the
financial covenants hereunder after giving effect to the subject Acquisition on
a Pro Forma Basis and compliance with clauses (g) and (h) above, and reaffirming
that the representations are true and correct in all material respects as of
such date and providing supplements to the Schedules as required by the
Compliance Certificate and (B) a certificate of a Responsible Officer of the
Borrower describing the Person to be acquired, including, without limitation,
the location and type of operations, key management and HMO assets of such
Person, if any; provided, however, that the Acquisition shall not result in
interests in such Person or the property of such Person being directly or
indirectly held by or transferred into Xxxxxx Healthcare of California or any of
its Subsidiaries so long as the stock of Xxxxxx Healthcare of California has not
been pledged pursuant to terms of this Agreement and, so long as Xxxxxx
Healthcare of Michigan is a wholly-owned Subsidiary of
21
Xxxxxx Healthcare of California, into Xxxxxx Healthcare of Michigan and its
Subsidiaries, except that Xxxxxx Healthcare of California and its Subsidiaries
located in California and Xxxxxx Healthcare of Michigan so long as it is a
wholly-owned Subsidiary of Xxxxxx Healthcare of California and its Subsidiaries,
shall be permitted to make one or more Acquisitions in accordance with the
provisions set forth in this definition but solely within the States of
California and, while Xxxxxx Healthcare of Michigan is wholly owned by Xxxxxx
Healthcare of California, Michigan, where the consideration therefor is payable
(x) solely in the form of common stock of the Borrower or (y) in the form of
cash and non-cash consideration in an amount equal to 50% of the amounts set
forth in the table below for less than 1.0 times in accordance with clauses
(h)(i) and (ii) above, but only if the Consolidated Leverage Ratio is less than
1.0 times; provided that for purposes of clarification the aforementioned
sublimits in the proviso shall apply to Xxxxxx Healthcare of California and its
Subsidiaries and Xxxxxx Healthcare of Michigan, so long as it is a wholly-owned
Subsidiary of Xxxxxx Healthcare of California, and its Subsidiaries and shall
reduce the limits stated in the table below by the amount of any cash
consideration paid for any such Acquisition.
PRE-SUCCESSFUL IPO POST-SUCCESSFUL IPO
------------------------------------------------------------------------------------------------------------------------
Consolidated Each Acquisition All Acquisitions in a Each Acquisition All Acquisitions in
Leverage Fiscal Year in the Aggregate a Fiscal Year in the
Ratio Aggregate
------------------------------------------------------------------------------------------------------------------------
>= 1.0 $10 million $20 million $15 million $30 million
<= 1.0 $15 million $30 million $20 million $40 million
------------------------------------------------------------------------------------------------------------------------
"Permitted Lien" has the meaning specified in Section 7.01.
"Permitted Stock Redemptions/ESOP Transactions" means the redemption by
the Borrower of outstanding shares of its common stock and purchases of
outstanding shares of the Borrower's common stock by an employee stock ownership
plan, in each case from MRM GRAT 000/0, Xxxx Xxxxxx Xxxxxx Trust (1995), Xxxxx
Xxxxx Xxxx Trust (1995), Xxxxxxxxx X. Xxxxxx Trust (1995), Xxxx X. Xxxxxx Living
Trust, Molina Marital Trust and Xxxx Xxxxxx Xxxxxxxxx, M.D.; provided that (a)
the stock redemption portion of the Permitted Stock Redemptions/ESOP
Transactions was completed on February 19, 2003, and the ESOP portion of the
Permitted Stock Redemptions/ESOP Transactions shall be completed no later than
September 30, 2003, (b) shall be for consideration of no more than $40 million
in the aggregate and shall comply with the requirements of Section 6.12 and (c)
shall be on terms reasonably satisfactory to the Administrative Agent and the
Required Lenders.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
22
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
"Pledge Agreement" means the Pledge Agreement executed by the Borrower
and any Subsidiary party thereto, which Pledge Agreement shall be substantially
in the form of Exhibit G hereto.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Pro Forma Basis" means, for purposes of determining the applicable
pricing level under the definition of "Applicable Rate," and determining
compliance with any financial covenant or test hereunder and determining whether
the conditions precedent to a Permitted Acquisition have been met, that the
subject transaction shall be deemed to have occurred as of the first day of the
period of four consecutive fiscal quarters ending as of the end of the most
recent fiscal quarter for which annual or quarterly financial statements shall
have been delivered in accordance with the provisions hereof (the "Reference
Period"). Further, for purposes of making calculations on a "Pro Forma Basis"
hereunder, (a) any funds to be used by any Person in consummating a Permitted
Acquisition will be assumed to have been used for that purpose as of the first
day of the Reference Period, (b) 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
EBITDAR, (c) any Indebtedness to be incurred by any Person in connection with
the consummation of any Permitted Acquisition will be assumed to have been
incurred on the first day of the Reference Period, (d) the gross interest
expenses, determined in accordance with GAAP, with respect to such Indebtedness
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 Indebtedness (including this Agreement if the
Indebtedness is incurred hereunder), and (e) any gross interest expense,
determined in accordance with GAAP, incurred during the Reference Period that
was or is to be refinanced with proceeds of Indebtedness 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 Basis is being given.
"Pro Rata Share" means, with respect to each Lender at any time, a
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the Commitment of such Lender at such
time and the denominator of which is the amount of the Aggregate Commitments at
such time; provided that if the commitment of each Lender to make Loans and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to Section 8.02, then the Pro Rata Share of each Lender shall be
determined based on the Pro Rata Share of such Lender immediately prior to such
termination and after giving effect to any subsequent assignments made pursuant
to the terms hereof. The initial Pro Rata Share of each Lender is set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
"Real Property Assets" means all interest (including leasehold
interests) of the Borrower and any Eligible Subsidiary in any real property.
23
"Register" has the meaning specified in Section 10.07(c).
"Reincorporation Merger Documents" means that certain Agreement of
Merger by and between Xxxxxx Healthcare, Inc., a California corporation, and
Xxxxxx Healthcare, Inc., a Delaware corporation, in the form attached hereto as
Schedule 7.04 with any non-substantive and non-material technical corrections
thereto mandated by the applicable California or Delaware regulatory
authorities, and that certain Certificate of Merger merging Xxxxxx Healthcare,
Inc., a California corporation, into Xxxxxx Healthcare, Inc., a Delaware
corporation, in the form attached hereto as Schedule 7.04 with any
non-substantive and non-material technical corrections thereto mandated by the
applicable California or Delaware regulatory authorities.
"Rental Expense" means, for any period of determination, for any
Person, the gross rental expenses for such period.
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30 day notice period has been waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Loans, a Loan Notice, and (b) with respect to an
L/C Credit Extension, a Letter of Credit Application.
"Required Advances" means advances required by HMO Regulators to be
made by the Borrower or any of the Subsidiaries to a Contract Provider; provided
that the Borrower shall have provided reasonably satisfactory evidence of any
such requirement to the Administrative Agent.
"Required Lenders" means, as of any date of determination, at least
three Lenders having more than 50% of the Aggregate Commitments or, if the
commitment of each Lender to make Loans and the obligation of the L/C Issuer to
make L/C Credit Extensions have been terminated pursuant to Section 8.02, or
otherwise, at least three Lenders holding in the aggregate more than 50% of the
Total Outstandings (with the aggregate amount of each Lender's risk
participation and funded participation in L/C Obligations being deemed "held" by
such Lender for purposes of this definition); provided that the Commitment of,
and the portion of the Total Outstandings held or deemed held by, any Defaulting
Lender shall be excluded for purposes of making a determination of Required
Lenders.
"Responsible Officer" means the chief executive officer, president,
chief financial officer, or treasurer of any Person. Any document delivered
hereunder that is signed by a Responsible Officer of a Loan Party shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such Loan Party and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
such Loan Party.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any capital stock or
other equity interest of the Borrower or any of the Subsidiaries (including,
without limitation, any payment in connection with any dissolution, merger,
consolidation or disposition involving the Borrower or any of the Subsidiaries),
and any redemption, retirement, cancellation, termination, payment in any
sinking
24
fund or similar payment, purchase, or other acquisition of any such capital
stock or other equity interest or of any option, warrant or other right to
acquire any such capital stock or other equity interest or on account of any
warrant or other right to acquire any such capital stock or other equity
interest, or on account of any return of capital to the Borrower's or any of the
Subsidiaries' stockholders, partners or members (or the equivalent Persons
thereof) or the issuance of any equity interest or acceptance of any capital
contributions.
"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.
"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.
"Xxxxxxxx-Xxxxx" means the Xxxxxxxx-Xxxxx Act of 2002.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Secured Obligations" has the meaning specified in Section 2.2 of the
Security Agreement.
"Secured Party" means the Administrative Agent, each Lender and each
Swap Bank.
"Secured Swap Contract" means any Swap Contract required or permitted
under this Agreement that is entered into by and between the Borrower and any
Swap Bank.
"Securitization Transaction" means any financing transaction or series
of financing transactions, including factoring transactions, that have been or
may be entered into by the Borrower or any of its Subsidiaries pursuant to which
such Person may sell, convey or otherwise transfer to (i) a Subsidiary or
Affiliate of such Person, or (ii) any other Person, or may grant a security
interest in, any accounts receivable, notes receivable, rights to future lease
payments or residuals or other similar rights to payment (the "Securitization
Receivables") (whether such Securitization Receivables are then existing or
arising in the future) of the Borrower or such Subsidiary, as applicable, and
any assets related thereto, including, without limitation, all security
interests in merchandise or services financed thereby, the proceeds of such
Securitization Receivables, and other assets that are customarily sold or in
respect of which security interests are customarily granted in connection with
securitization or factoring transactions involving such assets.
"Security Agreement" means the Security Agreement executed by the
Borrower and each Eligible Subsidiary, substantially in the form of Exhibit H
hereto.
"Shareholders' Equity" means, as of any date of determination,
consolidated shareholders' equity of the Borrower and the Subsidiaries as of
that date determined in accordance with GAAP.
25
"Social Security Act" means the Social Security Act of 1965 as set
forth in Title 42 of the United States Code, as amended, and any successor
statute thereto, as interpreted by the rules and regulations issued thereunder,
in each case as in effect from time to time. References to sections of the
Social Security Act shall be construed to refer to any successor sections.
"Xxxxx I and II" means Section 1877 of the Social Security Act as set
forth at Section 1395nn of Title 42 of the United States Code, as amended, and
any successor statute thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time.
"Subject Properties" has the meaning specified in Section 5.12(a).
"Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity which is organized
under the Laws of a political subdivision of the United States of which a
majority of the shares of securities or other interests having ordinary voting
power for the election of directors or other governing body (other than
securities or interests having such power only by reason of the happening of a
contingency) are at the time beneficially owned, or the management of which is
otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a
Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guaranty" means the Subsidiary Guaranty Agreement duly
executed by each Guarantor, substantially in the form of Exhibit I hereto.
"Successful IPO" means an initial public offering of the capital stock
of the Borrower which results in net cash proceeds to the Borrower of at least
$50 million.
"Swap Bank" means any Lender or an Affiliate of a Lender in its
capacity as a party to a Swap Contract entered into after the date of this
Agreement.
"Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.
26
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
"Syndication Agent" means CIBC World Markets Corp. in its capacity as
syndication agent under any of the Loan Documents, or any successor syndication
agent.
"Taxes" has the meaning specified in Section 3.01(a).
"Threshold Amount" means $5 million.
"Title Insurance Company" has the meaning specified in Section
6.15(b)(ii).
"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.
"Total Outstandings" means the aggregate Outstanding Amount of all
Loans and all L/C Obligations.
"Type" means, with respect to a Loan, its character as a Base Rate Loan
or a Eurodollar Rate Loan.
"UCC" means the Uniform Commercial Code.
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning specified in Section 2.03(c)(i).
"Waiver Agreement" means, collectively, the Waiver Agreements, each
substantially in the form of Exhibit C to the Security Agreement.
Section 1.02 Other Interpretive Provisions. With reference to this
Agreement and each other Loan Document, unless otherwise specified herein or in
such other Loan Document:
(a) The meanings of defined terms are equally applicable
to the singular and plural forms of the defined terms.
27
(b) (i) The words "herein," "hereto," "hereof" and
"hereunder" and words of similar import when used in any Loan Document shall
refer to such Loan Document as a whole and not to any particular provision
thereof.
(ii) Article, Section, Exhibit and Schedule
references are to the Loan Document in which such reference appears.
(iii) The term "including" is by way of example
and not limitation.
(c) The term "documents" includes any and all
instruments, documents, agreements, certificates, notices, reports, financial
statements and other writings, however evidenced, whether in physical or
electronic form.
(d) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including;" the words "to" and "until" each mean "to but excluding;" and the
word "through" means "to and including."
(e) Each reference to "basis points" or "bps" shall be
interpreted in accordance with the convention that 100 bps = 1.0%.
(f) Section headings herein and in the other Loan
Documents are included for convenience of reference only and shall not affect
the interpretation of this Agreement or any other Loan Document.
Section 1.03 Accounting Terms.
(a) All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP
applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the Audited Financial Statements,
except as otherwise specifically prescribed herein. Notwithstanding anything
herein to the contrary, determination of (i) the applicable pricing level under
the definition of "Applicable Rate", (ii) compliance with any financial covenant
or test hereunder and (iii) whether the conditions precedent to a Permitted
Acquisition have been met shall be made on a Pro Forma Basis.
(b) If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of the Required Lenders);
provided that, until so amended, (i) such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein and (ii) the
Borrower shall provide to the Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of such
ratio or requirement made before and after giving effect to such change in GAAP.
28
Section 1.04 Rounding. Any financial ratios required to be
maintained by the Borrower pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).
Section 1.05 References to Agreements and Laws. Unless otherwise
expressly provided herein, (a) references to Organization Documents, agreements
(including the Loan Documents) and other contractual instruments shall be deemed
to include all subsequent amendments, restatements, extensions, supplements and
other modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document, and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
Section 1.06 Times of Day. Unless otherwise specified, all
references herein to times of day shall be references to Eastern time (daylight
or standard, as applicable).
Section 1.07 Letter of Credit Amounts. Unless otherwise specified,
all references herein to the amount of a Letter of Credit at any time shall be
deemed to mean the maximum face amount of such Letter of Credit after giving
effect to all increases thereof contemplated by such Letter of Credit or the
Letter of Credit Application therefor, whether or not such maximum face amount
is in effect at such time.
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
Section 2.01 Loans. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make loans (each such loan, a "Loan") to
the Borrower from time to time, on any Business Day during the Availability
Period, in an aggregate amount not to exceed at any time outstanding the amount
of such Lender's Commitment; provided, however, that after giving effect to any
Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Loans of any
Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C
Obligations shall not exceed such Lender's Commitment. Within the limits of each
Lender's Commitment, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.01, prepay under Section 2.05, and
reborrow under this Section 2.01. Loans may be Base Rate Loans or Eurodollar
Rate Loans, as further provided herein.
Section 2.02 Borrowings, Conversions and Continuations of Loans.
(a) Each Borrowing, each conversion of Loans from one
Type to the other, and each continuation of Eurodollar Rate Loans shall be made
upon the Borrower's irrevocable notice to the Administrative Agent, which may be
given by telephone. Each such notice must be received by the Administrative
Agent not later than 11:00 a.m. (i) three Business Days prior to the requested
date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans
or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on
the requested date
29
of any Borrowing of Base Rate Loans. Each telephonic notice by the Borrower
pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the
Administrative Agent of a written Loan Notice, appropriately completed and
signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion
to, or continuation of, Eurodollar Rate Loans shall be in a principal amount of
$5 million or a whole multiple of $500,000 in excess thereof. Except as provided
in Sections 2.03(c), each Borrowing of or conversion to Base Rate Loans shall be
in a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof. Each Loan Notice (whether telephonic or written) shall specify (i)
whether the Borrower is requesting a Borrowing, a conversion of Loans from one
Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (iii) the principal amount of Loans to be
borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to
which existing Loans are to be converted, and (v) if applicable, the duration of
the Interest Period with respect thereto. If the Borrower fails to specify a
Type of Loan in a Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Loans shall be made
as, or converted to, Base Rate Loans. Any such automatic conversion of a
Eurodollar Rate Loan to Base Rate Loans shall be effective as of the last day of
the Interest Period then in effect with respect to the applicable Eurodollar
Rate Loans. If the Borrower requests a Borrowing of, conversion to, or
continuation of Eurodollar Rate Loans in any such Loan Notice, but fails to
specify an Interest Period, it will be deemed to have specified an Interest
Period of one month.
(b) Following receipt of a Loan Notice, the
Administrative Agent shall promptly notify each Lender of the amount of its Pro
Rata Share of the applicable Loans, and if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans
described in the preceding subsection (a). In the case of a Borrowing, each
Lender shall make the amount of its Loan available to the Administrative Agent
in immediately available funds at the Administrative Agent's Office not later
than 1:00 p.m. on the Business Day specified in the applicable Loan Notice. Upon
satisfaction of the applicable conditions set forth in Section 4.02 (and, if
such Borrowing is the initial Credit Extension, Section 4.01), the
Administrative Agent shall make all funds so received available to the Borrower
in like funds as received by the Administrative Agent either by (i) crediting
the account of the Borrower on the books of Bank of America with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the Administrative Agent
by the Borrower; provided, however, that if, on the date the Loan Notice with
respect to such Borrowing is given by the Borrower, there are L/C Borrowings
outstanding, then the proceeds of such Borrowing shall be applied, first, to the
payment in full of any such L/C Borrowings and second, to the Borrower as
provided above.
(c) Except as otherwise provided herein, a Eurodollar
Rate Loan may be continued or converted only on the last day of an Interest
Period for such Eurodollar Rate Loan. During the existence of a Default, no
Loans may be requested as, converted to or continued as Eurodollar Rate Loans
without the consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the
Borrower and the Lenders of the interest rate applicable to any Interest Period
for Eurodollar Rate Loans upon
30
determination of such interest rate. The determination of the Eurodollar Rate by
the Administrative Agent shall be conclusive in the absence of manifest error.
At any time that Base Rate Loans are outstanding, the Administrative Agent shall
notify the Borrower and the Lenders of any change in Bank of America's prime
rate used in determining the Base Rate promptly following the public
announcement of such change.
(e) After giving effect to all Borrowings, all
conversions of Loans from one Type to the other, and all continuations of Loans
as the same Type, there shall not be more than five Interest Periods in effect
with respect to Loans.
(f) The failure of any Lender to make any Loan 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 Loan on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
any Loan to be made by such other Lender on the date of any Borrowing.
Section 2.03 Letters of Credit.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set
forth herein, (A) the L/C Issuer agrees, in reliance upon the
agreements of the other Lenders set forth in this Section 2.03, (1)
from time to time on any Business Day during the period from the
Closing Date until the Letter of Credit Expiration Date, to issue
Letters of Credit for the account of the Borrower, and to amend Letters
of Credit previously issued by it, in accordance with subsection (b)
below, and (2) to honor drafts under the Letters of Credit, and (B) the
Lenders severally agree to participate in Letters of Credit issued for
the account of the Borrower; provided that the L/C Issuer shall not be
obligated to make any L/C Credit Extension with respect to any Letter
of Credit, and no Lender shall be obligated to participate in any
Letter of Credit if, as of the date of such L/C Credit Extension, (x)
the Total Outstandings would exceed the Aggregate Commitments, (y) the
aggregate Outstanding Amount of the Loans of any Lender, plus such
Lender's Pro Rata Share of the Outstanding Amount of all L/C
Obligations, would exceed such Lender's Commitment, or (z) the
Outstanding Amount of the L/C Obligations would exceed the Letter of
Credit Sublimit. Within the foregoing limits, and subject to the terms
and conditions hereof, the Borrower's ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrower may,
during the foregoing period, obtain Letters of Credit to replace
Letters of Credit that have expired or that have been drawn upon and
reimbursed.
(ii) The L/C Issuer shall be under no obligation
to issue any Letter of Credit if:
(A) any order, judgment or decree of
any Governmental Authority or arbitrator shall by its terms
purport to enjoin or restrain the L/C Issuer from issuing such
Letter of Credit, or any Law applicable to the L/C Issuer or
any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over
the L/C Issuer shall prohibit, or
31
request that the L/C Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in
particular or shall impose upon the L/C Issuer with respect to
such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise
compensated hereunder) not in effect on the Closing Date, or
shall impose upon the L/C Issuer any unreimbursed loss, cost
or expense which was not applicable on the Closing Date and
which the L/C Issuer in good xxxxx xxxxx material to it;
(B) the expiry date of such requested
Letter of Credit would occur more than twelve months after the
date of issuance, unless the Required Lenders have approved
such expiry date;
(C) the expiry date of such requested
Letter of Credit would occur after the Letter of Credit
Expiration Date, unless all the Lenders have approved such
expiry date;
(D) the issuance of such Letter of
Credit would violate one or more policies of the L/C Issuer;
or
(E) such Letter of Credit is in an
initial amount less than $100,000, in the case of a commercial
Letter of Credit, or $500,000, in the case of a standby Letter
of Credit.
(iii) The L/C Issuer shall be under no obligation
to amend any Letter of Credit if (A) the L/C Issuer would have no
obligation at such time to issue such Letter of Credit in its amended
form under the terms hereof, or (B) the beneficiary of such Letter of
Credit does not accept the proposed amendment to such Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of
Credit.
(i) Each Letter of Credit shall be issued or
amended, as the case may be, upon the request of the Borrower delivered
to the L/C Issuer (with a copy to the Administrative Agent) in the form
of a Letter of Credit Application, appropriately completed and signed
by a Responsible Officer of the Borrower. Such Letter of Credit
Application must be received by the L/C Issuer and the Administrative
Agent not later than 11:00 a.m. at least two Business Days (or such
later date and time as the L/C Issuer may agree in a particular
instance in its sole discretion) prior to the proposed issuance date or
date of amendment, as the case may be. In the case of a request for an
initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the L/C
Issuer the following: (A) the proposed issuance date of the requested
Letter of Credit (which shall be a Business Day); (B) the amount
thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such
beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; and (G) such other matters as the L/C Issuer may require.
In the case of a request for an amendment of any outstanding Letter of
Credit, such Letter of Credit Application shall specify in form and
detail satisfactory to the L/C Issuer the following:
32
(A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which shall be a Business Day); (C) the nature of
the proposed amendment; and (D) such other matters as the L/C Issuer
may require.
(ii) Promptly after receipt of any Letter of
Credit Application, the L/C Issuer will confirm with the Administrative
Agent (by telephone or in writing) that the Administrative Agent has
received a copy of such Letter of Credit Application from the Borrower
and, if not, the L/C Issuer will provide the Administrative Agent with
a copy thereof. Upon receipt by the L/C Issuer of confirmation from the
Administrative Agent that the requested issuance or amendment is
permitted in accordance with the terms hereof, then, subject to the
terms and conditions hereof, the L/C Issuer shall, on the requested
date, issue a Letter of Credit for the account of the Borrower or enter
into the applicable amendment, as the case may be, in each case in
accordance with the L/C Issuer's usual and customary business
practices. Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the L/C Issuer a risk participation in such
Letter of Credit in an amount equal to the product of such Lender's Pro
Rata Share times the amount of such Letter of Credit.
(iii) Promptly after its delivery of any Letter of
Credit or any amendment to a Letter of Credit to an advising bank with
respect thereto or to the beneficiary thereof, the L/C Issuer will also
deliver to the Borrower and the Administrative Agent a true and
complete copy of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of
Participations.
(i) Upon receipt from the beneficiary of any
Letter of Credit of any notice of a drawing under such Letter of
Credit, the L/C Issuer shall notify the Borrower and the Administrative
Agent thereof and shall state the date payment shall be made by the L/C
Issuer under a Letter of Credit (each such date, an "Honor Date"). Not
later than 11:00 a.m. on the Honor Date, the Borrower shall reimburse
the L/C Issuer through the Administrative Agent in an amount equal to
the amount of such drawing. If the Borrower fails to so reimburse the
L/C Issuer by such time, the Administrative Agent shall promptly notify
each Lender of the Honor Date, the amount of the unreimbursed drawing
(the "Unreimbursed Amount"), and the amount of such Lender's Pro Rata
Share thereof. In such event, the Borrower shall be deemed to have
requested a Borrowing of Base Rate Loans to be disbursed on the Honor
Date in an amount equal to the Unreimbursed Amount, without regard to
the minimum and multiples specified in Section 2.02 for the principal
amount of Base Rate Loans, but subject to the amount of the unutilized
portion of the Aggregate Commitments and the conditions set forth in
Section 4.02 (other than the delivery of a Loan Notice). Any notice
given by the L/C Issuer or the Administrative Agent pursuant to this
Section 2.03(c)(i) may be given by telephone if immediately confirmed
in writing; provided that the lack of such an immediate confirmation
shall not affect the conclusiveness or binding effect of such notice.
(ii) Each Lender (including the Lender acting as
L/C Issuer) shall upon any notice pursuant to Section 2.03(c)(i) make
funds available to the Administrative
33
Agent for the account of the L/C Issuer at the Administrative Agent's
Office in an amount equal to its Pro Rata Share of the Unreimbursed
Amount not later than 1:00 p.m. on the Business Day specified in such
notice by the Administrative Agent, whereupon, subject to the
provisions of Section 2.03(c)(iii), each Lender that so makes funds
available shall be deemed to have made a Base Rate Loan to the Borrower
in such amount. The Administrative Agent shall remit the funds so
received to the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that
is not fully refinanced by a Borrowing of Base Rate Loans because the
conditions set forth in Section 4.02 cannot be satisfied or for any
other reason, the Borrower shall be deemed to have incurred from the
L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount
that is not so refinanced, which L/C Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the
Default Rate. In such event, each Lender's payment to the
Administrative Agent for the account of the L/C Issuer pursuant to
Section 2.03(c)(ii) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance
from such Lender in satisfaction of its participation obligation under
this Section 2.03.
(iv) Until each Lender funds its Loan or L/C
Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer
for any amount drawn under any Letter of Credit, interest in respect of
such Lender's Pro Rata Share of such amount shall be solely for the
account of the L/C Issuer.
(v) Each Lender's obligation to make Loans or
L/C Advances to reimburse the L/C Issuer for amounts drawn under
Letters of Credit, as contemplated by this Section 2.03(c), shall be
absolute and unconditional and shall not be affected by any
circumstance, including (A) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the L/C
Issuer, the Administrative Agent, the Borrower or any other Person for
any reason whatsoever, (B) the occurrence or continuance of a Default,
or (C) any other occurrence, event or condition, whether or not similar
to any of the foregoing; provided, however, that each Lender's
obligation to make Loans pursuant to this Section 2.03(c) is subject to
the conditions set forth in Section 4.02 (other than delivery by the
Borrower of a Loan Notice). No such making of an L/C Advance shall
relieve or otherwise impair the obligation of the Borrower to reimburse
the L/C Issuer for the amount of any payment made by the L/C Issuer
under any Letter of Credit, together with interest as provided herein.
(vi) If any Lender fails to make available to the
Administrative Agent for the account of the L/C Issuer any amount
required to be paid by such Lender pursuant to the foregoing provisions
of this Section 2.03(c) by the time specified in Section 2.03(c)(ii),
the L/C Issuer shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the
date on which such payment is immediately available to the L/C Issuer
at a rate per annum equal to the Federal Funds Rate from time to time
in effect. A certificate of the L/C Issuer submitted to any Lender
(through the Administrative Agent) with respect to any amounts owing
under this clause (vi) shall be conclusive absent manifest error.
34
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a
payment under any Letter of Credit and has received from any Lender
such Lender's L/C Advance in respect of such payment in accordance with
Section 2.03(c), if the Administrative Agent receives for the account
of the L/C Issuer any payment in respect of the related Unreimbursed
Amount or interest thereon (whether directly from the Borrower or
otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such
Lender its Pro Rata Share thereof (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such
Lender's L/C Advance was outstanding) in the same funds as those
received by the Administrative Agent.
(ii) If any payment received by the
Administrative Agent for the account of the L/C Issuer pursuant to
Section 2.03(c)(i) is required to be returned under any of the
circumstances described in Section 10.06 (including pursuant to any
settlement entered into by the L/C Issuer in its discretion), each
Lender shall pay to the Administrative Agent for the account of the L/C
Issuer its Pro Rata Share thereof on demand of the Administrative
Agent, plus interest thereon from the date of such demand to the date
such amount is returned by such Lender, at a rate per annum equal to
the Federal Funds Rate from time to time in effect.
(e) Obligations Absolute. The obligation of the Borrower
to reimburse the L/C Issuer for each drawing under each Letter of Credit and to
repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:
(i) any lack of validity or enforceability of
such Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto;
(ii) the existence of any claim, counterclaim,
set-off, defense or other right that the Borrower may have at any time
against any beneficiary or any transferee of such Letter of Credit (or
any Person for whom any such beneficiary or any such transferee may be
acting), the L/C Issuer or any other Person, whether in connection with
this Agreement, the transactions contemplated hereby or by such Letter
of Credit or any agreement or instrument relating thereto, or any
unrelated transaction;
(iii) any draft, demand, certificate or other
document presented under such 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; or any loss or delay
in the transmission or otherwise of any document required in order to
make a drawing under such Letter of Credit;
(iv) any payment by the L/C Issuer under such
Letter of Credit against presentation of a draft or certificate that
does not strictly comply with the terms of such Letter of Credit; or
any payment made by the L/C Issuer under such Letter of Credit to any
Person purporting to be a trustee in bankruptcy, debtor-in-possession,
assignee for
35
the benefit of creditors, liquidator, receiver or other representative
of or successor to any beneficiary or any transferee of such Letter of
Credit, including any arising in connection with any proceeding under
any Debtor Relief Law;
(v) any exchange, release or non-perfection of
any collateral, or any release or amendment or waiver of or consent to
the departure from any Guarantee, for all or any of the Obligations of
the Borrower in respect of any Letter of Credit; or
(vi) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including
any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it, and, in the event of any claim
of noncompliance with the Borrower's instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and the Borrower
agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall
not have any responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. None of the
L/C Issuer, any Agent-Related Person nor any of the respective correspondents,
participants or assignees of the L/C Issuer shall be liable to any Lender for
(i) any action taken or omitted in connection herewith at the request or with
the approval of the Lenders or the Required Lenders, as applicable, (ii) any
action taken or omitted in the absence of gross negligence or willful
misconduct, or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Letter of Credit Application. The Borrower hereby assumes all risks of the acts
or omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended to,
and shall not, preclude the Borrower's pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement. None of the L/C Issuer, any Agent-Related Person, nor any of the
respective correspondents, participants or assignees of the L/C Issuer, shall be
liable or responsible for any of the matters described in clauses (i) through
(vi) of Section 2.03(e); provided, however, that anything in such clauses to the
contrary notwithstanding, the Borrower may have a claim against the L/C Issuer,
and the L/C Issuer may be liable to the Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrower which the Borrower proves were caused by the L/C
Issuer's willful misconduct or gross negligence or the L/C Issuer's willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, the L/C Issuer may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or
36
assign a Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective for
any reason.
(g) Cash Collateral. Upon the request of the
Administrative Agent, (i) if the L/C Issuer has honored any full or partial
drawing request under any Letter of Credit and such drawing has resulted in an
L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any
Letter of Credit may for any reason remain outstanding and partially or wholly
undrawn, the Borrower shall immediately Cash Collateralize the then Outstanding
Amount of all L/C Obligations (in an amount equal to such Outstanding Amount
determined as of the date of such L/C Borrowing or the Letter of Credit
Expiration Date, as the case may be). For purposes hereof, "Cash Collateralize"
means to pledge and deposit with or deliver to the Administrative Agent, for the
benefit of the L/C Issuer and the Lenders, as collateral for the L/C
Obligations, cash or deposit account balances pursuant to documentation in form
and substance satisfactory to the Administrative Agent and the L/C Issuer (which
documents are hereby consented to by the Lenders). Derivatives of such term have
corresponding meanings. The Borrower hereby grants to the Administrative Agent,
for the benefit of the L/C Issuer and the Lenders, a security interest in all
such cash, deposit accounts and all balances therein and all proceeds of the
foregoing. Cash collateral shall be maintained in blocked, non-interest bearing
deposit accounts at Bank of America. If at any time the Administrative Agent
determines that any funds held as Cash Collateral are subject to any right or
claim of any Person other than the Administrative Agent or that the total amount
of such funds is less than the aggregate Outstanding Amount of L/C Obligations,
the Borrower will forthwith, upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional funds to be deposited and held in deposit
accounts at Bank of America as aforesaid, an amount equal to the excess of (i)
such aggregate Outstanding Amount over (ii) the total amount of funds, if any,
then held as Cash Collateral that the Administrative Agent 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 as Cash Collateral, such funds shall be applied,
to the extent permitted under applicable Law, to reimburse the L/C Issuer.
(h) Applicability of ISP98 and UCP. Unless otherwise
expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is
issued, (i) the rules of the "International Standby Practices 1998" published by
the Institute of International Banking Law & Practice (or such later version
thereof as may be in effect at the time of issuance) shall apply to each standby
Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for
Documentary Credits, as most recently published by the International Chamber of
Commerce (the "ICC") at the time of issuance (including the ICC decision
published by the Commission on Banking Technique and Practice on April 6, 1998
regarding the European single currency (euro)) shall apply to each commercial
Letter of Credit.
(i) Letter of Credit Fees. The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its Pro
Rata Share a Letter of Credit fee for each issued Letter of Credit equal to the
Applicable Rate times the daily maximum amount available to be drawn under such
Letter of Credit (whether or not such maximum amount is then in effect under
such issued Letter of Credit). Such letter of credit fees shall be computed on a
quarterly basis in arrears. Such letter of credit fees shall be due and payable
on the last Business Day of each March, June, September and December, commencing
with the first such date to
37
occur after the issuance of such Letter of Credit, on the Letter of Credit
Expiration Date and thereafter on demand. If there is any change in the
Applicable Rate during any quarter, the daily maximum amount of each issued
Letter of Credit shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in
effect.
(j) Fronting Fee and Documentary and Processing Charges
Payable to L/C Issuer. The Borrower shall pay directly to the L/C Issuer for its
own account a fronting fee with respect to each Letter of Credit in an amount
equal to 0.125% per annum of the maximum available amount to be drawn under such
Letter of Credit on the date of the issuance of such Letter of Credit payable on
such date. In addition, the Borrower shall pay directly to the L/C Issuer for
its own account the customary issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of the L/C Issuer
relating to letters of credit as from time to time in effect. Such customary
fees and standard costs and charges are due and payable on demand and are
nonrefundable.
(k) Conflict with Letter of Credit Application. In the
event of any conflict between the terms hereof and the terms of any Letter of
Credit Application, the terms hereof shall control.
Section 2.04 [Intentionally Omitted].
Section 2.05 Prepayments.
(a) The Borrower may, upon notice to the Administrative
Agent, at any time or from time to time voluntarily prepay Loans in whole or in
part without premium or penalty; provided that (i) such notice must be received
by the Administrative Agent not later than 11:00 a.m. (A) three Business Days
prior to any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Loans, (ii) any prepayment of Eurodollar Rate Loans
shall be in a principal amount of $5 million or a whole multiple of $500,000 in
excess thereof, and (iii) any prepayment of Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof
or, in each case, if less, the entire principal amount thereof then outstanding.
Each such notice shall specify the date and amount of such prepayment and the
Type(s) of Loans to be prepaid. The Administrative Agent will promptly notify
each Lender of its receipt of each such notice, and of the amount of such
Lender's Pro Rata Share of such prepayment. If such notice is given by the
Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.
Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued
interest thereon, together with any additional amounts required pursuant to
Section 3.05. Each such prepayment shall be applied to the Loans of the Lenders
in accordance with their respective Pro Rata Shares.
(b) In the event the Successful IPO of the Borrower has
not been consummated on or prior to the day which is 18 months after the Closing
Date, the Borrower shall promptly prepay the Loans and/or Cash Collateralize or
pay the L/C Obligations in an aggregate amount necessary to reduce the
Outstanding Amount of Loans plus the Outstanding Amount of L/C Obligations to
$50 million.
38
(c) In the event the Successful IPO of the Borrower has
not been consummated on or prior to the which is day 30 months after the Closing
Date, the Borrower shall promptly prepay the Loans and/or Cash Collateralize or
pay the L/C Obligations in an aggregate amount necessary to reduce the
Outstanding Amount of Loans plus the Outstanding Amount of L/C Obligations to
$40 million.
(d) If for any reason the Total Outstandings at any time
exceed the Aggregate Commitments then in effect, the Borrower shall immediately
prepay Loans and/or Cash Collateralize the L/C Obligations in an aggregate
amount equal to such excess; provided, however, that the Borrower shall not be
required to Cash Collateralize the L/C Obligations pursuant to this Section
2.05(d) unless, after the prepayment in full of the Loans, the Total
Outstandings exceed the Aggregate Commitments then in effect.
Section 2.06 Termination or Reduction of Commitments.
(a) The Borrower may, upon notice to the Administrative
Agent, terminate the Aggregate Commitments, or from time to time permanently
reduce the Aggregate Commitments; provided that (i) any such notice shall be
received by the Administrative Agent not later than 11:00 a.m. five Business
Days prior to the date of termination or reduction, (ii) any such partial
reduction shall be in an aggregate amount of $2.5 million or any whole multiple
of $500,000 in excess thereof, (iii) the Borrower shall not terminate or reduce
the Aggregate Commitments if, after giving effect thereto and to any concurrent
prepayments hereunder, the Total Outstandings would exceed the Aggregate
Commitments, and (iv) if, after giving effect to any reduction of the Aggregate
Commitments, the Letter of Credit Sublimit exceeds the amount of the Aggregate
Commitments, such Letter of Credit Sublimit shall be automatically reduced by
the amount of such excess. The Administrative Agent will promptly notify the
Lenders of any such notice of termination or reduction of the Aggregate
Commitments. Any reduction of the Aggregate Commitments shall be applied to the
Commitment of each Lender according to its Pro Rata Share. All commitment fees
accrued until the effective date of any termination of the Aggregate Commitments
shall be paid on the effective date of such termination.
(b) On any date that any Loans are required to be prepaid
and/or the L/C Obligations are required to be paid or Cash Collateralized as a
result of a prepayment required by Sections 2.05 (b) or (c) (or would be so
required if any Loans or L/C Obligations were outstanding), the Aggregate
Commitments shall be automatically and permanently reduced by the total amount
of such required prepayments and Cash Collateral; provided that, regardless of
whether any Loans or L/C Obligations are outstanding, the Aggregate Commitments
shall be automatically and permanently reduced in the amounts and under the
conditions and times specified in Sections 2.05(b) and (c). The Administrative
Agent will promptly notify the Lenders of any such reduction of the Aggregate
Commitments. Any reduction of the Aggregate Commitments shall be applied to the
Commitment of each Lender according to its Pro Rata Share.
Section 2.07 Repayment of Loans. The Borrower shall repay to the
Lenders on the Maturity Date the Outstanding Amount of Loans on such date.
39
Section 2.08 Interest.
(a) Subject to the provisions of subsection (b) below,
(i) each Eurodollar Rate Loan shall bear interest on the outstanding principal
amount thereof for each Interest Period at a rate per annum equal to the
Eurodollar Rate for such Interest Period plus the Applicable Rate; and (ii) each
Base Rate Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Rate.
(b) If any amount payable by the Borrower under any Loan
Document is not paid when due (without regard to any applicable grace periods),
whether at stated maturity, by acceleration or otherwise, such amount shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Law.
Furthermore, while any Event of Default exists, the Borrower shall pay interest
on the principal amount of all outstanding Obligations hereunder at the Default
Rate to the fullest extent permitted by applicable Law. Accrued and unpaid
interest on past due amounts (including interest on past due interest) shall be
due and payable upon demand.
(c) Interest on each Loan shall be due and payable in
arrears on each Interest Payment Date applicable thereto and at such other times
as may be specified herein. Interest hereunder shall be due and payable in
accordance with the terms hereof before and after judgment and before and after
the commencement of any proceeding under any Debtor Relief Law.
Section 2.09 Fees. In addition to certain fees described in
subsections (i) and (j) of Section 2.03:
(a) Commitment Fee. The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its Pro
Rata Share, a commitment fee equal to 0.75% per annum pre-Successful IPO or
0.50% per annum post-Successful IPO, as applicable, times the actual daily
amount by which the Aggregate Commitments exceed the sum of (i) the Outstanding
Amount of Loans and (ii) the Outstanding Amount of L/C Obligations. The
commitment fee shall accrue at all times during the Availability Period,
including at any time during which one or more of the conditions in Article IV
is not met, and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with the
first such date to occur after the Closing Date, and on the Maturity Date.
(b) Other Fees. The Borrower shall pay to the Co-Lead
Arrangers and the Administrative Agent for their own respective accounts fees in
the amounts and at the times specified in the Commitment Letter and the Fee
Letter. Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.
Section 2.10 Computation of Interest and Fees. All computations of
interest for Base Rate Loans when the Base Rate is determined by Bank of
America's "prime rate" shall be made on the basis of a year of 365 or 366 days,
as the case may be, and actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more fees or interest, as applicable, being paid than if
computed on the
40
basis of a 365-day year). Interest shall accrue on each Loan for the day on
which the Loan is made, and shall not accrue on a Loan, or any portion thereof,
for the day on which the Loan or such portion is paid; provided that any Loan
that is repaid on the same day on which it is made shall, subject to Section
2.12(a), bear interest for one day. Each determination by the Administrative
Agent of an interest rate or fee hereunder shall be conclusive and binding for
all purposes, absent manifest error.
Section 2.11 Evidence of Debt.
(a) The Credit Extensions made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
the Administrative Agent in the ordinary course of business. The accounts or
records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Credit Extensions made by
the Lenders to the Borrower and the interest and payments thereon. Any failure
to so record or any error in doing so shall not, however, limit or otherwise
affect the obligation of the Borrower hereunder to pay any amount owing with
respect to the Obligations. In the event of any conflict between the accounts
and records maintained by any Lender and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error. Upon the
request of any Lender made through the Administrative Agent, the Borrower shall
execute and deliver to such Lender (through the Administrative Agent) a Note,
which shall evidence such Lender's Loans in addition to such accounts or
records. Each Lender may attach schedules to its Note and endorse thereon the
date, Type, amount and maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to
in subsection (a) above, each Lender and the Administrative Agent shall maintain
in accordance with its usual practice accounts or records evidencing the
purchases and sales by such Lender of participations in Letters of Credit. In
the event of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error.
(c) Entries made in good faith by the Administrative
Agent in the Register pursuant to subsections (a) and (b) above, and by each
Lender in its accounts pursuant to subsections (a) and (b) above, shall be prima
facie evidence of the amount of principal and interest due and payable or to
become due and payable from the Borrower to, in the case of the Register each
Lender and, in the case of such account or accounts, such Lender, under this
Agreement and the other Loan Documents, absent manifest error; provided that the
failure of the Administrative Agent or such Lender to make any entry, or any
finding that an entry is incorrect, in the Register or such account or accounts
shall not limit or otherwise affect the obligations of the Borrower under this
Agreement and the other Loan Documents.
Section 2.12 Payments Generally.
(a) All payments to be made by the Borrower shall be made
without condition or deduction for any counterclaim, defense, recoupment or
setoff. Except as otherwise expressly provided herein, all payments by the
Borrower hereunder shall be made to the Administrative
41
Agent, for the account of the respective Lenders to which such payment is owed,
at the Administrative Agent's Office in Dollars and in immediately available
funds not later than 2:00 p.m. on the date specified herein. The Administrative
Agent will promptly distribute to each Lender its Pro Rata Share (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender's Lending Office. All payments received by the
Administrative Agent after 2:00 p.m. shall be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue.
(b) If any payment to be made by the Borrower shall
become due on a day other than a Business Day, payment shall be made on the next
following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be; provided, however, that, if such
extension would cause payment of interest on or principal of Eurodollar Rate
Loans to be made in the next succeeding calendar month, such payment shall be
made on the immediately preceding Business Day.
(c) Unless the Borrower or any Lender has notified the
Administrative Agent, prior to the date any payment is required to be made by it
to the Administrative Agent hereunder, that the Borrower or such Lender, as the
case may be, will not make such payment, the Administrative Agent may assume
that the Borrower or such Lender, as the case may be, has timely made such
payment and may (but shall not be so required to), in reliance thereon, make
available a corresponding amount to the Person entitled thereto. If and to the
extent that such payment was not in fact made to the Administrative Agent in
immediately available funds, then:
(i) if the Borrower failed to make such payment,
each Lender shall forthwith on demand repay to the Administrative Agent
the portion of such assumed payment that was made available to such
Lender in immediately available funds, together with interest thereon
in respect of each day from and including the date such amount was made
available by the Administrative Agent to such Lender to the date such
amount is repaid to the Administrative Agent in immediately available
funds at the Federal Funds Rate from time to time in effect; and
(ii) if any Lender failed to make such payment,
such Lender shall forthwith on demand pay to the Administrative Agent
the amount thereof in immediately available funds, together with
interest thereon for the period from the date such amount was made
available by the Administrative Agent to the Borrower to the date such
amount is recovered by the Administrative Agent (the "Compensation
Period") at a rate per annum equal to the Federal Funds Rate from time
to time in effect. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's
Loan included in the applicable Borrowing. If such Lender does not pay
such amount forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent may make a demand therefor upon the Borrower,
and the Borrower shall pay such amount to the Administrative Agent,
together with interest thereon for the Compensation Period at a rate
per annum equal to the rate of interest applicable to the applicable
Borrowing. Nothing herein shall be deemed to relieve any Lender from
its obligation to fulfill its Commitment or to prejudice any rights
which the Administrative Agent or the Borrower may have against any
Lender as a result of any default by such Lender hereunder.
42
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (c) shall be conclusive,
absent manifest error.
(d) If any Lender makes available to the Administrative
Agent funds for any Loan to be made by such Lender as provided in the foregoing
provisions of this Article II, and such funds are not made available to the
Borrower by the Administrative Agent because the conditions to the applicable
Credit Extension set forth in Article IV are not satisfied or waived in
accordance with the terms hereof, the Administrative Agent shall return such
funds (in like funds as received from such Lender) to such Lender, without
interest.
(e) The obligations of the Lenders hereunder to make
Loans and to fund participations in Letters of Credit are several and not joint.
The failure of any Lender to make any Loan or to fund any such participation on
any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan or purchase
its participation.
(f) Nothing herein shall be deemed to obligate any Lender
to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.
(g) The Borrower hereby authorizes each Lender, if and to
the extent payment owed to such Lender 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 and all of the Borrower's accounts with such Lender any amount so
due.
Section 2.13 Sharing of Payments. If, other than as expressly
provided elsewhere herein, any Lender shall obtain on account of the Loans made
by it, or the participations in L/C Obligations held by it, any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify the Administrative
Agent of such fact, and (b) purchase from the other Lenders such participations
in the Loans made by them and/or such subparticipations in the participations in
L/C Obligations held by them, as the case may be, as shall be necessary to cause
such purchasing Lender to share the excess payment in respect of such Loans or
such participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender under any of the circumstances described in
Section 10.06 (including pursuant to any settlement entered into by the
purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender's ratable share (according to the proportion of (i) the amount of such
paying Lender's required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered, without further
interest thereon. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by Law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and
43
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a participation pursuant to this Section
shall from and after such purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
Section 3.01 Taxes.
(a) Subject to Section 10.15, any and all payments by the
Borrower to or for the account of the Administrative Agent or any Lender under
any Loan Document shall be made free and clear of and without deduction for any
and all present or future taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges and all liabilities with
respect thereto, excluding, in the case of the Administrative Agent and each
Lender, taxes imposed on or measured by its overall net income and franchise
taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the Laws of which the Administrative Agent
or such Lender, as the case may be, is organized or maintains a lending office
(all such non-excluded taxes, duties, levies, imposts, deductions, assessments,
fees, withholdings or similar charges, and liabilities being hereinafter
referred to as "Taxes"). Subject to Section 10.15, if the Borrower shall be
required by any Laws to deduct any Taxes from or in respect of any sum payable
under any Loan Document to the Administrative Agent or any Lender, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section), each of the Administrative Agent and such Lender receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable Law, and (iv) within 30 days after the date of such
payment, the Borrower shall furnish to the Administrative Agent (which shall
forward the same to such Lender) the original or a certified copy of a receipt
evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all
present or future stamp, court or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any payment made
under any Loan Document or from the execution, delivery, performance,
enforcement or registration of, or otherwise with respect to, any Loan Document
(hereinafter referred to as "Other Taxes").
(c) If the Borrower shall be required to deduct or pay
any Taxes or Other Taxes from or in respect of any sum payable under any Loan
Document to the Administrative Agent or any Lender, the Borrower shall also pay
to the Administrative Agent or to such Lender, as the case may be, at the time
interest is paid, such additional amount that the Administrative Agent or such
Lender specifies is necessary to preserve the after-tax yield (after factoring
in all taxes, including taxes imposed on or measured by net income) that the
Administrative Agent or such Lender would have received if such Taxes or Other
Taxes had not been imposed.
44
(d) The Borrower agrees to indemnify the Administrative
Agent and each Lender for (i) the full amount of Taxes and Other Taxes
(including any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section) paid by the Administrative Agent and such
Lender, (ii) amounts payable under this Section 3.01 and (iii) any liability
(including additions to tax, penalties, interest and expenses) arising therefrom
or with respect thereto, in each case whether or not such Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. Payment under this subsection (d) shall be made within 30 days after
the date the Lender or the Administrative Agent makes a demand therefor.
Section 3.02 Illegality. If any Lender determines that any Law has
made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund Eurodollar Rate Loans, or to determine or charge interest rates based upon
the Eurodollar Rate, then, on notice thereof by such Lender to the Borrower
through the Administrative Agent, any obligation of such Lender to make or
continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate
Loans shall be suspended until such Lender notifies the Administrative Agent and
the Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, and upon demand from such Lender (with a
copy to the Administrative Agent), the Borrower shall, at its sole option so
long as no Default has occurred, prepay or, if applicable, convert all
Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day
of the Interest Period therefor, if such Lender may lawfully continue to
maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such
prepayment or conversion, the Borrower shall also pay accrued interest on the
amount so prepaid or converted. Each Lender agrees to designate a different
Lending Office if such designation will avoid the need for such notice and will
not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender.
Section 3.03 Inability to Determine Rates. If the Required Lenders
determine that for any reason adequate and reasonable means do not exist for
determining the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Loan, or that the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan does
not adequately and fairly reflect the cost to such Lenders of funding such Loan,
the Administrative Agent will promptly so notify the Borrower and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate
Loans shall be suspended until the Administrative Agent (upon the instruction of
the Required Lenders) revokes such notice. Upon receipt of such notice, the
Borrower may revoke any pending request for a Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or, failing that, will be deemed to have
converted such request into a request for a Borrowing of Base Rate Loans in the
amount specified therein.
Section 3.04 Increased Cost and Reduced Return; Capital Adequacy;
Reserves on Eurodollar Rate Loans.
(a) If any Lender determines that as a result of the
introduction of or any change in or in the interpretation of any Law, or such
Lender's compliance therewith, there shall be any increase in the cost to such
Lender of agreeing to make or making, funding or maintaining
45
Eurodollar Rate Loans or (as the case may be) issuing or participating in
Letters of Credit, or a reduction in the amount received or receivable by such
Lender in connection with any of the foregoing (excluding for purposes of this
subsection (a) any such increased costs or reduction in amount resulting from
(i) Taxes or Other Taxes (as to which Section 3.01 shall govern), (ii) changes
in the basis of taxation of overall net income or overall gross income by the
United States or any foreign jurisdiction or any political subdivision of either
thereof under the Laws of which such Lender is organized or has its Lending
Office, and (iii) reserve requirements contemplated by Section 3.04(c)), then
from time to time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such increased cost or reduction.
(b) If any Lender determines that the introduction of any
Law regarding capital adequacy or any change therein or in the interpretation
thereof, or compliance by such Lender (or its Lending Office) therewith, has the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder (taking into consideration its policies with respect to
capital adequacy and such Lender's desired return on capital), then from time to
time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such reduction; provided in no event
shall the amount set forth in such demand cover a period commencing earlier than
180 days prior to the date of the demand.
(c) The Borrower shall pay to each Lender, as long as
such Lender shall be required to maintain reserves with respect to liabilities
or assets consisting of or including Eurocurrency funds or deposits (currently
known as "Eurocurrency liabilities"), additional interest on the unpaid
principal amount of each Eurodollar Rate Loan equal to the actual costs of such
reserves allocated to such Loan by such Lender (as determined by such Lender in
good faith, which determination shall be conclusive), which shall be due and
payable on each date on which interest is payable on such Loan; provided the
Borrower shall have received at least 15 days' prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender. If a Lender
fails to give notice 15 days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable 15 days from receipt of such
notice.
Section 3.05 Funding Losses. Upon demand of any Lender (with a
copy to the Administrative Agent) from time to time, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment
of any Loan other than a Base Rate Loan on a day other than the last day of the
Interest Period for such Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise); or
(b) any failure by the Borrower (for a reason other than
the failure of such Lender to make a Loan) to prepay, borrow, continue or
convert any Loan other than a Base Rate Loan on the date or in the amount
notified by the Borrower;
including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds
46
were obtained. The Borrower shall also pay any customary administrative fees
charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the
Lenders under this Section 3.05, each Lender shall be deemed to have funded each
Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the London interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.
Section 3.06 Matters Applicable to all Requests for Compensation.
(a) A certificate of the Administrative Agent or any
Lender claiming compensation under this Article III and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, the Administrative
Agent or such Lender may use any reasonable averaging and attribution methods.
(b) Upon a Lender's making a claim for compensation under
Sections 3.01 or 3.04, the Borrower may replace such Lender in accordance with
Section 10.19.
Section 3.07 Survival. All of the Borrower's obligations under
this Article III shall survive termination of the Aggregate Commitments and
repayment of all other Obligations hereunder.
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
Section 4.01 Conditions of Initial Credit Extension. The
obligation of each Lender to make its initial Credit Extension hereunder is
subject to satisfaction of the following conditions precedent:
(a) The Administrative Agent's receipt of the following,
each of which shall be originals or facsimiles (followed promptly by originals)
unless otherwise specified, each properly executed by a duly authorized officer
of the signing Loan Party, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date)
and each in form and substance satisfactory to the Administrative Agent and its
legal counsel:
(i) executed counterparts of this Agreement,
each Collateral Document and the Subsidiary Guaranty, sufficient in
number for distribution to the Administrative Agent, each Lender and
the Borrower;
(ii) an original Note executed by the Borrower in
favor of each Lender requesting a Note;
47
(iii) such certificates of resolutions or other
action, incumbency certificates evidencing the identity, authority and
capacity of each duly authorized officer authorized to act on behalf of
such Loan Party in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party;
(iv) such documents and certifications as the
Administrative Agent may reasonably require to evidence each of the
Borrower and each of the Subsidiaries is duly organized or formed, and
each of the Borrower and each of the Subsidiaries is validly existing,
in good standing and qualified to engage in business in each
jurisdiction where its ownership, lease or operation of properties or
the conduct of its business requires such qualification, except to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect, including, certified copies of the
Organization Documents of the Borrower and each of the Subsidiaries,
certificates of good standing and/or qualification to engage in
business and tax clearance certificates;
(v) favorable opinions of counsel for the Loan
Parties, addressed to the Administrative Agent and each Lender, as to
the matters set forth in Exhibit F, with such customary assumptions,
qualifications and exceptions;
(vi) a certificate of a duly authorized officer
of each Loan Party and any Subsidiary whose capital stock is subject to
a pledge under the Pledge Agreement either (A) attaching copies of all
consents, licenses and approvals required in connection with the
execution, delivery and performance by such Loan Party and the validity
against such Loan Party of the Loan Documents to which it is a party
and, required in connection with the Loan Documents and the
transactions contemplated thereby (including, without limitation, the
pledge of any Subsidiary's capital stock and the expiration, without
imposition of conditions, of all applicable waiting periods in
connection with the transactions contemplated by the Loan Documents),
and such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are
so required;
(vii) a certificate signed by a duly authorized
officer of the Borrower certifying (A) that the conditions specified in
Sections 4.02(a) and (b) have been satisfied, and (B) that there has
been no event or circumstance since the date of the most recent Audited
Financial Statements that has had or could be reasonably expected to
have, either individually or in the aggregate, a Material Adverse
Effect;
(viii) evidence that all insurance required to be
maintained pursuant to the Loan Documents has been obtained and is in
full force and effect;
(ix) original certificates evidencing all of the
issued and outstanding shares of capital stock or other equity or other
ownership interests required to be pledged pursuant to the terms of the
Pledge Agreement (including without limitation pledges of all the
capital stock of the Guarantors, Xxxxxx Healthcare of Washington and
Xxxxxx Healthcare of Utah), which certificates shall be accompanied by
undated stock powers duly executed in blank by each relevant pledgor in
favor of the Administrative Agent;
48
(x) the original Intercompany Notes required to
be pledged pursuant to the terms of the Pledge Agreement, duly endorsed
in blank by each relevant pledgor in favor of the Administrative Agent;
(xi) certified copies of Uniform Commercial Code
Requests for Information or Copies (Form UCC-11) or similar search
reports certified by a party acceptable to the Administrative Agent,
dated a date reasonably near (but prior to) the Closing Date, listing
all effective UCC financing statements, tax liens and judgment liens
which name the Borrower or any of the Subsidiaries, as the debtor, and
which are filed in the jurisdictions in which the Borrower and the
Subsidiaries are organized or have any property or assets, and in such
other jurisdictions as the Administrative Agent may reasonably request,
together with copies of such financing statements (none of which (other
than financing statements filed pursuant to the terms hereof in favor
of the Administrative Agent, if such Form UCC-11 or search report, as
the case may be, is current enough to list such financing statements)
shall cover any of the Collateral, other than Liens existing on the
date hereof and listed on Schedule 7.01);
(xii) with respect to all the Intellectual
Property Collateral, search results from the United States Patent and
Trademark Office and United States Copyright Office to the extent any
patents, trademarks or copyrights form a part of the Collateral;
(xiii) (A) acknowledgment copies of UCC financing
statements naming the Borrower and each Eligible Subsidiary as the
debtor and the Administrative Agent as the secured party, which such
UCC financing statements have been filed under the UCC of all
jurisdictions as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the first priority security
interest of the Administrative Agent pursuant to the Security
Agreement; (B) evidence reasonably satisfactory to the Administrative
Agent of the filing (or delivery for filing) of appropriate trademark,
copyright and patent security supplements with the United States Patent
and Trademark Office and United States Copyright Office to the extent
relevant; and (C) such control agreements (including the Account
Control Agreements) as reasonably requested by the Administrative Agent
with respect to the Collateral under the Security Agreement in which a
security interest may be perfected by "control" (as defined in the
relevant UCC), in each case, duly executed and delivered or
authenticated by the parties thereto;
(xiv) 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
(together with access letters) created under the Collateral Documents
has been taken (including, without limitation, receipt of duly executed
payoff letters, UCC-3 termination statements and landlords' and
bailees' waiver and consent agreements);
(xv) a certificate signed by a duly authorized
officer of the Borrower attaching true and correct copies of all
Material Contracts of each Loan Party and their respective
Subsidiaries;
49
(xvi) such other assurances, certificates,
documents, consents and waivers, estoppel certificates, or opinions as
the Administrative Agent, the L/C Issuer or the Required Lenders
reasonably may require; and
(xvii) evidence of appointment of CT Corporation
System as agent for service of process in accordance with Section 10.17
for the Borrower and in accordance with Section 5.16(b) of the Guaranty
Agreement for the Guarantor.
(b) The Lenders shall be satisfied that, concurrently
with the Closing Date, all existing Indebtedness of the Loan Parties and their
respective Subsidiaries has been repaid, redeemed or defeased in full or
otherwise satisfied and extinguished, except the Indebtedness listed on Schedule
7.03 hereof, which Indebtedness shall be on terms and conditions satisfactory to
the Lenders and all Liens securing such obligations have been or concurrently
with the Closing Date are being released, other than Liens listed on Schedule
7.01.
(c) The Lenders shall be satisfied with the amount, terms
and conditions of all intercompany Indebtedness.
(d) The fees and expenses of the Loan Parties pursuant to
the Commitment Letter, Fee Letter and Section 10.04 required to be paid on or
before the Closing Date shall have been paid.
(e) The Borrower shall have paid all Attorney Costs of
the Administrative Agent to the extent invoiced prior to or on the Closing Date,
plus such additional amounts of Attorney Costs as shall constitute its
reasonable estimate of Attorney Costs incurred or to be incurred by it through
the closing proceedings (provided, that such estimate shall not thereafter
preclude a final settling of accounts between the Borrower and the
Administrative Agent).
Section 4.02 Conditions to all Credit Extensions. The obligation
of each Lender to honor any Request for Credit Extension (other than a Loan
Notice requesting only a conversion of Loans to the other Type, or a
continuation of Eurodollar Rate Loans) is subject to the following conditions
precedent:
(a) The representations and warranties of the Borrower
contained in Article V or any other Loan Document, or which are contained in any
document furnished at any time under or in connection herewith or therewith,
shall be true and correct in all material respects on and as of the date of such
Credit Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct in all material respects as of such earlier date, and except that for
purposes of this Section 4.02, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most
recent statements furnished pursuant to subsections (a) and (b), respectively,
of Section 6.01 and the references to Schedules shall be deemed to refer to the
most updated supplements to the Schedules furnished pursuant to subsection (b)
of Section 6.02.
(b) No Default shall exist, or would result from such
proposed Credit Extension.
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(c) The Administrative Agent and, if applicable, the L/C
Issuer shall have received a Request for Credit Extension in accordance with the
requirements hereof.
(d) The Administrative Agent shall have received such
other approvals, opinions or documents as any Lender, through the Administrative
Agent, may reasonably request.
Each Request for Credit Extension (other than a Loan Notice requesting
only a conversion of Loans to the other Type or a continuation of Eurodollar
Rate Loans) submitted by the Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a) and (b) have been
satisfied on and as of the date of the applicable Credit Extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and
the Lenders that:
Section 5.01 Existence, Qualification and Power. The Borrower and
each of the Subsidiaries (a) is duly organized or formed, validly existing and
in good standing under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite corporate power and authority to (i) own its
assets and carry on its business and (ii) execute, deliver and perform its
obligations under the Loan Documents to which it is a party, including, without
limitation, to conduct its business or to own, as applicable, an HMO in the
state of its organization, and (c) is duly qualified and is licensed and in good
standing under the Laws of each jurisdiction where its ownership, lease or
operation of its properties or the conduct of its business requires such
qualification or license, except where such failure could not reasonably be
expected to have a Material Adverse Effect.
Section 5.02 Authorization; No Contravention. The execution,
delivery and performance by each Loan Party of each Loan Document to which such
Person is party, have been duly authorized by all necessary corporate or other
organizational action. The execution, delivery and performance by each Loan
Party of each Loan Document to which it is a party, and the consummation of the
transactions contemplated hereby with respect to each Loan Party and any of
their respective Subsidiaries, do not and will not: (a) contravene the terms of
any of such Person's Organization Documents; (b) conflict with or result in any
breach or contravention of, or (except for the Liens created under the Loan
Documents) the creation of any Lien under, (i) any material Contractual
Obligation to which such Person is a party or (ii) any order, injunction, writ
or decree of any Governmental Authority or any arbitral award to which such
Person or its property is subject; or (c) violate any material Law applicable to
any Loan Party, including, without limitation, state and Federal Laws relating
to health care organizations and health care providers.
Section 5.03 Governmental Authorization; Other Consents. Except as
specifically disclosed on Schedule 5.03, no material approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with (a) the execution, delivery or performance by, or
51
enforcement against, any Loan Party of this Agreement or any other Loan Document
(other than those that have been obtained), (b) the validity or enforceability
of any Loan Documents against the Loan Parties (except such filings as are
necessary in connection with the perfection of the Liens created by such Loan
Documents), or (c) the consummation of the transactions contemplated hereby
(other than those that have been obtained by the Borrower and the Subsidiaries).
Section 5.04 Binding Effect. This Agreement has been, and each
other Loan Document, when delivered hereunder, will have been, duly executed and
delivered by each Loan Party that is party thereto. This Agreement constitutes,
and each other Loan Document when so delivered will constitute, a legal, valid
and binding obligation of such Loan Party, enforceable against each Loan Party
that is party thereto in accordance with its terms, except as enforceability may
be limited by Debtor Relief Laws.
Section 5.05 Financial Statements; No Material Adverse Effect.
(a) The Audited Financial Statements (i) were prepared in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein, (ii) fairly present the financial
condition of the Borrower and the Subsidiaries as of the date thereof and their
results of operations for the period covered thereby in accordance with GAAP (or
as applicable, with respect to HMO Subsidiaries, SAP) consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein, and (iii) show all material indebtedness and other material
liabilities, direct or contingent, of the Borrower and the Subsidiaries as of
the date thereof, including material liabilities for taxes, material commitments
and Indebtedness.
(b) Since the date of the most recent Audited Financial
Statements, there has been no event or circumstance, either individually or in
the aggregate, that has had or could reasonably be expected to have a Material
Adverse Effect.
(c) The financial statements delivered to the
Administrative Agent and each Lender pursuant to Sections 6.01(a) and (b) (i)
will be prepared in accordance with GAAP (or, as applicable, with respect to HMO
Subsidiaries, SAP), except as otherwise noted therein, and (ii) will fairly
present the financial condition of the Borrower and the Subsidiaries as of the
date thereof and their results of operations for the period covered thereby in
accordance with GAAP (or, as applicable, with respect to HMO Subsidiaries, SAP).
Section 5.06 Litigation. There are no actions, suits, proceedings,
claims or disputes pending or, to the actual knowledge of the Borrower,
threatened or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, by or against the Borrower or any of the Subsidiaries or
against any of their respective properties or revenues or injunctions, writs,
temporary restraining orders or other orders of any nature issued by any court
or Governmental Authority that (a) purport to affect, pertain to or enjoin or
restrain the execution, delivery or performance of this Agreement or any other
Loan Document, or any of the transactions contemplated hereby, or (b) either
individually or in the aggregate, if determined adversely, could reasonably be
expected to have a Material Adverse Effect.
52
Section 5.07 No Default. No default exists and, to the knowledge
of the Borrower, no default has been asserted under or with respect to any
Contractual Obligation that could, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. No Default could
reasonably be expected to result from the consummation of the transactions
contemplated by this Agreement or any other Loan Document.
Section 5.08 Subsidiaries. The Borrower has no Subsidiaries other
than those specifically disclosed in Part (a) of Schedule 5.08 (including the
jurisdiction of organization, classes of capital stock (including options,
warrants, rights of subscription, conversion and exchangeability and other
similar rights, ownership and ownership percentages thereof) and whether such
Subsidiaries are capitalized or licensed as an HMO, conducting HMO Business
and/or providing managed care services) and has no equity investments in any
other corporation or entity other than those specifically disclosed in Part (b)
of Schedule 5.08 or on Schedule 7.02. The outstanding shares of capital stock
shown have been validly issued, fully-paid and are non-assessable and owned free
and clear of Liens. The outstanding shares of capital stock shown are not
subject to buy-sell, voting trust or other shareholder agreement, except as
specifically disclosed in Part (c) of Schedule 5.08.
Section 5.09 Ownership of Personal Property; Liens. Each of the
Borrower and each Subsidiary has good title to all of their respective material
personal properties and assets (except for those properties and assets disposed
of not in violation of this Agreement and the other Loan Documents and except
for encumbrances and title defects that could not be reasonably be expected to
have a Material Adverse Effect). The property and assets of the Borrower and the
Subsidiaries are subject to no Liens, other than Liens permitted by Section
7.01. Each of the Borrower and each of the Subsidiaries has obtained all
material licenses, permits, franchises or other certifications, consents,
approvals and authorizations, governmental or private, necessary to the
ownership of its property and assets and the conduct of its business.
Section 5.10 Intellectual Property; Licenses, Etc. The Borrower
and the Subsidiaries own, or possess the right to use, all of the trademarks,
service marks, trade names, copyrights, patents, patent rights, franchises,
licenses and other intellectual property rights (collectively, "IP Rights") that
are reasonably necessary for the operation of its businesses. To the actual
knowledge of the Borrower the use of such IP Rights by the Borrower and its
Subsidiaries does not infringe on the rights of any Person, except for such
infringements that could not reasonably be expected to have a Material Adverse
Effect. To the best knowledge of the Borrower, no slogan or other advertising
device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by the Borrower or any Subsidiary
infringes upon any rights held by any other Person.
Section 5.11 Real Estate, Lease. (a) Schedule 5.11 sets forth an
accurate description, as of the Closing Date, of the location, by state and
street address, of all Real Property Assets owned by the Borrower and the
Subsidiaries under the heading "Fee Properties" and all Real Property Assets
leased by the Borrower and the Subsidiaries under the heading "Leased
Properties", together with, in the case of owned Real Property Assets, a
statement as to whether each such Real Property Asset is the subject of a
contract of sale (and, if so, a statement as to the status of such sale), and,
in the case of the each Real Property Asset, the identity of the lessor and
lessee, the term of the lease and the annual rental payments.
53
(b) The Borrower and each of the Subsidiaries has (i)
good and marketable fee title to all of its owned Real Property Assets and (ii)
good and valid title to the leasehold estates in all of the leased Real Property
Assets, in each case free and clear of all Liens, except Permitted Liens.
(c) All material permits, licenses, franchises or other
certifications, consents, approvals and authorizations, governmental or private
with respect to the Real Property Assets, necessary to enable the Borrower and
any of the Subsidiaries to lawfully occupy and use such property for all of the
purposes for which it is currently occupied and used have been lawfully issued
and are in full force and effect, other than such permits, licenses, franchises
or other certifications, consents, approvals and authorizations, governmental or
private, which, if not obtained, would not have a material adverse effect on the
intended use or operation of any such Real Property Assets. All the Real
Property Assets are in compliance in all material respects with all applicable
legal requirements, including the Americans with Disabilities Act of 1990.
Except as specifically disclosed in Schedule 5.11, no consent or approval of any
landlord or other third party in connection with any leased Property Assets is
necessary for any Loan Party to enter into and execute the Loan Documents.
(d) All material easements, cross easements, licenses,
air rights and rights-of way or other similar property interests, if any,
necessary for the full utilization of the Improvements for their intended
purposes have been obtained and are in full force and effect.
Section 5.12 Environmental Matters. Except as would not reasonably
be expected to have a Material Adverse Effect, to the knowledge of the Borrower:
(a) Each of the facilities and properties owned, leased
or operated by the Borrower and the Subsidiaries (the "Subject Properties") and
all operations at the Subject Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any Environmental Law with
respect to the Subject Properties or the businesses operated by the Borrower and
the Subsidiaries (the "Businesses"), and there are no conditions relating to the
Businesses or Subject Properties that could be reasonably likely to give rise to
liability under any applicable Environmental Laws.
(b) None of the Subject Properties contains, or to the
actual knowledge of the Borrower, has previously contained, any Hazardous
Materials at, on or under the Subject Properties in amounts or concentrations
that constitute or constituted a violation of, or could give rise to liability
under, Environmental Laws.
(c) Neither the Borrower nor any of the Subsidiaries has
received any written or verbal notice of, or inquiry from any Governmental
Authority regarding, any violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Subject Properties or the
Businesses, nor does the Borrower have knowledge that any such notice will be
received or is being threatened.
(d) Hazardous Materials have not been transported or
disposed of from the Subject Properties, or generated, treated, stored or
disposed of at, on or under any of the Subject
54
Properties or any other location, in each case by or on behalf of the Borrower
or any of the Subsidiaries in violation of, or in a manner that would be
reasonably likely to give rise to liability under, any applicable Environmental
Law.
(e) There are no consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
the Borrower or any of the Subsidiaries, the Subject Properties or the
Businesses.
(f) There has been no release or threat of release of
Hazardous Materials at or from the Subject Properties, or arising from or
related to the operations (including, without limitation, disposal) of the
Borrower or any of the Subsidiaries in connection with the Subject Properties or
otherwise in connection with the Businesses, in violation of, or in amounts or
in a manner that could give rise to liability under, Environmental Laws.
Section 5.13 Security Documents.
(a) The Security Agreement is effective to create in
favor of the Administrative Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral
identified therein owned by the Loan Parties who are a party thereto, and, when
financing statements in appropriate form are filed in the appropriate offices
for the locations specified in the schedules to the Security Agreement, the
Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the grantors thereunder in such
Collateral that may be perfected by filing, recording or registering a financing
statement under the UCC as in effect, in each case prior and superior in right
to any other Lien on any Collateral other than Permitted Liens.
(b) The Pledge Agreement is effective to create in favor
of the Administrative Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security interest in the Collateral identified
therein, and, when such Collateral is delivered to the Administrative Agent, the
Pledge Agreement shall constitute a fully perfected first priority Lien on, and
security interest in, all right, title and interest of the pledgors thereunder
in such Collateral, in each case subject to no other Lien other than Permitted
Liens.
(c) The Security Agreement, together with the Notice of
Grant of a Security Interest in Trademarks when duly recorded in the United
States Patent and Trademark Office, will constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the grantors
thereunder in all Trademarks and Trademark Licenses (each as defined in the
Security Agreement) owned by such grantors and in which a security interest may
be perfected by filing, recording or registration of a Notice in the United
States Patent and Trademark Office, in each case prior and superior in right to
any other Lien other than Permitted Liens.
Section 5.14 Insurance. The Borrower and the Subsidiaries
maintain, with financially sound and reputable insurance companies not
Affiliates of the Borrower, insurance (including workers' compensation,
liability insurance and casualty insurance), with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar businesses and owning similar properties
in localities where the Borrower
55
or such Subsidiary operates, of such types and in such amounts, with such
deductibles and covering such risks, as are customarily carried under similar
circumstances by such other Persons (or otherwise required in the Collateral
Documents). The present insurance coverage of the Borrower and each of the
Subsidiaries is described as to name of insured, carrier, policy number,
expiration date, type and amount on Schedule 5.14.
Section 5.15 Taxes. The Borrower and each of the Subsidiaries have
filed all Federal, state and other tax returns and reports required to be filed,
and have paid all Federal, state and other taxes, assessments, fees and other
governmental charges shown thereon to be due (including interest and penalties)
and all other Federal, state and other taxes, assessments, fees and other
governmental charges owing by it, except (i) which are not yet delinquent or
(ii) that are being contested in good faith by appropriate proceedings
diligently conducted and for which adequate reserves have been provided in
accordance with GAAP (or as applicable, with respect to HMO Subsidiaries, SAP).
To the knowledge of the Borrower, there is no pending investigation or proposed
tax assessment against the Borrower or any of the Subsidiaries that would, if
made, have a Material Adverse Effect.
Section 5.16 ERISA Compliance.
(a) Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other Federal or state
Laws. Each Plan that is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS or an application for
such a letter is currently being processed by the IRS with respect thereto and,
to the best knowledge of the Borrower, nothing has occurred which would prevent,
or cause the loss of, such qualification. The Borrower and each ERISA Affiliate
have made all required contributions to each Plan subject to Section 412 of the
Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.
(b) There are no pending or, to the actual knowledge of
the Borrower, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan that could reasonably be
expected to have a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan that has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably
expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability;
(iii) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007 of
ERISA); (iv) neither the Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in such
liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer
Plan; and (v) neither the Borrower nor any ERISA Affiliate has engaged in a
transaction that could be subject to Sections 4069 or 4212(c) of ERISA.
56
Section 5.17 Margin Regulations; Investment Company Act; Public
Utility Holding Company Act.
(a) The Borrower is not engaged, and will not engage,
principally or as one of its important activities, in the business of purchasing
or carrying margin stock (within the meaning of Regulation U issued by the FRB),
or extending credit for the purpose of purchasing or carrying margin stock, and
no proceeds of any Loans 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 margin stock.
(b) None of the Borrower, any Person Controlling the
Borrower, or any Subsidiary (i) is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, or (ii) is or is required to be registered
as an "investment company" under the Investment Company Act of 1940. Neither the
making of the Loans, nor the issuance of the Letters of Credit or the
application of the proceeds or repayment thereof by the Borrower, nor the
consummation of other transactions contemplated hereunder, will violate any
provision of any such Act or any rule, regulation or order of the SEC.
Section 5.18 Disclosure. The Borrower has disclosed to the
Administrative Agent and the Lenders all agreements, instruments and corporate
or other restrictions to which it or any of the Subsidiaries is subject, and all
other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. No written
report, financial statement, certificate or other written information furnished
by or on behalf of any Loan Party or any of their respective Subsidiaries to the
Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement and the other Loan
Documents or delivered hereunder or thereunder (as modified or supplemented by
other information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided that, with respect to projected financial and projected operational
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed by it to be reasonable at the time.
Section 5.19 Compliance with Laws. Each of the Borrower and its
Subsidiaries is in compliance in all material respects with the requirements of
all Laws (including, without limitation, HMO Regulations, Medicare Regulations
and Medicaid Regulations applicable to it and its Properties) and all orders,
writs, injunctions and decrees applicable to it or to its properties, except in
such instances in which (a) such requirement of Law or order, writ, injunction
or decree is being contested in good faith by appropriate proceedings diligently
conducted or (b) the failure to comply therewith, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
Without limiting the generality of the foregoing, with respect to the Borrower
and each of the Subsidiaries:
(i) (A) neither the Borrower nor any of the Subsidiaries
nor any individual employed by the Borrower or any of the Subsidiaries
is reasonably expected to have criminal culpability or to be excluded
from participation in any Medical
57
Reimbursement Program for corporate or individual actions or failures
to act where such culpability or exclusion has resulted or could
reasonably be expected to result in an Exclusion Event; and (B) there
is no officer continuing to be employed by the Borrower or any of the
Subsidiaries who may reasonably be expected to have individual
culpability for matters under investigation by the OIG or other
Governmental Authority relating to the Businesses unless such officer
has been, within a reasonable period of time after discovery of such
actual or potential culpability, either suspended or removed from
positions of responsibility related to those activities under challenge
by the OIG or other Governmental Authority;
(ii) current billing policies, arrangements, protocols and
instructions comply with requirements of Medical Reimbursement Programs
and are administered by properly trained personnel, except where any
such failure to comply would not reasonably be expected to result in an
Exclusion Event;
(iii) current medical director compensation arrangements
comply with state and federal anti-kick back, fraud and abuse, and
Xxxxx I and II requirements, except where any such failure to comply
would not reasonably be expected to result in an Exclusion Event; and
(iv) the Borrower and the Subsidiaries and their
respective Affiliates have established and implemented such policies,
programs, procedures, contracts and systems, as are necessary for the
Borrower and the Subsidiaries and their respective Affiliates to comply
with the Health Insurance Portability and Accountability Act of 1996;
Title II, Subtitle F, Sections 161-264, Public Law 104-191 and the
Standards for Privacy of Individually Identifiable Health Information,
45 C.F.R. Parts 160-164 as of the dates such establishment or
implementation is required by such Laws.
Section 5.20 Labor Matters.
Except as would not reasonably be expected to have a Material Adverse
Effect:
(a) There are no strikes or lockouts against the Borrower
or any Subsidiary pending or, to the actual knowledge of the Borrower,
threatened;
(b) The hours worked by and payments made to employees of
the Borrower and the Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable federal, state, local or foreign Law
dealing with such matters in any case where a Material Adverse Effect could
reasonably be expected to occur as a result of the violation thereof;
(c) All payments due from the Borrower or any of the
Subsidiaries, or for which any claim may be made against the Borrower or any
Subsidiary, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on the books of the
Borrower or such Subsidiary; and
58
(d) Neither the Borrower nor any of the Subsidiaries is a
party to a collective bargaining agreement.
Set forth on Schedule 5.20 is a summary of all labor matters pending
or, to the actual knowledge of the Borrower, threatened by or against the
Borrower or any of the Subsidiaries, and none of such labor matters,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
Section 5.21 Fraud And Abuse. Neither the Borrower, any of the
Subsidiaries nor any of their respective officers, directors or, to the actual
knowledge of the Borrower, any Contract Provider, has engaged in any activities
that are prohibited under Medicare Regulations or Medicaid Regulations or that
are prohibited by binding rules of professional conduct which, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
Section 5.22 Licensing. The Borrower and each of the Subsidiaries
and, to the actual knowledge of the Borrower, each Contract Provider, has, to
the extent applicable (a) obtained (or been duly assigned) all required
authorizations, consents, approvals, certificates of authority, certificates of
need or determinations of need as required by the relevant state Governmental
Authority for the acquisition, construction, expansion of, investment in or
operation of its businesses as currently operated, (b) obtained and maintains
all required licenses, and (c) entered into and maintains its status as a
Medicare supplier and as a Medicaid supplier. To the actual knowledge of the
Borrower, each Contract Provider is duly licensed by each state, state agency,
commission or other Governmental Authority having jurisdiction over the
provisions of such services by such Contract Provider in the locations where the
Borrower or any of the Subsidiaries conduct business, to the extent such
licensing is required to enable such Contract Provider to provide the
professional services provided by such Contract Provider and otherwise as is
necessary to enable the Borrower and the Subsidiaries to operate as currently
operated and as contemplated to be operated. To the actual knowledge of the
Borrower, all such required licenses are in full force and effect on the date
hereof and have not been revoked or suspended or otherwise limited.
Section 5.23 Solvency. Immediately after giving effect to the
initial Credit Extension made on the Closing Date, (a) the fair value of the
assets of each of the Borrower and each of the Subsidiaries will exceed its
debts and liabilities, subordinated, contingent or otherwise, (b) the present
fair saleable value of the property of each of the Borrower and each of the
Subsidiaries will be greater than the amount that will be required to pay the
probable liability of its debts and other liabilities, subordinated, contingent
or otherwise, as such debts and other liabilities become absolute and mature,
and (c) each of the Borrower and each of the Subsidiaries will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.
Section 5.24 Material Contracts. Set forth on Schedule 5.24 is a
complete and accurate list of all Material Contracts of the Borrower and each of
the Subsidiaries, showing as of the date hereof, the name thereof, the parties,
the subject matter and the term. Each such Material Contract is in full force
and effect and is binding upon and enforceable against the Borrower and each
Subsidiary party thereto, (and to the actual knowledge of the Borrower, all
other parties thereto) in accordance with its terms, except to the extent
enforceability may be
59
limited by Debtor Relief Laws, and there exists no material default under any
Material Contract by the Borrower or any of the Subsidiaries, or to the
Borrower's actual knowledge, by any other party thereto.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower shall:
Section 6.01 Financial Statements. Deliver to the Administrative
Agent and each Lender, in form and detail satisfactory to the Administrative
Agent and the Required Lenders:
(a) as soon as available, but in any event within the
earlier of ninety-five (95) days after the end of each fiscal year, or such
shorter period required by the SEC (plus five (5) days) of the Borrower and the
Subsidiaries, (i) consolidated and consolidating balance sheets of the Borrower
and the Subsidiaries as at the end of such fiscal year, and the related
consolidated and consolidating statements of income or operations, shareholders'
equity and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable
detail and prepared in accordance with GAAP, audited and accompanied by a report
and opinion of an independent certified public accountant of nationally
recognized standing reasonably acceptable to the Required Lenders, which report
and opinion shall be prepared in accordance with generally accepted auditing
standards and shall not be subject to any "going concern" or like qualification
or exception or any qualification or exception as to the scope of such audit,
and (ii) with respect to each HMO Subsidiary, annual financial statements of
such HMO Subsidiary prepared in accordance with SAP; and
(b) as soon as available, but in any event within the
earlier of fifty (50) days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower and the Subsidiaries, or such
shorter period required by the SEC (plus five (5) days), (i) consolidated and
consolidating balance sheets of the Borrower and the Subsidiaries as at the end
of such fiscal quarter, and the related consolidated and consolidating
statements of income or operations, shareholders' equity and cash flows for such
fiscal quarter and for the portion of the Borrower's or the Subsidiaries' fiscal
year then ended, setting forth in each case in comparative form the figures for
the corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, all in reasonable detail and
certified by Responsible Officers of the Borrower as fairly presenting the
consolidated and consolidating financial condition, results of operations,
shareholders' equity and cash flows of the Borrower and the Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes, and (ii) with respect to each HMO Subsidiary, quarterly
financial statements of such HMO Subsidiary prepared in accordance with SAP.
As to any information contained in materials furnished pursuant to Section
6.02(d), the Borrower shall not be separately required to furnish such
information under subsection (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the
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information and materials described in subsections (a) and (b) above at the
times specified therein.
Section 6.02 Certificates; Other Information. Deliver to the
Administrative Agent and each Lender, in form and detail satisfactory to the
Administrative Agent and the Required Lenders:
(a) concurrently with the delivery of the financial
statements referred to in Section 6.01(a), a certificate of its independent
certified public accountants certifying such financial statements and stating
that in making the examination necessary therefor no knowledge was obtained of
any Default under the financial covenants set forth herein or, if any such
Default shall exist, stating the nature and status of such Default setting forth
the details of such Default and the action that the Borrower has taken or
proposes to take with respect thereto;
(b) concurrently with the delivery of the financial
statements referred to in Sections 6.01(a) and (b), a duly completed Compliance
Certificate signed by Responsible Officers of the Borrower. In connection with
the delivery by the Borrower of each Compliance Certificate pursuant to this
Section 6.02(b), the Borrower shall deliver to the Administrative Agent
supplements to Schedules 5.08, 5.11, 5.14, 5.20 and 5.24 and the report required
by Section 6.15(c), together with a statement of the Responsible Officers
executing the Compliance Certificate, certifying that, as of the date thereof,
after giving effect to the supplements to such Schedules and such report
delivered therewith, the representations and warranties in Article V hereof are
true and correct in all material respects. In addition, for fiscal year 2003, no
later than April 30, 2003 and for any fiscal year thereafter, concurrently with
the delivery of the financial statements referred to in Section 6.01(a), a
schedule signed by a Responsible Officer of the Borrower setting forth in
reasonable detail the reinsurance arrangements maintained by each of the HMO
Subsidiaries of the Borrower;
(c) promptly after receipt thereof, copies of any
detailed audit reports, management letters or recommendations submitted to the
board of directors (or the audit committee of the board of directors) of the
Borrower or any of the Subsidiaries by independent accountants in connection
with the accounts or books of the Borrower or any of the Subsidiaries, or any
audit of any of them;
(d) promptly after the same are available, (i) copies of
management discussion and analysis in relationship to the financial statements
delivered pursuant to Sections 6.01(a) and 6.01(b), (ii) copies of each annual
report, proxy or financial statement or other report or communication sent to
the stockholders of the Borrower in their capacities as stockholders, and copies
of all annual, regular, periodic and special reports and registration statements
which the Borrower may file or be required to file with the SEC under Section 13
or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to
be delivered to the Administrative Agent pursuant hereto, and (iii) upon the
request of the Administrative Agent, all reports and written information to and
from the United States Environmental Protection Agency, or any state or local
agency responsible for environmental matters, the United States Occupational
Health and Safety Administration, or any state or local agency responsible for
health and safety matters, or any successor or other agencies or authorities
concerning environmental, health or safety matters;
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(e) no later than the Closing Date for fiscal year 2003,
and within forty-five (45) days following the end of each fiscal year of the
Borrower thereafter, an annual business plan and budget of the Borrower and the
Subsidiaries containing, among other things, summary pro forma financial
information for the next fiscal year with respect to each calendar month and
fiscal quarter; and
(f) as soon as reasonably practicable after the
Borrower's receipt of a request thereof, promptly, such additional information
regarding the business, financial or corporate affairs of the Borrower or any
Subsidiary, or compliance with the terms of the Loan Documents, as the
Administrative Agent or any Lender may from time to time reasonably request.
Documents required to be delivered pursuant to Sections 6.01(a) or (b)
or Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower's
website on the Internet at the website address listed on Schedule 10.02, or (ii)
on which such documents are posted on the Borrower's behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent); provided that, (i)
the Borrower shall deliver paper copies of such documents to the Administrative
Agent or any Lender that requests the Borrower to deliver such paper copies
until a written request to cease delivering paper copies is given by the
Administrative Agent or such Lender, and (ii) the Borrower shall notify (which
may be by facsimile or electronic mail) the Administrative Agent and each Lender
of the posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance the Borrower shall
be required to provide paper copies of the Compliance Certificates required by
Section 6.02(a) and (b) to the Administrative Agent. The Administrative Agent
shall have no obligation to request the delivery or to maintain copies, except
for such Compliance Certificate of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by the Borrower with
any such request for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents.
Section 6.03 Notices. Promptly notify the Administrative Agent
and each Lender:
(a) of the occurrence of any Default;
(b) of to the actual knowledge of the Borrower, (i) any
material breach or non-performance of, or any material default under, a Material
Contract of the Borrower or any Subsidiary, (ii) any material dispute, action,
litigation, investigation or proceeding between the Borrower or any Subsidiary
and any Governmental Authority, (iii) the commencement of, or any material
development in, any material action, litigation, investigation or proceeding
affecting the Borrower or any Subsidiary, including pursuant to any applicable
Environmental Laws, (iv) the institution of any material action, litigation,
investigation or proceeding against the Borrower or any Subsidiary (or, to the
actual knowledge of the Borrower, any Contract Provider) to suspend, revoke or
terminate (or that may result in termination of) its status as a Medicaid
supplier or its status as a Medicare supplier, or any such investigation or
proceeding that may result in an
62
Exclusion Event, (v) a copy of any notice of intent to exclude the Borrower or
any of the Subsidiaries from participation in any Medical Reimbursement Program,
any notice of proposal to exclude the Borrower or any of the Subsidiaries from
participation in any Medical Reimbursement Program issued by the OIG, or any
other Exclusion Event, (vi) a copy of any notice of loss of participation under
any reimbursement program or loss of applicable health care license or
certificate of authority of any HMO Subsidiary, and all other material
deficiency notices, compliance orders or adverse reports issued by any HMO
Regulator or other Governmental Authority or private insurance company pursuant
to a provider agreement that, if not promptly complied with or cured, could
reasonably be expected to result in the suspension or forfeiture of any license
or certification 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, or (vii) any correspondence received by the
Borrower and any Subsidiary from an HMO Regulator asserting that the Borrower or
any Subsidiary is not in compliance with HMO Regulations, or to the actual
knowledge of the Borrower, threatening action against the Borrower or any
Subsidiary under the HMO Regulations, which in either case could reasonably be
expected to have a material adverse effect on the entity so notified;
(c) of the occurrence of any ERISA Event;
(d) of any material change in accounting policies or
financial reporting practices by the Borrower or any Subsidiary; and
(e) within the period for delivery of the quarterly
financial statements provided in Section 6.01(b), of any written notification of
Investments during such fiscal quarter by the Borrower or any Subsidiary in any
HMO Subsidiary that, individually or in the aggregate in any fiscal year of the
Borrower, exceed ten percent (10%) of the Company Action Level or the relevant
state's risk-based capital threshold, as applicable, (in each case as determined
in accordance with SAP at the immediately preceding fiscal-year-end
determination thereof) of such HMO Subsidiary; provided that, to the extent such
Investments, individually or in the aggregate, materially deviate from the
business plan and budget delivered pursuant to Section 6.02(e), written
notification of such Investments shall be provided not later than fifteen days
following the end of the calendar month during which such Investments are made.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower has taken
and proposes to take with respect thereto. Each notice pursuant to Section
6.03(a) shall describe with particularity any and all provisions of this
Agreement and any other Loan Document that have been breached.
Section 6.04 Payment of Obligations. Pay and discharge, and cause
each of the Subsidiaries to pay and discharge, as the same shall become due and
payable, all its material obligations and liabilities, including (a) all tax
liabilities, fees, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being diligently contested in good
faith by appropriate proceedings diligently conducted and adequate reserves in
accordance with GAAP are being maintained, (b) all Indebtedness, as and when due
and payable, but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness; provided that no violation
of this clause (b) shall constitute an Event of
63
Default unless such violation is also an Event of Default under Section 8.01(e),
and (c) all lawful claims that, if unpaid, could reasonably be expected to give
rise to a Lien upon any of its properties, except, in each case to the extent
being diligently contested in good faith by appropriate proceedings which
suspend the enforcement of the Lien and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.
Section 6.05 Preservation of Existence, Etc. (a) Preserve, renew
and maintain, and cause each of the Subsidiaries to preserve, renew and
maintain, in full force and effect its legal existence, legal structure, legal
name and good standing under the Laws of the jurisdiction of its incorporation
or organization, except in a transaction permitted by Sections 7.04 or 7.05; (b)
take all reasonable action, and cause each of the Subsidiaries to take all
reasonable action, to maintain all rights (charter or statutory), privileges,
permits, licenses, approvals and franchises in each case which are necessary in
the normal conduct of its business, except in a transaction permitted by
Sections 7.04 and 7.05; and (c) preserve or renew, and cause each of the
Subsidiaries to preserve and renew, all of its registered patents, trademarks,
trade names and service marks, except, in each case, where failure to do so
could not reasonably be expected to have a Material Adverse Effect.
Section 6.06 Maintenance of Properties. Maintain, preserve and
protect, and cause each of Subsidiaries to maintain, preserve and protect, all
of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted,
to the extent and in the manner customary for Persons engaged in similar
businesses.
Section 6.07 Maintenance of Insurance. Maintain, and cause each of
the Subsidiaries to maintain, with financially sound and reputable insurance
companies not Affiliates of the Borrower, insurance (including workers'
compensation, liability insurance and casualty insurance), with respect to its
properties and business against loss or damage of the kinds customarily insured
against by Persons engaged in the same or similar businesses and owning similar
properties in localities where the Borrower or such Subsidiary operates, of such
types and in such amounts, with such deductibles and covering such risks, as are
customarily carried under similar circumstances by such other Persons (or
otherwise required in the Collateral Documents). The Administrative Agent shall
be named as loss payee and/or additional insured with respect to any such
insurance providing coverage in respect of any Collateral, and each provider of
any such insurance shall agree, by endorsement upon the policy or policies
issued by it or by independent instruments furnished to the Administrative
Agent, that it will give the Administrative Agent thirty (30) days prior written
notice before any such policy or policies shall be altered or canceled, and that
no act or default of the Borrower, any Subsidiary or any other Person shall
affect the rights of the Administrative Agent or the Lenders under such policy
or policies.
Section 6.08 Reinsurance Arrangements. Deliver a schedule at the
time set forth in Section 6.02(b) signed by a Responsible Officer of the
Borrower setting forth in reasonable detail the reinsurance arrangements
maintained by each of the HMO Subsidiaries of the Borrower as of the end of such
fiscal year (with any changes subsequent to the end of such fiscal year
described therein).
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Section 6.09 Compliance with Laws. Comply, and cause each of the
Subsidiaries to comply, in all material respects with the requirements of all
Laws and all orders, writs, injunctions and decrees applicable to it or to its
business or property, to include, without limitation, compliance with HMO
Regulations applicable to them in the operation of HMO Businesses, ERISA and the
Racketeer Influenced and Corrupt Organization Chapter of the Organized Crime
Control Act of 1970, except in such instances in which such requirement of Law
or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted.
Section 6.10 Books and Records. (a) Maintain, and cause each of
the Subsidiaries to maintain, proper books of record and account, in which full,
true and correct entries in conformity with GAAP consistently applied shall be
made of all financial transactions and matters involving the assets and business
of the Borrower or such Subsidiary, as the case may be (and with respect to each
HMO Subsidiary, in accordance with SAP); and (b) maintain, and cause each of the
Subsidiaries to maintain, such books of record and account in material
conformity with all applicable requirements of any Governmental Authority having
regulatory jurisdiction over the Borrower or such Subsidiary, as the case may
be.
Section 6.11 Inspection Rights. Permit, and cause each of the
Subsidiaries to permit, representatives and independent contractors of the
Administrative Agent and each Lender to visit and inspect any of its properties,
to examine its corporate, financial and operating records, and make copies
thereof or abstracts therefrom, subject, in each case to applicable Laws of
Governmental Authorities regarding confidentiality of patient health information
and other confidentiality restrictions of Governmental Authorities to which the
Borrower and its Subsidiaries are bound, and to discuss its affairs, finances
and accounts with its directors, officers, and independent public accountants,
and at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower; provided,
however, that notwithstanding anything to the contrary contained herein
(including Section 10.04), only when an Event of Default exists may the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) do any of the foregoing at the expense of the
Borrower at any time during normal business hours and without advance notice.
The Borrower agrees that the Administrative Agent and its representatives may
conduct an annual audit of the Collateral, at the expense of the Borrower.
Section 6.12 Use of Proceeds. In the case of the Borrower, use the
proceeds of the Credit Extensions (a) to pay fees and expenses incurred in
connection with the Loan Documents, (b) to provide for working capital for the
Borrower and the Subsidiaries in accordance with the provisions of this
Agreement, (c) for Permitted Acquisitions; (d) for the Permitted Stock
Redemption/ESOP Transactions ;provided that in no event shall more than $20
million in the aggregate be borrowed for such purpose during the term of this
Agreement; and (e) for other general corporate purposes not in contravention of
any Law or of any Loan Document (including a borrowing of an aggregate amount of
no more than $3.4 million to repay the Building Finance Loan subject to the
simultaneous release of the Lien securing the Building Finance Loan).
Section 6.13 Further Assurances with Respect to Eligible
Subsidiaries. (a) Notify the Administrative Agent at the time that any Person
becomes an Eligible Subsidiary, (b) promptly thereafter (and in any event within
thirty (30) days), cause such Person to (i) become a
65
Guarantor by executing and delivering to the Administrative Agent the Subsidiary
Guaranty, or if the Subsidiary Guaranty has been executed and delivered by
another Guarantor, a Joinder Agreement and such other documents as the
Administrative Agent shall deem appropriate for such purpose, (ii) perfect and
maintain the validity, effectiveness and any priority of security interests in
all of its personal property, assets and all proceeds and accessories therefrom
to secure the Obligations as contemplated herein and in the Collateral Documents
by executing and delivering the Security Agreement, or if the Security Agreement
has been executed and delivered by another Eligible Subsidiary, a Joinder
Agreement and such other documents as the Administrative Agent shall deem
appropriate for such purpose, and (iii) become a party to or execute all
applicable Collateral Documents, as determined by the Administrative Agent and
such other documents as the Administrative Agent shall deem appropriate for such
purpose, (c) promptly thereafter (and in any event within thirty (30) days)
pledge and maintain a pledge of one hundred percent (100%) of the capital stock
of such Eligible Subsidiary and (d) promptly thereafter (and in any event within
thirty (30) days) deliver, and cause such Person to deliver, to the
Administrative Agent documents of the types referred to in clauses (iii), (iv),
(vi), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi) and (xvii) of
Section 4.01(a) and favorable opinions of counsel to the Borrower and such
Eligible Subsidiary (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the documentation referred to in
subsection (a) of Section 4.01), all in form, content and scope reasonably
satisfactory to the Administrative Agent.
Section 6.14 Further Assurances with Respect to HMO Subsidiaries.
(a) After the consummation of the initial public offering of the Borrower, the
Borrower (i) shall use commercially reasonable efforts to obtain any necessary
consents and/or make any necessary filings in order to transfer the ownership of
Xxxxxx Healthcare of Michigan from Xxxxxx Healthcare of California to the
Borrower and (ii) if ownership is so transferred, shall obtain, or cause to be
obtained, any necessary consents and/or make any necessary filings in order to
pledge to the Administrative Agent one hundred percent (100%) of the capital
stock of Xxxxxx Healthcare of Michigan and shall take any and all action
necessary or reasonably requested by the Administrative Agent to maintain the
pledge of all such capital stock.
(b) In the event the HMO Regulations in California change
or the undertaking agreement which prohibits the pledge of the capital stock of
Xxxxxx Healthcare of California or any of its Subsidiaries to secure a loan to
the Borrower or any of its Subsidiaries is terminated or changed at a date in
the future to permit the pledge of the capital stock of Xxxxxx Healthcare of
California or any of its Subsidiaries, the Borrower shall be required to take,
or cause to be taken, commercially reasonable efforts to pledge one hundred
percent (100%) of the capital stock of the Xxxxxx Healthcare of California and
its Subsidiaries.
(c) (i) Notify the Administrative Agent at any time that
any other Person becomes an HMO Subsidiary, (ii) promptly thereafter (and in any
event within thirty (30) days) cause such Person to (A) become a party to and
execute all applicable Collateral Documents, as determined by the Administrative
Agent and such other documents as the Administrative Agent shall deem
appropriate for such purpose and (B) deliver to the Administrative Agent
documents of the type referred to in clauses (iii), (iv), (vi), (viii), (ix),
(xi), (xv), (xvi) and (xvii) of Section 4.01(a) and (iii) pledge and maintain
the pledge of one hundred percent (100%) of the capital
66
stock of such HMO Subsidiary (subject to no Liens); provided, however with
respect to a Permitted Acquisition by Xxxxxx Healthcare of California or Xxxxxx
Healthcare of Michigan, while a wholly-owned Subsidiary of Xxxxxx Healthcare of
California, the actions specified in clauses (i) and (ii) of this clause (c)
shall only be required to the extent permitted by applicable Law.
Section 6.15 Further Assurances with Respect to other Collateral.
(a) To the fullest extent permitted by applicable Law,
execute, and cause each of the Subsidiaries (to the extent appropriate) to
execute, any and all further documents, financing statements, agreements and
instruments, and take all such further actions (including the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust
and other documents), which may be required under any applicable Law, or which
the Administrative Agent or the Required Lenders may reasonably request, to
comply with the terms of this Agreement and the other Loan Documents, including
causing, to the fullest extent permitted by Law, (i) the Collateral to be
subject to a first priority security interest in favor of the Administrative
Agent (subject, in the case of non-possessory security interests, to the Liens
permitted by Section 7.01) and (ii) the pledge of the capital stock of the
Subsidiaries which capital stock is subject to a pledge pursuant to the Pledge
Agreement, in each case to secure all the Obligations, all at the expense of the
Borrower. The Borrower also agrees to provide to the Administrative Agent, from
time to time upon request, evidence reasonably satisfactory to the
Administrative Agent as to the validity, perfection and priority of the Liens
created or intended to be created by the Loan Documents.
(b) If any property or asset is acquired or leased by the
Borrower or any of its Eligible Subsidiaries after the Closing Date, notify the
Administrative Agent thereof (except, in the case of personal property, such
notice shall not be required if the Administrative Agent has a valid first
priority perfected security interest in such property and assets by virtue of
any actions previously taken by or on behalf of the Administrative Agent), and
cause, to the fullest extent permitted by Law, subject to the next succeeding
sentence with respect to Real Property Assets acquired or leased after the
Closing Date, such property and assets to be subjected to a first priority
security interest, in the case of a Real Property Asset would be a first
priority deed of trust, in favor of the Administrative Agent (subject, in the
case of non-possessory security interests, to the Liens permitted by Section
7.01) take, and cause each of its Eligible Subsidiaries to take, to the fullest
extent permitted by Law, such actions as shall be necessary or reasonably
requested by the Administrative Agent or the Required Lenders to grant and
perfect such Liens, including the actions described in subsection (a) and will
obtain, and cause each of its Eligible Subsidiaries to obtain, Waiver Agreements
with respect (i) to real property assets that are leased by the Borrower or any
of its Eligible Subsidiaries and (ii) all such property and assets that are
located in a public warehouse. The Borrower and any of its Eligible Subsidiaries
shall only be required to provide a valid first priority perfected security
interest in a Real Property Asset acquired after the Closing Date with a market
value of $1 million or greater or a Real Property Asset in the form of a lease
entered into after the Closing Date (i) with annual rent of $500,000 or greater,
and (ii) wherein the granting of such lien does not cause a default by the
Borrower or its Eligible Subsidiary under the lease; provided the Borrower makes
a good faith effort to obtain
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permission from landlord to grant such lien. With respect to any such Real
Property Assets, the Borrower shall provide, or cause to be provided, the
following:
(i) only with respect to any such Real
Property Asset with a market value of $1,000,000 or greater,
or any such leasehold Real Property Asset with annual rent of
$500,000 or greater (and provided that the landlord consents
thereto without additional cost or expense to the Borrower or
its Eligible Subsidiary except for reasonable costs and legal
fees of the landlord, the Borrower and the Administrative
Agent), an as-built survey of the sites of the Mortgaged
Property (and floor plans for leasehold interests) that are
certified to the Administrative Agent and the Title Insurance
Company in a manner satisfactory to them, dated not more than
30 days prior to the date of the initial Credit Extension by
an independent professional licensed land surveyor
satisfactory to the Administrative Agent and the Title
Insurance Company (as defined hereinafter), which surveys on
which they are based shall be made in accordance with the
Minimum Standard Detail Requirements for Land Title Surveys
jointly established and adopted by the American Land Title
Association and the American Congress on Surveying and Mapping
in 1997 or 1999 and meeting the accuracy requirements as
defined therein, and, without limiting the generality of the
foregoing, there shall be surveyed and shown on such surveys
the following: (A) a current "as-built" survey showing the
location of any adjoining streets (including their widths and
any pavement or other improvements), easements (including the
recorded information with respect to all recorded
instruments), the mean high water base line or other legal
boundary lines of any adjoining bodies of water, fences,
zoning or restriction setback lines, rights-of-way, utility
lines to the points of connection and any encroachments; (B)
all means of ingress and egress, certifying the amount of
acreage and square footage, the address of the Mortgaged
Property, the legal description of the Mortgaged Property, and
also contain a location sketch of the Mortgaged Property; (C)
the location of all improvements as constructed on the
Mortgaged Property, all of which shall be within the boundary
lines of the Mortgaged Property and conform to all applicable
zoning ordinances, set-back lines and restrictions; (D) the
location of any Improvements on the Mortgaged Property with
the dimensions in relations to the lot and building lines; (E)
the measured distances from the Improvements to be set back
and specified distances from street or property lines in the
event that deed restrictions, recorded plats or zoning
ordinances require same; (F) all courses and distances
referred to in the legal description, and the names of all
adjoining owners on all sides of the Mortgaged Property, to
the extent available; and (G) the flood zone designation, if
any, in which the Mortgaged Property is located. The legal
description of the applicable Mortgaged Property shall be
shown on the face of each survey or affixed thereto, and the
same shall conform to the legal description contained in the
title policy described below;
(ii) A mortgagee's title insurance
policy (or policies) or marked up unconditional binder for
such insurance. Each such policy shall (A) be in an
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amount satisfactory to the Administrative Agent, (B) be issued
at ordinary rates, (C) insure that each Mortgage insured
thereby creates a valid first Lien on, and security interest
in, the Mortgaged Property (which for a leasehold Real
Property Asset shall mean the leasehold interest of the
Borrower and shall not include nor require encumbrance in any
manner whatsoever the fee estate of the landlord of such Real
Property Asset) free and clear of all Liens, except as
reasonably acceptable to the Administrative Agent, (D) name
the Administrative Agent for the benefit of the Lenders as the
insured thereunder, (E) be in the form of ALTA Loan Policy -
1970 Form B (Amended 10/17/70 and 10/17/84) (or equivalent
policies), if available, (F) contain such endorsements and
affirmative coverage as the Administrative Agent may
reasonably request in form and substance acceptable to the
Administrative Agent, including, without limitation (to the
extent applicable with respect to the relevant Mortgaged
Property and available in the jurisdiction in which such
Mortgaged Property is located), the following: variable rate
endorsement; survey endorsement, but only as to such Real
Property Assets for which a land survey is required pursuant
to clause (i) above; comprehensive endorsement; zoning (ALTA
3.1 with parking added) endorsement, but only as to such Real
Property Assets for which a land survey is required pursuant
to clause (i) above; first loss, last dollar and tie-in
endorsement; access coverage; separate tax parcel coverage;
usury; doing business; subdivision; environmental protection
lien; CLTA 119.2; contiguity coverage; and such other
endorsements as the Administrative Agent shall reasonably
require in order to provide insurance against specific risks
identified by the Administrative Agent in connection with the
Mortgaged Property (provided that all endorsements requested
by the Administrative Agent shall be made based on the
relative value of the Real Property Asset and the extent the
requested endorsement is generally available at commercially
reasonable rates) and (G) be issued by nationally recognized
title companies (collectively, the "Title Insurance Company"),
satisfactory to the Administrative Agent. The Administrative
Agent shall have received evidence satisfactory to it that all
premiums in respect of each such policy, all charges for
mortgage recording tax, and all related expenses, if any, have
been paid;
(iii) if requested by the Administrative
Agent, and generally available for the Real Property Asset at
commercially reasonable rates (but excluding a leasehold Real
Property Asset where such insurance is not required or
maintained under the terms of the subject lease), a policy of
flood insurance that (A) covers any parcel of the Mortgaged
Property that is located in a flood zone, and (B) is written
in an amount not less than the outstanding principal amount of
the Indebtedness secured by each relevant Mortgage or the
maximum limit of coverage made available with respect to the
particular type of Mortgaged Property under the National Flood
Insurance Act of 1968, whichever is less;
(iv) a copy of (A) all documents listed
as exceptions to title in, the title policy or policies
referred to in clause (ii) above and (B) all other material
documents affecting the Mortgaged Property in the possession
or under the
69
control of the Borrower, including, for those Real Property
Assets for which a land survey is requried under clause (i)
above, including all building, construction, environmental and
other permits, licenses, franchises, approvals, consents,
authorizations and other approvals required in connection with
the construction, ownership, use, occupation or operation of
the Mortgaged Property; and
(v) evidence reasonably acceptable to
the Administrative Agent that the Real Property Assets comply
with applicable zoning ordinances, if any.
(c) At the time of delivery of the financial statements
and reports required by Section 6.01(a), deliver a schedule of the Borrower
setting forth (i) a list of registration numbers for all patents, trademarks,
service marks, tradenames and copyrights awarded to the Borrower or any of its
Eligible Subsidiaries since the last day of the immediately preceding fiscal
year and (ii) a list of all patent applications, trademark applications, service
xxxx applications, tradename applications and copyright applications submitted
by the Borrower or any of its Eligible Subsidiaries since the last day of the
immediately preceding fiscal year and the status of each application, all in
such form as shall be reasonably satisfactory to the Administrative Agent.
Section 6.16 Performance of Material Contracts. Do the following,
and cause each of the Subsidiaries to do the following: (a) perform and observe
all the terms and provisions of each Material Contract to be performed or
observed by it; and (b) maintain each such Material Contract in full force and
effect, enforce each such Material Contract in accordance with its terms,
except, in either case, where the failure to do so, either individually or in
the aggregate, could not be reasonably likely to have a Material Adverse Effect.
Section 6.17 Maintenance of Licensing, Etc. Preserve and maintain,
and cause each of the HMO Subsidiaries to preserve and maintain, (a) the
licensing and certification of each HMO Subsidiary pursuant to the HMO
Regulations, (b) 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 owned by the Borrower or any of the
Subsidiaries in their respective jurisdictions and (c) all licenses, permits,
authorizations and qualifications required under the HMO Regulations in
connection with the ownership or operation of HMOs.
Section 6.18 Environmental. (a) Upon the reasonable written
request of the Administrative Agent following the occurrence of any event or the
discovery of any condition that the Administrative Agent or the Required Lenders
reasonably believe has caused (or could be reasonably expected to cause) the
representations and warranties set forth in Section 5.12 to be untrue in any
material respect, furnish or cause to be furnished to the Administrative Agent,
at the Borrower's expense, a report of an environmental assessment of reasonable
scope, form and depth, (including, where appropriate, invasive soil or
groundwater sampling) by a consultant reasonably acceptable to the
Administrative Agent as to the nature and extent of the presence of Hazardous
Materials on any Subject Properties and as to the compliance by the Borrower and
each Subsidiary with Environmental Laws at such Subject Properties. If the
Borrower fails to deliver such an environmental report within 75 days after
receipt of such written request then the
70
Administrative Agent may arrange for the same, and the Borrower and each of the
Subsidiaries hereby grant to the Administrative Agent and their representatives
access to the Subject Properties to reasonably undertake such an assessment
(including, where appropriate, invasive soil or groundwater sampling). The
reasonable cost of any assessment arranged for by the Administrative Agent
pursuant to this provision will be payable by the Borrower on demand and added
to the obligations secured by the Collateral Documents.
(b) Conduct and complete, and cause each of the
Subsidiaries to conduct and complete, all investigations, studies, sampling, and
testing and all remedial, removal, and other actions necessary to address all
Hazardous Materials on, from or affecting any of the Subject Properties to the
extent necessary for the Borrower and its Subsidiaries to be in compliance with
all Environmental Laws and with the validly issued orders and directives of all
Governmental Authorities with jurisdiction over such Subject Properties to the
extent any failure could have a Material Adverse Effect.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower shall not, directly or indirectly:
Section 7.01 Liens. Create, incur, assume or suffer to exist, or
permit any Subsidiary to create, incur, assume or suffer to exist, any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, other than the following (collectively, the "Permitted Liens"):
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on
Schedule 7.01 and any renewals or extensions thereof; provided that the property
covered thereby is not increased and any renewal or extension of the obligations
secured or benefited thereby is permitted by Section 7.03(b);
(c) Liens for taxes, fees, assessments or other
governmental charges not yet due or which are not delinquent or remain payable
without penalty, or to the extent non-payment thereof is permitted by Section
6.04; provided that no notice of Lien has been filed or recorded under the Code
unless such is being contested in good faith and by appropriate proceedings
diligently conducted and adequate reserves with respect thereto are maintained
on the books of the applicable Person in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not delinquent or which are being contested in good faith and by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture or
sale of the property subject thereto;
71
(e) pledges or deposits in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other social security legislation, other than any Lien imposed by ERISA;
(f) easements, rights-of-way, restrictions and other
similar encumbrances affecting real property incurred in the ordinary course of
business which do not in any case materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of the applicable Person;
(g) Liens securing judgments for the payment of money not
constituting an Event of Default under Section 8.01(h) or securing appeal or
other surety bonds related to such judgments; provided that enforcement of such
Liens is effectively stayed;
(h) Liens securing Indebtedness permitted under Section
7.03(e); provided that (i) any such Lien attaches to such property concurrently
with or within 45 days of the acquisition thereof, (ii) such Lien does not at
any time encumber any property other than the property financed by such
Indebtedness, and (iii) the Indebtedness secured thereby does not exceed 100% of
the cost or fair market value, whichever is lower, of the property being
acquired on the date of acquisition;
(i) any interest or title of a lessor under, and Liens
arising from UCC financing statements relating to, leases permitted by this
Agreement; and
(j) Liens created or deemed to exist by the establishment
of trusts for the purpose of satisfying (i) Governmental Reimbursement Program
Costs and (ii) other actions or claims pertaining to the same or related
matters; provided that the Borrower in its reasonable discretion in each case
shall have established adequate reserves for such claims or actions.
Section 7.02 Investments. Make or hold, or permit any of the
Subsidiaries to make or hold, any Investments in any Person, except:
(a) Investments by the Loan Parties held in the form of
cash equivalents or short-term marketable debt securities;
(b) Investments made prior to the Closing Date and set
forth in Schedule 7.02;
(c) Advances or loans to directors, officers and
employees in the ordinary course of business of the Borrower and the
Subsidiaries as presently conducted in an aggregate principal amount not to
exceed $1 million in the aggregate at any one time outstanding; provided,
however that any such advances or loans to directors or executive officers shall
only be permitted to the extent allowable under Xxxxxxxx-Xxxxx;
(d) Investments by the Borrower in and to any Loan Party
in the form of contributions to capital or loans or advances; provided that (i)
immediately before and after giving effect thereto, no Default exists or would
result therefrom, (ii) each item of intercompany Indebtedness shall be unsecured
and (iii) each item of Intercompany Indebtedness shall be evidenced by an
Intercompany Note which shall be pledged as security for the Obligations of the
72
holder thereof under the Loan Documents and delivered to the Administrative
Agent pursuant to the terms of the Collateral Documents;
(e) Investments by any Subsidiary in the Borrower or any
other Loan Party in the form of loans or advances;
(f) Investments in any HMO Subsidiaries which are not
Loan Parties, and any other Subsidiaries which are not Loan Parties; provided
that such Investment (other than Investments in HMO Subsidiaries required for
capital adequacy requirements) shall not exceed in an aggregate amount $2.5
million at any time outstanding (on a cost basis);
(g) Investments that constitute Permitted Acquisitions
and Investments that constitute the Permitted Stock Redemption/ESOP
Transactions;
(h) (i) Required Advances and (ii) other advances to
Contract Providers (and their Affiliates) in an amount not to exceed (A) with
respect to any Contract Provider (and its Affiliates) individually, $1 million
in the aggregate at any time outstanding (excluding Required Advances) and (B)
with respect to Contract Providers collectively, $5 million in the aggregate at
any time outstanding (excluding Required Advances);
(i) Investments by the Borrower in Swap Contracts
permitted under Section 7.03(d); and
(j) Investments of a nature not addressed in any of the
foregoing subsections in an amount not to exceed $2.5 million in the aggregate
at any time outstanding.
Section 7.03 Indebtedness. Create, incur, assume or suffer to
exist, or permit any Subsidiary to create, incur, assume or suffer to exist, any
Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness outstanding on the date hereof and
listed on Schedule 7.03 and any refinancings, refundings, renewals or extensions
thereof; provided that the amount of such Indebtedness is not increased at the
time of such refinancing, refunding, renewal or extension except by an amount
equal to a reasonable premium or other reasonable amount paid, and fees and
expenses reasonably incurred, in connection with such refinancing and by an
amount equal to any existing commitments unutilized thereunder;
(c) Guarantees of any Guarantor in respect of
Indebtedness otherwise permitted hereunder of the Borrower;
(d) obligations (contingent or otherwise) of the Borrower
existing or arising under any Swap Contract; provided that (i) such obligations
are (or were) entered into by such Person in the ordinary course of business for
the purpose of directly mitigating risks associated with liabilities,
commitments, investments, assets, or property held or reasonably anticipated by
such Person, or changes in the value of securities issued by such Person, and
not for purposes of speculation or taking a "market view," and (ii) such Swap
Contract does not contain any
73
provision exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party;
(e) Indebtedness in respect of Capitalized Leases and
purchase money obligations for fixed or capital assets within the limitations
set forth in the proviso in Section 7.01(h); provided, however, that the
aggregate amount of all such Indebtedness at any one time outstanding shall not
exceed $5 million;
(f) Intercompany Indebtedness permitted under Section
7.02(d);
(g) Indebtedness arising or existing with respect to
Governmental Reimbursement Program Costs; and
(h) so long as no Default has occurred and is continuing
or would result therefrom, additional unsecured Indebtedness of the Borrower,
any Loan Party or any wholly-owned Subsidiary of the Borrower whose stock is
pledged pursuant to the Pledge Agreement not covered in the foregoing clauses in
an aggregate principal amount not to exceed $5 million at any time outstanding
pre-Successful IPO and $10 million at any time outstanding post-Successful IPO;
provided that such Indebtedness is not senior in right of payment to the payment
of the Indebtedness arising under this Agreement and the Loan Documents.
Section 7.04 Fundamental Changes and Acquisitions.
(a) Merge, dissolve, liquidate, consolidate with or into
another Person, or Dispose of, or permit any of the Subsidiaries to merge,
dissolve, liquidate, consolidate with or into another Person, or Dispose of,
(whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to or in favor of
any Person, except that, so long as no Default exists or would result therefrom:
(i) Xxxxxx Healthcare, Inc., a California
corporation, may effect a reincorporation by merger with and into
Xxxxxx Healthcare, Inc., a Delaware corporation with Xxxxxx Healthcare,
Inc., a Delaware corporation, being the surviving entity pursuant to
and in accordance with the Reincorporation Merger Documents; provided
that: (A) no Default exists or would result from such action; (B)
satisfactory evidence is provided that no dissenters' rights exist with
respect to the existing shareholders of Xxxxxx Healthcare, Inc., a
California corporation, and all requisite shareholder approval of
Xxxxxx Healthcare, Inc., a California corporation, and Xxxxxx
Healthcare, Inc., a Delaware corporation, has been obtained and is in
full force and effect; (C) all Obligations under the Loan Documents
shall continue in full force and effect after Xxxxxx Healthcare, Inc.,
a California corporation, effects the reincorporation by merger with
and into Xxxxxx Healthcare, Inc., a Delaware corporation, on the same
terms as applicable to Xxxxxx Healthcare, Inc., a California
corporation, and the existing Subsidiary Guaranty shall remain in full
force and effect and the Liens under the Collateral Documents shall
remain in place with the same perfection and priority as required in
the Loan Documents; (D) Xxxxxx Healthcare, Inc., a Delaware
corporation, shall become the Borrower hereunder and under the
Collateral Documents, shall execute and deliver an assumption agreement
in form and substance satisfactory to the Administrative Agent and the
Lenders and
74
Xxxxxx Healthcare, Inc., a Delaware corporation, and the Loan Parties
shall take such other actions as the Administrative Agent reasonably
deems necessary;
(ii) a Loan Party may merge with the Borrower;
provided that the Borrower shall be the continuing or surviving Person;
(iii) a Loan Party (other than the Borrower) may
be party to a transaction of merger or consolidation with another Loan
Party;
(iv) a Subsidiary may be a party to a transaction
of merger or consolidation with a Person other than the Borrower or any
Subsidiary; provided that (A) the surviving entity shall be a
wholly-owned Subsidiary and shall execute and deliver such Joinder
Agreement, Pledge Agreement, Security Agreement and Intercompany Notes,
as applicable, and take other such action as may be necessary for
compliance with the provisions of Sections 6.13, 6.14 and 6.15, and (B)
the transaction shall otherwise constitute a Permitted Acquisition; and
(v) a Subsidiary may enter into a transaction of
merger or consolidation in connection with a Disposition permitted
under Section 7.05.
(b) Permit the Borrower or any Subsidiary to make any
Acquisition, unless:
(i) in the case of an acquisition of capital
stock of another Person, after giving effect to such acquisition,
(A) if the Acquisition is not of a
controlling interest in the subject Person such that after giving
effect thereto the subject Person will not be a Subsidiary, then such
Acquisition will constitute an Investment permitted by Section 7.02;
and
(B) if the Acquisition is of a
controlling interest in the subject Person such that after giving
effect thereto the subject Person will be a Subsidiary, then such
Acquisition will constitute a Permitted Acquisition; and
(ii) in the case of an Acquisition of all or any
substantial portion of the Property (other than capital stock) of
another Person, then such Acquisition will constitute a Permitted
Acquisition.
Section 7.05 Dispositions. Make any Disposition or permit any
Subsidiary to make any Disposition, except:
(a) Dispositions of obsolete or worn out property,
whether now owned or hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory in the ordinary course of
business;
(c) Dispositions of equipment or real property to the
extent that (i) such property is exchanged for credit against the purchase price
of similar replacement property or (ii)
75
the proceeds of such Disposition are reasonably promptly applied to the purchase
price of similar replacement property;
(d) Dispositions of property to a Loan Party;
(e) Dispositions permitted by Section 7.04; and
(f) non-exclusive licenses of IP Rights in the ordinary
course of business and substantially consistent with past practice for terms not
exceeding five years;
provided, however, that any Disposition pursuant to subsections (a) through (f)
shall be for fair market value.
Section 7.06 Restricted Payments. Make, or permit any Subsidiary
to make, any Restricted Payment; provided that:
(i) the Borrower may so long as no Default
exists or would result from such action, (A) make the redemptions and
purchases in connection with Permitted Stock Redemption/ESOP
Transactions; provided that after giving effect to any Permitted Stock
Redemption/ESOP Transactions on a Pro Forma Basis and any Credit
Extension related thereto, the Consolidated Leverage Ratio is less than
1.0 times and (B) take the actions contemplated in the Reincorporation
Merger Documents in accordance with the provisions set forth in the
proviso of Section 7.04(a)(i);
(ii) the Borrower may declare and pay dividends
and distributions and finance the costs of Permitted Acquisitions
payable solely in common stock of the Borrower; and
(iii) any Subsidiary may declare and pay dividends
to the Borrower or any wholly-owned Subsidiary of the Borrower.
Section 7.07 Amendment, Etc. of Indebtedness, Other Material
Contracts and Constitutive Documents and Payments in respect of Indebtedness.
(a) After the issuance thereof, amend or modify (or
permit the amendment or modification of (including any waivers of)), or permit
any Subsidiary to amend or modify (or permit the amendment or modification of
(including any waivers of)), the terms of any Indebtedness in a manner adverse
in any material respect to the interests of the Lenders (including, without
limitation, specifically shortening any maturity or average life to maturity or
requiring any payment sooner than previously scheduled or increasing the
interest rate or fees applicable thereto).
(b) Cancel or terminate any other Material Contract or
consent to or accept any cancellation or termination thereof by any Subsidiary,
amend or modify (or permit the amendment or modification of (including any
waivers of)), or permit any Subsidiary to amend or modify (or permit the
amendment or modification of (including waivers of)), any Material Contract,
waive, or permit any Subsidiary to waive, any default under or breach any
Material Contract, unless, in each case, any such cancellation termination,
amendment or modification, or
76
consent, waiver or approval thereunder could not reasonably be expected to have
a Material Adverse Effect.
(c) Amend, or permit any of the Subsidiaries to amend,
its Organization Documents, unless, in each case, any such amendment is not
adverse in any material respect to the Lenders.
(d) Make any payment, or permit any Subsidiary to make
any payment, in contravention of the terms of any subordination with respect to
any Indebtedness.
(e) Except in connection with a refinancing or refunding
permitted hereunder, make any prepayment, redemption, defeasance or acquisition
for value (including, without limitation, by way of depositing money or
securities with the trustee with respect thereto before due for the purpose of
paying when due), or refund, refinance or exchange, or permit any Subsidiary to
make any prepayment, redemption, defeasance or acquisition for value (including,
without limitation, by way of depositing money or securities with the trustee
with respect thereto before due for the purpose of paying when due), or refund,
refinance or exchange, of any Indebtedness (other than the Indebtedness under
the Loan Documents and intercompany Indebtedness permitted hereunder) other than
regularly scheduled payments of principal and interest on such Indebtedness.
Section 7.08 Change in Nature of Business. Make, or permit any
Subsidiary to make, any material change in the nature of its business as carried
on at the date hereof.
Section 7.09 Transactions with Affiliates. Except for certain
existing transactions specifically set forth on Schedule 7.09, enter into or
permit to exist, or permit any Subsidiary to enter into or permit to exist, any
transaction or series of transactions with any Affiliate of the Borrower,
whether or not in the ordinary course of business, other than on fair and
reasonable terms and conditions substantially as favorable to the Borrower or
such Subsidiary as would be obtainable by it in a comparable arms-length
transaction with a Person other than an Affiliate; provided, however, other than
in connection with transactions pursuant to the Administrative Services
Agreements, the Borrower shall not, and shall not permit any of the Subsidiaries
to, enter into any transaction with an Affiliate if the amount to be paid
pursuant to any one such transaction (whether immediately or over time) exceeds
$2 million in the aggregate or for all transactions if the amount to be paid
pursuant to such transactions (whether immediately or over time) exceeds $10
million in the aggregate during the term of this Agreement.
Section 7.10 Limitations on Restricted Actions. Enter into or
create or otherwise cause to exist or become effective, or permit any Subsidiary
to enter into or create or otherwise cause to exist or become effective, any
agreement or arrangement that: (a) limits the ability (i) of any Subsidiary to
make Restricted Payments to the Borrower or to otherwise transfer property to
the Borrower, (ii) of any Subsidiary to Guarantee the Indebtedness of the
Borrower or (iii) of the Borrower or any Subsidiary to create, incur, assume or
suffer to exist Liens on property of such Person; provided, however, that this
clause (iii) shall not prohibit (A) any negative pledge incurred or provided in
favor of any holder of Indebtedness permitted under Section 7.03(e) solely to
the extent any such negative pledge relates to the property financed by or the
subject of such Indebtedness or (B) any amendments to or modifications of any
undertaking between
77
Xxxxxx Healthcare of California and Government Authorities in California solely
with respect to Xxxxxx Healthcare of California but only to the extent the
amendments and modifications could not reasonably be expected to have a material
adverse effect on Xxxxxx Healthcare of California; or (b) requires the grant of
a Lien to secure an obligation of such Person if a Lien is granted to secure
another obligation of such Person.
Section 7.11 Operating Lease Obligations. Enter into, assume or
permit to exist, or allow any Subsidiary to enter into, assume or permit to
exist, any obligations for the payment of rent under Operating Leases that in
the aggregate would exceed $10 million in any fiscal year.
Section 7.12 Use of Proceeds. Use the proceeds of any Credit
Extension, whether directly or indirectly, and whether immediately, incidentally
or ultimately, to purchase or carry margin stock (within the meaning of
Regulation U of the FRB) or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund indebtedness originally
incurred for such purpose.
Section 7.13 Impairment of Security Interests. Permit any Loan
Party or any of their respective Subsidiaries to (a) take or omit to take any
action which action or omission might or would materially impair the security
interests in favor of the Administrative Agent with respect to the Collateral or
(b) grant to any Person (other than the Administrative Agent pursuant to the
Collateral Documents) any interest whatsoever in the Collateral, except for
Permitted Liens.
Section 7.14 Ownership of Subsidiaries, Foreign Subsidiaries and
Other Restrictions Relating to Subsidiaries.
(a) Ownership of Subsidiaries. Notwithstanding any other
provisions of this Agreement to the contrary, (i) permit any Person (other than
the Borrower or any wholly-owned Subsidiary; provided that Xxxxxx Healthcare of
California and, so long as Xxxxxx Healthcare of Michigan is a wholly-owned
Subsidiary of Xxxxxx Healthcare of California, Xxxxxx Healthcare of Michigan,
both Subsidiaries of the Borrower, shall not have any such right, except to the
extent permitted by the definition of Permitted Acquisition) to own any capital
stock of any Subsidiary (except Xxxxxx Healthcare of California presently owns
Xxxxxx Healthcare of Michigan, and except as a result of or in connection with a
dissolution, merger, consolidation or disposition of a Subsidiary permitted
under Section 7.04 or Section 7.05) or (ii) permit any Subsidiary to issue any
shares of preferred capital stock.
(b) No Foreign Subsidiaries. Form or acquire, or cause
any of the Subsidiaries to form or acquire, any Foreign Subsidiaries.
(c) Other Restrictions. Except as set forth in the final
proviso of the definition of Permitted Acquisition, form or acquire, any new
Subsidiaries of Xxxxxx Healthcare of California or, so long as Xxxxxx Healthcare
of Michigan is a wholly-owned Subsidiary of Xxxxxx Healthcare of California, of
Xxxxxx Healthcare of Michigan.
Section 7.15 Fiscal Year. Change its fiscal year, or permit any
Subsidiary to change its fiscal year, unless such change is not adverse in any
respect to the Lenders.
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Section 7.16 Partnerships, etc. Become, or permit any Subsidiary
to become, a general partner or limited partner or joint venture.
Section 7.17 Capital Expenditures. Make, or become legally
obligated to make, any Capital Expenditure, except for Capital Expenditures
determined on a consolidated basis in accordance with GAAP in the ordinary
course of business not exceeding the aggregate amount of $15 million for the
Borrower and the Subsidiaries during each fiscal year; provided, however, that
so long as no Default has occurred and is continuing or would result from such
Capital Expenditure, any portion of any amount set forth above, if not expended
in the fiscal year for which it is permitted, may be carried over in an amount
equal to 50% of the unused portion for Capital Expenditures in the next
following fiscal year.
Section 7.18 Financial Covenants.
(a) Consolidated Net Worth. Permit Consolidated Net Worth
at any time to be less than the sum of (i) $81 million, (ii) an amount equal to
50% of the Consolidated Net Income earned in each full fiscal quarter ending
after March 31, 2003 (with no deduction for a net loss in any such fiscal
quarter), (iii) 85% of net cash proceeds from the initial public offering of the
Borrower, and (iv) an amount equal to 100% of net cash proceeds resulting from
the aggregate increases in Shareholders' Equity of the Borrower and the
Subsidiaries after the date of the initial public offering of the Borrower by
reason of the issuance and sale of capital stock or other equity interests of
the Borrower or any Subsidiary (other than issuances to the Borrower or a
wholly-owned Subsidiary), including any conversion of debt securities of the
Borrower into such capital stock or other equity interests, minus, $20.3 million
for the stock redemption portion of the Permitted Stock Redemption/ESOP
Transaction already consummated and minus, no more than $20 million for the ESOP
portion of the Permitted Stock Redemption/ESOP Transaction upon the occurrence
thereof.
(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio as of the end of any fiscal quarter of the Borrower to be less
than the ratio set forth below opposite the period in which such date occurs:
Minimum Fixed
Charge Coverage
Four Fiscal Quarters Ending Ratio
----------------------------------------------------------------
Closing Date through June 30, 2004 1.6x
July 1, 2004 through June 30, 2005 1.25x
July 1, 2005 and each fiscal quarter thereafter 1.5x
(c) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio at any time during any period of four fiscal quarters of the
Borrower to be greater than 2.00:1.0.
Section 7.19 Risk-Based Capital Ratio. As of the end of each
fiscal quarter:
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(a) With respect to HMO Subsidiaries operating
in a state in which regulatory action may be taken against HMOs that do
not maintain a minimum risk-based capital threshold at a level equal to
or greater than Company Action Level, permit each such HMO Subsidiary
to maintain a ratio of Total Adjusted Capital to Risk-Based Capital at
a level less than 1.10:1.00; and
(b) With respect to all other HMO Subsidiaries,
permit each such HMO Subsidiary to maintain a ratio of Total Adjusted
Capital to the applicable state's risk-based capital threshold at a
level less than 1.25:1.00; provided if a state's risk-based capital
threshold exceeds or would exceed the Company Action Level (if such
state had adopted, or in the future adopts, the HMO Model Act), then
permit each such HMO Subsidiary to maintain a ratio of Total Adjusted
Capital to Risk-Based Capital at a level less than 1.10:1.00;
provided in each case for the first three fiscal quarters of each year, the
denominator shall be the prescribed level as of the end of the preceding fiscal
year, and for the last fiscal quarter of each year, the denominator shall be the
prescribed level as of the end of such fiscal year.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01 Events of Default. Any of the following shall
constitute an Event of Default:
(a) Non-Payment. The Borrower or any other Loan Party
fails to pay (i) when and as required to be paid herein, any amount of principal
of any Loan or any L/C Obligation, or (ii) within three days after the same
becomes due, any interest on any Loan or on any L/C Obligation, or any
commitment or other fee due hereunder, or (iii) within five days after the same
becomes due, any other amount payable hereunder or under any other Loan
Document; or
(b) Specific Covenants. The Borrower fails to perform or
observe any term, covenant or agreement contained in any of Section 6.01, 6.02,
6.03, 6.05, 6.12, 6.13, 6.14 or 6.15 or Article VII; or
(c) Other Defaults. The Borrower fails to perform or
observe any other covenant or agreement (not specified in subsection (a) or (b)
above) contained in any Loan Document on its part to be performed or observed
and such failure continues for 30 days; or
(d) Representations and Warranties. Any representation,
warranty, certification or statement of fact made or deemed made by or on behalf
of the Borrower or any other Loan Party herein, in any other Loan Document, or
in any document delivered in connection herewith or therewith shall be incorrect
or misleading when made or deemed made; or
(e) Cross-Default. (i) The Borrower or any Subsidiary (A)
fails to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) beyond the applicable grace
period with respect thereto, if any in respect of (x) the
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Building Finance Loan or (y) any other Indebtedness or Guarantee (other than
Indebtedness hereunder and Indebtedness under Swap Contracts) having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than the Threshold Amount, or (B) fails to observe or
perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness
or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become
due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded or; (ii) the
Borrower or any Subsidiary fails in the performance or observance (beyond the
applicable grace period with respect thereto, if any) of any Material Contract
(other than those covered in clauses (i) and (iii) hereof) and such default
together with any other such defaults, could reasonably be expected to have a
Material Adverse Effect; or (iii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event
of default under such Swap Contract as to which the Borrower or any Subsidiary
is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as defined in such Swap Contract) under such Swap Contract as
to which the Borrower or any Subsidiary is an Affected Party (as defined in such
Swap Contract) and, in either event, the Swap Termination Value owed by the
Borrower or such Subsidiary as a result thereof is greater than the Threshold
Amount; or
(f) Insolvency Proceedings, Etc. The Borrower or any
Subsidiaries (i) institutes or consents to the institution of any proceeding
under any Debtor Relief Law, or makes an assignment for the benefit of creditors
or (ii) applies for or consents to the appointment of any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer for it or
for all or any material part of its property; or any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of such Person and the appointment
continues undischarged or unstayed for 60 calendar days; or any proceeding under
any Debtor Relief Law relating to any such Person or to all or any material part
of its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) The Borrower
or any Subsidiary admits in writing its inability or fails generally to pay its
debts as they become due, or (ii) any writ or warrant of attachment or execution
or similar process is issued or levied against all or any material part of the
property of any such Person and is not released, vacated or fully bonded within
30 days after its issue or levy; or
(h) Judgments. There is entered against the Borrower or
any Subsidiary (i) a final judgment or order for the payment of money in an
aggregate amount exceeding the Threshold Amount (to the extent not covered by
independent third-party insurance as to which the insurer does not dispute
coverage), or (ii) any one or more non-monetary final judgments that
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have, or could reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect and, in either case, there is a period of 30 (thirty)
consecutive days during which a stay of enforcement of such judgment, by reason
of a pending appeal or otherwise, is not in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Borrower or any Subsidiary under Title IV
of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate
amount in excess of the Threshold Amount, or (ii) the Borrower or any ERISA
Affiliate fails to pay when due, after the expiration of any applicable grace
period, any installment payment with respect to its withdrawal liability under
Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in
excess of the Threshold Amount; or
(j) Invalidity of Loan Documents. Any Loan Document, at
any time after its execution and delivery and for any reason other than as
expressly permitted hereunder or satisfaction in full of all the Obligations,
ceases to be in full force and effect; or any Loan Party or any other Person
contests in any manner the validity or enforceability of any Loan Document; or
any Responsible Officer of a Loan Party denies that it has any or further
liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any Loan Document, or in the case of any Lien granted
pursuant to any Collateral Document (including any Lien granted after the
Closing Date in accordance with Section 6.13, 6.14 or 6.15) in favor of the
Administrative Agent, such Lien ceases to have the priority purported to be
granted under such Collateral Document (other than pursuant to the terms thereof
or hereunder) or is declared by a court of competent jurisdiction to be null and
void, invalid or unenforceable in any respect; or
(k) Subsidiary Guaranty. The Subsidiary Guaranty given by
any Guarantor (including any Person that becomes a Guarantor after the Closing
Date in accordance with Section 6.13) or any provision thereof shall cease to be
in full force and effect, or any Responsible Officer of a Guarantor (including
any Person that becomes a Guarantor after the Closing Date in accordance with
Section 6.13) or any Person acting by or on behalf of such Guarantor shall deny
or disaffirm such Guarantor's obligations under the Subsidiary Guaranty, or any
Guarantor shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to the
Subsidiary Guaranty; or
(l) Change of Control. There occurs any Change of Control
with respect to the Borrower; or
(m) HMO Event. (i) An HMO Event shall remain unremedied
for sixty (60) days after the occurrence thereof (or such lesser period of time,
if any, as the HMO Regulator administering the HMO Regulations shall have
imposed for the cure of such HMO Event), or (ii) any HMO Subsidiary shall suffer
the loss of twenty-five percent (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 and could reasonably
be expected to have a Material Adverse Effect; or
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(n) Exclusion Event. There shall occur an Exclusion Event
that would result in a Material Adverse Effect.
Section 8.02 Remedies Upon Event of Default. If any Event of
Default occurs and is continuing, the Administrative Agent shall, at the request
of, or may, with the consent of, the Required Lenders, take any or all of the
following actions:
(a) declare the Commitment of each Lender to be
terminated, whereupon such Commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C
Obligations (in an amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all
rights and remedies available to it and the Lenders under applicable Law or the
Loan Documents, including, without limitation, all rights and remedies existing
under the Collateral Documents and all rights and remedies against a Guarantor;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.
Section 8.03 Application of Funds. After the exercise of remedies
provided for in Section 8.02 (or after the Loans have automatically become
immediately due and payable and the L/C Obligations have automatically been
required to be Cash Collateralized as set forth in the proviso to Section 8.02),
any amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article III hereof and Section 2.5 of the Subsidiary Guaranty)
payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest) payable
to the Lenders (including Attorney Costs and amounts payable under Article III
hereof and Section 2.5 of the Subsidiary Guaranty),
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ratably among them in proportion to the amounts described in this clause Second
payable to them;
Third, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans and L/C Borrowings, ratably among the
Lenders in proportion to the respective amounts described in this clause Third
payable to them;
Fourth, (i) to payment of that portion of the Obligations constituting
unpaid principal of the Loans and L/C Borrowings, ratably among the Lenders in
proportion to the respective amounts described in this subclause (i) to this
clause Fourth held by them and (ii) to payment of that portion of the
Obligations constituting amounts owing under or in respect of Secured Swap
Contracts, ratably among the Swap Banks in proportion to the respective amounts
described in this subclause (ii) to this clause Fourth held by them;
Fifth, to the Administrative Agent for the account of the L/C Issuer,
to Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by
applicable Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE IX
ADMINISTRATIVE AGENT
Section 9.01 Appointment and Authorization of Administrative
Agent.
(a) Each Lender hereby irrevocably appoints, designates
and authorizes the Administrative Agent to take such action on its behalf under
the provisions of this Agreement and each other Loan Document and to exercise
such powers and perform such duties as are expressly delegated to it by the
terms of this Agreement or any other Loan Document, together with such powers as
are reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, neither the
Administrative Agent nor any other Agent-Related Person shall have any duties or
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent and any other Agent-Related Persons have or be deemed to
have any fiduciary relationship with any Lender or participant, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against the Administrative Agent and any other Agent-Related Persons. Without
limiting the generality of the foregoing sentence, the use of the term "agent"
herein and in the other Loan Documents with reference to the Administrative
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable Law. Instead, such
term is used
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merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties.
(b) The L/C Issuer shall act on behalf of the Lenders
with respect to any Letters of Credit issued by it and the documents associated
therewith, and the L/C Issuer shall have all of the benefits and immunities (i)
provided to the Administrative Agent in this Article IX with respect to any acts
taken or omissions suffered by the L/C Issuer in connection with Letters of
Credit issued by it or proposed to be issued by it and the applications and
agreements for letters of credit pertaining to such Letters of Credit as fully
as if the term "Administrative Agent" as used in this Article IX and in the
definition of "Agent-Related Person" included the L/C Issuer with respect to
such acts or omissions, and (ii) as additionally provided herein with respect to
the L/C Issuer.
Section 9.02 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement or any other Loan Document by or
through agents, employees or attorneys-in-fact and shall be entitled to advice
of counsel and other consultants or experts concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct.
Section 9.03 Liability of Agent-Related Persons. No Agent-Related
Person shall (a) be liable for any action taken or omitted to be taken by any of
them under or in connection with this Agreement or any other Loan Document or
the transactions contemplated hereby (except for its own gross negligence or
willful misconduct in connection with its duties expressly set forth herein), or
(b) be responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by any Loan Party or any officer
thereof, contained herein or in any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of any Loan Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party or any Affiliate thereof.
Section 9.04 Reliance by Administrative Agent.
(a) The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, communication,
signature, resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, electronic mail
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to any Loan Party), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under any Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate,
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and, if it so requests, it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or such greater number of Lenders as may be
expressly required hereby in any instance) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the
conditions specified in Section 4.01, each Lender that has signed this Agreement
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 a Lender unless the Administrative
Agent shall have received notice from such Lender prior to the proposed Closing
Date specifying its objection thereto.
Section 9.05 Notice of Default. The Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Administrative Agent for the account of the Lenders, unless
the Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Agreement, describing such Default and stating that
such notice is a "notice of default." The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to such Default as may be directed by the Required
Lenders in accordance with Article VIII; provided, however, that unless and
until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable or in the best interest of the Lenders.
Section 9.06 Credit Decision; Disclosure of Information by
Administrative Agent. Each Lender acknowledges that no Agent-Related Person has
made any representation or warranty to it, and that no act by the Administrative
Agent hereafter taken, including any consent to and acceptance of any assignment
or review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other
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condition and creditworthiness of the Loan Parties and their respective
Subsidiaries, and all applicable bank or other regulatory Laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower. Each Lender also represents that
it will, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent herein, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of any of the Loan Parties or any of their
respective Affiliates which may come into the possession of any Agent-Related
Person.
Section 9.07 Indemnification of Administrative Agent. Whether or
not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand each Agent-Related Person (to the extent not reimbursed by
or on behalf of the Borrower or any Guarantor and without limiting the
obligation of the Borrower or any Guarantor to do so), pro rata, and hold
harmless each Agent-Related Person from and against any and all Indemnified
Liabilities incurred by it; provided, however, that no Lender shall be liable
for the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, nonappealable judgment by a
court of competent jurisdiction to have resulted from such Agent-Related
Person's own gross negligence or willful misconduct; provided, however, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section 9.07. In the case of any investigation, litigation or proceeding giving
rise to Indemnified Liabilities, this Section 9.07 applies whether any such
investigation, litigation or proceeding is brought by any Lender or any other
Person. Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive termination of the Aggregate
Commitments, the payment of all other Obligations and the resignation of the
Administrative Agent.
Section 9.08 Administrative Agent in its Individual Capacity. Bank
of America and its Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with each of the Loan Parties and their respective Affiliates as though
Bank of America were not the Administrative Agent or the L/C Issuer hereunder
and without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, Bank of America or its Affiliates may receive
information regarding any Loan Party or its Affiliates (including information
that may be subject to confidentiality obligations in favor of such Loan Party
or such Affiliate) and acknowledge that the Administrative Agent shall be under
no obligation to provide such information to them. With respect to its Loans,
Bank of America shall have the same rights and powers under this Agreement as
any other Lender and may exercise such rights and powers as though it were not
the Administrative Agent or the L/C Issuer, and the terms "Lender" and "Lenders"
include Bank of America in its individual capacity.
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Section 9.09 Successor Administrative Agent. The Administrative
Agent may resign as Administrative Agent upon 30 days' notice to the Lenders and
the Borrower; provided that any such resignation by Bank of America shall also
constitute its resignation as L/C Issuer. If the Administrative Agent resigns
under this Agreement, the Required Lenders shall appoint from among the Lenders
a successor administrative agent for the Lenders, which successor administrative
agent shall be consented to by the Borrower at all times other than during the
existence of an Event of Default (which consent of the Borrower shall not be
unreasonably withheld or delayed). If no successor administrative agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Lenders
and the Borrower, a successor administrative agent from among the Lenders. Upon
the acceptance of its appointment as successor administrative agent hereunder,
the Person acting as such successor administrative agent shall succeed to all
the rights, powers and duties of the retiring Administrative Agent and L/C
Issuer and the respective terms "Administrative Agent" and "L/C Issuer" shall
mean such successor administrative agent and Letter of Credit issuer and the
retiring Administrative Agent's appointment, powers and duties as Administrative
Agent shall be terminated and the retiring L/C Issuer's rights, powers and
duties as such shall be terminated, without any other or further act or deed on
the part of such retiring L/C Issuer or any other Lender, other than the
obligation of the successor L/C Issuer to issue letters of credit in
substitution for the Letters of Credit, if any, existing at the time of such
succession or to make other arrangements satisfactory to the retiring L/C Issuer
to effectively assume the obligations of the retiring L/C Issuer with respect to
such Letters of Credit. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article IX and
Sections 10.04 and 10.05 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement. If no successor administrative agent has accepted appointment as
Administrative Agent by the date which is 30 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor agent as
provided for above.
Section 9.10 Administrative Agent May File Proofs of Claim. In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, L/C Obligations
and all other Obligations that are owing and unpaid and to file such other
documents as may be necessary or advisable in order to have the claims of the
Lenders and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders and the
Administrative Agent and their respective agents and counsel and all other
amounts due the Lenders and the Administrative Agent under Sections 2.03(i) and
(j), 2.09 and 10.04) allowed in such judicial proceeding; and
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(b) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
Section 9.11 Collateral and Guaranty Matters. The Lenders
irrevocably authorize the Administrative Agent, at its option and in its
discretion,
(a) to release any Lien on any property granted to or
held by the Administrative Agent under any Loan Document (i) upon termination of
the Aggregate Commitments and payment in full of all Obligations (other than
contingent indemnification obligations) and the expiration or termination of all
Letters of Credit, (ii) that is sold or to be sold as part of or in connection
with any sale permitted hereunder or under any other Loan Document, or (iii)
subject to Section 10.01, if approved, authorized or ratified in writing by the
Required Lenders;
(b) to subordinate any Lien on any property granted to or
held by the Administrative Agent under any Loan Document to the holder of any
Lien on such property that is permitted by Section 7.01(h); and
(c) to release any Guarantor from its obligations under
the Subsidiary Guaranty if such Person ceases to be a Subsidiary as a result of
a transaction permitted hereunder.
Upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the Administrative Agent's authority to release
or subordinate its interest in particular types or items of property, or to
release any Guarantor from its obligations under the Subsidiary Guaranty
pursuant to this Section 9.11.
Section 9.12 Other Agents; Arrangers and Managers. None of the
Lenders or other Persons identified on the facing page or signature pages of
this Agreement as a "syndication agent," "documentation agent," "co-agent,"
"book manager," "book runner," "lead manager," "arranger," "lead arranger,"
"co-lead arranger" or "co-arranger" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than, in the case
of such Lenders, those applicable to all Lenders as such. Without limiting the
foregoing, none of the
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Lenders or other Persons so identified shall have or be deemed to have any
fiduciary relationship with any Lender. Each Lender acknowledges that it has not
relied, and will not rely, on any of the Lenders or other Persons so identified
in deciding to enter into this Agreement or in taking or not taking action
hereunder.
ARTICLE X
MISCELLANEOUS
Section 10.01 Amendments, Etc. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent to any
departure by the Borrower or any other Loan Party therefrom, shall in any event
be effective unless the same shall be in writing and signed by the Required
Lenders and the Borrower or the applicable Loan Party, as the case may be, and
acknowledged by the Administrative Agent, then each such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such amendment, waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a)
without the written consent of each Lender;
(b) extend or increase the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to Section 8.02) without the
written consent of such Lender;
(c) postpone any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) or any scheduled or mandatory
reduction of the Aggregate Commitments hereunder or under any other Loan
Document without the written consent of each Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest
specified herein on, any Loan or L/C Borrowing, or (subject to clause (iii) of
the second proviso to this Section 10.01) any fees or other amounts payable
hereunder or under any other Loan Document without the written consent of each
Lender directly affected thereby; provided, however, that only the consent of
the Required Lenders shall be necessary (i) to amend the definition of "Default
Rate" or to waive any obligation of the Borrower to pay interest at the Default
Rate or (ii) to amend any financial covenant hereunder (or any defined term used
therein) even if the effect of such amendment would be to reduce the rate of
interest on any Loan or L/C Borrowing or to reduce any fee payable hereunder;
(e) change Section 2.13 or Section 8.03 in a manner that
would alter the pro rata sharing of payments required thereby without the
written consent of each Lender;
(f) change any provision of this Section or the
definition of "Required Lenders" or any other provision hereof specifying the
number or percentage of Lenders required to amend, waive or otherwise modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender; or
(g) release all or substantially all of the Guarantors
from the Subsidiary Guaranty without the written consent of each Lender, or
release all or substantially all of the
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Collateral except as specifically permitted by the Loan Documents without the
written consent of each Lender;
provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Letter
of Credit Application relating to any Letter of Credit issued or to be issued by
it, (ii) no amendment, waiver or consent shall, unless in writing and signed by
the Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document, and (iii) each of the Fee Letter and the Commitment Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties thereto. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender. Upon delivery by
the Borrower of each Compliance Certificate of Responsible Officers certifying
supplements to the Schedules to this Agreement pursuant to Section 6.02(b), the
schedule supplements attached to each such certificate shall be incorporated
into and become a part of and supplement Schedules 5.08, 5.11, 5.20, 5.24 and
6.07 hereto, as applicable, and the Administrative Agent may attach such
schedule supplements to such Schedules, and each reference to such Schedules
shall mean and be a reference to such Schedules, as supplemented pursuant
thereto.
Section 10.02 Notices and Other Communications; Facsimile Copies.
(a) General. Unless otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission). All such written notices shall be mailed,
faxed or delivered to the applicable address, facsimile number or (subject to
subsection (c) below) electronic mail address, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:
(i) if to the Borrower, the Administrative Agent
or the L/C Issuer, to the address, facsimile number, electronic mail
address or telephone number specified for such Person on Schedule 10.02
or to such other address, facsimile number, electronic mail address or
telephone number as shall be designated by such party in a notice to
the other parties hereto; and
(ii) if to any other Lender, to the address,
facsimile number, electronic mail address or telephone number specified
in its Administrative Questionnaire or to such other address, facsimile
number, electronic mail address or telephone number as shall be
designated by such party in a notice to the Borrower, the
Administrative Agent and the L/C Issuer.
All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail
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(which form of delivery is subject to the provisions of subsection (c)
below), when delivered; provided, however, that notices and other communications
to the Administrative Agent and the L/C Issuer pursuant to Article II shall not
be effective until actually received by such Person. In no event shall a
voicemail message be effective as a notice, communication or confirmation
hereunder.
(b) Effectiveness of Facsimile Documents and Signatures.
Loan Documents may be transmitted and/or signed by facsimile. The effectiveness
of any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Loan Parties, the Administrative Agent, the Syndication Agent, the L/C Issuer,
the Co-Lead Arrangers and the Lenders. The Administrative Agent may also require
that any such documents and signatures be confirmed by a manually-signed
original thereof; provided, however, that the failure to request or deliver the
same shall not limit the effectiveness of any facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and
Internet and intranet websites may be used only to distribute routine
communications, such as financial statements and other information as provided
in Section 6.02, and to distribute Loan Documents for execution by the parties
thereto, and may not be used for any other purpose.
(d) Reliance by Administrative Agent and Lenders. The
Administrative Agent and the Lenders shall be entitled to rely and act upon any
notices (including written or telephonic Loan Notices) purportedly given by or
on behalf of the Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower shall indemnify
each Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower. All telephonic notices to and
other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.
Section 10.03 No Waiver; Cumulative Remedies. No failure by any
Lender or the Administrative Agent to exercise, and no delay by any such Person
in exercising, any right, remedy, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by Law.
Section 10.04 Attorney Costs, Expenses and Taxes. The Borrower
agrees (a) to pay or reimburse the Administrative Agent and the Co-Lead
Arrangers for all reasonable costs and expenses incurred in connection with the
development, preparation, negotiation and execution of the Commitment Letter,
the Fee Letter, this Agreement and the other Loan Documents, the due diligence
related thereto, and the syndication of the Loans, and any amendment, waiver,
consent or other modification of the provisions hereof and thereof (whether or
not the transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (b) to pay or
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reimburse the Administrative Agent and each Lender for all reasonable costs and
expenses incurred in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or the other Loan
Documents (including all such costs and expenses incurred during any "workout"
or restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all Attorney
Costs. The foregoing costs and expenses shall include all search, filing,
recording, title insurance and appraisal charges and fees and taxes related
thereto, and other out-of-pocket expenses incurred by the Administrative Agent
and the cost of independent public accountants and other outside experts
retained by the Administrative Agent or any Lender. All amounts due under this
Section 10.04 shall be payable within ten Business Days after demand therefor.
The agreements in this Section shall survive the termination of the Aggregate
Commitments and repayment of all other Obligations.
Section 10.05 Indemnification by the Borrower. Whether or not the
transactions contemplated hereby are consummated, the Borrower shall indemnify
and hold harmless each Agent-Related Person, each Co-Lead Arranger, the
Syndication Agent, each Lender and their respective Affiliates, directors,
officers, employees, counsel, agents and attorneys-in-fact (collectively the
"Indemnitees") from and against any and all liabilities, obligations, losses,
damages, penalties, claims, demands, actions, judgments, suits, costs, expenses
and disbursements (including Attorney Costs) of any kind or nature whatsoever
which may at any time be imposed on, incurred by or asserted against any such
Indemnitee in any way relating to or arising out of or in connection with (a)
the Commitment Letter (including, without limitation, the pre-closing
syndication and arrangement of the Loans), (b) the execution, delivery,
enforcement, performance or administration of any Loan Document or any other
agreement, letter or instrument delivered in connection with the transactions
contemplated thereby or the consummation of the transactions contemplated
thereby, (c) any Commitment, Loan or Letter of Credit or the use or proposed use
of the proceeds therefrom (including any refusal by the L/C Issuer to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (d) any actual or alleged presence or release of Hazardous Materials
on or from any property currently or formerly owned or operated by the Borrower,
any other Loan Party or any of their respective Subsidiaries, or any
Environmental Liability related in any way to the Borrower, any other Loan Party
or any of their respective Subsidiaries, or (e) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory (including any investigation
of, preparation for, or defense of any pending or threatened claim,
investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"), in all cases, whether or not caused by or arising, in whole or in
part, out of the negligence of the Indemnitee; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee. No Indemnitee
shall be liable for any damages arising from the use by others of any
information or other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Agreement, nor shall
any Indemnitee have any liability for any indirect or consequential damages
relating to this
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Agreement or any other Loan Document or arising out of its activities in
connection herewith or therewith (whether before or after the Closing Date). In
the case of an investigation, litigation or proceeding to which the indemnity in
this Section 10.05 applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by the Borrower or any
of the Subsidiaries, its directors, stockholders or auditors or an Indemnitee or
any other Person, whether or not any Indemnitee is otherwise a party thereto.
All amounts due under this Section 10.05 shall be payable within ten Business
Days after demand therefor. The agreements in this Section shall survive the
resignation of the Administrative Agent, the replacement of any Lender, the
termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.
Section 10.06 Payments Set Aside. To the extent that any payment by
or on behalf of the Borrower is made to the Administrative Agent or any Lender,
or the Administrative Agent or any Lender exercises its right of set-off, and
such payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect.
Section 10.07 Successors and Assigns.
(a) The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee in accordance with the provisions of subsection (b) of this Section,
(ii) by way of participation in accordance with the provisions of subsection (d)
of this Section, or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of subsection (f) of this Section (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in subsection (d)
of this Section and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans (including
for purposes of this subsection (b), participations in L/C Obligations) at the
time owing to it); provided that (i) except in the case of an assignment of the
entire remaining amount of the assigning Lender's Commitment and the Loans at
the time owing to it or in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund
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with respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) subject to each such assignment,
determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent or, if "Trade Date" is
specified in the Assignment and Assumption, as of the Trade Date, shall not be
less than $1 million unless each of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower otherwise consents
(each such consent not to be unreasonably withheld or delayed), (ii) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender's rights and obligations under this Agreement with respect
to the Loans or the Commitment assigned, (iii) any assignment of a Commitment
must be approved by the Administrative Agent and the L/C Issuer unless the
Person that is the proposed assignee is itself a Lender (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee), and (iv) the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption, together with a processing and recordation fee of
$3,500. Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05
with respect to facts and circumstances occurring prior to the effective date of
such assignment). Upon request, the Borrower (at the expense of the assignee or
assignor Lender) shall execute and deliver a Note to the assignee Lender. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this subsection shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this
purpose as an agent of the Borrower, shall maintain at the Administrative
Agent's Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans and L/C Obligations owing to,
each Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of,
or notice to, the Borrower or the Administrative Agent, sell participations to
any Person (other than a natural person or the Borrower or any of the Borrower's
Affiliates or Subsidiaries) (each, a "Participant") in all or a portion of such
Lender's rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender's
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participations in L/C Obligations) owing to it); provided, further, that (i)
such Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that directly affects such Participant. Subject to subsection (e)
of this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by Law, each Participant also shall be
entitled to the benefits of Section 10.09 as though it were a Lender; provided
such Participant agrees to be subject to Section 2.13 as though it were a
Lender.
(e) A Participant shall not be entitled to receive any
greater payment under Section 3.01 or 3.04 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower's prior written consent. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 3.01
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with
Section 10.15 as though it were a Lender.
(f) Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.
(g) As used herein, the following terms have the
following meanings:
"Eligible Assignee" means (i) a Lender, (ii) an Affiliate of a
Lender, (iii) an Approved Fund, and (iv) any other Person (other than a
natural person) approved by (A) the Administrative Agent and the L/C
Issuer, and (B) unless an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably
withheld or delayed); provided that notwithstanding the foregoing,
"Eligible Assignee" shall not include the Borrower or any of the
Borrower's Affiliates or Subsidiaries.
"Fund" means any Person (other than a natural person) that is
(or will be) engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the
ordinary course of its business.
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"Approved Fund" means any Fund that is administered or managed
by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an
Affiliate of an entity that administers or manages a Lender.
(h) Notwithstanding anything to the contrary contained
herein, if at any time Bank of America assigns all of its Commitment and Loans
pursuant to subsection (b) above, Bank of America may, upon 30 days notice to
the Borrower and the Lenders, resign as L/C Issuer. In the event of any such
resignation as L/C Issuer, the Borrower shall be entitled to appoint from among
the Lenders a successor L/C Issuer hereunder; provided, however, that no failure
by the Borrower to appoint any such successor shall affect the resignation of
Bank of America as L/C Issuer. If Bank of America resigns as L/C Issuer, it
shall retain all the rights and obligations of the L/C Issuer hereunder with
respect to all Letters of Credit outstanding as of the effective date of its
resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans or fund risk
participations in Unreimbursed Amounts pursuant to Section 2.03(c)).
Section 10.08 Confidentiality. Each of the Administrative Agent,
the L/C Issuer, the Syndication Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any Governmental
Authority, (c) to the extent required by applicable Law or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any Eligible Assignee of or Participant in, or any
prospective Eligible Assignee of or Participant in, any of its rights or
obligations under this Agreement or (ii) any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterparty's or
prospective counterparty's professional advisor) to any credit derivative
transaction relating to obligations of the Loan Parties, (g) with the consent of
the Borrower, (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Administrative Agent, the Syndication Agent or any Lender on a
nonconfidential basis from a source other than the Borrower, or (i) to the NAIC
or any other similar organization. In addition, the Administrative Agent, the
Syndication Agent and the Lenders may disclose the existence of this Agreement
and information about this Agreement to market data collectors, similar service
providers to the lending industry, and service providers to the Administrative
Agent, the Syndication Agent and the Lenders in connection with the
administration and management of this Agreement, the other Loan Documents, the
Commitments, and the Credit Extensions. For the purposes of this Section,
"Information" means all information received from any Loan Party, relating to
any Loan Party, its respective Subsidiaries or the business, other than any such
information that is available to the Administrative Agent, the Syndication Agent
or any Lender on a nonconfidential basis prior to disclosure by any Loan Party;
provided that, in the case of information received from a Loan Party after the
date hereof, such information is clearly identified in writing at the time of
delivery as confidential. Any Person required to maintain the
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confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
Section 10.09 Set-off. In addition to any rights and remedies of
the Lenders provided by Law, upon the occurrence and during the continuance of
any Event of Default, each Lender is authorized at any time and from time to
time, without prior notice to the Borrower or any other Loan Party, any such
notice being waived by the Borrower (on its own behalf and on behalf of each
Loan Party) to the fullest extent permitted by Law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender to or for
the credit or the account of the respective Loan Parties against any and all
Obligations owing to such Lender hereunder or under any other Loan Document, now
or hereafter existing, irrespective of whether or not the Administrative Agent
or such Lender shall have made demand under this Agreement or any other Loan
Document and although such Obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Borrower and the Administrative Agent after
any such set-off and application made by such Lender; provided, however, that
the failure to give such notice shall not affect the validity of such set-off
and application.
Section 10.10 Interest Rate Limitation. Notwithstanding anything to
the contrary contained in any Loan Document, the interest paid or agreed to be
paid under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "Maximum Rate"). If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.
Section 10.11 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 10.12 Integration. This Agreement, together with the other
Loan Documents, comprises the complete and integrated agreement of the parties
on the subject matter hereof and thereof and supersedes all prior agreements,
written or oral, on such subject matter. In the event of any conflict between
the provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Administrative Agent or the
Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.
98
Section 10.13 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
Section 10.14 Severability. If any provision of this Agreement or
the other Loan Documents is held to be illegal, invalid or unenforceable, (a)
the legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 10.15 Tax Forms. (a) (i) Each Lender that is not a "United
States person" within the meaning of Section 7701(a)(30) of the Code (a "Foreign
Lender") shall deliver to the Administrative Agent, prior to receipt of any
payment subject to withholding under the Code (or upon accepting an assignment
of an interest herein), two duly signed completed copies of either IRS Form
W-8BEN or any successor thereto (relating to such Foreign Lender and entitling
it to an exemption from, or reduction of, withholding tax on all payments to be
made to such Foreign Lender by the Borrower pursuant to this Agreement) or IRS
Form W-8ECI or any successor thereto (relating to all payments to be made to
such Foreign Lender by the Borrower pursuant to this Agreement) or such other
evidence satisfactory to the Borrower and the Administrative Agent that such
Foreign Lender is entitled to an exemption from, or reduction of, U.S.
withholding tax, including any exemption pursuant to Section 881(c) of the Code.
Thereafter and from time to time, each such Foreign Lender shall (A) promptly
submit to the Administrative Agent such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States Laws to avoid, or such evidence as is
satisfactory to the Borrower and the Administrative Agent of any available
exemption from or reduction of, United States withholding taxes in respect of
all payments to be made to such Foreign Lender by the Borrower pursuant to this
Agreement, (B) promptly notify the Administrative Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction, and (C) take such steps as shall not be materially disadvantageous to
it, in the reasonable judgment of such Lender, and as may be reasonably
necessary (including the re-designation of its Lending Office) to avoid any
requirement of applicable Law that the Borrower make any deduction or
withholding for taxes from amounts payable to such Foreign Lender.
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(ii) Each Foreign Lender, to the extent it does
not act or ceases to act for its own account with respect to any
portion of any sums paid or payable to such Lender under any of the
Loan Documents (for example, in the case of a typical participation by
such Lender), shall deliver to the Administrative Agent on the date
when such Foreign Lender ceases to act for its own account with respect
to any portion of any such sums paid or payable, and at such other
times as may be necessary in the determination of the Administrative
Agent (in the reasonable exercise of its discretion), (A) two duly
signed completed copies of the forms or statements required to be
provided by such Lender as set forth above, to establish the portion of
any such sums paid or payable with respect to which such Lender acts
for its own account that is not subject to U.S. withholding tax, and
(B) two duly signed completed copies of IRS Form W-8IMY (or any
successor thereto), together with any information such Lender chooses
to transmit with such form, and any other certificate or statement of
exemption required under the Code, to establish that such Lender is not
acting for its own account with respect to a portion of any such sums
payable to such Lender.
(iii) The Borrower shall not be required to pay
any additional amount to any Foreign Lender under Section 3.01 (A) with
respect to any Taxes required to be deducted or withheld on the basis
of the information, certificates or statements of exemption such Lender
transmits with an IRS Form W-8IMY pursuant to this Section 10.15(a) or
(B) if such Lender shall have failed to satisfy the foregoing
provisions of this Section 10.15(a); provided that if such Lender shall
have satisfied the requirement of this Section 10.15(a) on the date
such Lender became a Lender or ceased to act for its own account with
respect to any payment under any of the Loan Documents, nothing in this
Section 10.15(a) shall relieve the Borrower of its obligation to pay
any amounts pursuant to Section 3.01 in the event that, as a result of
any change in any applicable Law or order, or any change in the
interpretation, administration or application thereof, such Lender is
no longer properly entitled to deliver forms, certificates or other
evidence at a subsequent date establishing the fact that such Lender or
other Person for the account of which such Lender receives any sums
payable under any of the Loan Documents is not subject to withholding
or is subject to withholding at a reduced rate; provided, further, that
should such Lender become subject to Taxes because of its failure to
satisfy the foregoing provisions of this Section 10.15(a) the Borrower
shall take steps as such Lender shall reasonably request to assist such
Lender in recovering such Taxes.
(iv) The Administrative Agent may, without
reduction, withhold any Taxes required to be deducted and withheld from
any payment under any of the Loan Documents with respect to which the
Borrower is not required to pay additional amounts under Section 3.01
or this Section 10.15(a).
(b) Upon the request of the Administrative Agent, each
Lender that is a "United States person" within the meaning of Section
7701(a)(30) of the Code shall deliver to the Administrative Agent two duly
signed completed copies of IRS Form W-9. If such Lender fails to deliver such
forms, then the Administrative Agent may withhold from any interest payment to
such Lender an amount equivalent to the applicable back-up withholding tax
imposed by the Code, without reduction.
100
(c) If any Governmental Authority asserts that the
Administrative Agent did not properly withhold or backup withhold, as the case
may be, any Tax or other amount from payments made to or for the account of any
Lender, such Lender shall indemnify the Administrative Agent therefor, including
all penalties and interest, any Taxes imposed by any jurisdiction on the amounts
payable to the Administrative Agent under this Section, and costs and expenses
(including Attorney Costs) of the Administrative Agent. The obligation of the
Lenders under this Section shall survive the termination of the Aggregate
Commitments, repayment of all other Obligations hereunder and the resignation of
the Administrative Agent.
Section 10.16 [Intentionally omitted.]
Section 10.17 Governing Law.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE
AGENT AND EACH PARTY HERETO SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX
XX XXX XXXX SITTING IN NEW YORK COUNTY OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE
BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER HEREBY IRREVOCABLY
APPOINTS CT CORPORATION SYSTEM IN NEW YORK, NEW YORK AS ITS AUTHORIZED AGENT TO
ACCEPT AND ACKNOWLEDGE SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY
SUIT, ACTION OR PROCEEDING OF THE NATURE REFERRED TO IN THIS SECTION 10.17 AND
CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING UPON CT
CORPORATION SYSTEM IN NEW YORK, NEW YORK IN ANY MANNER OR BY THE MAILING OF A
COPY THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT
REQUESTED, TO THE BORROWER'S ADDRESS REFERRED TO IN SECTION 10.02. THE BORROWER
AGREES THAT SUCH SERVICE (i) SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE
OF PROCESS UPON IT IN ANY SUCH SUIT, ACTION OR PROCEEDING AND (ii) SHALL, TO THE
FULLEST EXTENT PERMITTED BY LAW, BE TAKEN AND HELD TO BE VALID PERSONAL SERVICE
UPON AND PERSONAL DELIVERY TO IT. NOTHING IN THIS SECTION 10.17 SHALL AFFECT THE
RIGHT OF ANY OTHER PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY MANNER
101
PERMITTED BY LAW OR LIMIT THE RIGHT OF ANY OTHER PARTY TO THIS AGREEMENT TO
BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY JURISDICTION OR
JURISDICTIONS.
Section 10.18 Waiver of Right to Trial by Jury. THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS EACH HEREBY EXPRESSLY WAIVES THEIR
RESPECTIVE RIGHTS TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT
OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED
PERSON, PARTICIPANT OR ASSIGNEE WHETHER FOUNDED IN CONTRACT OR TORT OR
OTHERWISE. THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS EACH HEREBY
AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL
BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.
Section 10.19 Replacement of Lenders. Under any circumstances set
forth herein providing that the Borrower shall have the right to replace a
Lender as a party to this Agreement, the Borrower may, upon notice to such
Lender and the Administrative Agent (with a copy to the other Lenders), replace
such Lender by causing such Lender to assign its Commitment (with the assignment
fee to be paid by the Borrower in such instance) pursuant to Section 10.07(b) to
one or more other Lenders or Eligible Assignees procured by the Borrower;
provided, however, that if the Borrower elects to exercise such right with
respect to any Lender pursuant to Section 3.06(b), it shall be obligated to
replace all Lenders that have made similar requests for compensation pursuant to
Section 3.01 or 3.04 who also request replacement pursuant to this Section 10.19
within ten (10) days after receipt of a copy of the Borrower's notice of
exercise. The Borrower shall (x) pay in full all principal, interest, fees and
other amounts owing to such Lender through the date of replacement (including
any amounts payable pursuant to Section 3.05), (y) provide appropriate
assurances and indemnities (which may include letters of credit) to the L/C
Issuer as it may reasonably require with respect to any continuing obligation to
fund participation interests in any L/C Obligations and (z) release such Lender
from its obligations under the Loan Documents. Any Lender being replaced shall
execute and deliver an Assignment and Assumption with respect to such Lender's
Commitment and outstanding Loans and participations in L/C Obligations.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
XXXXXX HEALTHCARE, INC., a California
corporation, as the Borrower
By: /s/ XXXX X. XXXXXX
-------------------------------------
Name: Xxxx X. Xxxxxx
-----------------------------------
Title: Executive Vice President
-----------------------------------
S - 1
BANK OF AMERICA, N.A., as
Administrative Agent
By: /s/ XXXXXX X. XXXXX
-------------------------------------
Name: Xxxxxx X. Xxxxx
-----------------------------------
Title: Principal
-----------------------------------
S - 2
CIBC WORLD MARKETS CORP. as
Syndication Agent
By: /s/ XXXXXXX XXXXX
-------------------------------------
Name: Xxxxxxx Xxxxx
-----------------------------------
Title: Executive Director
-----------------------------------
S - 3
BANK OF AMERICA, N.A., as a Lender and
L/C Issuer
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
-----------------------------------
Title: Principal
-----------------------------------
S - 4
CIBC INC., as Lender
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
-----------------------------------
Title: Executive Director
-----------------------------------
S - 5
SOCIETE GENERALE, as Lender
By: Xxxxxxx Bernof
-------------------------------------
Name: Xxxxxxx Bernof
-----------------------------------
Title: Director
-----------------------------------
S - 6
U.S. BANK NATIONAL ASSOCIATION, as
Lender
By: Xxxxxxxxx X. Xxxxx III
-------------------------------------
Name: Xxxxxxxxx X. Xxxxx III
-----------------------------------
Title: Vice President
-----------------------------------
S - 7
EAST WEST BANK, as Lender
By: /s/ XXXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------------
Title: Executive Vice President
-----------------------------------
S - 8
SCHEDULE 10.02
ADMINISTRATIVE AGENT'S OFFICE,
CERTAIN ADDRESSES FOR NOTICES
XXXXXX HEALTHCARE, INC., a California corporation:
Xxx Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Executive Vice President
Telephone: (000) 000-0000, Ext. 1128
Facsimile: (000) 000-0000
Electronic Mail: xxxxxx@xxxxxxxxxxxxxxxx.xxx
ADMINISTRATIVE AGENT:
Administrative Agent's Office (for payments and Requests for Credit Extensions):
Bank of America, N.A.
Street Address
Attention: Xxxxx Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Electronic Mail: xxxxx.x.xxxxxxx@xxxxxxxxxxxxx.xxx
Account No.: 1366212250600
Ref: Xxxxxx Healthcare, Inc.
ABA# 000000000
Other Notices as Administrative Agent:
Bank of America, N.A.
Agency Management
0000 Xxxxxx Xxxxxx
Mail Code: CA5-701-05-19
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxxxx XxXxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Electronic Mail: xxxxxxxxx.x.xxxxxx@xxxxxxxxxxxxx.xxx
With a copy to:
Bank of America, N.A.
Healthcare Portfolio Management
000 Xxxxx Xxxxx Xxxxxx
Mail Code: NC1-007-17-11
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Electronic Mail: xxxxxx.x.xxxxx@xxxxxxxxxxxxx.xxx
L/C ISSUER:
Bank of America, N.A.
Trade Operations-Los Angeles #22621
000 X. Xxxxxxx Xxxxxx, 00xx Xxxxx
Mail Code: CA9-703-19-23
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxx
Vice President
Telephone: 000.000.0000
Facsimile: 213.345.6694
Electronic Mail: Xxxxxx.Xxxx@xxxxxxxxxxxxx.xxx
