AMENDMENT NO. 8
TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT NO. 8 dated as of January 24, 1996 (this
"Amendment") to the SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of May
2, 1994 (as amended by Amendment No. 1 thereto dated as of June 9, 1994,
Amendment No. 2 thereto dated as of September 30, 1994, Amendment No. 3 thereto
dated as of December 12, 1994, Amendment No. 4 thereto dated as of January 11,
1995, Amendment No. 5 thereto dated as of March 17, 1995, Amendment No. 6
thereto dated as of October 17, 1995 and Amendment No. 7 thereto dated as of
November 30, 1995, the "Credit Agreement"), each among MAGELLAN HEALTH SERVICES,
INC., a Delaware corporation formerly known as CHARTER MEDICAL CORPORATION (the
"Company"), the banking and other financial institutions from time to time party
thereto (the "Lenders"), BANKERS TRUST COMPANY, as agent for the Lenders, and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as Co-Agent. Capitalized terms used
herein and not defined herein shall have the respective meanings set forth for
such terms in the Credit Agreement after giving effect to the amendments thereto
set forth herein.
W I T N E S S E T H :
WHEREAS, the Company has requested that the Credit Agreement
be amended to, among other things, (a) disregard certain cash settlement
payments for purposes of the definition of EBITDA and (b) provide that the sale
by the Company of certain shares of common stock of Green Spring will not be
considered an Asset Sale under the Credit Agreement; and
WHEREAS, subject to and upon the terms and conditions
hereinafter set forth and in the Credit Agreement as amended hereby, the Lenders
party hereto are willing to agree to the foregoing;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Section 1. Amendments to Credit Agreement. Effective as of
December 31, 1995, the Credit Agreement is amended as follows:
(a) Section 8.2 of the Credit Agreement is amended by (i)
deleting the "and" at the end of clause (k) thereof, (ii) replacing the period
at the end of clause (l)
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thereof with "; and" and (iii) inserting the following at the end of such
Section as clause (m) thereof:
"(m) so long as no Default or Event of
Default has occurred and is continuing either immediately before or
after giving effect thereto, the Company may sell the New Green Spring
Common Stock to any Person in one or more transactions, and such
transactions will not individually or in the aggregate constitute an
Asset Sale other than for purposes of Section 7.1(e)(iii); provided
that: (i) each such sale is made for consideration that is at least
equal to the fair
market value of such New Green Spring Common Stock, (ii) at least 70%
of the consideration therefor is the payment of Cash, (iii) the
Collateral Agent has a perfected Lien on any non-Cash proceeds received
in such sale, other than notes and similar instruments having, in the
aggregate, a principal amount of $500,000 or less, (iv) immediately
after giving effect to each of such transactions individually and in
the aggregate, the Company will own at least 51% of all of the
outstanding shares of each class of capital stock of Green Spring on a
fully diluted basis, and (v) notwithstanding anything herein to the
contrary, the entire amount of any excess of (A) the consideration
received by the Company in connection with such sale or sales of such
New Green Spring Common Stock over (B) the consideration paid or
payable by the Company in connection with the acquisition of such New
Green Spring Common Stock (it being understood that to the extent all
or any part of such consideration consti tuted Company Common Stock,
the amount of such consideration shall be considered zero for purposes
of this clause (B)), which excess shall be deter mined either
proportionately on a per share basis or in the aggregate, as the case
may be, shall constitute Net Proceeds of an Asset Sale and shall be
used to make the prepayments required by Section 4.2(a) hereof."
(b) The definition of the term "Asset Sale" in Section 10 of
the Credit Agreement is amended by (i) deleting the "and" at the end of clause
(vi) of the second proviso thereof and (ii) inserting ", and (viii) the sale by
the Company of New Green Spring Common Stock to the extent permitted by Section
8.2(m)" at the end of clause (vii) of the second proviso thereof.
(c) The definition of the term "EBITDA" in Section 10 of the
Credit Agreement is amended by inserting the following at the end thereof
"Notwithstanding anything in the foregoing to the contrary, (a) Insurance
Settlement Payments made at any time prior to or on December 31, 1995 shall not
be deducted from the calculation of EBITDA for the relevant period, and (b) if,
on or prior to March 31, 1996, the
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Company shall have consummated the sale of shares of Company Common Stock to a
group of investors led by Xxxxxxx Xxxxxxxxx and Xxxxx Xxxxx and shall have
received Cash Net Proceeds from such transaction in an amount at least equal to
$60,000,000, Insurance Settlement Payments made at any time after December 31,
1995 shall not be deducted from the calculation of EBITDA for the relevant
period; provided that such Insurance Settlement Payments do not in the aggregate
exceed $67,300,000 at any time."
(d) The following is inserted after the definition of the term
"Initial NME Acquisition Closing" in Section 10 of the Credit Agreement:
"'Insurance Settlement Payments' shall mean the cash
payments made from time to time by the Company to the insurers that are
party to the Set tlement Agreements dated November 16, 1994 and March
31, 1995, respective ly, in accordance with Schedule 10.1(f) hereto and
in an aggregate amount not to exceed $67,300,000."
(e) The definition of the term "Net Proceeds" in Section 10 of
the Credit Agreement is amended by (i) deleting the "and" at the end of clause
(a) and (ii) inserting "; and (c) in the case of any sale of New Green Spring
Common Stock, the amount set forth in clause (v) of Section 8.2(m)" at the end
of the first sentence.
(f) The following is inserted after the definition of the term
"Net Proceeds" in Section 10 of the Credit Agreement:
"'New Green Spring Common Stock' shall mean the 1,349
shares of common stock of Green Spring purchased by the Company on
December 21, 1995 from Health Care Service Corporation for an aggregate
consideration of $16,705,098, which shares represent 10% of the
outstanding common stock of Green Spring."
(g) Exhibit A hereto is added as Schedule 10.1(f) to the
Credit Agreement.
Section 2. Representations and Warranties. The Company
hereby represents and warrants to the Agent and the Lenders that:
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(a) Exhibit A is a true, correct and complete copy of the
payment schedules relating to the Insurance Settlement Payments, as adjusted for
future asset sales.
(b) The execution and delivery by the Company of this
Amendment and the performance by the Company of the Credit Agreement as amended
hereby are within the Company's corporate powers, have been duly authorized by
all necessary corporate or other action and will not (i) contravene the
certificate or articles of incorporation or the bylaws of the Company, (ii)
contravene any law, regulation, order, writ, judgment, decree, determination or
award currently in effect binding on or affecting the Company or any of its
Subsidiaries or any of their respective assets, except where such contra vention
would not have a Material Adverse Effect, or (iii) conflict with or result in
any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of any Lien
(except pursuant to the Security Documents) upon any of the property or assets
of the Company or any of its Subsid iaries pursuant to the terms of, any
indenture, mortgage, deed of trust, agreement or other instrument (including,
without limitation, the Senior Subordinated Notes Inden ture) to which the
Company or any of its Subsidiaries is a party or by which the Compa ny, any of
its Subsidiaries or any of their respective properties or assets is bound or sub
ject to, except to the extent such conflict, breach, default or creation or
imposition would not have a Material Adverse Effect.
(c) This Amendment, the Credit Agreement as amended hereby,
and after giving effect to this Amendment, the other Credit Documents constitute
the legal, valid and binding obligations of the Company and the other Credit
Parties party thereto, enforceable against the Company and such Credit Parties
in accordance with their re spective terms, except to the extent such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the en forcement of
creditors' rights generally, and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(d) On and as of the date hereof, and both before and after
giving effect to this Amendment, no Default or Event of Default has occurred and
is continuing.
(e) The representations and warranties of the Company and the
other Credit Parties contained in the Credit Agreement and the other Credit
Documents are true and correct on and as of the date hereof as if made on and as
of the date hereof both before and after giving effect to the effectiveness of
this Amendment, except to the extent such representations and warranties
expressly relate to a specific date.
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Section 3. Effectiveness. This Amendment shall become
effective when the Agent shall have received duly executed counterparts of this
Amendment from the Company, each Subsidiary of the Company that is a party to
any Credit Document and as many of the Lenders as shall be necessary to comprise
the "Required Lenders".
Section 4. Company Certificate. The Company hereby agrees to
provide a certificate to the Agent on or prior to March 31, 1996 regarding the
sale by the Company of shares of Company Common Stock to a group of investors
led by Xxxxxxx Xxxxxxxxx and Xxxxx Xxxxx, which certificate shall specify (i)
whether such transaction has been consummated, and (ii) if such transaction has
been consummated, (a) that immediately before and after giving effect to the
consummation of such transaction no Default or Event of Default shall have
occurred or be continuing and (b) the aggregate amount of net cash proceeds
received by the Company in connection with such transac tion.
Section 5. Status of Credit Documents. This Amendment is
limited solely for the purposes and to the extent expressly set forth herein,
and, except as ex pressly modified hereby, the terms, provisions and conditions
of the Credit Documents and the Liens granted thereunder shall continue in full
force and effect and are hereby ratified and confirmed in all respects.
Section 6. Counterparts. This Amendment may be executed and
delivered in any number of counterparts and by the different parties hereto on
separate counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A complete set of counterparts shall be lodged with the Company and
the Agent.
Section 7. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH, AND SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF).
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IN WITNESS WHEREOF, the parties hereto have caused their
respective duly authorized officers to execute and deliver this Amendment No. 8
to the Second Amended and Restated Credit Agreement as of the date first above
written.
MAGELLAN HEALTH SERVICES, INC.
By:________________________
Name:
Title:
BANKERS TRUST COMPANY,
as Agent and a Lender
By:________________________
Name:
Title:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, as Co-Agent
and a Lender
By:________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:________________________
Name:
Title:
0
XXXX XX XXXXXXX
By:________________________
Name:
Title:
BANQUE FRANCAISE COMMERCE
D'EXTERIEUR
By:________________________
Name:
Title:
CREDIT LYONNAIS,
Cayman Islands Branch
By:________________________
Name:
Title:
DRESDNER BANK AG, New York and
Grand Cayman Islands Branches
By:________________________
Name:
Title:
By:________________________
Name:
Title:
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GENERAL ELECTRIC CAPITAL
CORPORATION
By:________________________
Name:
Title:
GIROCREDIT BANK AG DER
SPARKESSEN
By:________________________
Name:
Title:
THE BANK OF NEW YORK
By:________________________
Name:
Title:
THE MITSUBISHI BANK, LIMITED,
New York Branch
By:________________________
Name:
Title:
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Consented and agreed to as of the date first above written by each of the
entities listed on Schedule I hereto:
By:____________________
Name:
Title: ,
of each of the entities
listed on Schedule I hereto
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