EXHIBIT 10.15
[LOGO]
THE BANK OF NEW YORK
CREDIT AND GUARANTY AGREEMENT
dated as of October 17, 2002
among
WELLCHOICE, INC.,
as Borrower and Guarantor
EMPIRE HEALTHCHOICE ASSURANCE, INC.
and
EMPIRE HEALTHCHOICE HMO, INC.,
as Applicants
The Lenders Party Hereto,
THE BANK OF NEW YORK,
as Issuing Bank,
HSBC BANK USA
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Co-Syndication Agents,
and
THE BANK OF NEW YORK,
as Administrative Agent
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BNY CAPITAL MARKETS, INC.,
as Lead Arranger and Book Runner
▇▇▇▇▇ ▇▇▇▇ LLP
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS............................................................................. 1
Section 1.1 Defined Terms...................................................................... 1
Section 1.2 Classification of Loans and Borrowings............................................. 15
Section 1.3 Terms Generally.................................................................... 15
Section 1.4 Accounting Terms; GAAP or SAP...................................................... 15
ARTICLE 2. THE CREDITS............................................................................. 15
Section 2.1 Commitments........................................................................ 15
Section 2.2 Loans and Borrowings............................................................... 16
Section 2.3 Requests for Borrowings............................................................ 16
Section 2.4 Funding of Borrowings.............................................................. 17
Section 2.5 Termination and Reduction of Commitments........................................... 17
Section 2.6 Repayment of Loans; Evidence of Debt............................................... 18
Section 2.7 Prepayment of Loans................................................................ 19
Section 2.8 Letter of Credit................................................................... 19
Section 2.9 Payments Generally; Pro Rata Treatment; Sharing of Setoffs......................... 22
ARTICLE 3. INTEREST, FEES, YIELD PROTECTION, ETC................................................... 24
Section 3.1 Interest........................................................................... 24
Section 3.2 Interest Elections Relating to Borrowings.......................................... 24
Section 3.3 Fees............................................................................... 26
Section 3.4 Alternate Rate of Interest......................................................... 27
Section 3.5 Increased Costs; Illegality........................................................ 27
Section 3.6 Break Funding Payments............................................................. 28
Section 3.7 Taxes.............................................................................. 29
Section 3.8 Mitigation Obligations............................................................. 30
ARTICLE 4. REPRESENTATIONS AND WARRANTIES.......................................................... 30
Section 4.1 Organization; Powers............................................................... 30
Section 4.2 Authorization; Enforceability...................................................... 30
Section 4.3 Governmental Approvals; No Conflicts............................................... 31
Section 4.4 Financial Condition; No Material Adverse Change.................................... 31
Section 4.5 Properties......................................................................... 31
Section 4.6 Litigation and Environmental Matters............................................... 31
Section 4.7 Compliance With Laws and Agreements; No Default.................................... 32
Section 4.8 Investment and Holding Company Status.............................................. 32
Section 4.9 Taxes.............................................................................. 32
Section 4.10 ERISA.............................................................................. 32
Section 4.11 Disclosure......................................................................... 32
Section 4.12 Subsidiaries....................................................................... 33
Section 4.13 Federal Reserve Regulations........................................................ 33
Section 4.14 Solvency........................................................................... 33
Section 4.15 Business of Borrower Prior to the Effective Date................................... 33
ARTICLE 5. CONDITIONS.............................................................................. 34
Section 5.1 Closing Date....................................................................... 34
Section 5.2 Effective Date..................................................................... 35
Section 5.3 Each Borrowing..................................................................... 36
ARTICLE 6. AFFIRMATIVE COVENANTS................................................................... 36
Section 6.1 Financial Statements and Other Information......................................... 37
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Section 6.2 Notices of Material Events......................................................... 38
Section 6.3 Existence; Conduct of Business..................................................... 39
Section 6.4 Payment and Performance of Obligations............................................. 39
Section 6.5 Maintenance of Properties.......................................................... 39
Section 6.6 Books and Records; Inspection Rights............................................... 39
Section 6.7 Compliance With Laws............................................................... 39
Section 6.8 Use of Proceeds.................................................................... 40
Section 6.9 Insurance.......................................................................... 40
Section 6.10 Further Assurances................................................................. 40
Section 6.11 Environmental Compliance........................................................... 40
Section 6.12 Financial Covenants................................................................ 40
Section 6.13 Ownership.......................................................................... 41
ARTICLE 7. NEGATIVE COVENANTS...................................................................... 41
Section 7.1 Indebtedness; Equity Securities.................................................... 41
Section 7.2 Liens.............................................................................. 42
Section 7.3 Fundamental Changes................................................................ 42
Section 7.4 Asset Sales; Equity Issuances...................................................... 43
Section 7.5 Transactions With Affiliates....................................................... 43
Section 7.6 Restrictive Agreements............................................................. 43
Section 7.7 Amendment of Material Agreements................................................... 44
ARTICLE 8. EVENTS OF DEFAULT....................................................................... 44
ARTICLE 9. THE ADMINISTRATIVE AGENT................................................................ 46
ARTICLE 10. MISCELLANEOUS.......................................................................... 48
Section 10.1 Notices............................................................................ 48
Section 10.2 Waivers; Amendments................................................................ 49
Section 10.3 Expenses; Indemnity; Damage Waiver................................................. 50
Section 10.4 Successors and Assigns............................................................. 51
Section 10.5 Survival........................................................................... 53
Section 10.6 Counterparts; Integration.......................................................... 54
Section 10.7 Severability....................................................................... 54
Section 10.8 Right of Setoff.................................................................... 54
Section 10.9 Governing Law; Jurisdiction; Consent to Service of Process......................... 54
Section 10.10 Waiver of Jury Trial............................................................... 55
Section 10.11 Headings........................................................................... 55
Section 10.12 Interest Rate Limitation........................................................... 55
Section 10.13 Joint and Several Obligations...................................................... 56
Section 10.14 Appointment of Attorney............................................................ 57
ARTICLE 11. GUARANTY............................................................................... 57
Section 11.1 Guaranty........................................................................... 57
Section 11.2 Guarantee of Payment............................................................... 57
Section 11.3 Waiver of Subrogation.............................................................. 57
Section 11.4 Obligations Not Waived............................................................. 58
Section 11.5 No Discharge or Diminishment of Guaranty........................................... 58
Section 11.6 Defenses of Applicants Waived...................................................... 58
Section 11.7 Agreement to Pay; Subordination.................................................... 59
Section 11.8 Information........................................................................ 59
Section 11.9 Termination of Guaranty............................................................ 59
ARTICLE 12. Termination of Agreement............................................................... 59
Section 12.1 Termination of Agreement........................................................... 59
(ii)
TABLE OF CONTENTS
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ARTICLE 13. PRIOR TO THE EFFECTIVE DATE............................................................ 60
Section 13.1 Prior to the Effective Date........................................................ 60
(iii)
TABLE OF CONTENTS
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SCHEDULES:
Schedule 2.1 List of Commitments
Schedule 4.6 List of Litigation
Schedule 4.12 List of Subsidiaries
Schedule 7.1 List of Existing Indebtedness
Schedule 7.2 List of Existing Liens
Schedule 7.6 List of Existing Restrictions
EXHIBITS:
Exhibit A Form of Assignment and Acceptance
Exhibit B-1 Form of Opinion of Special Counsel to the Loan Parties
Exhibit B-2 Form of Opinion of Special Counsel to the Loan Parties
Exhibit C Form of Borrowing Request
Exhibit D Form of Note
Exhibit E Form of Compliance Certificate
(iv)
CREDIT AND GUARANTY AGREEMENT, dated as of October 17, 2002, among
WELLCHOICE, INC., as Borrower and guarantor, EMPIRE HEALTHCHOICE ASSURANCE, INC.
and EMPIRE HEALTHCHOICE HMO, INC., as Applicants, the LENDERS party hereto, THE
BANK OF NEW YORK, as Issuing Bank, HSBC BANK USA and WACHOVIA BANK, NATIONAL
ASSOCIATION, as Co-Syndication Agents, and THE BANK OF NEW YORK, as
Administrative Agent.
The parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
Section 1.1 Defined Terms
As used in this Agreement, the following terms have the meanings
specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan or Borrowing bears interest at a rate determined by reference
to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (i) the LIBO Rate for such Interest
Period multiplied by (ii) the Statutory Reserve Rate.
"Administrative Agent" means BNY, in its capacity as administrative
agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Affiliate Agreements" means (a) The Administrative Services
Agreement, dated as of the Effective Date, between the Borrower and Assurance,
(b) The Management Contract, dated as of the Effective Date, between the
Borrower and HMO, and (c) the Administrative Services Agreement, dated as of the
Effective Date, between the Borrower and WellChoice Insurance of New Jersey,
Inc.
"Agreement" means this Credit and Guaranty Agreement, as the same may
be amended, supplemented or otherwise modified from time to time.
"Agreement Date" means the first date appearing in this Agreement.
"Alternate Base Rate" means, for any day, a rate per annum equal to
the greater of (i) the Prime Rate in effect on such day and (ii) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
1
"Applicable Margin" means (i) with respect to ABR Borrowings, the
percentage set forth below under the heading "ABR Margin" adjacent to the
appropriate Applicable Financial Strength Rating, and (ii) with respect to
Eurodollar Borrowings and fees payable under Section 3.3(c), the percentage set
forth below under the heading "Eurodollar and LC Fee Margin" adjacent to the
appropriate Applicable Financial Strength Rating:
=============================================================
Eurodollar
Applicable and LC Fee
Financial Strength Rating ABR Margin Margin
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**** BBB+ 0.000% 1.125%
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BBB 0.000% 1.250%
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* BBB or no rating 1.000% 2.250%
=============================================================
* Less than
**** Greater than or equal to
Changes in the Applicable Margin resulting from a change in the Applicable
Financial Strength Rating shall become effective immediately upon the effective
date of such change.
"Applicable Financial Strength Rating" means the lower of the
Financial Strength Rating of Assurance and, if rated, HMO.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicants" means Assurance and HMO; each an "Applicant".
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.4), and accepted by the Administrative Agent,
substantially in the form of Exhibit A or any other form approved by the
Administrative Agent.
"Assurance" means, after giving effect to the Conversion Transactions,
Empire HealthChoice Assurance, Inc., a New York corporation.
"Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"BNY" means The Bank of New York and its successors.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower" means WellChoice, Inc., a Delaware corporation.
"Borrowing" means Loans of the same Type made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
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"Borrowing Request" means a Borrowing Request, substantially in the
form of Exhibit C, or in such other form as shall be acceptable to the
Administrative Agent.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed, provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"Capitalization Percentage Ratio" means, at any time, the ratio
(expressed as a percentage) of (i) Consolidated Indebtedness at such time to
(ii) the sum of Consolidated Indebtedness and Consolidated Net Worth, in each
case at such time.
"Capital Lease Obligations" means, with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" means, at any time after the consummation of the
Conversion Transactions, (i) the ownership, directly or indirectly, beneficially
or of record, by any Person or group (within the meaning of the Securities
Exchange Act of 1934), other than the Fund or the Foundation, of securities
representing 10% or more of the aggregate ordinary voting power or 20% or more
of the economic interests represented by the issued and outstanding Equity
Interests of the Borrower on a fully diluted basis, (ii) the occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Borrower by Persons who were neither (a) nominated by the board of directors of
the Borrower nor (b) appointed by directors so nominated, or (iii) the failure
of the Borrower to own directly, beneficially and of record, 100% of the issued
and outstanding equity interests of Holdings on a fully diluted basis.
"Change in Law" means (i) the adoption of any law, rule or regulation
after the Agreement Date, (ii) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the Agreement Date or (iii) compliance by any Credit Party (or, for purposes of
Section 3.5(b), by any lending office of such Credit Party or by such Credit
Party's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the Agreement Date.
"Closing Date" means the date on which the conditions specified in
Section 5.1 are satisfied (or waived in accordance with Section 10.2).
"Co-Syndication Agents" means HSBC Bank USA and Wachovia Bank,
National Association, in their capacity as syndication agents for the Lenders
hereunder.
"Code" means the Internal Revenue Code of 1986.
"Commitment" means, with respect to each Lender, the commitment of
such Lender to make Loans and to participate in the Letter of Credit in an
aggregate outstanding amount not exceeding the amount of such Lender's
Commitment as set forth on Schedule 2.1, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Commitment, as applicable,
as such Commitment may be adjusted from time to time pursuant to Section 2.5 or
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pursuant to assignments by or to such Lender pursuant to Section 10.4. The
initial aggregate amount of the Commitments on the Agreement Date is set forth
on Schedule 2.1.
"Company Action Level" has the meaning set forth in the risk based
capital guidelines prescribed by the NAIC.
"Compliance Certificate" means a certificate, substantially in the
form of Exhibit E.
"Consolidated Charges" means, for any period, the aggregate (without
duplication) of the following, all as determined on a consolidated basis for the
Borrower and its subsidiaries in accordance with GAAP: (i) Consolidated Interest
Expense for such period, (ii) the aggregate of all payments of principal on
Consolidated Indebtedness required to have been made during such period (whether
or not such payments are actually made), (iii) the aggregate of all rental
obligations (not constituting Capital Lease Obligations) required to have been
paid during such period (whether or not said rental obligations are actually
paid), and (iv) the aggregate of all capital expenditures, excluding capital
expenditures related to the outsourcing of the Borrower's data center and
related system support services and maintenance, made during such period.
"Consolidated EBITDAR" means, for any period, the aggregate of (i)
Consolidated Net Income for such period plus (ii) the sum of Consolidated
Interest Expense, federal, state, local and other income taxes, depreciation,
amortization of intangible assets, rental expense, extraordinary or
non-recurring losses (solely to the extent related to the displacement of the
Borrower's operations from its previous headquarters at the World Trade Center),
and non-recurring restructuring costs related solely to the consummation of the
Conversion Transactions, in each case to the extent deducted in the calculation
of Consolidated Net Income.
"Consolidated Indebtedness" means, at any time, all Indebtedness of
the Borrower and its subsidiaries at such time, as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the interest
expense, both expensed and capitalized (including the interest component in
respect of Capital Lease Obligations), accrued or paid by the Borrower and its
subsidiaries during such period, as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income" means, for any period, net income of the
Borrower and its subsidiaries for such period, as determined on a consolidated
basis in accordance with GAAP (excluding extraordinary and non-recurring gains
and losses and gains and losses on the sale, transfer or other disposition of
assets, other than inventory and other assets sold, transferred, or otherwise
disposed of in the ordinary course of business).
"Consolidated Net Worth" means, at any time, the net worth of the
Borrower and its subsidiaries at such time, as determined on a consolidated
basis in accordance with GAAP (without regard to the requirements of Financial
Accounting Standards No. 115 issued by the Financial Accounting Standards Board
of the American Institute of Certified Public Accountants), excluding
Disqualified Equity Interests of the Borrower and its subsidiaries.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
The terms "Controlling" and "Controlled" have meanings correlative thereto.
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"Conversion" means the conversion of Old Empire to a for-profit
accident and health insurance company licensed under Article 42 of the New York
Insurance Law.
"Conversion Transaction Documents" means the Empire HealthChoice,
Inc., d/b/a Empire Blue Cross and Blue Shield Amended Plan of Conversion, dated
September 26, 2002, and all documents and exhibits referenced therein.
"Conversion Transactions" means the following series of transactions:
(a) the Conversion;
(b) the issuance by Empire HealthChoice, Inc. (immediately
following the Conversion) of 95% and 5% of its authorized capital stock to the
Fund and the Foundation, respectively;
(c) the transfer by the Fund and the Foundation of their shares
in Empire HealthChoice, Inc. to Holdings, a wholly-owned subsidiary of the
Borrower, in exchange for a corresponding amount of the Borrower's common stock,
such that, immediately after such transaction, the Fund and the Foundation shall
own 100% of the Borrower's common stock;
(d) the merger of Empire HealthChoice Assurance, Inc. (an
indirect, wholly owned subsidiary of Empire HealthChoice, Inc.) into Empire
HealthChoice, Inc., and the liquidation of WellChoice, Inc. (a subsidiary of
Empire HealthChoice, Inc. separate and distinct from the Borrower) into Empire
HealthChoice, Inc., with such merged corporation surviving under the name
"Empire HealthChoice Assurance, Inc.";
(e) the transfer of those assets and liabilities (which will be
of equal value) necessary for the Borrower to operate its business, including
real estate leases, furniture and equipment and vendor agreements, along with
their respective liabilities, and cash and other instruments, all as described
in the Conversion Transaction Documents, from the merged corporation (as
referenced above in subsection (d)) to the Borrower;
(f) the declaration and payment of a dividend in an amount not
exceeding $225,000,000 from the merged corporation (as referenced above in
subsection (d)) to Holdings and then from Holdings to the Borrower; and
(g) the sale of a portion of the Borrower's stock to the public
in a registered public offering.
"Credit Parties" means the Administrative Agent, the Issuing Bank,
the Co-Syndication Agents and the Lenders.
"Default" means any event or condition which constitutes an Event of
Default or that upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disqualified Equity Interest" means, with respect to any Person, any
Equity Interest of such Person, that, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or upon
the happening of any event or otherwise, (i) matures or is mandatorily
redeemable or subject to any mandatory repurchase requirement, pursuant to a
sinking fund obligation or otherwise, (ii) is redeemable or subject to any
mandatory repurchase requirement at
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the sole option of the holder thereof, or (iii) is convertible into or
exchangeable for (whether at the option of the issuer or the holder thereof) (a)
debt securities or (b) any Equity Interest referred to in (i) or (ii) above, in
each case under (i), (ii), or (iii) above at any time on or prior to the
Expiration Date.
"dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means the date on which the conditions specified in
Section 5.2 are satisfied (or waived in accordance with Section 10.2).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means, as to any Person, any liability,
contingent or otherwise (including any liability for damages, costs of
environmental remediation, fines, penalties or indemnities), of such Person
directly or indirectly resulting from or based upon (i) violation of any
Environmental Law, (ii) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (iii) exposure to any
Hazardous Materials, (iv) the release or threatened release of any Hazardous
Materials into the environment or (v) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"Equity Interest" means (i) shares of corporate stock, partnership
interests, membership interests, and any other interest that confers on a Person
the right to receive a share of the profits and losses of, or distribution of
assets of, the issuing Person, and (ii) all warrants, options or other rights to
acquire any Equity Interest set forth in clause (i) of this defined term (but
excluding any debt security that is convertible into, or exchangeable for, any
such Equity Interest).
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with any Loan Party or any of its subsidiaries, is
treated as a single employer under Section 414(b) or (c) of the Code or, solely
for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as
a single employer under Section 414 of the Code.
"ERISA Event" means (i) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30 day notice period is waived); (ii) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (iii)
the filing pursuant to Section 412(d) of the Code or Section 303(a) of ERISA of
an application for a waiver of the minimum funding standard with respect to any
Plan; (iv) the incurrence by any Loan Party, any of its subsidiaries, or any
ERISA Affiliate of any liability under Title IV of ERISA with respect to the
termination of any Plan; (v) the receipt by any Loan Party, any of its
subsidiaries, or any ERISA Affiliate from the PBGC or a plan administrator of
any notice relating to an intention to terminate any Plan or Plans or to appoint
a trustee to administer any Plan; (vi) the incurrence by any Loan Party, any of
its subsidiaries, or any ERISA Affiliate of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (vii)
the receipt by any Loan Party, any of its subsidiaries, or any ERISA Affiliate
of any notice, or the receipt by any
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Multiemployer Plan from any Loan Party, any of its subsidiaries, or any ERISA
Affiliate of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan or Borrowing bears interest at a rate determined by
reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article 8.
"Excluded Taxes" means, with respect to any Credit Party or any other
recipient of any payment to be made by or on account of any obligation of any
Loan Party under any Loan Document, (i) income or franchise taxes imposed on (or
measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Credit Party, in which its
applicable lending office is located, (ii) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which such Loan Party is located and (iii) in the case of a
Foreign Lender, any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 3.7(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from such Loan
Party with respect to such withholding tax pursuant to Section 3.7(a).
"Existing Letter of Credit and Guaranty Agreement" means the Letter of
Credit and Guaranty Agreement, dated as of January 28, 2002, among Empire
HealthChoice, Inc., Empire HealthChoice HMO, Inc. and Empire HealthChoice
Assurance, Inc., as applicants, WellChoice, Inc., as guarantor, the lenders
party thereto, The Bank of New York, as issuing bank, and The Bank of New York,
as administrative agent (as amended, supplemented or otherwise modified from
time to time).
"Expiration Date" means January 28, 2003, as such date may be
extended pursuant to Section 2.8(b).
"Federal Funds Effective Rate" means, for any day, a rate per annum
(expressed as a decimal, rounded upwards, if necessary, to the next higher 1/100
of 1%) 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 Reserve Bank of New York
on the Business Day next succeeding such day, provided that (i) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Effective 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
(ii) if such rate is not so published for any day, the Federal Funds Effective
Rate for such day shall be the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by it.
"Financial Officer" means, with respect to any Loan Party, the chief
financial officer, principal accounting officer, treasurer or controller of such
Loan Party.
"Financial Strength Rating" means the publicly available Financial
Strength Rating of Assurance or HMO, as applicable, as issued by S&P.
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"Fixed Charge Coverage Ratio" means, as of the last day of any fiscal
quarter, the ratio of (i) Consolidated EBITDAR to (ii) Consolidated Charges, in
each case for the period of four consecutive fiscal quarters then ending.
"Foreign Lender" means any Lender that is organized under the laws of
a jurisdiction other than that in which the applicable Loan Party is located.
For purposes of this definition, the United States of America, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"Foundation" means a New York not-for-profit corporation established
under the New York Insurance Law for charitable purposes.
"Fund" means the New York Public Asset Fund, a "public asset fund"
established by the New York Insurance Law.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, any agency, authority, instrumentality, regulatory body, court, central
bank or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government,
the Blue Cross and Blue Shield Association and the NAIC.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (ii) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (iii)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor as to enable the primary obligor
to pay such Indebtedness or other obligation or (iv) as an account party in
respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation, provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guaranteed" has a meaning correlative thereto.
"Guaranteed Obligations" has the meaning assigned to such term in
Section 11.1.
"Guaranty" means the guaranty by the Borrower as set forth in Article
11.
"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.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price swap, cap, collar,
hedging or other like arrangement.
-8-
"HMO" means Empire HealthChoice HMO, Inc., a New York corporation.
"Holdings" means WellChoice Holdings of New York, Inc. a New York
corporation.
"Indebtedness" means, with respect to any Person, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by or otherwise in respect of bonds, debentures, notes or
similar instruments, including seller paper, (iii) all obligations of such
Person upon which interest charges are customarily paid, (iv) all obligations of
such Person under conditional sale or other title retention agreements relating
to property acquired by such Person, (v) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of business), (vi) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (vii) all Guarantees by such Person of
Indebtedness of others, (viii) all Capital Lease Obligations of such Person,
(ix) all obligations, contingent or otherwise, of such Person as an account
party in respect of letters of credit and letters of guaranty, (x) the principal
balance outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product of such
Person where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease under GAAP, (xi) all
obligations, contingent or otherwise, of such Person in respect of bankers'
acceptances and (xii) to the extent not otherwise included, all net obligations
of such Person under Hedging Agreements. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitee" has the meaning assigned to such term in Section 10.3(b).
"Interest Election Request" means a request by the Borrower to convert
or continue a Borrowing in accordance with Section 3.2.
"Interest Payment Date" means (i) with respect to any ABR Loan, the
last day of each March, June, September and December, (ii) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Eurodollar Loan is a part and, in the case of a Eurodollar Loan
with an Interest Period of more than three months' duration, each day prior to
the last day of such Interest Period that occurs at intervals of three months'
duration after the first day of such Interest Period, and (iii) with respect to
all Loans, the Maturity Date.
"Interest Period" means, with respect to any Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect, provided that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day, unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, and (ii) any Interest
Period that commences on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the last calendar month
of such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes
-9-
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.
"Issuing Bank" means BNY, in its capacity as issuer of the Letter of
Credit.
"LC Disbursement" means a payment made by the Issuing Bank pursuant to
the Letter of Credit.
"LC Exposure" means, at any time, (i) with respect to all of the
Lenders, the sum, without duplication, of (a) the undrawn amount of the Letter
of Credit at such time plus (b) the aggregate amount of all LC Disbursements
that have not yet been reimbursed by or on behalf of the Applicants at such time
and (ii) with respect to each Lender, its Applicable Percentage of the amount
determined under clause (i).
"Lenders" means the Persons listed on Schedule 2.1 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Letter of Credit" means letter of credit number S00044262 issued on
January 28, 2002 by the Issuing Bank in favor of Forest City Myrtle Associates,
LLC, as beneficiary (and any successive renewals thereof).
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate of interest per annum as determined by the
Administrative Agent, equal to the rate, as reported by BNY to the
Administrative Agent, quoted by BNY to leading banks in the London interbank
market as the rate at which BNY is offering dollar deposits in an amount
approximately equal to its ratable share of such Eurodollar Borrowing for dollar
deposits with a maturity comparable to such Interest Period at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (i) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (ii) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement relating
to such asset and (iii) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"Loan Documents" means this Agreement, the Notes and the documentation
in respect of the Letter of Credit.
"Loan Parties" means the Borrower and the Applicants.
"Loans" means the loans referred to in Section 2.1 and made by the
Lenders to the Borrower pursuant to Section 2.4; each a "Loan".
"Margin Stock" has the meaning assigned to such term in Regulation U.
"Material Adverse Effect" means a material adverse effect on (i) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Loan Parties and their subsidiaries, taken as a whole, (ii) the business,
assets, operations, prospects or condition, financial or otherwise, of the Loan
Parties, taken as a whole, (iii) the ability of any Loan Party to perform any of
its obligations
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under any Loan Document or (iv) the rights of or benefits available to any
Credit Party under any Loan Document.
"Material Obligations" means Indebtedness (other than Indebtedness
under the Loan Documents) or other obligations of any one or more of the Loan
Parties or any of their subsidiaries in an aggregate principal amount exceeding
$10,000,000. For purposes of determining Material Obligations, the "principal
amount" of the obligations of any Loan Party or any of its subsidiaries in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that such Loan Party or such
subsidiary, as applicable, would be required to pay if such Hedging Agreement
were terminated at such time.
"Maturity Date" means October 16, 2003.
"MetroTech Lease" means the Agreement of Lease, dated as of January
17, 2002, by and between Forest City Myrtle Associates, LLC, as landlord, and
Empire HealthChoice, Inc. d/b/a Empire Blue Cross/Blue Shield, as tenant.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NAIC" means the National Association of Insurance Commissioners.
"Net Proceeds" means, with respect to any Prepayment Event, (i) the
cash proceeds received in respect of such Prepayment Event, including any cash
received in respect of any non-cash proceeds, but only as and when received,
(ii) net of the sum of (a) all fees and out of pocket expenses paid by the
Borrower and its subsidiaries to third parties in connection with such
Prepayment Event, (b) the amount of all payments required to be made by the
Borrower or any of its subsidiaries as a result of such Prepayment Event to
repay Indebtedness (other than Indebtedness under the Loan Documents) secured by
the assets that are the subject of such Prepayment Event and (c) the amount of
all taxes paid (or reasonably estimated to be payable) by the Borrower or any of
its subsidiaries and the amount of any cash reserves established by the Borrower
or any of its subsidiaries to fund contingent liabilities reasonably estimated
to be payable, as adjusted (no less than annually) from time to time, in each
case that are directly attributable to such Prepayment Event (as determined
reasonably and in good faith by the chief financial officer of the Borrower);
provided that, if the Borrower shall deliver a certificate of a Financial
Officer of the Borrower to the Administrative Agent at the time of such
Prepayment Event setting forth the Borrower's or such subsidiary's intent to use
the proceeds of the sale, transfer, lease or other disposition of the assets
that are the subject of such Prepayment Event to replace such assets with other
assets to be used in the same line of business within 180 days of receipt of
such proceeds and no Default shall have occurred and shall be continuing at the
time of such certificate or at any time on or before the proposed time of the
application of such proceeds or the Required Lenders shall have consented
thereto in writing, such proceeds shall not constitute Net Proceeds except to
the extent not so used at the end of such 180 day period, at which time such
proceeds shall be deemed Net Proceeds.
"Note" means, with respect to each Lender, a promissory note
evidencing such Lender's Loans payable to the order of such Lender (or, if
required by such Lender, to such Lender and its registered assigns)
substantially in the form of Exhibit D.
"Obligations" means (i) the due and punctual payment of (a) all
obligations in respect of the principal of and premium, if any, and interest
(including interest accruing during the pendency
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of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the Loans,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, and (b) all other monetary obligations,
including reimbursement obligations in respect of LC Disbursements, fees,
commissions, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), in
each case of the Loan Parties under the Loan Documents, and (ii) the due and
punctual performance of all covenants, agreements, obligations and liabilities
of the Loan Parties under or pursuant to the Loan Documents.
"Old Empire" means, prior to the Conversion, Empire HealthChoice,
Inc., a New York not-for-profit health services corporation licensed under
Article 43 of the New York Insurance Law.
"Other Taxes" means any and all current or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, the Loan Documents.
"Participant" has the meaning assigned to such term in Section
10.4(e).
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 6.4;
(b) landlords', vendors', carriers', warehousemen's, mechanics',
materialmen's, repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not overdue by
more than 30 days or are being contested in compliance with Section 6.4;
(c) pledges and deposits made in the ordinary course of business
in compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts
(other than contracts for the payment of money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature, in each case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute
an Event of Default under paragraph (k) of Article 8;
(f) easements, zoning restrictions, rights of way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of any Loan Party or its subsidiaries;
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(g) Liens in favor of a banking institution arising as a matter
of law encumbering deposits (including the right of set off) held by such
banking institution in the ordinary course of its banking business and which are
within the general parameters customary in the banking industry;
(h) Liens on the assets of any Loan Party in favor of any other
Loan Party; and
(i) Liens on Margin Stock to the extent that a prohibition on
such Liens would violate Regulation U.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which any Loan Party,
any of its subsidiaries, or any ERISA Affiliate is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Prepayment Event" means any sale, transfer, lease or other
disposition (including pursuant to a sale and leaseback transaction) of any
property or asset of the Borrower or any of its subsidiaries, other than
dispositions described in paragraphs (a), (b), (c) and (d) of Section 7.4.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by BNY as its prime commercial lending rate at its
principal office in New York City; each change in the Prime Rate being effective
from and including the date such change is publicly announced as being
effective. The Prime Rate is not intended to be lowest rate of interest charged
by BNY in connection with extensions of credit to borrowers.
"Register" has the meaning assigned to such term in Section 10.4(c).
"Regulation D" means Regulation D of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation T" means Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" means Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" means Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.
"Reimbursement Date" has the meaning assigned to such term in Section
2.8(d).
"Reimbursement Payment" has the meaning assigned to such term in
Section 2.8(d).
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"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means Lenders having unused Commitments, LC
Exposure and outstanding Loans representing at least 51% of the sum of the
unused Commitments, LC Exposure and outstanding Loans of all Lenders.
"Revolving Credit Exposure" means, with respect to any Lender at any
time, the sum of the aggregate outstanding principal amount of such Lender's
Loans and LC Exposure at such time.
"SAP" means the rules and procedures prescribed or permitted by the
relevant state of domicile for determining an insurer's financial condition or
results of operation for statutory purposes.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, or any successor thereto.
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as "Eurocurrency liabilities" in
Regulation D). Such reserve percentages shall include those imposed pursuant to
Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power is or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held by the parent or one or more
subsidiaries of the parent.
"Taxes" means any and all current or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
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Section 1.2 Classification of Loans and Borrowings
For purposes of this Agreement, Loans may be classified and referred
to by Type (e.g., a "Eurodollar Loan" or an "ABR Loan") and Borrowings may also
be classified and referred to by Type (e.g., a "Eurodollar Borrowing" or an "ABR
Borrowing").
Section 1.3 Terms Generally
The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation". The word "will" shall be construed to have
the same meaning and effect as the word "shall". Unless the context requires
otherwise, (i) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified, (ii) any definition of or reference to any law shall be
construed as referring to such law as from time to time amended and any
successor thereto and the rules and regulations promulgated from time to time
thereunder, (iii) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (iv) the words "herein", "hereof"
and "hereunder", and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (v)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, and (vi) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
Section 1.4 Accounting Terms; GAAP or SAP
Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with, as
applicable, GAAP or SAP as in effect from time to time, provided that, if the
Loan Parties notify the Administrative Agent that the Loan Parties request an
amendment to any provision hereof to eliminate the effect of any change
occurring after the Agreement Date in, as applicable, GAAP or SAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Loan Parties that the Required Lenders request an amendment
to any provision hereof for such purpose), regardless of whether any such notice
is given before or after such change in, as applicable, GAAP or SAP or in the
application thereof, then such provision shall be interpreted on the basis of,
as applicable, GAAP or SAP as in effect and applied immediately before such
change shall have become effective until such notice shall have been withdrawn
or such provision amended in accordance herewith. Unless the context otherwise
requires, any reference to a fiscal period shall refer to the relevant fiscal
period of the applicable Loan Party.
ARTICLE 2.
THE CREDITS
Section 2.1 Commitments
Subject to the terms and conditions hereof, each Lender agrees to make
Loans to the Borrower in dollars from time to time during the Availability
Period in an aggregate principal amount
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that will not result in such Lender's Revolving Credit Exposure exceeding such
Lender's Commitment. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow Loans.
Section 2.2 Loans and Borrowings
(a) Each Loan shall be made as part of a Borrowing consisting of
Loans made by the Lenders ratably in accordance with their respective
Commitments. The failure of any Lender to make any Loan required to be made by
it shall not relieve any other Lender of its obligations hereunder, provided
that the Commitments of the Lenders are several, and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(b) Subject to Section 3.4, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans, as applicable, in each case as the
Borrower may request in accordance herewith. Each Lender at its option may make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan, provided that any exercise of such option shall
not affect the obligation of the Borrower to repay such Loan in accordance with
the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $500,000 and not less than $5,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $500,000 and not less than $1,000,000, provided that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments or in an aggregate amount that is required to
finance the reimbursement of an LC Disbursement. Borrowings of more than one
Type may be outstanding at the same time, provided that there shall not at any
time be more than a total of 5 Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
Section 2.3 Requests for Borrowings
(a) To request a Borrowing, the Borrower shall deliver to the
Administrative Agent a signed Borrowing Request (or shall notify the
Administrative Agent by telephone, to be promptly confirmed by the delivery to
the Administrative Agent of a signed Borrowing Request) (i) in the case of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of the proposed Borrowing or (ii) in the case of
an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business
Day before the date of the proposed Borrowing. Each such Borrowing Request
(including each such telephonic request) shall be irrevocable and shall specify
the following information in compliance with Section 2.2:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
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(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.4.
(b) If no election as to the Type of Borrowing is specified, then
the requested Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested Eurodollar Borrowing, then the Borrower
shall be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
Section 2.4 Funding of Borrowings
(a) Each Lender shall make each Loan to be made by it hereunder
on the proposed date thereof by wire transfer of immediately available funds by
1:00 p.m., New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. Subject to
Section 5.2, the Administrative Agent will make such Loans available to the
Borrower by promptly crediting or otherwise transferring the amounts so
received, in like funds, to an account of the Borrower maintained with the
Administrative Agent and designated by the Borrower in the applicable Borrowing
Request, provided that ABR Loans made to finance the reimbursement of an LC
Disbursement shall be remitted by the Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with Section 2.4(a) or Section 2.8(d)
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to
but excluding the date of payment to the Administrative Agent, at (i) in the
case of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of the Borrower, the interest rate
that would be otherwise applicable to such Borrowing. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
Section 2.5 Termination and Reduction of Commitments
(a) Unless previously terminated, the Commitments shall terminate
on the Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments, provided that (i) the Borrower shall not terminate or
reduce the Commitments if, after giving effect to any concurrent prepayment of
the Loans in accordance with Section 2.7, the sum of
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the Revolving Credit Exposures would exceed the total Commitments, and (ii) each
such reduction of the Commitments shall be in an amount that is an integral
multiple of $1,000,000 and not less than $5,000,000.
(c) In addition to any termination or reduction of the
Commitments under paragraphs (a) and (b) of this Section, the Commitments shall
be reduced as required under Section 2.7(b).
(d) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable, provided that a notice
of termination of the Commitments delivered by the Borrower may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Each reduction, and any termination, of the
Commitments shall be permanent and each reduction of the Commitments shall be
made ratably among the Lenders in accordance with their respective Commitments.
Section 2.6 Repayment of Loans; Evidence of Debt
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Loan on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the debt of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period, if any, applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) or (c) of this Section shall, to the extent not inconsistent with
any entries made in the Notes, be prima facie evidence of the existence and
amounts of the obligations recorded therein, provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that the Loans made by it be evidenced
by a Note. In such event, the Borrower shall prepare, execute and deliver to
such Lender, a Note payable to the order of such Lender, substantially in the
form of Exhibit D. In addition, if requested by a Lender, its Note may be made
payable to such Lender and its registered assigns in which case all Loans
evidenced by such Note and interest thereon shall at all times (including after
assignment pursuant to Section
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10.4) be represented by one or more Notes in like form payable to the order of
the payee named therein and its registered assigns.
Section 2.7 Prepayment of Loans
(a) The Borrower shall have the right at any time and from time
to time to prepay any Borrowing in whole or in part, subject to the requirements
of this Section.
(b) In the event and on each occasion that any Net Proceeds are
received by or on behalf of any Loan Party or any of its subsidiaries in respect
of any Prepayment Event, then, immediately after such Net Proceeds are received,
the Commitments shall be automatically reduced, and the Borrower shall prepay
Borrowings in an aggregate amount equal to such Net Proceeds.
(c) In the event of any partial reduction or termination of the
Commitments, then (i) at or prior to the date of such reduction or termination,
the Administrative Agent shall notify the Borrower and the Lenders of the sum of
the Revolving Credit Exposures after giving effect thereto and (ii) if such sum
would exceed the total Commitments after giving effect to such reduction or
termination, then the Borrower shall, on the date of such reduction or
termination, prepay Borrowings in an amount sufficient to eliminate such excess.
(d) The Borrower shall notify the Administrative Agent by
telephone (confirmed by facsimile) of any prepayment hereunder (i) in the case
of a prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of prepayment or (ii) in the case
of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City
time, one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid, provided that, if a notice of
prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.5, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.5. Promptly following receipt of any such notice relating to a
Borrowing, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing under Section 2.7(a) shall be
in an integral multiple of $1,000,000 and not less than $5,000,000. Prepayments
shall be accompanied by accrued interest to the extent required by Section 3.1.
Section 2.8 Letter of Credit
(a) General. On January 28, 2002, the Issuing Bank issued the
Letter of Credit. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any other agreement
submitted by the Loan Parties to, or entered into by the Loan Parties with, the
Issuing Bank relating to the Letter of Credit, the terms and conditions of this
Agreement shall control.
(b) Expiration Date. The Letter of Credit shall expire at or
prior to the close of business on the Expiration Date and provides that it shall
be subject to automatic renewal for additional one-year periods unless, pursuant
to the terms of the Letter of Credit, the Issuing Bank shall have notified the
beneficiary thereof at least 30 days prior to the then Expiration Date that the
Letter of Credit will not be renewed. If, as at (but immediately prior to) the
time of automatic renewal, the Letter of Credit expiration date is prior to the
Maturity Date, and provided that, as at such time, (i) the Issuing Bank, in its
sole and absolute discretion, has agreed to extend the Letter of Credit, (ii)
the Commitments have not been terminated or otherwise allowed to lapse, (iii)
the aggregate
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Commitments are not less than the sum of the Revolving Credit Exposures and (iv)
the Issuing Bank has received a certificate of a Financial Officer of the
Borrower certifying that no Default has occurred and is continuing and the
Issuing Bank has not received written notice from the Administrative Agent, any
Lender or any Loan Party that a Default has occurred and is continuing, the
Letter of Credit will be extended for one year. If, as at (but immediately prior
to) the time of automatic renewal, (1) the Letter of Credit expiration date is
on or after the Maturity Date, (2) the Commitments have been terminated or
otherwise allowed to lapse, (3) the Aggregate Commitments are less than the sum
of the Revolving Credit Exposures or (4) the Issuing Bank has not received a
certificate of a Financial Officer of the Borrower certifying that no Default
has occurred and is continuing or the Issuing Bank has received written notice
from the Administrative Agent, any Lender or any Loan Party that a Default has
occurred and is continuing, the Letter of Credit will not be extended unless
Lenders representing 100% of the LC Exposure shall have notified the
Administrative Agent that such Lenders have consented to such extension at least
60 days prior to the expiration of the Letter of Credit (provided that, as at
(but immediately prior to) the time of automatic renewal, the Borrower shall
have satisfied all conditions set forth in such consent to such extension) and
the Issuing Bank, in its sole and absolute discretion, shall have consented to
such extension.
(c) Participations. The Issuing Bank hereby grants to each Lender
on the Effective Date, and each Lender hereby acquires from the Issuing Bank on
the Effective Date, a participation in the Letter of Credit equal to such
Lender's Applicable Percentage of the aggregate amount available to be drawn
under the Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of the Issuing Bank, such Lender's
Applicable Percentage of each LC Disbursement made by the Issuing Bank and not
reimbursed by the Applicants on the date due as provided in paragraph (d) of
this Section, or of any reimbursement payment required to be refunded to the
Applicants for any reason. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
the Letter of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including any amendment, renewal or extension of
the Letter of Credit or the occurrence and continuance of a Default or reduction
or termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever; provided
that no Lender shall be obligated to make any payment to the Administrative
Agent for any wrongful LC Disbursement made by the Issuing Bank as a result of
acts or omissions constituting willful misconduct or gross negligence on the
part of the Issuing Bank.
(d) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of the Letter of Credit, then the Issuing Bank shall
notify the Applicants to reimburse the Issuing Bank therefor, in which case the
Applicants shall reimburse such LC Disbursement by paying to the Administrative
Agent, for the account of the Issuing Bank, an amount equal to such LC
Disbursement and any accrued interest thereon (the "Reimbursement Payment") (i)
if the Applicants receive such notice prior to 2:00 p.m., New York City time, by
4:00 p.m., New York City time, on the Business Day that the Applicants receive
such notice and (ii) if the Applicants receive such notice on or after 2:00
p.m., New York City time, by 12:00 noon, New York City time on the following
Business Day (the "Reimbursement Date"), whereupon the Administrative Agent will
make such amount available to the Issuing Bank by promptly crediting or
otherwise transferring the amounts so received, in like funds, to the Issuing
Bank for the purpose of repaying such Reimbursement Payment. If for any reason
the Applicants shall have failed to make full payment of the Reimbursement
Payment to the Administrative Agent on the Reimbursement Date, (i) the
Administrative Agent shall notify each Lender (other than the Issuing Bank) of
the details thereof and of the amount of such Lender's Applicable Percentage of
the unpaid Reimbursement Payment and (ii) each such Lender shall, whether
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or not any Default shall have occurred and be continuing, any representation or
warranty shall be accurate, or any other matter whatsoever, pay to the
Administrative Agent for the account of the Issuing Bank the amount of such
Lender's Applicable Percentage of the unpaid Reimbursement Payment by wire
transfer of immediately available funds to the account of the Administrative
Agent most recently designated by it for such purpose no later than (A) the
Business Day that such Lender receives such notice, if such notice is received
prior to 4:00 p.m., New York City time, on the day of receipt or (B) the
Business Day immediately following the day that such Lender receives such
notice, if such notice is not received prior to such time on the day of receipt.
The obligation of each Lender to make such payments shall be absolute and
unconditional. The Administrative Agent will make such payments available to the
Issuing Bank by promptly crediting or otherwise transferring the amounts so
received, in like funds, to the Issuing Bank for the purpose of repaying in full
the Reimbursement Payment.
(e) Obligations Absolute. The Applicants' obligation to reimburse
LC Disbursements as provided in paragraph (d) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of the Letter of
Credit or this Agreement, or any term or provision therein or herein, (ii) any
draft or other document presented under the Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under the
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of the Letter of Credit or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Applicants' obligations
hereunder. Neither any Credit Party nor any of their respective Related Parties
shall have any liability or responsibility by reason of or in connection with
the issuance or transfer of the Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances referred
to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to the Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Bank;
provided that the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Applicants to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Applicants to the extent permitted by applicable law) suffered by the Applicants
that are caused by the Issuing Bank's failure to exercise care when determining
whether drafts and other documents presented under the Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or willful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of the Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of the
Letter of Credit.
(f) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under the Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Applicants by telephone (confirmed by
facsimile) of such demand for payment and whether the Issuing Bank has
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made or will make an LC Disbursement thereunder; provided that any failure to
give or delay in giving such notice shall not relieve the Applicants of their
obligation to reimburse the Issuing Bank and the Lenders with respect to any
such LC Disbursement.
(g) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Applicants shall reimburse such LC Disbursement
in full on the date such LC Disbursement is made, the unpaid amount thereof
shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Applicants reimburse
such LC Disbursement, at a rate per annum then applicable to ABR Loans, provided
that, if the Applicants fail to reimburse such LC Disbursement when due pursuant
to paragraph (d) of this Section, then Section 3.1(b) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.
(h) Cash Collateral. If any Event of Default shall occur and be
continuing, on the Business Day that the Applicants receive notice from the
Administrative Agent or the Required Lenders demanding the deposit of cash
collateral pursuant to this paragraph, the Applicants shall deposit in an
account with the Administrative Agent, in the name of the Administrative Agent
and for the benefit of the Lenders, an amount in cash equal to the LC Exposure
as of such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default described
in paragraph (h) or (i) of Article 8. Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
obligations of the Applicants under this Agreement. The Administrative Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Such deposit shall not bear interest, nor shall
the Administrative Agent be under any obligation whatsoever to invest the same,
provided that, at the request of the Applicants, such deposit shall be invested
by the Administrative Agent in direct short-term obligations of, or short-term
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America, in each case maturing no later than
the then Expiration Date of the Letter of Credit. Interest or profits, if any,
on such investments shall accumulate in such account. Moneys in such account
shall be applied by the Administrative Agent to reimburse the Issuing Bank for
LC Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Applicants for the LC Exposure plus any accrued and unpaid interest thereon
at such time together with all other obligations of the Applicants under this
Agreement. If the Applicants are required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the
Applicants within three Business Days upon request of the Applicants after all
Events of Default have been cured or waived.
Section 2.9 Payments Generally; Pro Rata Treatment; Sharing of Setoffs
(a) Each Loan Party shall make each payment required to be made by
it hereunder or under any other Loan Document (whether of principal of Loans, LC
Disbursements, interest or fees, or of amounts payable under Sections 3.5, 3.6,
3.7 or 10.3, or otherwise) prior to 12:00 noon, New York City time (except as
otherwise provided in Section 2.8(d)), on the date when due, in immediately
available funds, without setoff or counterclaim. Any amounts received after such
time on any date may, in the discretion of the Administrative Agent, be deemed
to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be
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made to the Administrative Agent at its office at One Wall Street, New York, New
York, or such other office as to which the Administrative Agent may notify the
other parties hereto, except payments to be made to the Issuing Bank as
expressly provided herein and except that payments pursuant to Sections 3.5,
3.6, 3.7 and 10.3 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal of Loans,
unreimbursed LC Disbursements, interest, fees and commissions then due
hereunder, such funds shall be applied (i) first, towards payment of interest,
fees and commissions then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest, fees and commissions then
due to such parties and (ii) second, towards payment of principal of Loans and
unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal of Loans and
unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of, or
interest on, any of its Loans or participations in LC Disbursements or interest
thereon resulting in such Lender receiving payment of a greater proportion of
the aggregate amount of its Loans and participations in LC Disbursements and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Loans and participations in LC Disbursements of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of, and accrued interest on, their respective Loans and
participations in LC Disbursements, provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Loan Parties pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Loan
Parties or any Affiliate thereof (as to which the provisions of this paragraph
shall apply). Each Loan Party consents to the foregoing and agrees, to the
extent it may effectively do so under applicable law, that any Lender acquiring
a participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
a Loan Party prior to the date on which any payment is due to the Administrative
Agent for the account of the applicable Credit Parties hereunder that such Loan
Party will not make such payment, the Administrative Agent may assume that such
Loan Party has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to such Credit Parties the amount due.
In such event, if such Loan Party has not in fact made such payment, then each
such Credit Party severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Credit Party with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
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greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
(e) If any Credit Party shall fail to make any payment required to
be made by it pursuant to Section 2.4(b) or 2.8(d), then the Administrative
Agent may, in its discretion (notwithstanding any contrary provision hereof),
apply any amounts thereafter received by the Administrative Agent for the
account of such Credit Party to satisfy such Credit Party's obligations under
such Sections until all such unsatisfied obligations are fully paid.
ARTICLE 3.
INTEREST, FEES, YIELD PROTECTION, ETC.
Section 3.1 Interest
(a) The Loans comprising each ABR Borrowing shall bear interest at
the Alternate Base Rate plus the Applicable Margin. The Loans comprising each
Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the
Interest Period in effect for such Borrowing plus the Applicable Margin.
(b) Notwithstanding the foregoing, if any principal of or interest
on any Loan, any reimbursement obligation in respect of any LC Disbursement or
any fee or other amount payable by the Loan Parties hereunder is not paid when
due, whether at stated maturity, upon acceleration or otherwise, such overdue
amount shall bear interest, after as well as before judgment, at a rate per
annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in paragraph (a) of this
Section or (ii) in the case of any other amount, 2% plus the rate applicable to
ABR Borrowings as provided in paragraph (a) of this Section.
(c) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan, provided that (i) interest accrued
pursuant to paragraph (b) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan, accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment, and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
(d) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent clearly demonstrable error.
Section 3.2 Interest Elections Relating to Borrowings
(a) Each Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a different Type
or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
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elect Interest Periods therefor, all as provided in this Section. The Borrower
may elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower
shall deliver to the Administrative Agent a signed Interest Election Request in
a form approved by the Administrative Agent (or notify the Administrative Agent
by telephone, to be promptly confirmed by delivery to the Administrative Agent
of a signed Interest Election Request) by the time that a Borrowing Request
would be required under Section 2.3 if the Borrower were requesting a Borrowing
of the Type resulting from such election to be made on the effective date of
such election.
(c) Each such telephonic and written Interest Election Request
shall be irrevocable and shall specify the following information:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified pursuant
to clauses (iii) and (iv) of this paragraph shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to
such Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing,
the Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request prior to the end of the Interest Period applicable thereto, then, unless
such Borrowing is repaid as provided herein, at the end of such Interest Period,
such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any
contrary provision hereof, if an Event of Default has occurred and is continuing
and the Administrative Agent, at the request of the Required Lenders, so
notifies the Borrower, then, so long as an Event of Default is continuing, (i)
no outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted
to an ABR Borrowing at the end of the Interest Period applicable thereto.
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Section 3.3 Fees
(a) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender, a ticking fee, which shall accrue at a rate per annum
equal to 0.125% on the daily amount of the unused Commitment of such Lender
during the period from and including the Closing Date to but excluding the
earlier to occur of (i) the Effective Date and (ii) date on which such
Commitment terminates. Accrued ticking fees shall be payable in arrears on the
last day of March, June, September and December of each year, each date on which
the Commitments are permanently reduced, on the date on which the Commitments
terminate and the Effective Date, commencing on the first such date to occur
after the date hereof. All ticking fees shall be computed on the basis of a year
of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(b) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender, a commitment fee, which shall accrue at a rate per annum
equal to 0.250% on the daily amount of the unused Commitment of such Lender
during the period from and including the Effective Date to but excluding the
date on which such Commitment terminates. Accrued commitment fees shall be
payable in arrears on the last day of March, June, September and December of
each year, each date on which the Commitments are permanently reduced and on the
date on which the Commitments terminate, commencing on the first such date to
occur after the date hereof. All commitment fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(c) The Applicants agree to pay (i) to the Administrative Agent for
the account of each Lender, a letter of credit fee, which shall accrue at rate
per annum equal to the Applicable Margin on the average daily amount of such
Lender's LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the Effective Date to but
excluding the date on which such Lender ceases to have any LC Exposure and (ii)
to the Issuing Bank for its own account a fronting fee, which shall accrue at
the rate or rates per annum separately agreed upon between the Applicants and
the Issuing Bank on the average daily amount of the LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the date on which there
ceases to be any LC Exposure, as well as the Issuing Bank's standard fees with
respect to the amendment, renewal, transfer or extension of the Letter of Credit
or processing of drawings thereunder. Accrued letter of credit fees and fronting
fees shall be payable in arrears on the last day of March, June, September and
December of each year, commencing on the first such date to occur after the
Effective Date, and on each date on which the Commitments are reduced or
terminated, and any such fees accruing after the date on which the Commitments
terminate shall be payable on demand. Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within 10 days after demand. All
letter of credit fees and fronting fees shall be computed on the basis of a year
of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). Notwithstanding anything
to the contrary herein, if an Event of Default has occurred and is continuing
and the Administrative Agent, at the request of the Required Lenders, in the
case of letter of credit fees, or the Issuing Bank, in the case of fronting
fees, so notifies the Applicants, then, so long as such Event of Default is
continuing, all letter of credit fees and fronting fees shall be calculated at a
rate per annum equal to 2% plus the rate otherwise applicable thereto and shall
be payable on demand.
(d) All fees and other amounts payable hereunder shall be paid on
the dates due, in immediately available funds. Fees and other amounts paid shall
not be refundable under any circumstances.
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Section 3.4 Alternate Rate of Interest
If prior to the commencement of any Interest Period for a Eurodollar
Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO
Rate, as applicable, for such Interest Period; or
(b) the Administrative Agent is advised by Required Lenders
that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such
Interest Period will not adequately and fairly reflect the cost of making
or maintaining their Loans included in such Borrowing for such Interest
Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or facsimile as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
Section 3.5 Increased Costs; Illegality
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Credit Party (except any such
reserve requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Credit Party or the London interbank
market any other condition affecting this Agreement, any Eurodollar Loans
made by such Credit Party or any participation therein or the Letter of
Credit or any participation therein.
and the result of any of the foregoing shall be to increase the cost to such
Credit Party of making or maintaining any Eurodollar Loan or the cost to such
Credit Party of participating in or maintaining the Letter of Credit hereunder
or to increase the cost to such Credit Party or to reduce the amount of any sum
received or receivable by such Credit Party hereunder (whether of principal,
interest or otherwise), then the Loan Parties will pay to such Credit Party such
additional amount or amounts as will compensate such Credit Party for such
additional costs incurred or reduction suffered.
(b) If any Credit Party reasonably determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Credit Party's capital or on the capital of such Credit
Party's holding company, if any, as a consequence of this Agreement or the Loans
made, the Letter of Credit issued or the participations therein held, by such
Credit Party to a level below that which such Credit Party or such Credit
Party's holding company could have achieved but for such Change in Law (taking
into consideration such Credit Party's policies and the policies of such Credit
Party's holding company with respect to capital adequacy), then from time to
time the Loan Parties will pay to such Credit Party such additional amount or
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amounts as will compensate such Credit Party or such Credit Party's holding
company for any such reduction suffered.
(c) A certificate of a Credit Party setting forth the amount or
amounts necessary to compensate such Credit Party or its holding company, as
applicable, as specified in paragraph (a) or (b) of this Section shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Loan Parties shall pay such Credit Party the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Credit Party to demand
compensation pursuant to this Section shall not constitute a waiver of such
Credit Party's right to demand such compensation.
(e) Notwithstanding any other provision of this Agreement, if,
after the Agreement Date, any Change in Law shall make it unlawful for any
Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by such Lender
hereunder (or be continued for additional Interest Periods) and ABR Loans
will not thereafter (for such duration) be converted into Eurodollar Loans,
whereupon any request for a Eurodollar Borrowing or to convert an ABR
Borrowing to a Eurodollar Borrowing or to continue a Eurodollar Borrowing,
as applicable, for an additional Interest Period shall, as to such Lender
only, be deemed a request for an ABR Loan (or a request to continue an ABR
Loan as such for an additional Interest Period or to convert a Eurodollar
Loan into an ABR Loan, as applicable), unless such declaration shall be
subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar
Loans made by it be converted to ABR Loans, in which event all such
Eurodollar Loans shall be automatically converted to ABR Loans, as of the
effective date of such notice as provided in the last sentence of this
paragraph.
In the event any Lender shall exercise its rights under clause (i) or (ii) of
this paragraph, all payments and prepayments of principal that would otherwise
have been applied to repay the Eurodollar Loans that would have been made by
such Lender or the converted Eurodollar Loans of such Lender shall instead be
applied to repay the ABR Loans made by such Lender in lieu of, or resulting from
the conversion of, such Eurodollar Loans, as applicable. For purposes of this
paragraph, a notice to the Borrower by any Lender shall be effective as to each
Eurodollar Loan made by such Lender, if lawful, on the last day of the Interest
Period currently applicable to such Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt by the Borrower.
Section 3.6 Break Funding Payments
In the event of (a) the payment or prepayment (voluntary or
otherwise) of any principal of any Eurodollar Loan other than on the last day of
an Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, or (c) the failure to borrow,
convert, continue or prepay any Eurodollar Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.7(d) and is revoked in accordance therewith),
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then, in any such event, the Borrower shall compensate each Lender for the loss,
cost and expense attributable to such event. In the case of a Eurodollar Loan,
such loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest that would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest that would accrue on such principal
amount for such period at the interest rate that such Lender would bid were it
to bid, at the commencement of such period, for dollar deposits of a comparable
amount and period from other banks in the eurodollar market. A certificate of
any Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
Section 3.7 Taxes
(a) Any and all payments by or on account of any obligation of
any Loan Party hereunder and under any other Loan Document shall be made free
and clear of and without deduction for any Indemnified Taxes or Other Taxes,
provided that, if such Loan Party shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that, after making all required deductions (including
deductions applicable to additional sums payable under this Section), the
applicable Credit Party receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Loan Party shall make such
deductions and (iii) such Loan Party shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Loan Parties shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) Each Loan Party shall indemnify each Credit Party, within 10
days after written demand therefor, for the full amount of any Indemnified Taxes
or Other Taxes paid by such Credit Party on or with respect to any payment by or
on account of any obligation of such Loan Party under the Loan Documents
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to a Loan Party by a Credit Party, or by
the Administrative Agent on its own behalf or on behalf of a Credit Party, shall
be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by a Loan Party to a Governmental Authority, such Loan Party
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
relevant Loan Party is located, or any treaty to which such jurisdiction is a
party, with respect to payments under the Loan Documents shall
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deliver to such Loan Party (with a copy to the Administrative Agent), at the
time or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by such Loan
Party as will permit such payments to be made without withholding or at a
reduced rate.
Section 3.8 Mitigation Obligations
(a) If any Lender requests compensation under Section 3.5, or if
any Loan Party is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.7,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans or the Letter of Credit (or any
participation therein) hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or Affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 3.5 or 3.7, as applicable, in the future and
(ii) would not subject such Lender or any of its Affiliates to any unreimbursed
cost or expense and would not otherwise be disadvantageous to such Lender or any
of its Affiliates. The Loan Parties hereby agree to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
The Borrower (prior to the Effective Date) and each Loan Party
(on and after the Effective Date) represents and warrants to the Credit Parties
that:
Section 4.1 Organization; Powers
(a) It is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite power
and authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
(b) Except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, each of its subsidiaries that is not a Loan Party is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and is qualified to do business in, and is in good standing in,
every jurisdiction where such qualification is required.
Section 4.2 Authorization; Enforceability
The execution, delivery and performance of its obligations under
the Loan Documents to which it is a party are within its corporate, partnership
or other analogous powers and have been duly authorized by all necessary
corporate, partnership or other analogous and, if required, equity holder
action. Each Loan Document to which it is a party has been duly executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally.
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Section 4.3 Governmental Approvals; No Conflicts
The execution, delivery and performance of its obligations under
the Loan Documents to which it is a party (i) do not require any consent or
approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or made and are in
full force and effect, (ii) will not violate any applicable law or regulation or
its charter, by-laws or other organizational documents or any order of any
Governmental Authority applicable to it or any of its subsidiaries, (iii) will
not violate or result in a default under any material indenture, agreement or
other instrument binding upon it or any of its subsidiaries or its or any of its
subsidiaries assets, or give rise to a right thereunder to require any payment
to be made by it or any of its subsidiaries, and (iv) will not result in the
creation or imposition of any Lien on any assets of it or its subsidiaries
(other than Liens permitted by Section 7.2).
Section 4.4 Financial Condition; No Material Adverse Change
(a) Old Empire has heretofore furnished to the Credit Parties (i)
its consolidated balance sheet and statements of income, changes in reserves for
policyholders' protection and cash flows as of and for the six months ended June
30, 2002, reported on by Ernst & Young LLP, independent public accountants, and
(ii) its consolidated balance sheet and statements of income, changes in
reserves for policyholders' protection and cash flows as of and for the fiscal
year ended December 31, 2001, reported on by Ernst & Young LLP, independent
public accountants. The consolidated financial statements referred to in clauses
(i) and (ii) above present fairly, in all material respects, the financial
position and results of operations and cash flows of Old Empire and its
consolidated subsidiaries as of the dates and for the indicated periods in
accordance with GAAP.
(b) Since June 30, 2002, there has been no material adverse
change in the business, assets, operations, prospects or condition, financial or
otherwise, of (i) prior to the consummation of the Conversion Transactions, Old
Empire and its subsidiaries, taken as a whole, and (ii) on and after the
consummation of the Conversion Transactions, (A) the Borrower and its
subsidiaries, taken as a whole, or (B) the Loan Parties, taken as a whole.
Section 4.5 Properties
(a) It and its subsidiaries each has good title to, or valid
leasehold interests in, all its real and personal property material to its
business, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
(b) It and its subsidiaries each owns, or is entitled to use, all
trademarks, trade names, copyrights, patents and other intellectual property
material to its business, and the use thereof by it and its subsidiaries does
not infringe upon the rights of any other Person, except for any such
infringements that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
Section 4.6 Litigation and Environmental Matters
(a) There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to its knowledge,
threatened against or affecting it or any of its subsidiaries (i) that could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect or (ii) that involve the Letter of Credit, any Loan
Document or, except as set forth on Schedule 4.6, the Conversion Transactions.
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(b) Except with respect to any matters that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, neither it nor any of its subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
Section 4.7 Compliance with Laws and Agreements; No Default
(a) It and its subsidiaries each is in compliance with all laws,
regulations, directives and orders of any Governmental Authority applicable to
it or its property and all indentures, agreements and other instruments binding
upon it or its property, except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(b) No Default has occurred and is continuing.
Section 4.8 Investment and Holding Company Status
Neither it nor any of its subsidiaries is (i) an "investment company"
as defined in, or subject to regulation under, the Investment Company Act of
1940 or (ii) a "holding company" as defined in, or subject to regulation under,
the Public Utility Holding Company Act of 1935.
Section 4.9 Taxes
It and its subsidiaries each has timely filed or caused to be filed
all Tax returns and reports required to have been filed and has paid or caused
to be paid all Taxes required to have been paid by it, except (i) Taxes that are
being contested in good faith by appropriate proceedings and for which it or
such subsidiary, as applicable, has set aside on its books adequate reserves or
(ii) to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect. ERISA.
Section 4.10 ERISA
No ERISA Event has occurred or is reasonably expected to occur that,
when taken together with all other such ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect. The present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed the fair market value of the assets of all such underfunded
Plans.
Section 4.11 Disclosure
It has disclosed to the Credit Parties all agreements, instruments and
corporate or other restrictions to which it or any of its 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.
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None of the reports, financial statements, certificates or other information
furnished by or on behalf of it to any Credit Party in connection with the
negotiation of the Loan Documents or delivered 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
information, it represents only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time.
Section 4.12 Subsidiaries
(a) On the Agreement Date, it has no direct or indirect
subsidiaries.
(b) On the Effective Date, it has no direct or indirect
subsidiaries except as disclosed in Schedule 4.12. Such Schedule sets forth its
ownership interest in each of its subsidiaries on the Effective Date.
Section 4.13 Federal Reserve Regulations
(a) Neither it nor any of its subsidiaries is engaged
principally, or as one of their important activities, in the business of
extending credit for the purpose of buying or carrying Margin Stock.
(b) Neither the Letter of Credit nor any part of the proceeds
thereof will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, to purchase, acquire or carry any Margin Stock or
for any purpose that entails a violation of, or that is inconsistent with, the
provisions of the regulations of the Board, including Regulation T, U or X.
Section 4.14 Solvency
On the Effective Date and immediately after giving effect to the
making of each Loan hereunder, (i) the fair value of the assets of the Borrower
and its subsidiaries, taken as a whole, at a fair valuation, will exceed their
debts and liabilities, subordinated, contingent or otherwise, (ii) the present
fair saleable value of the property of the Borrower and its subsidiaries, taken
as a whole, will be greater than the amount that will be required to pay the
probable liability of their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured, (iii) each of the Loan Parties will be able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured, and (iv) each of the Loan Parties 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 such date.
Section 4.15 Business of Borrower Prior to the Effective Date
The Borrower shall not own any assets and shall not conduct any
business prior to the Effective Date.
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ARTICLE 5.
CONDITIONS
Section 5.1 Closing Date
This Agreement shall not become effective, and the Lenders shall have
no obligations hereunder, until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 10.2):
(a) Execution by the Borrower, the Lenders, the Issuing Bank and
the Administrative Agent. The Administrative Agent (or its counsel) shall have
received from the Borrower, the Lenders, the Issuing Bank and the Administrative
Agent either (i) a counterpart of this Agreement signed on behalf of such party
or (ii) written evidence satisfactory to the Administrative Agent (which may
include facsimile transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement.
(b) Notes. The Administrative Agent shall have received a Note
for each Lender, signed on behalf of the Borrower.
(c) Legal Opinions. The Administrative Agent shall have received
a favorable written opinion (addressed to the Credit Parties and dated the
Closing Date) from Weil, Gotshal & ▇▇▇▇▇▇ LLP, special counsel to the Borrower,
substantially in the form of Exhibit B-1, and covering such other matters
relating to the Borrower, the Loan Documents and the transactions contemplated
hereby as the Required Lenders shall reasonably request. The Borrower hereby
requests such counsel to deliver such opinions.
(d) Organizational Documents, etc. The Administrative Agent shall
have received such documents and certificates as the Administrative Agent or its
counsel may reasonably request relating to the organization, existence and good
standing of the Borrower, the authorization of the transactions contemplated
hereby, the incumbency of its officer or officers who may sign the Loan
Documents, including therein a signature specimen of such officer or officers
and any other legal matters relating to the Borrower, the Loan Documents or the
transactions contemplated hereby, all in form and substance satisfactory to the
Administrative Agent and its counsel.
(e) Conversion Transaction Documents. The Administrative Agent
shall have received a certificate, dated the Closing Date and signed by the
chief executive officer or the chief financial officer of the Borrower,
attaching a true, correct and complete copy of the then current drafts of the
Conversion Transaction Documents, which drafts shall be in all respects
satisfactory to the Administrative Agent.
(f) Officer's Certificate regarding Existing Letter of Credit and
Guaranty Agreement. The Administrative Agent shall have received a certificate,
dated as of the Closing Date and signed by the chief executive office, the
general counsel or any Financial Officer of the Borrower, certifying that on,
and immediately prior to, the Closing Date (i) the representations and
warranties of the Loan Parties (as defined in the Existing Letter of Credit and
Guaranty Agreement) shall be true and correct and (ii) no Default (under and as
defined in the Existing Letter of Credit and Guaranty Agreement) shall exist.
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(g) Fees and Expenses. The Administrative Agent shall have
received all fees and other amounts due and payable on or prior to the Closing
Date, including, to the extent invoiced, reimbursement or payment of all out of
pocket expenses required to be reimbursed or paid by the Loan Parties hereunder.
Section 5.2 Effective Date
The obligations of the Lenders to make Loans hereunder and to acquire
participations in the Letter of Credit shall not become effective until the date
on which each of the following conditions is satisfied (or waived in accordance
with Section 10.2):
(a) Execution by the Applicants. The Administrative Agent (or its
counsel) shall have received from the Applicants either (i) a counterpart of
this Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include facsimile
transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement.
(b) Legal Opinions. The Administrative Agent shall have received
a favorable written opinion (addressed to the Credit Parties and dated the
Effective Date) from Weil, Gotshal & ▇▇▇▇▇▇ LLP, special counsel to the Loan
Parties, substantially in the form of Exhibit B-2, and covering such other
matters relating to the Loan Parties, the Loan Documents and the transactions
contemplated hereby as the Required Lenders shall reasonably request. Loan
Parties hereby request such counsel to deliver such opinions.
(c) Organizational Documents, etc. The Administrative Agent shall
have received such documents and certificates as the Administrative Agent or its
counsel may reasonably request relating to the organization, existence and good
standing of each Loan Party, the authorization of the transactions contemplated
hereby, the incumbency of its officer or officers who may sign the Loan
Documents, including therein a signature specimen of such officer or officers
and any other legal matters relating to the Loan Parties, the Loan Documents or
the transactions contemplated hereby, all in form and substance satisfactory to
the Administrative Agent and its counsel.
(d) Officer's Certificate. The Administrative Agent shall have
received a certificate, dated the Effective Date and signed by the chief
executive officer or Financial Officer of the Borrower, confirming the Financial
Strength Rating of Assurance and, if rated, HMO, on the Effective Date.
(e) Officer's Certificate. The Administrative Agent shall have
received a certificate, dated the Effective Date and signed by the chief
executive officer or the chief financial officer of the Borrower, confirming
compliance with the conditions set forth in paragraphs (a) and (b) of Section
5.3.
(f) Officer's Certificate regarding Existing Letter of Credit and
Guaranty Agreement. The Administrative Agent shall have received a certificate,
dated as of the Effective Date and signed by the chief executive office or any
Financial Officer of the Borrower, certifying that on, and immediately prior to,
the Effective Date (i) the representations and warranties of the Loan Parties
(as defined in the Existing Letter of Credit and Guaranty Agreement) shall be
true and correct and (ii) no Default (under and as defined in the Existing
Letter of Credit and Guaranty Agreement) shall exist.
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(g) Conversion Transactions. Each of the Conversion Transactions
shall have been consummated substantially simultaneously, all in accordance with
the Conversion Transaction Documents, all consents or approvals of,
registrations and filings with, or any other action by any Governmental
Authority necessary for the consummation of the Conversion Transactions shall
have been obtained or made and shall be in full force and effect, and there
shall have been no modification or change to the Conversion Transaction
Documents from the drafts delivered to the Administrative Agent pursuant to
Section 5.1(e) that could reasonably be expected to materially and adversely
affect the Credit Parties; and the Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the chief executive officer
or the chief financial officer of the Borrower, (i) to the foregoing effect and
(ii) attaching a true, correct and complete copy of the Conversion Transaction
Documents and the MetroTech Lease.
(h) Termination of Existing Letter of Credit and Guaranty
Agreement. The Administrative Agent shall have received evidence satisfactory to
it demonstrating that the Existing Letter of Credit and Guaranty Agreement has
been terminated and that all amounts due thereunder have been paid in full.
(i) Fees and Expenses. The Administrative Agent shall have received
all fees and other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all out of pocket
expenses required to be reimbursed or paid by the Loan Parties hereunder.
The Administrative Agent shall notify the Borrower and the Credit Parties of the
Effective Date, which notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder and to
acquire participations in the Letter of Credit shall not become effective unless
each of the foregoing conditions is satisfied (or waived pursuant to Section
10.2) at or prior to 3:00 p.m., New York City time, on January 31, 2003 (and, in
the event such conditions are not so satisfied or waived, the Commitments and
all other obligations of the Lenders to the Loan Parties shall terminate at such
time).
Section 5.3 Each Borrowing
The obligation of each Lender to make a Loan on the occasion of any
Borrowing is subject to the satisfaction of the following conditions:
(a) The representations and warranties of the Loan Parties set
forth in the Loan Documents shall be true and correct on and as of the date of
such Borrowing.
(b) At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.
(c) The Administrative Agent shall have received such other
documentation and assurances as shall be reasonably required by it in connection
therewith.
Each Borrowing shall be deemed to constitute a representation and warranty by
each Loan Party on the date thereof as to the matters specified in paragraphs
(a) and (b) of this Section.
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ARTICLE 6.
AFFIRMATIVE COVENANTS
For the period from and including the Effective Date until the
Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees and other amounts payable under the Loan Documents shall
have been paid in full and the Letter of Credit has expired and all LC
Disbursements have been reimbursed, the Loan Parties covenant and agree with the
Credit Parties that:
Section 6.1 Financial Statements and Other Information
The Loan Parties will furnish to the Administrative Agent and each
Lender:
(a) within 90 days after the end of each fiscal year, the audited
consolidated balance sheet of the Borrower and related consolidated statements
of income, stockholders' equity and cash flows as of the end of and for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by Ernst & Young LLP or other independent
public accountants of recognized national standing (without a "going concern" or
like qualification or exception and without any qualification or exception as to
the scope of such audit) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition and
results of operations of the Borrower and its consolidated subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;
(b) within 90 days after the end of each fiscal year, the balance
sheet of Assurance and related statements of income, stockholders' equity and
cash flows as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all certified by one
of its Financial Officers as presenting fairly in all material respects the
financial condition and results of operations of Assurance in accordance with
SAP consistently applied;
(c) within 90 days after the end of each fiscal year, the balance
sheet of HMO and related statements of income, stockholders' equity and cash
flows as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all certified by one
of its Financial Officers as presenting fairly in all material respects the
financial condition and results of operations of HMO in accordance with SAP
consistently applied;
(d) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, the consolidated balance sheet of the Borrower and
related statements of income, stockholders' equity and cash flows as of the end
of and for such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of)
the previous fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of the Borrower and its consolidated subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
(e) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, the balance sheet of Assurance and related
statements of income, stockholders' equity and cash flows as of the end of and
for such fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the corresponding period
or periods of
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(or, in the case of the balance sheet, as of the end of) the previous fiscal
year, all certified by one of its Financial Officers as presenting fairly in all
material respects the financial condition and results of operations of Assurance
in accordance with SAP consistently applied, subject to normal year-end
adjustments;
(f) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, the balance sheet of HMO and related statements of
income, stockholders' equity and cash flows as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year, setting forth in each
case in comparative form the figures for the corresponding period or periods of
(or, in the case of the balance sheet, as of the end of) the previous fiscal
year, all certified by one of its Financial Officers as presenting fairly in all
material respects the financial condition and results of operations of HMO in
accordance with SAP consistently applied, subject to normal year-end
adjustments;
(g) promptly after the filing thereof, copies (without exhibits
thereto, other than, in the case of reports on Form 10-K, the annual report) of
all registration statements (other than any registration statements on Form S-8
or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which any Loan Party shall have filed with the Securities and
Exchange Commission;
(h) promptly after the mailing thereof, copies of any materials
sent to the public stockholders' of any Loan Party, except to the extent that
such information is a duplication of the information requested in paragraph (g)
above;
(i) concurrently with any delivery of financial statements under
paragraphs (a) through (f) above, a Compliance Certificate signed by a Financial
Officer (i) stating the Financial Strength Rating of Assurance and, if rated,
HMO as of the date of such Compliance Certificate and (ii) stating whether any
change in GAAP or SAP or in the application thereof has occurred since the date
of the annual financial statements referred to in Section 4.4 and, if any such
change has occurred, specifying the effect of such change on the financial
statements accompanying such Compliance Certificate;
(j) concurrently with any delivery of financial statements under
paragraph (a) above, a certificate of the accounting firm that reported on such
financial statements stating whether they obtained knowledge during the course
of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules or
guidelines); and
(k) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of any Loan
Party or any of its subsidiaries, or compliance with the terms of the Loan
Documents, as any Credit Party may reasonably request.
Section 6.2 Notices of Material Events
The Loan Parties will furnish to the Administrative Agent and each
Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or affecting any
Loan Party or any Affiliate thereof that could reasonably be expected to result
in a Material Adverse Effect;
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(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Loan Parties and their subsidiaries in an aggregate
amount exceeding $5,000,000;
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect; and
(e) any change in the Financial Strength Rating of Assurance or, if
rated, HMO within five (5) Business Days of the effective date of such change.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect
thereto.
Section 6.3 Existence; Conduct of Business
Each Loan Party will, and will cause each of its subsidiaries to, do
or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence and the rights, licenses, permits,
privileges and franchises material to the conduct of its business, provided that
the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 7.3 or any sale, lease, transfer or other
disposition permitted by Section 7.5.
Section 6.4 Payment and Performance of Obligations
Each Loan Party will, and will cause each of its subsidiaries to, pay
or perform its obligations, including Tax liabilities, that, if not paid or
performed, could reasonably be expected to result in a Material Adverse Effect
before the same shall become delinquent or in default, except where (i) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (ii) such Loan Party has set aside on its books adequate reserves
with respect thereto in accordance with GAAP or SAP, as applicable, and (iii)
the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
Section 6.5 Maintenance of Properties
Each Loan Party will, and will cause each of its subsidiaries to, keep
and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
Section 6.6 Books and Records; Inspection Rights
Each Loan Party will, and will cause each of its subsidiaries to, keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and
activities. Each Loan Party will, and will cause each of its subsidiaries to,
permit any representatives designated by the Administrative Agent or any Lender,
upon reasonable prior notice, to visit and inspect its properties, to examine
and make extracts from its books and records, and to discuss its affairs,
finances and condition with its officers and independent accountants, all at
such reasonable times and as often as reasonably requested.
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Section 6.7 Compliance with Laws
Each Loan Party will, and will cause each of its subsidiaries to,
comply with all laws, rules, regulations and orders of any Governmental
Authority applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
Section 6.8 Use of Proceeds
The proceeds of the Loans will be used for general corporate purposes
of the Borrower not inconsistent with the terms hereof. Neither the Letter of
Credit nor any part of the proceeds of any Loan or the Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase, acquire or carry any Margin Stock or for any purpose
that entails a violation of any of the regulations of the Board, including
Regulations T, U and X.
Section 6.9 Insurance
Each Loan Party will, and will cause each of its subsidiaries to,
maintain, with financially sound and reputable insurance companies, adequate
insurance for its insurable properties, all to such extent and against such
risks, including fire, casualty, business interruption and other risks insured
against by extended coverage, as is customary with companies in the same or
similar businesses operating in the same or similar locations.
Section 6.10 Further Assurances
Each Loan Party will execute any and all further documents, agreements
and instruments, and take all such further actions, that may be required under
any applicable law, or which the Administrative Agent or the Required Lenders
may reasonably request, to effectuate the transactions contemplated by the Loan
Documents, all at the expense of the Loan Parties.
Section 6.11 Environmental Compliance
Each Loan Party will, and will cause each of its subsidiaries to, use
and operate all of its facilities and property in compliance with all
Environmental Laws, keep all necessary permits, approvals, certificates,
licenses and other authorizations relating to environmental matters in effect
and remain in compliance therewith, and handle all Hazardous Materials in
compliance with all applicable Environmental Laws, except where noncompliance
with any of the foregoing could not reasonably be expected to have a Material
Adverse Effect.
Section 6.12 Financial Covenants
(a) Surplus. Each Loan Party will, and will cause each of its
subsidiaries to, maintain at all times sufficient surplus in accordance with all
applicable laws, regulations, orders and directives of all Governmental
Authorities (including under the Insurance Law and Health Law of the State of
New York and, with respect to the Borrower and Assurance, Standard 3 of the
Membership Standards applicable to Regular Members of the Blue Cross and Blue
Shield Association, and, with respect to HMO, the Membership Standards
applicable to Members of the Blue Cross and Blue Shield Association), in each
case to the extent such Loan Party or subsidiary is required to do so by such
applicable law, regulation, order or directive.
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(b) Risk Based Capital. Each Loan Party will, and will cause each
of its subsidiaries to, maintain at all times, to the extent it is required to
do so, sufficient risk based capital in excess of the Company Action Level
applicable to it.
(c) Financial Strength Rating. Each of Assurance and, if rated,
HMO will maintain at all times a minimum Financial Strength Rating of BBB.
(d) Capitalization Percentage Ratio. The Borrower will not permit
the Capitalization Percentage Ratio to be greater than 30% at any time.
(e) Fixed Charge Coverage Ratio. The Borrower will not permit the
Fixed Charge Coverage Ratio as of the last day of any fiscal quarter to be less
than 1.5:1.0.
Section 6.13 Ownership
At all times after the consummation of the Conversion Transactions,
(a) the Borrower, Holdings or Assurance shall own directly, beneficially and of
record, 100% of the issued and outstanding equity interests of HMO on a fully
diluted basis and (b) the Borrower or Holdings shall own directly, beneficially
and of record, 100% of the issued and outstanding equity interests of Assurance
on a fully diluted basis.
ARTICLE 7.
NEGATIVE COVENANTS
For the period from and including the Effective Date until the
Commitments have expired or been terminated, the Letter of Credit has expired
and all LC Disbursements have been reimbursed, and all fees and other amounts
payable under the Loan Documents have been paid in full, the Loan Parties
covenant and agree with the Credit Parties that:
Section 7.1 Indebtedness; Equity Securities
(a) Each Loan Party will not, and will not permit any of its
subsidiaries to, create, incur, assume or permit to exist any Indebtedness,
except:
(i) Indebtedness under the Loan Documents;
(ii) Indebtedness existing on the Agreement Date and set
forth in Schedule 7.1, and extensions, renewals and replacements of any
such Indebtedness that do not increase the outstanding principal amount
thereof;
(iii) Capital Lease Obligations and Guarantees thereof for
all Loan Parties and their subsidiaries (other than Holdings), in each
case incurred in the ordinary course of its business;
(iv) Indebtedness of a Loan Party to any other Loan Party;
(v) Guarantees by any Loan Party of Indebtedness of any
other Loan Party permitted under this Section 7.1(a); and
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(vi) other unsecured Indebtedness of the Loan Parties and
their subsidiaries (other than Holdings).
(b) Each Loan Party will not, and it will not permit any of its
subsidiaries to, issue any Equity Interests which are not issued on a perpetual
basis or in respect of which any Loan Party or any of its subsidiaries is or
shall become liable (under any contingency or otherwise) to purchase, redeem,
retire or otherwise acquire any such Equity Interest.
Section 7.2 Liens
Each Loan Party will not, and will not permit any of its subsidiaries
to, create, incur, assume or permit to exist any Lien on any property or asset
now owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except:
(a) Liens created under the Loan Documents;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of such Loan Party or any
of its subsidiaries existing on the Agreement Date and set forth in Schedule
7.2, provided that (i) such Lien shall not apply to any other property or asset
of such Loan Party or any of its subsidiaries and (ii) such Lien shall secure
only those obligations which it secures on the Agreement Date and any
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof; and
(d) security interests on fixed or capital assets of such Loan
Party or any of its subsidiaries subject to Capital Lease Obligations, provided
that (i) such security interests secure Capital Lease Obligations of such Loan
Party or any of its subsidiaries permitted by clause (iii) of Section 7.1 and no
other Indebtedness, and (ii) such security interests shall not apply to any
other property or assets of any Loan Party or any of its subsidiaries.
Section 7.3 Fundamental Changes
(a) Each Loan Party will not, and will not permit any of its
subsidiaries to, merge into or consolidate with any other Person, or permit any
other Person to merge into or consolidate with it, or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto,
no Default shall or would have occurred and be continuing:
(i) any wholly-owned subsidiary of a Loan Party may merge
into a Loan Party, provided that such Loan Party shall be the surviving
entity, and any wholly-owned subsidiary of a Loan Party may merge into any
other wholly-owned subsidiary of a Loan Party, provided that if either such
wholly-owned subsidiary is a Loan Party such Loan Party shall be the
surviving entity;
(ii) any subsidiary of a Loan Party which is not itself a
Loan Party may merge with any Person in a transaction that is not permitted
by clause (i) of this Section 7.3(a), provided that such merger is
permitted by Section 7.4;
(iii) any subsidiary of a Loan Party which is not itself a
Loan Party may liquidate or dissolve if such Loan Party determines in good
faith that such liquidation or
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dissolution is in the best interests of such Loan Party and if such
liquidation or dissolution is not materially disadvantageous to the
Lenders; and
(iv) the Conversion Transactions may be consummated.
(b) Each Loan Party will not, and will not permit any of its
subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Loan Parties and their subsidiaries on
the Agreement Date and businesses which are reasonably related thereto.
Section 7.4 Asset Sales; Equity Issuances
Each Loan Party will not, and will not permit any of its subsidiaries
to, sell, transfer, lease or otherwise dispose (including pursuant to a merger)
of any asset, including any Equity Interest, nor will it permit any of its
subsidiaries to issue any additional Equity Interests, except:
(a) sales, transfers, leases and other dispositions, in each case
in the ordinary course of business;
(b) sales, transfers, leases and other dispositions made by a
Loan Party to another Loan Party;
(c) issuances of Equity Interests by any subsidiary of a Loan
Party to any Loan Party or any of its wholly-owned subsidiaries;
(d) issuances of Equity Interests of the Borrower; and
(e) if at the time thereof and immediately after giving effect
thereto no Default shall have occurred and be continuing, other sales,
transfers, leases and other dispositions of assets, provided that (i) the
aggregate fair market value of all such assets sold, transferred, leased or
otherwise disposed of in any fiscal year of the Borrower shall not exceed in the
aggregate 5% of the consolidated assets of the Borrower as of the end of the
immediately preceding fiscal year of the Borrower, (ii) the aggregate revenues
attributable to all such assets sold, transferred, leased or otherwise disposed
of in any fiscal year of the Borrower shall not exceed in the aggregate 5% of
the consolidated revenues of the Borrower for the immediately preceding fiscal
year of the Borrower and (iii) all such sales, transfers, leases and other
dispositions shall be made for fair value.
Section 7.5 Transactions with Affiliates
Each Loan Party will not, and will not permit any of its subsidiaries
to, sell, transfer, lease or otherwise dispose (including pursuant to a merger)
any property or assets to, or purchase, lease or otherwise acquire (including
pursuant to a merger) any property or assets from, or otherwise engage in any
other transactions with, any of its Affiliates, except in the ordinary course of
business at prices and on terms and conditions not less favorable to it or such
subsidiary than could be obtained on an arms-length basis from unrelated third
parties, provided that this Section shall not apply to (a) the Affiliate
Agreements or (b) any transaction that is permitted under Section 7.1, 7.3 or
7.4 between or among the Loan Parties and not involving any other Affiliate.
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Section 7.6 Restrictive Agreements
Each Loan Party will not, and will not permit any of its subsidiaries
to, directly or indirectly, enter into, incur or permit to exist any agreement
or other arrangement binding on it or any of its subsidiaries that prohibits,
restricts or imposes any condition upon the ability of it or any of its
subsidiaries to create, incur or permit to exist any Lien upon any of its
property or assets (unless such agreement or arrangement does not prohibit,
restrict or impose any condition upon the ability of any Loan Party to create,
incur or permit to exist any Lien in favor of the Administrative Agent to secure
the Obligations), provided that (a) the foregoing shall not apply to
restrictions and conditions imposed by law or by the Loan Documents, (b) the
foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 7.6 (but shall apply to any extension or renewal
of, or any amendment or modification expanding the scope of, any such
restriction or condition), (c) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
subsidiary pending such sale, provided that such restrictions and conditions
apply only to the subsidiary that is to be sold and such sale is permitted
hereunder, (d) the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness, and (e) the foregoing shall not apply to
customary provisions in leases restricting the assignment thereof.
Section 7.7 Amendment of Material Agreements
Each Loan Party will not enter into or permit any amendment or other
modification of the MetroTech Lease, the Conversion Transaction Documents or its
certificate of formation, operating agreement or other organizational documents,
other than immaterial amendments, modifications or waivers and amendments
required to consummate the Conversion Transactions, in each case that could not
reasonably be expected to adversely affect the Credit Parties, provided that a
copy of each such amendment or modification shall be promptly delivered to the
Administrative Agent after the execution and delivery thereof.
ARTICLE 8.
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
(a) the Loan Parties shall fail to pay any principal of any Loan
or any reimbursement obligation in respect of any LC Disbursement when and as
the same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) the Loan Parties shall fail to pay any interest on any Loan
or on any reimbursement obligation in respect of any LC Disbursement or any fee,
commission or any other amount (other than an amount referred to in paragraph
(a) of this Article) payable under any Loan Document, when and as the same shall
become due and payable, and such failure shall continue unremedied for a period
of three Business Days;
(c) any representation or warranty made or deemed made by or on
behalf of any Loan Party in or in connection with any Loan Document or any
amendment or modification hereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished
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pursuant to or in connection with any Loan Document or any amendment or
modification hereof or waiver thereunder, shall prove to have been incorrect in
any material respect when made or deemed made;
(d) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in Section 6.2, 6.3, 6.8, 6.12, or 6.13 or in
Article 7;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document to which it is a party
(other than those specified in paragraph (a), (b) or (d) of this Article), and
such failure shall continue unremedied for a period of 30 days after such Loan
Party shall have obtained knowledge thereof;
(f) any Loan Party or any of its subsidiaries shall fail to make
any payment (whether of principal, interest or otherwise and regardless of
amount) in respect of any Material Obligations constituting Indebtedness, when
and as the same shall become due and payable (after giving effect to any
applicable grace period);
(g) any event or condition occurs that results in any Material
Obligations becoming due prior to their scheduled maturity or payment date, or
that enables or permits (with or without the giving of notice, the lapse of time
or both) the holder or holders of any Material Obligations or any trustee or
agent on its or their behalf to cause any Material Obligations to become due
prior to their scheduled maturity or payment date or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to their scheduled maturity
or payment date (in each case after giving effect to any applicable cure
period), provided that this paragraph (g) shall not apply to secured
Indebtedness that becomes due solely as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of any Loan Party or any of its subsidiaries or the
debts, or of a substantial part of the assets, of any Loan Party or any of its
subsidiaries under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for any Loan Party or any of its subsidiaries or for a substantial part of the
assets of any Loan Party or any of its subsidiaries, and, in any such case, such
proceeding or petition shall continue undismissed for 45 days or an order or
decree approving or ordering any of the foregoing shall be entered;
(i) any Loan Party or any of its subsidiaries shall (i)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in paragraph (h) of this Article, (iii)
apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for any Loan Party or any of its
subsidiaries or for a substantial part of the assets of any Loan Party or any of
its subsidiaries, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;
(j) any Loan Party or any of its subsidiaries shall become
unable, admit in writing its inability or fail generally to pay its debts as
they become due;
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(k) one or more judgments for the payment of money in an
aggregate amount in excess of $5,000,000 shall be rendered against any one or
more of the Loan Parties or any of their subsidiaries or any combination thereof
(which shall not be fully covered by insurance without taking into account any
applicable deductibles) and the same shall remain undischarged or unbonded for a
period of 60 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of any Loan Party or any of its subsidiaries to enforce any
such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of any Loan Party
or any of its subsidiaries in an aggregate amount exceeding $5,000,000;
(m) (i) any Loan Document shall cease, for any reason, to be in
full force and effect, or any Loan Party shall so assert in writing or shall
disavow any of its obligations thereunder;
(n) a Change in Control shall occur;
then, and in every such event (other than an event described in clause (h) or
(i) of this Article), and at any time thereafter during the continuance of such
event, the Administrative Agent may, and at the request of the Required Lenders
shall, by notice to the Borrower, take either or both of the following actions
(whether before or after the Closing Date), at the same or different times: (i)
terminate the Commitments, and thereupon the Commitments shall terminate
immediately and (ii) declare the Loans then outstanding to be due and payable in
whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of each Loan Party accrued
under the Loan Documents, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Loan Parties; and in case of any event described in clause
(h) or (i) of this Article, the Commitments shall automatically terminate
(whether before or after the Closing Date) and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of each Loan Party accrued under the Loan Documents, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Loan Parties.
ARTICLE 9.
THE ADMINISTRATIVE AGENT
Each Credit Party hereby irrevocably appoints the Administrative Agent
as its agent and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof, together with such actions and powers as are reasonably
incidental thereto.
The Person serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and such
Person and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with any Loan Party or any subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder.
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The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (i) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (ii) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated by the Loan Documents that the
Administrative Agent is required to exercise in writing by the Required Lenders
(or such other number or percentage of the Credit Parties as shall be necessary
under the circumstances as provided in Section 10.2), and (iii) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to any Loan Party or any of its subsidiaries that is communicated to or
obtained by the Person serving as Administrative Agent or any of its Affiliates
in any capacity. The Administrative Agent shall not be liable for any action
taken or not taken by it with the consent or at the request of the Required
Lenders (or such other number or percentage of the Credit Parties as shall be
necessary under the circumstances as provided in Section 10.2) or in the absence
of its own gross negligence or willful misconduct. The Administrative Agent
shall be deemed not to have knowledge of any Default unless and until written
notice thereof is given to the Administrative Agent by a Loan Party or a Credit
Party (and, promptly after its receipt of any such notice, it shall give each
Credit Party notice thereof), and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (a) any statement,
warranty or representation made in or in connection with any Loan Document, (b)
the contents of any certificate, report or other document delivered thereunder
or in connection therewith, (c) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth therein, (d) the
validity, enforceability, effectiveness or genuineness thereof or any other
agreement, instrument or other document or (e) the satisfaction of any condition
set forth in Article 5 or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Loan Parties), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent, provided that no such delegation shall
serve as a release of the Administrative Agent or waiver by any Loan Party of
any rights hereunder. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Credit Parties and the Loan Parties. Upon
any such resignation, the Required Lenders shall have the right, in consultation
with the Loan Parties, to appoint a successor. If no successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on
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behalf of the Credit Parties, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by any Loan Party to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between such Loan Party and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 10.3 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.
Each Credit Party acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Credit Party and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Credit Party also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Credit Party and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon any Loan
Document, any related agreement or any document furnished thereunder.
Notwithstanding any provisions to the contrary contained in this
Agreement or in any other Loan Document, neither Co-Syndication Agent shall have
any duties or responsibilities, nor have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Documents or otherwise exist against either
Co-Syndication Agent.
ARTICLE 10.
MISCELLANEOUS
Section 10.1 Notices
Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
facsimile, as follows:
(a) if to the Loan Parties or to any of the Loan Parties:
WellChoice, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
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WellChoice, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Administrative Agent or to BNY as Issuing Bank:
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
The Bank of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to any other Credit Party, to it at its address (or
facsimile number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
Section 10.2 Waivers; Amendments
(a) No failure or delay by any Credit Party in exercising any
right or power under any Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Credit Parties under the Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of any Loan Document or
consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the issuance, amendment, extension or renewal of the Letter of Credit
shall not be construed as a waiver of any Default, regardless of whether any
Credit Party may have had notice or knowledge of such Default at the time.
(b) Neither any Loan Document nor any provision thereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the
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Loan Parties and the Required Lenders or by the Loan Parties and the
Administrative Agent with the consent of the Required Lenders, provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
any reimbursement obligation with respect to a LC Disbursement, or reduce the
rate of any interest (other than under Section 3.1(b)), or reduce any fees,
payable under the Loan Documents, without the written consent of each Credit
Party affected thereby, (iii) postpone the date of payment of any Loan, or the
date of payment of any reimbursement obligation with respect to an LC
Disbursement, any interest or any fees payable under the Loan Documents, or
reduce the amount of, waive or excuse any such payment, or postpone the stated
termination or expiration of the Commitments, without the written consent of
each Credit Party affected thereby, (iv) change any provision hereof in a manner
that would alter the pro rata sharing of payments required by Section 2.9(b) or
the pro rata reduction of Commitments required by Section 2.5(d), without the
written consent of each Credit Party affected thereby, (v) change any provision
hereof in a manner that would alter several nature of the obligations of Lenders
under any of the Loan Documents, without the consent of each Lender, (vi) change
any of the provisions of this Section or the definition of the term "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender, or (vii) release the Guaranty, or limit the Borrower's liability
under the Guaranty, without the written consent of each Lender, and provided
that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent or the Issuing Bank hereunder without the
prior written consent of the Administrative Agent or the Issuing Bank, as
applicable. Notwithstanding the foregoing, any provision of any Loan Document
may be amended by an agreement in writing entered into by the Loan Parties, the
Required Lenders, the Issuing Bank and the Administrative Agent if (A) by the
terms of such agreement the Commitment of each Lender not consenting to the
amendment provided for therein shall terminate upon or simultaneously with the
effectiveness of such amendment and (B) upon or simultaneously with the
effectiveness of such amendment, each Lender not consenting thereto receives
payment in full of the principal of and interest accrued on each Loan made by it
and all other amounts owing to it or accrued for its account under the Loan
Documents.
(c) Neither the Letter of Credit nor any provision thereof may
be amended or modified without the written consent of the Issuing Bank and
without the written consent of the Required Lenders, provided that no such
amendment or modification shall (i) increase the face amount of the Letter of
Credit without the written consent of each Lender or (ii) extend the expiration
date of the Letter of Credit (except pursuant to Section 2.8(b)) without the
written consent of each Lender and, provided further, that no consent of any
Lender shall be required to reduce the face amount of the Letter of Credit,
shorten the expiration date of the Letter of Credit, permit the transfer of the
Letter of Credit by the beneficiary thereof in accordance with the terms of the
Letter of Credit, or change any notice, payment or similar ministerial provision
of the Letter of Credit.
Section 10.3 Expenses; Indemnity; Damage Waiver
(a) The Loan Parties, jointly and severally, shall pay (i) all
reasonable out-of-pocket costs and expenses incurred by the Administrative Agent
and its Affiliates, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent, in connection with the preparation and
administration of each Loan Document or any amendments, modifications or waivers
of the provisions thereof, (ii) all reasonable out-of-pocket costs and expenses
incurred by the Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all reasonable out-of-pocket costs and expenses incurred by any Credit
Party, including the reasonable fees, charges and disbursements of any counsel
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for any Credit Party and any expert witness fees, in connection with the
enforcement or protection of its rights in connection with the Loan Documents,
including its rights under this Section, or in connection with the Loans made
hereunder or the Letter of Credit, including all such reasonable out-of-pocket
costs and expenses incurred during any workout, restructuring or negotiations in
respect of the Loan Documents, the Loans or the Letter of Credit.
(b) The Loan Parties, jointly and severally, shall indemnify
each Credit Party and each Related Party thereof (each such Person being called
an "Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of any Loan Document or any agreement or
instrument contemplated thereby, the performance by the parties to the Loan
Documents of their respective obligations thereunder or the consummation of the
transactions contemplated thereby, (ii) any Loan or the Letter of Credit or the
use of the proceeds thereof, including any refusal of the Issuing Bank to honor
a demand for payment under the Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of the Letter
of Credit, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by any Loan Party or any of
its subsidiaries, or any Environmental Liability related in any way to any Loan
Party or any of its subsidiaries or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto, provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) To the extent that any Loan Party fails to pay any amount
required to be paid by it to the Administrative Agent or the Issuing Bank under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent or the Issuing Bank, as applicable, an amount equal to the
product of such unpaid amount multiplied by a fraction, the numerator of which
is sum of such Lender's unused Commitment, the outstanding principal balance of
such Lender's Loans and such Lender's LC Exposure and the denominator of which
is sum of the unused Commitments, the outstanding principal amount of all Loans
of the Lenders and the LC Exposure of all Lenders (in each case determined as of
the time that the applicable unreimbursed expense or indemnity payment is sought
or, in the event that no Lender shall have any unused Commitment, outstanding
Loans or LC Exposure at such time, as of the last time at which any Lender had
any unused Commitment, outstanding Loans or LC Exposure), provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as applicable, was incurred by or asserted against the Administrative
Agent or the Issuing Bank, as applicable, in its capacity as such.
(d) To the extent permitted by applicable law, each Loan Party
shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct and actual damages) arising out of, in connection with, or
as a result of, any Loan Document or any agreement, instrument or other document
contemplated thereby, the transactions contemplated hereby, any Loan, the Letter
of Credit or the use of the proceeds of any Loan or the Letter of Credit.
(e) All amounts due under this Section shall be payable promptly
but in no event later than ten days after written demand therefor.
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Section 10.4 Successors and Assigns
(a) The Loan Documents shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that no Loan Party may assign or otherwise transfer any
of its rights or obligations thereunder without the prior written consent of
each Credit Party (and any attempted assignment or transfer by any Loan Party
without such consent shall be null and void). Nothing in the Loan Documents,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
and, to the extent expressly contemplated hereby, the Related Parties of each
Credit Party) any legal or equitable right, remedy or claim under or by reason
of any Loan Document.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under the Loan Documents (including all or
a portion of its Commitment or all or a portion of its LC Exposure and the Loans
at the time owing to it), provided that (i) such Lender shall have obtained the
prior written consent of the Administrative Agent and the Issuing Bank, (ii)
such Lender shall have obtained the consent of the Borrower (such consent not to
be unreasonably withheld or delayed), provided that no such consent of the
Borrower shall be required if a Default shall exist or if the assignment is to a
Lender or an Affiliate of a Lender, (iii) except in the case of an assignment to
a Lender or an Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender's Commitment, the amount of the Commitment of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless the
Administrative Agent otherwise consents, (iv) the parties to each assignment
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance together with, unless otherwise agreed by the Administrative Agent, a
processing and recordation fee of $3,500, and (v) the assignee, if it shall not
be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire. Subject to acceptance and recording thereof pursuant to paragraph
(d) of this Section, from and after the effective date specified in each
Assignment and Acceptance, the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under the Loan Documents, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under the Loan
Documents (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender's rights and obligations under the Loan Documents, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 3.5, 3.6, 3.7 and 10.3). Any assignment or transfer by a
Lender of rights or obligations under the Loan Documents that does not comply
with this paragraph shall be treated for purposes of the Loan Documents as a
sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Loan Parties, shall maintain at one of its offices in New York City
a copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and the principal amount of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive absent clearly demonstrable error, and the Loan Parties and
each Credit Party 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 any Loan Party or any Credit Party, at any
reasonable time and from time to time upon reasonable prior notice.
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(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of any Loan Party or any
Credit Party, sell participations to one or more banks or other entities (each
such bank or other entity being called a "Participant") in all or a portion of
such Lender's rights and obligations under the Loan Documents (including all or
a portion of its Commitment, LC Exposure and outstanding Loans owing to it),
provided that (i) such Lender's obligations under the Loan Documents shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Loan
Parties and the Credit Parties shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under the
Loan Documents. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce the Loan Documents and to approve any amendment, modification or
waiver of any provision of any Loan Documents, provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 10.2(b) that affects such Participant. Subject to
paragraph (f) of this Section, the Loan Parties agree that each Participant
shall be entitled to the benefits of Sections 3.5, 3.6 and 3.7 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.8 as though it
were a Lender, provided that such Participant agrees to be subject to Section
2.9(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 3.5 or 3.7 than the Lender that sold the participation to
such Participant would have been entitled to receive with respect to interests
in the Loan Documents subject to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the Loan
Parties' 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 3.7 unless the
Loan Parties are notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Loan Parties, to comply with Section
3.7(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under the Loan Documents to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest, provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations under the Loan Documents or substitute any such pledgee or assignee
for such Lender as a party hereto.
Section 10.5 Survival
All covenants, agreements, representations and warranties made by
the Loan Parties herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of any Loan Document and the
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making of any Loan, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that any Credit Party may have had notice
or knowledge of any Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any LC
Disbursement or any fee or any other amount payable under the Loan Documents is
outstanding and unpaid or the Letter of Credit is outstanding and so long as the
Commitments have not expired or terminated. The provisions of Sections 3.5, 3.6,
3.7, 10.3, 10.9, 10.10 and Article 9 shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Loans and the LC Disbursements, the expiration or
termination of the Letter of Credit and the termination of the Commitments or
the termination of this Agreement or any provision hereof.
Section 10.6 Counterparts; Integration
This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which, when taken together, shall constitute but one
contract. This Agreement and any separate letter agreements with respect to fees
payable to any Credit Party or the syndication of the credit facilities
established hereunder constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.
Section 10.7 Severability
In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
Section 10.8 Right of Setoff
If an Event of Default shall have occurred and be continuing,
each of the Lenders and their respective Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by applicable law,
to setoff and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by it to or for the credit or the account of any Loan Party against any of and
all the obligations of such Loan Party now or hereafter existing under this
Agreement and the other Loan Documents held by it, irrespective of whether or
not it shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of each of the Lenders and their
respective Affiliates under this Section are in addition to other rights and
remedies (including other rights of setoff) that it may have.
Section 10.9 Governing Law; Jurisdiction; Consent to Service of Process
(a) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
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(b) Each Loan Party hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or Federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that, to the extent
permitted by applicable law, all claims in respect of any such action or
proceeding may be heard and determined in such New York State court or, to the
extent permitted by applicable law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Administrative Agent or any other Credit Party may otherwise have
to bring any action or proceeding relating to this Agreement or the other Loan
Documents against any Loan Party, or any of its property, in the courts of any
jurisdiction.
(c) Each Loan Party hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any court referred to in paragraph (b) of this Section. Each
of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by applicable law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 10.1. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
Section 10.10 WAIVER OF JURY TRIAL
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 10.11 Headings
Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and
shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.
Section 10.12 Interest Rate Limitation
Notwithstanding anything herein to the contrary, if at any time
the interest rate applicable to any of the Obligations, together with all fees,
charges and other amounts that are treated
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as interest on such Loan under applicable law (collectively the "charges"),
shall exceed the maximum lawful rate (the "maximum rate") that may be contracted
for, charged, taken, received or reserved by the Lender holding such Obligations
in accordance with applicable law, the rate of interest payable in respect of
such Obligations hereunder, together with all of the charges payable in respect
thereof, shall be limited to the maximum rate and, to the extent lawful, the
interest and the charges that would have been payable in respect of such
Obligations but were not payable as a result of the operation of this Section
shall be cumulated, and the interest and the charges payable to such Lender in
respect of other Obligations or periods shall be increased (but not above the
maximum rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender.
Section 10.13 Joint and Several Obligations
ALL OBLIGATIONS OF THE APPLICANTS UNDER THE LOAN DOCUMENTS ARE AND
SHALL BE JOINT AND SEVERAL.
The obligations of each Applicant under the Loan Documents are
absolute, unconditional and irrevocable. Each Applicant acknowledges and agrees
that (a) any of the Administrative Agent, the Issuing Bank or the Lenders may,
at their option, from time to time, proceed against such Applicant in the first
instance to enforce the Loan Documents without first proceeding against, or
resorting to any other rights or remedies against, any other Applicant, the
Borrower or any other Person; (b) none of Administrative Agent, the Issuing
Bank, the Lenders or any other Person has made any representation or warranty to
such Applicant with respect to any other Applicant, any Loan Document, or any
agreement, instrument or document executed or delivered in connection therewith
or any other matter whatsoever; and (c) such Applicant shall be liable
hereunder, and such liability shall not be affected or impaired, irrespective of
(i) the collectibility of any of the Obligations, (ii) the preference or
priority ranking with respect to any of the Obligations, (iii) the existence,
validity, enforceability or perfection of any security interest or collateral
security under any Loan Document, or the release, exchange, substitution or loss
or impairment of any such security interest or collateral security, (iv) any
failure, delay, neglect or omission by the Administrative Agent, the Issuing
Bank or any Lender to realize upon or protect any direct or indirect collateral
security, indebtedness, liability or obligation, any Loan Document, or any
agreement, instrument or document executed or delivered in connection therewith,
or any of the Obligations, (v) the existence or exercise of any right of set-off
by the Administrative Agent, the Issuing Bank or any Lender, (vi) the existence,
validity or enforceability of any guaranty (including the Guaranty) with respect
to any of the Obligations, the liability of any other Applicant, the Borrower or
any other Person in respect of any of the Obligations, or the release of any
other Applicant or any such other Person or any guarantor (including the
Borrower) of any of the Obligations, (vii) any act or omission of the
Administrative Agent, the Issuing Bank or any Lender in connection with the
administration of any Loan Document or any of the Obligations, (viii) the
bankruptcy, insolvency, reorganization or receivership of, or any other
proceeding for the relief of debtors commenced by or against, any other
Applicant, the Borrower or any other Person, (ix) the disaffirmance or
rejection, or the purported disaffirmance or purported rejection, of any of the
Obligations, any Loan Document, or any agreement, instrument or document
executed or delivered in connection therewith, in any bankruptcy, insolvency,
reorganization or receivership, or any other proceeding for the relief of
debtors, relating to any other Applicant, the Borrower or any other Person, (x)
any law, regulation or decree now or hereafter in effect which might in any
manner affect any of the terms or provisions of any Loan Document, or any
agreement, instrument or document executed or delivered in connection therewith
or any of the Obligations, or which might cause or permit to be invoked any
alteration in the time, amount, manner or payment or performance of any of any
other Applicant's or the Borrower's obligations and liabilities (including the
Obligations), (xi) the merger or
-56-
consolidation of any other Applicant or the Borrower into or with any Person,
(xii) the sale by any other Applicant or the Borrower of all or part of its
assets, (xiii) the fact that at any time and from time to time none of the
Obligations may be outstanding or owing to the Administrative Agent, the Issuing
Bank or any Lender, (xiv) any amendment or modification of, or supplement to,
any Loan Document or the Letter of Credit or (xv) any other reason or
circumstance which might otherwise constitute a defense available to or a
discharge of any other Applicant or the Borrower in respect of its obligations
or liabilities (including the Obligations) other than by the performance in full
thereof.
Section 10.14 Appointment of Attorney
Each Loan Party hereby irrevocably appoints the Borrower as its agent
for all purposes under the Loan Documents, including the right to give and
receive all notices and to make and receive all requests. Such appointment shall
be deemed coupled with an interest. The Credit Parties are hereby
unconditionally entitled to rely on any notice, request or other action taken by
the Borrower on behalf of one or more of the Loan Parties under the Loan
Documents.
ARTICLE 11.
GUARANTY
Section 11.1 Guaranty
Each of Assurance and HMO, after the effective date of the Conversion,
is an indirect, wholly-owned subsidiary of the Borrower. The Borrower
acknowledges that (i) it will derive substantial benefit from the Letter of
Credit and (ii) the execution and delivery by the Borrower of this Guaranty and
this Agreement is a condition precedent to the effectiveness of this Agreement,
and the Credit Parties would not have entered into this Agreement if the
Borrower had not executed and delivered this Guaranty and this Agreement.
The Borrower unconditionally guarantees, as a primary obligor and not
merely as a surety, all Obligations of Assurance and HMO (the "Guaranteed
Obligations"). The Borrower further agrees that the Guaranteed Obligations may
be extended or renewed, in whole or in part, without notice to or further assent
from it and that it will remain bound upon its guarantee notwithstanding any
extension or renewal of any Guaranteed Obligation.
Section 11.2 Guarantee of Payment
The Borrower further agrees that this Guaranty constitutes a guarantee
of payment when due and not of collection, and waives any right to require that
any resort be had by the Administrative Agent or any other Credit Party to any
security held for payment of the Guaranteed Obligations or to any balance of any
deposit account or credit on the books of the Administrative Agent or any other
Credit Party in favor of any Applicant or any other person.
Section 11.3 Waiver of Subrogation
Anything in this Agreement to the contrary notwithstanding, the
Borrower expressly waives any and all rights of subrogation, reimbursement,
indemnity, exoneration, contribution or any other claim that it may now or
hereafter have against any other Loan Party, any other guarantor or any other
Person directly or contingently liable for the Guaranteed Obligations, or
against or with respect
-57-
to the property of such other Loan Party, such other guarantor or such other
Person, arising from the existence or performance hereof, and, in furtherance,
and not in limitation, of the preceding waiver, the Borrower agrees that, in the
event that any money or property shall be transferred to any Credit Party by the
Borrower pursuant to this Guaranty in reduction of the Guaranteed Obligations,
such transfer shall be deemed to be a contribution to the capital of the
applicable Loan Party, other guarantor or other Person (in the case of the
transfer of property, in an amount equal to the fair market value of the
property so transferred) as of the date of such transfer, and any such transfer
shall not cause the Borrower to be a creditor of such Loan Party.
Section 11.4 Obligations Not Waived
To the fullest extent permitted by applicable law, the Borrower waives
presentment to, demand of payment from, and protest to any Loan Party of any of
the Guaranteed Obligations, and also waives notice of acceptance of its
guarantee and notice of protest for nonpayment. To the fullest extent permitted
by applicable law, the obligations of the Borrower under this Guaranty shall not
be affected by (i) the failure of the Administrative Agent or any other Credit
Party to assert any claim or demand or to enforce or exercise any right or
remedy against any other Loan Party under the provisions of this Agreement or
any other Loan Document, or otherwise, (ii) any rescission, waiver, amendment or
modification of, or any release from, any of the terms or provisions of this or
any other Loan Document, or (iii) the failure to perfect any security interest
in, or the release of, any of the security held by or on behalf of the
Administrative Agent or any other Credit Party.
Section 11.5 No Discharge or Diminishment of Guaranty
The obligations of the Borrower under this Guaranty shall not be
subject to any reduction, limitation, impairment or termination for any reason
(other than the termination of this Guaranty in accordance with Section 11.9),
including any claim of waiver, release, surrender, alteration or compromise of
any of the Guaranteed Obligations, and shall not be subject to any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of the Guaranteed Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
the Borrower under this Guaranty shall not be discharged or impaired or
otherwise affected by the failure of the Administrative Agent or any other
Credit Party to assert any claim or demand or to enforce any remedy under this
Agreement, any other Loan Document or any other agreement, by any waiver or
modification of any provision of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the Guaranteed Obligations, or by
any other act or omission that may or might in any manner or to any extent vary
the risk of the Borrower or that would otherwise operate as a discharge of the
Borrower as a matter of law or equity (other than the termination of this
Guaranty in accordance with Section 11.9).
Section 11.6 Defenses of Applicants Waived
To the fullest extent permitted by applicable law, the Borrower waives
any defense based on or arising out of any defense of any other Loan Party or
the unenforceability of the Guaranteed Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of any other Loan Party,
other than the termination of this Guaranty in accordance with Section 11.9. The
Administrative Agent and the other Credit Parties may, at their election,
foreclose on any security held by one or more of them by one or more judicial or
nonjudicial sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Guaranteed Obligations, make
any other accommodation with any other Loan Party or exercise any other right or
remedy available to them against any other Loan Party, without affecting or
impairing in
-58-
any way the liability of the Borrower under this Guaranty. Pursuant to
applicable law, the Borrower waives any defense arising out of any such election
even though such election operates, pursuant to applicable law, to impair or to
extinguish any right of reimbursement or subrogation or other right or remedy of
the Borrower against any other Loan Party or any security.
Section 11.7 Agreement to Pay; Subordination
In furtherance of the foregoing and not in limitation of any other
right that the Administrative Agent or any other Credit Party has at law or in
equity against the Borrower by virtue hereof, upon the failure of any other Loan
Party to pay any Guaranteed Obligation when and as the same shall become due,
whether at maturity, by acceleration, after notice of prepayment or otherwise,
the Borrower hereby promises to and will forthwith pay, or cause to be paid, to
the Administrative Agent or such other Credit Party as designated thereby in
cash the amount of such unpaid Guaranteed Obligations. Upon payment by the
Borrower of any sums to the Administrative Agent or any Credit Party as provided
above, all rights of the Borrower against the applicable Loan Party arising as a
result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subordinate and junior in right
of payment to the prior final and indefeasible payment in full in cash of the
Guaranteed Obligations. In addition, any debt of any other Loan Party now or
hereafter held by the Borrower is hereby subordinated in right of payment to the
prior final and indefeasible payment in full in cash of the Guaranteed
Obligations. If any amount shall erroneously be paid to the Borrower on account
of (i) such subrogation, contribution, reimbursement, indemnity or similar right
or (ii) any such debt of such other Loan Party, such amount shall be held in
trust for the benefit of the Credit Parties and shall forthwith be paid to the
Administrative Agent to be credited against the payment of the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms of the
Loan Documents.
Section 11.8 Information
The Borrower assumes all responsibility for being and keeping itself
informed of each other Loan Party's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks that the Borrower
assumes and incurs under this Guaranty, and agrees that none of the
Administrative Agent or the other Credit Parties will have any duty to advise
the Borrower of information known to it or any of them regarding such
circumstances or risks.
Section 11.9 Termination of Guaranty
This Guaranty (i) shall terminate when all the Guaranteed Obligations
have been finally and indefeasibly paid in full in cash, the Commitments have
been terminated and the Letter of Credit shall have expired or been canceled and
returned to the Issuing Bank and (ii) shall continue to be effective or be
reinstated, as applicable, if at any time payment of any of the Guaranteed
Obligations is rescinded or must otherwise be restored by any Credit Party or
the Borrower upon the bankruptcy or reorganization of any Loan Party or
otherwise.
-59-
ARTICLE 12.
TERMINATION OF AGREEMENT
Section 12.1 Termination of Agreement
This Agreement (i) shall terminate when all the Obligations have been
finally and indefeasibly paid in full in cash, the Commitments have been
terminated and the Letter of Credit shall have expired or been canceled and
returned to the Issuing Bank and (ii) shall continue to be effective or be
reinstated, as applicable, if at any time payment of any of the Obligations is
rescinded or must otherwise be restored by any Credit Party or any Loan Party
upon the bankruptcy or reorganization of any Loan Party or otherwise.
ARTICLE 13.
PRIOR TO THE EFFECTIVE DATE
Section 13.1 Prior to the Effective Date
Prior to the Effective Date, the Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of any development
that could reasonably be expected to materially and adversely affect the
consummation of the Conversion Transactions in accordance with the Conversion
Transaction Documents.
-60-
WELLCHOICE, INC.
CREDIT AND GUARANTY AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
WELLCHOICE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
EMPIRE HEALTHCHOICE ASSURANCE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
EMPIRE HEALTHCHOICE HMO, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
WELLCHOICE, INC.
CREDIT AND GUARANTY AGREEMENT
THE BANK OF NEW YORK, individually, as
Issuing Bank and as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
WELLCHOICE, INC.
CREDIT AND GUARANTY AGREEMENT
HSBC BANK USA, individually and as
Co-Syndication Agent
By: /s/ ▇▇▇▇▇▇ Broad
------------------------------
Name: ▇▇▇▇▇▇ Broad
Title: Vice President
WELLCHOICE, INC.
CREDIT AND GUARANTY AGREEMENT
WACHOVIA BANK, NATIONAL ASSOCIATION.,
individually and as Co-Syndication Agent
By: /s/ ▇▇▇▇▇ ▇. Black
--------------------------------
Name: ▇▇▇▇▇ ▇. Black
Title: Director
WELLCHOICE, INC.
CREDIT AND GUARANTY AGREEMENT
CREDIT SUISSE FIRST BOSTON, acting through
its Cayman Islands Branch
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇▇ ▇. Pieza
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. Pieza
Title: Associate
WELLCHOICE, INC.
CREDIT AND GUARANTY AGREEMENT
JPMORGAN CHASE BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Schedule 2.1
List of Revolving Commitments
================================================================================
Name of Lender Revolving Commitment
-------------- --------------------
--------------------------------------------------------------------------------
The Bank of New York $ 24,000,000
--------------------------------------------------------------------------------
HSBC Bank USA $ 22,000,000
--------------------------------------------------------------------------------
Wachovia Bank, National Association $ 22,000,000
--------------------------------------------------------------------------------
Credit Suisse First Boston $ 17,000,000
--------------------------------------------------------------------------------
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ $ 15,000,000
--------------------------------------------------------------------------------
TOTAL $100,000,000
================================================================================
Schedule 4.6
List of Litigation
1. Consumers Union of U.S., Inc. et al. v. State of New York et al. and Empire
HealthChoice, Inc. d/b/a Blue Cross and Blue Shield.
Schedule 4.12
List of Subsidiaries
Company Place of Organization
-------------------------------------------------------------------------------
EHC Benefits Agency, Inc. New York
Empire HealthChoice Assurance, Inc. New York
Empire HealthChoice HMO, Inc. New York
Empire National Account Service Co., Inc. New York
WellChoice Holdings of New York, Inc. New York
WellChoice Insurance of New Jersey, Inc. New Jersey
Schedule 7.1
List of Existing Indebtedness
Letter of Credit $ 607,200
Letter of Credit under
the Existing Letter of Credit
and Guaranty Agreement $25,000,000
Schedule 7.2
List of Existing Liens
None.
Schedule 7.6
List of Existing Restrictions
None.
WELLCHOICE, INC. - EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit and Guaranty Agreement, dated as of
October 17, 2002, by and among WellChoice, Inc. (the "Borrower"), Empire
HealthChoice Assurance, Inc. and Empire HealthChoice HMO, Inc., as Applicants,
the Lenders party thereto, The Bank of New York, as Issuing Bank, HSBC Bank USA
and Wachovia Bank, National Association, as Co-Syndication Agents, and The Bank
of New York, as Administrative Agent (as the same may be amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"). Capitalized
terms used herein that are defined in the Credit Agreement shall have the
meanings therein defined.
The Assignor named below hereby sells and assigns, without recourse, to
the Assignee named below, and the Assignee hereby purchases and assumes, without
recourse, from the Assignor, effective as of the Assignment Date (as defined
below), the interests set forth below (the "Assigned Interest") in the
Assignor's rights and obligations under the Credit Agreement, including, without
limitation, the interests set forth below in the Commitment of the Assignor on
the Assignment Date and the Loans owing to the Assignor that are outstanding on
the Assignment Date, together with, in the case of such Commitment, all of the
related participations held by the Assignor in respect of the Letter of Credit
(including its LC Exposure), but excluding accrued interest and fees to and
excluding the Assignment Date. The Assignee hereby acknowledges receipt of a
copy of the Credit Agreement. From and after the Assignment Date, (i) the
Assignee shall be a party to and be bound by the provisions of the Credit
Agreement and, to the extent of the Assigned Interest, have the rights and
obligations of a Lender under the Loan Documents and (ii) the Assignor shall, to
the extent of the Assigned Interest, relinquish its rights and be released from
its obligations under the Loan Documents.
This Assignment and Acceptance is being delivered to the Administrative
Agent, together with (i) if the Assignee is a Foreign Lender, any documentation
required to be delivered by the Assignee pursuant to Section 3.7(e) of the
Credit Agreement, duly completed and executed by the Assignee, and (ii) if the
Assignee is not already a Lender under the Credit Agreement, an Administrative
Questionnaire in the form supplied by the Administrative Agent, duly completed
by the Assignee. The [Assignee/Assignor]/1/ shall pay the fee payable to the
Administrative Agent pursuant to Section 10.4(b) of the Credit Agreement.
THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
________________________________
/1/ Delete inapplicable term(s).
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment (the "Assignment Date"):
Commitment Assigned:
Principal Amount of Loans Assigned:
Amount of LC Exposure Assigned:
The terms set forth above are hereby agreed to:
[Name of Assignor], as Assignor
By:________________________________________
Name:______________________________________
Title:_____________________________________
[Name of Assignee], as Assignee
By: _______________________________________
Name:______________________________________
Title:_____________________________________
The undersigned hereby consent[s]/2/ to the within assignment:
WELLCHOICE, INC.
By:________________________________________
Name:______________________________________
Title:_____________________________________
THE BANK OF NEW YORK, as Administrative
Agent and as Issuing Bank
By:________________________________________
Name:______________________________________
Title:_____________________________________
_______________________
/2/ Consents to be included to the extent required by Section 10.4(b) of the
Credit Agreement.
-2-
Exhibit B-1
[Letterhead of Weil, Gotshal & ▇▇▇▇▇▇ LLP]
[Closing Date Opinion]
October __, 2002
To The Bank of New York, as Administrative
Agent and Issuing Bank, and each of the Lenders
party to the Credit and Guaranty
Agreement referred to below
Re: Credit and Guaranty Agreement, dated as of October __, 2002, by and
among WellChoice, Inc., as Borrower and guarantor, Empire HealthChoice
Assurance, Inc. and Empire HealthChoice HMO, Inc., as Applicants, the Lenders
party thereto, The Bank of New York, as Issuing Bank, HSBC Bank USA and Wachovia
Bank, National Association, as Co-Syndication Agents, and The Bank of New York,
as Administrative Agent (the "Agreement").
Ladies and Gentlemen:
We have acted as counsel to WellChoice Inc., a Delaware corporation (the
"Company"), in connection with the preparation, execution and delivery of, and
the consummation of the transactions contemplated by, the above-referenced
Agreement. This opinion is furnished to you pursuant to Section 5.1(c) of the
Agreement. Capitalized terms defined in the Agreement and used (but not
otherwise defined) herein are used herein as so defined.
In so acting, we have examined originals or copies (certified or otherwise
identified to our satisfaction) of the Agreement and such corporate records,
agreements, documents or other instruments, and such certificates or comparable
documents of public officials and of officers and representatives of the
Company, and have made such inquiries of such officers and representatives, as
we have deemed relevant and necessary as a basis for the opinions hereinafter
set forth.
In such examination, we have assumed the genuineness of all signatures, the
legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. As to all questions of
fact material to these opinions that have not been independently established, we
have relied upon certificates or comparable documents of officers and
representatives of the Company and upon the representations and warranties of
the Company contained in the Agreement. As used herein, "of which we are aware"
October __, 2002
Page 2
means the conscious awareness of facts or other information by any lawyer in our
firm actively involved in the transactions contemplated by the Agreement.
Based on the foregoing, and subject to the qualifications stated herein, we
are of the opinion that:
1. The Company is duly organized, validly existing and in good standing
under the laws of the State of Delaware.
2. The Company has all requisite corporate power and authority to execute
and deliver the Agreement and to perform its obligations thereunder. The
execution, delivery and performance of the Agreement by the Company has been
duly authorized by all necessary corporate action on the part of the Company.
The Agreement has been duly and validly executed and delivered by the Company
and assuming the due authorization, execution and delivery thereof by the
Lenders, the Issuing Bank and the Administrative Agent, the Agreement
constitutes the legal, valid and binding obligation of the Company, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity) and except that no
opinion is expressed with respect to Section 2.9(c) of the Agreement.
3. The execution and delivery by the Company of the Agreement and the
performance by the Company of its obligations thereunder will not conflict with,
constitute a default under or violate (i) any of the terms, conditions or
provisions of the Certificate of Incorporation or by-laws of the Company, (ii)
New York, Delaware corporate or federal law or regulation (excluding federal and
state securities or blue sky laws, as to which we express no opinion in this
paragraph), or (iii) any judgment, writ, injunction, decree, order or ruling of
any court or governmental authority binding on the Company of which we are
aware.
The opinion expressed herein is limited to the laws of the State of New
York, the corporate laws of the State of Delaware and the federal laws of the
United States, and we express no opinion as to the effect on the matters covered
by this letter of the laws of any other jurisdiction.
The opinion expressed herein is rendered solely for your benefit in
connection with the transactions described herein. This opinion may not be used
or relied upon by any other person, nor may this letter or any copies thereof be
furnished to a third party, filed with a governmental agency, quoted, cited or
otherwise referred to without
October __, 2002
Page 3
our prior written consent, other than to bank regulatory authorities or
permitted assigns (and may be shown to potential assigns) of any Lender.
Very truly yours,
Exhibit B-2
[Letterhead of Weil, Gotshal & ▇▇▇▇▇▇ LLP]
[Effective Date Opinion]
[Date]
To The Bank of New York, as Administrative
Agent and Issuing Bank, and each of the Lenders
party to the Credit and Guaranty
Agreement referred to below
Re: Credit and Guaranty Agreement, dated as of October __, 2002, by and
among WellChoice, Inc., as Borrower and guarantor, Empire HealthChoice
Assurance, Inc. and Empire HealthChoice HMO, Inc., as Applicants, the Lenders
party thereto, The Bank of New York, as Issuing Bank, HSBC Bank USA and Wachovia
Bank, National Association, as Co-Syndication Agents, and The Bank of New York,
as Administrative Agent (the "Agreement").
Ladies and Gentlemen:
We have acted as counsel to WellChoice Inc., a Delaware corporation, as
Borrower and guarantor (the "Borrower"), Empire HealthChoice Assurance, Inc., a
New York corporation and Empire HealthChoice HMO, Inc., a New York corporation
(the "Applicants" and together with the Borrower, collectively, the "Loan
Parties" and each a "Loan Party"), in connection with the preparation, execution
and delivery of, and the consummation of the transactions contemplated by, the
above-referenced Agreement. This opinion is furnished to you pursuant to Section
5.2(b) of the Agreement. Capitalized terms defined in the Agreement and used
(but not otherwise defined) herein are used herein as so defined.
In so acting, we have examined originals or copies (certified or otherwise
identified to our satisfaction) of the Agreement and such corporate records,
agreements, documents or other instruments, and such certificates or comparable
documents of public officials and of officers and representatives of the Loan
Parties, and have made such inquiries of such officers and representatives, as
we have deemed relevant and necessary as a basis for the opinions hereinafter
set forth.
In such examination, we have assumed the genuineness of all signatures, the
legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. As to all questions of
fact material to these opinions that have not been independently established, we
have relied upon certificates or comparable documents of officers and
representatives of the Loan Parties and upon the representations and
[Date]
Page 2
warranties of the Loan Parties contained in the Agreement. As used herein, "to
our knowledge" and "of which we are aware" mean the conscious awareness of facts
or other information by any lawyer in our firm actively involved in the
transactions contemplated by the Agreement.
Based on the foregoing, and subject to the qualifications stated herein, we
are of the opinion that:
1. The Borrower is duly organized, validly existing and in good standing
under the laws of the State of Delaware, has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted. The Borrower is duly qualified to transact business and
is in good standing as a foreign corporation in the State of New York.
2. Each Applicant, EHC Benefits Agency, Inc., WellChoice Holdings of New
York, Inc., and Empire National Account Service Co., Inc. is a corporation
validly existing and in good standing under the laws of the State of New York
and has all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted.
3. Each Loan Party has all requisite corporate power and authority to
execute and deliver the Agreement and the Notes (collectively, the "Loan
Documents") and to perform its obligations thereunder, to the extent it is a
party thereto. The execution, delivery and performance of the Loan Documents by
each Loan Party party thereto has been duly authorized by all necessary
corporate action on the part of such Loan Party. The Loan Documents have been
duly and validly executed and delivered by each Loan Party party thereto, and
assuming the due authorization, execution and delivery thereof by the Lenders,
the Issuing Bank and the Administrative Agent, constitute the legal, valid and
binding obligation of each Loan Party party thereto, enforceable against each in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity) and except that no opinion is expressed with
respect to Section 2.9(c) of the Agreement.
4. The execution and delivery by the Loan Parties of the Loan Documents,
and the performance by the Loan Parties of their obligations thereunder will not
conflict with, constitute a default under or violate (i) any of the terms,
conditions or provisions of the Certificate of Incorporation or by-laws of the
Loan Parties, (ii) any of the terms, conditions or provisions of any material
document, agreement or other instrument to which any Loan Party is a party or by
which it is bound of which we are
aware, (iii) New York, Delaware corporate or federal law or regulation
(excluding federal and state securities or blue sky laws, as to which we express
no opinion in this paragraph), or (iv) any judgment, writ, injunction, decree,
order or ruling of any court or governmental authority binding on any Loan Party
of which we are aware.
5. Except as set forth in Schedule I attached hereto, to our knowledge,
there is no litigation, proceeding or governmental investigation pending or
overtly threatened against the Loan Parties that relates to any of the
transactions contemplated by the Agreement.
To our knowledge, no injunction or temporary restraining order that could
potentially stop or delay the Conversion Transactions has been filed in the
litigation listed in Schedule I attached hereto.
6. Each Loan Party is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "holding company" or a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
7. The entering of the Agreement and the use of the proceeds in accordance
with the provisions of and contemplated by the Agreement, does not violate or
conflict with Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
The opinion expressed herein is limited to the laws of the State of New
York, the corporate laws of the State of Delaware and the federal laws of the
United States, and we express no opinion as to the effect on the matters covered
by this letter of the laws of any other jurisdiction.
The opinion expressed herein is rendered solely for your benefit in
connection with the transactions described herein. This opinion may not be used
or relied upon by any other person, nor may this letter or any copies thereof be
furnished to a third party, filed with a governmental agency, quoted, cited or
otherwise referred to without our prior written consent, other than to bank
regulatory authorities or permitted assigns (and may be shown to potential
assigns) of any Lender.
Very truly yours,
SCHEDULE I
1. Consumers Union of U.S., Inc. et al. v. State of New York et al. and
Empire HealthChoice, Inc. d/b/a Blue Cross and Blue Shield.
WELLCHOICE, INC. - EXHIBIT C
FORM OF BORROWING REQUEST
[Date]
The Bank of New York, as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Agency Function Administration
The Bank of New York, as Administrative Agent
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Reference is made to the Credit and Guaranty Agreement, dated as
of October 17, 2002, by and among WellChoice, Inc. (the "Borrower"), Empire
HealthChoice Assurance, Inc. and Empire HealthChoice HMO, Inc., as Applicants,
the Lenders party thereto, The Bank of New York, as Issuing Bank, HSBC Bank USA
and Wachovia Bank, National Association, as Co-Syndication Agents, and The Bank
of New York, as Administrative Agent (as the same may be amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"). Capitalized
terms used herein that are defined in the Credit Agreement shall have the
meanings therein defined.
1. Pursuant to Section 2.3(a) of the Credit Agreement, the
Borrower hereby gives notice of its intention to borrow Loans in an aggregate
principal amount of $_______ on _______, 200_, which Borrowing(s) shall consist
of the following Types:
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Type of Borrowing (ABR Interest Period for
or Eurodollar) Amount Eurodollar Advances
------------ ------ -------------------
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2. The location and number of the Borrower's account to which
funds are to be disbursed is as follows: [Insert Wire Instructions]
3. The Borrower hereby certifies that (a) the representations
and warranties of the Loan Parties set forth in the Loan Documents shall be true
and correct on and as of the date of such Borrowing(s) and (b) at the time of
and immediately after giving effect to such Borrowing(s), no Default shall have
occurred and be continuing.
IN WITNESS WHEREOF, the Borrower has caused this Borrowing Request to be duly
executed by its authorized officer(s) as of the day and year first written
above.
WELLCHOICE, INC.
By:_____________________________
Name:___________________________
Title:__________________________
WELLCHOICE, INC. - EXHIBIT D
FORM OF NOTE
FOR VALUE RECEIVED, the undersigned, WellChoice, Inc., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
________________ (the "Lender") the unpaid principal amount of the Loans made by
the Lender to the Borrower, in the amounts and at the times set forth in the
Credit and Guaranty Agreement, dated as of October 17, 2002, by and among the
Borrower, Empire HealthChoice Assurance, Inc. and Empire HealthChoice HMO, Inc.,
as Applicants, the Lenders party thereto, The Bank of New York, as Issuing Bank,
HSBC Bank USA and Wachovia Bank, National Association, as Co-Syndication Agents,
and The Bank of New York, as Administrative Agent (as the same may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
and to pay interest from the date hereof on the principal balance of such Loans
from time to time outstanding at the rate or rates and at the times set forth in
the Credit Agreement, in each case at the office of the Administrative Agent
located at One Wall Street, New York, New York, or at such other place as the
Administrative Agent may specify from time to time, in lawful money of the
United States in immediately available funds. Terms not otherwise defined herein
but defined in the Credit Agreement are used herein with the same meanings.
The Loans evidenced by this Note are prepayable in the amounts, and
under the circumstances, and their respective maturities are subject to
acceleration upon the terms, set forth in the Credit Agreement. This Note is
subject to, and should be construed in accordance with, the provisions of the
Credit Agreement and is entitled to the benefits and security set forth in the
Loan Documents.
The Lender is hereby authorized to record on the Schedule annexed
hereto, and any continuation sheets which the Lender may attach hereto, (i) the
date of each Loan made by the Lender to the Borrower, (ii) the Type and amount
thereof, (iii) the interest rate (without regard to the Applicable Margin) and
Interest Period applicable to each Eurodollar Loan and (iv) the date and amount
of each conversion of, and each payment or prepayment of the principal of, any
such Loan. The entries made on such Schedule shall be prima facie evidence of
the existence and amounts of the obligations recorded thereon, provided that the
failure to so record or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans in accordance with the terms of
the Credit Agreement.
Except as specifically otherwise provided in the Credit Agreement, the
Borrower hereby waives presentment, demand, notice of dishonor, protest, notice
of protest and all other demands, protests and notices in connection with the
execution, delivery, performance, collection and enforcement of this Note.
Whenever in this Note either party hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party.
The Borrower shall not have the right to assign its rights or obligations
hereunder or any interest herein (and any such attempted assignment shall be
void), except as expressly permitted by the Loan Documents. No failure or delay
of the Lender in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. Neither this Note nor any provision hereof may be waived,
amended or modified, nor shall any departure therefrom be consented to, except
pursuant to a written agreement entered into between the Borrower and the Lender
with respect to which such waiver, amendment, modification or consent is to
apply, subject to any consent required in accordance with Section 10.2 of the
Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
All communications and notices hereunder shall be in writing and given
as provided in Section 10.1 of the Credit Agreement.
The Borrower hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court
or Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out of
or relating to this Note or the other Loan Documents, or for recognition or
enforcement of any judgment, and the Borrower hereby irrevocably and
unconditionally agrees that, to the extent permitted by applicable law, all
claims in respect of any such action or proceeding may be heard and determined
in such New York State court or, to the extent permitted by applicable law, in
such Federal court. The Borrower agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Note shall affect any right that the Lender or Administrative Agent may
otherwise have to bring any action or proceeding relating to this Note or the
other Loan Documents against the Borrower, or any of its property, in the courts
of any jurisdiction.
The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Note or the other Loan Documents in any court
referred to in the preceding paragraph hereof. The Borrower hereby irrevocably
waives, to the fullest extent permitted by applicable law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
The Borrower irrevocably consents to service of process in the manner
provided for notices herein. Nothing herein will affect the right of the Lender
or the Administrative Agent to serve process in any other manner permitted by
law.
THE BORROWER, AND BY ACCEPTING THIS NOTE, THE LENDER, EACH HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE. THE BORROWER (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE LENDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT SUCH LENDER HAS BEEN
INDUCED TO ACCEPT THIS NOTE AND ENTER INTO THE LOAN DOCUMENTS TO WHICH IT IS A
PARTY BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH.
WELLCHOICE, INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
-2-
SCHEDULE TO NOTE
===========================================================================================
Amount of
---------
principal Interest
--------- --------
converted, Interest Rate Period for
--------- ------------- ----------
Amount of paid or on Eurodollar Eurodollar Notation
--------- ------- ------------- ---------- --------
Date Type of Loan Loan prepaid Loans Loans Made By
---- ------------ ---- ------- ----- ----- -------
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WELLCHOICE, INC. - EXHIBIT E
FORM OF COMPLIANCE CERTIFICATE
I, ______________, do hereby certify that I am the __________ of
WellChoice, Inc. (the "Borrower"), and that, as such, I am duly authorized to
execute and deliver this Compliance Certificate on the Borrower's behalf
pursuant to Section 6.1(i) of the Credit and Guaranty Agreement, dated as of
October 17, 2002, by and among the Borrower, Empire HealthChoice Assurance, Inc.
and Empire HealthChoice HMO, Inc., as Applicants, the Lenders party thereto, The
Bank of New York, as Issuing Bank, HSBC Bank USA and Wachovia Bank, National
Association, as Co-Syndication Agents, and The Bank of New York, as
Administrative Agent (as the same may be amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"). Capitalized terms used
herein that are defined in the Credit Agreement shall have the meanings therein
defined.
I hereby certify that:
1. Attached are the financial statements of the Loan Parties for
the fiscal [quarter/year] ended _____________ required to be delivered pursuant
to Section 6.1 of the Credit Agreement.
2. To the best of my knowledge, all financial statements
delivered herewith have been prepared in accordance with, as applicable, GAAP or
SAP. There have been no material changes in the application, as applicable, of
GAAP or SAP since the date of the audited financial statements referred to in
Section 4.4(a) of the Credit Agreement[, except as follows:/1/]
3. There exists no violation of any covenant or agreement
contained in any Loan Document, and no condition or event has occurred which
would constitute a Default or Event of Default[, except as follows:/2/]
4. As of the fiscal [quarter/year] ended _________, the actual
Surplus maintained by each Loan Party, to the extent such Loan Party is required
to do so by applicable law, and the Surplus required by applicable law for such
Loan Party is:
=================================================================
Loan Party Actual Surplus Required
Surplus
-----------------------------------------------------------------
WellChoice, Inc.
-----------------------------------------------------------------
Empire HealthChoice Assurance, Inc.
-----------------------------------------------------------------
Empire HealthChoice HMO, Inc.
=================================================================
5. As of the fiscal [quarter/year] ended _________, the actual
Risk Based Capital maintained by each Loan Party, and the Company Action Level,
if any, required by the NAIC for such entity are:
---------------
/1/ Specify all such changes, and the effect of each such change on the
financial statements accompanying this Compliance Certificate.
/2/ Specify all such violations, conditions and events, the nature and status
thereof and any action taken or proposed to be taken with respect thereto.
=================================================================
Loan Party Risk Based Required
Capital Company
Action Level
-----------------------------------------------------------------
WellChoice, Inc.
-----------------------------------------------------------------
Empire HealthChoice Assurance, Inc.
-----------------------------------------------------------------
Empire HealthChoice HMO, Inc.
=================================================================
6. As of the date hereof, the Financial Strength Rating, if any,
of each of the Applicants is:
=================================================================
Applicant Financial
Strength Rating
-----------------------------------------------------------------
Empire HealthChoice Assurance, Inc.
-----------------------------------------------------------------
Empire HealthChoice HMO, Inc.
=================================================================
7. As of the date hereof, the Capitalization Percentage Ratio of
the Borrower is:
=================================================================
Loan Party Actual Required
Capitalization Capitalization
Percentage Ratio Percentage Ratio
-----------------------------------------------------------------
WellChoice, Inc.
=================================================================
8. As of the date hereof, the Fixed Charge Coverage Ratio of the
Borrower is:
=================================================================
Loan Party Actual Fixed Required Fixed
Charge Coverage Charge Coverage
Ratio Ratio
-----------------------------------------------------------------
WellChoice, Inc.
=================================================================
9. Attached are true and correct calculations (in form and
substance satisfactory to the Administrative Agent) showing compliance with
Section 6.12(d) (Capitalization Percentage Ratio) and (e) (Fixed Charge Coverage
Ratio) of the Credit Agreement.
-2-
IN WITNESS WHEREOF, I have executed this Compliance Certificate on this
___ day of ________, 200_.
______________________________________
-3-