Exhibit 10.1
EXECUTION VERSION
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$75,000,000
CREDIT AGREEMENT
DATED AS OF APRIL 21, 2006,
AMONG
HEALTHSPRING, INC.,
AS BORROWER,
THE GUARANTORS PARTY HERETO,
AS GUARANTORS,
THE LENDERS PARTY HERETO
AND
UBS SECURITIES LLC,
AS JOINT LEAD ARRANGER AND JOINT BOOKRUNNER,
AND
CITIGROUP GLOBAL MARKETS INC.,
AS JOINT LEAD ARRANGER AND JOINT BOOKRUNNER,
AND
CITICORP USA, INC.,
AS SYNDICATION AGENT
AND
BANK OF AMERICA, N.A.,
AS DOCUMENTATION AGENT
AND
UBS AG, STAMFORD BRANCH,
AS ISSUING BANK, ADMINISTRATIVE AGENT AND
COLLATERAL AGENT,
AND
UBS LOAN FINANCE LLC,
AS SWINGLINE LENDER
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms.................................................... 1
SECTION 1.02 Classification of Loans and Borrowings........................... 33
SECTION 1.03 Terms Generally.................................................. 33
SECTION 1.04 Accounting Terms; GAAP........................................... 33
SECTION 1.05 Resolution of Drafting Ambiguities............................... 34
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments...................................................... 34
SECTION 2.02 Loans............................................................ 34
SECTION 2.03 Borrowing Procedure.............................................. 35
SECTION 2.04 Evidence of Debt; Repayment of Loans............................. 36
SECTION 2.05 Fees............................................................. 37
SECTION 2.06 Interest on Loans................................................ 38
SECTION 2.07 Termination and Reduction of Commitments......................... 38
SECTION 2.08 Interest Elections............................................... 39
SECTION 2.09 [Reserved]....................................................... 40
SECTION 2.10 Optional and Mandatory Prepayments of Loans...................... 40
SECTION 2.11 Alternate Rate of Interest....................................... 42
SECTION 2.12 Yield Protection................................................. 42
SECTION 2.13 Breakage Payments................................................ 43
SECTION 2.14 Payments Generally; Pro Rata Treatment; Sharing of Setoffs....... 44
SECTION 2.15 Taxes............................................................ 46
SECTION 2.16 Mitigation Obligations; Replacement of Lenders................... 47
SECTION 2.17 Swingline Loans.................................................. 49
SECTION 2.18 Letters of Credit................................................ 50
SECTION 2.19 Increase in Commitments.......................................... 56
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Organization; Powers............................................. 58
SECTION 3.02 Authorization; Enforceability.................................... 58
SECTION 3.03 No Conflicts..................................................... 58
SECTION 3.04 Financial Statements; Projections................................ 59
SECTION 3.05 Properties....................................................... 59
SECTION 3.06 Intellectual Property............................................ 60
SECTION 3.07 Equity Interests and Subsidiaries................................ 60
SECTION 3.08 Litigation; Compliance with Laws................................. 61
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Section Page
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SECTION 3.09 Agreements....................................................... 62
SECTION 3.10 Federal Reserve Regulations...................................... 62
SECTION 3.11 Investment Company Act........................................... 62
SECTION 3.12 Use of Proceeds.................................................. 62
SECTION 3.13 Taxes............................................................ 63
SECTION 3.14 No Material Misstatements........................................ 63
SECTION 3.15 Labor Matters.................................................... 63
SECTION 3.16 Solvency......................................................... 64
SECTION 3.17 Employee Benefit Plans........................................... 64
SECTION 3.18 Environmental Matters............................................ 64
SECTION 3.19 Insurance........................................................ 66
SECTION 3.20 Security Documents............................................... 66
SECTION 3.21 [Reserved]....................................................... 67
SECTION 3.22 Anti-Terrorism Law............................................... 67
SECTION 3.23 [Reserved]....................................................... 68
SECTION 3.24 Fraud and Abuse.................................................. 68
SECTION 3.25 Licensing and Accreditation...................................... 68
ARTICLE IV
CONDITIONS TO CREDIT EXTENSIONS
SECTION 4.01 Conditions to Initial Credit Extension........................... 68
SECTION 4.02 Conditions to All Credit Extensions.............................. 72
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01 Financial Statements, Reports, etc............................... 73
SECTION 5.02 Litigation and Other Notices..................................... 75
SECTION 5.03 Existence; Businesses and Properties............................. 76
SECTION 5.04 Insurance........................................................ 77
SECTION 5.05 Obligations and Taxes............................................ 78
SECTION 5.06 Employee Benefits................................................ 78
SECTION 5.07 Maintaining Records; Access to Properties and Inspections;
Annual Meetings.................................................. 79
SECTION 5.08 Use of Proceeds.................................................. 79
SECTION 5.09 Compliance with Environmental Laws; Environmental Reports........ 80
SECTION 5.10 [Reserved]....................................................... 80
SECTION 5.11 Additional Collateral; Additional Guarantors..................... 80
SECTION 5.12 Security Interests; Further Assurances........................... 81
SECTION 5.13 Information Regarding Collateral................................. 82
SECTION 5.14 Company Action Level............................................. 82
SECTION 5.15 [Reserved]....................................................... 82
SECTION 5.16 Compliance with Laws............................................. 82
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Section Page
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ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01 Indebtedness..................................................... 83
SECTION 6.02 Liens............................................................ 85
SECTION 6.03 Sale and Leaseback Transactions.................................. 88
SECTION 6.04 Investments, Loans and Advances.................................. 88
SECTION 6.05 Mergers and Consolidations....................................... 89
SECTION 6.06 Asset Sales...................................................... 90
SECTION 6.07 Acquisitions..................................................... 91
SECTION 6.08 Dividends........................................................ 91
SECTION 6.09 Transactions with Affiliates..................................... 92
SECTION 6.10 Financial Covenants.............................................. 93
SECTION 6.11 Prepayments of Other Indebtedness; Modifications of
Organizational Documents and Other Documents, etc................ 93
SECTION 6.12 Limitation on Certain Restrictions on Subsidiaries............... 94
SECTION 6.13 Limitation on Issuance of Capital Stock.......................... 94
SECTION 6.14 Limitation on Creation of Subsidiaries........................... 95
SECTION 6.15 Business......................................................... 95
SECTION 6.16 Fiscal Year...................................................... 95
SECTION 6.17 No Further Negative Pledge....................................... 95
SECTION 6.18 Anti-Terrorism Law; Anti-Money Laundering........................ 96
SECTION 6.19 Embargoed Person................................................. 96
ARTICLE VII
GUARANTEE
SECTION 7.01 The Guarantee.................................................... 96
SECTION 7.02 Obligations Unconditional........................................ 97
SECTION 7.03 Reinstatement.................................................... 98
SECTION 7.04 Subrogation; Subordination....................................... 98
SECTION 7.05 Remedies......................................................... 98
SECTION 7.06 Instrument for the Payment of Money.............................. 98
SECTION 7.07 Continuing Guarantee............................................. 99
SECTION 7.08 General Limitation on Guarantee Obligations...................... 99
SECTION 7.09 Release of Guarantors............................................ 99
SECTION 7.10 Right of Contribution............................................ 99
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01 Events of Default................................................ 99
SECTION 8.02 Rescission....................................................... 102
SECTION 8.03 Application of Proceeds.......................................... 102
SECTION 8.04 Reinstatement.................................................... 103
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Section Page
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ARTICLE IX
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 9.01 Appointment and Authority........................................ 103
SECTION 9.02 Rights as a Lender............................................... 104
SECTION 9.03 Exculpatory Provisions........................................... 104
SECTION 9.04 Reliance by Agent................................................ 105
SECTION 9.05 Delegation of Duties............................................. 105
SECTION 9.06 Resignation of Agent............................................. 105
SECTION 9.07 Non-Reliance on Agent and Other Lenders.......................... 106
SECTION 9.08 No Other Duties, etc............................................. 106
ARTICLE X
MISCELLANEOUS
SECTION 10.01 Notices.......................................................... 106
SECTION 10.02 Waivers; Amendment............................................... 108
SECTION 10.03 Expenses; Indemnity; Damage Waiver............................... 110
SECTION 10.04 Successors and Assigns........................................... 112
SECTION 10.05 Survival of Agreement............................................ 114
SECTION 10.06 Counterparts; Integration; Effectiveness; Electronic Execution... 114
SECTION 10.07 Severability..................................................... 115
SECTION 10.08 Right of Setoff.................................................. 115
SECTION 10.09 Governing Law; Jurisdiction; Consent to Service of Process....... 115
SECTION 10.10 Waiver of Jury Trial............................................. 116
SECTION 10.11 Headings......................................................... 116
SECTION 10.12 Treatment of Certain Information; Confidentiality................ 116
SECTION 10.13 USA PATRIOT Act Notice........................................... 117
SECTION 10.14 Interest Rate Limitation......................................... 117
SECTION 10.15 Lender Addendum.................................................. 117
ANNEXES
Annex I Applicable Margin
SCHEDULES
Schedule 1.01(a) Refinancing Indebtedness to Be Repaid
Schedule 1.01(b) Guarantors
Schedule 3.13 Taxes
Schedule 3.19 Insurance
Schedule 4.01(n)(vi) Landlord Access Agreements
Schedule 6.01(b) Existing Indebtedness
Schedule 6.02(c) Existing Liens
Schedule 6.04(b) Existing Investments
EXHIBITS
Exhibit A Form of Administrative Questionnaire
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Exhibit B Form of Assignment and Assumption
Exhibit C Form of Borrowing Request
Exhibit D Form of Compliance Certificate
Exhibit E Form of Interest Election Request
Exhibit F Form of Joinder Agreement
Exhibit G Form of Landlord Access Agreement
Exhibit H Form of LC Request
Exhibit I Form of Lender Addendum
Exhibit J [Reserved]
Exhibit K-1 Form of Revolving Note
Exhibit K-2 Form of Swingline Note
Exhibit L-1 Form of Perfection Certificate
Exhibit L-2 Form of Perfection Certificate Supplement
Exhibit M Form of Security Agreement
Exhibit N-1 Form of Opinion of External Company Counsel
Exhibit N-2 Form of Opinion of Internal Company Counsel
Exhibit O Form of Solvency Certificate
Exhibit P Form of Intercompany Note
Exhibit Q Form of Non-Bank Certificate
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CREDIT AGREEMENT
This CREDIT AGREEMENT (this "AGREEMENT") dated as of April 21, 2006,
among HEALTHSPRING, INC., a Delaware corporation ("BORROWER"), the Guarantors
(such term and each other capitalized term used but not otherwise defined herein
having the meaning given to it in Article I), the Lenders, UBS SECURITIES LLC,
as joint lead arranger and joint bookrunner (in such capacity, a "JOINT LEAD
ARRANGER"), CITIGROUP GLOBAL MARKETS INC., as joint lead arranger and joint
bookrunner (in such capacity, a "JOINT LEAD ARRANGER" and, together with the
other Joint Lead Arranger, the "ARRANGERS"), CITICORP USA, INC., as Syndication
Agent (the "SYNDICATION AGENT"), BANK OF AMERICA, N.A., as Documentation Agent
(the "DOCUMENTATION AGENT"), UBS LOAN FINANCE LLC, as swingline lender (in such
capacity, "SWINGLINE LENDER"), and UBS AG, STAMFORD BRANCH, as issuing bank (in
such capacity, "ISSUING BANK"), as administrative agent (in such capacity,
"ADMINISTRATIVE AGENT") for the Lenders and as collateral agent (in such
capacity, "COLLATERAL AGENT") for the Secured Parties and the Issuing Bank.
WITNESSETH:
WHEREAS, Borrower has requested the Lenders to extend credit in the
form of Revolving Loans at any time and from time to time prior to the Maturity
Date, in an aggregate principal amount at any time outstanding not in excess of
$75,000,000.
WHEREAS, Borrower has requested the Swingline Lender to make Swingline
Loans, at any time and from time to time prior to the Maturity Date, in an
aggregate principal amount at any time outstanding not in excess of $2,500,000.
WHEREAS, Borrower has requested the Issuing Bank to issue letters of
credit, in an aggregate face amount at any time outstanding not in excess of
$5,000,000, to support payment obligations incurred in the ordinary course of
business by Borrower and its Subsidiaries.
WHEREAS, the proceeds of the Loans are to be used in accordance with
Section 3.12.
NOW, THEREFORE, the Lenders are willing to extend such credit to
Borrower and the Issuing Bank is willing to issue letters of credit for the
account of Borrower on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINED TERMS. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR," when used in reference to any Loan or Borrowing, is used when
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"ABR BORROWING" shall mean a Borrowing comprised of ABR Loans.
"ABR LOAN" shall mean any Revolving Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ACQUISITION CONSIDERATION" shall mean the purchase consideration
(which does not include associated transaction fees, expenses or similar costs)
for any Permitted Acquisition and all other payments by Borrower or any of its
Subsidiaries in exchange for, or as part of, or in connection with, any
Permitted Acquisition, whether paid in cash or by exchange of Equity Interests
in Borrower or its Subsidiaries or of properties or otherwise and whether
payable at or prior to the consummation of such Permitted Acquisition or
deferred for payment at any future time, whether or not any such future payment
is subject to the occurrence of any contingency, and includes any and all
payments representing the purchase price and any assumptions of Indebtedness,
"earn-outs" and other agreements to make any payment the amount of which is, or
the terms of payment of which are, in any respect subject to or contingent upon
the revenues, income, cash flow or profits (or the like) of any person or
business; provided that any such future payment that is subject to a contingency
shall be considered Acquisition Consideration only to the extent of the reserve,
if any, required under GAAP at the time of such Permitted Acquisition to be
established in respect thereof by Borrower or any of its Subsidiaries.
"ADJUSTED LIBOR RATE" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, (a) an interest rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) determined by the
Administrative Agent to be equal to the LIBOR Rate for such Eurodollar Borrowing
in effect for such Interest Period divided by (b) 1 minus the Statutory Reserves
(if any) for such Eurodollar Borrowing for such Interest Period.
"ADMINISTRATIVE AGENT" shall have the meaning assigned to such term in
the preamble hereto and includes each other person appointed as the successor
pursuant to Article X.
"ADMINISTRATIVE AGENT FEE" shall have the meaning assigned to such
term in Section 2.05(b).
"ADMINISTRATIVE QUESTIONNAIRE" shall mean an Administrative
Questionnaire in substantially the form of Exhibit A.
"AFFILIATE" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified; provided, however, that, for purposes of Section 6.09, the term
"Affiliate" shall also include (i) any person that directly or indirectly owns
more than 10% of any Voting Stock of the person specified or (ii) any person
that is an executive officer or director of the person specified.
"AGENTS" shall mean the Syndication Agent, the Documentation Agent,
the Administrative Agent and the Collateral Agent; and "AGENT" shall mean any of
them.
"AGREEMENT" shall have the meaning assigned to such term in the
preamble hereto.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
greater of (a) the Base Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 0.50%. If the Administrative Agent
shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Federal Funds Effective Rate for any
reason, including the inability or failure of the Administrative
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Agent to obtain sufficient quotations in accordance with the terms of the
definition thereof, the Alternate Base Rate shall be determined without regard
to clause (b) of the preceding sentence until the circumstances giving rise to
such inability no longer exist. Any change in the Alternate Base Rate due to a
change in the Base Rate or the Federal Funds Effective Rate shall be effective
on the effective date of such change in the Base Rate or the Federal Funds
Effective Rate, respectively.
"ANTI-TERRORISM LAWS" shall have the meaning assigned to such term in
Section 3.22.
"APPLICABLE MARGIN" shall mean, for any day, with respect to any
Revolving Loan, the applicable percentage set forth in Annex I.
"APPLICABLE PERCENTAGE" shall mean, with respect to any Lender, the
percentage of the total Loans and Commitments represented by such Lender's Loans
and Commitments.
"APPROVED FUND" shall mean any Fund that is administered or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers or manages a Lender.
"ARRANGERS" shall have the meaning assigned to such term in the
preamble hereto.
"ASSET SALE" shall mean (a) any conveyance, sale, lease, sublease,
assignment, transfer or other disposition (including by way of merger or
consolidation and including any Sale and Leaseback Transaction) of any property
excluding (i) sales of inventory, (ii) disposition of used, worn out, obsolete
or surplus property by any Company and the abandonment, termination or other
disposition of Intellectual Property or leasehold properties that is, in the
reasonable judgment of Borrower, no longer economically practicable or
commercially desirable to maintain or useful in the conduct of the business of
the Companies taken as a whole, (iii) discounts or forgiveness of accounts
receivable in the ordinary course of business in correction or compromise
thereof and (iv) dispositions of cash and Cash Equivalents, in each case, in the
ordinary course of business, by Borrower or any of its Subsidiaries and (b) any
issuance or sale of any Equity Interests of any Subsidiary of Borrower (except
nominal amounts of Equity Interests issued in order to comply with local law or
as permitted under Section 6.13(b)(iii)), in each case, to any person other than
(i) Borrower, (ii) any Guarantor or (iii) other than for purposes of Section
6.06, any other Subsidiary.
"ASSIGNMENT AND ASSUMPTION" shall mean an assignment and assumption
entered into by a Lender and an Eligible Assignee (with the consent of any party
whose consent is required by Section 10.04(b)), and accepted by the
Administrative Agent, in substantially the form of Exhibit B, or any other form
approved by the Administrative Agent and Borrower, such approval not to be
unreasonably withheld, delayed or conditioned.
"ATTRIBUTABLE INDEBTEDNESS" shall mean, when used with respect to any
Sale and Leaseback Transaction, as at the time of determination, the present
value (discounted at a rate equivalent to Borrower's then-current weighted
average cost of funds for borrowed money as at the time of determination,
compounded on a semi-annual basis) of the total obligations of the lessee for
rental payments during the remaining term of the lease included in any such Sale
and Leaseback Transaction.
"BASE RATE" shall mean, for any day, a rate per annum that is equal to
the corporate base rate of interest established by the Administrative Agent from
time to time; each change in the Base Rate
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shall be effective on the date such change is effective. The corporate base rate
is not necessarily the lowest rate charged by the Administrative Agent to its
customers.
"BOARD" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"BOARD OF DIRECTORS" shall mean, with respect to any person, (i) in
the case of any corporation, the board of directors of such person, (ii) in the
case of any limited liability company, the board or committee of managers or
board of governors of such person, (iii) in the case of any partnership, the
Board of Directors of the general partner of such person and (iv) in any other
case, the functional equivalent of the foregoing.
"BORROWER" shall have the meaning assigned to such term in the
preamble hereto.
"BORROWING" shall mean (a) Revolving 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, or (b) a Swingline Loan.
"BORROWING REQUEST" shall mean a request by Borrower in accordance
with the terms of Section 2.03 and substantially in the form of Exhibit C, or
such other form as shall be approved by the Administrative Agent.
"BUSINESS ASSOCIATE AGREEMENT" shall mean a contract among the
Administrative Agent, the Collateral Agent, Borrower and each of its
Subsidiaries that is a "covered entity" or a "business associate" of a covered
entity as such is defined under HIPAA that permits disclosure of any protected
health information (as defined under HIPAA) that may be associated with the
Collateral.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to close; provided, however, that when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"CAPITAL EXPENDITURES" shall mean, with respect to any person for any
period, without duplication, the aggregate amount of all expenditures by such
person during such period for fixed or capital assets that, in accordance with
GAAP, are classified as capital expenditures in the consolidated statement of
cash flows of such person, whether such increase is due to purchase of
properties for cash or financed by the incurrence of Indebtedness, but excluding
(i) any portion of such expenditures attributable to acquisitions of property,
plant and equipment (or any other fixed or capital assets) in Permitted
Acquisitions, (ii) expenditures made with the proceeds of issuances of Qualified
Capital Stock after the Closing Date and (iii) Capital Lease Obligations and
expenditures financed with Purchase Money Indebtedness.
"CAPITAL LEASE OBLIGATIONS" of any person shall mean the obligations
of such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CASH EQUIVALENTS" shall mean, as to any person, (a) securities
issued, or directly, unconditionally and fully guaranteed or insured, by the
United States or any agency or instrumentality thereof (provided that the full
faith and credit of the United States is pledged in support thereof) having
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maturities of not more than one year from the date of acquisition by such
person; (b) time deposits and certificates of deposit of any Lender or any
commercial bank having, or which is the principal banking subsidiary of a bank
holding company organized under the laws of the United States, any state thereof
or the District of Columbia having, capital and surplus aggregating in excess of
$250.0 million and a rating of "A" (or such other similar equivalent rating) or
higher by at least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act) with maturities of not more than
one year from the date of acquisition by such person; (c) repurchase obligations
with a term of not more than 30 days for underlying securities of the types
described in clause (a) above entered into with any bank meeting the
qualifications specified in clause (b) above, which repurchase obligations are
secured by a valid perfected security interest in the underlying securities; (d)
commercial paper issued by any person incorporated in the United States rated at
least A-2 or the equivalent thereof by Standard & Poor's Rating Service ("S&P")
or at least P-2 or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc.
("MOODY'S") and in each case maturing not more than one year after the date of
acquisition by such person; (e) investments in money market funds substantially
all of whose assets are comprised of securities of the types described in
clauses (a) through (d) above; (f) demand deposit accounts maintained in the
ordinary course of business; (g) with respect to (i) Borrower, marketable debt
securities regularly traded on a national securities exchange or in the
over-the-counter market, if and to the extent such debt security constitutes a
permitted investment under the HMO Regulations applicable to any of the HMO
Subsidiaries or (ii) any HMO Subsidiary, marketable debt securities regularly
traded on a national securities exchange or in the over-the-counter market and
any other security, if and to the extent such security constitutes a permitted
investment under the HMO Regulations applicable to such HMO Subsidiary and (h)
securities issued, or directly, unconditionally and fully guaranteed or insured,
by any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within one year from
the date of acquisition thereof and, at the time of acquisition, having one of
the two highest ratings obtainable from either S&P or ▇▇▇▇▇'▇.
"CASH INTEREST EXPENSE" shall mean, for any period, Consolidated
Interest Expense for such period, less the sum of (a) interest on any debt paid
by the increase in the principal amount of such debt including by issuance of
additional debt of such kind, (b) items described in clause (c) or, other than
to the extent paid in cash, clause (g) of the definition of "Consolidated
Interest Expense," (c) gross interest income of Borrower and its Subsidiaries
for such period, (d) fees and expenses relating to the Loans or Letters of
Credit to the extent included in Consolidated Interest Expense and (e) any
payment made to obtain Hedging Agreements to the extent included in Consolidated
Interest Expense.
"CASUALTY EVENT" shall mean any involuntary loss of title, any
involuntary loss of, any damage to or any destruction of, or any condemnation or
other taking (including by any Governmental Authority) of, any property of
Borrower or any of its Subsidiaries. "Casualty Event" shall include but not be
limited to any taking of all or any part of any Real Property of any person, in
or by condemnation or other eminent domain proceedings pursuant to any
Requirement of Law, or by reason of the temporary requisition of the use or
occupancy of all or any part of any Real Property of any person by any
Governmental Authority, civil or military, or any settlement in lieu thereof.
"Casualty Event" shall not include any Asset Sale.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq.
"CHANGE IN CONTROL" shall be deemed to have occurred if:
(a) at any time a change of control occurs under any Material
Indebtedness;
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(b) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than one or more Permitted Holders,
is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that for purposes of this clause such person
or group shall be deemed to have "beneficial ownership" of all securities
that such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of Voting Stock of Borrower representing more than 30% of the
voting power of the total outstanding Voting Stock of Borrower; or
(c) during any one-year period, individuals who at the beginning of
such period constituted the Board of Directors of Borrower (together with
any new directors who were nominated by Sponsor or its Controlled
Investment Affiliates or whose election to such Board of Directors or whose
nomination for election was approved by a vote of a majority of the members
of the Board of Directors of Borrower, which members comprising such
majority are then still in office and were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of
the Board of Directors of Borrower.
For purposes of this definition, a person shall not be deemed to have
beneficial ownership of Equity Interests subject to a stock purchase agreement,
merger agreement or similar agreement until the consummation of the transactions
contemplated by such agreement.
"CHANGE IN LAW" shall mean the occurrence, after the date of this
Agreement, of any of the following: (a) the adoption or taking into effect of
any law, treaty, order, policy, rule or regulation, (b) any change in any law,
treaty, order, policy, rule or regulation or in the administration,
interpretation or application thereof by any Governmental Authority or (c) the
making or issuance of any request, guideline or directive (whether or not having
the force of law) by any Governmental Authority.
"CHARGES" shall have the meaning assigned to such term in Section
10.14.
"CLASS," when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or Swingline Loans and, when used in reference to any Commitment, refers to
whether such Commitment is a Revolving Commitment or Swingline Commitment.
"CLOSING DATE" shall mean the April 21, 2006.
"CMS" shall mean the Centers for Medicare and Medicaid Services of
HHS, any successor thereof and any predecessor thereof (including the United
States Health Care Financing Administration).
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL" shall mean, collectively, all of the Security Agreement
Collateral, any Mortgaged Property and all other property of whatever kind and
nature subject or purported to be subject from time to time to a Lien under any
Security Document.
"COLLATERAL AGENT" shall have the meaning assigned to such term in the
preamble hereto.
-6-
"COMMERCIAL LETTER OF CREDIT" shall mean any letter of credit or
similar instrument issued for the purpose of providing credit support in
connection with the purchase of materials, goods or services by Borrower or any
of its Subsidiaries in the ordinary course of their businesses.
"COMMITMENT" shall mean, with respect to any Lender, such Lender's
Revolving Commitment or Swingline Commitment.
"COMMITMENT FEE" shall have the meaning assigned to such term in
Section 2.05(a).
"COMPANIES" shall mean Borrower and its Subsidiaries; and "COMPANY"
shall mean any one of them.
"COMPANY ACTION LEVEL" shall mean the Company Action Level risk-based
capital threshold, as defined by NAIC, or, in any state that has not adopted the
NAIC definition, as defined by the applicable state Governmental Authority.
"COMPLIANCE CERTIFICATE" shall mean a certificate of a Financial
Officer substantially in the form of Exhibit D.
"CONSOLIDATED AMORTIZATION EXPENSE" shall mean, for any period, the
amortization expense of Borrower and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED DEPRECIATION EXPENSE" shall mean, for any period, the
depreciation expense of Borrower and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED EBITDA" shall mean, for any period, Consolidated Net
Income for such period, adjusted by (x) adding thereto, in each case (other than
clause (m)) only to the extent (and in the same proportion) deducted in
determining such Consolidated Net Income and without duplication:
(a) Consolidated Interest Expense for such period,
(b) Consolidated Amortization Expense for such period,
(c) Consolidated Depreciation Expense for such period,
(d) Consolidated Tax Expense for such period,
(e) fees, costs and expenses directly incurred in connection with the
Transactions, the Original Transactions and the IPO (not to exceed
$8,000,000),
(f) the aggregate amount of all other non-cash charges reducing
Consolidated Net Income (including goodwill impairment charges) for such
period,
(g) the cumulative effect of any changes in accounting principles,
(h) management or transaction fees actually paid to Sponsor prior to
the Closing Date;
-7-
(i) one-time costs, fees and expenses related to any Permitted
Acquisition or Investment, Equity Issuance, Asset Sale or incurrence of
Indebtedness, in each case otherwise permitted hereunder, including
one-time compensation charges, stay bonuses paid to existing management and
severance costs,
(j) expenses and charges incurred to the extent reimbursed by third
parties pursuant to indemnification provisions,
(k) Dividends paid to holders of Equity Interests (other than Borrower
or any of its Subsidiaries) of HMO Subsidiaries,
(l) fees, costs and expenses directly attributable to initial
expansion into a state where the Companies had no prior operations and
incurred during the first twelve months of such expansion, not to exceed
$2.0 million in the aggregate in any fiscal year, and
(m) the amount of cash (x) received as net proceeds of business
interruption insurance to the extent not included in Consolidated Net
Income and (y) which resulted in the reversal of a reserve for which a
non-cash charge reduced Consolidated Net Income in any prior Test Period,
and
(y) subtracting therefrom the aggregate amount of all non-cash items increasing
Consolidated Net Income (other than the accrual of revenue or recording of
receivables in the ordinary course of business) for such period.
Consolidated EBITDA shall be calculated on a Pro Forma Basis to give
effect to any Permitted Acquisition and Asset Sales (other than any dispositions
in the ordinary course of business) consummated at any time on or after the
first day of the Test Period thereof as if each such Permitted Acquisition had
been effected on the first day of such period and as if each such Asset Sale had
been consummated on the day prior to the first day of such period.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" shall mean, for any Test
Period, the ratio of (a) Consolidated EBITDA for such Test Period to (b)
Consolidated Fixed Charges for such Test Period.
"CONSOLIDATED FIXED CHARGES" shall mean, for any period, the sum,
without duplication, of
(a) Cash Interest Expense for such period;
(b) the aggregate amount of Capital Expenditures made in cash during
such period;
(c) all cash payments in respect of income taxes made during such
period (net of any cash refund in respect of income taxes actually received
during such period); and
(d) the principal amount of all scheduled amortization payments (as
adjusted for any prepayments) on all Indebtedness (including the principal
component of all Capital Lease Obligations, but excluding (i) such
amortization payments on Indebtedness incurred to finance Capital
Expenditures included in clause (b) above in such period or any prior
period and (ii) such amortization payments made prior to the Closing Date)
of Borrower and its Subsidiaries for such period (as determined on the
first day of the respective period).
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For purposes of calculating Cash Interest Expense for purposes of this
definition, for each of the Test Periods ending June 30, 2006, September 30,
2006 and December 31, 2006, Cash Interest Expense shall equal Cash Interest
Expense for the period beginning April 1, 2006 and ending on (i) June 30, 2006,
multiplied by 4, (ii) September 30, 2006, multiplied by 2 and (iii) December 31,
2006, multiplied by 4/3, respectively.
"CONSOLIDATED GROUP" shall mean Borrower and its consolidated
Subsidiaries, as determined in accordance with GAAP.
"CONSOLIDATED INDEBTEDNESS" shall mean, as at any date of
determination, the aggregate amount of all Indebtedness for borrowed money
(including Capital Lease Obligations) of Borrower and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, the total
consolidated interest expense of Borrower and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP plus, without
duplication:
(a) imputed interest on Capital Lease Obligations and Attributable
Indebtedness of Borrower and its Subsidiaries for such period;
(b) commissions, discounts and other fees and charges owed by Borrower
or any of its Subsidiaries with respect to letters of credit securing
financial obligations, bankers' acceptance financing and receivables
financings for such period;
(c) amortization or writeoff of debt issuance costs, debt discount or
premium and other financing fees and expenses incurred by Borrower or any
of its Subsidiaries for such period;
(d) cash contributions to any employee stock ownership plan or similar
trust made by Borrower or any of its Subsidiaries to the extent such
contributions are used by such plan or trust to pay interest or fees to any
person (other than Borrower or a Wholly Owned Subsidiary) in connection
with Indebtedness incurred by such plan or trust for such period;
(e) all interest paid or payable with respect to discontinued
operations of Borrower or any of its Subsidiaries for such period;
(f) the interest portion of any deferred payment obligations of
Borrower or any of its Subsidiaries for such period; and
(g) all interest on any Indebtedness of Borrower or any of its
Subsidiaries of the type described in clause (f) or (j) of the definition
of "Indebtedness" for such period;
provided that (a) to the extent related to the Original Transactions or the
Transactions, debt issuance costs, debt discount or premium and other financing
fees and expenses shall be excluded from the calculation of Consolidated
Interest Expense and (b) Consolidated Interest Expense shall be calculated after
giving effect to Hedging Agreements, but excluding unrealized gains and losses
with respect to Hedging Agreements.
Consolidated Interest Expense shall be calculated on a Pro Forma Basis
to give effect to any Indebtedness incurred, assumed or permanently repaid or
extinguished during the relevant Test Period in connection with the
Transactions, any Permitted Acquisitions and Asset Sales (other than any
dispositions
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in the ordinary course of business) as if such incurrence, assumption, repayment
or extinguishing had been effected on the first day of such period.
"CONSOLIDATED NET INCOME" shall mean, for any period, the consolidated
net income (or loss) (including interest income) of Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP;
provided that there shall be excluded from such net income (to the extent
otherwise included therein), without duplication:
(a) the net income (or loss) of any person (other than a Subsidiary of
Borrower) in which any person other than Borrower and its Subsidiaries has
an ownership interest, except to the extent that cash in an amount equal to
any such income has actually been received by Borrower or (subject to
clause (b) below) any of its Subsidiaries during such period;
(b) the net income of any HMO Subsidiary during such period to the
extent that the declaration or payment of dividends or similar
distributions by such Subsidiary of that income is not permitted by
operation of the terms of its Organizational Documents or any agreement or
instrument (other than agreements or instruments with a Governmental
Authority and other than Requirements of Law) applicable to that Subsidiary
during such period;
(c) any gain (or loss), together with any related provisions for taxes
on any such gain (or the tax effect of any such loss), realized during such
period by Borrower or any of its Subsidiaries upon any Asset Sale by
Borrower or any of its Subsidiaries;
(d) earnings and charges or losses resulting from any reappraisal,
revaluation or write-up or write-down of assets;
(e) unrealized gains and losses with respect to Hedging Obligations
for such period;
(f) any (x) extraordinary gain (or extraordinary loss) together with
any related provision for taxes on any such gain (or the tax effect of any
such loss), recorded or recognized by Borrower or any of its Subsidiaries
during such period and (y) unusual or non-recurring gains (or losses),
including severance, personnel relocation and other non-recurring
restructuring costs, together with any related provision for taxes on any
such gain (or the tax effect of any such loss), recorded or recognized by
Borrower or any of its Subsidiaries during such period, in the case of any
such loss, not to exceed 2.5% of Consolidated EBITDA (for such purposes
determined without giving effect to this clause (f)(y)) for any Test
Period;
(g) purchase accounting or similar adjustments required or permitted
by GAAP, in connection with a Permitted Acquisition; and
(h) any gain (or loss) in respect of returned surplus assets from any
pension plans or other post-retirement benefits.
"CONSOLIDATED TAX EXPENSE" shall mean, for any period, the tax expense
of Borrower and its Subsidiaries, for such period, determined on a consolidated
basis in accordance with GAAP.
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"CONTESTED COLLATERAL LIEN CONDITIONS" shall mean, with respect to any
Permitted Lien of the type described in clauses (a), (b), (e) and (f) of Section
6.02, the following conditions:
(a) the appropriate Loan Party shall cause any proceeding instituted
contesting such Lien to stay the sale or forfeiture of any portion of the
Collateral on account of such Lien; and
(b) at the option and at the request of the Administrative Agent, to
the extent such Lien is in an amount in excess of $500,000, the appropriate
Loan Party shall maintain cash reserves in an amount sufficient to pay and
discharge such Lien and a reasonable estimate of all interest and penalties
related thereto.
"CONTINGENT OBLIGATION" shall mean, as to any person, any obligation,
agreement, understanding or arrangement of such person guaranteeing or intended
to guarantee any Indebtedness, leases, dividends or other obligations ("PRIMARY
OBLIGATIONS") of any other person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, including any obligation of such person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor; (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor; (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation; (d) with respect to bankers' acceptances,
letters of credit and similar credit arrangements, until a reimbursement
obligation (which reimbursement obligation constitutes Indebtedness) arises; or
(e) otherwise to assure or hold harmless the holder of such primary obligation
against loss in respect thereof; provided, however, that the term "Contingent
Obligation" shall not include endorsements of instruments for deposit or
collection or customary contractual indemnities in the ordinary course of
business or any product warranties. The amount of any Contingent Obligation
shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Contingent Obligation is made
(or, if less, the maximum amount of such primary obligation for which such
person may be liable, whether singly or jointly, pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such person is required to perform thereunder) as determined by such
person in good faith.
"CONTRACT PROVIDER" shall mean any person or any employee, agent or
subcontractor of such person who provides professional health care services
under or pursuant to any contract with any Loan Party.
"CONTROL" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "CONTROLLING" and "CONTROLLED" shall have meanings
correlative thereto.
"CONTROLLED INVESTMENT AFFILIATE" means, as to any person, any other
person which directly or indirectly is in Control of, is Controlled by, or is
under common Control with, such person and is organized by such person (or any
person Controlling such person) primarily for making equity or debt investments
in Borrower or other portfolio companies.
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"CREDIT EXTENSION" shall mean, as the context may require, (i) the
making of a Loan by a Lender or (ii) the issuance of any Letter of Credit, or
the amendment, extension or renewal of any existing Letter of Credit, by the
Issuing Bank.
"DEBT ISSUANCE" shall mean the incurrence by Borrower or any of its
Subsidiaries of any Indebtedness after the Closing Date.
"DEFAULT" shall mean any event, occurrence or condition that is, or
upon notice, lapse of time or both pursuant to Section 8.01 would constitute, an
Event of Default.
"DEFAULTED LOAN" shall have the meaning assigned to such term in
Section 2.16(c).
"DEFAULTING LENDER" shall have the meaning assigned to such term in
Section 2.16(c).
"DEFAULT PERIOD" shall have the meaning assigned to such term in
Section 2.16(c).
"DEFAULT RATE" shall have the meaning assigned to such term in Section
2.06(c).
"DISQUALIFIED CAPITAL STOCK" shall mean any Equity Interest that, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable other than at the sole option of the issuer), or upon
the happening of any event, (a) matures (excluding any maturity as the result of
an optional redemption by the issuer thereof) or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or is redeemable at the
option of the holder thereof, in whole or in part, on or prior to the 180th day
after the Maturity Date, (b) is convertible into or exchangeable (unless at the
sole option of the issuer thereof) for (i) debt securities or (ii) any Equity
Interests referred to in (a) above, in each case at any time on or prior to the
180th day after the Maturity Date, or (c) contains any repurchase obligation
which may come into effect prior to payment in full of all Obligations;
provided, however, that any Equity Interests that would not constitute
Disqualified Capital Stock but for provisions thereof giving holders thereof (or
the holders of any security into or for which such Equity Interests is
convertible, exchangeable or exercisable) the right to require the issuer
thereof to redeem such Equity Interests upon the occurrence of a change in
control or an asset sale occurring prior to the 180th day after the Maturity
Date shall not constitute Disqualified Capital Stock if such Equity Interests
provide that the issuer thereof will not redeem any such Equity Interests
pursuant to such provisions prior to the repayment in full of the Obligations
(other than contingent indemnity obligations).
"DIVIDEND" with respect to any person shall mean that such person has
declared or paid a dividend or returned any equity capital to the holders of its
Equity Interests or authorized or made any other distribution, payment or
delivery of property (other than Qualified Capital Stock of such person) or cash
to the holders of its Equity Interests as such, or redeemed, retired, purchased
or otherwise acquired, directly or indirectly, for consideration any of its
Equity Interests outstanding (or any options or warrants issued by such person
with respect to its Equity Interests), or set aside in trust or escrow any funds
for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for consideration any of the
Equity Interests of such person outstanding (or any options or warrants issued
by such person with respect to its Equity Interests). Without limiting the
foregoing, "Dividends" with respect to any person shall also include all
payments made or required to be made by such person with respect to any stock
appreciation rights plans, equity incentive or achievement plans or any similar
plans or setting aside of any funds for the foregoing purposes except and solely
to the extent such payments or funds set aside are deducted in the calculation
of the consolidated net income (or loss) (including interest
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income) of Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP and not added back in the calculation of Consolidated Net
Income and Consolidated EBITDA.
"DOCUMENTATION AGENT" shall have the meaning assigned to such term in
the preamble hereto.
"DOLLARS" or "$" shall mean lawful money of the United States.
"DOMESTIC SUBSIDIARY" shall mean any Subsidiary that is organized or
existing under the laws of the United States, any state thereof or the District
of Columbia.
"ELIGIBLE ASSIGNEE" shall mean (a) if the assignment does not include
assignment of a Revolving Commitment, (i) any Lender, (ii) an Affiliate of any
Lender, (iii) an Approved Fund and (iv) any other person approved by the
Administrative Agent and Borrower (each such approval not to be unreasonably
withheld or delayed) and (b) if the assignment includes assignment of a
Revolving Commitment, (i) any Revolving Lender, (ii) an Affiliate of any
Revolving Lender, (iii) an Approved Fund of a Revolving Lender and (iv) any
other person approved by the Administrative Agent, the Issuing Bank, the
Swingline Lender and Borrower (each such approval not to be unreasonably
withheld or delayed); provided, in each case, that no approval of Borrower shall
be required upon the occurrence and during the continuance of an Event of
Default.
"EMBARGOED PERSON" shall have the meaning assigned to such term in
Section 6.19.
"ENVIRONMENT" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, natural resources or as otherwise defined in any
Environmental Law.
"ENVIRONMENTAL CLAIM" shall mean any claim, notice, demand, order,
action, suit, proceeding or other communication alleging liability for
investigation, remediation, removal, cleanup, response, corrective action,
damages to natural resources, personal injury, property damage, fines, penalties
or other costs resulting from, related to or arising out of (i) the presence,
Release or threatened Release in or into the Environment of Hazardous Material
at any location or (ii) any violation of Environmental Law, and shall include
any claim seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from, related to or arising out of
the presence, Release or threatened Release of Hazardous Material or alleged
injury or threat of injury (a) to the Environment or (b) to employee health or
safety, in each case from exposure to or Release of Hazardous Materials.
"ENVIRONMENTAL LAW" shall mean any and all applicable treaties, laws,
statutes, ordinances, regulations, rules, decrees, orders, judgments, consent
orders, consent decrees, code or other legally binding requirements, and the
common law, relating to the Environment or the Release or threatened Release of
Hazardous Material (and the protection of the public health therefrom), natural
resources or natural resource damage, or occupational safety or health relating
to any Release of Hazardous Materials.
"ENVIRONMENTAL PERMIT" shall mean any permit, license, approval,
consent or other authorization required by or from a Governmental Authority
under Environmental Law.
"EQUIPMENT" shall have the meaning assigned to such term in the
Security Agreement.
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"EQUITY INTEREST" shall mean, with respect to any person, any and all
shares, interests, participations or other equivalents, including membership
interests (however designated, whether voting or nonvoting), of equity of such
person, including, if such person is a partnership, partnership interests
(whether general or limited) and any other interest or participation that
confers on a person the right to receive a share of the profits and losses of,
or distributions of property of, such partnership, whether outstanding on the
date hereof or issued after the Closing Date, but excluding debt securities
convertible or exchangeable into such equity.
"EQUITY ISSUANCE" shall mean, without duplication, (i) any issuance or
sale by Borrower after the Closing Date of any Equity Interests in Borrower
(including any Equity Interests issued upon exercise of any warrant or option)
or any warrants or options to purchase such Equity Interests or (ii) any cash
contribution to the capital of Borrower; provided, however, that for the
purposes of this definition, an Equity Issuance shall not include any Preferred
Stock Issuance or Debt Issuance.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended from time to time.
"ERISA AFFILIATE" shall mean, with respect to any person, any trade or
business (whether or not incorporated) that, together with such person, is
treated as a single employer under Section 414 of the Code.
"ERISA EVENT" shall mean (a) any "reportable event," as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan (other than an event for which the 30-day notice period is waived by
regulation); (b) the existence with respect to any Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived; (c) the failure to make by its due date a
required installment under Section 412(m) of the Code with respect to any Plan
or the failure to make any required contribution to a Multiemployer Plan; (d)
the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of
an application for a waiver of the minimum funding standard with respect to any
Plan; (e) the incurrence by any Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(f) the receipt by any Company or any of its ERISA Affiliates from the PBGC or a
plan administrator of any notice relating to the intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan, or the occurrence of
any event or condition which could reasonably be expected to constitute grounds
under ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (g) the incurrence by any Company or any of its ERISA
Affiliates of any liability with respect to the withdrawal from any Plan or
Multiemployer Plan; (h) the receipt by any Company or its ERISA Affiliates of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA; (i) the "substantial
cessation of operations" within the meaning of Section 4062(e) of ERISA with
respect to a Plan; (j) the making of any amendment to any Plan that could result
in the imposition of a lien or the posting of a bond or other security; and (k)
the occurrence of a nonexempt prohibited transaction (within the meaning of
Section 4975 of the Code or Section 406 of ERISA) with respect to a Plan that
could reasonably be expected to result in liability to any Company.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised of Eurodollar
Loans.
"EURODOLLAR LOAN" shall mean any Revolving Loan bearing interest at a
rate determined by reference to the Adjusted LIBOR Rate in accordance with the
provisions of Article II.
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"EVENT OF DEFAULT" shall have the meaning assigned to such term in
Section 8.01.
"EXCESS AMOUNT" shall have the meaning assigned to such term in
Section 2.10(h).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXCLUDED TAXES" shall mean, with respect to the Administrative Agent,
any Lender, the Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of Borrower hereunder, (a) taxes imposed on or
measured by its overall net income (however denominated), franchise taxes
imposed on it (in lieu of net income taxes) and branch profits taxes imposed on
it, by a jurisdiction (or any political subdivision thereof) as a result of the
recipient being organized or having its principal office or, in the case of any
Lender, having its applicable lending office in such jurisdiction and (b) in the
case of a Foreign Lender, any U.S. federal withholding tax that (i) is imposed
on amounts payable to such Foreign Lender at the time such Foreign Lender
becomes a party hereto (or designates a new lending office), except (x) to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from Borrower with respect to such withholding tax pursuant
to Section 2.15(a) or (y) if such Foreign Lender is an assignee pursuant to a
request by Borrower under Section 2.16); provided that this subclause (b)(i)
shall not apply to any Tax imposed on a Lender in connection with an interest or
participation in any Loan or other obligation that such Lender was required to
acquire pursuant to Section 2.14(c), or (ii) is attributable to such Foreign
Lender's failure to comply with Section 2.15(e).
"EXCLUSION EVENT" means an event or related events resulting in the
exclusion of one or more members of the Consolidated Group from participation in
any Medical Reimbursement Program.
"EXECUTIVE ORDER" shall have the meaning assigned to such term in
Section 3.22.
"EXISTING LIEN" shall have the meaning assigned to such term in
Section 6.02(c).
"FAMILY CARE" shall mean health care programs designed for uninsured
segments of the population (other than Medicaid-eligible or SCHIP-eligible
segments of the population) that are operated by or financed in part by federal
and/or state government.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System of the United States arranged by federal funds brokers,
as published on the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for the day for such transactions received by
the Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"FEES" shall mean the Commitment Fees, the Administrative Agent Fees,
the LC Participation Fees and the Fronting Fees.
"FINANCIAL OFFICER" of any person shall mean each of the chief
financial officer, principal accounting officer, vice president of finance,
treasurer and controller of such person.
"FIRREA" shall mean the Federal Institutions Reform, Recovery and
Enforcement Act of 1989, as amended.
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"FOREIGN LENDER" shall mean any Lender that is not, for United States
federal income tax purposes, (i) an individual who is a citizen or resident of
the United States, (ii) a corporation, partnership or other entity treated as a
corporation or partnership created or organized in or under the laws of the
United States, or any political subdivision thereof, (iii) an estate whose
income is subject to U.S. federal income taxation regardless of its source or
(iv) a trust if a court within the United States is able to exercise primary
supervision over the administration of such trust and one or more United States
persons have the authority to control all substantial decisions of such trust.
"FOREIGN SUBSIDIARY" shall mean a Subsidiary that is organized under
the laws of a jurisdiction other than the United States or any state thereof or
the District of Columbia.
"FRONTING FEE" shall have the meaning assigned to such term in Section
2.05(c).
"FUND" shall mean any person that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.
"FUNDING DEFAULT" shall have the meaning assigned to such term in
Section 2.16(c).
"GAAP" shall mean generally accepted accounting principles in the
United States applied on a consistent basis.
"GOVERNMENTAL AUTHORITY" shall mean the government of the United
States or any other nation, or of any political subdivision thereof, whether
state, provincial or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government (including any supra-national bodies such as the
European Union or the European Central Bank).
"GOVERNMENTAL REAL PROPERTY DISCLOSURE REQUIREMENTS" shall mean any
Requirement of Law of any Governmental Authority requiring notification of the
buyer, lessee, mortgagee, assignee or other transferee of any Real Property,
facility, establishment or business, or notification, registration or filing to
or with any Governmental Authority, in connection with the sale, lease,
mortgage, assignment or other transfer (including any transfer of control) of
any Real Property, facility, establishment or business, of the actual or
threatened presence or Release in or into the Environment, or the use, disposal
or handling of Hazardous Material on, at, under or near the Real Property,
facility, establishment or business to be sold, leased, mortgaged, assigned or
transferred.
"GUARANTEED OBLIGATIONS" shall have the meaning assigned to such term
in Section 7.01.
"GUARANTEES" shall mean the guarantees issued pursuant to Article VII
by the Guarantors.
"GUARANTORS" shall mean each Subsidiary listed on Schedule 1.01(b),
and each other Subsidiary that is or becomes a party to this Agreement pursuant
to Section 5.11(b)(ii).
"HAZARDOUS MATERIALS" shall mean the following: hazardous substances;
hazardous wastes; polychlorinated biphenyls ("PCBS") or any substance or
compound containing PCBs; asbestos or any asbestos-containing materials in any
form or condition; radon or any other radioactive materials including any
source, special nuclear or by-product material; petroleum, crude oil or any
fraction thereof;
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and any other pollutant or contaminant or chemicals, wastes, materials,
compounds, constituents or substances subject to regulation or that can give
rise to liability under any Environmental Laws.
"HEDGING AGREEMENT" shall mean any swap, cap, collar, forward purchase
or similar agreements or arrangements dealing with interest rates, currency
exchange rates or commodity prices, either generally or under specific
contingencies.
"HEDGING OBLIGATIONS" shall mean obligations under or with respect to
Hedging Agreements.
"HHS" shall mean the United States Department of Health and Human
Services and any successor thereof.
"HIPAA" shall mean the Health Insurance Portability and Accountability
Act of 1996, Pub. L. 104-191, Aug. 21, 1996, 110 Stat. 1936 and regulations
promulgated thereto regarding privacy, security and transmission of health
information.
"HMO" shall mean any health maintenance organization, managed care
organization, any person doing business as a health maintenance organization or
managed care organization, or any person required to qualify or be licensed as a
health maintenance organization or managed care organization under applicable
federal or state law (including HMO Regulations).
"HMO EVENT" shall mean any material non-compliance by Borrower or any
of its Subsidiaries with any of the terms and provisions of any applicable HMO
Regulations pertaining to its fiscal soundness, solvency or financial condition;
or the assertion in writing, after the date hereof, by an HMO Regulator that it
intends to take administrative action against Borrower or any of its
Subsidiaries to revoke or modify any license, charter or permit of the Borrower
or any of its Subsidiaries or to enforce the fiscal soundness, solvency or
financial provisions or requirements of the HMO Regulations against Borrower or
any of its Subsidiaries.
"HMO REGULATIONS" shall mean all laws, regulations, directives and
administrative orders applicable under federal or state law to any HMO
Subsidiary whether or not specifically applicable to an HMO (and any
regulations, orders and directives promulgated or issued pursuant to any of the
foregoing) and Subchapter XI of Title 42 of the United States Code and the rules
and regulations of any accrediting authority having jurisdiction over any HMO
Subsidiary.
"HMO REGULATOR" shall mean any person charged with the administration,
oversight or enforcement of an HMO Regulation, whether primarily, secondarily or
jointly.
"HMO SUBSIDIARIES" shall mean subsidiaries of Borrower that are HMOs
or other similar regulated entities or businesses.
"INCREASE EFFECTIVE DATE" shall have the meaning assigned to such term
in Section 2.19(a).
"INCREASE JOINDER" shall have the meaning assigned to such term in
Section 2.19(c).
"INDEBTEDNESS" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or advances; (b) all obligations
of such person evidenced by bonds, debentures, notes or similar instruments; (c)
all obligations of such person under conditional sale or other title
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retention agreements relating to property purchased by such person upon which
interest charges are customarily paid or accrued; (d) all obligations of such
person issued or assumed as the deferred purchase price of property or services
to the extent required to be classified as debt under GAAP; (e) all Indebtedness
of others secured by any Lien on property owned or acquired by such person,
whether or not the obligations secured thereby have been assumed, but limited to
the fair market value of such property; (f) all Capital Lease Obligations and
Purchase Money Obligations of such person; (g) all Hedging Obligations to the
extent required by GAAP to be reflected on a balance sheet of such person; (h)
all Attributable Indebtedness of such person; (i) all non-contingent obligations
of such person for the reimbursement of any obligor in respect of letters of
credit, letters of guaranty, bankers' acceptances and similar credit
transactions; and (j) all Contingent Obligations of such person in respect of
Indebtedness or obligations of others of the kinds referred to in clauses (a)
through (i) above. The Indebtedness of any person shall include the Indebtedness
of any other entity (including any partnership in which such person is a general
partner) to the extent such person is liable therefor as a result of such
person's ownership interest in or other relationship with such entity, except
(other than in the case of general partner liability) to the extent that terms
of such Indebtedness expressly provide that such person is not liable therefor,
and (x) Preferred Stock of Borrower and any of its Subsidiaries shall not be
Indebtedness and (y) operating lease payments, employee consulting arrangements,
accrued expenses, deferred rent, deferred taxes, obligations under employment
agreements and deferred compensation shall not be Indebtedness, in each case of
clause (y) to the extent not required to be treated as debt under GAAP.
"INDEMNIFIED TAXES" shall mean all Taxes that arise from any payment
made hereunder or under any other Loan Document or from the execution, delivery
and enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document, excluding, however, Excluded Taxes.
"INDEMNITEE" shall have the meaning assigned to such term in Section
10.03(b).
"INFORMATION" shall have the meaning assigned to such term in Section
10.12.
"INSURANCE POLICIES" shall mean the insurance policies and coverages
required to be maintained by each Loan Party who is an owner of Mortgaged
Property with respect to the applicable Mortgaged Property pursuant to Section
5.04 and all renewals and extensions thereof.
"INSURANCE REQUIREMENTS" shall mean, collectively, all provisions of
the Insurance Policies, all requirements of the issuer of any of the Insurance
Policies and all orders, rules, regulations and any other requirements of the
National Board of Fire Underwriters (or any other body exercising similar
functions) binding upon each Loan Party which is an owner of Mortgaged Property
and applicable to any Mortgaged Property or any use or condition thereof.
"INTELLECTUAL PROPERTY" shall have the meaning assigned to such term
in Section 3.06(a).
"INTERCOMPANY NOTE" shall mean a promissory note substantially in the
form of Exhibit P.
"INTEREST ELECTION REQUEST" shall mean a request by Borrower to
convert or continue a Revolving Borrowing in accordance with Section 2.08(b),
substantially in the form of Exhibit E.
"INTEREST PAYMENT DATE" shall mean (a) with respect to any ABR Loan
(including Swingline Loans), the last Business Day of each March, June,
September and December to occur during any period in which such Loan is
outstanding, (b) with respect to any Eurodollar Loan, the last day of the
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Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurodollar Loan with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period
and (c) the Maturity Date or such earlier date on which the Revolving
Commitments are terminated.
"INTEREST PERIOD" shall mean, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months (or, if each affected Lender so agrees, nine or twelve months)
thereafter, as Borrower may elect; provided that (a) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing.
"INVESTMENTS" shall have the meaning assigned to such term in Section
6.04.
"IPO" shall mean Borrower's initial public offering of its common
stock consummated on February 8, 2006.
"ISSUING BANK" shall mean, as the context may require, (a) UBS AG,
Stamford Branch, in its capacity as issuer of Letters of Credit issued by it;
(b) any other Lender that may become an Issuing Bank pursuant to Sections
2.18(j) and (k) in its capacity as issuer of Letters of Credit issued by such
Lender; or (c) collectively, all of the foregoing.
"JOINDER AGREEMENT" shall mean a joinder agreement substantially in
the form of Exhibit F.
"LANDLORD ACCESS AGREEMENT" shall mean a Landlord Access Agreement,
substantially in the form of Exhibit G, or such other form as may reasonably be
acceptable to the Administrative Agent.
"LC COMMITMENT" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.18. The amount of the LC Commitment
shall initially be $5,000,000, but in no event exceed the Revolving Commitment.
"LC DISBURSEMENT" shall mean a payment or disbursement made by the
Issuing Bank pursuant to a drawing under a Letter of Credit.
"LC EXPOSURE" shall mean at any time the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate principal amount of all Reimbursement Obligations outstanding at such
time. The LC Exposure of any Revolving Lender at any time shall mean its Pro
Rata Percentage of the aggregate LC Exposure at such time.
"LC PARTICIPATION FEE" shall have the meaning assigned to such term in
Section 2.05(c).
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"LC REQUEST" shall mean a request by Borrower in accordance with the
terms of Section 2.18(b) and substantially in the form of Exhibit H, or such
other form as shall be reasonably approved by the Administrative Agent.
"LEASES" shall mean any and all leases, subleases, tenancies, options,
concession agreements, rental agreements, occupancy agreements, franchise
agreements, access agreements and any other agreements (including all
amendments, extensions, replacements, renewals, modifications and/or guarantees
thereof), whether or not of record and whether now in existence or hereafter
entered into, affecting the use or occupancy of all or any portion of any Real
Property.
"LENDER ADDENDUM" shall mean with respect to any Lender on the Closing
Date, a lender addendum in the form of Exhibit I, to be executed and delivered
by such Lender on the Closing Date as provided in Section 10.15.
"LENDERS" shall mean (a) the financial institutions that have become a
party hereto pursuant to a Lender Addendum and (b) any financial institution
that has become a party hereto pursuant to an Assignment and Assumption, other
than, in each case, any such financial institution that has ceased to be a party
hereto pursuant to an Assignment and Assumption. Unless the context clearly
indicates otherwise, the term "Lenders" shall include the Swingline Lender.
"LETTER OF CREDIT" shall mean any (i) Standby Letter of Credit and
(ii) Commercial Letter of Credit, in each case, issued or to be issued by an
Issuing Bank for the account of Borrower pursuant to Section 2.18.
"LETTER OF CREDIT EXPIRATION DATE" shall mean the date that is five
days prior to the Maturity Date.
"LIBOR RATE" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate per annum determined by the Administrative Agent
to be the arithmetic mean of the offered rates for deposits in dollars with a
term comparable to such Interest Period that appears on the Telerate British
Bankers Assoc. Interest Settlement Rates Page (as defined below) at
approximately 11:00 a.m., London, England time, on the second full Business Day
preceding the first day of such Interest Period; provided, however, that (i) if
no comparable term for an Interest Period is available, the LIBOR Rate shall be
determined using the weighted average of the offered rates for the two terms
most nearly corresponding to such Interest Period and (ii) if there shall at any
time no longer exist a Telerate British Bankers Assoc. Interest Settlement Rates
Page, "LIBOR Rate" shall mean, with respect to each day during each Interest
Period pertaining to Eurodollar Borrowings comprising part of the same
Borrowing, the rate per annum equal to the rate at which the Administrative
Agent is offered deposits in dollars at approximately 11:00 a.m., London,
England time, two Business Days prior to the first day of such Interest Period
in the London interbank market for delivery on the first day of such Interest
Period for the number of days comprised therein and in an amount comparable to
its portion of the amount of such Eurodollar Borrowing to be outstanding during
such Interest Period. "TELERATE BRITISH BANKERS ASSOC. INTEREST SETTLEMENT RATES
PAGE" shall mean the display designated as Page 3750 on the Telerate System
Incorporated Service (or such other page as may replace such page on such
service for the purpose of displaying the rates at which dollar deposits are
offered by leading banks in the London interbank deposit market).
"LIEN" shall mean, with respect to any property, (a) any mortgage,
deed of trust, lien, pledge, encumbrance, claim, charge, assignment,
hypothecation, security interest or encumbrance of any kind or any arrangement
to provide priority or preference or any filing of any financing statement under
-20-
the UCC or any other similar notice of lien under any similar notice or
recording statute of any Governmental Authority (other than UCC financing
statements that purport to evidence voluntary liens for which no Loan Party
granted a Lien or are filed with the consent of the Collateral Agent (not to be
unreasonably withheld) in connection with a refinancing of the Loans and
Commitments in full satisfaction of this Agreement to the extent that no
security interest has attached with respect thereto), including any material
easement, right-of-way or other material encumbrance on title to Real Property,
in each of the foregoing cases whether voluntary or imposed by law, and any
agreement to give any of the foregoing (other than with the consent of the
Collateral Agent (not to be unreasonably withheld) in connection with a
refinancing of the Loans and Commitments in full satisfaction of this Agreement
to the extent no security interest has attached with respect thereto); (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having substantially
the same economic effect as any of the foregoing) relating to such property; and
(c) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
"LOAN DOCUMENTS" shall mean this Agreement, the Letters of Credit, the
Notes (if any), the Security Documents and, solely for purposes of paragraph (e)
of Section 8.01, the confidential Fee Letter, dated March 9, 2006, among
Borrower, UBS Loan Finance LLC, UBS Securities LLC and Citigroup Global Markets
Inc.
"LOAN PARTIES" shall mean Borrower and the Guarantors.
"LOANS" shall mean, as the context may require, a Revolving Loan or a
Swingline Loan.
"MARGIN STOCK" shall have the meaning assigned to such term in
Regulation U.
"MATERIAL ADVERSE EFFECT" shall mean (a) a material adverse effect on
the business, results of operations, financial condition, assets or liabilities
of Borrower and its Subsidiaries, taken as a whole; (b) material impairment of
the rights of or benefits or remedies available to the Lenders or the Collateral
Agent under any Loan Document, taken as a whole; or (c) a material adverse
effect on the Collateral (taken as a whole) or the Liens in favor of the
Collateral Agent (for its benefit and for the benefit of the other Secured
Parties) on the Collateral (taken as a whole) or the priority of such Liens.
"MATERIAL INDEBTEDNESS" shall mean any Indebtedness (other than the
Loans and Letters of Credit) or Hedging Obligations of Borrower or any of its
Subsidiaries in an aggregate outstanding principal amount exceeding $10,000,000.
For purposes of determining Material Indebtedness, the "principal amount" in
respect of any Hedging Obligations of any Loan Party at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that such
Loan Party would be required to pay if the related Hedging Agreement were
terminated at such time.
"MATURITY DATE" shall mean the date that is five years after the
Closing Date or, if such date is not a Business Day, the first Business Day
thereafter.
"MAXIMUM RATE" shall have the meaning assigned to such term in Section
10.14.
"MEDICAID" shall mean that means-tested entitlement program under
Title XIX, P.L. 89-87, of the Social Security Act, which provides federal grants
to states for medical assistance based on specific eligibility criteria, as set
forth at Section 1396, et seq. of Title 42 of the United States Code, as
amended.
-21-
"MEDICAID REGULATIONS" shall mean, collectively, (a) all federal
statutes (whether set forth in Title XIX of the Social Security Act or
elsewhere) regarding the medical assistance program established by Title XIX of
the Social Security Act and any statutes succeeding thereto; (b) all applicable
provisions of all federal rules, regulations, manuals and orders of all
Governmental Authorities promulgated pursuant to or in connection with the
statutes described in clause (a) above and all binding federal administrative,
reimbursement and other guidelines of all Governmental Authorities having the
force of law promulgated pursuant to or in connection with the statutes
described in clause (a) above; (c) all state statutes and plans for medical
assistance enacted in connection with the statutes and provisions described in
clauses (a) and (b) above; and (d) all applicable provisions of all binding
rules, regulations, manuals and orders of all Governmental Authorities
promulgated pursuant to or in connection with the statutes described in clause
(c) above and all state administrative, reimbursement and other guidelines of
all Governmental Authorities having the force of law promulgated pursuant to or
in connection with the statutes described in clause (b) above, in each case as
may be amended, supplemented or otherwise modified from time to time.
"MEDICAL REIMBURSEMENT PROGRAMS" shall mean a collective reference to
the Medicare, Medicaid, SCHIP and Family Care programs and any other health care
program operated by or financed in whole or in part by any foreign or domestic
federal, state or local government and any other non-government funded
third-party payor programs.
"MEDICAL REIMBURSEMENT PROGRAM PROVIDER AGREEMENTS" shall mean an
agreement entered into with a Medical Reimbursement Program to provide services
for program patients in accordance with the terms thereof and applicable law.
"MEDICARE" shall mean that government-sponsored entitlement program
under Title XVIII, P.L. 89-87, of the Social Security Act, which provides for a
health insurance system for eligible elderly and disabled individuals, as set
forth at Section 1395, et seq. of Title 42 of the United States Code, as
amended.
"MEDICARE REGULATIONS" shall mean, collectively, all federal statutes
(whether set forth in Title XVIII of the Social Security Act or elsewhere)
affecting the health insurance program for the aged and disabled established by
Title XVIII of the Social Security Act and any statutes succeeding thereto;
together with all applicable provisions of all rules, regulations, manuals and
orders and administrative, reimbursement and other guidelines having the force
of law of all Governmental Authorities (including, without limitation, CMS, the
OIG, HHS, or any person succeeding to the functions of any of the foregoing)
promulgated pursuant to or in connection with any of the foregoing having the
force of law, as each may be amended, supplemented or otherwise modified from
time to time.
"MEMBERS" shall mean all individuals for whom an HMO Subsidiary bears
the financial risk for the cost of providing healthcare services (including
prescription drug benefits).
"MORTGAGE" shall mean an agreement, including a mortgage, deed of
trust or any other document, creating and evidencing a Lien on a Mortgaged
Property, which shall be substantially in a form reasonably satisfactory to the
Collateral Agent, in each case, with such schedules and including such
provisions as shall be necessary to conform such document to applicable local or
foreign law or as shall be customary under applicable local or foreign law.
"MORTGAGED PROPERTY" shall mean each Real Property, if any, that shall
be subject to a Mortgage delivered after the Closing Date pursuant to Section
5.11(c).
-22-
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan within the
meaning of Section 4001(a)(3) or Section 3(37) of ERISA (a) to which any Company
or any ERISA Affiliate is then making or accruing an obligation to make
contributions; (b) to which any Company or any ERISA Affiliate has within the
preceding five plan years made contributions; or (c) with respect to which any
Company could incur liability.
"NAIC" shall mean the National Association of Insurance Commissioners,
a national organization of insurance regulators.
"NET CASH PROCEEDS" shall mean, with respect to any Equity Issuance or
any other issuance or sale of Equity Interests by any Subsidiary of Borrower,
the cash proceeds thereof to Borrower or such Subsidiary, net of customary fees,
commissions, discounts, transfer taxes, costs and other expenses incurred in
connection therewith.
"NOTES" shall mean any promissory notes evidencing the Revolving Loans
or Swingline Loans issued pursuant to this Agreement, if any, substantially in
the form of Exhibit K-1 or K-2.
"OBLIGATIONS" shall mean (a) obligations of Borrower and the other
Loan Parties from time to time arising under or in respect of the due and
punctual payment of (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by Borrower and the other Loan
Parties under this Agreement in respect of any Letter of Credit, when and as
due, including payments in respect of Reimbursement Obligations, interest
thereon and obligations to provide cash collateral and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of Borrower and the other Loan Parties under this
Agreement and the other Loan Documents, and (b) the due and punctual performance
of all covenants, agreements, obligations and liabilities of Borrower and the
other Loan Parties under or pursuant to this Agreement and the other Loan
Documents.
"OFAC" shall have the meaning assigned to such term in Section 3.22.
"OFFICER'S CERTIFICATE" shall mean a certificate executed by the
chairman of the Board of Directors (if an officer), the chief executive officer,
the president, any vice president or one of the Financial Officers, each in his
or her official (and not individual) capacity.
"OIG" shall mean the Office of Inspector General of HHS and any
successor thereof.
"ORGANIZATIONAL DOCUMENTS" shall mean, with respect to any person, (i)
in the case of any corporation, the certificate of incorporation and by-laws (or
similar documents) of such person, (ii) in the case of any limited liability
company, the certificate of formation and operating agreement (or similar
documents) of such person, (iii) in the case of any limited partnership, the
certificate of formation and limited partnership agreement (or similar
documents) of such person, (iv) in the case of any general partnership, the
partnership agreement (or similar document) of such person and (v) in any other
case, the functional equivalent of the foregoing.
-23-
"ORIGINAL TRANSACTIONS" shall mean the March 1, 2005 recapitalization
of NewQuest, LLC and the financings related thereto.
"OTHER TAXES" shall mean all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or under any other Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement or any other Loan Document.
"PARTICIPANT" shall have the meaning assigned to such term in Section
10.04(d).
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA.
"PERFECTION CERTIFICATE" shall mean a certificate in the form of
Exhibit L-1 or any other form approved by the Collateral Agent, as the same
shall be supplemented from time to time by a Perfection Certificate Supplement
or otherwise.
"PERFECTION CERTIFICATE SUPPLEMENT" shall mean a certificate
supplement in the form of Exhibit L-2 or any other form approved by the
Collateral Agent.
"PERMITTED ACQUISITION" shall mean any transaction or series of
related transactions for the direct or indirect (a) acquisition of all or
substantially all of the property of any person, or of any business or division
of any person; (b) acquisition of in excess of 50% of the Equity Interests of
any person, and otherwise causing such person to become a Subsidiary of the
acquiring person; or (c) merger or consolidation or any other combination with
any person, if each of the following conditions is met:
(i) no Default then exists or would result therefrom;
(ii) after giving effect to such transaction on a Pro Forma
Basis, Borrower shall be in compliance with the covenant set forth in
Section 6.10(a) as of the most recent Test Period (assuming, for
purposes of Section 6.10(a), that such transaction, and all other
Permitted Acquisitions consummated since the first day of the relevant
Test Period for Section 6.10(a) ending on or prior to the date of such
transaction, had occurred on the first day of such relevant Test
Period);
(iii) no Company shall, in connection with any such transaction,
assume or remain liable with respect to any Indebtedness or other
liability (including any material tax or ERISA liability) of the
related seller or the business, person or properties acquired, except
(A) to the extent permitted under Section 6.01 and (B) obligations not
constituting Indebtedness incurred in the ordinary course of business
and necessary or desirable to the continued operation of the
underlying properties, and any other such liabilities or obligations
not permitted to be assumed or otherwise supported by any Company
hereunder shall be paid in full or released as to the business,
persons or properties being so acquired on or before the consummation
of such acquisition;
(iv) the person or business to be acquired shall be, or shall be
engaged in, a business of the type that Borrower and the Subsidiaries
are permitted to be engaged in under Section 6.15, is located in the
United States and the property acquired in connection with any such
transaction shall be made subject to the Lien of the Security
Documents to the extent required hereunder or thereunder and shall be
free and clear of any Liens, other than Permitted Liens;
-24-
(v) the Board of Directors of the person to be acquired shall not
have indicated publicly its opposition to the consummation of such
acquisition (which opposition has not been publicly withdrawn);
(vi) all transactions in connection therewith shall be
consummated in accordance with all applicable Requirements of Law in
all material respects;
(vii) with respect to any transaction involving Acquisition
Consideration of more than $25,000,000, Borrower shall have provided
the Administrative Agent (for the Lenders) with (A) historical
financial statements for the last three fiscal years (or, if less, the
number of years since formation) of the person or business to be
acquired (audited if available without undue cost or delay) and
unaudited financial statements thereof for the most recent interim
period which are available, (B) reasonably detailed projections for
the succeeding five years (or, if shorter, the period beginning with
the date of the consummation of such acquisition and ending on the
Maturity Date) pertaining to the person or business to be acquired and
updated projections for Borrower after giving effect to such
transaction and (C) a reasonably detailed description of all material
information relating thereto and copies of all material documentation
pertaining to such transaction;
(viii) at least 5 Business Days prior to the proposed date of
consummation of the transaction, Borrower shall have delivered to the
Agents and the Lenders an Officer's Certificate certifying that (A)
such transaction complies with this definition (which shall have
attached thereto reasonably detailed backup data and calculations
showing such compliance), and (B) such transaction is not reasonably
expected to result in a Material Adverse Effect; and
(ix) the aggregate amount of the Acquisition Consideration
(exclusive of any amount financed with the proceeds of the issuance
after the Closing Date of Qualified Capital Stock) for all Permitted
Acquisitions since the Closing Date shall not exceed $150,000,000;
provided that any Equity Interests constituting all or a portion of
such Acquisition Consideration shall not have a cash dividend
requirement on or prior to the Maturity Date.
"PERMITTED HOLDERS" shall mean (a) Sponsor, (b) its Affiliates (other
than any of Sponsor's portfolio companies) and (c) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and such persons' Related
Parties.
"PERMITTED LIENS" shall have the meaning assigned to such term in
Section 6.02.
"PERMITTED SUBORDINATED DEBT" shall mean unsecured subordinated
Indebtedness of Borrower having no amortization of principal and a scheduled
final maturity no earlier than the Maturity Date and other terms and conditions
and documentation (including subordination, interest, yield, covenants,
prepayments and events of default) as are consistent with similar securities
issued by similar issuers with comparable credit ratings (if applicable) in
similar markets.
"PERMITTED SUBORDINATED DEBT INCURRENCE" shall have the meaning
assigned to such term in Section 6.01(q).
"PERSON" shall mean any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PLAN" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA which
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is maintained or contributed to by any Company or its ERISA Affiliate or with
respect to which any Company could incur liability (including under Section 4069
of ERISA).
"POST-INCREASE REVOLVING LENDERS" shall have the meaning assigned to
such term in Section 2.19(d).
"PRE-INCREASE REVOLVING LENDERS" shall have the meaning assigned to
such term in Section 2.19(d).
"PREFERRED STOCK" shall mean, with respect to any person, any and all
preferred or preference Equity Interests (however designated) of such person
whether now outstanding or issued after the Closing Date.
"PREMISES" shall have the meaning assigned thereto in any applicable
Mortgage.
"PRO FORMA BASIS" shall mean on a basis (i) in accordance with GAAP
and Regulation S-X or (ii) reflecting cost savings directly attributable to a
Permitted Acquisition or Asset Sale or Permitted Subordinated Debt Incurrence
and that are related to actions implemented or to be implemented, that are of a
type reasonably expected to be realized within one year of the date of the
Permitted Acquisition, Asset Sale or Permitted Subordinated Debt Incurrence and
that are supportable and quantifiable by the underlying accounting records of
such business or otherwise factually supportable and reasonably identifiable, in
each case, as certified by a Financial Officer and otherwise reasonably
satisfactory to the Administrative Agent.
"PRO RATA PERCENTAGE" of any Revolving Lender at any time shall mean
the percentage of the total Commitments of all Revolving Lenders represented by
such Lender's Commitment.
"PROPERTY" shall mean any right, title or interest in or to property
or assets of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible and including Equity Interests or other ownership
interests of any person and whether now in existence or owned or hereafter
entered into or acquired, including all Real Property.
"PROPERTY MATERIAL ADVERSE EFFECT" shall have the meaning assigned
thereto in a Mortgage.
"PURCHASE MONEY OBLIGATION" shall mean, for any person, the
obligations of such person in respect of Indebtedness (including Capital Lease
Obligations) incurred for the purpose of financing all or any part of the
purchase price of any property (including Equity Interests of any person) or the
cost of installation, construction or improvement of any property and any
refinancing thereof; provided, however, that (i) such Indebtedness is incurred
within one year after such acquisition of or installation, construction or
improvement with respect to such property by such person and (ii) the amount of
such Indebtedness does not exceed 100% of the cost of such acquisition,
installation, construction or improvement, as the case may be.
"QUALIFIED CAPITAL STOCK" of any person shall mean any Equity
Interests of such person that are not Disqualified Capital Stock.
"REAL PROPERTY" shall mean, collectively, all right, title and
interest (including any leasehold, mineral or other estate) in and to any and
all parcels of or interests in real property owned, leased or operated by any
person, whether by lease, license or other means, together with, in each case,
all
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easements, hereditaments and appurtenances relating thereto, all improvements
and appurtenant fixtures and equipment, all general intangibles and contract
rights and other property and rights incidental to the ownership, lease or
operation thereof.
"REFINANCING" shall mean the repayment in full and the termination of
any commitment to make extensions of credit under all of the outstanding
indebtedness listed on Schedule 1.01(a) of Borrower or any of its Subsidiaries.
"REGISTER" shall have the meaning assigned to such term in Section
10.04(c).
"REGULATION D" shall mean Regulation D of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATION S-X" shall mean Regulation S-X promulgated under the
Securities Act.
"REGULATION T" shall mean Regulation T of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATION U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATION X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"REGULATORY ACTION LEVEL" small mean the Regulatory Action Level
risk-based capital threshold, as defined by NAIC, or, in any state that has not
adopted the NAIC definition, as defined by the applicable state Governmental
Authority.
"REIMBURSEMENT OBLIGATIONS" shall mean Borrower's obligations under
Section 2.18(e) to reimburse LC Disbursements.
"RELATED PARTIES" shall mean, with respect to any person, such
person's Affiliates and the partners, directors, officers, employees, agents and
advisors of such person and of such person's Affiliates.
"RELEASE" shall mean any spilling, leaking, seepage, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing, depositing, dispersing, emanating or migrating of any Hazardous
Material in, into, onto or through the Environment.
"REQUIRED ADVANCES" means advances required by HMO Regulators to be
made by any member of the Consolidated Group to a Contract Provider.
"REQUIRED LENDERS" shall mean Lenders having more than 50% of all
Commitments or, after the Revolving Commitments have terminated, more than 50%
of all Revolving Exposure.
"REQUIREMENTS OF LAW" shall mean, collectively, any and all
requirements of any Governmental Authority including any and all laws,
judgments, orders, decrees, ordinances, rules, regulations, statutes or case law
(including all applicable HMO Regulations, Medicare Regulations and Medicaid
Regulations).
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"RESPONSE" shall mean (a) "response" as such term is defined in
CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required by any
Governmental Authority or voluntarily undertaken to (i) clean up, remove, treat,
▇▇▇▇▇ or in any other way address any Hazardous Material in the environment;
(ii) prevent the Release or threat of Release, or minimize the further Release,
of any Hazardous Material; or (iii) perform studies and investigations in
connection with, or as a precondition to, clause (i) or (ii) above.
"RESPONSIBLE OFFICER" of any person shall mean any executive officer
or Financial Officer of such person and any other officer or similar official
thereof with responsibility for the administration of the obligations of such
person in respect of this Agreement.
"REVOLVING AVAILABILITY PERIOD" shall mean the period from and
including the Closing Date to but excluding the earlier of (i) the Business Day
preceding the Maturity Date and (ii) the date of termination of the Revolving
Commitments.
"REVOLVING BORROWING" shall mean a Borrowing comprised of Revolving
Loans.
"REVOLVING COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans hereunder up to the amount set
forth on Schedule I to the Lender Addendum executed and delivered by such Lender
or by an Increase Joinder, or in the Assignment and Assumption pursuant to which
such Lender assumed its Revolving Commitment, as applicable, as the same may be
(a) reduced from time to time pursuant to Section 2.07 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The aggregate amount of the Lenders' Revolving
Commitments on the Closing Date is $75,000,000.
"REVOLVING EXPOSURE" shall mean, with respect to any Lender at any
time, the aggregate principal amount at such time of all outstanding Revolving
Loans of such Lender, plus the aggregate amount at such time of such Lender's LC
Exposure, plus the aggregate amount at such time of such Lender's Swingline
Exposure.
"REVOLVING LENDER" shall mean a Lender with a Revolving Commitment.
"REVOLVING LOAN" shall mean a Loan made by the Lenders to Borrower
pursuant to Section 2.01. Each Revolving Loan shall either be an ABR Loan or a
Eurodollar Loan.
"RISK-BASED CAPITAL" means, with respect to each HMO Subsidiary, at
any time, the amount of capital that an HMO Subsidiary must hold in reserve, as
determined by the risk-based capital formula promulgated by the NAIC.
"RS ADVANCES" shall mean ordinary course advances made by HMO
Subsidiaries to Contract Providers on a per member per month basis designed to
cover such Contract Providers' anticipated professional risk, which advances are
then adjusted on a periodic basis (and in any event no less than quarterly)
between the HMO Subsidiaries and the Contract Providers based on actual
experience measured against pre-determined sharing ratios.
"SALE AND LEASEBACK TRANSACTION" has the meaning assigned to such term
in Section 6.03.
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"SAP" shall mean, with respect to each HMO Subsidiary, the statutory
accounting principles and procedures prescribed or permitted by applicable HMO
Regulations for such HMO Subsidiary, applied on a consistent basis.
"SCHIP" shall mean the State Children's Health Insurance Program, a
federal/state matching program that provides health care coverage to children
not otherwise covered by Medicaid or other insurance programs and that may be
administered by states through their Medicaid programs.
"SECURED OBLIGATIONS" shall mean (a) the Obligations, (b) the due and
punctual payment and performance of all obligations of Borrower and the other
Loan Parties under each Hedging Agreement relating to the Facilities entered
into with any counterparty that is a Secured Party at the time such Hedging
Agreement is entered into and (c) the due and punctual payment and performance
of all obligations of Borrower and the other Loan Parties (including overdrafts
and related liabilities) under each Treasury Services Agreement entered into
with a counterparty that is a Secured Party.
"SECURED PARTIES" shall mean, collectively, the Administrative Agent,
the Collateral Agent, each other Agent, the Lenders and each party to a Hedging
Agreement or Treasury Services Agreement if at the date of entering into such
Hedging Agreement or Treasury Services Agreement such person was a Lender or an
Affiliate of a Lender and such person executes and delivers to the
Administrative Agent a letter agreement in form and substance reasonably
acceptable to the Administrative Agent pursuant to which such person (i)
appoints the Collateral Agent as its agent under the applicable Loan Documents
and (ii) agrees to be bound by the provisions of Sections 10.03 and 10.09.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SECURITIES COLLATERAL" shall have the meaning assigned to such term
in the Security Agreement.
"SECURITY AGREEMENT" shall mean a Security Agreement substantially in
the form of Exhibit M among the Loan Parties and Collateral Agent for the
benefit of the Secured Parties.
"SECURITY AGREEMENT COLLATERAL" shall mean all property pledged or
granted as collateral pursuant to the Security Agreement delivered (a) on the
Closing Date or (b) thereafter pursuant to Section 5.11.
"SECURITY DOCUMENTS" shall mean the Security Agreement, any Mortgages
and each other security document or pledge agreement delivered in accordance
with applicable local or foreign law to grant a valid, perfected security
interest in any property as collateral for the Secured Obligations, and all UCC
or other financing statements or instruments of perfection required by this
Agreement, the Security Agreement, any Mortgage or any other such security
document or pledge agreement to be filed with respect to the security interests
in property and fixtures created pursuant to the Security Agreement or any
Mortgage and any other document or instrument utilized to pledge or grant or
purport to pledge or grant a security interest or lien on any property as
collateral for the Secured Obligations.
"SIGNIFICANT SUBSIDIARY" shall mean any Subsidiary of Borrower that
individually, or any group of Subsidiaries of Borrower that together, would be a
"Significant Subsidiary" of Borrower within the meaning of Rule 1-02 under
Regulation S-X promulgated by the Securities and Exchange Commission.
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"SOCIAL SECURITY ACT" shall mean the Social Security Act of 1965 as
set forth in Title 42 of the United States Code, as amended, and any successor
statute thereto, as interpreted by the rules and regulations promulgated
thereunder.
"SPONSOR" shall mean GTCR ▇▇▇▇▇▇ ▇▇▇▇▇▇, L.L.C and GTCR ▇▇▇▇▇▇ ▇▇▇▇▇▇
Fund VIII.
"STANDBY LETTER OF CREDIT" shall mean any standby letter of credit or
similar instrument issued for the purpose of supporting (a) workers'
compensation liabilities of Borrower or any of its Subsidiaries, (b) the
obligations of third-party insurers of Borrower or any of its Subsidiaries
arising by virtue of the laws of any jurisdiction requiring third-party insurers
to obtain such letters of credit, (c) performance, payment, deposit or surety
obligations of Borrower or any of its Subsidiaries if required by a Requirement
of Law or in accordance with custom and practice in the industry, (d)
Indebtedness of Borrower or any of its Subsidiaries permitted to be incurred
under Section 6.01 or such other obligations as may be agreed by the Issuing
Bank.
"▇▇▇▇▇ LAW" means Section 1877 of the Social Security Act as set forth
at Section 1395nn of Title 42 of the United States Code, as amended, and any
successor statute thereto, as interpreted by the rules and regulations issued
thereunder, in each case as in effect from time to time.
"STATUTORY RESERVES" shall mean for any Interest Period for any
Eurodollar Borrowing in dollars, the average maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period under Regulation D by member banks of the
United States Federal Reserve System in New York City with deposits exceeding
one billion dollars against "Eurocurrency liabilities" (as such term is used in
Regulation D). Eurodollar Borrowings shall be deemed to constitute Eurodollar
liabilities and to be subject to such reserve requirements without benefit of or
credit for proration, exceptions or offsets which may be available from time to
time to any Lender under Regulation D.
"SUBORDINATED INDEBTEDNESS" shall mean Indebtedness of Borrower or any
Guarantor that is by its terms subordinated in right of payment to the
Obligations of Borrower and such Guarantor, as applicable.
"SUBSIDIARY" shall mean, with respect to any person (the "PARENT") at
any date, (i) any person the accounts of which would be consolidated with those
of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, (ii)
any other corporation, limited liability company, association or other business
entity of which securities or other ownership interests representing more than
50% of the Voting Stock thereof are, as of such date, owned, controlled or held
by the parent and/or one or more subsidiaries of the parent, (iii) any
partnership (a) the sole general partner or the managing general partner of
which is the parent and/or one or more subsidiaries of the parent or (b) the
only general partners of which are the parent and/or one or more subsidiaries of
the parent and (iv) any other person that is otherwise Controlled by the parent
and/or one or more subsidiaries of the parent. Unless the context requires
otherwise, "Subsidiary" refers to a Subsidiary of Borrower.
"SURVEY" shall mean a survey of any Mortgaged Property (and all
improvements thereon) which is (a) (i) prepared by a surveyor or engineer
licensed to perform surveys in the jurisdiction where such Mortgaged Property is
located, (ii) dated (or redated) not earlier than six months prior to the date
of delivery thereof unless there shall have occurred within six months prior to
such date of delivery any exterior
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construction on the site of such Mortgaged Property or any easement, right of
way or other interest in the Mortgaged Property has been granted or become
effective through operation of law or otherwise with respect to such Mortgaged
Property which, in either case, can be depicted on a survey, in which events, as
applicable, such survey shall be dated (or redated) after the completion of such
construction or if such construction shall not have been completed as of such
date of delivery, not earlier than 20 days prior to such date of delivery, or
after the grant or effectiveness of any such easement, right of way or other
interest in the Mortgaged Property, (iii) certified by the surveyor (in a manner
reasonably acceptable to the Administrative Agent) to the Administrative Agent,
the Collateral Agent and the Title Company, (iv) complying in all material
respects with the minimum detail requirements of the American Land Title
Association as such requirements are in effect on the date of preparation of
such survey, unless otherwise approved by the Collateral Agent and (v)
sufficient for the Title Company to remove all standard survey exceptions from
the title insurance policy (or commitment) relating to such Mortgaged Property
and issue the endorsements of the type required by Section 4.01(o)(iii) or (b)
otherwise reasonably acceptable to the Collateral Agent.
"SWINGLINE COMMITMENT" shall mean the commitment of the Swingline
Lender to make loans pursuant to Section 2.17, as the same may be reduced from
time to time pursuant to Section 2.07 or Section 2.17. The amount of the
Swingline Commitment shall initially be $2,500,000, but shall in no event exceed
the Revolving Commitment.
"SWINGLINE EXPOSURE" shall mean at any time the aggregate principal
amount at such time of all outstanding Swingline Loans. The Swingline Exposure
of any Revolving Lender at any time shall equal its Pro Rata Percentage of the
aggregate Swingline Exposure at such time.
"SWINGLINE LENDER" shall have the meaning assigned to such term in the
preamble hereto.
"SWINGLINE LOAN" shall mean any loan made by the Swingline Lender
pursuant to Section 2.17.
"SYNDICATION AGENT" shall have the meaning assigned to such term in
the preamble hereto.
"TAX RETURN" shall mean all returns, statements, filings, attachments
and other documents or certifications required to be filed in respect of Taxes.
"TAXES" shall mean all present or future taxes, levies, imposts,
duties, deductions, withholdings, assessments, fees or other charges imposed by
any Governmental Authority, including any interest, additions to tax or
penalties applicable thereto.
"TEST PERIOD" shall mean, at any date of determination, the four
consecutive fiscal quarters of Borrower then last ended (in each case taken as
one accounting period) for which financial statements have been or are required
to be delivered pursuant to Section 5.01(a) or (b).
"TITLE COMPANY" shall mean any title insurance company as shall be
retained by Borrower and reasonably acceptable to the Administrative Agent.
"TITLE POLICY" shall mean a policy of title insurance (or marked up
title insurance commitment having the effect of a policy of title insurance)
insuring the Lien of a Mortgage as a valid first mortgage Lien on the Mortgaged
Property and fixtures described therein in the amount equal to not less
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than 100% of the fair market value of such Mortgaged Property and fixtures,
which policy (or such marked up commitment) shall (A) be issued by the Title
Company, (B) to the extent necessary, include such reinsurance arrangements
(with provisions for direct access, if necessary) as shall be reasonably
acceptable to the Collateral Agent, (C) contain a "tie-in" or "cluster"
endorsement, if available under applicable law (i.e., policies that together
insure against losses regardless of location or allocated value of the insured
property up to a stated maximum aggregate coverage amount), (D) have been
supplemented by such endorsements (or where such endorsements are not available,
opinions of special counsel, architects or other professionals reasonably
acceptable to the Collateral Agent) as shall be reasonably requested by the
Collateral Agent (including endorsements on matters relating to usury, first
loss, last dollar, zoning, contiguity, revolving credit, doing business,
non-imputation, public road access, survey, variable rate, environmental lien,
subdivision, mortgage recording tax, separate tax lot, revolving credit, and
so-called comprehensive coverage over covenants and restrictions), and (E)
contain no exceptions to title other than exceptions reasonably acceptable to
the Collateral Agent.
"TOTAL ADJUSTED CAPITAL" means, with respect to each HMO Subsidiary,
at any time, the Total Adjusted Capital (as defined by the NAIC on the date of
determination and as determined in accordance with SAP) of such HMO Subsidiary.
"TOTAL LEVERAGE RATIO" shall mean, at any date of determination, the
ratio of Consolidated Indebtedness on such date to Consolidated EBITDA for the
Test Period then most recently ended.
"TRANSACTIONS" shall mean, collectively, the transactions to occur on
or prior to the Closing Date, including (a) the Refinancing and (b) the payment
of all fees, costs and expenses to be paid on or prior to the Closing Date and
owing in connection with the Refinancing.
"TRANSFERRED GUARANTOR" shall have the meaning assigned to such term
in Section 7.09.
"TREASURY SERVICES AGREEMENT" shall mean any agreement relating to
treasury, depositary and cash management services or automated clearinghouse
transfer of funds.
"TYPE," when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBOR Rate or the
Alternate Base Rate.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time (except as otherwise specified) in any applicable state or jurisdiction.
"UNITED STATES" shall mean the United States of America.
"VOTING STOCK" shall mean, with respect to any person, any class or
classes of Equity Interests pursuant to which (or for purposes of the definition
of "Affiliate" only, any class or classes of Equity Interests freely convertible
at the holder's option at any time into a class of Equity Interest pursuant to
which), the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the Board of Directors of such
person.
"WHOLLY OWNED SUBSIDIARY" shall mean, as to any person, (a) any
corporation 100% of whose capital stock or membership interests (other than
directors' qualifying shares or other nominal amount of capital stock or
membership interests required to comply with local laws) is at the time owned by
such person and/or one or more Wholly Owned Subsidiaries of such person and (b)
any partnership,
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association, joint venture, limited liability company or other entity in which
such person and/or one or more Wholly Owned Subsidiaries of such person have a
100% equity interest at such time.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").
SECTION 1.03 TERMS GENERALLY. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires otherwise (a) any definition of or reference to any
Loan Document, agreement, instrument or other document herein shall be construed
as referring to such agreement, instrument or other document as from time to
time amended, supplemented or otherwise modified (subject to any restrictions on
such amendments, supplements or modifications set forth herein), (b) any
reference herein to any person shall be construed to include such person's
permitted successors and assigns, (c) the words "herein," "hereof" and
"hereunder," and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, (e) any reference to any law or regulation herein shall refer to
such law or regulation as amended, modified or supplemented from time to time,
(f) the words "asset" and "property" shall be construed to have the same meaning
and effect and, as the context requires, to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights, (g) "on," when used with respect to the Mortgaged Property or
any property adjacent to the Mortgaged Property, means "on, in, under, above or
about," and (h) the phrase "to the knowledge of" or similar phrases shall mean,
where used in reference to Borrower or any of its Affiliates, the actual or
constructive knowledge of any Responsible Officer.
SECTION 1.04 ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all financial statements to be delivered pursuant to this
Agreement shall be prepared in accordance with GAAP as in effect as set forth in
the next sentence unless otherwise agreed to by Borrower and the Required
Lenders. In the event that any "Accounting Change" (as defined below) shall
occur and such change results in a change in the method of calculation of
financial covenants, standards or terms in this Agreement, then Borrower and the
Administrative Agent agree to enter into negotiations in good faith in order to
amend such provisions of this Agreement so as to reflect equitably such
Accounting Change with the desired result that the criteria for evaluating
Borrower's financial condition shall be the same after such Accounting Change as
if such Accounting Change had not occurred. Until such time as such amendment
shall have been executed and delivered by Borrower and the Required Lenders, all
financial covenants, standards and terms in this Agreement shall continue to be
calculated or construed as if such Accounting Change had not occurred.
"ACCOUNTING CHANGE" refers to any change in accounting principles required by
the promulgation of any rule, regulation, pronouncement or opinion by the
Financial Accounting
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Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the Securities and Exchange Commission (or successors thereto or
agencies with similar functions).
SECTION 1.05 RESOLUTION OF DRAFTING AMBIGUITIES. Each Loan Party
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery of the Loan Documents to which it is a party, that it
and its counsel reviewed and participated in the preparation and negotiation
hereof and thereof and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation hereof or thereof.
ARTICLE II
THE CREDITS
SECTION 2.01 COMMITMENTS. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Revolving
Lender, severally and not jointly, agrees to make Revolving Loans to Borrower,
at any time and from time to time during the Revolving Availability Period in
accordance with the terms hereof, in an aggregate principal amount at any time
outstanding that will not result in such Lender's Revolving Exposure exceeding
such Lender's Revolving Commitment.
Within the limits set forth above and subject to the terms, conditions
and limitations set forth herein, Borrower may borrow, pay or prepay and
reborrow Revolving Loans.
SECTION 2.02 LOANS.
(a) Each Loan (other than Swingline Loans) shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their applicable Commitments; provided that the failure of any Lender to make
its Loan shall not in itself relieve any other Lender of its obligation to lend
hereunder (it being understood, however, that no Lender shall be responsible for
the failure of any other Lender to make any Loan required to be made by such
other Lender). Except for Loans deemed made pursuant to Section 2.18(e)(ii), (x)
ABR Loans comprising any Borrowing shall be in an aggregate principal amount
that is (i) an integral multiple of $250,000 and not less than $250,000 or (ii)
equal to the remaining available balance of the applicable Commitments and (y)
the Eurodollar Loans comprising any Borrowing shall be in an aggregate principal
amount that is (i) an integral multiple of $250,000 and not less than $250,000
or (ii) equal to the remaining available balance of the applicable Commitments.
(b) Subject to Sections 2.11 and 2.12, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as Borrower may request
pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of Borrower to repay such Loan in accordance with the terms of this
Agreement. Borrowings of more than one Type may be outstanding at the same time;
provided that Borrower shall not be entitled to request any Borrowing that, if
made, would result in more than eight Eurodollar Borrowings outstanding
hereunder at any one time. For purposes of the foregoing, Borrowings having
different Interest Periods, regardless of whether they commence on the same
date, shall be considered separate Borrowings.
(c) Except with respect to Loans deemed made pursuant to Section
2.18(e)(ii), each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of
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immediately available funds to such account in New York City as the
Administrative Agent may designate not later than 12:00 noon, New York City
time, and the Administrative Agent shall promptly credit the amounts so received
to an account as directed by Borrower in the applicable Borrowing Request
maintained with the Administrative Agent or, if a Borrowing shall not occur on
such date because any condition precedent herein specified shall not have been
met, return the amounts so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above, and the Administrative Agent may, in
reliance upon such assumption, make available to Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available, then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, each of such Lender and Borrower
severally agrees to repay to the Administrative Agent forthwith on written
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to Borrower until the date such
amount is repaid to the Administrative Agent at (i) in the case of Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement, and
Borrower's obligation to repay the Administrative Agent such corresponding
amount pursuant to this Section 2.02(d) shall cease.
(e) Notwithstanding any other provision of this Agreement, Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
SECTION 2.03 BORROWING PROCEDURE. To request a Revolving Borrowing,
Borrower shall deliver, by hand delivery or telecopier, a duly completed and
executed Borrowing Request to the Administrative Agent (i) in the case of a
Eurodollar Borrowing, not later than 12:00 noon, New York City time, three
Business Days before the date of the proposed Borrowing or (ii) in the case of
an ABR Borrowing, not later than 10:00 a.m., New York City time, on the date of
the proposed Borrowing. Each Borrowing Request shall be irrevocable and shall
specify the following information in compliance with Section 2.02:
(a) the aggregate amount of such Borrowing;
(b) the date of such Borrowing, which shall be a Business Day;
(c) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(d) 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";
(e) the location and number of Borrower's account to which funds are
to be disbursed; and
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(f) that the conditions set forth in Sections 4.02(b)-(c) have been
satisfied as of the date of the notice.
If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested Eurodollar Borrowing, then Borrower
shall be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04 EVIDENCE OF DEBT; REPAYMENT OF LOANS.
(a) Promise to Repay. Borrower hereby unconditionally promises to pay
(i) to the Administrative Agent for the account of each Revolving Lender, the
then unpaid principal amount of each Revolving Loan of such Lender on the
Maturity Date and (ii) to the Swingline Lender, the then unpaid principal amount
of each Swingline Loan on the earlier of (x) the Maturity Date and (y) the first
date after such Swingline Loan is made that is the 15th or last day of a
calendar month and is at least two Business Days after such Swingline Loan is
made; provided that solely in the case of repayments pursuant to clause (ii)(y)
and so long as notice is given pursuant to Section 2.03 and the conditions in
Section 4.02 are satisfied, such repayments may be made by converting Swingline
Loans into Revolving Loans; provided further that on each date that a Revolving
Borrowing is made, Borrower shall repay all Swingline Loans that were
outstanding on the date such Borrowing was requested.
(b) Lender and Administrative Agent Records. Each Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
the Indebtedness of Borrower to such Lender resulting from each Loan made by
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement. The
Administrative Agent shall maintain accounts in which it will record (i) the
amount of each Loan made hereunder, the Type and Class thereof and the Interest
Period applicable thereto; (ii) the amount of any principal or interest due and
payable or to become due and payable from Borrower to each Lender hereunder; and
(iii) the amount of any sum received by the Administrative Agent hereunder for
the account of the Lenders and each Lender's share thereof. The entries made in
the accounts maintained pursuant to this paragraph shall be prima facie evidence
of the existence and amounts of the obligations therein recorded; provided that
the failure of any Lender or the Administrative Agent to maintain such accounts
or any error therein shall not in any manner affect the obligations of Borrower
to repay the Loans in accordance with their terms.
(c) Promissory Notes. Any Lender by written notice to Borrower (with a
copy to the Administrative Agent) may request that Loans of any Class made by it
be evidenced by a Note. In such event, Borrower shall prepare, execute and
deliver to such Lender a Note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered permitted assigns)
in the applicable form. Thereafter, the Loans evidenced by such Note and
interest thereon shall at all times (including after assignment pursuant to
Section 10.04) be represented by one or more Notes in such form payable to the
order of the payee named therein (or, if such Note is a registered note, to such
payee and its registered permitted assigns).
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SECTION 2.05 FEES.
(a) Commitment Fee. Borrower agrees to pay to the Administrative Agent
for the account of each Lender a commitment fee (a "COMMITMENT FEE") equal to
0.375% per annum on the average daily unused amount of the Revolving Commitment
of such Lender during the period from and including the date hereof to but
excluding the date on which the Revolving Commitment terminates. Accrued
Commitment Fees shall be payable in arrears (A) on the last Business Day of
March, June, September and December of each year, commencing on the last
Business Day of June 2006, and (B) on the date on which the Revolving Commitment
terminates. Commitment Fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). For purposes of computing Commitment Fees, a
Revolving Commitment of a Lender shall be deemed to be used to the extent of the
outstanding Revolving Loans and LC Exposure of such Lender (and the Swingline
Exposure of such Lender shall be disregarded for such purpose); provided that
Defaulting Lenders shall not be entitled to receive any Commitment Fee accrued
during a Default Period.
(b) Administrative Agent Fees. Borrower agrees to pay to the
Administrative Agent, for its own account, the administrative fees payable in
the amounts and at the times separately agreed upon between Borrower and the
Administrative Agent (the "ADMINISTRATIVE AGENT FEES").
(c) LC and Fronting Fees. Borrower agrees to pay (i) to the
Administrative Agent for the account of each Revolving Lender a participation
fee ("LC PARTICIPATION FEE") with respect to its participations in Letters of
Credit, which shall accrue at a rate equal to the Applicable Margin from time to
time used to determine the interest rate on Eurodollar Loans pursuant to Section
2.06 on the average daily amount of such Lender's LC Exposure (excluding any
portion thereof attributable to Reimbursement Obligations) during the period
from and including the Closing Date to but excluding the later of the date on
which such Lender's Revolving Commitment terminates and the date on which such
Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting
fee ("FRONTING FEE"), which shall accrue at the rate of 0.25% (or such other
percentage as may be agreed upon by an Issuing Bank and Borrower) per annum on
the average daily amount of the LC Exposure (excluding any portion thereof
attributable to Reimbursement Obligations) during the period from and including
the Closing Date to but excluding the later of the date of termination of the
Revolving Commitments and the date on which there ceases to be any LC Exposure,
as well as the Issuing Bank's customary and reasonable fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or processing
of drawings thereunder. Accrued LC Participation Fees and Fronting Fees shall be
payable in arrears (i) on the last Business Day of March, June, September and
December of each year, commencing on the last Business Day of June 2006, and
(ii) on the date on which the Revolving Commitments terminate. Any such fees
accruing after the date on which the Revolving Commitments terminate shall be
payable on demand. Any other fees payable to the Issuing Bank pursuant to this
paragraph shall be payable on the last Business Day of March, June, September or
December. All LC Participation Fees and Fronting Fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).
(d) Generally. All Fees shall be paid on the dates due, in immediately
available funds in dollars, to the Administrative Agent for distribution, if and
as appropriate, among the Lenders (other than Defaulting Lenders during a
Default Period with respect thereto), except that Borrower shall pay the
Fronting Fees directly to the Issuing Bank. Once paid, none of the Fees shall be
refundable under any circumstances.
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SECTION 2.06 INTEREST ON LOANS.
(a) ABR Loans. Subject to the provisions of Section 2.06(c), the Loans
comprising each ABR Borrowing, including each Swingline Loan, shall bear
interest at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin in effect from time to time.
(b) Eurodollar Loans. Subject to the provisions of Section 2.06(c),
the Loans comprising each Eurodollar Borrowing shall bear interest at a rate per
annum equal to the Adjusted LIBOR Rate for the Interest Period in effect for
such Borrowing plus the Applicable Margin in effect from time to time.
(c) Default Rate. Notwithstanding the foregoing, (i) if any principal
of or interest on any Loan or any fee or other amount payable by Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount for so long as such amount remains overdue and
(ii) upon the occurrence and during the continuation of an Event of Default
under Section 8.01(g) or (h), all Obligations, in each case shall, to the extent
permitted by applicable law, bear interest, after as well as before judgment, at
a rate per annum equal to (i) in the case of overdue principal of or interest on
any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section 2.06 or (ii) in the case of any other
amount, 2% plus the rate applicable to ABR Loans as provided in Section 2.06(a)
(in either case, the "DEFAULT RATE").
(d) Interest Payment Dates. Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan; provided that
(i) interest accrued pursuant to Section 2.06(c) shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Loan or a Swingline Loan without a permanent reduction in
Revolving Commitments), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii)
in the event of any conversion of any Eurodollar Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be payable
on the effective date of such conversion.
(e) Interest Calculation. All interest hereunder shall be computed on
the basis of a year of 360 days, except that interest computed by reference to
the Alternate Base Rate shall be computed on the basis of a year of 365 days (or
366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). The
applicable Alternate Base Rate or Adjusted LIBOR Rate shall be determined by the
Administrative Agent in accordance with the provisions of this Agreement and
such determination shall be conclusive absent manifest error.
SECTION 2.07 TERMINATION AND REDUCTION OF COMMITMENTS.
(a) Termination of Commitments. The Revolving Commitments, the
Swingline Commitment and the LC Commitment shall automatically terminate on the
Maturity Date.
(b) Optional Terminations and Reductions. At its option, Borrower may
at any time terminate, or from time to time permanently reduce, the Revolving
Commitments; provided that (i) each reduction of the Revolving Commitments shall
be in an amount that is an integral multiple of $250,000 and not less than
$250,000 and (ii) the Revolving Commitments shall not be terminated or reduced
if, after giving effect to any concurrent prepayment of the Revolving Loans in
accordance with Section 2.10, the aggregate amount of Revolving Exposures would
exceed the aggregate amount of Revolving Commitments.
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(c) Borrower Notice. Borrower shall notify the Administrative Agent in
writing of any election to terminate or reduce Revolving Commitments under
Section 2.07(b) at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Revolving Lenders of the contents thereof. Each notice
delivered by Borrower pursuant to this Section shall be irrevocable; provided
that a notice of termination of Revolving Commitments delivered by Borrower may
state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by Borrower (by notice to
the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments of
any Class shall be permanent. Each reduction of Revolving Commitments shall be
made ratably among the Revolving Lenders in accordance with their respective
Revolving Commitments.
SECTION 2.08 INTEREST ELECTIONS.
(a) Generally. Each Revolving Borrowing 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. Borrower may elect different options with respect to different portions
of the affected Borrowing, in which case each such portion shall be allocated
ratably among the Lenders holding the Loans comprising such Borrowing, and the
Loans comprising each such portion shall be considered a separate Borrowing.
Notwithstanding anything to the contrary, Borrower shall not be entitled to
request any conversion or continuation that, if made, would result in more than
eight Eurodollar Borrowings outstanding hereunder at any one time. This Section
shall not apply to Swingline Borrowings, which may not be converted or
continued.
(b) Interest Election Notice. To make an election pursuant to this
Section, Borrower shall deliver, by hand delivery or telecopier, a duly
completed and executed Interest Election Request to the Administrative Agent not
later than the time that a Borrowing Request would be required under Section
2.03 if Borrower were requesting a Revolving Borrowing of the Type resulting
from such election to be made on the effective date of such election. Each
Interest Election Request shall be irrevocable. Each Interest Election Request
shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, or if outstanding Borrowings are being combined, allocation to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period."
If any such Interest Election Request requests a Eurodollar Borrowing
but does not specify an Interest Period, then Borrower shall be deemed to have
selected an Interest Period of one month's duration.
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Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(c) Automatic Conversion to ABR Borrowing. If an Interest Election
Request with respect to a Eurodollar Borrowing is not timely delivered prior to
the end of the Interest Period applicable thereto, then, unless such Borrowing
is repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if (x) an Event of Default of the type specified in clauses (a), (b),
(g) or (h) of Section 8.01 has occurred and is continuing, the Administrative
Agent or the Required Lenders may require, by notice to Borrower, that (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing
and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto and (y) any Event
of Default other than those specified in clauses (a), (b), (g) or (h) of Section
8.01 has occurred and is continuing, the Administrative Agent or the Required
Lenders may require, by notice to Borrower, that no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing in excess of one month
during the continuance of such Event of Default.
SECTION 2.09 [RESERVED]
SECTION 2.10 OPTIONAL AND MANDATORY PREPAYMENTS OF LOANS.
(a) Optional Prepayments. Borrower shall have the right at any time
and from time to time to prepay any Borrowing, in whole or in part (including
accrued and unpaid interest thereon), subject to the requirements of this
Section 2.10; provided that each partial prepayment shall be in an amount that
is an integral multiple of $250,000 and not less than $250,000 or, if less, the
outstanding principal amount of such Borrowing, together with any accrued and
unpaid interest thereon.
(b) Revolving Loan Prepayments.
(i) In the event of the termination of all the Revolving Commitments,
Borrower shall, on the date of such termination, repay or prepay all its
outstanding Revolving Borrowings and all outstanding Swingline Loans, in each
case including accrued and unpaid interest thereon, and replace all outstanding
Letters of Credit or cash collateralize all outstanding Letters of Credit in
accordance with the procedures set forth in Section 2.18(i).
(ii) In the event of any partial reduction of the Revolving
Commitments, then (x) at or prior to the effective date of such reduction, the
Administrative Agent shall notify Borrower and the Revolving Lenders of the sum
of the Revolving Exposures after giving effect thereto and (y) if the sum of the
Revolving Exposures would exceed the aggregate amount of Revolving Commitments
after giving effect to such reduction, then Borrower shall, on the date of such
reduction, first, repay or prepay Swingline Loans, second, repay or prepay
Revolving Borrowings and third, to the extent necessary, replace outstanding
Letters of Credit or cash collateralize outstanding Letters of Credit in
accordance with the procedures set forth in Section 2.18(i), in an aggregate
amount sufficient to eliminate such excess.
(iii) In the event that the sum of all Lenders' Revolving Exposures
exceeds the Revolving Commitments then in effect, Borrower shall, without notice
or demand, immediately first, repay or prepay Revolving Borrowings, and second,
replace outstanding Letters of Credit or cash collateralize outstanding Letters
of Credit in accordance with the procedures set forth in Section 2.18(i), in an
aggregate amount sufficient to eliminate such excess.
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(iv) In the event that the aggregate LC Exposure exceeds the LC
Commitment then in effect, Borrower shall, without notice or demand, immediately
replace outstanding Letters of Credit or cash collateralize outstanding Letters
of Credit in accordance with the procedures set forth in Section 2.18(i), in an
aggregate amount sufficient to eliminate such excess.
(c) [Reserved]
(d) [Reserved]
(e) [Reserved]
(f) [Reserved]
(g) [Reserved]
(h) Application of Prepayments. Prior to any optional prepayment
hereunder, Borrower shall select the Borrowing or Borrowings to be prepaid and
shall specify such selection in the notice of such prepayment pursuant to
Section 2.10(i), subject to the provisions of this Section 2.10(h).
Amounts to be applied pursuant to this Section 2.10 to the prepayment
of Revolving Loans shall be applied first to reduce outstanding ABR Loans and
any amounts remaining after such application shall be applied to prepay
Eurodollar Loans. Notwithstanding the foregoing, if the amount of any prepayment
of Loans required under this Section 2.10 shall be in excess of the amount of
the ABR Loans at the time outstanding (an "EXCESS AMOUNT"), only the portion of
the amount of such prepayment as is equal to the amount of such outstanding ABR
Loans shall be immediately prepaid and, at the election of Borrower, the Excess
Amount shall be either (A) deposited in an escrow account on terms satisfactory
to the Collateral Agent and applied to the prepayment of Eurodollar Loans on the
last day of the then next-expiring Interest Period for Eurodollar Loans;
provided that (i) interest in respect of such Excess Amount shall continue to
accrue thereon at the rate provided hereunder for the Loans which such Excess
Amount is intended to repay until such Excess Amount shall have been used in
full to repay such Loans and (ii) at any time while a Default has occurred and
is continuing, the Administrative Agent may, and upon written direction from the
Required Lenders shall, apply any or all proceeds then on deposit to the payment
of such Loans in an amount equal to such Excess Amount or (B) prepaid
immediately, together with any amounts owing to the Lenders under Section 2.13.
(i) Notice of Prepayment. Borrower shall notify the Administrative
Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender)
by written notice of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Borrowing, not later than 1:00 p.m., New York City time, three
Business Days before the date of prepayment, (ii) in the case of prepayment of
an ABR Borrowing, not later than 1:00 p.m., New York City time, one Business Day
before the date of prepayment and (iii) in the case of prepayment of a Swingline
Loan, not later than 12:00 noon, New York City time, on the date of prepayment.
Each such notice shall be irrevocable; provided that, if a notice of prepayment
is given in connection with a conditional notice of termination of the
Commitments as contemplated by Section 2.07, then such notice of prepayment may
be revoked if such termination is revoked in accordance with Section 2.07. Each
such notice shall specify the prepayment date, the principal amount of each
Borrowing or portion thereof to be prepaid and, in the case of a mandatory
prepayment, a reasonably detailed calculation of the amount of such prepayment.
Promptly following receipt of any such notice (other than a notice relating
solely to Swingline Loans), the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing shall be in an
amount that
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would be permitted in the case of a Credit Extension of the same Type as
provided in Section 2.02, except as necessary to apply fully the required amount
of a mandatory prepayment. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing and otherwise in
accordance with this Section 2.10. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.06.
SECTION 2.11 ALTERNATE RATE OF INTEREST. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
final and conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBOR Rate for such
Interest Period; or
(b) the Administrative Agent is advised in writing by the Required
Lenders that the Adjusted LIBOR Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest
Period;
then the Administrative Agent shall give written notice thereof to Borrower and
the Lenders as promptly as practicable thereafter and, until the Administrative
Agent notifies Borrower and the Lenders that the circumstances giving rise to
such notice no longer exist, (i) any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing.
SECTION 2.12 YIELD PROTECTION.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in,
by any Lender (except any reserve requirement reflected in the Adjusted
LIBOR Rate) or the Issuing Bank;
(ii) subject any Lender or the Issuing Bank to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender or the Issuing Bank
in respect thereof (except for Indemnified Taxes or Other Taxes covered by
Section 2.15 and the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender or the Issuing Bank); or
(iii) impose on any Lender or the Issuing Bank or the London interbank
market any other condition, cost or expense affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender, the
Issuing Bank or such Lender's or the Issuing Bank's holding company, if any, of
participating in, issuing or maintaining any Letter of Credit (or of maintaining
its obligation to participate in or to issue any Letter of Credit), or to reduce
the amount of any sum received or receivable by such
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Lender or the Issuing Bank hereunder (whether of principal, interest or any
other amount), then, upon written request of such Lender or the Issuing Bank,
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender or the Issuing Bank determines
(in good faith, but in its reasonable discretion) that any Change in Law
affecting such Lender or the Issuing Bank or any lending office of such Lender
or such Lender's or the Issuing Bank's holding company, if any, regarding
capital requirements has or would have the effect of reducing the rate of return
on such Lender's or the Issuing Bank's capital or on the capital of such
Lender's or the Issuing Bank's holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Bank, to a level below that which such Lender or
the Issuing Bank or such Lender's or the Issuing Bank's holding company could
have achieved but for such Change in Law (taking into consideration such
Lender's or the Issuing Bank's policies and the policies of such Lender's or the
Issuing Bank's holding company with respect to capital adequacy), then from time
to time Borrower will pay to such Lender or the Issuing Bank, as the case may
be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank or such Lender's or the Issuing Bank's holding company for any such
reduction suffered (it being understood that this Section 2.12 shall not impose
duplicative obligations on Borrower relative to Section 2.15).
(c) Certificates for Reimbursement. A certificate of a Lender or the
Issuing Bank setting forth the amount or amounts necessary to compensate such
Lender or the Issuing Bank or its holding company, as the case may be, as
specified in paragraph (a) or (b) of this Section 2.12 and delivered to Borrower
shall be conclusive absent manifest error. Borrower shall pay such Lender or the
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 15 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender or
the Issuing Bank to demand compensation pursuant to this Section 2.12 shall not
constitute a waiver of such Lender's or the Issuing Bank's right to demand such
compensation; provided that Borrower shall not be required to compensate a
Lender or the Issuing Bank pursuant to this Section for any increased costs
incurred or reductions suffered more than 180 days prior to the date that such
Lender or the Issuing Bank, as the case may be, notifies Borrower of the Change
in Law giving rise to such increased costs or reductions and of such Lender's or
the Issuing Bank's intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 180 day period referred to above shall be extended to include the
period of retroactive effect thereof) .
SECTION 2.13 BREAKAGE PAYMENTS. In the event of (a) the payment or
prepayment, whether optional or mandatory, of any principal of any Eurodollar
Loan earlier than the last day of an Interest Period applicable thereto
(including as a result of the occurrence or continuance of an Event of Default),
(b) the conversion of any Eurodollar Loan earlier than the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue
or prepay any Revolving Loan on the date specified in any notice delivered
pursuant hereto or (d) the assignment of any Eurodollar Loan earlier than the
last day of the Interest Period applicable thereto as a result of a request by
Borrower pursuant to Section 2.16(b), then, in any such event, Borrower shall
compensate each applicable Lender for the loss, cost and expense (other than
loss of anticipated profit) attributable to such event. In the case of a
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 LIBOR Rate that would have been
applicable to such
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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 in reasonable detail any amount or amounts that such
Lender is entitled to receive pursuant to this Section 2.13 shall be delivered
to Borrower (with a copy to the Administrative Agent) and shall be conclusive
and binding absent manifest error. Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.14 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SETOFFS.
(a) Payments Generally. Borrower shall make each payment required to
be made by it hereunder or under any other Loan Document (whether of principal,
interest, fees or Reimbursement Obligations, or of amounts payable under Section
2.12, 2.13, 2.15 or 10.03, or otherwise) on or before the time expressly
required hereunder or under such other Loan Document for such payment (or, if no
such time is expressly required, prior to 2:00 p.m., New York City time), on the
date when due, in immediately available funds, without setoff, deduction or
counterclaim (except as expressly provided herein). Any amounts received after
such time on any date may, in the reasonable discretion of the Administrative
Agent, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, except payments to be made directly to the Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.12, 2.13, 2.15 and 10.03 shall be made directly to the persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the persons specified therein. The Administrative Agent shall distribute any
such payments received by it for the account of any other person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, unless
specified otherwise, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
under each Loan Document shall be made in dollars, except as expressly specified
otherwise.
(b) Insufficient Funds. If at any time insufficient funds are received
by and available to the Administrative Agent to pay fully all amounts of
principal, Reimbursement Obligations, interest and fees then due hereunder, such
funds shall be applied (i) first, toward payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, toward
payment of principal and Reimbursement Obligations then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of principal
and Reimbursement Obligations then due to such parties.
(c) Sharing of Setoff. If any Lender (and/or the Issuing Bank, which
shall be deemed a "Lender" for purposes of this Section 2.14(c)) shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans or other Obligations
resulting in such Lender's receiving payment of a proportion of the aggregate
amount of its Loans and accrued interest thereon or other Obligations greater
than its pro rata share thereof as provided herein, then the Lender receiving
such greater proportion shall (a) notify the Administrative Agent of such fact,
and (b) purchase (for cash at face value) participations in the Loans and such
other obligations of the other Lenders, or make such other adjustments as shall
be equitable, so that the benefit of all such payments
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shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Loans and other amounts
owing them; provided that:
(i) if any such participations are purchased and all or any portion of
the payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest; and
(ii) the provisions of this paragraph shall not be construed to apply
to (x) any payment made by Borrower pursuant to and in accordance with the
express terms of this Agreement or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of
its Loans or participations in LC Disbursements to any assignee or
participant, other than to Borrower or any Subsidiary thereof (as to which
the provisions of this paragraph shall apply).
Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable Requirements of Law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Loan Party rights of setoff and counterclaim with respect to such
participation as fully (and subject to the same limitations regarding payroll,
tax, withholding, trust and ▇▇▇▇▇ cash accounts) as if such Lender were a direct
creditor of such Loan Party in the amount of such participation. If under
applicable bankruptcy, insolvency or any similar law any Secured Party receives
a secured claim in lieu of a setoff or counterclaim to which this Section
2.14(c) applies, such Secured Party shall to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with the
rights to which the Secured Party is entitled under this Section 2.14(c) to
share in the benefits of the recovery of such secured claim.
(d) Borrower Default. Unless the Administrative Agent shall have
received notice from Borrower prior to the date on which any payment is due to
the Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that Borrower will not make such payment, the Administrative Agent may
assume that Borrower has made such payment on such date in accordance herewith
and may, in reliance upon such assumption, distribute to the Lenders or the
Issuing Bank, as the case may be, the amount due. In such event, if Borrower has
not in fact made such payment, then each of the Lenders or the Issuing Bank, as
the case may be, severally agrees to repay to the Administrative Agent forthwith
on demand the amount so distributed to such Lender or the Issuing Bank with
interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation.
(e) Lender Default. If any Lender shall fail to make any payment
required to be made by it pursuant to Section 2.02(c), 2.14(d), 2.17(d),
2.18(d), 2.18(e) or 10.03(c), then the Administrative Agent may, in its
reasonable discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
(f) Pro Rata Treatment.
(i) Each payment by Borrower of interest in respect of the Revolving
Loans shall be applied to the amounts of such obligations owing to the Revolving
Lenders pro rata according to the respective amounts then due and owing to the
Revolving Lenders.
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(ii) Each payment on account of principal of the Revolving Borrowings
shall be made pro rata according to the respective outstanding principal amounts
of the Revolving Loans then held by the Revolving Lenders.
SECTION 2.15 TAXES.
(a) Payments Free of Taxes. Any and all payments by or on account of
any obligation of the Loan Parties hereunder or under any other Loan Document
shall be made free and clear of and without reduction or withholding for any
Indemnified Taxes or Other Taxes; provided that if the Loan Parties shall be
required by applicable Requirements of Law to deduct any Indemnified Taxes
(including any Other Taxes) from such payments, then (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender or Issuing Bank, as the case may be, receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the applicable Loan Party shall make such deductions and (iii) the
applicable Loan Party shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable Requirements of Law.
(b) Payment of Other Taxes by Borrower. Without limiting the
provisions of paragraph (a) above, Borrower shall timely pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable Requirements
of Law.
(c) Indemnification by Borrower. Borrower shall indemnify the
Administrative Agent, each Lender and the Issuing Bank, within 30 days after
written demand therefor (including reasonable backup documentation supporting
such request), for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Administrative
Agent, such Lender or the Issuing Bank, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority; provided that if
Borrower reasonably believes that such Taxes were not correctly or legally
asserted, the Administrative Agent or such Lender, as the case may be, will use
commercially reasonable efforts to cooperate with Borrower to obtain a refund of
such Taxes at Borrower's expense; provided further that neither the
Administrative Agent nor such Lender shall be required to take any action that
in its good faith judgment would be disadvantageous to it; provided further that
any such refund will be subject to Section 2.15(f). A certificate as to the
amount of such payment or liability delivered to Borrower by a Lender or the
Issuing Bank (with a copy to the Administrative Agent), or by the Administrative
Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be
conclusive absent manifest error.
(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by a Loan Party to a Governmental Authority,
such Loan Party shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Status of Lenders. Any Foreign Lender shall, to the extent it may
lawfully do so, deliver to Borrower and the Administrative Agent (in such number
of copies as shall be requested by the recipient) on or prior to the date on
which such Foreign Lender becomes a Lender under this Agreement (and from time
to time thereafter upon the request of Borrower or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:
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(i) duly completed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the
United States of America is a party,
(ii) duly completed copies of Internal Revenue Service Form W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, (x) a
certificate, in substantially the form of Exhibit Q, or any other form
approved by the Administrative Agent, to the effect that such Foreign
Lender is not (A) a "bank" within the meaning of Section 881(c)(3)(A) of
the Code, (B) a "10 percent shareholder" of Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or (C) a "controlled foreign corporation"
described in Section 881(c)(3)(C) of the Code and (y) duly completed copies
of Internal Revenue Service Form W-8BEN, or
(iv) any other form prescribed by applicable Requirements of Law as a
basis for claiming exemption from or a reduction in United States Federal
withholding tax duly completed together with such supplementary
documentation as may be prescribed by applicable Requirements of Law to
permit Borrower to determine the withholding or deduction required to be
made.
(f) Treatment of Certain Refunds. If the Administrative Agent, a
Lender or the Issuing Bank determines, in its sole good faith discretion, that
it has received a refund of any Indemnified Taxes or Other Taxes as to which it
has been indemnified by the Loan Parties or with respect to which the Loan
Parties have paid additional amounts pursuant to this Section, it shall promptly
pay the Loan Parties an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by the Loan Parties under
this Section with respect to the Indemnified Taxes or Other Taxes giving rise to
such refund), net of all out-of-pocket expenses of the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided that the Loan Parties, upon the written request of the
Administrative Agent, such Lender or the Issuing Bank, agree to promptly repay
the amount paid over to Loan Parties (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Administrative
Agent, such Lender or the Issuing Bank in the event the Administrative Agent,
such Lender or the Issuing Bank is required to repay such refund to such
Governmental Authority. This paragraph shall not be construed to require the
Administrative Agent, any Lender or the Issuing Bank to make available its tax
returns (or any other information relating to its taxes that it deems
confidential) to Loan Parties or any other person. Notwithstanding anything to
the contrary, in no event will any Lender be required to pay any amount to Loan
Parties the payment of which would place such Lender in a less favorable net
after-tax position than such Lender would have been in if the additional amounts
giving rise to such refund of any Indemnified Taxes or Other Taxes had never
been paid in the first instance.
SECTION 2.16 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 2.12, or requires Borrower to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.15, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, or file any certificate or document with a Government
Authority to the extent reasonably requested by Borrower and not materially
adverse to such Lender if, in the reasonable judgment of such Lender, such
designation, assignment or filing (i) would eliminate or reduce amounts payable
pursuant to Section 2.12 or 2.15, as the case may
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be, in the future and (ii) would not subject such Lender to any unreimbursed
cost or expense and would not otherwise be disadvantageous to such Lender.
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment. A certificate
setting forth such costs and expenses shall be submitted by such Lender to
Borrower and shall be conclusive absent manifest error.
(b) Replacement of Lenders. If any Lender requests compensation under
Section 2.12, or if Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.15, or if any Lender defaults in its obligation to fund Loans
hereunder, or if Borrower exercises its replacement rights under Section
10.02(d), then Borrower may, at its sole expense and effort, upon notice to such
Lender and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in, and consents required by, Section 10.04), all of its interests, rights and
obligations under this Agreement and the other Loan Documents to an Eligible
Assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that:
(i) Borrower shall have paid to the Administrative Agent the
processing and recordation fee specified in Section 10.04(b);
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements
and Swingline Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 2.13), assuming for this purpose (in
the case of a Lender being replaced pursuant to Section 10.02(d)) that the
Loans of such Lender were being prepaid) from the assignee (to the extent
of such outstanding principal and accrued interest and fees) or Borrower
(in the case of all other amounts);
(iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.12 or payments required to be made pursuant to
Section 2.15, such assignment will result in a reduction in such
compensation or payments thereafter; and
(iv) such assignment does not conflict with applicable Requirements of
Law.
A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling Borrower to require such assignment and delegation cease
to apply.
(c) Defaulting Lenders. Anything contained herein to the contrary
notwithstanding, in the event that any Revolving Lender ("DEFAULTING LENDER")
defaults (a "FUNDING DEFAULT") in its obligation to fund any Revolving Loan (a
"DEFAULTED LOAN") in accordance with Section 2.02, then (i) after the occurrence
and during any Funding Default (a "DEFAULT PERIOD") with respect to such
Defaulting Lender, such Defaulting Lender shall be deemed not to be a "Revolving
Lender" for purposes of voting on any matters (including the granting of any
consents or waivers) with respect to any of the Loan Documents and (ii) to the
extent permitted by applicable law during the Default Period any voluntary
prepayment of the Loans pursuant to Section 2.10 shall, if Borrower so requests
at the time of making such voluntary prepayment and if the Administrative Agent,
in its sole discretion, consents thereto, be applied to the Loans of other
Lenders as if such Defaulting Lender had no Loans outstanding and the Revolving
Exposure of such Defaulting Lender were zero, and if the Administrative Agent
does not so elect, the portion attributable to the Defaulting Lender shall be
held by the Administrative Agent for the benefit of the
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Defaulting Lender, and as security (along with earnings, if any) for its
obligations (y) under this agreement to the Agents and the Lenders and (z) when
all such obligations (contingent and otherwise) have been satisfied, paid to
Borrower, (iii) upon the Administrative Agent providing written consent (not to
be unreasonably withheld) such Defaulting Lender's Revolving Commitment and
outstanding Loans, and such Defaulting Lender's pro rata share of the LC
Disbursements, shall be excluded for purposes of calculating the Commitment Fee
in respect of any day during any Default Period with respect to such Defaulting
Lender, and upon the Administrative Agent providing written consent (not to be
unreasonably withheld), such Defaulting Lender shall not be entitled to receive
any Commitment Fee with respect to such Defaulting Lender's Revolving Commitment
in respect of any Defaulted Loan with respect to such Defaulting Lender and (iv)
any portion of the Commitment Fee allocated to the Defaulting Lender shall be
held by Administrative Agent for the benefit of the Defaulting Lender and as
security (along with earnings, if any) for its obligations owed (y) under this
Agreement to the Agents and the Lenders and (z) when all such obligations
(contingent and otherwise) have been satisfied, paid to Borrower.
SECTION 2.17 SWINGLINE LOANS.
(a) Swingline Commitment. Subject to the terms and conditions set
forth herein, the Swingline Lender agrees to make Swingline Loans to Borrower
from time to time during the Revolving Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $2,500,000
or (ii) the sum of the total Revolving Exposures exceeding the total Revolving
Commitments; provided that the Swingline Lender shall not be required to make a
Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing
limits and subject to the terms and conditions set forth herein, Borrower may
borrow, repay and reborrow Swingline Loans.
(b) Swingline Loans. To request a Swingline Loan, Borrower shall
deliver, by hand delivery or telecopier, a duly completed and executed Borrowing
Request to the Administrative Agent and the Swingline Lender, not later than
2:00 p.m., New York City time, on the day of a proposed Swingline Loan. Each
such notice shall be irrevocable and shall specify the requested date (which
shall be a Business Day) and the amount of the requested Swingline Loan. Each
Swingline Loan shall be an ABR Loan. The Swingline Lender shall make each
Swingline Loan available to Borrower to an account as directed by Borrower in
the applicable Borrowing Request maintained with the Administrative Agent (or,
in the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.18(e), by remittance to the Issuing Bank)
by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.
Borrower shall not request a Swingline Loan if at the time of or immediately
after giving effect to the Credit Extension contemplated by such request a
Default has occurred and is continuing or would result therefrom. Swingline
Loans shall be made in minimum amounts of $100,000 and integral multiples of
$100,000 above such amount.
(c) Prepayment. Borrower shall have the right at any time and from
time to time to repay any Swingline Loan, in whole or in part, upon giving
written notice to the Swingline Lender and the Administrative Agent before 12:00
(noon), New York City time, on the proposed date of repayment. Borrower may
repay any Swingline Loan with the proceeds of a Revolving Loan made in
accordance with the terms of this Agreement.
(d) Participations. The Swingline Lender may at any time in its
reasonable discretion by written notice given to the Administrative Agent
(provided such notice requirement shall not apply if the Swingline Lender and
the Administrative Agent are the same entity) not later than 1:00 p.m., New York
City time, on the next succeeding Business Day following such notice require the
Revolving
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Lenders to acquire participations on such Business Day in all or a portion of
the Swingline Loans then outstanding. Such notice shall specify the aggregate
amount of Swingline Loans in which Revolving Lenders will participate. Promptly
upon receipt of such notice, the Administrative Agent will give notice thereof
to each Revolving Lender, specifying in such notice such Lender's Pro Rata
Percentage of such Swingline Loan or Loans. Each Revolving Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of the Swingline Lender,
such Lender's Pro Rata Percentage of such Swingline Loan or Loans. Each
Revolving Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever (so long as such
payment shall not cause such Lender's Revolving Exposure to exceed such Lender's
Revolving Commitment). Each Revolving Lender shall comply with its obligation
under this paragraph by wire transfer of immediately available funds, in the
same manner as provided in Section 2.02(c) with respect to Loans made by such
Lender (and Section 2.02 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the Swingline Lender the amounts so received by it from the
Revolving Lenders. The Administrative Agent shall notify Borrower of any
participations in any Swingline Loan acquired by the Revolving Lenders pursuant
to this paragraph, and thereafter payments in respect of such Swingline Loan
shall be made to the Administrative Agent and not to the Swingline Lender. Any
amounts received by the Swingline Lender from Borrower (or other party on behalf
of Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent. Any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their payments pursuant to this
paragraph, as their interests may appear. The purchase of participations in a
Swingline Loan pursuant to this paragraph shall not relieve Borrower of any
default in the payment thereof.
SECTION 2.18 LETTERS OF CREDIT
(a) General. Subject to the terms and conditions set forth herein,
Borrower may request the Issuing Bank, and the Issuing Bank agrees, to issue
Letters of Credit for its own account or the account of Borrower or a Subsidiary
in a form reasonably acceptable to the Administrative Agent and the Issuing
Bank, at any time and from time to time during the Revolving Availability Period
(provided that Borrower shall be a co-applicant, and be jointly and severally
liable, with respect to each Letter of Credit issued for the account of a
Subsidiary). The Issuing Bank shall have no obligation to issue, and Borrower
shall not request the issuance of, any Letter of Credit at any time if after
giving effect to such issuance, the LC Exposure would exceed the LC Commitment
or the total Revolving Exposure would exceed the total Revolving Commitments. In
the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by Borrower to, or entered into by
Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and
conditions of this Agreement shall control.
(b) Request for Issuance, Amendment, Renewal, Extension; Certain
Conditions and Notices. To request the issuance of a Letter of Credit or the
amendment, renewal or extension of an outstanding Letter of Credit, Borrower
shall deliver, by hand or telecopier (or transmit by electronic communication,
if arrangements for doing so have been approved by the Issuing Bank), an LC
Request to the Issuing Bank and the Administrative Agent not later than 1:00 p.m
New York City time on the third Business Day preceding the requested date of
issuance, amendment, renewal or extension (or such later date and time as is
acceptable to the Issuing Bank).
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A request for an initial issuance of a Letter of Credit shall specify
in form and detail reasonably satisfactory to the Issuing Bank:
(i) the proposed issuance date of the requested Letter of Credit
(which shall be a Business Day);
(ii) the amount thereof;
(iii) the expiry date thereof (which shall not be later than the close
of business on the Letter of Credit Expiration Date except as provided in
clause (c) below);
(iv) the name and address of the beneficiary thereof;
(v) whether the Letter of Credit is to be issued for its own account
or for the account of one of its Guarantors (provided that Borrower shall
be a co-applicant, and therefore jointly and severally liable, with respect
to each Letter of Credit issued for the account of a Guarantor);
(vi) the documents to be presented by such beneficiary in connection
with any drawing thereunder;
(vii) the full text of any certificate to be presented by such
beneficiary in connection with any drawing thereunder; and
(viii) such other matters as the Issuing Bank may reasonably require.
A request for an amendment, renewal or extension of any outstanding
Letter of Credit shall specify in form and detail reasonably satisfactory to the
Issuing Bank:
(i) the Letter of Credit to be amended, renewed or extended;
(ii) the proposed date of amendment, renewal or extension thereof
(which shall be a Business Day);
(iii) the nature of the proposed amendment, renewal or extension; and
(iv) such other matters as the Issuing Bank may reasonably require.
If requested by the Issuing Bank, Borrower also shall submit a letter of credit
application on the Issuing Bank's standard form in connection with any request
for a Letter of Credit; provided that to the extent such standard form is
inconsistent with the Loan Documents, such Loan Documents shall supersede. A
Letter of Credit shall be issued, amended, renewed or extended only if (and,
upon issuance, amendment, renewal or extension of each Letter of Credit,
Borrower shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension, (i) the LC Exposure shall not
exceed the LC Commitment, (ii) the total Revolving Exposures shall not exceed
the total Revolving Commitments and (iii) the conditions set forth in Article IV
in respect of such issuance, amendment, renewal or extension shall have been
satisfied. Unless the Issuing Bank shall agree otherwise, no Letter of Credit
shall be in an initial amount less than $100,000.
Upon the issuance of any Letter of Credit or amendment, renewal,
extension or modification to a Letter of Credit, the Issuing Bank shall promptly
notify the Administrative Agent, who shall
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promptly notify each Revolving Lender, thereof, which notice shall be
accompanied by a copy of such Letter of Credit or amendment, renewal, extension
or modification to a Letter of Credit and the amount of such Lender's respective
participation in such Letter of Credit pursuant to Section 2.18(d). On the first
Business Day of each calendar month, the Issuing Bank shall provide to the
Administrative Agent a report listing all outstanding Letters of Credit and the
amounts and beneficiaries thereof and the Administrative Agent shall promptly
provide such report to each Revolving Lender.
(c) Expiration Date.
(1) Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) in the case of a Standby Letter of Credit, (x)
the date which is one year after the date of the issuance of such Standby Letter
of Credit (or, in the case of any renewal or extension thereof, one year after
such renewal or extension) and (y) the Letter of Credit Expiration Date and (ii)
in the case of a Commercial Letter of Credit, (x) the date that is 180 days
after the date of issuance of such Commercial Letter of Credit (or, in the case
of any renewal or extension thereof, 180 days after such renewal or extension)
and (y) the Letter of Credit Expiration Date; provided that notwithstanding the
foregoing, Letters of Credit may expire later than the Letter of Credit
Expiration Date (but no later than one year (in the case of a standby letter of
credit) or 180 days (in the case of a Commercial Letter of Credit) from the date
of issuance thereof) provided that Borrower agrees to cash collateralize such
Letters of Credit in an amount equal to 105% of the aggregate amount available
to be drawn under such Letters of Credit by the date that is thirty (30) days
prior to the Maturity Date on terms and conditions reasonably satisfactory to
the Issuing Bank, and Borrower hereby agrees so to cash collateralize such
Letters of Credit by such date, it being understood that no Lenders shall be
released from any and all obligations to purchase participations or make Loans
in respect of such Letters of Credit until such Letters of Credit shall have
expired or been terminated.
(2) If Borrower so requests in any Letter of Credit Request, the
Issuing Bank may, in its sole and absolute discretion, agree to issue a Letter
of Credit that has automatic renewal provisions (each, an "AUTO RENEWAL LETTER
OF CREDIT"); provided that any such Auto Renewal Letter of Credit must permit
the Issuing Bank to prevent any such renewal at least once in each twelve month
period (commencing with the date of issuance of such Letter of Credit) by giving
prior notice to the beneficiary thereof not later than a day in each such twelve
month period to be agreed upon at the time such Letter of Credit is issued.
Unless otherwise directed by the Issuing Bank, Borrower shall not be required to
make a specific request to the Issuing Bank for any such renewal. Once an Auto
Renewal Letter of Credit has been issued, the Revolving Lenders shall be deemed
to have authorized (but may not require) the Issuing Bank to permit the renewal
of such Letter of Credit at any time to an expiry date not later than the
earlier of (i) one year from the date of such renewal and (ii) the Letter of
Credit Expiration Date; provided that the Issuing Bank shall not permit any such
renewal if (x) the Issuing Bank has determined that it would have no obligation
at such time to issue such Letter of Credit in its renewed form under the terms
hereof (by reason of the provisions of Section 2.18(l), 4.02 or otherwise), or
(y) it has received notice on or before the day that is two Business Days before
the date that has been agreed upon pursuant to the proviso of the first sentence
of this paragraph from the Administrative Agent that any Revolving Lender
directly affected thereby has elected not to permit such renewal.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby irrevocably grants to each Revolving Lender, and each Revolving Lender
hereby acquires from the Issuing Bank, a participation in such Letter of Credit
equal to such Revolving Lender's Pro Rata Percentage of the aggregate amount
available to be drawn under such Letter of
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Credit. In consideration and in furtherance of the foregoing, each Revolving
Lender hereby absolutely and unconditionally agrees to pay to the Administrative
Agent, for the account of the Issuing Bank, such Revolving Lender's Pro Rata
Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed
by Borrower on the date due as provided in Section 2.18(e), or of any
reimbursement payment required to be refunded to Borrower for any reason. Each
Revolving Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, or expiration, termination or cash
collateralization of any Letter of Credit and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement.
(i) If the Issuing Bank shall make any LC Disbursement in respect of a
Letter of Credit, Borrower shall reimburse such LC Disbursement by paying to the
Issuing Bank an amount equal to such LC Disbursement not later than 3:00 p.m.,
New York City time, on the date that such LC Disbursement is made if Borrower
shall have received notice of such LC Disbursement prior to 11:00 a.m., New York
City time, on such date, or, if such notice has not been received by Borrower
prior to such time on such date, then not later than 3:00 p.m., New York City
time, on the Business Day immediately following the day that Borrower receives
such notice; provided that Borrower may, subject to the conditions to borrowing
set forth herein, request in accordance with Section 2.03 that such payment be
financed with ABR Loans or Swingline Loans in an equivalent amount and, to the
extent so financed, Borrower's obligation to make such payment shall be
discharged and replaced by the resulting ABR Loans or Swingline Loans.
Notwithstanding the foregoing, if such LC Disbursement is made after Borrower
cash collateralized such Letter of Credit in accordance with Section 2.18(c),
the Issuing Bank shall first apply such cash collateral as reimbursement in an
amount equal to such LC Disbursement. If the LC Disbursement exceeds the cash
collateral, then Borrower shall reimburse the Issuing Bank for such excess
promptly after Borrower receives notice of such excess. Following the expiration
or termination of any Letter of Credit that is cash collateralized pursuant to
Section 2.18(c), the Issuing Bank shall forward any remaining cash collateral
with respect to such Letter of Credit to Borrower.
(ii) If Borrower fails to make such payment when due or the amount due
is not refunded pursuant to clause (i) above, the Issuing Bank shall notify the
Administrative Agent and the Administrative Agent shall notify each Revolving
Lender of the applicable LC Disbursement, the payment then due from Borrower in
respect thereof and such Revolving Lender's Pro Rata Percentage thereof. Each
Revolving Lender shall pay by wire transfer of immediately available funds to
the Administrative Agent not later than 2:00 p.m., New York City time, on such
date (or, if such Revolving Lender shall have received such notice later than
12:00 noon, New York City time, on any day, not later than 11:00 a.m., New York
City time, on the immediately following Business Day), an amount equal to such
Revolving Lender's Pro Rata Percentage of the unreimbursed LC Disbursement in
the same manner as provided in Section 2.02(c) with respect to Revolving Loans
made by such Revolving Lender, and the Administrative Agent will promptly pay to
the Issuing Bank the amounts so received by it from the Revolving Lenders. The
Administrative Agent will promptly pay to the Issuing Bank any amounts received
by it from Borrower pursuant to the above paragraph prior to the time that any
Revolving Lender makes any payment pursuant to the preceding sentence and any
such amounts received by the Administrative Agent from Borrower thereafter will
be promptly remitted by the Administrative Agent to the Revolving Lenders that
shall have made such payments and to the Issuing Bank, as appropriate.
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(iii) If any Revolving Lender shall not have made its Pro Rata
Percentage of such LC Disbursement available to the Administrative Agent as
provided above, each of such Revolving Lender and Borrower severally agrees to
pay interest on such amount, for each day from and including the date such
amount is required to be paid in accordance with the foregoing to but excluding
the date such amount is paid, to the Administrative Agent for the account of the
Issuing Bank at (i) in the case of Borrower, the rate per annum set forth in
Section 2.18(h) and (ii) in the case of such Lender, at a rate determined by the
Administrative Agent in accordance with banking industry rules or practices on
interbank compensation.
(f) Obligations Absolute. The Reimbursement Obligation of Borrower as
provided in Section 2.18(e) shall be absolute, unconditional and irrevocable,
and shall be paid and performed strictly in accordance with the terms of this
Agreement under any and all circumstances whatsoever and irrespective of (i) any
lack of validity or enforceability of any Letter of Credit or this Agreement, or
any term or provision therein; (ii) any draft or other document presented under
a Letter of Credit being proved to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect; (iii) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or other document that fails to comply with the
terms of such Letter of Credit; (iv) any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section 2.18, constitute a legal or equitable discharge of,
or provide a right of setoff against, the obligations of Borrower hereunder; (v)
the fact that a Default shall have occurred and be continuing; or (vi) any
material adverse change in the business, property, results of operations,
prospects or condition, financial or otherwise, of Borrower and its
Subsidiaries. None of the Agents, the Lenders, the Issuing Bank or any of their
Affiliates shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived
by Borrower to the extent permitted by applicable Requirements of Law) suffered
by Borrower that are caused by the Issuing Bank's failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented that appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
give written notice to the Administrative Agent and Borrower of such demand for
payment and whether the Issuing Bank has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve Borrower of its Reimbursement Obligation to the Issuing Bank
and the Revolving Lenders with respect to any such LC
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Disbursement (other than with respect to the timing of such Reimbursement
Obligation set forth in Section 2.18(e)).
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless Borrower shall reimburse such LC Disbursement in full
on the date such LC Disbursement is made, the unpaid amount thereof shall bear
interest payable on demand, for each day from and including the date such LC
Disbursement is made to but excluding the date that Borrower reimburses such LC
Disbursement, at the rate per annum determined pursuant to Section 2.06(c).
Interest accrued pursuant to this paragraph shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by
any Revolving Lender pursuant to Section 2.18(e) to reimburse the Issuing Bank
shall be for the account of such Lender to the extent of such payment.
(i) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposure representing greater
than 50% of the total LC Exposure) reasonably demanding the deposit of cash
collateral pursuant to this paragraph, Borrower shall deposit on terms and in
accounts reasonably satisfactory to the Collateral Agent, in the name of the
Collateral Agent and for the benefit of the Revolving Lenders, an amount in cash
equal to the LC Exposure as of such date plus any accrued and unpaid interest
thereon; provided that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to Borrower described in Section 8.01(g) or (h).
Funds so deposited shall be applied by the Collateral Agent to reimburse the
Issuing Bank for LC Disbursements for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of outstanding
Reimbursement Obligations or, if the maturity of the Loans has been accelerated
(but subject to the consent of Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure), be applied to satisfy other
Obligations of Borrower under this Agreement. If Borrower is required to provide
an amount of cash collateral hereunder as a result of the occurrence of an Event
of Default, such amount plus any accrued interest or realized profits with
respect to such amounts (to the extent not applied as aforesaid) shall be
returned to Borrower within three Business Days after all Events of Default have
been cured or waived.
(j) Additional Issuing Banks. Borrower may, at any time and from time
to time, designate one or more additional Revolving Lenders to act as an issuing
bank under the terms of this Agreement, with the consent of the Administrative
Agent (which consent shall not be unreasonably withheld or delayed), the Issuing
Bank and such Revolving Lender(s). Any Lender designated as an issuing bank
pursuant to this paragraph (j) shall be deemed (in addition to being a Revolving
Lender) to be the Issuing Bank with respect to Letters of Credit issued or to be
issued by such Revolving Lender, and all references herein and in the other Loan
Documents to the term "Issuing Bank" shall, with respect to such Letters of
Credit, be deemed to refer to such Revolving Lender in its capacity as Issuing
Bank, as the context shall require.
(k) Resignation or Removal of the Issuing Bank. The Issuing Bank may
resign as Issuing Bank hereunder at any time upon at least 30 days' prior notice
to the Lenders, the Administrative Agent and Borrower. The Issuing Bank may be
replaced at any time by written agreement among Borrower, each Agent, the
replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent
shall notify the Lenders of any such replacement of the Issuing Bank or any such
additional Issuing Bank. At the time any such resignation or replacement shall
become effective, Borrower shall pay all unpaid and invoiced fees accrued for
the account of the replaced Issuing Bank pursuant to Section 2.05(c). From and
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after the effective date of any such resignation or replacement or addition, as
applicable, (i) the successor or additional Issuing Bank shall have all the
rights and obligations of the Issuing Bank under this Agreement with respect to
Letters of Credit to be issued by it thereafter and (ii) references herein to
the term "Issuing Bank" shall be deemed to refer to such successor or such
addition or to any previous Issuing Bank, or to such successor or such addition
and all previous Issuing Banks, as the context shall require. After the
resignation or replacement of an Issuing Bank hereunder, the replaced Issuing
Bank shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such resignation or replacement, but shall not be
required to issue additional Letters of Credit. If at any time there is more
than one Issuing Bank hereunder, Borrower may, in its discretion, select which
Issuing Bank is to issue any particular Letter of Credit.
(l) Other. The Issuing Bank shall be under no obligation to issue any
Letter of Credit if
(i) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the Issuing
Bank from issuing such Letter of Credit, or any Requirement of Law
applicable to the Issuing Bank or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction
over the Issuing Bank shall prohibit, or request that the Issuing Bank
refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the Issuing Bank with respect to
such Letter of Credit any restriction, reserve or capital requirement (for
which the Issuing Bank is not otherwise compensated hereunder) not in
effect on the Closing Date, or shall impose upon the Issuing Bank any
unreimbursed loss, cost or expense which was not applicable on the Closing
Date and which the Issuing Bank in good ▇▇▇▇▇ ▇▇▇▇▇ material to it; or
(ii) the issuance of such Letter of Credit would violate one or more
policies of the Issuing Bank.
The Issuing Bank shall be under no obligation to amend any Letter of Credit if
(A) the Issuing Bank would have no obligation at such time to issue such Letter
of Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.
SECTION 2.19 INCREASE IN COMMITMENTS.
(a) Borrower Request. Borrower may by written notice to the
Administrative Agent elect to request no more than three times prior to the
Maturity Date, an increase to the existing Revolving Commitments by an amount
not in excess of $50,000,000 in the aggregate and not less than $10,000,000
individually. Each such notice shall specify (i) the date (each, an "INCREASE
EFFECTIVE Date") on which Borrower proposes that the increased or new
Commitments shall be effective, which shall be a date not less than 10 Business
Days after the date on which such notice is delivered to the Administrative
Agent and (ii) the identity of each Eligible Assignee to whom Borrower proposes
any portion of such increased or new Commitments be allocated and the amounts of
such allocations; provided that any existing Lender requested to provide all or
a portion of the increased or new Commitments may elect or decline, in its sole
discretion, to provide such increased or new Commitment.
(b) Conditions. The increased or new Commitments shall become
effective, as of such Increase Effective Date; provided that:
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(i) each of the conditions set forth in Section 4.02 shall be
satisfied (or waived);
(ii) no Default shall have occurred and be continuing or would result
from the borrowings to be made on the Increase Effective Date;
(iii) after giving effect to the borrowings to be made on the Increase
Effective Date and to any change in Consolidated EBITDA and any increase or
decrease in Indebtedness resulting from the consummation of any Permitted
Acquisition concurrently with such borrowings on a Pro Forma Basis as of
the date of the most recent financial statements delivered pursuant to
Section 5.01(a) or (b), Borrower shall be in compliance with Section
6.10(a), in each case for the applicable Test Period;
(iv) Borrower shall make any payments required pursuant to Section
2.13 in connection with any adjustment of Revolving Loans pursuant to
Section 2.19(d); and
(v) Borrower shall deliver or cause to be delivered any legal opinions
or other documents reasonably requested by the Administrative Agent in
connection with any such transaction.
(c) Terms of New Loans and Commitments. The terms and provisions of
Revolving Loans made pursuant to new Commitments shall be identical to the
Revolving Loans. The increased or new Commitments shall be effected by a joinder
agreement (the "INCREASE JOINDER") executed by Borrower, the Administrative
Agent and each Lender making such increased or new Commitment, in form and
substance reasonably satisfactory to each of them. The Increase Joinder may,
without the consent of any other Lenders, effect such amendments to this
Agreement and the other Loan Documents as may be necessary or appropriate, in
the reasonable opinion of the Administrative Agent, to effect the provisions of
this Section 2.19; provided that such amendment or amendments shall be otherwise
in compliance with Section 10.02.
(d) Adjustment of Revolving Loans. Each of the Lenders having a
Revolving Commitment prior to such Increase Effective Date (the "PRE-INCREASE
REVOLVING LENDERS") shall assign to any Revolving Lender which is acquiring a
new or additional Revolving Commitment on the Increase Effective Date (the
"POST-INCREASE REVOLVING LENDERS"), and such Post-Increase Revolving Lenders
shall purchase from each Pre-Increase Revolving Lender, at the principal amount
thereof, such interests in the Revolving Loans and participation interests in LC
Exposure and Swingline Loans outstanding on such Increase Effective Date as
shall be necessary in order that, after giving effect to all such assignments
and purchases, such Revolving Loans and participation interests in LC Exposure
and Swingline Loans will be held by Pre-Increase Revolving Lenders and
Post-Increase Revolving Lenders ratably in accordance with their Revolving
Commitments after giving effect to such increased Revolving Commitments.
(e) [Reserved]
(f) Equal and Ratable Benefit. The Loans and Commitments established
pursuant to this paragraph shall constitute Loans and Commitments under, and
shall be entitled to all the benefits afforded by, this Agreement and the other
Loan Documents, and shall, without limiting the foregoing, benefit equally and
ratably from the Guarantees and security interests created by the Security
Documents. The Loan Parties shall take any actions reasonably required by the
Administrative Agent to ensure and/or demonstrate that the Lien and security
interests granted by the Security Documents continue to be perfected under the
UCC or otherwise after giving effect to the establishment of any such new
Commitments. In addition, unless otherwise specifically provided herein, all
references in the Loan Documents to
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Revolving Loans shall be deemed, unless the context otherwise requires, to
include references to Revolving Loans made pursuant to new Commitments made
pursuant to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Administrative Agent,
the Collateral Agent, the Issuing Bank and each of the Lenders that:
SECTION 3.01 ORGANIZATION; POWERS. Each Company (a) is a corporation,
limited partnership or limited liability company duly organized or formed and,
with respect to each Company that is a corporation or limited liability company,
validly existing, under the laws of the jurisdiction of its organization, (b)
has all requisite organizational power and authority and all requisite
governmental licenses, authorizations, consents and approvals to carry on its
business as now conducted and to own and lease its property and (c) is
registered or qualified to do business and in good standing (to the extent such
concept is applicable in the applicable jurisdiction) in every jurisdiction
where such registered or qualification is required, except in such jurisdictions
where the failure to so qualify or be in good standing, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. There is no existing default under any Organizational Document of any
Company or any event that, with the giving of notice or passage of time or both,
would constitute a default by any party thereunder that could reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.02 AUTHORIZATION; ENFORCEABILITY. The Transactions to be
entered into by each Loan Party are within such Loan Party's organizational
powers and have been duly authorized by all necessary organizational action on
the part of such Loan Party. This Agreement has been duly executed and delivered
by each Loan Party and constitutes, and each other Loan Document to which any
Loan Party is to be a party, when executed and delivered by such Loan Party,
will constitute, a legal, valid and binding obligation of such Loan Party,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
SECTION 3.03 NO CONFLICTS. The Transactions (a) do not require any
consent or approval of, registration or filing with or other action by any
Governmental Authority, except (i) such as have been obtained or made and are in
full force and effect, (ii) filings necessary to perfect Liens created by the
Loan Documents and (iii) consents, approvals, registrations, filings, permits or
actions the failure to obtain or perform which could not reasonably be expected
to result in a Material Adverse Effect, (b) will not violate the Organizational
Documents of any Company, (c) will not violate any Requirement of Law except to
the extent such violation could not be reasonably expected to result in a
Material Adverse Effect, (d) will not violate or result in a default or require
any consent or approval under any indenture, agreement or other instrument
binding upon any Company or its property, or give rise to a right thereunder to
require any payment to be made by any Company, except for violations, defaults
or the creation of such rights that could not reasonably be expected to result
in a Material Adverse Effect, and (e) will not result in the creation or
imposition of any Lien on any property of any Company, except Liens created by
the Loan Documents and Permitted Liens.
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SECTION 3.04 FINANCIAL STATEMENTS; PROJECTIONS.
(a) Historical Financial Statements. Borrower has heretofore delivered
to the Lenders (i) the consolidated balance sheets of Borrower as of December
31, 2005 and the related statements of income, stockholders' equity and cash
flows of Borrower for the ten month period from March 1, 2005 to December 31,
2005 and the consolidated balance sheets of NewQuest, LLC as of December 31,
2004 and the related statements of income, members' equity and cash flows of
NewQuest, LLC for the two month period from January 1, 2005 to February 28, 2005
and for the fiscal years ended December 31, 2004 and 2003, in each case audited
by and accompanied by the unqualified opinion of KPMG, LLP, independent public
accountants; and (ii) the balance sheets and related statements of income,
stockholders' equity and cash flows for each HMO Subsidiary as of and for the
fiscal years ended 2004 and 2003. Such financial statements have been and all
financial statements delivered pursuant to Sections 5.01(a), (b) and (c) will be
prepared in accordance with GAAP (or, as applicable with respect to HMO
Subsidiaries, SAP) and present fairly in all material respects the financial
condition and results of operations and cash flows of Borrower or the HMO
Subsidiaries as of the dates and for the periods to which they relate.
(b) No Material Adverse Effect. Since December 31, 2005 there has been
no event, change, circumstance or occurrence that, individually or in the
aggregate, has had or could reasonably be expected to result in a Material
Adverse Effect.
(c) [Reserved].
(d) Forecasts. On or prior to the Closing Date, Borrower has delivered
to the Lenders forecasts of the financial performance of Borrower and its
subsidiaries for the period ending December 31, 2010 prepared by Borrower. The
forecasts of financial performance of Borrower and its subsidiaries furnished to
the Lenders have been prepared in good faith by Borrower and based on
assumptions believed by Borrower to be reasonable when made, it being understood
by the Lenders, however, that forecasts as to the future events are not
historical facts and that the actual results during the period or periods
covered by the forecasts may differ from the forecasted results and that the
differences may be material.
SECTION 3.05 PROPERTIES.
(a) Generally. Each Company has legal title to, or valid leasehold
interests in, all its property material to its business, free and clear of all
Liens except for Permitted Liens and minor irregularities or deficiencies in
title that, individually or in the aggregate, do not interfere in any material
way with its ability to conduct its business as currently conducted or to
utilize in any material way such property for its intended purpose. The property
of the Companies, taken as a whole, (i) is in good operating order, condition
and repair (ordinary wear and tear and damage by casualty excepted) except to
the extent that failure to be in such condition could not be reasonably expected
to result in a Material Adverse Effect and (ii) constitutes all the property
that is reasonably required for the business and operations of the Companies as
presently conducted.
(b) Real Property. Schedules 8(a) and 8(b) to the Perfection
Certificate dated the Closing Date contain a true and complete list of each
parcel of Real Property leased, subleased or otherwise occupied or utilized by
any Company, as lessee, sublessee, franchisee or licensee, as of the Closing
Date. No Company owns in fee any Real Property as of the Closing Date.
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(c) No Casualty Event. No Company has received any written notice of,
nor has any knowledge of, the occurrence or pendency or contemplation of any
Casualty Event affecting all or any portion of its property and that could
reasonably be expected to result in a Material Adverse Effect. No Mortgage
encumbers improved Real Property that is located in an area that has been
identified by the Secretary of Housing and Urban Development as an area having
special flood hazards within the meaning of the National Flood Insurance Act of
1968 unless flood insurance available under such Act has been obtained in
accordance with Section 5.04.
(d) Collateral. Each Loan Party owns or has rights to use all of the
Collateral and all rights with respect to any of the foregoing necessary for or
material to each Loan Party's business as currently conducted. The use by each
Loan Party of such Collateral and all such rights with respect to the foregoing
do not infringe on the rights of any person other than such infringement that
could not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect. To Borrower's knowledge, no claim has been made and
remains outstanding that any Loan Party's use of any Collateral does or may
violate the rights of any third party that could, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06 INTELLECTUAL PROPERTY.
(a) Ownership/No Claims. Each Loan Party owns, or is licensed to use,
all patents, patent applications, trademarks, trade names, service marks,
copyrights, technology, trade secrets, proprietary information, domain names,
know-how and processes necessary for the conduct of its business as currently
conducted (the "INTELLECTUAL PROPERTY"), except for those the failure to own or
have a license to use, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No claim has been asserted and
is pending by any person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does any Loan Party know of any valid basis for any such claim.
The use of such Intellectual Property by each Loan Party does not infringe the
rights of any person, except for such claims of infringement that could not
reasonably be expected to result in a Material Adverse Effect.
(b) Registrations. Except pursuant to licenses and other user
agreements entered into by each Loan Party that are listed in Schedule 12(a) or
12(b) to the Perfection Certificate or as could otherwise not be reasonably
expected to result in a Material Adverse Effect, on and as of the date hereof
each Loan Party owns and possesses the right to use, and has done nothing to
authorize or enable any other person to use, any copyright, patent or trademark
(as such terms are defined in the Security Agreement) listed in Schedule 12(a)
or 12(b) to the Perfection Certificate. Each Loan Party has taken commercially
reasonable action to maintain and protect all material patent, copyright and
trademark registrations listed in Schedule 12(a) or 12(b) to the Perfection
Certificate.
(c) No Violations or Proceedings. To each Loan Party's knowledge, on
and as of the date hereof, there is no material violation by others of any right
of such Loan Party with respect to any copyright, patent or trademark listed in
Schedule 12(a) or 12(b) to the Perfection Certificate, pledged by it under the
name of such Loan Party.
SECTION 3.07 EQUITY INTERESTS AND SUBSIDIARIES.
(a) Equity Interests. Schedules 1(a) and 10(a) to the Perfection
Certificate dated the Closing Date set forth a list of (i) all the Subsidiaries
of Borrower, their jurisdictions of organization as of the Closing Date and
whether such Subsidiary is an HMO Subsidiary and (ii) the number of each class
of
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its Equity Interests authorized, and the number outstanding, on the Closing Date
and the number of units or shares covered by all outstanding options, warrants,
rights of conversion or purchase and similar rights at the Closing Date. All
Equity Interests of each Subsidiary of Borrower that are owned by Borrower or
any of its Subsidiaries are duly and validly issued and are fully paid (except
as to the general partner interests of GulfQuest, L.P.) and non-assessable
(except, in the case of (1) GulfQuest, L.P., as assessments could be required on
its outstanding limited partnership interests in respect of the matters
described in Sections 3.03(a) and 6.07 of the Texas Revised Limited Partnership
Act (the "TRLPA"), and as nonassessability of its outstanding general partner
interests may be affected by the matters referred to in Section 4.03(b) of the
TRLPA and GulfQuest L.P.'s Limited Partnership Agreement dated as of November
30, 2002 (the "PARTNERSHIP AGREEMENT") and (2) each Subsidiary that is a limited
liability company, as assessments could be required on its outstanding limited
liability company interests in respect of the matters referred to in Section
5.09 of the Texas Limited Liability Company Act, Section ▇▇-▇▇▇-▇▇▇ of the
Tennessee Limited Liability Company Act, Section 18-607 of the Delaware Limited
Liability Company Act, Section 10-12-29 of the Alabama Limited Liability Company
Act and Section 25-30 of the Illinois Limited Liability Company Act), and are
owned by Borrower, directly or indirectly through Wholly Owned Subsidiaries. As
of the Closing Date, contributions on the outstanding Equity Interests of any
Company that is a limited liability company could not be required under the
applicable Limited Liability Company Act. Each Loan Party is the record and
beneficial owner of, and has good and marketable title to, the Equity Interests
pledged by it under the Security Agreement, free of any and all Liens, rights or
claims of other persons, except the security interest created by the Security
Agreement and Permitted Liens, and there are no outstanding warrants, options or
other rights to purchase, or shareholder, voting trust or similar agreements
outstanding with respect to, or property that is convertible into, or that
requires the issuance or sale of, any such Equity Interests (except for rights
of first refusal under the Partnership Agreement).
(b) No Consent of Third Parties Required. Except for consents obtained
on or prior to the Closing Date, no consent of any person including any other
general or limited partner, any other member of a limited liability company, any
other shareholder or any other trust beneficiary is necessary (from the
perspective of a secured party) in connection with the creation, perfection or
first priority status of the security interest of the Collateral Agent in any
Equity Interests pledged to the Collateral Agent for the benefit of the Secured
Parties under the Security Agreement or the exercise by the Collateral Agent of
the voting or other rights provided for in the Security Agreement or the
exercise of remedies in respect thereof.
(c) Organizational Chart. An accurate organizational chart, showing
the ownership structure of Borrower and each Subsidiary on the Closing Date, is
set forth on Schedule 10(a) to the Perfection Certificate dated the Closing
Date.
SECTION 3.08 LITIGATION; COMPLIANCE WITH LAWS. There are no actions,
suits or proceedings at law or in equity by or before any Governmental Authority
now pending or, to the knowledge of any Loan Party, threatened against any
Company or any business, property or rights of any Company or any of Borrower's
Responsible Officers (i) that involve any Loan Document or any of the
Transactions or (ii) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect. No
Company or any of its property is in violation of, nor will the continued
operation of its property as currently conducted violate, any Requirements of
Law (including any zoning or building ordinance, code or approval or any
building permits) or any requirements of a Medical Reimbursement Program or is
in default with respect to any Requirement of Law, where in each case such
violation or
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default, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
Without limiting the generality of the foregoing, with respect to each
member of the Consolidated Group:
(i) there is (A) no member of the Consolidated Group or Responsible
Officer of any member of the Consolidated Group or, to the knowledge of any
Loan Party, any other individual employed by any member of the Consolidated
Group, in each case that would reasonably be expected to have criminal
culpability or to be excluded from participation in any Medical
Reimbursement Program for corporate or individual actions or failures to
act where such culpability or exclusion has resulted or could reasonably be
expected to result in an Exclusion Event; and (B) no officer continuing to
be employed by the Consolidated Group who may reasonably be expected to
have individual culpability for matters under investigation by the OIG or
other Governmental Authority unless such officer has been, within a
reasonable period of time after discovery of such actual or potential
culpability, either suspended or removed from positions of responsibility
related to those activities under challenge by the OIG or other
Governmental Authority;
(ii) current billing policies, arrangements, protocols and
instructions comply with requirements of Medical Reimbursement Programs and
are administered by properly trained personnel, except where any such
failure to comply would not reasonably be expected to result in an
Exclusion Event; and
(iii) current medical director compensation arrangements comply with
state and federal anti-kick back, fraud and abuse and ▇▇▇▇▇ Law
requirements, except where any such failure to comply would not reasonably
be expected to result in an Exclusion Event.
SECTION 3.09 AGREEMENTS. No Company is in default in any manner under
any provision of any indenture or other agreement or instrument evidencing
Indebtedness, or any other agreement or instrument to which it is a party or by
which it or any of its property is or may be bound, where in any such case such
default could reasonably be expected to result in a Material Adverse Effect, and
no condition exists that, with the giving of notice or the lapse of time or
both, would constitute such a default.
SECTION 3.10 FEDERAL RESERVE REGULATIONS. No Company is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of buying or carrying Margin Stock. No part of the
proceeds of any Loan or any Letter of Credit will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, for any purpose
in contravention of the provisions of the regulations of the Board, including
Regulation T, Regulation U or Regulation X. The pledge of the Securities
Collateral pursuant to the Security Agreement does not violate such regulations.
SECTION 3.11 INVESTMENT COMPANY ACT. No Company is registered or
required to be registered as an "investment company" or a company "controlled"
by an "investment company," as defined in the Investment Company Act of 1940, as
amended.
SECTION 3.12 USE OF PROCEEDS. Borrower will use the proceeds of any
Revolving Loans and Swingline Loans on the Closing Date to effect the
Transactions and after the Closing Date for
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general corporate purposes (including to effect Permitted Acquisitions, working
capital and other purposes not prohibited by applicable Requirements of Law).
SECTION 3.13 TAXES. Except as described on Schedule 3.13, each Company
has (a) timely filed or caused to be timely filed all federal Tax Returns and
all material Tax Returns or materials required to have been filed by it and all
such Tax Returns are true and correct in all material respects and (b) duly and
timely paid, collected or remitted or caused to be duly and timely paid,
collected or remitted all Taxes (whether or not shown on any Tax Return) due and
payable, collectible or remittable by it and all assessments received by it,
except Taxes that are being contested in good faith by appropriate proceedings
and for which such Company has set aside on its books adequate reserves in
accordance with GAAP. As used herein, "timely" shall mean that the required
action has been taken prior to delinquency, taking into account any extensions
to which such Company is entitled. Each Company has made adequate provision in
accordance with GAAP for all Taxes not yet due and payable. Each Company is
unaware of any proposed or pending tax assessments, deficiencies or audits that
could be reasonably expected to, individually or in the aggregate, result in a
Material Adverse Effect. No Company has ever been a party to any understanding
or arrangement constituting a "tax shelter" within the meaning of Section
6662(d)(2)(C)(iii) of the Code or within the meaning of Section 6111(c) or
Section 6111(d) of the Code as in effect immediately prior to the enactment of
the American Jobs Creation of 2004, or has ever "participated" in a "reportable
transaction" within the meaning of Treasury Regulation Section 1.6011-4, except
as could not be reasonably expected to, individually or in the aggregate, result
in a Material Adverse Effect.
SECTION 3.14 NO MATERIAL MISSTATEMENTS. No written information,
report, financial statement, certificate, Borrowing Request, LC Request, exhibit
or schedule furnished by or on behalf of any Company to the Administrative Agent
or any Lender in connection with the negotiation of any Loan Document or
included therein or delivered pursuant thereto, taken as a whole, contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were or are made, not materially misleading as of
the date such information is dated or certified; provided that to the extent any
such information, report, financial statement, exhibit or schedule was based
upon or constitutes a forecast or projection, each Company represents only that
it acted in good faith and utilized assumptions it believed to be reasonable at
the time of the preparation of such information, report, financial statement,
exhibit or schedule, it being understood by the Lenders, however, that forecasts
as to the future events are not historical facts and that the actual results
during the period or periods covered by the forecasts may differ from the
forecasted results and that the differences may be material.
SECTION 3.15 LABOR MATTERS. As of the Closing Date, there are no
strikes, lockouts or slowdowns against any Company pending or, to the knowledge
of any Company, threatened. The hours worked by and payments made to employees
of any Company have not been in violation of the Fair Labor Standards Act of
1938, as amended, or any other applicable federal, state, local or foreign law
dealing with such matters in any manner that could reasonably be expected to
result in a Material Adverse Effect. All payments due from any Company, or for
which any claim may be made against any Company, on account of wages and
employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of such Company except where the failure to
do so could not reasonably be expected to result in a Material Adverse Effect.
The consummation of the Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which any Company is bound.
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SECTION 3.16 SOLVENCY. On the Closing Date and immediately following
the making of each Loan, and after giving effect to the application of the
proceeds of each Loan, (a) the fair value of the properties of Borrower (on a
consolidated basis with its Subsidiaries) on a going concern basis will exceed
its debts and liabilities, subordinated, contingent or otherwise; (b) the
present fair saleable value of the property of Borrower (on a consolidated basis
with its Subsidiaries) on a going concern basis will be greater than the amount
that will be required to pay the probable liability of its debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) Borrower (on a consolidated basis
with its Subsidiaries) will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) Borrower (on a consolidated basis with its
Subsidiaries) will not have unreasonably small capital with which to conduct its
business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Closing Date.
SECTION 3.17 EMPLOYEE BENEFIT PLANS. Except as could not be reasonably
expected to result in a Material Adverse Effect, each Plan is in compliance in
all material respects with the applicable provisions of ERISA and the Code and
the regulations and published interpretations thereunder. No ERISA Event has
occurred or is reasonably expected to occur that, when taken together with all
other such ERISA Events, could reasonably be expected to result in liability of
any Company or any of its ERISA Affiliates that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, or
the imposition of a Lien on any of the property of any Company that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. The present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the property of all such underfunded Plans except where such
underfunding could not be reasonably expected to result in a Material Adverse
Effect. Using actuarial assumptions and computation methods consistent with
subpart I of subtitle E of Title IV of ERISA, the aggregate liabilities of each
Company or its ERISA Affiliates to all Multiemployer Plans in the event of a
complete withdrawal therefrom, as of the close of the most recent fiscal year of
each such Multiemployer Plan, could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.18 ENVIRONMENTAL MATTERS.
(a) Except as, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect:
(i) The Companies and their businesses, operations and Real Property
are and in the last six years have been in compliance with, and the
Companies have no liability under, Environmental Laws;
(ii) The Companies have obtained all Environmental Permits required
for the conduct of their businesses and operations, and the ownership,
operation and use of their property, under Environmental Law, all such
Environmental Permits are valid and in good standing and, under the
currently effective business plan of the Companies, no expenditures or
operational adjustments will be required in order to renew or modify such
Environmental Permits during the next five years;
(iii) There has been no Release or threatened Release of Hazardous
Material on, at, under or from any Real Property or facility presently or
formerly owned, leased or operated by
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the Companies or their predecessors in interest that could reasonably be
expected to result in liability by the Companies under Environmental Law;
(iv) There is no Environmental Claim pending or, to the knowledge of
the Companies, threatened against the Companies, or relating to the Real
Property currently or formerly owned, leased or operated by the Companies
or relating to the operations of the Companies, and there are no actions,
activities, circumstances, conditions, events or incidents that could form
the basis of such an Environmental Claim; and
(v) No person with an indemnity or contribution obligation to the
Companies relating to compliance with or liability under Environmental Law
is in default with respect to such obligation.
(b) (i) Except as, individually or in the aggregate, could not be
reasonably expected to result in a Material Adverse Effect, no Company is
obligated to perform any action or otherwise incur any expense under
Environmental Law pursuant to any written and binding order, decree, judgment or
agreement by which it is bound or has assumed by contract or agreement, and no
Company is conducting or financing any Response pursuant to any Environmental
Law with respect to any Real Property or any other location;
(ii) Except as, individually or in the aggregate, could not be
reasonably expected to result in a Material Adverse Effect, no Real Property or
facility owned, operated or leased by the Companies and, to the knowledge of the
Companies, no Real Property or facility formerly owned, operated or leased by
the Companies or any of their predecessors in interest is (i) listed or proposed
for listing on the National Priorities List promulgated pursuant to CERCLA or
(ii) listed on the Comprehensive Environmental Response, Compensation and
Liability Information System promulgated pursuant to CERCLA or (iii) included on
any similar list maintained by any Governmental Authority including any such
list relating to petroleum;
(iii) Except as, individually or in the aggregate, could not be
reasonably expected to result in a Material Adverse Effect, no Lien has been
recorded or, to the knowledge of any Company, threatened under any Environmental
Law with respect to any Real Property or other assets of the Companies;
(iv) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not require any
notification, registration, filing, reporting, disclosure, investigation,
remediation or cleanup pursuant to any Governmental Real Property Disclosure
Requirements or any other Environmental Law; and
(v) The Companies have made available to the Lenders all material
records and files in the possession, custody or control of, or otherwise
reasonably available to, the Companies concerning compliance with or liability
under Environmental Law, including those concerning the existence of Hazardous
Material at, on, under or from Real Property or facilities currently or formerly
owned, operated, leased or used by the Companies.
This Section 3.18 sets forth the sole representations and warranties
of the Companies with respect to matters generally applicable to Environmental
Laws.
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SECTION 3.19 INSURANCE. Schedule 3.19 sets forth a true, complete and
correct description in all material respects of all insurance maintained by each
Company as of the Closing Date. All insurance maintained by the Companies is in
full force and effect, all premiums have been duly paid, no Company has received
notice of violation or cancellation thereof, any Premises, and the use,
occupancy and operation thereof, comply in all material respects with all
Insurance Requirements, and there exists no material default under any Insurance
Requirement. Each Company has insurance in such amounts and covering such risks
and liabilities as are customary for companies of a similar size engaged in
similar businesses in similar locations with similar risks and liabilities.
SECTION 3.20 SECURITY DOCUMENTS.
(a) Security Agreement. The Security Agreement is effective to create
in favor of the Collateral Agent for the benefit of the Secured Parties, legal
and valid Liens on, and security interests in, the Security Agreement Collateral
and, when (i) financing statements and other filings in appropriate form are
filed in the offices specified on Schedule 7 to the Perfection Certificate and
(ii) upon the taking of possession or control by the Collateral Agent of the
Security Agreement Collateral with respect to which a security interest may be
perfected only by possession or control (which possession or control shall be
given to the Collateral Agent to the extent possession or control by the
Collateral Agent is required by the Security Agreement), the Liens created by
the Security Agreement shall constitute fully perfected Liens on, and security
interests in, all right, title and interest of the grantors thereunder in the
Security Agreement Collateral (other than such Security Agreement Collateral in
which a security interest cannot be perfected under the UCC as in effect at the
relevant time in the relevant jurisdiction), in each case subject to no Liens
other than Permitted Liens. Notwithstanding anything to the contrary, the
Collateral does not include any rights or Intellectual Property or intent-to-use
trademark applications in each case solely to the extent that any law applicable
to such rights or Intellectual Property prohibits the creation of a security
interest or would otherwise result in a loss of rights from the creation of
security interests therein.
(b) Intellectual Property Filing. When the Security Agreement or a
short form thereof is filed in the United States Patent and Trademark Office and
the United States Copyright Office, together with the filings referred to in (a)
above, the Liens created by such Security Agreement shall constitute fully
perfected Liens on, and security interests in, all right, title and interest of
the grantors thereunder in the Patents, Trademarks, Registered Copyrights and
Registered Copyright Licenses (each as defined in such Security Agreement), in
each case to the extent perfection can be so accomplished and subject to no
Liens other than Permitted Liens.
(c) Mortgages. Each Mortgage, if any, when filed in the office
identified in the local counsel opinion delivered with respect thereto, is
effective to create, in favor of the Collateral Agent, for its benefit and the
benefit of the Secured Parties, legal and valid first priority Liens on, and
security interests in, all of the Loan Parties' right, title and interest in and
to the Mortgaged Properties thereunder and the proceeds thereof, subject only to
Permitted Liens or other Liens reasonably acceptable to the Collateral Agent,
and when each Mortgage is filed in the offices specified in the local counsel
opinion delivered with respect thereto in accordance with the provisions of
Sections 5.11 and 5.12, the Mortgages shall constitute fully perfected Liens on,
and security interests in, all right, title and interest of the Loan Parties in
any Mortgaged Properties and the proceeds thereof, in each case prior and
superior in right to any other person, other than Permitted Liens.
(d) Valid Liens. Each Security Document delivered pursuant to Sections
5.11 and 5.12 will, upon execution and delivery thereof, be effective to create
in favor of the Collateral Agent, for
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the benefit of the Secured Parties, legal and valid Liens on, and security
interests in, all of the Loan Parties' right, title and interest in and to the
Collateral thereunder, and (i) when all appropriate filings or recordings are
made in the appropriate offices as may be required under applicable law and (ii)
upon the taking of possession or control by the Collateral Agent of such
Collateral with respect to which a security interest may be perfected only by
possession or control (which such possession or control shall be given to the
Collateral Agent to the extent possession or control by the Collateral Agent is
required by each Security Document), the Liens created by such Security Document
will constitute fully perfected Liens on, and security interests in, all right,
title and interest of the Loan Parties in such Collateral, in each case subject
to no Liens other than Permitted Liens.
SECTION 3.21 [RESERVED]
SECTION 3.22 ANTI-TERRORISM LAW.
(a) No Loan Party and, to the knowledge of the Loan Parties, none of
its Affiliates is in violation of any Requirement of Law relating to terrorism
or money laundering ("ANTI-TERRORISM LAWS"), including Executive Order No. 13224
on Terrorist Financing, effective September 24, 2001 (the "EXECUTIVE ORDER"),
and the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56.
(b) No Loan Party and to the knowledge of the Loan Parties, no
Affiliate or broker or other agent of any Loan Party acting or benefiting in any
capacity in connection with the Loans is any of the following:
(i) a person that is listed in the annex to, or is otherwise subject
to the provisions of, the Executive Order;
(ii) a person owned or controlled by, or acting for or on behalf of,
any person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order;
(iii) a person with which any Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;
(iv) a person that commits, threatens or conspires to commit or
supports "terrorism" as defined in the Executive Order; or
(v) a person that is named as a "specially designated national and
blocked person" on the most current list published by the U.S. Treasury
Department Office of Foreign Assets Control ("OFAC") at its official
website or any replacement website or other replacement official
publication of such list.
(c) No Loan Party and, to the knowledge of the Loan Parties, no broker
or other agent of any Loan Party acting in any capacity in connection with the
Loans (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any person
described in paragraph (b)(i) above or determined to be subject to the Executive
Order, (ii) deals in, or otherwise engages in any transaction relating to, any
property or interests in property blocked pursuant to the Executive Order, or
(iii) engages in or conspires to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
of the prohibitions set forth in any Anti-Terrorism Law.
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SECTION 3.23 [RESERVED]
SECTION 3.24 FRAUD AND ABUSE. To the knowledge of the Responsible
Officers of the Loan Parties, no Loan Party or any of their respective officers,
directors or Contract Providers with respect to their relationships with
Borrower or any of its Subsidiaries have engaged in any activities that are
prohibited under any applicable provision of the Social Security Act and the
regulations promulgated thereunder, including HIPAA, Medicare Regulations and
Medicaid Regulations, if such activities could reasonably be expected to result
in a Material Adverse Effect.
SECTION 3.25 LICENSING AND ACCREDITATION. Except to the extent a
failure to do so could not reasonably be expected to result in a Material
Adverse Effect, each Loan Party and each HMO Subsidiary: (i) has obtained and
maintains in good standing without restriction, all required licenses and
certificates of authority, (ii) to the extent prudent and customary in the
industry, has obtained and maintains in good standing without restriction,
accreditation from applicable recognized accrediting agencies, (iii) has entered
into and maintains in good standing without restriction its status under each
Medical Reimbursement Program Provider Agreement to which it is a party, (iv)
has implemented and maintains a compliance program designed to provide effective
internal controls to promote adherence to, and to prevent and detect material
violations of, any applicable HMO Regulations, Medicaid Regulations and Medicare
Regulations, and (v) has implemented and maintains policies consistent with
HIPAA on or before the date that any provision thereof becomes applicable to any
HMO Subsidiary. The Loan Parties require each Contract Provider to provide
evidence, in accordance with re-credentialing requirements, that such Contract
Provider is duly licensed by each Governmental Authority having jurisdiction
over the provision of such service by such person in the locations where the
Loan Parties and HMO Subsidiaries conduct business, to the extent such licensing
is required to enable such person to provide the professional services provided
by such person. To the knowledge of the Loan Parties, on the date hereof, all
such required licenses are in full force and effect and have not been revoked or
suspended or otherwise limited.
ARTICLE IV
CONDITIONS TO CREDIT EXTENSIONS
SECTION 4.01 CONDITIONS TO INITIAL CREDIT EXTENSION. The obligation of
each Lender and, if applicable, each Issuing Bank to fund the initial Credit
Extension requested to be made by it shall be subject to the prior or concurrent
satisfaction or deemed satisfaction of each of the conditions precedent set
forth in this Section 4.01.
(a) Loan Documents. All legal matters incident to this Agreement, the
Credit Extensions hereunder and the other Loan Documents shall be
reasonably satisfactory to the Lenders, to the Issuing Bank and to the
Administrative Agent and there shall have been delivered to the
Administrative Agent an executed counterpart of each of the Loan Documents
and the Perfection Certificate.
(b) Corporate Documents. The Administrative Agent shall have received:
(i) a certificate of the secretary or assistant secretary of each
Loan Party dated the Closing Date, certifying (A) that attached
thereto is a true and complete copy of each Organizational Document of
such Loan Party certified (to the extent applicable) as of a recent
date by the Secretary of State of the state of its organization, (B)
that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors
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of such Loan Party authorizing the execution, delivery and performance
of the Loan Documents to which such person is a party and, in the case
of Borrower, the borrowings hereunder, and that such resolutions have
not been modified, rescinded or amended and are in full force and
effect and (C) as to the incumbency and specimen signature of each
officer executing any Loan Document or any other document delivered in
connection herewith on behalf of such Loan Party (together with a
certificate of another officer as to the incumbency and specimen
signature of the secretary or assistant secretary executing the
certificate in this clause (i));
(ii) a certificate of the secretary or assistant secretary of
each HMO Subsidiary of any Loan Party dated the Closing Date,
certifying that attached thereto is a true and complete copy of each
Organizational Document of such HMO Subsidiary certified (to the
extent applicable) as of a recent date by the Secretary of State of
the state of its organization;
(iii) a certificate as to the good standing of each Loan Party
and each of their HMO Subsidiaries (in so-called "long-form" if
available) as of a recent date, from such Secretary of State (or other
applicable Governmental Authority); and
(iv) such other organizational documents as the Lenders, the
Issuing Bank or the Administrative Agent may reasonably request.
(c) Officer's Certificate. The Administrative Agent shall have
received a certificate, dated the Closing Date and signed by a Responsible
Officer of Borrower, confirming compliance with the conditions precedent
set forth in this Section 4.01 and Sections 4.02(b) and (c).
(d) Other Transactions, Etc.
(i) The Lenders shall be satisfied with any changes to (compared with
Borrower's audited financial statements as of and for the year ended
December 31, 2005) the capitalization and the corporate or other
organizational structure of the Companies.
(ii) The Refinancing shall have been consummated in full with all
liens in favor of the existing lenders being repaid in connection with the
Refinancing being unconditionally released (or committed to be released in
a manner satisfactory to the Administrative Agent); the Administrative
Agent shall have received a "pay-off" letter in form and substance
reasonably satisfactory to the Administrative Agent with respect to all
debt being refinanced in the Refinancing; and the Administrative Agent
shall have received from any person holding any Lien securing any such
debt, such UCC termination statements (or authorization to file same),
mortgage releases, releases of assignments of leases and rents, releases of
security interests in Intellectual Property and other instruments, in each
case in proper form for recording, as the Administrative Agent shall have
reasonably requested to release and terminate of record the Liens securing
such debt.
(e) Financial Statements; Projections. The Lenders shall have received
and shall be satisfied with the financial statements described in Section
3.04 and with the forecasts of the financial performance of Borrower and
its Subsidiaries.
(f) Indebtedness. After giving effect to the Transactions and the
other transactions contemplated hereby, no Company shall have outstanding
any Indebtedness and none of Borrower
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or any of its Subsidiaries shall have outstanding any Preferred Stock other
than (i) the Loans and Credit Extensions hereunder, (ii) the Indebtedness
listed on Schedule 6.01(b), and (iii) Indebtedness owed to Borrower or any
Guarantor.
(g) Opinions of Counsel. The Administrative Agent shall have received,
on behalf of itself, the other Agents, the Arrangers, the Lenders and the
Issuing Bank, a written opinion of (i) Bass, ▇▇▇▇▇ & ▇▇▇▇ PLC, special
counsel for the Loan Parties, substantially to the effect set forth in
Exhibit N-1, and (ii) the general counsel of Borrower and its Subsidiaries
substantially to the effect set forth in Exhibit N-2, in each case (A)
dated the Closing Date, (B) addressed to the Agents, the Issuing Bank and
the Lenders and (C) covering such other matters relating to the Loan
Documents and the Transactions as the Administrative Agent shall reasonably
request.
(h) Solvency Certificate. The Administrative Agent shall have received
a solvency certificate in the form of Exhibit O, dated the Closing Date and
signed by the chief financial officer of Borrower.
(i) Requirements of Law. The Lenders shall be reasonably satisfied
that Borrower, its Subsidiaries and the Transactions shall be in compliance
with all material Requirements of Law, including Regulations T, U and X of
the Board.
(j) Consents. The Lenders shall be reasonably satisfied that all
requisite Governmental Authorities and third parties shall have approved or
consented to the Transactions, and there shall be no governmental or
judicial action, actual or threatened, that has or would have, singly or in
the aggregate, a reasonable likelihood of restraining, preventing or
imposing burdensome conditions on the Transactions or the other
transactions contemplated hereby.
(k) Litigation. There shall be no litigation, public or private, or
administrative proceedings (private or governmental), governmental
investigation (to the knowledge of the Companies) or other legal or
regulatory developments, actual or to the knowledge of the Companies,
threatened, that, singly or in the aggregate, has a reasonable likelihood
of an adverse result and if adversely decided could reasonably be expected
to result in a Material Adverse Effect, or could materially and adversely
affect the ability of the parties to consummate the financings contemplated
hereby.
(l) [Reserved].
(m) Fees. The Arrangers and Administrative Agent shall have received
all Fees and other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses (including the legal fees and expenses of ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special counsel to the Agents, and the fees and
expenses of any local counsel, foreign counsel, appraisers, consultants and
other advisors) required to be reimbursed or paid by Borrower hereunder or
under any other Loan Document.
(n) Personal Property Requirements. The Collateral Agent shall have
received:
(i) all certificates, agreements or instruments representing or
evidencing the Securities Collateral accompanied by instruments of
transfer and stock powers undated and endorsed in blank;
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(ii) the Intercompany Note executed by and among Borrower and
each of the Guarantors, accompanied by instruments of transfer undated
and endorsed in blank;
(iii) all other certificates, agreements or instruments necessary
to perfect the Collateral Agent's security interest in all Chattel
Paper and all Instruments and all Investment Property of each Loan
Party (as each such term is defined in the Security Agreement and to
the extent required by the Security Agreement);
(iv) UCC financing statements in appropriate form for filing
under the UCC, filings with the United States Patent and Trademark
Office and United States Copyright Office and such other documents
under applicable Requirements of Law in each jurisdiction as may be
necessary or appropriate or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the Liens created, or purported
to be created, by the Security Documents;
(v) certified copies of UCC, United States Patent and Trademark
Office and United States Copyright Office, tax and judgment lien
searches, bankruptcy and pending lawsuit searches or equivalent
reports or searches, each of a recent date listing all effective
financing statements, lien notices or comparable documents that name
any Loan Party as debtor and that are filed in those state and county
jurisdictions in which any property of any Loan Party is located and
the state and county jurisdictions in which any Loan Party is
organized or maintains its principal place of business and such other
searches that the Collateral Agent deems necessary or appropriate,
none of which encumber the Collateral covered or intended to be
covered by the Security Documents (other than Permitted Liens or any
other Liens acceptable to the Collateral Agent);
(vi) with respect to each location set forth on Schedule
4.01(n)(vi), a Landlord Access Agreement; provided that no such
Landlord Access Agreement shall be required with respect to any Real
Property that could not be obtained after the Loan Party that is the
lessee shall have used all commercially reasonable efforts to do so;
and
(vii) evidence reasonably acceptable to the Collateral Agent of
payment or arrangements for payment by the Loan Parties of all
applicable recording taxes, fees, charges, costs and expenses required
for the recording of the Security Documents.
(o) Insurance. The Administrative Agent shall have received a copy of,
or a certificate as to coverage under, the insurance policies required by
Section 5.04 and the applicable provisions of the Security Documents, each
of which shall be endorsed or otherwise amended to include a "standard" or
"New York" lender's loss payable or mortgagee endorsement (as applicable)
and shall name the Collateral Agent, on behalf of the Secured Parties, as
additional insured, in form and substance reasonably satisfactory to the
Administrative Agent.
(p) HIPAA. The Business Associate Agreement shall have been executed
and delivered by each party thereto.
(q) USA Patriot Act. The Lenders shall have received, sufficiently in
advance of the Closing Date, all documentation and other information that
may be required by the Lenders in order to enable compliance with
applicable "know your customer" and anti-money laundering rules
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and regulations, including the United States PATRIOT Act (Title III of P.L.
107-56 (signed into law October 26, 2001)) including the information
described in Section 10.03.
SECTION 4.02 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of
each Lender and each Issuing Bank to make any Credit Extension (including the
initial Credit Extension) shall be subject to, and to the satisfaction of, each
of the conditions precedent set forth below.
(a) Notice. The Administrative Agent shall have received a notice or a
Borrowing Request as required by Section 2.03 (or such notice shall have
been deemed given in accordance with Section 2.03) if Loans are being
requested or, in the case of the issuance, substantive amendment, extension
or renewal of a Letter of Credit, the Issuing Bank and the Administrative
Agent shall have received notice or a LC Request as required by Section
2.18(b) or, in the case of the Borrowing of a Swingline Loan, the Swingline
Lender and the Administrative Agent shall have received a Borrowing Request
as required by Section 2.17(b).
(b) No Default. Borrower and each other Loan Party shall be in
compliance in all material respects with all the terms and provisions set
forth herein and in each other Loan Document on its part to be observed or
performed, and, at the time of and immediately after giving effect to such
Credit Extension and the application of the proceeds thereof, no Default
shall have occurred and be continuing on such date.
(c) Representations and Warranties. Each of the representations and
warranties made by any Loan Party set forth in Article III hereof or in any
other Loan Document shall be true and correct in all material respects
(except that any representation and warranty that is qualified as to
"materiality" or "Material Adverse Effect" shall be true and correct in all
respects) on and as of the date of such Credit Extension with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.
Each of the delivery of a Borrowing Request or an LC Request and the
acceptance by Borrower of the proceeds of such Credit Extension shall constitute
a representation and warranty by Borrower and each other Loan Party that on the
date of such Credit Extension (both immediately before and after giving effect
to such Credit Extension and the application of the proceeds thereof) the
conditions contained in Sections 4.02(b) - (c) have been satisfied (or waived).
ARTICLE V
AFFIRMATIVE COVENANTS
Each Loan Party warrants, covenants and agrees with each Lender that,
so long as this Agreement shall remain in effect (excluding contingent
indemnification obligations for which no claim has been asserted) and until the
Commitments have been terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any Loan Document have
been paid in full and all Letters of Credit have been canceled or have expired
and all amounts drawn thereunder have been reimbursed in full or cash
collateralized (in an amount equal to the 105% of the LC Exposure then
outstanding plus any related fees and expenses), unless the Required Lenders
shall otherwise consent in writing, each Loan Party will, and will cause each of
its Subsidiaries to:
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SECTION 5.01 FINANCIAL STATEMENTS, REPORTS, ETC. Furnish to the
Administrative Agent and each Lender (via Intralinks or other website or any
other method reasonably acceptable to the Administrative Agent):
(a) Annual Reports. As soon as available and in any event within 90
days after the end of each fiscal year, (i) the audited consolidated
balance sheet of Borrower and its Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income, cash flows and
stockholders' equity for such fiscal year, in comparative form with such
financial statements as of the end of, and for, the preceding fiscal year
(it being understood that financial statements for the year ended December
31, 2005 shall be presented on a combined basis for Borrower and the
predecessor entity, NewQuest, LLC, in a manner consistent with the
presentation in Borrower's Form 10-K for the year ended December 31, 2005),
and the notes thereto, and accompanied by an opinion of KPMG, LLP or other
independent public accountants of recognized national standing reasonably
satisfactory to the Administrative Agent (which opinion shall not be
qualified as to scope or contain any going concern or other qualification),
stating that such consolidated financial statements fairly present, in all
material respects, the consolidated financial condition, results of
operations and cash flows of Borrower and its Subsidiaries as of the dates
and for the periods specified in accordance with GAAP, (ii) a management
report in a form reasonably satisfactory to the Administrative Agent
setting forth (A) a statement of income items and Consolidated EBITDA of
Borrower and its Subsidiaries for such fiscal year, showing variance, by
dollar amount and percentage, from amounts for the previous fiscal year and
budgeted amounts (it being understood that statements of income items and
related amounts for the year ended December 31, 2005 shall be presented on
a combined basis for Borrower and the predecessor entity, NewQuest, LLC, in
a manner consistent with the presentation under the caption "Selected
Financial Data" in Borrower's Form 10-K for the year ended December 31,
2005) along with a brief discussion and analysis by management with respect
to any material variances from budgeted amounts and (B) key operational
information and statistics for such fiscal year consistent with internal
and industry-wide reporting standards, and (iii) a narrative report and
management's discussion and analysis, in a form reasonably satisfactory to
the Administrative Agent, of the financial condition and results of
operations of Borrower and its Subsidiaries for such fiscal year, as
compared to amounts for the previous fiscal year (it being understood that
(x) the information required by clauses (i) and (iii) may be furnished in
the form of a Form 10-K and (y) the information required by clause (ii) may
be provided in a single, consolidated report);
(b) Quarterly Reports. As soon as available and in any event within 45
days after the end of each of the first three fiscal quarters of each
fiscal year, beginning with the fiscal quarter ending March 31, 2006, (i)
the unaudited consolidated balance sheet of Borrower and its Subsidiaries
as of the end of such fiscal quarter and the related consolidated
statements of income and cash flows for such fiscal quarter and for the
then elapsed portion of the fiscal year, in comparative form with the
consolidated statements of income and cash flows for the comparable periods
in the previous fiscal year (it being understood that financial statements
for fiscal periods ended during 2005 shall be presented on a combined basis
for Borrower and the predecessor entity, NewQuest, LLC, in a manner
consistent with the presentation in Borrower's Form 10-K for the year ended
December 31, 2005), and accompanied by a certificate of a Financial Officer
stating that such financial statements fairly present, in all material
respects, the consolidated financial condition, results of operations and
cash flows of Borrower and its Subsidiaries as of the date and for the
periods specified in accordance with GAAP consistently applied, and on a
basis consistent with audited financial statements referred to in clause
(a) of this Section, subject to normal year-end audit adjustments, (ii) a
management report in a form reasonably satisfactory to the Administrative
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Agent setting forth (A) a statement of income items and Consolidated EBITDA
of Borrower and its Subsidiaries for such fiscal quarter and for the then
elapsed portion of the fiscal year, showing variance, by dollar amount and
percentage, from amounts for the comparable periods in the previous fiscal
year and budgeted amounts (it being understood that statements of income
items and related amounts for fiscal periods ended during 2005 shall be
presented on a combined basis for Borrower and the predecessor entity,
NewQuest, LLC in a manner consistent with the presentation in Borrower's
Form 10-K for the year ended December 31, 2005) along with a brief
discussion and analysis by management with respect to any material
variances from budgeted amounts and (B) key operational information and
statistics for such fiscal quarter and for the then elapsed portion of the
fiscal year consistent with internal and industry-wide reporting standards,
and (iii) a narrative report and management's discussion and analysis, in a
form reasonably satisfactory to the Administrative Agent, of the financial
condition and results of operations for such fiscal quarter and the then
elapsed portion of the fiscal year, as compared to the comparable periods
in the previous fiscal year (it being understood that (x) the information
required by clauses (i) and (iii) may be furnished in the form of a Form
10-Q and (y) the information required by clause (ii) may be provided in a
single, consolidated report;
(c) HMO Subsidiary Reports. Within 15 Business Days after the date
that such annual and quarterly financial statements of each HMO Subsidiary
are required to be filed pursuant to any HMO Regulation, such annual and
quarterly financial statements prepared in accordance with SAP;
(d) Financial Officer's Certificate. (i) Concurrently with any
delivery of financial statements under Section 5.01(a) or (b), a Compliance
Certificate (A) certifying that to the knowledge of such Financial Officer
no Default has occurred or, if such a Default has occurred, specifying the
nature and extent thereof and any corrective action taken or proposed to be
taken with respect thereto, (B) beginning with the fiscal quarter ending
March 31, 2006, setting forth computations in reasonable detail
satisfactory to the Administrative Agent demonstrating compliance with the
covenants contained in Sections 6.07(f) and 6.10 (including the aggregate
amount of any sale or issuances of Qualified Capital Stock after the
Closing Date for such period and the uses therefor), (C) showing a
reconciliation of Consolidated EBITDA to the net income set forth on the
statement of income and (D) stating whether there have been any changes to
Schedule 1(a) to the Perfection Certificate (as supplemented); (ii)
concurrently with any delivery of financial statements under Section
5.01(a) above, beginning with the fiscal year ending December 31, 2006, a
report of the accounting firm opining on or certifying such financial
statements stating that in the course of its regular audit of the financial
statements of Borrower and its Subsidiaries, which audit was conducted in
accordance with generally accepted auditing standards, such accounting firm
obtained no knowledge that any Default insofar as it relates to financial
or accounting matters has occurred or, if in the opinion of such accounting
firm such a Default has occurred, specifying the nature and extent thereof;
and (iii) concurrently with the delivery of financial statements under
Section 5.01(b), (A) written notification of Investments during such fiscal
quarter by any member of the Consolidated Group in any HMO Subsidiary that,
individually or in the aggregate in any fiscal year of Borrower, exceed 10%
of the Company Action Level or, in any state that has not adopted the NAIC
definition, the relevant state's reserve requirements, as applicable, (in
each case as determined in accordance with SAP at the immediately preceding
fiscal-year-end determination thereof) of such HMO Subsidiary; provided
that, to the extent such Investments, individually or in the aggregate,
materially deviate from the business plan and budget delivered pursuant to
Section 5.01(h), written notification of such Investments shall be provided
not later than fifteen days following the end of the calendar month during
which such Investments
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are made and (B) evidence of any requirement by an HMO Regulator for any
member of the Consolidated Group to make a Required Advance in excess of
$100,000;
(e) Financial Officer's Certificate Regarding Collateral. Concurrently
with any delivery of financial statements under Section 5.01(a), a
certificate of a Financial Officer setting forth the information required
pursuant to the Perfection Certificate Supplement or confirming that there
has been no change in such information since the date of the Perfection
Certificate or latest Perfection Certificate Supplement;
(f) Public Reports. Promptly after the same become publicly available,
copies of all periodic and other reports, proxy statements and other
materials filed by any Company with the Securities and Exchange Commission,
or any Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, or distributed
to holders of its Material Indebtedness pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or other
representative therefor), as the case may be;
(g) Management Letters. Promptly after the receipt thereof by any
Company, a copy of any final "management letter" received by any such
person from its certified public accountants and the management's responses
thereto;
(h) Budgets. Within 30 days after the beginning of each fiscal year
starting in 2007, a budget for Borrower in form reasonably satisfactory to
the Administrative Agent including balance sheets, statements of income and
sources and uses of cash, for each quarter of such fiscal year prepared in
detail with appropriate presentation and discussion of the principal
assumptions upon which such budget is based;
(i) Reinsurance. Within 120 days after the end of each fiscal year of
Borrower, a schedule setting forth in reasonable detail the reinsurance
arrangements maintained by each of the HMO Subsidiaries as of the end of
such fiscal year (with any subsequent changes described therein); and
(j) Other Information. Promptly, from time to time, such other
information regarding the operations, business affairs and financial
condition of any Company, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Lender may reasonably request
(other than privileged information or confidential information relating to
individual patients).
SECTION 5.02 LITIGATION AND OTHER NOTICES. Furnish to the
Administrative Agent (for each Lender) written notice of the following promptly
and in any event within five Business Days after Borrower obtains knowledge
thereof:
(a) any Default, specifying the nature and extent thereof and the
corrective action (if any) taken or proposed to be taken with respect
thereto;
(b) the filing or commencement of, or any known threat or notice of
intention of any person to file or commence, any action, suit, litigation
or proceeding, whether at law or in equity by or before any Governmental
Authority, (i) against any Company or any Affiliate thereof that could
reasonably be expected to result in a Material Adverse Effect or (ii) with
respect to any Loan Document;
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(c) any development that has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect;
(d) [Reserved];
(e) the institution of any investigation or proceeding against such
person to terminate (or that could reasonably be expected to result in the
termination of) the contract of any of the HMO Subsidiaries to be a
Medicare Advantage Program contractor or state Medicaid Program contractor
or its status under any Medical Reimbursement Program or any investigation
or proceeding that could reasonably be expected to result in an Exclusion
Event;
(f) its receipt of any notice of intent to exclude or any notice of
proposal to exclude issued by the OIG (together with a copy of any such
notice);
(g) its receipt of any notice of, compliance order or adverse
reporting regarding loss or threatened loss of accreditation, loss of
participation under any reimbursement program or loss of applicable health
care license or certificate of authority of any HMO Subsidiary, and any
other material deficiency notices, compliance orders or adverse reports
issued by any HMO Regulator or other Governmental Authority or private
insurance company pursuant to a provider agreement that, if not promptly
complied with or cured, could result in the suspension or forfeiture of any
license, certification, or accreditation necessary for such HMO Subsidiary
to carry on its business substantially as then conducted or the termination
of any insurance or reimbursement program available to any HMO Subsidiary
(in each case together with a copy of any such notice);
(h) its receipt of any correspondence from an HMO Regulator asserting
that Borrower or any of its Subsidiaries is not in compliance in all
material respects with HMO Regulations or threatening action against
Borrower or any of its Subsidiaries under the HMO Regulations (together
with a copy of such correspondence);
(i) the incurrence of any material Lien (other than Permitted Liens)
on, or claim asserted against any of the Collateral; and
(j) with respect to any HMO Subsidiary operating in a state that has
adopted the NAIC definition of Company Action Level, any failure of such
HMO Subsidiary to maintain its capital reserve requirements at or above the
Company Action Level.
SECTION 5.03 EXISTENCE; BUSINESSES AND PROPERTIES.
(a) Do or cause to be done all things necessary to preserve, renew and
maintain in full force and effect its legal existence, except as otherwise
expressly permitted under Section 6.05 or Section 6.06 or, in the case of
Borrower or any Subsidiary, where the failure to perform such obligations,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
(b) Do or cause to be done all things reasonably necessary to obtain,
preserve, renew, extend and keep in full force and effect the rights, licenses,
certifications, permits, privileges, franchises, authorizations, patents,
copyrights, trademarks and trade names material to the conduct of its business;
except as permitted by Section 6.15 maintain and operate such business in
substantially the manner in which it is presently conducted and operated; comply
with all applicable Requirements of Law (including any and all zoning, building,
Environmental Law, ordinance, code or approval or any building permits or any
restrictions of record or agreements affecting the Real Property) and decrees
and orders of any Governmental
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Authority, whether now in effect or hereafter enacted, except, in each case,
where the failure to comply, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect; and at all times
maintain, preserve and protect all property material to the conduct of such
business and keep such property in good repair, working order and condition
(other than wear and tear occurring in the ordinary course of business and
damage by casualty) and from time to time make, or cause to be made, all needful
repairs, renewals, additions, improvements and replacements thereto necessary in
order that the business carried on in connection therewith may be properly
conducted at all times; provided that nothing in this Section 5.03(b) shall
prevent (i) sales of property, consolidations or mergers by or involving any
Company in accordance with Section 6.05 or Section 6.06; (ii) the withdrawal by
any Company of its qualification as a foreign corporation in any jurisdiction
where such withdrawal, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect; or (iii) the abandonment by any
Company of any rights, franchises, licenses, trademarks, trade names, copyrights
or patents that such person reasonably determines are not necessary to the
conduct of the Companies' business, taken as a whole, or no longer commercially
desirable or economically practical to maintain.
SECTION 5.04 INSURANCE.
(a) Generally. Keep its insurable property adequately insured at all
times by financially sound and reputable insurers; maintain such other insurance
as is reasonably prudent in the good faith judgment of the Responsible Officers
of Borrower or otherwise, to such extent and against such risks as is customary
with companies in the same or similar businesses operating in the same or
similar locations and with similar risk factors, including insurance with
respect to any Mortgaged Properties and other properties material to the
business of the Companies against such casualties and contingencies and of such
types and in such amounts with such deductibles as is customary in the case of
similar businesses operating in the same or similar locations, including (i)
physical hazard insurance on an "all risk" basis, (ii) commercial general
liability against claims for bodily injury, death or property damage covering
any and all claims insurable at reasonable expense, (iii) explosion insurance in
respect of any boilers, machinery or similar apparatus constituting Collateral,
(iv) business interruption insurance (or an alternative form of insurance that
provides coverage to compensate for losses arising from business interruptions)
and (v) worker's compensation insurance and such other insurance as may be
required by any Requirement of Law; provided that with respect to physical
hazard insurance, neither the Collateral Agent nor the applicable Company shall
agree to the adjustment of any claim thereunder in excess of $1,000,000 without
the consent of the other (such consent not to be unreasonably withheld or
delayed); provided, further, that no consent of any Company shall be required
during the continuance of an Event of Default.
(b) Requirements of Insurance. All such insurance shall (i) provide
that no cancellation, material reduction in amount or material change in
coverage thereof shall be effective until at least 30 days after receipt by the
Collateral Agent of written notice thereof to the extent available on
commercially reasonable terms, (ii) name the Collateral Agent as mortgagee (in
the case of property insurance) or additional insured on behalf of the Secured
Parties (in the case of liability insurance) or loss payee (in the case of
property insurance but excluding business interruption insurance), as applicable
and (iii) if reasonably requested by the Collateral Agent, include a breach of
warranty clause.
(c) Notice to Agents. Notify the Administrative Agent and the
Collateral Agent immediately whenever any separate insurance concurrent in form
or contributing in the event of loss with that required to be maintained under
this Section 5.04 is taken out by any Company; and promptly deliver to the
Administrative Agent and the Collateral Agent a duplicate original copy of such
policy or policies.
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(d) Flood Insurance. With respect to any Mortgaged Property, obtain
flood insurance in such total amount as the Administrative Agent or the Required
Lenders may from time to time require, if at any time the area in which any
improvements located on any Mortgaged Property is designated a "flood hazard
area" in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency (or any successor agency), and otherwise comply with the
National Flood Insurance Program as set forth in the Flood Disaster Protection
Act of 1973, as amended from time to time.
(e) Broker's Report. Deliver to the Administrative Agent and the
Collateral Agent a report of a reputable insurance broker with respect to such
insurance and such supplemental reports with respect thereto as the
Administrative Agent or the Collateral Agent may from time to time reasonably
request (absent the occurrence and continuation of an Event of Default, no more
than once in any fiscal year).
(f) Mortgaged Properties. No Loan Party that is an owner of Mortgaged
Property, if any, shall take any action that is reasonably likely to be the
basis for termination, revocation or denial of any insurance coverage required
to be maintained under such Loan Party's respective Mortgage or that could be
the basis for a defense to any claim under any Insurance Policy maintained in
respect of the Premises, and each Loan Party shall otherwise comply in all
material respects with all Insurance Requirements in respect of the Premises;
provided, however, that each Loan Party may, at its own expense and with written
notice to the Administrative Agent, (i) contest the applicability or
enforceability of any such Insurance Requirements by appropriate legal
proceedings, the prosecution of which does not constitute a basis for
cancellation or revocation of any insurance coverage required under this Section
5.04 or (ii) cause the Insurance Policy containing any such Insurance
Requirement to be replaced by a new policy complying with the provisions of this
Section 5.04.
SECTION 5.05 OBLIGATIONS AND TAXES.
(a) Payment of Obligations. Discharge promptly when due all material
Taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or in respect of its property, before the same shall
become delinquent or in default, as well as all lawful claims for labor,
services, materials and supplies or otherwise that, if unpaid, might give rise
to a Lien other than a Permitted Lien upon such properties or any part thereof;
provided that such payment and discharge shall not be required with respect to
any such Tax, assessment, charge, levy or claim so long as (x)(i) the validity
or amount thereof shall be contested in good faith by appropriate proceedings
timely instituted and diligently conducted and the applicable Company shall have
set aside on its books adequate reserves or other appropriate provisions with
respect thereto in accordance with GAAP and (ii) such contest operates to
suspend collection of the contested obligation, Tax, assessment or charge and
enforcement of a Lien other than a Permitted Lien.
(b) Filing of Returns. Timely file all material Tax Returns required
to be filed by it. Withhold, collect and remit all Taxes that it is required to
collect, withhold or remit except to the extent the failure to withhold, collect
and remit could not be reasonably expected to result in a Material Adverse
Effect.
SECTION 5.06 EMPLOYEE BENEFITS. (a) Comply with the applicable
provisions of ERISA and the Code with respect to Plans except to the extent any
non-compliance could not be reasonably expected to result in a Material Adverse
Effect and (b) furnish to the Administrative Agent (x) as soon as possible
after, and in any event within 10 days after any Responsible Officer of any
Company or any ERISA Affiliates of any Company knows or has reason to know that,
any ERISA Event has occurred that,
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alone or together with any other ERISA Event could reasonably be expected to
result in liability of the Companies or the imposition of a Lien, in each case
in an aggregate amount that could reasonably be expected to result in a Material
Adverse Effect, a statement of a Financial Officer of Borrower setting forth
details as to such ERISA Event and the action, if any, that the Companies
propose to take with respect thereto, and (y) upon the reasonable request by the
Administrative Agent, copies of (i) each Schedule B (Actuarial Information) to
the annual report (Form 5500 Series) filed by any Company or any ERISA Affiliate
with the Employee Benefits Security Administration with respect to each Plan;
(ii) the most recent actuarial valuation report for each Plan; (iii) all written
notices received by any Company or any ERISA Affiliate from a Multiemployer Plan
sponsor or any governmental agency concerning an ERISA Event; and (iv) such
other documents or governmental reports or filings relating to any Plan (or
employee benefit plan sponsored or contributed to by any Company) as the
Administrative Agent shall reasonably request.
SECTION 5.07 MAINTAINING RECORDS; ACCESS TO PROPERTIES AND
INSPECTIONS; ANNUAL MEETINGS.
(a) Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and in all material respects with all
Requirements of Law are made of all dealings and transactions in relation to its
business and activities. Each Company will permit any representatives designated
by the Administrative Agent or any Lender (through the Administrative Agent) to
visit and inspect the financial records and the property of such Company at
reasonable times during normal business hours with reasonable prior notice and
as often as reasonably requested and to make extracts from and copies of such
financial records, and permit any representatives designated by the
Administrative Agent or any Lender (through the Administrative Agent) to discuss
(other than privileged information or confidential information about individual
patients) the affairs, finances, accounts and condition of any Company with the
officers and employees thereof and advisors therefor (including independent
accountants); provided that (i) this Section 5.07(a) shall not apply to HMO
Subsidiaries to the extent prohibited by any Requirements of Law, (ii) a
representative of Borrower shall be given the opportunity to be present for any
communication with Borrower's independent accountants, (iii) the Loan Parties
shall not be required to pay the expenses of more than one such visit and
inspection during any fiscal year unless any Event of Default has occurred and
is continuing and (iv) each Lender shall at times coordinate with Administrative
Agent the frequency and timing of any such visits and inspections so as to
reasonably minimize the burden imposed on the Loan Parties.
(b) Within 150 days after the end of each fiscal year of the
Companies, at the reasonable request of the Administrative Agent or Required
Lenders, use commercially reasonable efforts to hold a meeting (at a mutually
agreeable location, venue and time or, at the option of the Administrative Agent
in consultation with Borrower by conference call, the costs of such venue or
call to be paid by Borrower) with all Lenders who choose to attend such meeting,
at which meeting shall be reviewed the financial results of the previous fiscal
year and the financial condition of the Companies and the budgets presented for
the current fiscal year of the Companies. The Administrative Agent shall use
commercially reasonable efforts to provide Lenders reasonable notice of any such
meeting.
SECTION 5.08 USE OF PROCEEDS. Use the proceeds of the Loans only for
the purposes set forth in Section 3.12 and request the issuance of Letters of
Credit only for the purposes set forth in the definition of Commercial Letter of
Credit or Standby Letter of Credit, as the case may be.
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SECTION 5.09 COMPLIANCE WITH ENVIRONMENTAL LAWS; ENVIRONMENTAL
REPORTS.
(a) Comply, and cause all lessees and other persons occupying Real
Property of any Company to comply, in all material respects with all
Environmental Laws and Environmental Permits applicable to its operations and
Real Property; obtain and renew all material Environmental Permits applicable to
its operations and Real Property; and conduct, in all material respects, all
Responses required by, and in accordance with, Environmental Laws; provided that
no Company shall be required to undertake any Response to the extent that its
obligation to do so is being contested in good faith and by proper proceedings
and appropriate reserves are being maintained with respect to such circumstances
in accordance with GAAP.
(b) If a Default caused by reason of a breach of Section 3.18 or
Section 5.09(a) shall have occurred and be continuing for more than 20 days
without the Companies commencing activities reasonably likely to cure such
Default in accordance with Environmental Laws, at the reasonable written request
of the Administrative Agent or the Required Lenders through the Administrative
Agent, provide to the Lenders within 45 days after such reasonable request, at
the expense of Borrower, an environmental assessment report regarding the
matters that are the subject of such Default, including, where appropriate, soil
and/or groundwater sampling, prepared by an environmental consulting firm and,
in the form and substance, reasonably acceptable to the Administrative Agent and
indicating where appropriate in light of the subject matter of the request the
presence or absence of Hazardous Materials and the estimated cost of any
compliance or Response to address them.
SECTION 5.10 [RESERVED]
SECTION 5.11 ADDITIONAL COLLATERAL; ADDITIONAL GUARANTORS.
(a) Subject to this Section 5.11, with respect to any personal
property (other than real property leasehold interests) acquired after the
Closing Date by any Loan Party that is intended to be subject to the Lien
created by any of the Security Documents but is not so subject, promptly (and in
any event within 30 days after the acquisition thereof) (i) execute and deliver
to the Administrative Agent and the Collateral Agent such amendments or
supplements (prepared by the applicable Agent or its counsel) to the relevant
Security Documents or such other documents as the Administrative Agent or the
Collateral Agent shall deem necessary or advisable to grant to the Collateral
Agent, for its benefit and for the benefit of the other Secured Parties, a Lien
on such property subject to no Liens other than Permitted Liens, and (ii) take
all actions necessary to cause such Lien to be duly perfected to the extent
required by such Security Document in accordance with all applicable
Requirements of Law, including the filing of financing statements in such
jurisdictions as may be reasonably requested by the Administrative Agent.
Borrower shall otherwise take such actions and execute and/or deliver to the
Collateral Agent such documents as the Administrative Agent or the Collateral
Agent shall reasonably require to confirm the validity, perfection and priority
of the Lien of the Security Documents against such after-acquired properties.
(b) With respect to any person that is or becomes a Subsidiary after
the Closing Date in accordance with Section 6.14, promptly (and in any event
within 30 days after such person becomes a Subsidiary) (i) the applicable Loan
Party shall deliver to the Collateral Agent the certificates, if any,
representing all of such Subsidiary's Equity Interests such Loan Party holds,
together with undated stock powers or other appropriate instruments of transfer
executed and delivered in blank by a duly authorized officer of the holder(s) of
such Equity Interests, and all intercompany notes owing from such Subsidiary to
any Loan Party together with instruments of transfer executed and delivered in
blank by a duly authorized officer of such Loan Party and (ii) cause such new
Subsidiary (if a Domestic Subsidiary) (A) to execute
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a Joinder Agreement or such comparable documentation to become a Guarantor and a
joinder agreement to the Security Agreement, substantially in the form annexed
thereto, (B) to take all actions necessary or advisable in the reasonable
opinion of the Administrative Agent or the Collateral Agent to cause the Lien
created by the applicable Security Agreement to be duly perfected to the extent
required by such agreement in accordance with all applicable Requirements of
Law, including the filing of financing statements in such jurisdictions as may
be reasonably requested by the Administrative Agent or the Collateral Agent and
(C) execute a Business Associate Agreement. Notwithstanding the foregoing, (1)
the Equity Interests required to be delivered to the Collateral Agent pursuant
to clause (i) of this Section 5.11(b) shall not include more than 65% of any
Voting Stock of a "first tier" Foreign Subsidiary created or acquired after the
Closing Date, (2) no Foreign Subsidiary shall be required to take the actions
specified in clause (ii) of this Section 5.11(b) and (3) no HMO Subsidiary shall
be required to take the actions specified in clause (ii) of this Section
5.11(b).
(c) Promptly (and in any event, within 60 days of the acquisition
thereof), (i) grant to the Collateral Agent a security interest in and Mortgage
on each Real Property owned in fee by such Loan Party as is acquired by such
Loan Party after the Closing Date and that, together with any improvements
thereon, individually has a fair market value of at least $2,500,000, and (ii)
use its commercially reasonable efforts to grant to the Collateral Agent a
security interest in and Mortgage on, unless the Collateral Agent otherwise
consents, each leased Real Property of such Loan Party which lease individually
has a fair market value of at least $2,500,000 in each case, as additional
security for the Secured Obligations (unless the subject property is already
mortgaged to a third party to the extent permitted by Section 6.02). Such
Mortgages shall be granted pursuant to documentation reasonably satisfactory in
form and substance to the Collateral Agent and shall constitute legal and valid
perfected Liens subject only to Permitted Liens and other Liens reasonably
acceptable to the Collateral Agent. The Mortgages or instruments related thereto
shall be duly recorded or filed in such manner and in such places as are
required by law to establish, perfect, preserve and protect the Liens in favor
of the Collateral Agent required to be granted pursuant to the Mortgages and all
taxes, fees and other charges payable in connection therewith shall be paid in
full. Such Loan Party shall otherwise take such actions and execute and/or
deliver to the Collateral Agent such documents as the Administrative Agent or
the Collateral Agent shall reasonably require to confirm the validity,
perfection and priority of the Lien of any existing Mortgage or new Mortgage
against such after-acquired Real Property (including a Title Policy, a Survey
and local counsel opinion (in form and substance reasonably satisfactory to the
Administrative Agent and the Collateral Agent) in respect of such Mortgage).
SECTION 5.12 SECURITY INTERESTS; FURTHER ASSURANCES. Promptly, upon
the reasonable request of the Administrative Agent or the Collateral Agent, at
Borrower's expense, (a) execute, acknowledge and deliver, or cause the
execution, acknowledgment and delivery of, and thereafter register, file or
record, or cause to be registered, filed or recorded, in an appropriate
governmental office, any document or instrument supplemental to or confirmatory
of the Security Documents or otherwise deemed by the Administrative Agent or the
Collateral Agent reasonably necessary or desirable for the continued validity,
perfection and priority of the Liens on the Collateral covered thereby subject
to no other Liens except as permitted by the applicable Security Document or
Permitted Liens, or use commercially reasonable efforts to obtain any consents
or waivers as may be necessary or appropriate in connection therewith, and (b)
deliver or cause to be delivered to the Administrative Agent and the Collateral
Agent from time to time such other documentation, consents, authorizations,
approvals and orders in form and substance reasonably satisfactory to the
Administrative Agent and the Collateral Agent as the Administrative Agent and
the Collateral Agent shall reasonably deem necessary to perfect or maintain the
Liens on the Collateral pursuant to the Security Documents. Notwithstanding
anything to the contrary herein, for purposes of Intellectual Property, no Loan
Party shall have any obligation to perfect the Collateral Agent's or the
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Secured Parties' interest in Intellectual Property outside the United States
under any Security Documents. Upon the exercise by the Administrative Agent, the
Collateral Agent or any Lender of any power, right, privilege or remedy pursuant
to any Loan Document that requires any consent, approval, registration,
qualification or authorization of any Governmental Authority, execute and
deliver all applications, certifications, instruments and other documents and
papers that the Administrative Agent, the Collateral Agent or such Lender may
reasonably require. If the Administrative Agent, the Collateral Agent or the
Required Lenders determine that they are required by a Requirement of Law to
have appraisals prepared in respect of the Real Property of any Loan Party
constituting Collateral, Borrower shall provide to the Administrative Agent
appraisals that satisfy the applicable requirements of the Real Estate Appraisal
Reform Amendments of FIRREA and are otherwise reasonably satisfactory to the
Administrative Agent and the Collateral Agent.
SECTION 5.13 INFORMATION REGARDING COLLATERAL. Not effect any change
(i) in any Loan Party's legal name (including as a result of a changing identity
or organizational structure), (ii) in any Loan Party's Federal Taxpayer
Identification Number or organizational identification number, if any, or (iii)
in any Loan Party's jurisdiction of organization (in each case, including by
merging with or into any other entity, reorganizing, dissolving, liquidating,
reorganizing or organizing in any other jurisdiction), until (A) it shall have
given the Collateral Agent not less than 15 days' prior written notice, or such
lesser notice period agreed to by the Collateral Agent, of its intention so to
do, clearly describing such change and providing such other information in
connection therewith as the Collateral Agent may reasonably request and (B) it
shall have taken all action reasonably satisfactory to the Collateral Agent to
maintain the perfection and priority of the security interest of the Collateral
Agent for the benefit of the Secured Parties in the Collateral, if applicable,
to the extent required under any Loan Document. Each Loan Party agrees to
promptly provide the Collateral Agent with certified Organizational Documents
reflecting any of the changes described in the preceding sentence. Each Loan
Party also agrees to promptly notify the Collateral Agent of any change in the
location of any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral is located
(including the establishment of any such new office or facility), other than
changes in location to a Mortgaged Property or a leased property subject to a
Landlord Access Agreement.
SECTION 5.14 COMPANY ACTION LEVEL. Any HMO Subsidiary operating in a
state that has adopted the NAIC definition of Company Action Level that has
capital reserves below such Company Action Level shall comply with all
requirements under applicable HMO Regulations with respect to providing
information to the applicable Governmental Authority.
SECTION 5.15 [RESERVED]
SECTION 5.16 COMPLIANCE WITH LAWS.
(a) Comply with all applicable laws, rules, regulations, orders,
writs, injunctions and decrees of any Governmental Authority (including Titles
XVIII and XIX of the Social Security Act, Medicare Regulations, Medicaid
Regulations, HMO Regulations and HIPAA), whether now existing or hereafter
enacted, except where the failure to comply therewith, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(b) Obtain and maintain all material certifications, licenses,
permits, authorizations and approvals of all applicable Governmental Authorities
as are required for the conduct of its business as currently conducted and as
proposed to be conducted, including licenses and contracts with Medicare and
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Medicaid, except where the failure to comply therewith, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
ARTICLE VI
NEGATIVE COVENANTS
Each Loan Party warrants, covenants and agrees with each Lender that,
so long as this Agreement shall remain in effect (excluding contingent
indemnification obligations for which no claim has been asserted) and until the
Commitments have been terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any Loan Document have
been paid in full and all Letters of Credit have been canceled or have expired
and all amounts drawn thereunder have been reimbursed in full or cash
collateralized (in an amount equal to 105% of the LC Exposure then outstanding
plus fees and expenses related thereto), unless the Required Lenders shall
otherwise consent in writing, no Loan Party will, nor will they cause or permit
any Subsidiary to:
SECTION 6.01 INDEBTEDNESS. Incur, create, assume or permit to exist,
directly or indirectly, any Indebtedness, except:
(a) Indebtedness incurred under this Agreement and the other Loan
Documents;
(b) (i) Indebtedness outstanding on the Closing Date and listed on
Schedule 6.01(b) and (ii) refinancings and renewals of the Indebtedness
described in clause (i); provided that (A) any such refinancing
Indebtedness is in an aggregate principal amount not greater than the
aggregate principal amount of the Indebtedness being renewed or refinanced,
plus the amount of any premiums required to be paid thereon and reasonable
fees and expenses associated therewith, (B) such refinancing Indebtedness
has a later or equal final maturity and longer or equal weighted average
life than the Indebtedness being renewed or refinanced, (C) the covenants,
events of default, subordination and other provisions thereof (including
any guarantees thereof) shall be, in the aggregate, no less favorable to
Borrower than those contained in the Indebtedness being renewed or
refinanced and (D) any refinancing or renewal of Indebtedness of Borrower
or any Guarantor shall be Indebtedness of Borrower or any Guarantor;
(c) Indebtedness of Borrower or any Guarantor under Hedging
Obligations with respect to interest rates, foreign currency exchange rates
or commodity prices, in each case not entered into for speculative
purposes; provided that if such Hedging Obligations relate to interest
rates, (i) such Hedging Obligations relate to payment obligations on
Indebtedness otherwise permitted to be incurred by the Loan Documents and
(ii) the notional principal amount of such Hedging Obligations at the time
incurred does not exceed the principal amount of the Indebtedness to which
such Hedging Obligations relate;
(d) Indebtedness permitted by Section 6.04(f);
(e) Indebtedness in respect of Purchase Money Obligations and Capital
Lease Obligations, and refinancings or renewals thereof, in an aggregate
amount not to exceed $10,000,000 at any time outstanding;
(f) Indebtedness incurred by HMO Subsidiaries owed to third parties in
an aggregate amount not to exceed $2,000,000 at any time outstanding;
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(g) Indebtedness in respect of appeal, bid, performance or surety or
similar bonds, workers' compensation claims, self-insurance obligations and
bankers acceptances issued for the account of any Company in the ordinary
course of business, including guarantees or obligations of any Company with
respect to letters of credit supporting such bid, performance or surety
bonds, workers' compensation claims, self-insurance obligations and bankers
acceptances (in each case other than for an obligation for money borrowed);
(h) Contingent Obligations of any Loan Party in respect of
Indebtedness otherwise permitted under this Section 6.01;
(i) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business; provided, however, that such
Indebtedness is extinguished within ten days of incurrence;
(j) Indebtedness arising in connection with endorsement of instruments
for deposit in the ordinary course of business;
(k) other Indebtedness of Borrower or any Guarantor in an aggregate
amount not to exceed $25,000,000 at any time outstanding;
(l) subordinated (on terms reasonably satisfactory to the
Administrative Agent) Indebtedness of Borrower or any Guarantor issued to
sellers in connection with Permitted Acquisitions not to exceed $25,000,000
in aggregate principal amount at any one time outstanding;
(m) subordinated (on terms reasonably satisfactory to the
Administrative Agent) Indebtedness of Borrower or any Guarantor consisting
of promissory notes issued to current or former directors, consultants,
managers, officers and employees or their spouses or estates to purchase or
redeem an Equity Interest of Borrower issued to such person not to exceed
$5.0 million in aggregate principal amount per fiscal year and $10.0
million in aggregate principal amount prior to the Maturity Date; provided
that such amount shall be reduced dollar-for-dollar by payments made
pursuant to Section 6.08(b) (other than payments made with proceeds from
issuances of Qualified Capital Stock attributed thereto);
(n) Indebtedness incurred in connection with the financing of
insurance premiums in an aggregate amount at any time outstanding not to
exceed the premiums owed under such policy;
(o) Indebtedness of a person that is acquired in a Permitted
Acquisition which Indebtedness was in existence at the time of such
Permitted Acquisition and not incurred in contemplation thereof in an
aggregate principal amount not to exceed $25,000,000 at any time
outstanding;
(p) Contingent Obligations to financial institutions, in each case to
the extent in the ordinary course of business and on terms and conditions
that are within the general parameters customary in the banking industry,
entered into to obtain cash management services or deposit account
overdraft protection services (in amount similar to those offered for
comparable services in the financial industry) or other services in
connection with the management or opening of deposit accounts or incurred
as a result of endorsement of negotiable instruments for deposit or
collection
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purposes and other customary Contingent Obligations of Borrower and its
Subsidiaries incurred in the ordinary course of business;
(q) Permitted Subordinated Debt and (without duplication) related
guarantees not to exceed $50,000,000 in aggregate principal amount at any
one time outstanding; provided, however, that after giving effect to any
incurrence of such Permitted Subordinated Debt (a "PERMITTED SUBORDINATED
DEBT INCURRENCE") on a Pro Forma Basis, Borrower shall be in compliance
with Section 6.10(a) as of the most recent Test Period (assuming, for
purposes of Section 6.10(a), that such Permitted Subordinated Debt
Incurrence, and all other Permitted Subordinated Debt Incurrences
consummated since the first day of the relevant Test Period for Section
6.10(a) ending on or prior to the date of such Permitted Subordinated Debt
Incurrence, had occurred on the first day of such relevant Test Period);
(r) unsecured guarantees by Borrower or any Guarantor of facility
leases of any Company; and
(s) Indebtedness arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations or
from guarantee obligations, in each case in connection with acquisitions,
dispositions or Investments, in each case permitted hereunder.
SECTION 6.02 LIENS. Create, incur, assume or permit to exist, directly
or indirectly, any Lien on any property now owned or hereafter acquired by it or
on any income or revenues or rights in respect of any thereof, except the
following (collectively, the "PERMITTED LIENS"):
(a) Liens for taxes, assessments or governmental charges or levies not
yet due and payable or delinquent and Liens for taxes, assessments or
governmental charges or levies, which (i) are being contested in good faith
by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP, which proceedings (or orders entered
in connection with such proceedings) have the effect of preventing the
forfeiture or sale of the property on account of such Lien, or (ii) in the
case of any Lien that has or may become a Lien against any of the
Collateral, such Lien and the contest thereof shall satisfy the Contested
Collateral Lien Conditions;
(b) Liens in respect of property of any Company imposed by
Requirements of Law, which were incurred in the ordinary course of business
and do not secure Indebtedness for borrowed money, such as carriers',
warehousemen's, materialmen's, landlords', workmen's, suppliers',
repairmen's and mechanics' Liens and other similar Liens arising in the
ordinary course of business, and (i) which do not in the aggregate
materially detract from the value of the property of the Companies, taken
as a whole, and do not materially impair the use thereof in the operation
of the business of the Companies, taken as a whole, (ii) which, if they
secure obligations that are then due and unpaid, are being contested in
good faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP, which proceedings (or orders entered
in connection with such proceedings) have the effect of preventing the
forfeiture or sale of the property on account of such Lien, and (iii) in
the case of any such Lien that has or may become a Lien against any of the
Collateral, such Lien and the contest thereof shall satisfy the Contested
Collateral Lien Conditions;
(c) any Lien in existence on the Closing Date and set forth on
Schedule 6.02(c) and any Lien granted as a replacement or substitute
therefor; provided that any such replacement or
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substitute Lien (i) except as permitted by Section 6.01(b)(ii)(A), does not
secure an aggregate amount of Indebtedness, if any, greater than that
secured on the Closing Date and (ii) does not encumber any property other
than the property subject thereto on the Closing Date (any such Lien, an
"EXISTING LIEN");
(d) easements, rights-of-way, restrictions (including zoning
restrictions), covenants, licenses, encroachments, protrusions and other
similar charges or encumbrances, and minor title deficiencies, on or with
respect to any Real Property, in each case whether now or hereafter in
existence, not, (i) securing Indebtedness or (ii) individually or in the
aggregate materially impairing the value or marketability of the Real
Property of the Companies taken as a whole;
(e) Liens arising out of judgments, attachments or awards not
resulting in an Event of Default and in respect of which such Company shall
in good faith be prosecuting an appeal or proceedings for review and in
respect of which there shall have been obtained a subsisting stay of
execution pending such appeal or proceedings and, in the case of any such
Lien that has or may become a Lien against any of the Collateral, such Lien
and the contest thereof shall satisfy the Contested Collateral Lien
Conditions;
(f) Liens (x) imposed by Requirements of Law or deposits made in
connection therewith in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security legislation, (y) incurred in the ordinary course of business to
secure the performance of tenders, statutory obligations (other than excise
taxes), surety, stay, customs and appeal bonds, statutory bonds, bids,
leases, government contracts, trade contracts, performance and return of
money bonds and other similar obligations (exclusive of obligations for the
payment of Indebtedness for borrowed money) or (z) arising by virtue of
deposits made in the ordinary course of business to secure liability for
premiums to insurance carriers; provided that (i) with respect to clauses
(x), (y) and (z) of this paragraph (f), such Liens are for amounts not yet
delinquent or, to the extent such amounts are so delinquent, such amounts
are being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP, which
proceedings or orders entered in connection with such proceedings have the
effect of preventing the forfeiture or sale of the property subject to any
such Lien, (ii) to the extent such Liens are not imposed by Requirements of
Law, such Liens shall in no event encumber any property other than cash and
Cash Equivalents (other than clause (g) of the definition of Cash
Equivalents), (iii) in the case of any such Lien against any of the
Collateral, such Lien and the contest thereof shall satisfy the Contested
Collateral Lien Conditions and (iv) in the case of Liens in respect of
surety bonds as permitted under clause (y) of this paragraph (f) such Liens
shall only secure the project for which such surety bonds were obtained;
(g) Leases, licenses or sublicenses of the assets or properties of any
Company, in each case entered into in the ordinary course of such Company's
business;
(h) Liens securing Indebtedness incurred pursuant to Section 6.01(e);
provided that any such Liens attach only to the property being financed
pursuant to such Indebtedness and do not encumber any other property of any
Company;
(i) bankers' Liens, rights of setoff and other similar Liens existing
solely with respect to cash and Cash Equivalents on deposit in one or more
accounts maintained by any Company, in each case granted in the ordinary
course of business in favor of the bank or banks with
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which such accounts are maintained, securing amounts owing to such bank
with respect to cash management and operating account arrangements,
including those involving pooled accounts and netting arrangements;
provided that, unless such Liens are non-consensual and arise by operation
of law, in no case shall any such Liens secure (either directly or
indirectly) the repayment of any Indebtedness for borrowed money;
(j) Liens on property of a person existing at the time such person is
acquired or merged with or into or consolidated with any Company to the
extent permitted hereunder (and not created in anticipation or
contemplation thereof); provided that such Liens do not extend to property
not subject to such Liens at the time of acquisition (other than
improvements thereon) and are no more favorable to the lienholders than
such existing Lien;
(k) Liens granted pursuant to the Security Documents to secure the
Secured Obligations;
(l) licenses or sublicenses of Intellectual Property granted by any
Company in the ordinary course of business and not interfering in any
material respect with the ordinary conduct of business of the Companies;
(m) the filing of UCC financing statements solely as a precautionary
measure in connection with operating leases or consignment of goods;
(n) Liens incurred in the ordinary course of business with respect to
obligations that do not in the aggregate exceed $15,000,000 at any time
outstanding, so long as no more than $5,000,000 of the obligations secured
by such Liens, to the extent covering any Collateral, are not junior to the
Liens granted pursuant to the Security Documents;
(o) Liens for the benefit of a seller deemed to attach solely to ▇▇▇▇
▇▇▇▇▇▇▇ money deposits in connection with a letter of intent or acquisition
agreement with respect to a Permitted Acquisition;
(p) Liens deemed to exist in connection with Investments permitted
under Section 6.04 that constitute repurchase obligations and in connection
with related setoff rights;
(q) Liens in favor of any Loan Party and Liens (other than on assets
of a Loan Party) in favor of any HMO Subsidiary;
(r) Liens of a collecting bank arising in the ordinary course of
business under Section 4-210 of the UCC in effect in the relevant
jurisdiction covering only the items being collected upon;
(s) Liens of sellers of goods to Borrower or any of its Subsidiaries
arising under Article 2 of the UCC in effect in the relevant jurisdiction
in the ordinary course of business, covering only the goods sold and
covering only the unpaid purchase price for such goods and related
expenses;
(t) any interest or title of a lessor, sublessor, licensor or licensee
under any lease or license entered into by Borrower or any of its
Subsidiaries in the ordinary course of business; and
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(u) Liens on an insurance policy of Borrower or any of its
Subsidiaries and the identifiable cash proceeds thereof in favor of the
issuer of such policy and securing Indebtedness permitted under Section
6.01(n);
provided, however, that no consensual Liens shall be permitted to exist,
directly or indirectly, on any Securities Collateral issued by Borrower or any
of its Subsidiaries, other than Liens granted pursuant to the Security
Documents.
SECTION 6.03 SALE AND LEASEBACK TRANSACTIONS. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred (a "SALE AND LEASEBACK
TRANSACTION") unless (i) the sale of such property is permitted by Section 6.06,
(ii) any Liens arising in connection with its use of such property are permitted
by Section 6.02 and (iii) any related Capital Lease Obligation is permitted by
Section 6.01(e).
SECTION 6.04 INVESTMENTS, LOANS AND ADVANCES. Directly or indirectly,
lend money or credit (by way of guarantee or otherwise) or make advances to any
person, or purchase or acquire any stock, bonds, notes, debentures or other
obligations or securities of, or any other interest in, or make any capital
contribution to, any other person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract (all of the
foregoing, collectively, "INVESTMENTS"), except that the following shall be
permitted:
(a) [Reserved];
(b) Investments outstanding on the Closing Date and identified on
Schedule 6.04(b);
(c) the Companies may (i) acquire and hold accounts receivable owing
to any of them if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary terms, (ii)
invest in, acquire and hold cash and Cash Equivalents, (iii) endorse
negotiable instruments held for collection in the ordinary course of
business or (iv) make lease, utility and other similar deposits or any
other deposits permitted under Section 6.02, in each case in the ordinary
course of business;
(d) Hedging Obligations incurred pursuant to Section 6.01(c);
(e) loans and advances to directors, employees and officers of
Borrower and the Subsidiaries for bona fide business purposes and to
purchase Equity Interests of Borrower, in aggregate amount not to exceed
$5,000,000 at any time outstanding;
(f) Investments (i) by Borrower in any Guarantor, (ii) by any Company
in Borrower or any Guarantor, (iii) by a Guarantor in another Guarantor and
(iv) by a Subsidiary that is not a Guarantor in any other Subsidiary that
is not a Guarantor; provided that any Investment in the form of a loan or
advance owed to a Loan Party by a Loan Party shall be evidenced by the
Intercompany Note and, in the case of a loan or advance by a Loan Party,
pledged by such Loan Party as Collateral pursuant to the Security
Documents;
(g) Investments in securities of trade creditors or customers in the
ordinary course of business received in settlement of a bona fide dispute
or judgment or upon foreclosure or pursuant
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to any plan of reorganization or liquidation or similar arrangement upon
the bankruptcy or insolvency of such trade creditors or customers;
(h) Investments made by Borrower or any Guarantor as a result of
consideration received in connection with an Asset Sale made in compliance
with Section 6.06;
(i) Investments of Borrower or any Guarantor in HMO Subsidiaries
outstanding on the Closing Date and Investments by Borrower or any
Guarantor in HMO Subsidiaries made after the Closing Date in an aggregate
amount not to exceed (i) $5,000,000 plus the amount dividended, distributed
or otherwise paid to any Loan Party by an HMO Subsidiary that are
reinvested in a different HMO Subsidiary within 180 days of such dividend,
distribution or other payment plus (ii) other amounts as required by
applicable Requirements of Law (including minimum capital requirements);
(j) Permitted Acquisitions (and Investments owned by the acquired
person at the time of such Permitted Acquisition), to the extent permitted
by Section 6.07(f);
(k) (A) Required Advances, (B) RS Advances and (C) other advances to
Contract Providers in an amount not to exceed $1,000,000 at any time
outstanding;
(l) other Investments for less than 50% of the Equity Interests of any
person made by Borrower or any Guarantor in an aggregate amount not to
exceed the amount of any issuances of Qualified Capital Stock attributed
therefor, at any time outstanding;
(m) guarantees and other Contingent Obligations permitted under
Section 6.01;
(n) Investments that constitute an increase in value of existing
Investments;
(o) Loan Parties may cancel, forgive, set-off or accept prepayments
with respect to Indebtedness or other obligations owed to them and/or their
Equity Interests to the extent not otherwise prohibited hereunder;
(p) any Company may capitalize or forgive any Indebtedness owed to it
by a Loan Party;
(q) pledges and deposits permitted under Section 6.02;
(r) Investments consisting of ▇▇▇▇▇▇▇ money required in connection
with a Permitted Acquisition;
(s) Investments in deposit accounts; and
(t) other Investments made by Borrower or any Guarantor in an
aggregate amount not to exceed $10,000,000 at any time outstanding.
SECTION 6.05 MERGERS AND CONSOLIDATIONS. Wind up, liquidate or
dissolve its affairs or enter into any merger or consolidation (or enter into a
definitive written agreement to merge or consolidate at a future time without
any material conditions to closing), except that the following shall be
permitted:
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(a) [Reserved];
(b) Asset Sales in compliance with Section 6.06;
(c) acquisitions in compliance with Section 6.07;
(d) any Guarantor may merge or consolidate with or into Borrower or
any other Guarantor (as long as Borrower is the surviving person in the
case of any merger or consolidation involving Borrower and a Guarantor is
the surviving person in any other case); provided that the Lien on and
security interest in any Collateral granted or to be granted in favor of
the Collateral Agent under the Security Documents shall be maintained or
created in accordance with the provisions of Section 5.11 or Section 5.12,
as applicable; and
(e) any Subsidiary may dissolve, liquidate or wind up its affairs at
any time; provided that such dissolution, liquidation or winding up, as
applicable, could not reasonably be expected to have a Material Adverse
Effect.
To the extent the Required Lenders waive the provisions of this
Section 6.05 with respect to the sale of any Collateral, or any Collateral is
sold as permitted by this Section 6.05, such Collateral (unless sold to a Loan
Party) shall be sold free and clear of the Liens created by the Security
Documents, and the Agents shall take all actions they deem appropriate or
reasonably requested by Borrower in order to effect the foregoing.
SECTION 6.06 ASSET SALES. Effect any Asset Sale (or enter into a
definitive written agreement to effect any Asset Sale at a future time without
any material conditions to closing), except that the following shall be
permitted:
(a) [Reserved];
(b) Asset Sales; provided that the aggregate consideration received in
respect of all Asset Sales pursuant to this clause (b) shall not exceed
$5,000,000 in the aggregate after the Closing Date;
(c) leases or subleases of real or personal property in the ordinary
course of business and in accordance with the applicable Security
Documents;
(d) [Reserved];
(e) mergers and consolidations in compliance with Section 6.05;
(f) Investments in compliance with Section 6.04;
(g) sales of non-core assets acquired in a Permitted Acquisition;
provided that such sales shall be consummated within 270 days of the
Permitted Acquisition;
(h) Permitted Liens; and
(i) any sale or other disposition (including cancellation of
Indebtedness) of any Investment permitted hereunder.
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To the extent the Required Lenders waive the provisions of this
Section 6.06 with respect to the sale of any Collateral, or any Collateral is
sold as permitted by this Section 6.06, such Collateral (unless sold to a Loan
Party) shall be sold free and clear of the Liens created by the Security
Documents, and the Agents shall take all actions they deem appropriate or
reasonably requested by Borrower in order to effect the foregoing.
SECTION 6.07 ACQUISITIONS. Purchase or otherwise acquire (in one or a
series of related transactions) any part of the property (whether tangible or
intangible) of any other person (or agree to do any of the foregoing at any
future time without any material conditions to closing), except that the
following shall be permitted:
(a) acquisitions of fixed or capital assets used or useful in any
business activity permitted by Section 6.15;
(b) purchases and other acquisitions of inventory, materials,
equipment and intangible property in the ordinary course of business;
(c) Investments in compliance with Section 6.04;
(d) leases or licenses of real or personal property in the ordinary
course of business and in accordance with the applicable Security
Documents;
(e) [Reserved];
(f) Borrower and the Guarantors may consummate Permitted Acquisitions;
and
(g) mergers and consolidations in compliance with Section 6.05.
SECTION 6.08 DIVIDENDS. Authorize, declare or pay, directly or
indirectly, any Dividends with respect to any Company, except that the following
shall be permitted:
(a) Dividends by any Subsidiary to the holders of its Equity
Interests; provided that any such Dividends shall be made on a pro rata
basis;
(b) payments by Borrower to repurchase or redeem Qualified Capital
Stock of Borrower held by officers, directors or employees or former
officers, directors or employees (or their transferees, estates or
beneficiaries under their estates) of any Company, upon their death,
disability, retirement, severance or termination of employment or service;
provided that the aggregate cash consideration paid for all such
redemptions and payments shall not exceed, in any fiscal year, $5,000,000
plus any proceeds from sales or issuances of Qualified Capital Stock
attributed thereto and, in the aggregate since the Closing Date,
$10,000,000 plus any proceeds from sales or issuances of Qualified Capital
Stock attributed thereto plus the proceeds of any "key-man" life insurance
policies; provided that such amount shall be reduced dollar-for-dollar by
payments made in respect of Indebtedness incurred pursuant to Section
6.01(m);
(c) [Reserved];
(d) [Reserved];
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(e) Dividends by any HMO Subsidiary to the holders of its Equity
Interests; provided that any such Dividends shall be made on a pro rata
basis;
(f) cashless exercise of stock options; and
(g) Dividends by Borrower so long as no Default or Event of Default
shall have occurred and be continuing or would occur as a result thereof,
in an aggregate amount not to exceed the Net Cash Proceeds from sales or
issuances of Qualified Capital Stock made in connection with such Dividend.
SECTION 6.09 TRANSACTIONS WITH AFFILIATES. Enter into, directly or
indirectly, any transaction or series of related transactions, whether or not in
the ordinary course of business, with any Affiliate of any Company (other than
between or among Borrower and one or more of its Subsidiaries), other than on
terms and conditions taken as a whole at least as favorable to such Company as
would reasonably be obtained by such Company at that time in a comparable
arm's-length transaction with a person other than an Affiliate, except that the
following shall be permitted:
(a) Dividends permitted by Section 6.08;
(b) Indebtedness permitted by Section 6.01 and Investments permitted
by Sections 6.04(e), (f), (i), (m), and (p);
(c) director, officer and employee compensation (including bonuses)
and other benefits (including retirement, health, stock option and other
benefit plans) and indemnification arrangements, in each case approved by
the Board of Directors of Borrower;
(d) transactions with customers, clients, suppliers, joint venture
partners or purchasers or sellers of goods and services, in each case in
the ordinary course of business and otherwise not prohibited by the Loan
Documents;
(e) [Reserved]
(f) the existence of, and the performance by any Company of its
obligations under the terms of, any limited liability company, limited
partnership or other Organizational Document or securityholders agreement
(including any registration rights agreement or purchase agreement related
thereto) to which it is a party on the Closing Date and that has been
disclosed to the Lenders as in effect on the Closing Date, and similar
agreements that it may enter into thereafter; provided, however, that the
existence of, or the performance by any Company of obligations under, any
amendment to any such existing agreement or any such similar agreement
entered into after the Closing Date shall only be permitted by this Section
6.09(f) to the extent not more adverse to such Company in any material
respect, when taken as a whole, than any of such documents and agreements
as in effect on the Closing Date;
(g) sales of Qualified Capital Stock of Borrower to Affiliates of
Borrower not otherwise prohibited by the Loan Documents and the granting of
registration and other customary rights in connection therewith; and
(h) any transaction with an Affiliate where the only consideration
paid by any Loan Party is Qualified Capital Stock of Borrower.
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SECTION 6.10 FINANCIAL COVENANTS.
(a) Maximum Total Leverage Ratio. Permit the Total Leverage Ratio, at
the last day of any Test Period prior to the Maturity Date to exceed 2.50 to
1.00.
(b) Risk-Based Capital. As of the end of each of Borrower's fiscal
quarters:
(i) With respect to each HMO Subsidiary operating in a state that
statutorily applies a Risk-Based Capital methodology (each such HMO
Subsidiary being an "RBC HMO"), each such RBC HMO shall maintain a Total
Adjusted Capital amount equal to or greater than 10% above the upper limit
of the Regulatory Action Level in such state; and
(ii) With respect to each HMO Subsidiary that is not an RBC HMO (each
such HMO Subsidiary being a "NON-RBC HMO"), each such Non-RBC HMO shall
maintain a capital reserve at a level equal to or greater than 110% of the
applicable capital reserve requirement as determined by the state
Governmental Authority; provided that: (A) during the first year after the
Closing Date, the Non-RBC HMO operating in Tennessee shall maintain a
capital reserve at a level equal to or greater than 105% of the applicable
capital reserve requirement as determined by the Tennessee Governmental
Authority and (B) in no event will the amount required pursuant to this
clause (ii) for Non-RBC HMOs be greater than the amount that would be
required if clause (i) were applicable to such Non-RBC HMO;
provided in each case that, so long as each HMO Subsidiary maintains at least
the applicable minimum risk-based capital threshold of the state in which it
operates, (A) unrestricted cash-on-hand held by Borrower and the Guarantors and
(B) any of the aggregate amount of unused Revolving Commitment at such date may
be included in the computation of Total Adjusted Capital if necessary to comply
with the Risk-Based Capital requirement. Compliance with the Risk-Based Capital
requirement will be determined at the end of each fiscal quarter (using as the
denominator in each case, for the first three fiscal quarters of each year, the
prescribed level as of the end of the preceding fiscal year, and for the last
fiscal quarter of each year, the prescribed level as of the end of such fiscal
year).
(c) Minimum Fixed Charge Coverage Ratio. Permit the Consolidated Fixed
Charge Coverage Ratio, at the last day of any Test Period ending prior to the
Maturity Date to be less than 1.75 to 1.00.
SECTION 6.11 PREPAYMENTS OF OTHER INDEBTEDNESS; MODIFICATIONS OF
ORGANIZATIONAL DOCUMENTS AND OTHER DOCUMENTS, ETC. Directly or indirectly:
(a) make (or give any irrevocable notice in respect thereof) any
voluntary or optional payment or prepayment on or redemption or acquisition
for value of, or any prepayment or redemption as a result of any asset
sale, change of control or similar event of, any Indebtedness outstanding
under any Subordinated Indebtedness;
(b) [Reserved]; or
(c) terminate, amend, modify (including electing to treat any Pledged
Interests (as defined in the Security Agreement) as a "security" under
Section 8-103 of the UCC) or change any of its Organizational Documents
(including by the filing or modification of any certificate of designation)
or any agreement to which it is a party with respect to its Equity
Interests (including any stockholders' agreement), or enter into any new
agreement with respect to its Equity Interests,
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other than any such amendments, modifications or changes or such new
agreements which are not adverse in any material respect to the interests
of the Lenders; provided that Borrower may issue such Equity Interests, so
long as such issuance is not prohibited by Section 6.13 or any other
provision of this Agreement, and may amend its Organizational Documents to
authorize any such Equity Interests.
SECTION 6.12 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES.
Directly or indirectly, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction on the ability of any
Subsidiary to (a) pay dividends or make any other distributions on its capital
stock or any other interest or participation in its profits owned by Borrower or
any Subsidiary, or pay any Indebtedness owed to any Loan Party, (b) make loans
or advances to any Loan Party or (c) transfer any of its properties to any Loan
Party, except for such encumbrances or restrictions existing under or by reason
of (i) applicable Requirements of Law; (ii) this Agreement and the other Loan
Documents; (iii) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of a Subsidiary; (iv) customary
provisions restricting assignment of any agreement entered into by a Company in
the ordinary course of business; (v) any Lien permitted by Section 6.02
restricting the transfer of the property subject thereto; (vi) customary
restrictions and conditions contained in any agreement relating to the sale of
any property permitted under Section 6.06 pending the consummation of such sale;
(vii) any agreement in effect at the time a Subsidiary becomes a Subsidiary of
Borrower, so long as such agreement was not entered into in connection with or
in contemplation of such person becoming a Subsidiary of Borrower and amendments
or refinancings thereof that are otherwise permitted hereunder; (viii) without
affecting the Loan Parties' obligations under Section 5.11, customary provisions
in partnership agreements, limited liability company organizational governance
documents, asset sale and stock sale agreements and other similar agreements
entered into in the ordinary course of business that restrict the transfer of
ownership interests in such partnership, limited liability company or similar
person; (ix) restrictions on cash or other deposits or net worth imposed by
suppliers or landlords under contracts entered into in the ordinary course of
business; (x) any instrument or agreement governing Indebtedness assumed in
connection with any Permitted Acquisition, which encumbrance or restriction is
not applicable to any person, or the properties or assets of any person, other
than the person or the properties or assets of the person so acquired; (xi) in
the case of any joint venture which is not a Loan Party, in respect of any
matters referred to in clauses (b) and (c) above, restrictions in such person's
Organizational Documents or pursuant to any joint venture agreement or
stockholders agreements solely to the extent of the Equity Interests of or
property held in the subject joint venture or other entity; or (xii) any
encumbrances or restrictions imposed by any amendments or refinancings that are
otherwise permitted by the Loan Documents of the contracts, instruments or
obligations referred to in clause (vii) above; provided that such amendments or
refinancings are not materially more restrictive with respect to such
encumbrances and restrictions than those prior to such amendment or refinancing.
SECTION 6.13 LIMITATION ON ISSUANCE OF CAPITAL STOCK.
(a) With respect to Borrower, issue any Equity Interest that is not
Qualified Capital Stock.
(b) With respect to any Subsidiary of Borrower, issue any Equity
Interest (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, any Equity Interest,
except (i) for stock splits, stock dividends and additional issuances of Equity
Interests that do not decrease the percentage ownership of Borrower or any
Subsidiaries in any class of the Equity Interest of such Subsidiary; (ii)
Subsidiaries of Borrower formed after the Closing Date in accordance with
Section 6.14 may issue Equity Interests to Borrower or the Subsidiary of
Borrower that is to own
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such Equity Interests; and (iii) issuances of Equity Interests of an HMO
Subsidiary to certain Contract Providers affiliated with such HMO Subsidiary;
provided that each HMO Subsidiary shall remain at least 80% owned by Borrower
and Guarantors (in terms of both Voting Stock and the economic interest of
Equity Interests) at all times. All Equity Interests issued in accordance with
this Section 6.13(b) and held by a Loan Party shall, to the extent required by
Sections 5.11 and 5.12 or any Security Agreement, be delivered to the Collateral
Agent for pledge pursuant to the applicable Security Agreement.
SECTION 6.14 LIMITATION ON CREATION OF SUBSIDIARIES. Establish, create
or acquire any additional Subsidiaries without the prior written consent of the
Required Lenders; provided that, without such consent, Borrower or any Guarantor
may (i) establish or create one or more direct Wholly Owned Subsidiaries that
are Domestic Subsidiaries or domiciled in Puerto Rico, (ii) establish, create or
acquire one or more Domestic Subsidiaries or Puerto Rican Subsidiaries in
connection with an Investment permitted to be made pursuant to Section 6.04
(other than a Permitted Acquisition) or (iii) acquire one or more direct
Domestic Subsidiaries or Puerto Rican Subsidiaries in connection with a
Permitted Acquisition, so long as, in each case, Section 5.11(b) shall be
complied with to the extent applicable. Notwithstanding anything to the
contrary, no HMO Subsidiary shall establish, create or acquire any Subsidiary
without the prior written consent of the Required Lenders.
SECTION 6.15 BUSINESS. Engage (directly or indirectly) in any business
other than those businesses of the types in which Borrower and its Subsidiaries
are engaged on the Closing Date as described in the Form 10-K of Borrower for
the fiscal year ended December 31, 2005 (or, in the good faith judgment of the
Board of Directors, that are substantially related thereto or are reasonable
extensions thereof).
SECTION 6.16 FISCAL YEAR. Change its fiscal year-end to a date other
than December 31.
SECTION 6.17 No Further Negative Pledge. Enter into any agreement,
instrument, deed or lease that prohibits or limits the ability of any Loan Party
to create, incur, assume or suffer to exist any Lien upon any of their
respective properties or revenues, whether now owned or hereafter acquired, or
that requires the grant of any security for an obligation if security is granted
for another obligation, except the following: (1) this Agreement and the other
Loan Documents; (2) covenants in documents creating Liens permitted by Section
6.02 prohibiting further Liens on the properties encumbered thereby; (3) any
other agreement that does not restrict in any manner (directly or indirectly)
Liens created pursuant to the Loan Documents on any Collateral securing the
Secured Obligations and does not require the direct or indirect granting of any
Lien securing any other Indebtedness or obligation by virtue of the granting of
Liens on or pledge of property of any Loan Party to secure the Secured
Obligations; and (4) any prohibition or limitation that (a) exists pursuant to
applicable Requirements of Law, (b) consists of customary restrictions and
conditions contained in any agreement relating to the sale of any property
permitted under Section 6.06 pending the consummation of such sale, (c)
restricts subletting or assignment of any lease governing a leasehold interest,
(d) exists in any agreement in effect at the time a Subsidiary becomes a
Subsidiary of Borrower, so long as such agreement was not entered into in
contemplation of such person becoming a Subsidiary, (e) is imposed by any
amendments or refinancings that are otherwise permitted by the Loan Documents or
the contracts, instruments or obligations referred to in clause (4)(d); provided
that such amendments and refinancings are not materially more restrictive with
respect to such prohibitions and limitations than those prior to such amendment
or refinancing; (f) customary provisions restricting assignment of any agreement
entered into by a Company in the ordinary course of business; (g) customary
provisions in partnership agreements, limited liability company organizational
governance documents, asset sale and stock sale agreements and other similar
agreements
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entered into in the ordinary course of business that restrict the transfer of
ownership interests in such partnership, limited liability company or similar
person; (h) restrictions on cash or other deposits or net worth imposed by
suppliers or landlords under contracts entered into in the ordinary course of
business; (i) any instrument or agreement governing Indebtedness assumed in
connection with any Permitted Acquisition, which encumbrance or restriction is
not applicable to any person, or the properties or assets of any person, other
than the person or the properties or assets of the person so acquired; and (j)
in the case of any joint venture that is not a Loan Party, in respect of any
matters referred to in clauses (b) and (c) of Section 6.12 above, restrictions
in such person's Organizational Documents or pursuant to any joint venture
agreement or stockholders agreements solely to the extent of the Equity
Interests of or property held in the subject joint venture or other entity.
SECTION 6.18 ANTI-TERRORISM LAW; ANTI-MONEY LAUNDERING.
(a) Directly or indirectly, (i) knowingly conduct any business or
engage in making or receiving any contribution of funds, goods or services to or
for the benefit of any person described in Section 3.22(b), (ii) knowingly deal
in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to the Executive Order or any other
Anti-Terrorism Law, or (iii) knowingly engage in or conspire to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law
(and the Loan Parties shall deliver to the Lenders any certification or other
evidence reasonably requested from time to time by any Lender in its reasonable
discretion, confirming the Loan Parties' compliance with this Section 6.18).
(b) Cause or permit any of the funds of such Loan Party that are used
to repay the Loans to be derived from any unlawful activity with the result that
the making of the Loans would be in violation of any Requirement of Law.
SECTION 6.19 EMBARGOED PERSON. Cause or permit (a) any of the funds or
properties of the Loan Parties that are used to repay the Loans to constitute
property of, or be beneficially owned directly or indirectly by, any person
subject to sanctions or trade restrictions under United States law ("EMBARGOED
PERSON" or "EMBARGOED PERSONS") that is identified on (1) the "List of Specially
Designated Nationals and Blocked Persons" maintained by OFAC and/or on any other
similar list maintained by OFAC pursuant to any authorizing statute including
the International Emergency Economic Powers Act, 50 U.S.C. Sections 1701 et
seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any
Executive Order or Requirement of Law promulgated thereunder, with the result
that the investment in the Loan Parties (whether directly or indirectly) is
prohibited by a Requirement of Law, or the Loans made by the Lenders would be in
violation of a Requirement of Law, or (2) the Executive Order, any related
enabling legislation or any other similar Executive Orders or (b) any Embargoed
Person to have any direct or indirect interest, of any nature whatsoever in the
Loan Parties, with the result that the investment in the Loan Parties (whether
directly or indirectly) is prohibited by a Requirement of Law or the Loans are
in violation of a Requirement of Law.
ARTICLE VII
GUARANTEE
SECTION 7.01 THE GUARANTEE. The Guarantors hereby jointly and
severally guarantee, as a primary obligor and not as a surety, to each Secured
Party and their respective successors and assigns, the prompt payment in full
when due (whether at stated maturity, by required prepayment, declaration,
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demand, by acceleration or otherwise) of the principal of and interest
(including any interest, fees, costs or charges that would accrue but for the
provisions of the Title 11 of the United States Code after any bankruptcy or
insolvency petition under Title 11 of the United States Code) on the Loans made
by the Lenders to, and the Notes held by each Lender of, Borrower, and all other
Secured Obligations from time to time owing to the Secured Parties by any Loan
Party under any Loan Document or any Hedging Agreement or Treasury Services
Agreement and entered into with a counterparty that is a Secured Party, in each
case strictly in accordance with the terms thereof (such obligations being
herein collectively called the "GUARANTEED Obligations"). The Guarantors hereby
jointly and severally agree that if Borrower or other Guarantor(s) shall fail to
pay in full when due (whether at stated maturity, by acceleration or otherwise)
any of the Guaranteed Obligations, the Guarantors will promptly pay the same in
cash, without any demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
by acceleration or otherwise) in accordance with the terms of such extension or
renewal.
SECTION 7.02 OBLIGATIONS UNCONDITIONAL. The obligations of the
Guarantors under Section 7.01 shall constitute a guaranty of payment and to the
fullest extent permitted by applicable Requirements of Law, are absolute,
irrevocable and unconditional, joint and several, irrespective of the value,
genuineness, validity, regularity or enforceability of the Guaranteed
Obligations of Borrower under this Agreement, the Notes, if any, or any other
agreement or instrument referred to herein or therein, or any substitution,
release or exchange of any other guarantee of or security for any of the
Guaranteed Obligations, and, irrespective of any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a
surety or Guarantor (except for payment in full). Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or more
of the following shall not alter or impair the liability of the Guarantors
hereunder, which shall remain absolute, irrevocable and unconditional under any
and all circumstances as described above:
(i) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or the Notes, if any, or any other agreement or instrument
referred to herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be amended in any
respect, or any right under the Loan Documents or any other agreement or
instrument referred to herein or therein shall be amended or waived in any
respect or any other guarantee of any of the Guaranteed Obligations or any
security therefor shall be released or exchanged in whole or in part or
otherwise dealt with;
(iv) any Lien or security interest granted to, or in favor of, Issuing
Bank or any Lender or Agent as security for any of the Guaranteed
Obligations shall fail to be perfected; or
(v) the release of any other Guarantor pursuant to Section 7.09.
To the extent not prohibited by applicable law, the Guarantors hereby
expressly waive diligence, presentment, demand of payment, protest and all
notices whatsoever, and any requirement that any Secured Party exhaust any
right, power or remedy or proceed against Borrower under this Agreement
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or the Notes, if any, or any other agreement or instrument referred to herein or
therein, or against any other person under any other guarantee of, or security
for, any of the Guaranteed Obligations. To the extent not prohibited by
applicable law, the Guarantors waive any and all notice of the creation,
renewal, extension, waiver, termination or accrual of any of the Guaranteed
Obligations and notice of or proof of reliance by any Secured Party upon this
Guarantee or acceptance of this Guarantee, and the Guaranteed Obligations, and
any of them, shall conclusively be deemed to have been created, contracted or
incurred in reliance upon this Guarantee, and all dealings between Borrower and
the Secured Parties shall likewise be conclusively presumed to have been had or
consummated in reliance upon this Guarantee. This Guarantee shall be construed
as a continuing, absolute, irrevocable and unconditional guarantee of payment
without regard to any right of offset with respect to the Guaranteed Obligations
at any time or from time to time held by Secured Parties, and the obligations
and liabilities of the Guarantors hereunder shall not be conditioned or
contingent upon the pursuit by the Secured Parties or any other person at any
time of any right or remedy against Borrower or against any other person which
may be or become liable in respect of all or any part of the Guaranteed
Obligations or against any collateral security or guarantee therefor or right of
offset with respect thereto. This Guarantee shall remain in full force and
effect and be binding in accordance with and to the extent of its terms upon the
Guarantors and the successors and assigns thereof, and shall inure to the
benefit of the Lenders, and their respective successors and assigns,
notwithstanding that from time to time during the term of this Agreement there
may be no Guaranteed Obligations outstanding.
SECTION 7.03 REINSTATEMENT. The obligations of the Guarantors under
this Article VII shall be automatically reinstated if and to the extent that for
any reason any payment by or on behalf of Borrower or other Loan Party in
respect of the Guaranteed Obligations is rescinded or must be otherwise restored
by any holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise.
SECTION 7.04 SUBROGATION; SUBORDINATION. Each Guarantor hereby agrees
that until the payment and satisfaction in full of all Guaranteed Obligations
(other than unasserted, contingent indemnification obligations) and the
expiration and termination of the Commitments of the Lenders under this
Agreement it shall waive any claim and shall not exercise any right or remedy,
direct or indirect, arising by reason of any performance by it of its guarantee
in Section 7.01, whether by subrogation or otherwise, against Borrower or any
other Guarantor of any of the Guaranteed Obligations or any security for any of
the Guaranteed Obligations. Any Indebtedness of any Loan Party permitted
pursuant to Section 6.01(d) shall be subordinated to such Loan Party's Secured
Obligations in the manner set forth in the Intercompany Note evidencing such
Indebtedness.
SECTION 7.05 REMEDIES. The Guarantors jointly and severally agree
that, as between the Guarantors and the Lenders, the obligations of Borrower
under this Agreement and the Notes, if any, may be declared to be forthwith due
and payable as provided in Section 8.01 (and shall be deemed to have become
automatically due and payable in the circumstances provided in Section 8.01) for
purposes of Section 7.01, notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against Borrower and that, in the event of
such declaration (or such obligations being deemed to have become automatically
due and payable), such obligations (whether or not due and payable by Borrower)
shall forthwith become due and payable by the Guarantors for purposes of Section
7.01.
SECTION 7.06 INSTRUMENT FOR THE PAYMENT OF MONEY. Each Guarantor
hereby acknowledges that the guarantee in this Article VII constitutes an
instrument for the payment of money, and consents and agrees that any Lender or
Agent, at its sole option, in the event of a dispute by such Guarantor
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in the payment of any moneys due hereunder, shall have the right to bring a
motion-action under New York CPLR Section 3213.
SECTION 7.07 CONTINUING GUARANTEE. The guarantee in this Article VII
is a continuing guarantee of payment, and shall apply to all Guaranteed
Obligations whenever arising.
SECTION 7.08 GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In any
action or proceeding involving any state corporate, limited partnership or
limited liability company law, or any applicable state, federal or foreign
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 7.01
would otherwise be held or determined to be void, voidable, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under Section 7.01, then, notwithstanding any
other provision to the contrary, the amount of such liability shall, without any
further action by such Guarantor, any Loan Party or any other person, be
automatically limited and reduced to the highest amount (after giving effect to
the right of contribution established in Section 7.10) that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.
SECTION 7.09 RELEASE OF GUARANTORS. If, in compliance with the terms
and provisions of the Loan Documents, all or substantially all of the Equity
Interests or property of any Guarantor (a "TRANSFERRED GUARANTOR") are sold or
otherwise transferred to a person or persons, none of which is Borrower or a
Subsidiary, such Transferred Guarantor shall, upon the consummation of such sale
or transfer, be automatically released from its obligations under this Agreement
(including under Section 10.03 hereof) and its obligations to pledge and grant
any Collateral owned by it pursuant to any Security Document and, in the case of
a sale of all or substantially all of the Equity Interests of the Transferred
Guarantor, the pledge of such Equity Interests to the Collateral Agent pursuant
to the Security Agreements shall be automatically released, and the Collateral
Agent shall take such actions as are necessary or reasonably requested by
Borrower to effect each release described in this Section 7.09 in accordance
with the relevant provisions of the Security Documents.
SECTION 7.10 RIGHT OF CONTRIBUTION. Each Guarantor hereby agrees that
to the extent that a Guarantor shall have paid more than its proportionate share
of any payment made hereunder, such Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder that has not
paid its proportionate share of such payment. Each Guarantor's right of
contribution shall be subject to the terms and conditions of Section 7.04. The
provisions of this Section 7.10 shall in no respect limit the obligations and
liabilities of any Guarantor to the Administrative Agent, the Issuing Bank, the
Swingline Lender and the Revolving Lenders, and each Guarantor shall remain
liable to the Administrative Agent, the Issuing Bank, the Swingline Lender and
the Revolving Lenders for the full amount guaranteed by such Guarantor
hereunder.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01 EVENTS OF DEFAULT. Upon the occurrence and during the
continuance of the following events ("EVENTS OF DEFAULT"):
(a) default shall be made in the payment of any principal of any Loan
or any Reimbursement Obligation when and as the same shall become due and
payable, whether at the due
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date thereof or at a date fixed for prepayment (whether voluntary or
mandatory) thereof or by acceleration thereof or otherwise;
(b) default shall be made in the payment of any interest on any Loan
or any Fee or any other amount (other than an amount referred to in
paragraph (a) above) due under any Loan Document, when and as the same
shall become due and payable, and such default shall continue unremedied
for a period of five Business Days;
(c) any representation or warranty made or deemed made in or in
connection with any Loan Document or the borrowings or issuances of Letters
of Credit hereunder, or any representation, warranty, statement or
information contained in any report, certificate, financial statement or
other instrument furnished pursuant to any Loan Document, shall prove to
have been false or misleading in any material respect when so made, deemed
made or furnished;
(d) default shall be made in the due observance or performance by any
Company of any covenant, condition or agreement contained in Section 5.02,
5.03(a) or 5.08 or in Article VI;
(e) default shall be made in the due observance or performance by any
Company of any covenant, condition or agreement contained in any Loan
Document (other than those specified in paragraphs (a), (b) or (d)
immediately above) and such default shall continue unremedied or unwaived
or shall not be waived for a period of 30 days after receipt of written
notice thereof from the Administrative Agent or any Lender to Borrower;
(f) any Company shall (i) fail to pay any principal or interest,
regardless of amount, due in respect of any Indebtedness (other than the
Obligations), when and as the same shall become due and payable beyond any
applicable grace period, or (ii) fail to observe or perform any other term,
covenant, condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness if the effect of any failure
referred to in this clause (ii) is to cause, or to permit the holder or
holders of such Indebtedness or a trustee or other representative on its or
their behalf (with or without the giving of notice, the lapse of time or
both) to cause, such Indebtedness to become due prior to its stated
maturity or become subject to a mandatory offer purchase by the obligor;
provided that it shall not constitute an Event of Default pursuant to this
paragraph (f) unless the aggregate amount of all such Indebtedness referred
to in clauses (i) and (ii) exceeds $7,500,000 at any one time (provided
that, in the case of Hedging Obligations, the amount counted for this
purpose shall be the amount owed by all Companies if such Hedging
Obligations were terminated at such time);
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of Borrower or any Significant Subsidiary, or of a
substantial part of the property of Borrower or any Significant Subsidiary,
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other federal, state or foreign bankruptcy, insolvency,
receivership or similar law; (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for Borrower or
any Significant Subsidiary or for a substantial part of the property of
Borrower or any Significant Subsidiary; or (iii) the winding-up or
liquidation of Borrower or any Significant Subsidiary; and such proceeding
or petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
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(h) Borrower or any Significant Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11
of the United States Code, as now constituted or hereafter amended, or any
other federal, state or foreign bankruptcy, insolvency, receivership or
similar law; (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or the filing of any petition
described in paragraph (g) above; (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for Borrower or any Significant Subsidiary or for a
substantial part of the property of Borrower or any Significant Subsidiary;
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding; (v) make a general assignment for the
benefit of creditors; (vi) become unable, admit in writing its inability or
fail generally to pay its debts as they become due; (vii) take any action
for the purpose of effecting any of the foregoing; or (viii) wind up or
liquidate;
(i) one or more judgments, orders or decrees for the payment of money
in an aggregate amount in excess of $7,500,000 (in excess of insurance
therefor for which coverage is not denied) shall be rendered against any
Company or any combination thereof and the same shall remain undischarged,
unvacated or unbonded for a period of 60 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to levy upon properties of any Company to
enforce any such judgment;
(j) one or more ERISA Events shall have occurred that, when taken
together with all other such ERISA Events, could reasonably be expected to
result in a Material Adverse Effect;
(k) other than with respect to de minimis items of Collateral not to
exceed $500,000 in the aggregate, the security interest and Lien purported
to be created by any Security Document shall cease to be in full force and
effect, or shall cease to give the Collateral Agent, for the benefit of the
Secured Parties, the Liens, rights, powers and privileges purported to be
created and granted under such Security Document (including a perfected
first priority security interest in and Lien on all of the Collateral
thereunder (except as otherwise expressly provided hereunder or in such
Security Document, including Permitted Liens)) in favor of the Collateral
Agent, or shall be asserted by Borrower or any other Loan Party not to be a
valid, perfected, first priority (except as otherwise expressly provided in
this Agreement or such Security Document, including Permitted Liens)
security interest in or Lien on the Collateral covered thereby;
(l) any Loan Document or any material provisions thereof shall at any
time and for any reason be declared by a court of competent jurisdiction to
be null and void, or a proceeding shall be commenced by any Loan Party or
any other person, or by any Governmental Authority, seeking to establish
the invalidity or unenforceability thereof (exclusive of questions of
interpretation of any provision thereof), or any Loan Party shall repudiate
or deny any portion of its liability or obligation for the Obligations;
(m) there shall have occurred a Change in Control;
(n) (i) there shall have occurred an HMO Event with respect to any
member of the Consolidated Group that would reasonably be expected to
materially and adversely affect such person and the circumstances that
triggered such HMO Event shall remain unremedied and/or such order shall
remain unsatisfied for 90 days after the occurrence thereof (or such lesser
period of time, if any, as the HMO Regulator administering the HMO
Regulations shall have imposed for the cure of such HMO Event), or (ii) any
HMO Subsidiary shall suffer a net loss of 25% or
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more of the aggregate of its commercial and Medicare plan Members (other
than as the result of any Asset Sale permitted hereunder), as measured from
the beginning of the previous month or from the close of its immediately
preceding fiscal year-end, that results in a Material Adverse Effect; or
(o) there shall occur any Exclusion Event that would result in a
Material Adverse Effect;
then, and in every such event (other than an event with respect to Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by written notice to Borrower, take either or both
of the following actions, at the same or different times: (i) terminate
forthwith the Commitments and (ii) declare the Loans and Reimbursement
Obligations then outstanding to be forthwith due and payable in whole or in
part, whereupon the principal of the Loans and Reimbursement Obligations so
declared to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other Obligations of Borrower accrued hereunder and
under any other Loan Document, shall become forthwith due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by Borrower and the Guarantors, anything contained
herein or in any other Loan Document to the contrary notwithstanding; and in any
event, upon the occurrence of an Event of Default with respect to Borrower
described in paragraph (g) or (h) above, the Commitments shall automatically
terminate and the principal of the Loans and Reimbursement Obligations then
outstanding, together with accrued interest thereon and any unpaid accrued Fees
and all other Obligations of Borrower accrued hereunder and under any other Loan
Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by Borrower and the Guarantors, anything contained herein or in
any other Loan Document to the contrary notwithstanding.
SECTION 8.02 RESCISSION. If at any time after termination of the
Commitments or acceleration of the maturity of the Loans, Borrower shall pay all
arrears of interest and all payments on account of principal of the Loans and
Reimbursement Obligations owing by it that shall have become due otherwise than
by acceleration (with interest on principal and, to the extent permitted by law,
on overdue interest, at the rates specified herein) and all Defaults (other than
non-payment of principal of and accrued interest on the Loans due and payable
solely by virtue of acceleration) shall be remedied or waived pursuant to
Section 10.02, then upon the written consent of the Required Lenders and written
notice to Borrower, the termination of the Commitments or the acceleration and
their consequences may be rescinded and annulled; but such action shall not
affect any subsequent Default or impair any right or remedy consequent thereon.
The provisions of the preceding sentence are intended merely to bind the Lenders
and the Issuing Bank to a decision that may be made at the election of the
Required Lenders, and such provisions are not intended to benefit Borrower and
do not give Borrower the right to require the Lenders to rescind or annul any
acceleration hereunder, even if the conditions set forth herein are met.
SECTION 8.03 APPLICATION OF PROCEEDS. The proceeds received by the
Collateral Agent in respect of any realization upon all or any part of the
Collateral pursuant to the exercise by the Collateral Agent of its remedies in
accordance with the terms of the Loan Documents shall be applied, in full or in
part, together with any other sums then held by the Collateral Agent pursuant to
this Agreement, promptly by the Collateral Agent as follows:
(a) First, to the payment of all reasonable out-of-pocket costs and
expenses, fees, commissions and taxes of such sale, collection or other
realization including compensation to the
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Collateral Agent and its agents and counsel, and all reasonable expenses,
liabilities and advances made or incurred by the Collateral Agent in
connection therewith and all amounts for which the Collateral Agent is
entitled to indemnification pursuant to the provisions of any Loan
Document, together with interest on each such amount at the highest rate
then in effect under this Agreement from and after the date such amount is
due, owing or unpaid until paid in full;
(b) Second, to the payment of all other reasonable out-of-pocket costs
and expenses of such sale, collection or other realization including
compensation to the other Secured Parties and their agents and counsel and
all reasonable costs, liabilities and advances made or incurred by the
other Secured Parties in connection therewith, together with interest on
each such amount at the highest rate then in effect under this Agreement
from and after the date such amount is due, owing or unpaid until paid in
full;
(c) Third, without duplication of amounts applied pursuant to clauses
(a) and (b) above, to the payment in full, pro rata, of interest and other
amounts constituting Obligations (other than principal and Reimbursement
Obligations) and any fees, premiums and scheduled periodic payments due
under Hedging Agreements or Treasury Services Agreements constituting
Secured Obligations and any interest accrued thereon, in each case equally
and ratably in accordance with the respective amounts thereof then due and
owing;
(d) Fourth, to the payment in full, pro rata, of principal of the
Obligations (including Reimbursement Obligations) and any breakage,
termination or other payments under Hedging Agreements or Treasury Services
Agreements constituting Secured Obligations and any interest accrued
thereon; and
(e) Fifth, the balance, if any, to the person lawfully entitled
thereto (including the applicable Loan Party or its successors or assigns)
or as a court of competent jurisdiction may direct.
In the event that any such proceeds are insufficient to pay in full
the items described in clauses (a) through (e) of this Section 8.03, the Loan
Parties shall remain liable, jointly and severally, for any deficiency.
SECTION 8.04 REINSTATEMENT. The obligations of Borrower under this
Agreement shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of Borrower or another Loan Party in respect
of the Obligations is rescinded or must be otherwise restored by any of the
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise.
ARTICLE IX
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 9.01 APPOINTMENT AND AUTHORITY. Each of the Lenders and the
Issuing Bank hereby irrevocably appoints UBS AG, Stamford Branch, to act on its
behalf as the Administrative Agent and the Collateral Agent hereunder and under
the other Loan Documents and authorizes such Agents to take such actions on its
behalf and to exercise such powers as are delegated to such Agents by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto. The provisions of this Article are solely for the benefit of
the Administrative Agent, the Collateral Agent,
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the Lenders and the Issuing Bank, and neither Borrower nor any other Loan Party
shall have rights as a third party beneficiary of any of such provisions.
SECTION 9.02 RIGHTS AS A LENDER. Each person serving as an Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not an Agent and
the term "Lender" or "Lenders" shall, unless otherwise expressly indicated or
unless the context otherwise requires, include each person serving as an Agent
hereunder in its individual capacity. Such person and its Affiliates may accept
deposits from, lend money to, act as the financial advisor or in any other
advisory capacity for and generally engage in any kind of business with Borrower
or any Subsidiary or other Affiliate thereof as if such person were not an Agent
hereunder and without any duty to account therefor to the Lenders.
SECTION 9.03 EXCULPATORY PROVISIONS. No Agent shall have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents. Without limiting the generality of the foregoing, no Agent:
(i) shall be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
(ii) shall have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that such Agent is
required to exercise as directed in writing by the Required Lenders (or
such other number or percentage of the Lenders as shall be expressly
provided for herein or in the other Loan Documents); provided that such
Agent shall not be required to take any action that, in its reasonable
judgment or the reasonable judgment of its counsel, may expose such Agent
to liability or that is contrary to any Loan Document or applicable
Requirements of Law; and
(iii) shall, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to Borrower or any of its
Affiliates that is communicated to or obtained by the person serving as
such Agent or any of its Affiliates in any capacity.
No Agent shall be liable for any action taken or not taken by it (x) with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as such Agent shall believe
in good faith shall be necessary, under the circumstances as provided in Section
10.02) or (y) in the absence of its own gross negligence or willful misconduct.
No Agent shall be deemed to have knowledge of any Default unless and until
notice describing such Default is given to such Agent by Borrower, a Lender or
the Issuing Bank.
No Agent shall be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document or (v) the satisfaction of any condition
set forth in Article IV or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to such Agent. Without limiting the
generality of the foregoing, the use of the term "agent" in this Agreement
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with reference to the Administrative Agent or the Collateral Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable law. Instead, such term us used
merely as a matter of market custom and is intended to create or reflect only an
administrative relationship between independent contracting parties.
SECTION 9.04 RELIANCE BY AGENT. Each Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper person. Each Agent also may rely upon any
statement made to it orally or by telephone and believed by it to have been made
by the proper person, and shall not incur any liability for relying thereon. In
determining compliance with any condition hereunder to the making of a Loan, or
the issuance of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or the Issuing Bank, the Administrative Agent may
presume that such condition is satisfactory to such Lender or the Issuing Bank
unless the Administrative Agent shall have received notice to the contrary from
such Lender or the Issuing Bank prior to the making of such Loan or the issuance
of such Letter of Credit. Each Agent may consult with legal counsel (who may be
counsel for Borrower), independent accountants and other experts selected by it,
and shall not be liable for any action taken or not taken by it in accordance
with the advice of any such counsel, accountants or experts.
SECTION 9.05 DELEGATION OF DUTIES. Each Agent may perform any and all
of its duties and exercise its rights and powers hereunder or under any other
Loan Document by or through, or delegate any and all such rights and powers to,
any one or more sub-agents appointed by such Agent. Each Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and
powers by or through their respective Related Parties. The exculpatory
provisions of this Article shall apply to any such sub-agent and to the Related
Parties of each Agent and any such sub-agent, and shall apply to their
respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.
SECTION 9.06 RESIGNATION OF AGENT. Each Agent may at any time give
notice of its resignation to the Lenders, the Issuing Bank and Borrower. Upon
receipt of any such notice of resignation, the Required Lenders shall have the
right, with the consent (not to be unreasonably withheld, delayed or
conditioned) of Borrower except after and during the continuance of an Event of
Default, to appoint a successor, which shall be a bank with an office in the
United States, or an Affiliate of any such bank with an office in the United
States. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring Agent may on
behalf of the Lenders and the Issuing Bank, appoint a successor Agent meeting
the qualifications set forth above with Borrower's consent (not to be
unreasonably withheld, delayed or conditioned) except after and during the
continuance of any Event of Default; provided that if the Agent shall notify
Borrower and the Lenders that no qualifying person has accepted such appointment
or Borrower has not consented, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Collateral Agent on behalf of the Lenders or the Issuing Bank under any of the
Loan Documents, the retiring Collateral Agent shall continue to hold such
collateral security as nominee until such time as a successor Collateral Agent
is appointed) and (2) all payments, communications and determinations provided
to be made by, to or through an Agent shall instead be made by or to each Lender
and the Issuing Bank directly, until such time as the Required Lenders, with the
consent (not to be unreasonably withheld, delayed or conditioned) of Borrower
except after and during the continuance of an Event of
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Default, appoint a successor Agent as provided for above in this paragraph. Upon
the acceptance of a successor's appointment as Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Agent, and the retiring Agent shall be
discharged from all of its duties and obligations hereunder or under the other
Loan Documents (if not already discharged therefrom as provided above in this
paragraph). The fees payable by Borrower to a successor Agent shall be the same
as those payable to its predecessor unless otherwise agreed between Borrower and
such successor. After the retiring Agent's resignation hereunder and under the
other Loan Documents, the provisions of this Article IX and Section 10.03 shall
continue in effect for the benefit of such retiring Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while the retiring Agent was acting as Agent.
SECTION 9.07 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender and
the Issuing Bank acknowledges that it has, independently and without reliance
upon any Agent or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender further represents and warrants that it has
reviewed each document made available to it on the Platform in connection with
this Agreement and has acknowledged and accepted the terms and conditions
applicable to the recipients thereof. Each Lender and the Issuing Bank also
acknowledges that it will, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document or
any related agreement or any document furnished hereunder or thereunder.
SECTION 9.08 NO OTHER DUTIES, ETC. Anything herein to the contrary
notwithstanding, none of the Syndication Agent, the Documentation Agent or the
Arrangers listed on the cover page hereof shall have any powers, duties or
responsibilities as such under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent,
the Collateral Agent, a Lender or an Issuing Bank hereunder.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 NOTICES.
(a) Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopier as follows:
(i) if to any Loan Party, to Borrower at:
HealthSpring, Inc.
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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(ii) if to the Administrative Agent, the Collateral Agent or Issuing
Bank, to it at:
UBS AG, Stamford Branch
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇.▇▇▇
(iii) if to a Lender, to it at its address (or telecopier number) set
forth in its Administrative Questionnaire; and
(iv) if to the Swingline Lender, to it at:
UBS Loan Finance LLC
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇.▇▇▇
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in paragraph (b) below, shall be effective as provided in said
paragraph (b).
(b) Electronic Communications. Notices and other communications to the
Administrative Agent, Collateral Agent or Lenders and the Issuing Bank hereunder
may be delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices to
any Lender or the Issuing Bank pursuant to Article II if such Lender or the
Issuing Bank, as applicable, has notified the Administrative Agent that it is
incapable of receiving notices under such Article by electronic communication.
The Administrative Agent, the Collateral Agent or Borrower may, in its
reasonable discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices
or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and
other communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
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(c) Change of Address, Etc. Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
the other parties hereto.
SECTION 10.02 WAIVERS; AMENDMENT.
(a) Generally. No failure or delay by any Agent, the Issuing Bank or
any Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
each Agent, the Issuing Bank and the Lenders hereunder and under the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of any Loan Document or
consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be permitted by this Section 10.02, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. Without limiting the generality of the foregoing,
the making of a Loan or issuance of a Letter of Credit shall not be construed as
a waiver of any Default, regardless of whether any Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time. No
notice or demand on Borrower in any case shall entitle Borrower to any other or
further notice or demand in similar or other circumstances.
(b) Required Consents. Subject to Sections 10.02(c) and (d), neither
this Agreement nor any other Loan Document nor any provision hereof or thereof
may be waived, amended, supplemented or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by
Borrower and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent, the Collateral Agent (in the case of any Security
Document) and the Loan Party or Loan Parties that are party thereto, in each
case with the written consent of the Required Lenders; provided that no such
agreement shall be effective if the effect thereof would:
(i) increase the Commitment of any Lender without the written consent
of such Lender (it being understood that no amendment, modification,
termination, waiver or consent with respect to any condition precedent,
covenant or Default shall constitute an increase in the Commitment of any
Lender);
(ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon (other than interest pursuant to
Section 2.06(c)) (other than waiver of default interest), or reduce any
Fees payable hereunder, or change the form or currency of payment of any
Obligation, without the written consent of each Lender directly affected
thereby (it being understood that any amendment or modification to the
financial definitions in this Agreement shall not constitute a reduction in
the rate of interest for purposes of this clause (ii));
(iii) (A) change the scheduled final maturity of any Loan, (B)
postpone the date for payment of any Reimbursement Obligation or any
interest or fees payable hereunder, (C) change the amount of, waive or
excuse any such payment (other than waiver of any increase in the interest
rate pursuant to Section 2.06(c)), or (D) postpone the scheduled date of
expiration of any Commitment or any Letter of Credit beyond the Maturity
Date, in any case, without the written consent of each Lender directly
affected thereby;
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(iv) increase the maximum duration of Interest Periods hereunder,
without the written consent of each Lender directly affected thereby;
(v) permit the assignment or delegation by Borrower of any of its
rights or obligations under any Loan Document, without the written consent
of each Lender;
(vi) release all or substantially all of the Guarantors from their
Guarantee (except as expressly provided in Article VII), or limit their
liability in respect of such Guarantee, without the written consent of each
Lender;
(vii) release all or substantially all or a portion of the Collateral
from the Liens of the Security Documents, in each case without the written
consent of each Lender (it being understood that additional Classes of
Loans pursuant to Section 2.19 or consented to by the Required Lenders may
be equally and ratably secured by the Collateral with the then existing
Secured Obligations under the Security Documents);
(viii) change any provision of this Section 10.02(b) or Section
10.02(c) or (d), without the written consent of each Lender directly
affected thereby;
(ix) reduce the percentage set forth in the definition of "Required
Lenders," or any other provision of any Loan Document (including this
Section) specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent
of each Lender (or each Lender of such Class, as the case may be), other
than to increase such percentage or number or to give any additional Lender
or group of Lenders such right to waive, amend or modify or make any such
determination or grant any such consent;
(x) change or waive any provision of Article IX as the same applies to
any Agent, or any other provision hereof as the same applies to the rights
or obligations of any Agent, in each case without the written consent of
such Agent;
(xi) change or waive any obligation of the Lenders relating to the
issuance of or purchase of participations in Letters of Credit, without the
written consent of the Administrative Agent and the Issuing Bank;
(xii) change or waive any provision hereof relating to Swingline Loans
(including the definition of "Swingline Commitment"), without the written
consent of the Swingline Lender; or
(xiii) change Section 2.14(b), (c) or (d) in a manner that would alter
the pro rata sharing of payments or setoffs required thereby or any other
provision in a manner that would alter the pro rata allocation among the
Lenders of Loan disbursements, including the requirements of Sections
2.02(a), 2.17(d) and 2.18(d), without the written consent of each Lender
directly affected thereby.
(c) Collateral. Without the consent of any other person, the
applicable Loan Party or Parties and the Administrative Agent and/or Collateral
Agent may (in its or their respective sole discretion, or shall, to the extent
required by any Loan Document) enter into any amendment or waiver of any Loan
Document, or enter into any new agreement or instrument, to effect the granting,
perfection, protection, expansion or enhancement of any security interest in any
Collateral or additional property to become Collateral for the benefit of the
Secured Parties, or as required by local law to give effect to, or protect
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any security interest for the benefit of the Secured Parties, in any property or
so that the security interests therein comply with applicable Requirements of
Law.
(d) Dissenting Lenders. If, in connection with any proposed change,
waiver, discharge or termination of the provisions of this Agreement as
contemplated by Section 10.02(b), the consent of the Required Lenders is
obtained but the consent of one or more of such other Lenders whose consent is
required is not obtained, then Borrower shall have the right to replace all, but
not less than all, of such non-consenting Lender or Lenders (so long as all
non-consenting Lenders are so replaced) with one or more persons pursuant to
Section 2.16 so long as at the time of such replacement each such new Lender
consents to the proposed change, waiver, discharge or termination.
SECTION 10.03 EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) Costs and Expenses. Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent, the Collateral
Agent, Citigroup Global Markets Inc., UBS Securities LLC and UBS Loan Finance
LLC (including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent and/or the Collateral Agent) in connection with the
syndication of the credit facilities provided for herein, the preparation,
negotiation, execution and delivery, amendment, waiver or modification
(including proposed amendments, waivers or modifications) of this Agreement and
the other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated or such amendments or modifications
become effective), (ii) all reasonable out-of-pocket expenses incurred by the
Issuing Bank in connection with the issuance, amendment, renewal or extension of
any Letter of Credit or any demand for payment thereunder, (iii) all
out-of-pocket expenses incurred by the Administrative Agent, the Collateral
Agent, any Lender or the Issuing Bank (including the reasonable fees, charges
and disbursements of one counsel (plus any local and/or special regulatory
counsel), unless the interests of the Administrative Agent, the Collateral
Agent, any Lender or the Issuing Bank are sufficiently divergent, and one
third-party workout consultant for the Administrative Agent, the Collateral
Agent, any Lender or the Issuing Bank), in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the other
Loan Documents, including its rights under this Section 10.03, or (B) in
connection with the Loans made or Letters of Credit issued hereunder, including
all such reasonable out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit and
(iv) all documentary and similar taxes and charges in respect of the Loan
Documents.
(b) Indemnification by Borrower. Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), the Collateral Agent (and any
sub-agent thereof), each Lender and the Issuing Bank, and each Related Party of
any of the foregoing persons (each such person being called an "INDEMNITEE"),
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, penalties, liabilities and reasonable related expenses (including the
reasonable fees, charges and disbursements of one counsel (plus any local and/or
special regulatory counsel) for all Indemnitees unless the interests of such
Indemnitees are sufficiently divergent) incurred by any Indemnitee or asserted
against any Indemnitee by any third party or by Borrower or any other Loan Party
arising out of or relating to (i) the execution or delivery of this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations
hereunder or thereunder or the consummation of the transactions contemplated
hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use
of the proceeds therefrom (including any refusal by the Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit),
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(iii) any actual or alleged presence or Release or threatened
Release of Hazardous Materials on, at, under or from any property owned, leased
or operated by any Company at any time, or any Environmental Claim related in
any way to any Company, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by
Borrower or any other Loan Party, and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, penalties,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have been incurred primarily
by reason of the gross negligence or willful misconduct of such Indemnitee or of
such Indemnitee's directors, officers, employees, advisors or agents. No Loan
Party shall be liable for any settlement of any such proceeding effected without
its written consent, but if settled with such consent or if there shall be a
final judgment for the plaintiff, such Loan Party shall indemnify the Indemnitee
from and against any loss or liability by reason of such settlement or judgment,
subject to such Loan Party's rights in this paragraph to claim exemption from
its indemnity obligations. No Loan Party shall, without the prior written
consent of any Indemnitee, effect any settlement of any pending or threatened
proceeding in respect of which such Indemnitee is or could have been a party and
indemnity could have been sought hereunder by such Indemnitee, unless such
settlement (i) includes an unconditional release of such Indemnitee from all
liability or claims that are the subject matter of such proceeding and (ii) does
not include a statement as to or an admission of fault, culpability, or a
failure to act by or on behalf of any Indemnitee.
(c) Reimbursement by Lenders. To the extent that Borrower for any
reason fails to indefeasibly pay any amount required under paragraph (a) or (b)
of this Section 10.03 to be paid by it to the Administrative Agent (or any
sub-agent thereof), the Collateral Agent, the Issuing Bank, the Swingline Lender
or any Related Party of any of the foregoing, each Lender severally agrees to
pay to the Administrative Agent (or any such sub-agent), the Collateral Agent
(or any sub-agent thereof), the Issuing Bank, the Swingline Lender or such
Related Party, as the case may be, such Lender's pro rata share (determined as
of the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent (or any such
sub-agent), the Collateral Agent (or any sub-agent thereof), the Swingline
Lender or the Issuing Bank in its capacity as such, or against any Related Party
of any of the foregoing acting for the Administrative Agent (or any such
sub-agent), the Collateral Agent (or any sub-agent thereof), the Swingline
Lender or Issuing Bank in connection with such capacity. The obligations of the
Lenders under this paragraph (c) are subject to the provisions of Section 2.14.
For purposes hereof, a Lender's "pro rata share" shall be determined based upon
its share of the sum of the total Revolving Exposure and unused Commitments at
the time.
(d) Waiver of Consequential Damages, Etc. To the fullest extent
permitted by applicable Requirements of Law, no party hereto shall assert, and
each party hereto hereby waives, any claim against any other party hereto, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby, the transactions contemplated
hereby or thereby, any Loan or Letter of Credit or the use of the proceeds
thereof. No Indemnitee referred to in paragraph (b) above nor any Company shall
be liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.
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(e) Payments. All amounts due under this Section shall be payable not
later than 10 Business Days after written demand therefor.
SECTION 10.04 SUCCESSORS AND ASSIGNS.
(a) Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the Administrative Agent, the Collateral Agent, the
Issuing Lender, the Swingline Lender and each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
Eligible Assignee in accordance with the provisions of paragraph (b) of this
Section 10.04, (ii) by way of participation in accordance with the provisions of
paragraph (d) of this Section 10.04 or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of paragraph (f) of this Section
(and any other attempted assignment or transfer by Borrower or any Lender shall
be null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in paragraph (d) of this Section and, to the extent expressly
contemplated hereby, the other Indemnitees) any legal or equitable right, remedy
or claim under or by reason of this Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it); provided that
(i) except in the case of (x) any assignment made in connection with
the primary syndication of the Commitment and Loans by either of the
Arrangers, (y) an assignment of the entire remaining amount of the
assigning Lender's Commitment and the Loans at the time owing to it or (z)
an assignment to a Lender or an Affiliate of a Lender or an Approved Fund
with respect to a Lender, the aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) or, if the applicable
Commitment is not then in effect, the principal outstanding balance of the
Loans of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent or, if "Trade Date" is
specified in the Assignment and Assumption, as of the Trade Date) shall not
be less than $5.0 million (treating multiple, contemporaneous assignments
by or to Approved Funds of a single Lender as a single assignment for such
purpose), unless each of the Administrative Agent and, so long as no Event
of Default has occurred and is continuing, Borrower otherwise consent (each
such consent not to be unreasonably withheld or delayed);
(ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
under this Agreement with respect to the Loans or the Commitment assigned;
and
(iii) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500 (treating multiple,
contemporaneous assignments by or to Approved Funds of a single Lender as a
single assignment for such purpose), and the Eligible Assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.
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Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section 10.04, from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 2.12, 2.13, 2.15 and 10.03 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (d) of this Section
10.04.
(c) Register. The Administrative Agent, acting solely for this purpose
as an agent of Borrower, shall maintain at one of its offices in Stamford,
Connecticut a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans and LC Disbursements owing
to, each Lender pursuant to the terms hereof from time to time (the "REGISTER").
The entries in the Register shall be conclusive (absent manifest error), and
Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall treat
each person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by Borrower, the
Issuing Bank, the Collateral Agent, the Swingline Lender and any Lender (with
respect to its own interest only), at any reasonable time and from time to time
upon reasonable prior notice.
(d) Participations. Any Lender may at any time, without the consent
of, or notice to, Borrower, the Administrative Agent, the Issuing Bank or the
Swingline Lender sell participations to any person (other than a natural person
or Borrower or any of Borrower's Affiliates or Subsidiaries) (each, a
"PARTICIPANT") in all or a portion of such Lender's rights and/or obligations
under this Agreement (including all or a portion of its Commitment and/or the
Loans owing to it); provided that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) Borrower, the Administrative Agent and the Lenders and Issuing Bank
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce the Loan Documents and to approve any amendment, modification or waiver
of any provision of the Loan Documents; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in clause
(i), (ii) or (iii) of the first proviso to Section 10.02(b) that affects such
Participant. Subject to paragraph (e) of this Section, Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.12, 2.13 and 2.15
(subject to the requirements of those Sections) to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to paragraph (b)
of this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a Lender; provided
such Participant agrees to be subject to Section 2.14 as though it were a
Lender.
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(e) Limitations on Participant Rights. A Participant shall not be
entitled to receive any greater payment under Sections 2.12, 2.13, 2.15 and
10.04(d) than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with Borrower's prior written consent.
(f) Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto (or
entitle any such pledgee to vote as a Lender). In the case of any Lender that is
a fund that invests in bank loans, such Lender may, without the consent of
Borrower or the Administrative Agent, collaterally assign or pledge all or any
portion of its rights under this Agreement, including the Loans and Notes or any
other instrument evidencing its rights as a Lender under this Agreement, to any
holder of, trustee for, or any other representative of holders of, obligations
owed or securities issued, by such fund, as security for such obligations or
securities.
SECTION 10.05 SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Agents, the
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.12, 2.14, 2.15, 2.18 and Article X shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the replacement of
the Lender, the payment of the Reimbursement Obligations, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof (other than Section 10.12 which shall
solely survive and remain in full force and effect for a period of two years
thereafter).
SECTION 10.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC
EXECUTION.
(a) Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents, and any separate letter agreements with respect to fees payable
to the Administrative Agent, constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopier or Adobe PDF file shall be effective as delivery of a manually
executed counterpart of this Agreement.
(b) Electronic Execution of Assignments. The words "execution,"
"signed," "signature," and words of like import in any Assignment and Assumption
shall be deemed to include electronic
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signatures or the keeping of records in electronic form, each of which shall be
of the same legal effect, validity or enforceability as a manually executed
signature or the use of a paper-based recordkeeping system, as the case may be,
to the extent and as provided for in any applicable Requirement of Law,
including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar
state laws based on the Uniform Electronic Transactions Act.
SECTION 10.07 SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08 RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender, the Issuing Bank, and each of their
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by applicable Requirements of Law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final, in whatever currency) but excluding payroll, tax, withholding, trust and
▇▇▇▇▇ cash accounts at any time held and other obligations (in whatever
currency) at any time owing by such Lender, the Issuing Bank or any such
Affiliate to or for the credit or the account of Borrower or any other Loan
Party against any and all of the obligations of Borrower or such Loan Party now
or hereafter existing under this Agreement or any other Loan Document to such
Lender or the Issuing Bank, irrespective of whether or not such Lender or the
Issuing Bank shall have made any demand under this Agreement or any other Loan
Document and although such obligations of Borrower or such Loan Party may be
unmatured. The rights of each Lender, the Issuing Bank and their respective
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender, the Issuing Bank or their
respective Affiliates may have. Each Lender and the Issuing Bank agrees to
notify Borrower and the Administrative Agent promptly after any such setoff and
application; provided that the failure to give such notice shall not affect the
validity of such setoff and application.
SECTION 10.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS.
(a) Governing Law. This Agreement shall be construed in accordance
with and governed by the law of the State of New York, without regard to
conflicts of law principles that would require the application of the laws of
another jurisdiction.
(b) Submission to Jurisdiction. Each party hereto hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State court or, to the
fullest extent permitted by applicable law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or
any other Loan Document shall affect any right that the Administrative Agent,
the Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any
Loan Party or its properties in the courts of any jurisdiction.
-115-
(c) Waiver of Venue. Each party hereto hereby irrevocably and
unconditionally waives, to the fullest extent permitted by applicable
Requirements of Law, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or any other Loan Document in any court referred to in Section
10.09(b). Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by applicable Requirements of Law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) Service of Process. Each party hereto irrevocably consents to
service of process in any action or proceeding arising out of or relating to any
Loan Document, in the manner provided for notices (other than telecopier) in
Section 10.01; provided that service of process by such means shall be effective
only upon receipt (which may be evidenced by a return receipt). Nothing in this
Agreement or any other Loan Document will affect the right of any party hereto
to serve process in any other manner permitted by applicable Requirements of
Law.
SECTION 10.10 WAIVER OF JURY TRIAL. Each party hereto hereby waives,
to the fullest extent permitted by applicable Requirements of Law, any right it
may have to a trial by jury in any legal proceeding directly or indirectly
arising out of or relating to this Agreement, any other Loan Document or the
transactions contemplated hereby (whether based on contract, tort or any other
theory). Each party hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (b) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications in this Section.
SECTION 10.11 HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.12 TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY. Each
of the Administrative Agent, the Lenders and the Issuing Bank agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its Affiliates and to its and its
Affiliates' respective partners, directors, officers, employees, agents,
advisors and other representatives (it being understood that the persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the NAIC; provided
that to the extent practicable and permitted by applicable Requirements of Law,
the party requested to disclose the Information will provide prompt written
notice of such request to Borrower, will allow Borrower a reasonable opportunity
to seek appropriate protective measures prior to disclosure, and will disclose
the minimum amount of Information required by applicable law), (c) to the extent
required by applicable Requirements of Law or by any subpoena or similar legal
process, (d) to any other party hereto, (e) in connection with the exercise of
any remedies hereunder or under any other Loan Document or any action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section 10.12, to
(i) any assignee of or Participant in, or any bona fide prospective assignee of
or Participant in, any of its rights or obligations under this Agreement, (ii)
any actual or bona fide prospective counterparty (or its advisors) to any swap
or derivative transaction relating to Borrower and its obligations or (iii) any
rating agency for the purpose of obtaining a credit rating applicable to any
Lender, (g) with the prior consent of Borrower or (h) to the extent such
Information (x) becomes publicly available other than as a result of a breach of
this Section or (y) becomes available to the Administrative Agent, any Lender,
the Issuing Bank or any of their respective
-116-
Affiliates on a nonconfidential basis from a source other than Borrower. For
purposes of this Section, "INFORMATION" means all information received from
Borrower or any of its Subsidiaries relating to Borrower or any of its
Subsidiaries or any of their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or the
Issuing Bank on a nonconfidential basis prior to disclosure by Borrower or any
of its Subsidiaries (other than information received from a third party who was
known by the recipient of such information to be in breach of a confidentiality
obligation. Any person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such person has exercised the same degree of care to
maintain the confidentiality of such Information as such person would accord to
its own confidential information, which in any event shall be a commercially
reasonable standard.
SECTION 10.13 USA PATRIOT ACT NOTICE. Each Lender that is subject to
the Act (as hereinafter defined) and the Administrative Agent (for itself and
not on behalf of any Lender) hereby notifies Borrower that pursuant to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "ACT"), it is required to obtain, verify and record
information that identifies Borrower, which information includes the name,
address and tax identification number of Borrower and other information
regarding Borrower that will allow such Lender or the Administrative Agent, as
applicable, to identify Borrower in accordance with the Act. This notice is
given in accordance with the requirements of the Act and is effective as to the
Lenders and the Administrative Agent.
SECTION 10.14 INTEREST RATE LIMITATION. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts that are treated as interest
on such Loan under applicable Requirements of Law or are otherwise subject to
applicable usury laws (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 Loan in accordance with
applicable Requirements of Law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
SECTION 10.15 LENDER ADDENDUM. Each Lender to become a party to this
Agreement on the date hereof shall do so by delivering to the Administrative
Agent a Lender Addendum duly executed by such Lender, Borrower and the
Administrative Agent.
[Signature Pages Follow]
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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.
HEALTHSPRING, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board of Directors,
President and Chief Executive Officer
NEWQUEST, INC.
GULFQUEST, LP
By: TexQuest, L.L.C., its General Partner
HEALTH SPRING EMPLOYER SERVICES, INC.
HEALTHSPRING MANAGEMENT, INC.
HEALTHSPRING USA, LLC
HOUQUEST, L.L.C.
NEWQUEST, LLC
NEWQUEST MANAGEMENT OF ALABAMA, LLC
NEWQUEST MANAGEMENT OF ILLINOIS, LLC
SIGNATURE HEALTH ALLIANCE, INC.
TEXQUEST, L.L.C.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Officer
[Credit Agreement]
UBS SECURITIES LLC, as Joint Lead Arranger
and Joint Bookrunner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
UBS AG, STAMFORD BRANCH, as Issuing Bank,
Administrative Agent and Collateral
Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
By: /s/ Vladimira Holeckova
--------------------------------------
Name: Vladimira Holeckova
Title: Associate Director
UBS LOAN FINANCE LLC, as Swingline Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Associate Director
[Credit Agreement]
CITIGROUP GLOBAL MARKETS INC.
as Joint Lead Arranger and Joint
Bookrunner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
CITICORP USA, INC.
as Syndication Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
BANK OF AMERICA, N.A.
as Documentation Agent
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: SVP
ANNEX I
APPLICABLE MARGIN
REVOLVING LOANS
TOTAL -----------------
LEVERAGE RATIO EURODOLLAR ABR
-------------- ---------- ----
LEVEL I 1.75% 0.75%
--------------
>2.0:1.0
-
LEVEL II 1.50% 0.50%
--------------
<2.0:1.0 BUT
>1.5:1.0
-
LEVEL III 1.25% 0.25%
--------------
<1.5:1.0 BUT
>1.0:1.0
-
LEVEL IV 1.00% 0.00%
--------------
<1.0:1.0
Each change in the Applicable Margin resulting from a change in the
Total Leverage Ratio shall be effective with respect to all Loans and Letters of
Credit outstanding on and after the date of delivery to the Administrative Agent
of the financial statements and certificates required by Section 5.01(a) or (b)
and Section 5.01(d), respectively, indicating such change until the date
immediately preceding the next date of delivery of such financial statements and
certificates indicating another such change. Notwithstanding the foregoing, the
Total Leverage Ratio shall be deemed to be in (i) Level IV from the Closing Date
to the date of delivery to the Administrative Agent of the financial statements
and certificates required by Section 5.01(a) or (b) and Section 5.01(d) for the
first full fiscal period ended after the Closing Date and (ii) Level I at any
time during which Borrower has failed to deliver the financial statements and
certificates required by Section 5.01(a) or (b) and Section 5.01(d),
respectively.
EXHIBIT K-1
FORM OF
REVOLVING NOTE
This Note and the Loan evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained for such
purpose by or on behalf of the undersigned as provided in Section 10.04(c) of
the Credit Agreement (as defined below).
PROMISSORY NOTE
Dated: [___________]
$___________ New York, New York
FOR VALUE RECEIVED, HealthSpring, Inc., a Delaware corporation (the
"Borrower"), hereby promises to pay to the order of [___________] (the
"Lender"), for the account of Lender's applicable lending office provided for by
the Credit Agreement, at the principal office of the Administrative Agent, the
principal sum of [____________] Dollars ($[__________]) (or such lesser amount
as shall equal the aggregate unpaid principal amount of the Revolving Loans made
by the Lender to the Borrower under the Credit Agreement), in lawful money of
the United States of America and in immediately available funds, on the dates
and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Revolving Loan, at such
office, in like money and funds, for the period commencing on the date of such
Revolving Loan until such Revolving Loan shall be paid in full, at the rates per
annum and on the dates provided in the Credit Agreement.
The date, amount, Type, interest rate and duration of Interest Period (if
applicable) of each Revolving Loan made by the Lender to the Borrower, and each
payment made on account of the principal thereof, shall be recorded by the
Lender on its books and, prior to any transfer of this Note, endorsed by the
Lender on the schedule attached hereto or any continuation thereof; provided,
however, that the failure of the Lender to make any such recordation or
endorsement shall not affect the obligation of the Borrower to make a payment
when due of any amount owing under the Credit Agreement or hereunder.
This Note is one of the Revolving Notes referred to in the Credit
Agreement, dated as of April 21, 2006 (as modified and supplemented and in
effect from time to time, the "Credit Agreement"), among HealthSpring, Inc., as
Borrower and the guarantors party thereto, as Guarantors, certain lenders, UBS
Securities LLC, as Joint Lead Arranger and Joint Bookrunner, Citigroup Global
Markets Inc., as Joint Lead Arranger and Joint Bookrunner, Bank of America,
N.A., as Documentation Agent, Citicorp USA, Inc., as Syndication Agent, UBS AG,
Stamford Branch, as Issuing Bank, Administrative Agent and Collateral Agent and
UBS Loan Finance LLC, as Swingline Lender, and evidences Revolving Loans made by
the Lender thereunder.
Terms used but not defined in this Note have the respective meanings assigned to
them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of this
Note upon the occurrence and continuation of certain Events of Default and for
prepayments of Loans upon the terms and conditions specified therein.
Except as permitted by Section 10.04(b) of the Credit Agreement, this Note
may not be assigned by the Lender to any other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF.
[Signature Page Follows]
-2-
HEALTHSPRING, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-3-
SCHEDULE OF REVOLVING LOANS
This Note evidences Revolving Loans made, Continued or Converted under the
within-described Credit Agreement to the Borrower, on the dates, in the
principal amounts, of the Types, bearing interest at the rates and having
Interest Periods (if applicable) of the durations set forth below, subject to
the payments, Continuations, Conversions and prepayments of principal set forth
below:
Date
Made, Amount Paid,
Continued Principal Duration Prepaid, Unpaid
or Amount Type Interest of Interest Continued or Principal Notation
Converted of Loan of Loan Rate Period Converted Amount Made By
--------- --------- ------- -------- ----------- ------------ --------- --------
EXHIBIT K-2
FORM OF
SWINGLINE NOTE
This Note and the Loan evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained for such
purpose by or on behalf of the undersigned as provided in Section 10.04(c) of
the Credit Agreement (as defined below).
PROMISSORY NOTE
Dated:[_____________]
$____________ New York, New York
FOR VALUE RECEIVED, HealthSpring, Inc., a Delaware corporation (the
"Borrower"), hereby promises to pay to the order of [______________] (the
"Lender"), for the account of its applicable lending office provided for by the
Credit Agreement, at the principal office of the Administrative Agent, the
principal sum of [_____________] Dollars ($[______________]) (or such lesser
amount as shall equal the aggregate unpaid principal amount of the Swingline
Loans made by the Lender to the Borrower under the Credit Agreement), in lawful
money of the United States of America and in immediately available funds, on the
dates and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Swingline Loan, at such
office, in like money and funds, for the period commencing on the date of such
Swingline Loan until such Swingline Loan shall be paid in full, at the rates per
annum and on the dates provided in the Credit Agreement.
The date, amount and interest rate of each Swingline Loan made by the
Lender to the Borrower, and each payment made on account of the principal
thereof, shall be recorded by the Lender on its books and, prior to any transfer
of this Note, endorsed by the Lender on the schedule attached hereto or any
continuation thereof; provided, however, that the failure of the Lender to make
any such recordation or endorsement shall not affect the obligations of the
Borrower to make a payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Swingline Loans made by the Lender.
This Note is the Swingline Note referred to in the Credit Agreement, dated
as of April 21, 2006 (as modified and supplemented and in effect from time to
time, the "Credit Agreement"), among HealthSpring, Inc., as Borrower and the
guarantors party thereto, as Guarantors, the lenders party thereto, UBS
Securities LLC, as Joint Lead Arranger and Joint Bookrunner, Citigroup Global
Markets Inc., as Joint Lead Arranger and Joint Bookrunner, Bank of America,
N.A., as Documentation Agent, Citicorp USA, Inc., as Syndication Agent, UBS AG,
Stamford Branch, as Issuing Bank, Administrative Agent and Collateral Agent and
UBS Loan Finance LLC, as Swingline Lender, and evidences the Swingline Loans
made by the Lender thereunder. Terms
used but not defined in this Note have the respective meanings assigned to them
in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of this
Note upon the occurrence and continuation of certain Events of Default and for
prepayments of Loans upon the terms and conditions specified therein.
Except as permitted by Section 10.04(b) of the Credit Agreement, this Note
may not be assigned by the Lender to any other Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF.
[Signature Page Follows]
-2-
HEALTHSPRING, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
-3-
SCHEDULE OF SWINGLINE LOANS
This Note evidences the Swingline Loans made under the within-described
Credit Agreement to the Borrower, on the dates, in the principal amounts, and
bearing interest at the Alternate Base Rate, subject to the payments and
prepayments of principal set forth below:
Principal Unpaid
Date Amount Interest Amount Principal Notation
Made of Loan Rate Paid Amount Made By
---- --------- -------- ------ --------- --------
EXHIBIT M
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
[EXHIBIT M]
TO CREDIT AGREEMENT
================================================================================
SECURITY AGREEMENT
By
HEALTHSPRING, INC.
as Borrower
and
THE GUARANTORS PARTY HERETO
and
UBS AG, STAMFORD BRANCH,
as Collateral Agent
----------
Dated as of April 21, 2006
================================================================================
TABLE OF CONTENTS
Page
----
PREAMBLE................................................................. 1
RECITALS................................................................. 1
AGREEMENT................................................................ 2
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS............................................. 2
SECTION 1.2. INTERPRETATION.......................................... 9
SECTION 1.3. RESOLUTION OF DRAFTING AMBIGUITIES...................... 9
SECTION 1.4. PERFECTION CERTIFICATE.................................. 9
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1. GRANT OF SECURITY INTEREST.............................. 9
SECTION 2.2. FILINGS................................................. 10
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1. DELIVERY OF CERTIFICATED SECURITIES COLLATERAL.......... 11
SECTION 3.2. PERFECTION OF UNCERTIFICATED SECURITIES COLLATERAL...... 12
SECTION 3.3. FINANCING STATEMENTS AND OTHER FILINGS; MAINTENANCE OF
PERFECTED SECURITY INTEREST.......................... 12
SECTION 3.4. OTHER ACTIONS........................................... 12
SECTION 3.5. JOINDER OF ADDITIONAL GUARANTORS........................ 15
SECTION 3.6. SUPPLEMENTS; FURTHER ASSURANCES......................... 15
-i-
Page
----
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 4.1. TITLE................................................... 16
SECTION 4.2. VALIDITY OF SECURITY INTEREST........................... 17
SECTION 4.3. DEFENSE OF CLAIMS; TRANSFERABILITY OF PLEDGED
COLLATERAL.......................................... 17
SECTION 4.4. CHIEF EXECUTIVE OFFICE; CHANGE OF NAME; JURISDICTION OF
ORGANIZATION......................................... 17
SECTION 4.5. LOCATION OF INVENTORY AND EQUIPMENT..................... 17
SECTION 4.6. DUE AUTHORIZATION AND ISSUANCE.......................... 18
SECTION 4.7. CONSENTS, ETC........................................... 18
SECTION 4.8. PLEDGED COLLATERAL...................................... 18
SECTION 4.9. INSURANCE............................................... 18
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1. PLEDGE OF ADDITIONAL SECURITIES COLLATERAL.............. 18
SECTION 5.2. VOTING RIGHTS; DISTRIBUTIONS; ETC....................... 19
SECTION 5.3. DEFAULTS, ETC........................................... 20
SECTION 5.4. CERTAIN AGREEMENTS OF PLEDGORS AS ISSUERS AND HOLDERS OF
EQUITY INTERESTS..................................... 21
ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1. GRANT OF INTELLECTUAL PROPERTY LICENSE.................. 21
SECTION 6.2. PROTECTION OF COLLATERAL AGENT'S SECURITY............... 22
SECTION 6.3. AFTER-ACQUIRED PROPERTY................................. 23
SECTION 6.4. LITIGATION.............................................. 23
ARTICLE VII
CERTAIN PROVISIONS CONCERNING RECEIVABLES
SECTION 7.1. MAINTENANCE OF RECORDS.................................. 24
SECTION 7.2. LEGEND.................................................. 24
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Page
----
ARTICLE VIII
TRANSFERS
SECTION 8.1. TRANSFERS OF PLEDGED COLLATERAL......................... 24
ARTICLE IX
REMEDIES
SECTION 9.1. REMEDIES................................................ 25
SECTION 9.2. NOTICE OF SALE.......................................... 26
SECTION 9.3. WAIVER OF NOTICE AND CLAIMS............................. 27
SECTION 9.4. CERTAIN SALES OF PLEDGED COLLATERAL..................... 27
SECTION 9.5. NO WAIVER; CUMULATIVE REMEDIES.......................... 28
SECTION 9.6. CERTAIN ADDITIONAL ACTIONS REGARDING INTELLECTUAL
PROPERTY............................................. 29
ARTICLE X
[RESERVED]
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. CONCERNING COLLATERAL AGENT............................. 29
SECTION 11.2. COLLATERAL AGENT MAY PERFORM; COLLATERAL AGENT APPOINTED
ATTORNEY-IN-FACT..................................... 30
SECTION 11.3. CONTINUING SECURITY INTEREST; ASSIGNMENT................ 31
SECTION 11.4. TERMINATION; RELEASE.................................... 31
SECTION 11.5. MODIFICATION IN WRITING................................. 32
SECTION 11.6. NOTICES................................................. 32
SECTION 11.7. GOVERNING LAW, CONSENT TO JURISDICTION AND SERVICE OF
PROCESS; WAIVER OF JURY TRIAL........................ 32
SECTION 11.8. SEVERABILITY OF PROVISIONS.............................. 32
SECTION 11.9. EXECUTION IN COUNTERPARTS............................... 32
SECTION 11.10. BUSINESS DAYS........................................... 32
SECTION 11.11. NO CREDIT FOR PAYMENT OF TAXES OR IMPOSITION............ 33
SECTION 11.12. NO CLAIMS AGAINST COLLATERAL AGENT...................... 33
SECTION 11.13. NO RELEASE.............................................. 33
SECTION 11.14. OBLIGATIONS ABSOLUTE.................................... 33
-iii-
Page
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SIGNATURES............................................................... S-1
SCHEDULE 1.01 Acquisition Documents
EXHIBIT 1 Form of Issuer's Acknowledgment
EXHIBIT 2 Form of Securities Pledge Amendment
EXHIBIT 3 Form of Joinder Agreement
EXHIBIT 4 [Reserved]
EXHIBIT 5 [Reserved]
EXHIBIT 6 Form of Copyright Security Agreement
EXHIBIT 7 Form of Patent Security Agreement
EXHIBIT 8 Form of Trademark Security Agreement
-iv-
SECURITY AGREEMENT
This SECURITY AGREEMENT dated as of April 21, 2006 (as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with the provisions hereof, this "Agreement") made by HEALTHSPRING,
INC., a Delaware corporation (the "Borrower") and THE GUARANTORS LISTED ON THE
SIGNATURE PAGES HERETO (the "Original Guarantors") OR FROM TIME TO TIME PARTY
HERETO BY EXECUTION OF A JOINDER AGREEMENT (the "Additional Guarantors," and
together with the Original Guarantors, the "Guarantors"), as pledgors and
debtors (the Borrower, together with the Guarantors, in such capacities and
together with any successors in such capacities, the "Pledgors," and each, a
"Pledgor"), in favor of UBS AG, STAMFORD BRANCH, in its capacity as collateral
agent pursuant to the Credit Agreement (as hereinafter defined), as pledgee,
assignee and secured party (in such capacities and together with any permitted
successors in such capacities, the "Collateral Agent").
RECITALS:
A. The Borrower, the Original Guarantors, the Collateral Agent and the
lending institutions listed therein (the "Lenders") have, in connection with the
execution and delivery of this Agreement, entered into that certain credit
agreement, dated as of April 21, 2006 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Credit Agreement";
which term shall also include and refer to any increase in the amount of
indebtedness under the Credit Agreement and any refinancing or replacement of
the Credit Agreement (whether under a bank facility, securities offering or
otherwise) or one or more successor or replacement facilities whether or not
with a different group of agents or lenders (whether under a bank facility,
securities offering or otherwise) and whether or not with different obligors
upon the Administrative Agent's acknowledgment of the termination of the
predecessor Credit Agreement).
B. Each Guarantor has, pursuant to the Credit Agreement,
unconditionally guaranteed the Secured Obligations.
C. The Borrower and each Guarantor will receive substantial benefits
from the execution, delivery and performance of the obligations under the Credit
Agreement and the other Loan Documents and each is, therefore, willing to enter
into this Agreement.
D. This Agreement is given by each Pledgor in favor of the Collateral
Agent for the benefit of the Secured Parties (as hereinafter defined) to secure
the payment and performance of all of the Secured Obligations.
F. It is a condition to (i) the obligations of the Lenders to make the
Loans under the Credit Agreement, (ii) the obligations of the Issuing Bank to
issue Letters of Credit and (iii) the performance of the obligations of the
Secured Parties under the Hedging Agreements
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related to the Facilities that each Pledgor execute and deliver the applicable
Loan Documents, including this Agreement.
AGREEMENT:
NOW THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor and the Collateral Agent hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions.
(a) Unless otherwise defined herein or in the Credit Agreement,
capitalized terms used herein that are defined in the UCC shall have the
meanings assigned to them in the UCC, including the following that are
capitalized herein:
"Accounts"; "Chattel Paper"; "Commercial Tort Claim"; "Commodity
Account"; "Commodity Contract"; "Documents"; "Electronic Chattel Paper";
"Entitlement Order"; "Equipment"; "Financial Asset"; "Fixtures"; "Goods";
"Inventory"; "Letter-of-Credit Rights"; "Letters of Credit"; "Money"; "Payment
Intangibles"; "Proceeds"; "Records"; "Securities Account"; "Securities
Intermediary"; "Supporting Obligations"; and "Tangible Chattel Paper."
(b) Terms used but not otherwise defined herein that are defined in
the Credit Agreement shall have the meanings given to them in the Credit
Agreement. Sections 1.03 and 1.05 of the Credit Agreement shall apply herein
mutatis mutandis.
(c) The following terms shall have the following meanings:
"Account Debtor" shall mean each person who is obligated on a
Receivable or Supporting Obligation related thereto.
"Acquisition Documents" shall mean the collective reference to the
purchase and exchange agreement dated as of November 10, 2004, as amended, with
the persons named therein as sellers to acquire NewQuest Health Solutions, LLC
and the other documents listed on Schedule 1.01 hereto.
"Acquisition Document Rights" shall mean, with respect to each
Pledgor, collectively, all of such Pledgor's rights, title and interest in, to
and under the Acquisition Documents, including (i) all rights and remedies
relating to monetary damages, including indemnification rights and remedies, and
claims for damages or other relief pursuant to or in respect of the Acquisition
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Documents, (ii) all rights and remedies relating to monetary damages, including
indemnification rights and remedies, and claims for monetary damages under or in
respect of the agreements, documents and instruments referred to in the
Acquisition Documents or related thereto and (iii) all proceeds, collections,
recoveries and rights of subrogation with respect to the foregoing.
"Additional Guarantors" shall have the meaning assigned to such term
in the Preamble hereof.
"Agreement" shall have the meaning assigned to such term in the
Preamble hereof.
"Borrower" shall have the meaning assigned to such term in the
Preamble hereof.
"Collateral Agent" shall have the meaning assigned to such term in the
Preamble hereof.
"Collateral Support" shall mean all property (real or personal)
assigned, hypothecated or otherwise securing any Pledged Collateral and shall
include any security agreement or other agreement granting a lien or security
interest in such real or personal property.
"Contracts" shall mean, collectively, with respect to each Pledgor,
all sale, service, performance, equipment or property lease contracts,
agreements and grants and all other contracts, agreements or grants (in each
case, whether written or oral, or third party or intercompany), between such
Pledgor and any third party, and all assignments, amendments, restatements,
supplements, extensions, renewals, replacements or modifications thereof.
"Control" shall mean (i) in the case of a Deposit Account, "control,"
as such term is defined in Section 9-104 of the UCC, (ii) in the case of a
Security Entitlement, "control," as such term is defined in Section 8-106 of the
UCC, and (iii) in the case of a Commodity Contract, "control," as such term is
defined in Section 9-106 of the UCC.
"Copyrights" shall mean, collectively, with respect to each Pledgor,
all registered copyrights in the United States or any political subdivision
thereof and all U.S. copyright registrations and applications made by such
Pledgor, in each case, whether now owned or hereafter created or acquired by or
assigned to such Pledgor, together with any and all (i) rights and privileges
arising under applicable law with respect to such Pledgor's use of such
copyrights, (ii) reissues, renewals, continuations and extensions thereof and
amendments thereto, (iii) income, fees, royalties, damages, claims and payments
now or hereafter due and/or payable with respect thereto, including damages and
payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to ▇▇▇ for past,
present or future infringements thereof.
"Copyright Security Agreement" shall mean an agreement substantially
in the form annexed hereto as Exhibit 6.
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"Credit Agreement" shall have the meaning assigned to such term in
Recital A hereof.
"Deposit Accounts" shall mean, collectively, with respect to each
Pledgor, all "deposit accounts" as such term is defined in the UCC and in any
event shall include the LC Account and all accounts and sub accounts relating to
any of the foregoing accounts.
"Distributions" shall mean, collectively, with respect to each
Pledgor, all dividends, cash, options, warrants, rights, instruments,
distributions, returns of capital or principal, income, interest, profits and
other property, interests (debt or equity) or proceeds, including as a result of
a split, revision, reclassification or other like change of the Pledged
Securities, from time to time received, receivable or otherwise distributed to
such Pledgor in respect of or in exchange for any or all of the Pledged
Securities or Intercompany Notes.
"Excluded Property" shall mean:
(a) any Contract, permit, lease, license or Letter-of-Credit Rights
held by any Pledgor that validly prohibits the creation by such Pledgor of
a security interest therein or thereon (other than to the extent any such
prohibition will be rendered ineffective pursuant to Sections 9-406, 9-407,
9-408 or 9-409 of the UCC of any relevant jurisdiction or any other
applicable law); and
(b) any Contract, permit, lease, license or letter of credit rights
held by any Pledgor to the extent that any Requirement of Law applicable
thereto prohibits the creation of a security interest therein or thereof
(other than to the extent any such prohibition will be rendered ineffective
pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any
relevant jurisdiction or any other applicable law);
(c) Assets owned by any Pledgor on the date hereof or hereafter
acquired that are subject to a Lien securing a Purchase Money Obligation or
Capital Lease Obligation permitted to be incurred pursuant to the
provisions of the Credit Agreement if the contract or other agreement in
which such Lien is granted (or the documentation providing for such
Purchase Money Obligation or Capital Lease Obligation) prohibits the
creation of any other Lien on such Equipment; and
(d) Any Intellectual Property Collateral, including intent-to-use
trademark applications, for which the creation by a Pledgor of a security
interest therein is prohibited by Requirement of Law or would otherwise
result in the loss by any Loan Party of any material rights therein;
provided, however, that in each case described in clauses (a), (b), (c) and (d)
of this definition (x) such property shall constitute "Excluded Property" only
to the extent and for so long as such Contract permit, lease, license or
Letter-of-Credit Rights or Requirement of Law or contractual obligation
applicable thereto prohibits the creation of a Lien on such property in favor of
the Collateral Agent and, upon the termination of such prohibition (howsoever
occurring), such property
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shall cease to constitute "Excluded Property" and (y) any Proceeds,
substitutions or replacements of any Excluded Property shall not constitute
Excluded Property unless such Proceeds, substitutions or replacements otherwise
would constitute Excluded Property.
"General Intangibles" shall mean, collectively, with respect to each
Pledgor, all "general intangibles," as such term is defined in the UCC, of such
Pledgor and, in any event, shall include (i) all of such Pledgor's rights, title
and interest in, to and under all insurance policies and Contracts, (ii) all
know-how and warranties relating to any of the Pledged Collateral or the
Mortgaged Property, (iii) any and all other rights, claims, choses-in-action and
causes of action of such Pledgor against any other person and the benefits of
any and all collateral or other security given by any other person in connection
therewith, (iv) all guarantees, endorsements and indemnifications on, or of, any
of the Pledged Collateral or any of the Mortgaged Property, (v) all lists,
books, records, correspondence, ledgers, printouts, files (whether in printed
form or stored electronically), tapes and other papers or materials containing
information relating to any of the Pledged Collateral or any of the Mortgaged
Property, including all customer or tenant lists, identification of suppliers,
data, plans, blueprints, specifications, designs, drawings, appraisals, recorded
knowledge, surveys, studies, engineering reports, test reports, manuals,
standards, processing standards, performance standards, catalogs, research data,
computer and automatic machinery software and programs and the like, field
repair data, accounting information pertaining to such Pledgor's operations or
any of the Pledged Collateral or any of the Mortgaged Property and all media in
which or on which any of the information or knowledge or data or records may be
recorded or stored and all computer programs used for the compilation or
printout of such information, knowledge, records or data, (vi) all licenses,
consents, permits, variances, certifications, authorizations and approvals,
however characterized, now or hereafter acquired or held by such Pledgor,
including building permits, certificates of occupancy, environmental
certificates, industrial permits or licenses and certificates of operation and
(vii) all rights to reserves, deferred payments, deposits, refunds,
indemnification of claims and claims for tax or other refunds against any
Governmental Authority.
"Goodwill" shall mean, collectively, with respect to each Pledgor, the
goodwill of such Pledgor connected with such Pledgor's business including all
such goodwill connected with (i) the use of and symbolized by any Trademark or
Trademark Intellectual Property License in which such Pledgor has any interest,
(ii) all know-how, trade secrets, customer and supplier lists, proprietary
information, inventions, methods, procedures, formulae, descriptions,
compositions, technical data, drawings, specifications, name plates, catalogs,
confidential information and the right to limit the use or disclosure thereof by
any person, pricing and cost information, business and marketing plans and
proposals, consulting agreements, engineering contracts and such other assets
that relate to such goodwill and (iii) all product lines of such Pledgor's
business.
"Guarantors" shall have the meaning assigned to such term in the
Preamble hereof.
"Instruments" shall mean, collectively, with respect to each Pledgor,
all "instruments," as such term is defined in Article 9 of the UCC, and shall
include all promissory notes, drafts, bills of exchange or acceptances.
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"Intellectual Property Collateral" shall mean, collectively, the
Patents, Trademarks, Copyrights, Intellectual Property Licenses and Goodwill.
"Intellectual Property Licenses" shall mean, collectively, with
respect to each Pledgor, all license and distribution agreements with, and
covenants not to ▇▇▇, any other party with respect to any Patent, Trademark or
Copyright or any other patent, trademark or copyright, whether such Pledgor is a
licensor or licensee or distributor or distributee under any such license or
distribution agreement, together with any and all (i) renewals, extensions,
supplements and continuations thereof, (ii) income, fees, royalties, damages,
claims and payments now and hereafter due and/or payable thereunder, and with
respect thereto, including damages and payments for past, present or future
infringements or violations thereof, (iii) rights to ▇▇▇ for past, present and
future infringements or violations thereof and (iv) other rights to use, exploit
or practice any or all of the Patents, Trademarks or Copyrights or any other
patent, trademark or copyright.
"Intercompany Notes" shall mean, with respect to each Pledgor, all
intercompany notes described in Schedule 11 annexed to the Perfection
Certificate and intercompany notes hereafter acquired by such Pledgor and all
certificates, instruments or agreements evidencing such intercompany notes, and
all assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof to the extent permitted pursuant to the
terms hereof.
"Investment Property" shall mean a security, whether certificated or
uncertificated, Security Entitlement, Securities Account, Commodity Contract or
Commodity Account, excluding, however, the Securities Collateral.
"Joinder Agreement" shall mean an agreement substantially in the form
annexed hereto as Exhibit 3.
"LC Account" shall mean any account established and maintained in
accordance with the provisions of Section 2.18(c)(1) or 2.18(i) of the Credit
Agreement and all property from time to time on deposit in such LC Account.
"Lenders" shall have the meaning assigned to such term in Recital A
hereof.
"Mortgaged Property" shall have the meaning assigned to such term in
the Mortgages, if any.
"Original Guarantors" shall have the meaning assigned to such term in
the Preamble hereof.
"Patents" shall mean, collectively, with respect to each Pledgor, all
patents issued or assigned to, and all patent applications and registrations
made by, such Pledgor (whether established or registered or recorded in the
United States or any other country or any political subdivision thereof),
together with any and all (i) rights and privileges arising under applicable law
with respect to such Pledgor's use of any patents, (ii) inventions and
improvements described
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and claimed therein, (iii) reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof and amendments thereto, (iv)
income, fees, royalties, damages, claims and payments now or hereafter due
and/or payable thereunder and with respect thereto including damages and
payments for past, present or future infringements thereof, (v) rights
corresponding thereto throughout the world and (vi) rights to ▇▇▇ for past,
present or future infringements thereof.
"Patent Security Agreement" shall mean an agreement substantially in
the form annexed hereto as Exhibit 7.
"Perfection Certificate" shall mean that certain perfection
certificate dated April 21, 2006, executed and delivered by each Pledgor in
favor of the Collateral Agent for the benefit of the Secured Parties, and each
other Perfection Certificate (that shall be in form and substance reasonably
acceptable to the Collateral Agent) executed and delivered by the applicable
Guarantor in favor of the Collateral Agent for the benefit of the Secured
Parties contemporaneously with the execution and delivery of each Joinder
Agreement executed in accordance with Section 3.5 hereof, in each case, as the
same may be amended, amended and restated, supplemented or otherwise modified
from time to time in accordance with the Credit Agreement.
"Pledge Amendment" shall have the meaning assigned to such term in
Section 5.1 hereof.
"Pledged Collateral" shall have the meaning assigned to such term in
Section 2.1 hereof.
"Pledged Securities" shall mean, collectively, with respect to each
Pledgor, (i) all issued and outstanding Equity Interests of each issuer
described in Schedule 10(a) annexed to the Perfection Certificate that are owned
by such Pledgor and all options, warrants, rights, agreements and additional
Equity Interests of whatever class of any such issuer issued to such Pledgor,
together with all rights, privileges, authority and powers of such Pledgor
relating to such Equity Interests in each such issuer or under any
Organizational Document of each such issuer, and the certificates, instruments
and agreements representing such Equity Interests and any and all interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to such Equity Interests, (ii) all Equity Interests of any Subsidiary
hereafter acquired by or issued to such Pledgor and all options, warrants,
rights, agreements and additional Equity Interests of whatever class of any such
Subsidiary issued to such Pledgor, together with all rights, privileges,
authority and powers of such Pledgor relating to such Equity Interests or under
any Organizational Document of any such Subsidiary, and the certificates,
instruments and agreements representing such Equity Interests and any and all
interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such Equity Interests, from time to time acquired by
such Pledgor in any manner, and (iii) all Equity Interests of any successor
Subsidiary owned by such Pledgor (unless such successor is such Pledgor itself)
formed by or resulting from any consolidation or merger in which any person
listed in Schedule 1(a) annexed to the Perfection Certificate is not the
surviving entity; provided, however, that Pledged Securities shall not include
any Equity Interests that are not required to be pledged pursuant to Section
5.11(b) of the Credit Agreement.
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"Pledgor" shall have the meaning assigned to such term in the Preamble
hereof.
"Receivables" shall mean all (i) Accounts, (ii) Chattel Paper, (iii)
Payment Intangibles, (iv) General Intangibles, (v) Instruments and (vi) to the
extent not otherwise covered above, all other rights to payment, whether or not
earned by performance, for goods or other property sold, leased, licensed,
assigned or otherwise disposed of, or services rendered or to be rendered,
regardless of how classified under the UCC together with all of Pledgors'
rights, if any, in any goods or other property giving rise to such right to
payment and all Collateral Support and Supporting Obligations related thereto
and all Records relating thereto.
"Secured Parties" shall mean, collectively, the Administrative Agent,
the Collateral Agent, each other Agent, the Lenders and each party to a Hedging
Agreement relating to the Loans if at the date of entering into such Hedging
Agreement such person was a Lender or an Affiliate of a Lender and such person
executes and delivers to the Administrative Agent a letter agreement in form and
substance reasonably acceptable to the Administrative Agent pursuant to which
such person (i) appoints the Collateral Agent as its agent under the applicable
Loan Documents and (ii) agrees to be bound by the provisions of Section 9.03 of
the Credit Agreement.
"Securities Collateral" shall mean, collectively, the Pledged
Securities, the Intercompany Notes and the Distributions.
"Trademarks" shall mean, collectively, with respect to each Pledgor,
all trademarks (including service marks), slogans, logos, certification marks,
trade dress, corporate names and trade names, whether registered or
unregistered, owned by or assigned to such Pledgor and all registrations and
applications for the foregoing (whether statutory or common law and whether
established or registered in the United States or any other country or any
political subdivision thereof except for "intent to use" applications filed
pursuant to Section 1(b) of the ▇▇▇▇▇▇ Act, unless and until the amendment to
alleged use or a statement of use under Section 1(c) or Section 1(d) of such Act
has been filed), together with any and all (i) rights and privileges arising
under applicable law with respect to such Pledgor's use of any trademarks, (ii)
reissues, continuations, extensions and renewals thereof and amendments thereto,
(iii) income, fees, royalties, damages and payments now and hereafter due and/or
payable thereunder and with respect thereto, including damages, claims and
payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to ▇▇▇ for past,
present and future infringements thereof.
"Trademark Security Agreement" shall mean an agreement substantially
in the form annexed hereto as Exhibit 8.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York; provided, however, that if by reason of mandatory
provisions of law, any or all of the perfection or priority of the Collateral
Agent's and the Secured Parties' security interest in any item or portion of the
Pledged Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term "UCC" shall mean
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the Uniform Commercial Code as in effect on the date hereof in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or priority and for purposes of definitions relating to such provisions.
SECTION 1.2. Interpretation. The rules of interpretation specified in
the Credit Agreement (including Section 1.03 thereof) shall be applicable to
this Agreement.
SECTION 1.3. Resolution of Drafting Ambiguities. Each Pledgor
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (i.e., the Collateral Agent) shall not be employed in the
interpretation hereof.
SECTION 1.4. Perfection Certificate. The Collateral Agent and each
Secured Party agree that the Perfection Certificate and all descriptions of
Pledged Collateral, schedules, amendments and supplements thereto are and shall
at all times remain a part of this Agreement.
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1. Grant of Security Interest. As collateral security for
the payment and performance in full of all the Secured Obligations, each Pledgor
hereby pledges and grants to the Collateral Agent for the benefit of the Secured
Parties, a lien on and security interest in all of the right, title and interest
of such Pledgor in, to and under the following property, wherever located, and
whether now existing or hereafter arising or acquired from time to time
(collectively, the "Pledged Collateral"):
(i) all Accounts;
(ii) all Equipment, Goods, Inventory and Fixtures;
(iii) all Documents, Instruments and Chattel Paper;
(iv) all Letters of Credit;
(v) all Securities Collateral;
(vi) all Investment Property;
(vii) all Intellectual Property Collateral;
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(viii) the Commercial Tort Claims described on Schedule 13 to the
Perfection Certificate;
(ix) all General Intangibles;
(x) all Money and all Deposit Accounts;
(xi) all Acquisition Documents and Acquisition Document Rights;
(xii) all Supporting Obligations (including Letter-of-Credit Rights);
(xiii) all books and records relating to the Pledged Collateral; and
(xiv) all other personal property of such Pledgor, whether tangible or
intangible, and all Proceeds and products of each of the
foregoing and all Accessions to, substitutions and replacements
for, and rents, profits and products of, each of the foregoing,
any and all Proceeds of any insurance, indemnity, warranty or
guaranty payable to such Pledgor from time to time with respect
to any of the foregoing.
Notwithstanding anything to the contrary contained in clauses (i) through (xiv)
above, the security interest created by this Agreement shall not extend to, and
the term "Pledged Collateral" shall not include, any Excluded Property and the
Pledgors shall from time to time at the reasonable request of the Collateral
Agent give written notice to the Collateral Agent identifying in reasonable
detail the Excluded Property. Notwithstanding anything to the contrary contained
herein, in the absence of a court order by a court of competent jurisdiction,
the Collateral Agent shall not have a right (and such right is not being granted
hereunder) to directly collect, direct the transfer of, or otherwise enforce
against Medicare, Medicaid or CHAMPUS any rights to payment owing from Medicare,
Medicaid or CHAMPUS, as the case may be, that are Collateral, if such
collection, direction of transfer or other enforcement would be in violation of
applicable Requirements of Law or would cause a forfeiture of a Pledgor's rights
to payment as a direct result of such collection, direction of transfer or other
enforcement.
SECTION 2.2. Filings. (a) Each Pledgor hereby irrevocably authorizes
the Collateral Agent at any time and from time to time to file in any relevant
jurisdiction any financing statements (including fixture filings) and amendments
thereto that contain the information required by Article 9 of the UCC of each
applicable jurisdiction for the filing of any financing statement or amendment
relating to the Pledged Collateral, including (i) whether such Pledgor is an
organization, the type of organization and any organizational identification
number issued to such Pledgor, (ii) any financing or continuation statements or
other documents without the signature of such Pledgor where permitted by law,
including the filing of a financing statement describing the Pledged Collateral
as "all assets now owned or hereafter acquired by the Pledgor or in which
Pledgor otherwise has rights" and (iii) in the case of a financing statement
filed as a fixture filing or covering Pledged Collateral constituting minerals
or the like to be extracted or timber to be cut, a sufficient description of the
real property to which such Pledged Collateral relates.
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Each Pledgor agrees to provide all information described in the immediately
preceding sentence to the Collateral Agent promptly upon reasonable request by
the Collateral Agent.
(b) Upon prior written notice to the Pledgors, each Pledgor hereby
further authorizes the Collateral Agent to file filings with the United States
Patent and Trademark Office or United States Copyright Office (or any successor
office or any similar office in any other country), including this Agreement,
the Copyright Security Agreement, the Patent Security Agreement and the
Trademark Security Agreement, or other documents for the purpose of perfecting,
confirming, continuing, enforcing or protecting the security interest granted by
such Pledgor hereunder, without the signature of such Pledgor, and naming such
Pledgor, as debtor, and the Collateral Agent, as secured party.
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1. Delivery of Certificated Securities Collateral. Each
Pledgor represents and warrants that all certificates, agreements or instruments
representing or evidencing the Securities Collateral in existence on the date
hereof have been delivered to the Collateral Agent in suitable form for transfer
by delivery or accompanied by duly executed instruments of transfer or
assignment in blank and that the Collateral Agent has a perfected first priority
security interest therein subject only to Permitted Liens. Each Pledgor hereby
agrees that all certificates, agreements or instruments representing or
evidencing Securities Collateral acquired by such Pledgor after the date hereof
shall promptly (and in any event within 10 Business Days) upon receipt thereof
by such Pledgor be delivered to and held by or on behalf of the Collateral Agent
pursuant hereto. All certificated Securities Collateral acquired by such Pledgor
after the date hereof shall be in suitable form for transfer by delivery or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance reasonably satisfactory to the Collateral
Agent. The Collateral Agent shall have the right, at any time upon the
occurrence and during the continuance of any Event of Default, to endorse,
assign or otherwise transfer to or to register in the name of the Collateral
Agent or any of its nominees or endorse for negotiation any or all of the
Securities Collateral, without any indication that such Securities Collateral is
subject to the security interest hereunder; provided, however, following the
cure and/or waiver of any such Event of Default, the Collateral Agent shall
promptly, after written request by the applicable Pledgor, endorse, or otherwise
transfer the Securities Collateral to the applicable Pledgor to the extent not
previously disposed of or transferred as permitted by the terms hereof. In
addition, upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall have the right at any time to exchange certificates
representing or evidencing Securities Collateral for certificates of smaller or
larger denominations.
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SECTION 3.2. Perfection of Uncertificated Securities Collateral. Each
Pledgor represents and warrants that the Collateral Agent has a perfected first
priority security interest, subject to Permitted Liens, in all uncertificated
Pledged Securities pledged by it hereunder that are in existence on the date
hereof. Each Pledgor hereby agrees that if any of the Pledged Securities are at
any time not evidenced by certificates of ownership, then each applicable
Pledgor shall, to the extent permitted by applicable law, (A) cause such Pledged
Securities to be certificated and delivered to the Collateral Agent or (B) (i)
cause the issuer to execute and deliver to the Collateral Agent an
acknowledgment of the pledge of such Pledged Securities substantially in the
form of Exhibit 1 annexed hereto, (ii) if necessary to perfect a first priority
security interest in such Pledged Securities, cause such pledge to be recorded
on the equityholder register or the books of the issuer, execute any customary
pledge forms or other documents necessary to complete the pledge and give the
Collateral Agent the right to transfer such Pledged Securities under the terms
hereof, and (iii) after the occurrence and during the continuance of any Event
of Default, upon request by the Collateral Agent, promptly (A) cause the
Organizational Documents of such issuer that is a Subsidiary to be amended to
provide that such Pledged Securities shall be treated as "securities" for
purposes of the UCC and (B) cause such Pledged Securities to become certificated
and delivered to the Collateral Agent in accordance with the provisions of
Section 3.1.
SECTION 3.3. Financing Statements and Other Filings; Maintenance of
Perfected Security Interest. Each Pledgor represents and warrants that as of the
Closing Date all financing statements, agreements, instruments and other
documents necessary (to the extent such security interest can be perfected by
filing) to perfect the security interest granted by it to the Collateral Agent
in respect of the Pledged Collateral by filing have been delivered to the
Collateral Agent in completed and, to the extent necessary, duly executed form
for filing in each governmental, municipal or other office specified in Schedule
7 annexed to the Perfection Certificate (to the extent required to be listed on
the schedules to the Perfection Certificate as of the date this representation
is made or deemed made). Each Pledgor agrees that at the sole cost and expense
of the Pledgors, such Pledgor will maintain the security interest created by
this Agreement in the Pledged Collateral as a first priority security interest
perfected by filing or, to the extent otherwise expressly required hereunder,
possession or control, subject only to Permitted Liens.
SECTION 3.4. Other Actions. In order to further insure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Collateral Agent's security interest in the Pledged Collateral, each Pledgor
represents and warrants (as to itself) as follows and agrees, in each case at
such Pledgor's own expense, to take the following actions with respect to the
following Pledged Collateral:
(a) Instruments and Tangible Chattel Paper. (i) No amounts payable
under or in connection with any of the Pledged Collateral are evidenced by
any Instrument or Tangible Chattel Paper other than such Instruments and
Tangible Chattel Paper listed in Schedule 11 annexed to the Perfection
Certificate (to the extent required to be listed on the schedules to the
Perfection Certificate as of the date this representation is made or deemed
made) and (ii) each Instrument and each item of Tangible Chattel Paper
individually valued in excess of $250,000 listed in Schedule 11 annexed to
the Perfection
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Certificate has been properly endorsed, assigned and delivered to the
Collateral Agent, accompanied by instruments of transfer or assignment duly
executed in blank. If any amount then payable under or in connection with
any of the Pledged Collateral shall be evidenced by any Instrument or
Tangible Chattel Paper, and such amount, together with all amounts payable
evidenced by any Instrument or Tangible Chattel Paper not previously
delivered to the Collateral Agent exceeds $1,000,000 in the aggregate for
all Pledgors, the Pledgor acquiring such Instrument or Tangible Chattel
Paper shall promptly (and in any event within 10 Business Days) endorse,
assign and deliver the same to the Collateral Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the
Collateral Agent may from time to time reasonably specify; provided that so
long as no Event of Default has occurred and is continuing the Collateral
Agent shall promptly (and in any event within 10 Business Days), after
written request by the applicable Pledgor, return such Instrument or
Tangible Chattel Paper to such Pledgor from time to time, solely to the
extent necessary for collection in the ordinary course of such Pledgor's
business.
(b) Deposit Accounts. As of the date hereof each Pledgee has neither
opened nor maintains any Deposit Accounts other than the accounts listed in
Schedule 14 annexed to the Perfection Certificate. No Pledgor shall grant
Control of any Deposit Account to any person other than the Collateral
Agent.
(c) Investment Property. (i) No Pledgor shall grant Control over any
Investment Property to any person other than the Collateral Agent.
(ii) If any Pledgor shall at any time hold or acquire any certificated
securities constituting Investment Property (other than securities
delivered to a Securities Account) valued individually in excess of
$250,000, such Pledgor shall promptly endorse, assign and deliver the same
to the Collateral Agent, accompanied by such instruments of transfer or
assignment duly executed in blank, all in form and substance reasonably
satisfactory to the Collateral Agent.
(iii) As between the Collateral Agent and the Pledgors, the Pledgors
shall bear the investment risk with respect to the Investment Property and
Pledged Securities, and, subject to Section 11.1(ii) hereof, the risk of
loss of, damage to, or the destruction of the Investment Property and
Pledged Securities, whether in the possession of, or maintained as a
security entitlement or deposit by, or subject to the control of, the
Collateral Agent, a Securities Intermediary, a Commodity Intermediary, any
Pledgor or any other person; provided, however, that nothing contained in
this Section 3.4(c) shall release or relieve any Securities Intermediary or
Commodity Intermediary of its duties and obligations to the Pledgors or any
other person under applicable law.
(d) Electronic Chattel Paper and Transferable Records. No amount under
or in connection with any of the Pledged Collateral is evidenced by any
Electronic Chattel Paper or any "transferable record" (as that term is
defined in Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act, or in Section 16 of the Uniform
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Electronic Transactions Act as in effect in any relevant jurisdiction)
other than such Electronic Chattel Paper and transferable records listed in
Schedule 11 annexed to the Perfection Certificate (to the extent required
to be listed on the schedules to the Perfection Certificate as of the date
this representation is made or deemed made). If any amount payable under or
in connection with any of the Pledged Collateral shall be evidenced by any
Electronic Chattel Paper or any transferable record, the Pledgor acquiring
such Electronic Chattel Paper or transferable record shall promptly notify
the Collateral Agent thereof and shall take such action as the Collateral
Agent may reasonably request to vest in the Collateral Agent control of
such Electronic Chattel Paper under Section 9-105 of the UCC or control
under Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record. The requirement in the preceding sentence shall apply
to the extent that such amount, together with all amounts payable evidenced
by Electronic Chattel Paper or any transferable record in which the
Collateral Agent has not been vested control within the meaning of the
statutes described in the immediately preceding sentence exceeds $1,000,000
in the aggregate for all Pledgors. The Collateral Agent agrees with such
Pledgor that the Collateral Agent will arrange, pursuant to procedures
reasonably satisfactory to the Collateral Agent and so long as such
procedures will not result in the Collateral Agent's loss of control, for
the Pledgor to make alterations to the Electronic Chattel Paper or
transferable record permitted under Section 9-105 of the UCC or, as the
case may be, Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or Section 16 of the Uniform Electronic Transactions
Act for a party in control to allow without loss of control, unless an
Event of Default has occurred and is continuing.
(e) Letter-of-Credit Rights. If any Pledgor is at any time a
beneficiary under a Letter of Credit now or hereafter issued in favor of
such Pledgor, other than a Letter of Credit issued pursuant to the Credit
Agreement, such Pledgor shall promptly notify the Collateral Agent thereof
and such Pledgor shall, at the reasonable request of the Collateral Agent,
pursuant to an agreement in form and substance reasonably satisfactory to
the Collateral Agent, either (i) use commercially reasonable efforts to
arrange for the issuer and any confirmer of such Letter of Credit to
consent to an assignment to the Collateral Agent of the proceeds of any
drawing under the Letter of Credit or (ii) use commercially reasonable
efforts to arrange for the Collateral Agent to become the transferee
beneficiary of such Letter of Credit, with the Collateral Agent agreeing,
in each case, that the proceeds of any drawing under the Letter of Credit
are to be applied as provided in the Credit Agreement. The actions in the
preceding sentence shall be taken to the extent that the amount of such
Letter of Credit, together with all amounts of all other Letters of Credit,
other than any Letter of Credit issued pursuant to the Credit Agreement,
for which the actions described above in clause (i) and (ii) have not been
taken, exceeds $500,000 in the aggregate for all Pledgors.
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(f) Commercial Tort Claims. As of the date hereof each Pledgor hereby
represents and warrants that it holds no Commercial Tort Claims other than
those listed in Schedule 13 annexed to the Perfection Certificate (to the
extent required to be listed on the schedules to the Perfection Certificate
as of the date this representation is made or deemed made). If any Pledgor
shall at any time hold or acquire a Commercial Tort Claim having a value
together with all other Commercial Tort Claims of all Pledgors in which the
Collateral Agent does not have a perfected security interest in excess of
$500,000 in the aggregate, such Pledgor shall immediately notify the
Collateral Agent in writing signed by such Pledgor of the brief details
thereof and grant to the Collateral Agent in such writing a security
interest therein and in the Proceeds thereof, all upon the terms of this
Agreement, with such writing to be in form and substance reasonably
satisfactory to the Collateral Agent.
(g) Landlord's Access Agreements. After the date hereof, each Pledgor
shall use its commercially reasonable efforts to obtain a Landlord Access
Agreement and/or landlord's lien waiver, as applicable, from all such
landlords who from time to time have possession of any Pledged Collateral
valued in excess of $500,000 if reasonably requested by the Collateral
Agent.
(h) Motor Vehicles. Upon the reasonable written request of the
Collateral Agent, each Pledgor shall deliver to the Collateral Agent
originals of the certificates of title or ownership for the motor vehicles
(and any other Equipment covered by Certificates of Title or ownership)
owned by it with the Collateral Agent listed as lienholder therein. Such
requirement shall apply to the Pledgors if any such motor vehicle (or any
such other Equipment) is valued at over $75,000, provided that the
aggregate value of all such motor vehicles (and such Equipment) as to which
any Pledgor has not delivered a Certificate of Title or ownership is over
$500,000.
SECTION 3.5. Joinder of Additional Guarantors. The Pledgors shall
cause each Subsidiary of the Borrower (other than the HMO Subsidiaries) that,
from time to time, after the date hereof shall be required to pledge any assets
to the Collateral Agent for the benefit of the Secured Parties pursuant to the
provisions of the Credit Agreement, (a) to execute and deliver to the Collateral
Agent (i) a Joinder Agreement substantially in the form of Exhibit 3 annexed
hereto within thirty (30) days of the date on which it was acquired or created
and (ii) a Perfection Certificate, in each case, within thirty (30) days of the
date on which it was acquired or created and upon such execution and delivery,
such Subsidiary shall constitute a "Guarantor" and a "Pledgor" for all purposes
hereunder with the same force and effect as if originally named as a Guarantor
and Pledgor herein. The execution and delivery of such Joinder Agreement shall
not require the consent of any Pledgor hereunder. The rights and obligations of
each Pledgor hereunder shall remain in full force and effect notwithstanding the
addition of any new Guarantor and Pledgor as a party to this Agreement.
SECTION 3.6. Supplements; Further Assurances. At the written request
of the Collateral Agent, each Pledgor shall take such further actions, and to
execute and/or deliver to the Collateral Agent such additional financing
statements, amendments, assignments, agree-
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ments, supplements, powers and instruments, as the Collateral Agent may in its
reasonable judgment deem necessary in order to create, perfect, preserve and
protect the security interest in the Pledged Collateral to the extent required
hereby and the rights and interests granted to the Collateral Agent hereunder,
to carry into effect the purposes hereof and confirm unto the Collateral Agent
the Pledged Collateral other than foreign Intellectual Property or permit the
Collateral Agent to exercise and enforce its rights, powers and remedies
hereunder with respect to such Pledged Collateral, including the filing of any
financing statements, continuation statements and other documents other than
foreign Intellectual Property (including this Agreement) under the UCC (or other
similar laws) in effect in any jurisdiction, with respect to the security
interest created hereby, all in form reasonably satisfactory to the Collateral
Agent, and in such offices (including the United States Patent and Trademark
Office and the United States Copyright Office) wherever required by law to
perfect, continue and maintain a valid, enforceable, first priority security
interest in such Pledged Collateral, subject to Permitted Liens, as and to the
extent required hereby, and to preserve the other rights and interests granted
to the Collateral Agent hereunder, as against third parties, with respect to the
Pledged Collateral. Without limiting the generality of the foregoing, each
Pledgor shall make, execute, endorse, acknowledge, file or refile and/or deliver
to the Collateral Agent from time to time upon reasonable request by the
Collateral Agent (which request shall not be made more than once a fiscal
quarter prior to the occurrence and continuance of an Event of Default) such
lists, schedules, descriptions and designations of the Pledged Collateral,
supplements, additional security agreements, financing statements, powers of
attorney, certificates, reports and other assurances or instruments as the
Collateral Agent shall reasonably request. If an Event of Default has occurred
and is continuing, the Collateral Agent may, with prior notice to the Pledgors,
institute and maintain, in its own name or in the name of any Pledgor, such
suits and proceedings as the Collateral Agent may be advised by counsel shall be
necessary to prevent any impairment of the security interest in or the
perfection thereof in the Pledged Collateral. All of the foregoing shall be at
the sole cost and expense of the Pledgors. Notwithstanding anything herein to
the contrary, nothing in this Agreement or any other Loan Document shall require
any Pledgor to enter into any agreements granting Control over Deposit Accounts
or Securities Accounts to, or in favor of, the Collateral Agent.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Pledgor represents, warrants and covenants as follows:
SECTION 4.1. Title. Except for the security interest granted to the
Collateral Agent for the ratable benefit of the Secured Parties pursuant to this
Agreement and Permitted Liens, such Pledgor owns (or has an Intellectual
Property License to, in the case of Intellectual Property Collateral) and has
rights and, as to Pledged Collateral acquired by it from time to time after the
date hereof, will own and have rights in, each item of Pledged Collateral
pledged by it hereunder free and clear of any and all Liens or claims of others
other than Permitted Liens. In
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addition, no Liens or claims exist on the Securities Collateral, other than as
permitted by Section 6.02 of the Credit Agreement.
SECTION 4.2. Validity of Security Interest. The security interest in
and Lien on the Pledged Collateral granted to the Collateral Agent for the
benefit of the Secured Parties hereunder constitutes (a) a legal and valid
security interest in all the Pledged Collateral securing the payment of the
Secured Obligations, and (b) subject to the filings and other actions described
in Schedule 7 annexed to the Perfection Certificate (to the extent required to
be listed on the schedules to the Perfection Certificate as of the date this
representation is made or deemed made), a perfected security interest in all the
Pledged Collateral (to the extent such security interest can be perfected by
such filings and other actions described in Schedule 7 to the Perfection
Certificate), subject to Permitted Liens. The security interest and Lien granted
to the Collateral Agent for the benefit of the Secured Parties pursuant to this
Agreement in and on the Pledged Collateral (other than any Pledged Collateral
that has been released from the Lien created hereunder pursuant to the terms
hereof) will, subject to clause (b) of the immediately preceding sentence, at
all times constitute a perfected, continuing security interest therein, prior to
all other Liens on the Pledged Collateral except for Permitted Liens (except to
the extent that Control is required for perfection).
SECTION 4.3. Defense of Claims; Transferability of Pledged Collateral.
Subject to Section 5.05 of the Credit Agreement, each Pledgor shall, at its own
cost and expense, defend title to the Pledged Collateral pledged by it hereunder
and the security interest therein and Lien thereon granted to the Collateral
Agent and the priority thereof against all claims and demands of all persons, at
its own cost and expense, at any time claiming any interest therein adverse to
the Collateral Agent or any other Secured Party other than Permitted Liens. As
of the date hereof, except as permitted by the Credit Agreement, there is no
valid and enforceable agreement, order, judgment or decree, that would restrict
the transferability of any of the Pledged Collateral or otherwise impair or
conflict with such Pledgor's obligations or the rights of the Collateral Agent
hereunder except as otherwise permitted by the Credit Agreement.
SECTION 4.4. Chief Executive Office; Change of Name; Jurisdiction of
Organization. The Collateral Agent may rely on opinions of counsel as to whether
any or all UCC financing statements of the Pledgors need to be amended as a
result of any of the changes described in Section 5.13(a) of the Credit
Agreement. If any Pledgor fails to provide information to the Collateral Agent
about such changes on a timely basis, the Collateral Agent shall not be liable
or responsible to any party for any failure to maintain a perfected security
interest in such Pledgor's property constituting Pledged Collateral, for which
the Collateral Agent needed to have information relating to such changes. The
Collateral Agent shall have no duty to inquire about such changes if any Pledgor
does not inform the Collateral Agent of such changes, the parties acknowledging
and agreeing that it could not be feasible or practical for the Collateral Agent
to search for information on such changes if such information is not provided by
any Pledgor.
SECTION 4.5. Location of Inventory and Equipment. In no event shall
any Equipment or Inventory be moved to any location outside of the continental
United States or Puerto Rico.
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SECTION 4.6. Due Authorization and Issuance. All of the Pledged
Securities existing on the date hereof have been, and to the extent any Pledged
Securities are hereafter issued, such Pledged Securities will be, upon such
issuance, duly authorized and validly issued, and any Pledged Securities issued
by a corporation are fully paid and non-assessable. There is no amount or other
obligation owing by any Pledgor to any issuer of the Pledged Securities in
exchange for or in connection with the issuance of the Pledged Securities or any
Pledgor's status as a partner or a member of any issuer of the Pledged
Securities.
SECTION 4.7. Consents, etc. Upon the occurrence and during the
continuance of an Event of Default, if the Collateral Agent desires to exercise
any remedies, voting or consensual rights or attorney-in-fact powers set forth
in this Agreement and determines it necessary to obtain any approvals or
consents of any Governmental Authority or any other person therefor, then, upon
the reasonable written request of the Collateral Agent, such Pledgor agrees to
use its commercially reasonable efforts to assist and aid the Collateral Agent
to obtain as soon as commercially practicable any necessary approvals or
consents for the exercise of any such remedies, rights and powers.
SECTION 4.8. Pledged Collateral. All information set forth herein,
including the schedules annexed hereto, and all written information contained in
any documents, schedules and lists heretofore delivered to any Secured Party,
including the Perfection Certificate and the schedules thereto, in connection
with this Agreement, in each case, relating to the Pledged Collateral, is
accurate and complete in all material respects. The Pledged Collateral described
on the schedules annexed to the Perfection Certificate constitutes all of the
property of such types of Pledged Collateral owned or held by the Pledgors (to
the extent required to be described on such Perfection Certificate).
SECTION 4.9. Insurance. In the event that the proceeds of any property
insurance claim with respect to any Pledged Collateral are paid to any Pledgor
after the Collateral Agent has exercised its right to foreclose after the
occurrence and during the continuance of an Event of Default, the Net Cash
Proceeds of such claim shall be held in trust for the benefit of the Collateral
Agent and immediately after receipt thereof shall be paid to the Collateral
Agent for application in accordance with the Credit Agreement.
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1. Pledge of Additional Securities Collateral. Each Pledgor
shall, upon obtaining any Pledged Securities or Intercompany Notes in excess of
$250,000 of any person, accept the same in trust for the benefit of the
Collateral Agent and promptly (but in any event within ten Business Days after
receipt thereof) deliver to the Collateral Agent a pledge amendment, duly
executed by such Pledgor, in substantially the form of Exhibit 2 annexed
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hereto (each, a "Pledge Amendment"), and the certificates and other documents
required under Section 3.1 and Section 3.2 hereof in respect of the additional
Pledged Securities or Intercompany Notes that are to be pledged pursuant to this
Agreement, and confirming the attachment of the Lien hereby created on and in
respect of such additional Pledged Securities or Intercompany Notes. Each
Pledgor hereby authorizes the Collateral Agent to attach each Pledge Amendment
to this Agreement and agrees that all Pledged Securities or Intercompany Notes
listed on any Pledge Amendment delivered to the Collateral Agent shall for all
purposes hereunder be considered Pledged Collateral.
SECTION 5.2. Voting Rights; Distributions; etc.
(i) So long as no Event of Default shall have occurred and be
continuing and the Collateral Agent has not provided written notice of such
Event of Default to the applicable Pledgor and the Collateral Agent's intent to
exercise remedies:
(A) Each Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Securities Collateral or any part
thereof for any purpose not materially inconsistent with the terms hereof,
the Credit Agreement or any other document evidencing the Secured
Obligations; provided, however, that no Pledgor shall in any event exercise
such rights in any manner that could reasonably be expected to have a
Material Adverse Effect.
(B) Each Pledgor shall be entitled to receive and retain, and to
utilize free and clear of the Lien hereof, any and all Distributions, but
only if and to the extent not prohibited by the provisions of the Credit
Agreement; provided, however, that any and all such Distributions
consisting of rights or interests in the form of securities shall be
promptly delivered upon receipt (and in any event within 10 Business Days)
to the Collateral Agent to hold as Pledged Collateral as and to the extent
required hereby and to the same extent shall, if received by any Pledgor,
be received in trust for the benefit of the Collateral Agent, be segregated
from the other property or funds of such Pledgor and be forthwith delivered
to the Collateral Agent as Pledged Collateral in the same form as so
received (with any necessary endorsement).
(ii) So long as no Event of Default shall have occurred and be
continuing and the Collateral Agent has not provided written notice of such
Event of Default to the applicable Pledgor and the Collateral Agent's intent to
exercise remedies, the Collateral Agent shall be deemed without further action
or formality to have granted to each Pledgor all necessary consents relating to
voting rights and shall, if necessary, upon written request of any Pledgor and
at the sole cost and expense of the Pledgors, from time to time execute and
deliver (or cause to be executed and delivered) to such Pledgor all such
instruments as such Pledgor may reasonably request in order to permit such
Pledgor to exercise the voting and other rights that it is entitled to exercise
pursuant to Section 5.2(i)(A) hereof and to receive the Distributions that it is
authorized to receive and retain pursuant to Section 5.2(i)(B) hereof.
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(iii) Upon (i) the occurrence and during the continuance of any Event
of Default and (ii) written notice to the applicable Pledgor of the Collateral
Agent's intent to exercise remedies:
(A) All rights of each Pledgor to exercise the voting and other
consensual rights it would otherwise be entitled to exercise pursuant to
Section 5.2(i)(A) hereof shall immediately cease, and all such rights shall
thereupon become vested in the Collateral Agent, which shall thereupon have
the sole right to exercise such voting and other consensual rights until
the applicable Event of Default is no longer continuing, in which case the
Collateral Agent's rights under this Section 5.2(iii) shall cease to be
effective, subject to re-vesting in the event of a subsequent Event of
Default that is continuing.
(B) All rights of each Pledgor to receive Distributions that it would
otherwise be authorized to receive and retain pursuant to Section 5.2(i)(B)
hereof shall immediately cease and all such rights shall thereupon become
vested in the Collateral Agent, which shall thereupon have the sole right
to receive and hold as Pledged Collateral such Distributions until the
applicable Event of Default is no longer continuing, in which case (i) the
Collateral Agent's rights under this Section 5.2(iii) shall cease to be
effective, subject to re-vesting in the event of a subsequent Event of
Default that is continuing and (ii) promptly after such cure or waiver, the
Collateral Agent shall, upon written request from the applicable Pledgor,
repay and deliver to such Pledgor all cash and monies that such Pledgor is
entitled to retain pursuant to Section 5.2 that was not applied in
repayment of the Secured Obligations.
(iv) Each Pledgor shall, at its sole cost and expense, from time to
time execute and deliver to the Collateral Agent appropriate instruments as the
Collateral Agent may reasonably request in order to permit the Collateral Agent
to exercise the voting and other rights that it may be entitled to exercise
pursuant to Section 5.2(i)(A) hereof and to receive all Distributions that it
may be entitled to receive under Section 5.2(i)(B) hereof.
(v) All Distributions that are received by any Pledgor contrary to the
provisions of Section 5.2(i)(B) hereof shall be received in trust for the
benefit of the Collateral Agent, shall be segregated from other funds of such
Pledgor and shall immediately be paid over to the Collateral Agent as Pledged
Collateral in the same form as so received (with any necessary endorsement).
SECTION 5.3. Defaults, etc. Each Pledgor represents and warrants that
(a) such Pledgor is not in default in the payment of any portion of any
mandatory capital contribution, if any, required to be made under any agreement
to which such Pledgor is a party, relating to the Pledged Securities pledged by
it, that could reasonably be expected to result in a Material Adverse Effect,
and (b) no Securities Collateral pledged by such Pledgor is subject to any
defense, offset or counterclaim, nor have any of the foregoing been asserted or
alleged against such Pledgor by any person with respect thereto, and as of the
date hereof, there are no certificates, instruments, documents or other writings
(other than the Organizational Documents and certificate
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representing such Pledged Securities that have been delivered to the Collateral
Agent) that evidence any Pledged Securities of such Pledgor.
SECTION 5.4. Certain Agreements of Pledgors As Issuers and Holders of
Equity Interests.
(i) In the case of each Pledgor that is an issuer of Securities
Collateral, such Pledgor agrees to be bound by the terms of this Agreement
relating to the Securities Collateral issued by it and will comply with such
terms insofar as such terms are applicable to it.
(ii) In the case of each Pledgor that is a partner, shareholder or
member, as the case may be, in a partnership, limited liability company or other
entity that is an issuer of Pledged Securities, such Pledgor hereby consents to
the extent required by the applicable Organizational Document to the pledge by
each other Pledgor, pursuant to the terms hereof, of the Pledged Securities in
such partnership, limited liability company or other entity and, upon the
occurrence and during the continuance of an Event of Default, to the transfer of
such Pledged Securities to the Collateral Agent or its nominee and to the
substitution of the Collateral Agent or its nominee as a substituted partner,
shareholder or member in such partnership, limited liability company or other
entity with all the rights, powers and duties of a general partner, limited
partner, shareholder or member, as the case may be; provided, however, that upon
any waiver of such Event of Default, the Collateral Agent will transfer such
Pledged Securities back to the respective Pledgor to the extent not previously
disposed of or transferred as permitted hereunder.
ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1. Grant of Intellectual Property License. Solely in
connection with the exercise of remedies under Article IX or under applicable
law by the Collateral Agent to collect, enforce or satisfy the Secured
Obligations at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, to the extent permitted by applicable law and
any restrictions applicable to such Intellectual Property Collateral, each
Pledgor hereby grants to the Collateral Agent an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to the
Pledgors) to use, license or sublicense any of the Pledged Collateral consisting
of Intellectual Property Collateral now owned or hereafter acquired by such
Pledgor, and wherever the same may be located, and including in such license
access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout
thereof, subject, in the case of Trademarks, to (i) sufficient rights to quality
control and inspection in favor of such Pledgor to avoid the risk of
invalidation of said Trademarks, to use, operate under, license, or sublicense
any Intellectual Property Collateral now owned or hereafter acquired by such
Pledgor, and wherever the same may be
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located and (ii) any exclusive licenses granted by any Pledgor in compliance
with the provisions of this Agreement prior to the occurrence of an Event of
Default. The use of such license by the Collateral Agent shall be exercised, at
the option of the Collateral Agent, only upon the occurrence and during the
continuation of an Event of Default; provided, however, that any license,
sublicense or other transaction entered into by the Collateral Agent in
accordance herewith shall be binding upon each Pledgor notwithstanding any
subsequent cure of an Event of Default.
SECTION 6.2. Protection of Collateral Agent's Security. On a
continuing basis, each Pledgor shall, at its sole cost and expense, (i) within a
reasonable time following its becoming aware thereof, notify the Collateral
Agent of any material adverse determination in any proceeding or the institution
of any proceeding in any federal, state or local court or administrative body or
in the United States Patent and Trademark Office or the United States Copyright
Office regarding any of the Intellectual Property Collateral material to the use
and operation of the Pledged Collateral or Mortgaged Property, such Pledgor's
right to register such Intellectual Property Collateral or its right to keep and
maintain such registration in full force and effect, (ii) maintain and protect
the Intellectual Property Collateral material to the use and operation of the
Pledged Collateral or Mortgaged Property as presently used and operated and as
contemplated by the Credit Agreement, in each case, except as shall be
consistent with commercially reasonable business judgment (iii) not permit to
lapse or become abandoned any Intellectual Property Collateral material to the
use and operation of the Pledged Collateral or Mortgaged Property as presently
used and operated and as contemplated by the Credit Agreement, and not settle or
compromise any pending or future litigation or administrative proceeding with
respect to such Intellectual Property Collateral, in each case except as shall
be consistent with each Pledgor's commercially reasonable business judgment,
(iv) upon such Pledgor obtaining actual knowledge thereof, promptly notify the
Collateral Agent in writing of any event that would be reasonably expected to
materially and adversely affect the value or utility of any Intellectual
Property Collateral that is material to the use and operation of the Pledged
Collateral or Mortgaged Property or the rights and remedies of the Collateral
Agent in relation thereto including a levy or threat of levy or any legal
process against any Intellectual Property Collateral that is material to the use
and operation of the Pledged Collateral or Mortgaged Property or the rights and
remedies of the Collateral Agent in relation thereto, (v) not license the
Intellectual Property Collateral other than licenses entered into by such
Pledgor in, or incidental to, the ordinary course of business, or amend or
permit the amendment of any of the licenses in a manner that materially and
adversely affects the right to receive payments thereunder, or in any manner
that would materially and adversely impair the value of the Intellectual
Property Collateral or the Lien on and security interest in the Intellectual
Property Collateral created hereby, without the consent of the Collateral Agent
(which consent shall not be unreasonably withheld or delayed), (vi) diligently
keep adequate records respecting the Intellectual Property Collateral and (vii)
furnish to the Collateral Agent reasonably detailed statements and amended
schedules further identifying and describing the Intellectual Property
Collateral and such other materials evidencing or reports pertaining to the
Intellectual Property Collateral as the Collateral Agent may from time to time
reasonably request.
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SECTION 6.3. After-Acquired Property. If any Pledgor shall at any time
after the date hereof (i) obtain any rights to any additional Intellectual
Property Collateral or (ii) become entitled to the benefit of any additional
Intellectual Property Collateral or any renewal or extension thereof, including
any reissue, division, continuation, or continuation-in-part of any Intellectual
Property Collateral, or any improvement on any Intellectual Property Collateral,
the provisions hereof shall automatically apply thereto and any such item
enumerated in clause (i) or (ii) of this Section 6.3 with respect to such
Pledgor shall automatically constitute Intellectual Property Collateral as if
such would have constituted Intellectual Property Collateral at the time of
execution hereof and be subject to the Lien and security interest created by
this Agreement without further action by any party (excluding any Intellectual
Property Collateral that constitutes Excluded Property herein). Each Pledgor
shall promptly (i) provide to the Collateral Agent written notice of any of the
foregoing and (ii) confirm the attachment of the Lien and security interest
created by this Agreement to any rights described in clauses (i) and (ii) of the
immediately preceding sentence of this Section 6.3 by execution of an instrument
in form reasonably acceptable to the Collateral Agent and the filing of any
instruments or statements as shall be reasonably necessary to create, preserve,
protect or perfect the Collateral Agent's security interest in such Intellectual
Property Collateral to the extent a security interest in such Intellectual
Property Collateral may be perfected under applicable laws. Further, each
Pledgor authorizes, upon 10 days prior notice to such Pledgor, the Collateral
Agent to modify this Agreement by amending Schedules 12(a) and 12(b) annexed to
the Perfection Certificate to include any Intellectual Property Collateral of
such Pledgor acquired or arising after the date hereof.
SECTION 6.4. Litigation. Unless there shall occur and be continuing
any Event of Default, each Pledgor shall have the right, but shall in no way be
obligated, to commence and prosecute in its own name, as the party in interest,
for its own benefit and at the sole cost and expense of the Pledgors, such
applications for protection of the Intellectual Property Collateral and suits,
proceedings or other actions to prevent infringement, counterfeiting, unfair
competition, dilution, diminution in value or other damage as are necessary to,
in its commercially reasonable business judgment, protect the Intellectual
Property Collateral. Upon the occurrence and during the continuance of any Event
of Default, the Collateral Agent shall have the right but shall in no way be
obligated to file applications for protection of the Intellectual Property
Collateral and/or bring suit in the name of any Pledgor, the Collateral Agent or
the Secured Parties to enforce the Intellectual Property Collateral and any
license thereunder. In the event of such suit, each Pledgor shall, at the
reasonable request of the Collateral Agent, do any and all reasonable lawful
acts and execute any and all documents reasonably requested by the Collateral
Agent in aid of such enforcement and the Pledgors shall promptly reimburse upon
written demand and indemnify the Collateral Agent for all reasonable costs and
out-of-pocket expenses incurred by the Collateral Agent in the exercise of its
rights under this Section 6.4 in accordance with Section 10.03 of the Credit
Agreement other than any such costs or expenses determined by a court of
competent jurisdiction by final and non-appealable judgment to have been
incurred primarily by reason of the Collateral Agent's gross negligence or
willful misconduct. In the event that the Collateral Agent shall elect not to
bring suit to enforce the Intellectual Property Collateral, each Pledgor agrees,
at the reasonable request of the Collateral Agent, to take all commercially
reasonable actions necessary, whether by suit, proceeding or other action, to
pre-
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vent the infringement, counterfeiting, unfair competition, dilution, diminution
in value of or other damage to any material portion of the Intellectual Property
Collateral by any Person.
ARTICLE VII
CERTAIN PROVISIONS CONCERNING RECEIVABLES
SECTION 7.1. Maintenance of Records. Each Pledgor shall keep and
maintain at its own cost and expense complete, in all material respects, records
of each material Receivable, in a manner consistent with customary business
practice, including records of all material payments received, all material
credits granted thereon, all material merchandise returned and all other
material documentation relating thereto. Each Pledgor shall, at such Pledgor's
sole cost and expense, upon the Collateral Agent's written demand made at any
time after the occurrence and during the continuance of any Event of Default,
deliver all tangible evidence of Receivables, including all documents evidencing
Receivables and any books and records relating thereto, to the Collateral Agent
or to its representatives (copies of which evidence and books and records may be
retained by such Pledgor). Upon the occurrence and during the continuance of any
Event of Default, the Collateral Agent may transfer a full and complete copy of
any Pledgor's books, records, credit information, reports, memoranda and all
other writings relating to the Receivables to and for the use by any person that
has acquired or is contemplating acquisition of an interest in the Receivables
or the Collateral Agent's security interest therein without the consent of any
Pledgor, it being understood and agreed that all such information constitutes
"Information" under the Credit Agreement and is subject to Section 10.12 of the
Credit Agreement.
SECTION 7.2. Legend. Each Pledgor shall legend, at the reasonable
request of the Collateral Agent following the occurrence and during the
continuance of an Event of Default and in form and manner reasonably
satisfactory to the Collateral Agent, the books, records and documents of such
Pledgor evidencing or pertaining to the Receivables with an appropriate
reference to the fact that the Receivables have been assigned to the Collateral
Agent for the benefit of the Secured Parties and that the Collateral Agent has a
security interest therein.
ARTICLE VIII
TRANSFERS
SECTION 8.1. Transfers of Pledged Collateral. No Pledgor shall sell,
convey, assign or otherwise dispose of, or grant any option with respect to, any
of the Pledged Collateral pledged by it hereunder except as expressly permitted
by the Credit Agreement.
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ARTICLE IX
REMEDIES
SECTION 9.1. Remedies. In accordance with the terms of the Credit
Agreement, upon the occurrence and during the continuance of any Event of
Default the Collateral Agent may from time to time exercise in respect of the
Pledged Collateral, in addition to the other rights and remedies provided for
herein or otherwise available to it, the following remedies, and subject to
Article V hereof:
(i) Personally, or by agents or attorneys, immediately take possession
of the Pledged Collateral or any part thereof, from any Pledgor or any other
person who then has possession of any part thereof, with or without notice or
process of law, and for that purpose may peaceably enter upon any Pledgor's
premises where any of the Pledged Collateral is located, remove such Pledged
Collateral, remain present at such premises to receive copies of all
communications and remittances relating to the Pledged Collateral and use in
connection with such removal and possession any and all services, supplies, aids
and other facilities of any Pledgor;
(ii) Demand, ▇▇▇ for, collect or receive any money or property at any
time payable or receivable in respect of the Pledged Collateral including, after
a two Business Day prior notice, instructing the obligor or obligors on any
agreement, instrument or other obligation constituting part of the Pledged
Collateral to make any payment required by the terms of such agreement,
instrument or other obligation directly to the Collateral Agent, and in
connection with any of the foregoing, compromise, settle, extend the time for
payment and make other modifications with respect thereto; provided, however,
that in the event that any such payments are made directly to any Pledgor, prior
to receipt by any such obligor of such instruction, such Pledgor shall segregate
all amounts received pursuant thereto in trust for the benefit of the Collateral
Agent and shall promptly (but in no event later than five (5) Business Days
after receipt thereof) pay such amounts to the Collateral Agent;
(iii) Sell, assign, grant a license to use or otherwise liquidate, or
direct any Pledgor to sell, assign, grant a license to use or otherwise
liquidate, any and all investments made in whole or in part with the Pledged
Collateral or any part thereof, and take possession of the proceeds of any such
sale, assignment, license or liquidation;
(iv) Take possession of the Pledged Collateral or any part thereof, by
directing any Pledgor in writing to deliver the same to the Collateral Agent at
any place reasonably designated by the Collateral Agent, in which event such
Pledgor shall at its own expense: (A) forthwith cause the same to be moved to
the place so designated by the Collateral Agent and therewith delivered to the
Collateral Agent, (B) store and keep any Pledged Collateral so delivered to the
Collateral Agent at such place pending further action by the Collateral Agent
and (C) while the Pledged Collateral shall be so stored and kept, provide such
security and maintenance services as shall be necessary to protect the same and
to preserve and maintain the same in good condition subject to ordinary wear and
tear or Casualty Event. Each Pledgor's obligation to
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deliver the Pledged Collateral as contemplated in this Section 9.1(iv) is of the
essence hereof. Upon application to a court of equity having jurisdiction, the
Collateral Agent shall be entitled to a decree requiring specific performance by
any Pledgor of such obligation;
(v) Withdraw all moneys, instruments, securities and other property in
any bank, financial securities, deposit or other account of any Pledgor
constituting Pledged Collateral for application to the Secured Obligations as
provided in Article X hereof;
(vi) Subject to Section 5.2, retain and apply the Distributions to the
Secured Obligations as provided in Article X hereof;
(vii) Subject to Section 5.2, exercise any and all rights as
beneficial and legal owner of the Pledged Collateral, including perfecting
assignment of and exercising any and all voting, consensual and other rights and
powers with respect to any Pledged Collateral; and
(viii) Exercise all the rights and remedies of a secured party on
default under the UCC, and the Collateral Agent may also in its reasonable
discretion, without notice except as specified in Section 9.2 hereof or required
by applicable law, sell, assign or grant a license to use the Pledged Collateral
or any part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any of the Collateral Agent's offices or
elsewhere, for cash, on credit or for future delivery, and at such price or
prices and upon such other terms as the Collateral Agent may deem commercially
reasonable. The Collateral Agent or any other Secured Party or any of their
respective Affiliates may be the purchaser, licensee, assignee or recipient of
the Pledged Collateral or any part thereof at any such sale and shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Pledged Collateral sold, assigned
or licensed at such sale, to use and apply any of the Secured Obligations owed
to such person as a credit on account of the purchase price of the Pledged
Collateral or any part thereof payable by such person at such sale. Each
purchaser, assignee, licensee or recipient at any such sale shall acquire the
property sold, assigned or licensed absolutely free from any claim or right on
the part of any Pledgor, and each Pledgor hereby waives, to the fullest extent
permitted by law, all rights of redemption, stay and/or appraisal that it now
has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. The Collateral Agent shall not be obligated to
make any sale of the Pledged Collateral or any part thereof regardless of notice
of sale having been given. The Collateral Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Each Pledgor hereby waives, to the fullest
extent permitted by law, any claims against the Collateral Agent arising by
reason of the fact that the price at which the Pledged Collateral or any part
thereof may have been sold, assigned or licensed at such a private sale was less
than the price that might have been obtained at a public sale, even if the
Collateral Agent accepts the first offer received and does not offer such
Pledged Collateral to more than one offeree.
SECTION 9.2. Notice of Sale. Each Pledgor acknowledges and agrees
that, to the extent notice of sale or other disposition of the Pledged
Collateral or any part thereof shall be
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required by law, ten (10) days' prior notice to such Pledgor of the time and
place of any public sale or of the time after which any private sale or other
intended disposition is to take place shall be commercially reasonable
notification of such matters. No notification need be given to any Pledgor if it
has signed, after the occurrence of an Event of Default, a statement renouncing
or modifying any right to notification of sale or other intended disposition.
SECTION 9.3. Waiver of Notice and Claims. Each Pledgor hereby waives,
to the fullest extent permitted by applicable law, notice or judicial hearing in
connection with the Collateral Agent's taking possession or the Collateral
Agent's disposition of the Pledged Collateral or any part thereof, including any
and all prior notice and hearing for any prejudgment remedy or remedies and any
such right that such Pledgor would otherwise have under law, and each Pledgor
hereby further waives, to the fullest extent permitted by applicable law: (i)
all damages occasioned by such taking of possession in the absence of the
Collateral Agent's gross negligence or willful misconduct, (ii) all other
requirements as to the time, place and terms of sale or other requirements with
respect to the enforcement of the Collateral Agent's rights hereunder and (iii)
all rights of redemption, appraisal, valuation, stay, extension or moratorium
now or hereafter in force under any applicable law. The Collateral Agent shall
not be liable for any incorrect or improper payment made pursuant to this
Article IX in the absence of gross negligence or willful misconduct on the part
of the Collateral Agent. Any sale of, or the grant of options to purchase, or
any other realization upon, any Pledged Collateral shall operate to divest all
right, title, interest, claim and demand, either at law or in equity, of the
applicable Pledgor therein and thereto, and shall be a perpetual bar both at law
and in equity against such Pledgor and against any and all persons claiming or
attempting to claim the Pledged Collateral so sold, optioned or realized upon,
or any part thereof, from, through or under such Pledgor.
SECTION 9.4. Certain Sales of Pledged Collateral.
(i) Each Pledgor recognizes that, by reason of certain prohibitions
contained in law, rules, regulations or orders of any Governmental Authority,
the Collateral Agent may be compelled, with respect to any sale of all or any
part of the Pledged Collateral, to limit purchasers to those who meet the
requirements of such Governmental Authority. Each Pledgor acknowledges that any
such sales may be at prices and on terms less favorable to the Collateral Agent
than those obtainable through a public sale without such restrictions, and,
notwithstanding such circumstances, agrees that any such restricted sale shall
be deemed to have been made in a commercially reasonable manner and that, except
as may be required by applicable law, the Collateral Agent shall have no
obligation to engage in public sales.
(ii) Each Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act, and applicable state securities laws, the
Collateral Agent may be compelled, with respect to any sale of all or any part
of the Securities Collateral and Investment Property, to limit purchasers to
persons who will agree, among other things, to acquire such Securities
Collateral or Investment Property for their own account, for investment and not
with a view to the distribution or resale thereof. Each Pledgor acknowledges
that any such private sales may be at prices and on terms less favorable to the
Collateral Agent than those obtainable through a public sale without such
restrictions (including a public offering made pursuant to a
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registration statement under the Securities Act), and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Collateral Agent shall
have no obligation to engage in public sales and no obligation to delay the sale
of any Securities Collateral or Investment Property for the period of time
necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would agree to do so.
(iii) If the Collateral Agent determines to exercise its right to sell
any or all of the Securities Collateral or Investment Property, upon written
request, the applicable Pledgor shall from time to time furnish to the
Collateral Agent all such information as the Collateral Agent may reasonably
request in order to determine the number of securities included in the
Securities Collateral or Investment Property that may be sold by the Collateral
Agent as exempt transactions under the Securities Act and the rules of the
Securities and Exchange Commission thereunder, as the same are from time to time
in effect.
(iv) Each Pledgor further agrees that a breach of any of the covenants
contained in this Section 9.4 will cause irreparable injury to the Collateral
Agent and the other Secured Parties, that the Collateral Agent and the other
Secured Parties have no adequate remedy at law in respect of such breach and, as
a consequence, that each and every covenant contained in this Section 9.4 shall
be specifically enforceable against such Pledgor, and such Pledgor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred and
is continuing.
SECTION 9.5. No Waiver; Cumulative Remedies.
(i) No failure on the part of the Collateral Agent to exercise, no
course of dealing with respect to, and no delay on the part of the Collateral
Agent in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power, privilege or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power, privilege or remedy; nor
shall the Collateral Agent be required to look first to, enforce or exhaust any
other security, collateral or guaranties. All rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies provided
by law or otherwise available.
(ii) In the event that the Collateral Agent shall have instituted any
proceeding to enforce any right, power, privilege or remedy under this Agreement
or any other Loan Document by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every such
case, the Pledgors, the Collateral Agent and each other Secured Party shall be
restored to their respective former positions and rights hereunder with respect
to the Pledged Collateral, and all rights, remedies, privileges and powers of
the Collateral Agent and the other Secured Parties shall continue as if no such
proceeding had been instituted.
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SECTION 9.6. Certain Additional Actions Regarding Intellectual
Property. If any Event of Default shall have occurred and be continuing, upon
the written demand of the Collateral Agent, each Pledgor shall execute and
deliver to the Collateral Agent an assignment or assignments of the registered
Patents, Trademarks and/or Copyrights and Goodwill and such other documents as
are necessary or appropriate to carry out the intent and purposes hereof.
ARTICLE X
[RESERVED]
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Concerning Collateral Agent.
(i) The Collateral Agent has been appointed as collateral agent
pursuant to the Credit Agreement. The actions of the Collateral Agent hereunder
are subject to the provisions of the Credit Agreement. The Collateral Agent
shall have the right hereunder to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking action
(including the release or substitution of the Pledged Collateral), in accordance
with this Agreement and the Credit Agreement. The Collateral Agent may employ
agents and attorneys-in-fact in connection herewith and shall not be liable for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
it in good faith. The Collateral Agent may resign and a successor Collateral
Agent may be appointed in the manner provided in the Credit Agreement. Upon the
acceptance of any appointment as the Collateral Agent by a successor Collateral
Agent, that successor Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent under this Agreement, and the retiring Collateral Agent shall
thereupon be discharged from its duties and obligations under this Agreement.
After any retiring Collateral Agent's resignation, the provisions hereof shall
inure to its benefit as to any actions taken or omitted to be taken by it under
this Agreement while it was the Collateral Agent.
(ii) The Collateral Agent shall exercise reasonable care in the
custody and preservation of the Pledged Collateral and account for monies
actually received in its possession and accord such Pledged Collateral treatment
substantially equivalent to that which the Collateral Agent, in its individual
capacity, accords its own property consisting of similar instruments or
interests, it being understood that neither the Collateral Agent nor any of the
Secured Parties shall have responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relating to any Securities Collateral, whether or
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not the Collateral Agent or any other Secured Party has or is deemed to have
knowledge of such matters or (ii) taking any necessary steps to preserve rights
against any person with respect to any Pledged Collateral.
(iii) The Collateral Agent shall be entitled to rely upon any written
notice, statement, certificate, order or other document or any telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person, and, with respect to all matters pertaining to this
Agreement and its duties hereunder, upon reasonable advice of counsel selected
by it.
(iv) If any item of Pledged Collateral also constitutes collateral
granted to the Collateral Agent under any other deed of trust, mortgage,
security agreement, pledge or instrument of any type, in the event of any
irreconcilable conflict between the provisions hereof and the provisions of such
other deed of trust, mortgage, security agreement, pledge or instrument of any
type in respect of such collateral, the Collateral Agent, in its sole
discretion, shall select which provision or provisions shall control.
SECTION 11.2. Collateral Agent May Perform; Collateral Agent Appointed
Attorney-in-Fact. Upon the occurrence and during the continuance of an Event of
Default, if any Pledgor shall fail to perform any covenants contained in this
Agreement (including such Pledgor's covenants to (i) pay the premiums in respect
of all required insurance policies hereunder, (ii) pay and discharge any taxes,
assessments and special assessments, levies, fees and governmental charges
imposed upon or assessed against, and landlords', carriers', mechanics',
workmen's, repairmen's, laborers', materialmen's, suppliers' and warehousemen's
Liens and other claims arising by operation of law against, all or any portion
of the Pledged Collateral, (iii) make required repairs, (iv) discharge Liens to
the extent such Liens are not permitted by the Credit Agreement or (v) pay or
perform any obligations of such Pledgor under any Pledged Collateral) or if any
representation or warranty on the part of any Pledgor contained herein shall be
breached in any material respect, the Collateral Agent may (but shall not be
obligated to) do the same or cause it to be done or remedy any such breach, and
may expend funds for such purpose; provided, however, that the Collateral Agent
shall in no event be bound to inquire into the validity of any tax, Lien,
imposition or other obligation that such Pledgor fails to pay or perform as and
when required hereby and that such Pledgor does not contest in accordance with
the provisions of the Credit Agreement. Any and all amounts so expended by the
Collateral Agent shall be paid by the Pledgors in accordance with the provisions
of Section 10.03 of the Credit Agreement. Neither the provisions of this Section
11.2 nor any action taken by the Collateral Agent pursuant to the provisions of
this Section 11.2 shall prevent any such failure to observe any covenant
contained in this Agreement nor any breach of representation or warranty from
constituting an Event of Default. Each Pledgor hereby appoints the Collateral
Agent its attorney-in-fact, upon the occurrence and during the continuation of
an Event of Default, with full power and authority in the place and stead of
such Pledgor and in the name of such Pledgor, or otherwise, from time to time
after the occurrence and during the continuation of an Event of Default in the
Collateral Agent's reasonable discretion to take any action and to execute any
instrument consistent with the terms of the Credit Agreement, this Agreement and
the other Security Documents that the Collateral Agent may deem necessary to
accomplish the purposes hereof (but the Collat-
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eral Agent shall not be obligated to and shall have no liability to such Pledgor
or any third party for failure to so do or take action). The foregoing grant of
authority is a power of attorney coupled with an interest and such appointment
shall be irrevocable for the term hereof.
SECTION 11.3. Continuing Security Interest; Assignment. This Agreement
shall create a continuing security interest in the Pledged Collateral and shall
(i) be binding upon the Pledgors, their respective successors and assigns and
(ii) inure, together with the rights and remedies of the Collateral Agent
hereunder, to the benefit of the Collateral Agent and the other Secured Parties
and each of their respective permitted successors, transferees and assigns. No
other Persons (including any other creditor of any Pledgor) shall have any
interest herein or any right or benefit with respect hereto. Without limiting
the generality of the foregoing clause (ii), any Secured Party may assign or
otherwise transfer any indebtedness held by it secured by this Agreement to any
other person in accordance with the Credit Agreement, and such other person
shall thereupon become vested with all the benefits in respect thereof granted
to such Secured Party, herein or otherwise, subject however, to the provisions
of the Credit Agreement and, in the case of a Secured Party that is a party to a
Hedging Agreement, such Hedging Agreement.
SECTION 11.4. Termination; Release. (a)When all the Secured
Obligations have been paid in full and the Commitments of the Lenders to make
any Loan or to issue any Letter of Credit under the Credit Agreement shall have
expired or been sooner terminated and all Letters of Credit have been terminated
or cash collateralized in accordance with the provisions of the Credit
Agreement, this Agreement shall automatically terminate. Upon termination of
this Agreement the Pledged Collateral shall be automatically released from the
Lien of this Agreement. Upon such release or any release of Pledged Collateral
or any part thereof in accordance with the provisions of the Credit Agreement,
the Collateral Agent shall, upon the request and at the sole cost and expense of
the Pledgors, assign, transfer and deliver to the appropriate Pledgors, without
recourse to or warranty by the Collateral Agent except as to the fact that the
Collateral Agent has not encumbered the released assets, proper documents and
instruments (including UCC-3 termination financing statements, mortgage
releases, Intellectual Property Collateral releases or other releases)
acknowledging the termination hereof or the release of such Pledged Collateral,
as the case may be.
(b) Notwithstanding the foregoing, if (i) the Obligations have been
paid in full and the Commitments of the Lenders to make any Loan or to issue any
Letter of Credit under the Credit Agreement shall have expired or been sooner
terminated and all Letters of Credit have been terminated or cash collateralized
in accordance with the provisions of the Credit Agreement, (ii) Secured
Obligations of the type described in clause (b) of the definition of Secured
Obligations ("Remaining Secured Obligations") remain outstanding and (iii) all
or a portion of the repayment of the Obligations is financed by the proceeds of
Indebtedness of one or more Loan Parties or any affiliate of a Loan Party
("Refinancing Indebtedness") which Refinancing Indebtedness is secured by
property of such persons, this Agreement shall terminate as if the Remaining
Secured Obligations have been paid in full and the provisions of paragraph (a)
of this Section 11.4 shall apply concurrently with the incurrence of the
Refinancing Indebtedness and the securing of the Refinancing Indebtedness and
the Remaining Secured Obligations on an equal
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and ratable basis. For the avoidance of doubt, if the Refinancing Indebtedness
is not secured, this Agreement shall not terminate but shall remain in full
force and effect.
SECTION 11.5. Modification in Writing. No amendment, modification,
supplement, termination or waiver of or to any provision hereof, nor consent to
any departure by any Pledgor therefrom, shall be effective unless the same shall
be made in accordance with the terms of the Credit Agreement and unless in
writing and signed by the Collateral Agent. Any amendment, modification or
supplement of or to any provision hereof, any waiver of any provision hereof and
any consent to any departure by any Pledgor from the terms of any provision
hereof in each case shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically
required by this Agreement or any other document evidencing the Secured
Obligations, no notice to or demand on any Pledgor in any case shall entitle any
Pledgor to any other or further notice or demand in similar or other
circumstances.
SECTION 11.6. Notices. Unless otherwise provided herein or in the
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner and become effective as set forth in
the Credit Agreement, as to any Pledgor, addressed to it at the address of the
Borrower set forth in the Credit Agreement and as to the Collateral Agent,
addressed to it at the address set forth in the Credit Agreement, or in each
case at such other address as shall be designated by such party in a written
notice to the other party complying as to delivery with the terms of this
Section 11.6.
SECTION 11.7. Governing Law, Consent to Jurisdiction and Service of
Process; Waiver of Jury Trial. Sections 10.09 and 10.10 of the Credit Agreement
are incorporated herein, mutatis mutandis, as if a part hereof.
SECTION 11.8. Severability of Provisions. Any provision hereof that is
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity, legality or enforceability of such provision in any
other jurisdiction.
SECTION 11.9. Execution in Counterparts. This Agreement and any
amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
SECTION 11.10. Business Days. In the event any time period or any date
provided in this Agreement ends or falls on a day other than a Business Day,
then such time period shall be deemed to end and such date shall be deemed to
fall on the next succeeding Business Day, and performance herein may be made on
such Business Day, with the same force and effect as if made on such other day.
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SECTION 11.11. No Credit for Payment of Taxes or Imposition. Such
Pledgor shall not be entitled to any credit against the principal, premium, if
any, or interest payable under the Credit Agreement, and such Pledgor shall not
be entitled to any credit against any other sums that may become payable under
the terms thereof or hereof, by reason of the payment of any Tax on the Pledged
Collateral or any part thereof.
SECTION 11.12. No Claims Against Collateral Agent. Nothing contained
in this Agreement shall constitute any consent or request by the Collateral
Agent, express or implied, for the performance of any labor or services or the
furnishing of any materials or other property in respect of the Pledged
Collateral or any part thereof, nor as giving any Pledgor any right, power or
authority to contract for or permit the performance of any labor or services or
the furnishing of any materials or other property in such fashion as would
permit the making of any claim against the Collateral Agent in respect thereof
or any claim that any Lien based on the performance of such labor or services or
the furnishing of any such materials or other property is prior to the Lien
hereof.
SECTION 11.13. No Release. Nothing set forth in this Agreement or any
other Loan Document, nor the exercise by the Collateral Agent of any of the
rights or remedies hereunder, shall relieve any Pledgor from the performance of
any term, covenant, condition or agreement on such Pledgor's part to be
performed or observed under or in respect of any of the Pledged Collateral or
from any liability to any person under or in respect of any of the Pledged
Collateral or shall impose any obligation on the Collateral Agent or any other
Secured Party to perform or observe any such term, covenant, condition or
agreement on such Pledgor's part to be so performed or observed or shall impose
any liability on the Collateral Agent or any other Secured Party for any act or
omission on the part of such Pledgor relating thereto or for any breach of any
representation or warranty on the part of such Pledgor contained in this
Agreement, the Credit Agreement or the other Loan Documents, or under or in
respect of the Pledged Collateral or made in connection herewith or therewith.
Anything herein to the contrary notwithstanding, neither the Collateral Agent
nor any other Secured Party shall have any obligation or liability under any
contracts, agreements and other documents included in the Pledged Collateral by
reason of this Agreement, nor shall the Collateral Agent or any other Secured
Party be obligated to perform any of the obligations or duties of any Pledgor
thereunder or to take any action to collect or enforce any such contract,
agreement or other document included in the Pledged Collateral hereunder. The
obligations of each Pledgor contained in this Section 11.13 shall survive the
termination hereof and the discharge of such Pledgor's other obligations under
this Agreement, the Credit Agreement and the other Loan Documents.
SECTION 11.14. Obligations Absolute. All obligations of each Pledgor
hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any other Pledgor;
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(ii) any lack of validity or enforceability of the Credit Agreement,
any Hedging Agreement or any other Loan Document, or any other agreement or
instrument relating thereto;
(iii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, any Hedging Agreement or any other Loan Document or any other
agreement or instrument relating thereto;
(iv) any pledge, exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Secured Obligations;
(v) any exercise, non-exercise or waiver of any right, remedy, power
or privilege under or in respect hereof, the Credit Agreement, any Hedging
Agreement or any other Loan Document except as specifically set forth in a
waiver granted pursuant to the provisions of Section 11.5 hereof; or
(vi) any other circumstances that might otherwise constitute a defense
available to, or a discharge of, any Pledgor.
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S-1
IN WITNESS WHEREOF, each Pledgor and the Collateral Agent have caused
this Agreement to be duly executed and delivered by their duly authorized
officers as of the date first above written.
HEALTHSPRING, INC.,
as Pledgor
By:
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Name:
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Title:
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NEWQUEST, INC.
GULFQUEST, L.P.
By: TexQuest, L.L.C.,
its General Partner
HEALTHSPRING EMPLOYER SERVICES, INC.
HEALTHSPRING MANAGEMENT, INC.
HEALTHSPRING USA, LLC
HOUQUEST, L.L.C.
NEWQUEST, LLC
NEWQUEST MANAGEMENT OF ALABAMA, LLC
NEWQUEST MANAGEMENT OF ILLINOIS, LLC
SIGNATURE HEALTH ALLIANCE, INC.
TEXQUEST, L.L.C.
By:
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Name:
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Title:
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