EXHIBIT 10.1
EXECUTION COPY
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$450,000,000
CREDIT AGREEMENT
among
COVENTRY HEALTH CARE, INC.,
as Borrower,
The Several Lenders from Time to Time Parties Hereto,
BANK OF AMERICA, N.A.,
LASALLE BANK NATIONAL ASSOCIATION and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Documentation Agents,
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Syndication Agent,
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
Dated as of January 28, 2005
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CIBC WORD MARKETS CORP. and ▇▇▇▇▇▇ BROTHERS,
as Joint Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS................................................1
1.1 Defined Terms...................................................1
1.2 Other Definitional Provisions..................................18
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS...........................18
2.1 Term Commitments...............................................18
2.2 Procedure for Term Loan Borrowing..............................18
2.3 Repayment of Term Loans........................................19
2.4 Revolving Commitments..........................................19
2.5 Procedure for Revolving Loan Borrowing.........................19
2.6 Commitment Fees, etc...........................................20
2.7 Termination or Reduction of Revolving Commitments..............20
2.8 Optional Prepayments...........................................20
2.9 Conversion and Continuation Options............................21
2.10 Limitations on Eurodollar Tranches.............................21
2.11 Interest Rates and Payment Dates...............................21
2.12 Computation of Interest and Fees...............................22
2.13 Inability to Determine Interest Rate...........................22
2.14 Pro Rata Treatment and Payments................................23
2.15 Requirements of Law............................................24
2.16 Taxes..........................................................25
2.17 Indemnity......................................................27
2.18 Change of Lending Office.......................................27
2.19 Replacement of Lenders.........................................27
SECTION 3. LETTERS OF CREDIT.........................................28
3.1 L/C Commitment.................................................28
3.2 Procedure for Issuance of Letter of Credit.....................28
3.3 Fees and Other Charges.........................................29
3.4 L/C Participations.............................................29
3.5 Reimbursement Obligation of the Borrower.......................30
3.6 Obligations Absolute...........................................30
3.7 Letter of Credit Payments......................................30
3.8 Applications...................................................31
SECTION 4. REPRESENTATIONS AND WARRANTIES............................31
4.1 Financial Condition............................................31
4.2 No Change......................................................31
4.3 Existence; Compliance with Law.................................31
4.4 Power; Authorization; Enforceable Obligations..................32
4.5 No Legal Bar...................................................32
4.6 Litigation.....................................................32
4.7 No Default.....................................................33
4.8 Ownership of Property; Liens...................................33
4.9 Intellectual Property..........................................33
4.10 Taxes..........................................................33
4.11 Federal Regulations............................................33
4.12 ERISA..........................................................33
4.13 Investment Company Act; Other Regulations......................34
4.14 Subsidiaries...................................................34
4.15 Use of Proceeds................................................34
4.16 Environmental Matters..........................................34
4.17 Accuracy of Information, etc...................................35
4.18 Certain Documents..............................................35
SECTION 5. CONDITIONS PRECEDENT......................................35
5.1 Conditions to Initial Extension of Credit......................35
5.2 Conditions to Each Extension of Credit.........................36
SECTION 6. AFFIRMATIVE COVENANTS.....................................37
6.1 Financial Statements...........................................37
6.2 Certificates; Other Information................................37
6.3 Payment of Obligations.........................................38
6.4 Maintenance of Existence; Compliance...........................38
6.5 Maintenance of Property; Insurance.............................39
6.6 Inspection of Property; Books and Records; Discussions.........39
6.7 Notices........................................................39
SECTION 7. NEGATIVE COVENANTS........................................40
7.1 Financial Condition Covenants..................................40
7.2 Indebtedness...................................................41
7.3 Liens..........................................................41
7.4 Fundamental Changes............................................43
7.5 Disposition of Property........................................43
7.6 Restricted Payments............................................43
7.7 Investments....................................................44
7.8 Transactions with Affiliates...................................45
7.9 Changes in Fiscal Periods......................................45
7.10 Negative Pledge Clauses........................................45
7.11 Clauses Restricting Subsidiary Distributions...................45
7.12 Lines of Business..............................................45
SECTION 8. EVENTS OF DEFAULT.........................................45
SECTION 9. THE AGENTS................................................48
9.1 Appointment....................................................48
9.2 Delegation of Duties...........................................48
9.3 Exculpatory Provisions.........................................48
9.4 Reliance by Administrative Agent...............................49
9.5 Notice of Default..............................................49
9.6 Non-Reliance on Agents and Other Lenders.......................49
9.7 Indemnification................................................50
9.8 Agent in Its Individual Capacity...............................50
9.9 Successor Administrative Agent.................................50
9.10 Documentation Agents and Syndication Agent.....................51
SECTION 10. MISCELLANEOUS.............................................51
10.1 Amendments and Waivers.........................................51
10.2 Notices........................................................52
10.3 No Waiver; Cumulative Remedies.................................52
10.4 Survival of Representations and Warranties.....................53
10.5 Payment of Expenses and Taxes..................................53
10.6 Successors and Assigns; Participations and Assignments.........53
10.7 Adjustments; Set-off...........................................56
10.8 Counterparts...................................................56
10.9 Severability...................................................56
10.10 Integration....................................................56
10.11 GOVERNING LAW..................................................57
10.12 Submission To Jurisdiction; Waivers............................57
10.13 Acknowledgements...............................................57
10.14 Confidentiality................................................57
10.15 WAIVERS OF JURY TRIAL..........................................58
10.16 Delivery of Addenda............................................58
10.17 USA PATRIOT Act Notice.........................................58
SCHEDULES:
1.1 Existing Letters of Credit
4.4 Consents, Authorizations, Filings and Notices
4.14 Subsidiaries
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
EXHIBITS:
A Form of Compliance Certificate
B Form of Closing Certificate
C Form of Assignment and Assumption
D-1 Form of Legal Opinion of Bass, ▇▇▇▇▇ & ▇▇▇▇ PLC
D-2 Form of Legal Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
E Form of Exemption Certificate
F Form of Addendum
CREDIT AGREEMENT (this "Agreement"), dated as of January 28, 2005,
among COVENTRY HEALTH CARE, INC., a Delaware corporation (the "Borrower"), the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the "Lenders"), BANK OF AMERICA, N.A., LASALLE BANK
NATIONAL ASSOCIATION and WACHOVIA BANK, NATIONAL ASSOCIATION, as documentation
agents (in such capacity, the "Documentation Agents"), ▇▇▇▇▇▇ COMMERCIAL PAPER
INC., as syndication agent (in such capacity, the "Syndication Agent"), and
CANADIAN IMPERIAL BANK OF COMMERCE, as administrative agent.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower has entered into an Agreement and Plan of Merger,
dated as of October 13, 2004 (the "Acquisition Agreement"), with Coventry Merger
Sub Inc., a Delaware corporation that is a wholly owned Subsidiary of the
Borrower ("Merger Sub"), and First Health Group Corp., a Delaware corporation
("First Health"), pursuant to which First Health will be merged with and into
Merger Sub; and
WHEREAS, the Borrower wishes to enter into this Agreement pursuant to
which the Lenders will make available to it (a) term loans in the aggregate
amount of $300,000,000, the proceeds of which will be used (together with the
proceeds from the issuance of the Senior Notes) to (i) pay a portion of the cash
consideration that will be payable to the former shareholders of First Health
pursuant to the Acquisition Agreement and (ii) refinance the Existing First
Health Credit Agreement, and (b) a $150,000,000 revolving credit facility;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.
"ABR": for any day, a rate per annum equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean
the rate of interest per annum publicly announced from time to time by Canadian
Imperial Bank of Commerce as its prime rate in effect at its principal office in
New York City (the Prime Rate not being intended to be the lowest rate of
interest charged by Canadian Imperial Bank of Commerce in connection with
extensions of credit to debtors). Any change in the ABR due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is based
upon the ABR.
"Acquisition": as defined in Section 5.1.
"Acquisition Agreement": as defined in the recitals hereto.
"Acquisition Documentation": collectively, the Acquisition Agreement
and all schedules, exhibits and annexes thereto and all side letters and
agreements affecting the terms thereof or entered into in connection therewith.
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"Addendum": an instrument, substantially in the form of Exhibit F, by
which a Lender becomes a party to this Agreement as of the Closing Date.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": Canadian Imperial Bank of Commerce, together
with its affiliates, as the joint lead arranger of the Commitments and as the
administrative agent for the Lenders under this Agreement and the other Loan
Documents, together with any of its successors in such capacities.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Syndication Agent, the
Documentation Agents and the Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time, an amount
equal to (a) until the Closing Date, the aggregate amount of such Lender's
Commitments at such time and (b) thereafter, the sum of (i) the aggregate then
unpaid principal amount of such Lender's Term Loans and (ii) the amount of such
Lender's Revolving Commitment then in effect or, if the Revolving Commitments
have been terminated, the amount of such Lender's Revolving Extensions of Credit
then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate Exposure
at such time to the Aggregate Exposure of all Lenders at such time.
"Agreement": as defined in the preamble hereto.
"Applicable Margin": for each Type of Loan, the rate per annum
determined pursuant to the Pricing Grid.
"Application": an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to issue a Letter of
Credit.
"Approved Fund": 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.
"Assignment and Assumption": an Assignment and Assumption,
substantially in the form of Exhibit C.
"Available Revolving Commitment": as to any Revolving Lender at any
time, an amount equal to the excess, if any, of (a) such Lender's Revolving
Commitment then in effect over (b) such Lender's Revolving Extensions of Credit
then outstanding.
"Average Life": as of any date of determination, with respect to any
Indebtedness, the quotient obtained by dividing (a) the sum of the product of
the numbers of years (rounded to the nearest one-twelfth of one year) from the
date of determination to the dates of each successive scheduled
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principal payment of such Indebtedness multiplied by the amount of such payment
by (b) the sum of all such payments.
"Benefitted Lender": as defined in Section 10.7(a).
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified by the Borrower as a date
on which the Borrower requests the relevant Lenders to make Loans hereunder.
"Budget": as defined in Section 6.2(b).
"Business": as defined in Section 4.16(b).
"Business Day": a 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, that with respect to notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, such day is
also a day for trading by and between banks in Dollar deposits in the interbank
eurodollar market.
"Capital Expenditures": for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
"Capital Lease Obligations": as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
to the extent such obligations are required to be classified and accounted for
as capital leases on a balance sheet of such Person under GAAP and, for the
purposes of this Agreement, the amount of such obligations at any time shall be
the capitalized amount thereof at such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person other than a corporation and any and
all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by Standard & Poor's Ratings Services or P-1 by ▇▇▇▇▇'▇, or
carrying an equivalent rating by a nationally recognized rating agency, if both
of the two named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within six months from the date of acquisition;
(d) repurchase obligations of any Lender or of any commercial bank satisfying
the requirements of clause (b) of this definition,
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having a term of not more than 30 days, with respect to securities issued or
fully guaranteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by ▇▇▇▇▇'▇; (f)
securities with maturities of six months or less from the date of acquisition
backed by standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition; (g) money market
mutual or similar funds that invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition; or (h) money market
funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the
Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by
▇▇▇▇▇'▇ and (iii) have portfolio assets of at least $5,000,000,000.
"Closing Date": the date on which the conditions precedent set forth in
Section 5.1 shall have been satisfied, which date is January 28, 2005.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment": as to any Lender, the sum of the Term Commitment and the
Revolving Commitment of such Lender.
"Commitment Fee Rate": as set forth in the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not incorporated,
that is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group that includes the Borrower and that is
treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit A.
"Conduit Lender": any special purpose corporation organized and
administered by any Lender for the purpose of making Loans otherwise required to
be made by such Lender and designated by such Lender in a written instrument;
provided, that the designation by any Lender of a Conduit Lender shall not
relieve the designating Lender of any of its obligations to fund a Loan under
this Agreement if, for any reason, its Conduit Lender fails to fund any such
Loan, and the designating Lender (and not the Conduit Lender) shall have the
sole right and responsibility to deliver all consents and waivers required or
requested under this Agreement with respect to its Conduit Lender, and provided,
further, that no Conduit Lender shall (a) be entitled to receive any greater
amount pursuant to Section 2.15, 2.16, 2.17 or 10.5 than the designating Lender
would have been entitled to receive in respect of the extensions of credit made
by such Conduit Lender or (b) be deemed to have any Commitment.
"Confidential Information Memorandum": the Confidential Information
Memorandum dated December 2004 and furnished to prospective Lenders.
"Consolidated EBITDA": for any period, Consolidated Net Income for such
period plus, without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of (a) income
tax expense, (b) interest expense, amortization or writeoff of debt discount and
debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs and (e) any extraordinary or
non-recurring expenses or losses (including, whether or not otherwise includable
as a
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separate item in the statement of such Consolidated Net Income for such period,
losses on sales of assets outside of the ordinary course of business), and
minus, to the extent included in the statement of such Consolidated Net Income
for such period, the sum of (i) any extraordinary or non-recurring income or
gains (including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, gains on the sales of
assets outside of the ordinary course of business) and (ii) all non-cash items
increasing Consolidated Net Income for such period (other than any such non-cash
item to the extent that it will result in the receipt of cash payments in any
future period). For the purposes of calculating Consolidated EBITDA for any
period of four consecutive fiscal quarters (each, a "Reference Period") with
respect to any determination of the Consolidated Leverage Ratio, (i) if at any
time during such Reference Period the Borrower or any Subsidiary shall have made
any Material Disposition, the Consolidated EBITDA for such Reference Period
shall be reduced by an amount equal to the Consolidated EBITDA (if positive)
attributable to the property that is the subject of such Material Disposition
for such Reference Period or increased by an amount equal to the Consolidated
EBITDA (if negative) attributable thereto for such Reference Period and (ii) if
during such Reference Period the Borrower or any Subsidiary shall have made a
Material Acquisition, Consolidated EBITDA for such Reference Period shall be
calculated after giving pro forma effect thereto as if such Material Acquisition
occurred on the first day of such Reference Period. As used in this definition,
"Material Acquisition" means any acquisition of property or series of related
acquisitions of property (including the Acquisition) that (a) constitutes assets
comprising all or substantially all of an operating unit of a business or
results in a Person becoming a Subsidiary and (b) involves the payment of
consideration by the Borrower and its Subsidiaries in excess of $25,000,000; and
"Material Disposition" means any Disposition of property or series of related
Dispositions of property that yields gross proceeds to the Borrower or any of
its Subsidiaries in excess of $25,000,000.
"Consolidated EBITDAR": for any period, Consolidated EBITDA for such
period plus, without duplication and to the extent reflected as a charge in the
statement of Consolidated Net Income for such period, Consolidated Rental
Expense.
"Consolidated Fixed Charge Coverage Ratio": for any period, the ratio
of (a) Consolidated EBITDAR for such period less the aggregate amount actually
paid by the Borrower and its Subsidiaries during such period on account of (i)
Capital Expenditures (excluding an amount equal to the principal amount of
Indebtedness (other than any Loans) incurred in connection with such
expenditures) and (ii) taxes to (b) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b)
Consolidated Rental Expense for such period, (c) scheduled payments made during
such period on account of principal of Indebtedness of the Borrower or any of
its Subsidiaries (including scheduled principal payments in respect of the Term
Loans) and (d) Restricted Payments made during such period pursuant to Section
7.6(b).
"Consolidated Interest Expense": for any period, total cash interest
expense (including that attributable to Capital Lease Obligations) of the
Borrower and its Subsidiaries for such period with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries (including all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs under Swap Agreements in respect of
interest rates to the extent such net costs are allocable to such period in
accordance with GAAP).
"Consolidated Leverage Ratio": as at the last day of any period, the
ratio of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA for
such period.
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"Consolidated Net Income": for any period, the consolidated net income
(or loss) of the Borrower and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded (a) the
income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of the Borrower or is merged into or consolidated with the Borrower
or any of its Subsidiaries, (b) the income (or deficit) of any Person (other
than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or other distributions and (c) the undistributed earnings of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or (other than in the case of any such Subsidiary that is an HMO
Subsidiary or an Insurance Subsidiary) Requirement of Law applicable to such
Subsidiary.
"Consolidated Net Worth": at any date, all amounts that would, in
conformity with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under stockholders' or owners' equity at such
date.
"Consolidated Total Assets": at any date, all amounts that would, in
conformity with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under total assets at such date.
"Consolidated Rental Expense": for any period, the aggregate amount of
fixed and contingent rentals payable by the Borrower and its Subsidiaries for
such period with respect to leases of real property, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Total Debt": at any date, the aggregate principal amount
of all Indebtedness of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.
"Continuing Directors": the directors of the Borrower on the Closing
Date, after giving effect to the Acquisition and the other transactions
contemplated hereby, and each other director, if, in each case, such other
director's nomination for election to the board of directors of the Borrower is
recommended by at least a majority of the then Continuing Directors in his or
her election by the shareholders of the Borrower.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Default": any of the events specified in Section 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Disposition": with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof. The
terms "Dispose" and "Disposed of" shall have correlative meanings.
"Documentation Agents": as defined in the preamble hereto.
"Dollars" and "$": dollars in lawful currency of the United States.
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"Domestic Subsidiary": any Subsidiary of the Borrower organized under
the laws of any jurisdiction within the United States.
"Eligible Assignee": (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other Person (other than a natural person) approved
by (i) the Administrative Agent, (ii) in the case of any assignment of a
Revolving Commitment, the Issuing Lender, and (iii) unless an Event of Default
has occurred and is continuing, the Borrower (each such approval not to be
unreasonably withheld or delayed); provided that notwithstanding the foregoing,
"Eligible Assignee" shall not include the Borrower or any of the Borrower's
Affiliates or Subsidiaries.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves) under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on Page
3750 of the Telerate screen as of 11:00 A.M., London time, two Business Days
prior to the beginning of such Interest Period. In the event that such rate does
not appear on Page 3750 of the Telerate screen (or otherwise on such screen),
the "Eurodollar Base Rate" shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent or, in the absence of such availability, by
reference to the rate at which the Administrative Agent is offered Dollar
deposits at or about 11:00 A.M., New York City time, two Business Days prior to
the beginning of such Interest Period in the interbank eurodollar market where
its eurodollar and foreign currency and exchange operations are then being
conducted for delivery on the first day of such Interest Period for the number
of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
-------------------------------------------------
1.00 - Eurocurrency Reserve Requirements
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"Eurodollar Tranche": the collective reference to Eurodollar Loans
under a particular Facility the then current Interest Periods with respect to
all of which begin on the same date and end on the same later date (whether or
not such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8, provided
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Excess Investments": as defined in Section 7.7(i).
"Existing First Health Credit Agreement": the Credit Agreement, dated
as of April 23, 2002, among First Health, certain of its subsidiaries, Bank of
America, N.A., as administrative agent, and the other lenders and agents party
thereto.
"Existing Issuing Lender": Bank of America, N.A., as issuer of the
Existing Letters of Credit.
"Existing Letters of Credit": the letters of credit described in
Schedule 1.1.
"Facility": each of (a) the Term Commitments and the Term Loans made
thereunder (the "Term Facility") and (b) the Revolving Commitments and the
extensions of credit made thereunder (the "Revolving Facility").
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System 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 of such transactions received by Canadian Imperial Bank
of Commerce from three federal funds brokers of recognized standing selected by
it.
"Fee Payment Date": (a) the last day of each March, June, September and
December and (b) the last day of the Revolving Commitment Period.
"First Health": as defined in the recitals hereto.
"Foreign Subsidiary": any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"Funding Office": the office of the Administrative Agent specified in
Section 10.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.
"GAAP": generally accepted accounting principles in the United States
as in effect from time to time, except that for purposes of Section 7.1, GAAP
shall be determined on the basis of such principles in effect on the date hereof
and consistent with those used in the preparation of the most recent audited
financial statements referred to in Section 4.1(b). 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 the Borrower and the Administrative Agent agree to enter
into negotiations in order to amend such provisions of this Agreement so as to
reflect equitably such Accounting Changes with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this
9
Agreement shall continue to be calculated or construed as if such Accounting
Changes had not occurred. "Accounting Changes" refers to changes in accounting
principles required by the promulgation of any rule, regulation, pronouncement
or opinion by the Financial Accounting Standards Board of the American Institute
of Certified Public Accountants or, if applicable, the SEC.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"Group Members": the collective reference to the Borrower and its
Subsidiaries.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation, including a reimbursement, counterindemnity or similar
obligation, of the guaranteeing person that guarantees or in effect guarantees,
or which is given to induce the creation of a separate obligation by another
Person (including any bank under any letter of credit) that guarantees or in
effect guarantees, any Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"HIPAA": collectively, the Health Insurance Portability and
Accountability Act of 1996, as amended, and any successor statute thereto, as
interpreted by the rules and regulations thereunder, all as the same may be in
effect from time to time. References to sections of HIPAA shall be construed
also to refer to any successor sections.
"HMO": any Person licensed as a health maintenance organization or
similar organization by a Governmental Authority having jurisdiction over such
Person.
"HMO Regulations": all Requirements of Law applicable to any HMO
Subsidiary (other than provisions of the organizational or governing documents
of such HMO Subsidiary) under federal or state law and any regulations, orders
and directives promulgated or issued pursuant to the foregoing, including
regulations regarding total statutory capital levels.
"HMO Regulator": any Governmental Authority charged with
administration, oversight or enforcement of an HMO Regulation, whether
primarily, secondarily or jointly.
10
"HMO Subsidiary": any Subsidiary of the Borrower that is an HMO.
"Indebtedness": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person's
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) the liquidation value of all
mandatorily redeemable preferred Capital Stock of such Person, (h) all Guarantee
Obligations of such Person in respect of obligations of the kind referred to in
clauses (a) through (g) above, (i) all obligations of the kind referred to in
clauses (a) through (h) above secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be secured by) any
Lien on property (including accounts and contract rights) owned by such Person,
whether or not such Person has assumed or become liable for the payment of such
obligation, and (j) for the purposes of Section 8(e) only, all obligations of
such Person in respect of Swap Agreements. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness expressly
provide that such Person is not liable therefor.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Insurance Regulations": all Requirements of Law applicable to any
Insurance Subsidiary (other than provisions of the organizational or governing
documents of such Insurance Subsidiary) under federal or state law and any
regulations, orders and directives promulgated or issued pursuant to the
foregoing, including regulations regarding total statutory capital levels.
"Insurance Regulator": any Governmental Authority charged with the
administration, oversight or enforcement of an Insurance Regulation, whether
primarily, secondarily or jointly.
"Insurance Subsidiary": any Subsidiary of the Borrower that is doing
business or is licensed under Insurance Regulations to offer and sell indemnity
health and life insurance (or required to so qualify or to be so licensed).
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to ▇▇▇ at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any ABR Loan, the last day of each
March, June, September and December to occur while such Loan is outstanding and
the final maturity date of such Loan, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last day of such Interest Period,
(c) as to any Eurodollar Loan having an Interest Period longer than three
months, each
11
day that is three months, or a whole multiple thereof, after the first day of
such Interest Period and the last day of such Interest Period and (d) as to any
Loan (other than any Revolving Loan that is an ABR Loan), the date of any
repayment or prepayment made in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower by irrevocable notice to the Administrative Agent not
later than 11:00 A.M., New York City time, on the date that is three Business
Days prior to the last day of the then current Interest Period with respect
thereto; provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) the Borrower may not select an Interest Period under a
particular Facility that would extend beyond the Revolving Termination
Date or beyond the date final payment is due on the Term Loans;
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"Investments": as defined in Section 7.7.
"Issuing Lender": (a) with respect to the Existing Letters of Credit
only, the Existing Issuing Lender and (b) with respect to all other Letters of
Credit, Canadian Imperial Bank of Commerce, any affiliate thereof or any other
Lender designated by the Borrower and acceptable to the Administrative Agent, in
its capacity as issuer of any Letter of Credit.
"L/C Commitment": $40,000,000.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit that
have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": the collective reference to all the Revolving
Lenders other than the Issuing Lender.
"Lenders": as defined in the preamble hereto; provided, that unless the
context otherwise requires, each reference herein to the Lenders shall be deemed
to include any Conduit Lender.
"Letters of Credit": as defined in Section 3.1(a).
12
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
"Loan Documents": this Agreement, the Notes and any amendment, waiver,
supplement or other modification to any of the foregoing.
"Majority Facility Lenders": with respect to any Facility, the holders
of more than 50% of the aggregate unpaid principal amount of the Term Loans or
the Total Revolving Extensions of Credit, as the case may be, outstanding under
such Facility (or, in the case of the Revolving Facility, prior to any
termination of the Revolving Commitments, the holders of more than 50% of the
Total Revolving Commitments).
"Material Adverse Effect": a material adverse effect on (a) the assets,
liabilities, business, financial condition or results of operations of the
Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"Material HMO Subsidiary": any HMO Subsidiary that is also a Material
Subsidiary.
"Material Insurance Subsidiary": any Insurance Subsidiary that is also
a Material Subsidiary.
"Material Subsidiary": at any time, a Subsidiary of the Borrower having
(a) assets in an amount equal to at least 5% of the amount of total consolidated
assets of the Borrower and its Subsidiaries as of the last day of the most
recent fiscal quarter of the Borrower for which financial statements of the
Borrower have been furnished pursuant to Section 4.1 or 6.1 or (b) revenues in
an amount equal to at least 5% of the amount of total consolidated revenues of
the Borrower and its Subsidiaries for the twelve-month period ending on such
day.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.
"Medicaid Regulations": collectively, (a) all federal statutes (whether
set forth in Title XIX of the Social Security Act or elsewhere) affecting the
medical assistance program established thereby; (b) all applicable provisions of
all federal rules promulgated pursuant to or in connection with the statutes
described in clause (a) above and all federal administrative, reimbursement and
other guidelines of all Governmental Authorities having the force of law
promulgated pursuant to or in connection with the statutes described in 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 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.
13
"Merger Sub": as defined in the recitals hereto.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc. or any successor thereto.
"Multiemployer Plan": a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Non-Excluded Taxes": as defined in Section 2.16(a).
"Non-U.S. Lender": as defined in Section 2.16(d).
"Notes": the collective reference to any promissory note evidencing
Loans.
"Obligations": the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and Reimbursement Obligations
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender (or, in
the case of Specified Swap Agreements, any affiliate of any Lender), whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, the Letters of Credit, any
Specified Swap Agreement or any other document made, delivered or given in
connection herewith or therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including all
fees, charges and disbursements of counsel to the Administrative Agent or to any
Lender that are required to be paid by the Borrower pursuant hereto) or
otherwise.
"Other Taxes": any and 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 from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Loan Document.
"Participant": as defined in Section 10.6(d).
"Patriot Act": as defined in Section 10.17.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Refinancing Indebtedness": any Indebtedness that Refinances
any other Indebtedness, including any successive Refinancings, so long as (i)
such Indebtedness is in an aggregate principal amount (or if incurred with
original issue discount, an aggregate issue price) not in excess of the sum of
(x) the aggregate principal amount (or if incurred with original issue discount,
the aggregate accreted value) then outstanding of the Indebtedness being
Refinanced, and (y) an amount necessary to pay any fees and expenses, including
premiums and defeasance costs, related to such Refinancing; (ii) the Average
Life of such Indebtedness is equal to or greater than the Average Life of the
Indebtedness being Refinanced; (iii) the Stated Maturity of such Indebtedness is
no earlier than the Stated Maturity of the Indebtedness being Refinanced; and
(iv) the new Indebtedness shall not be senior in right of payment to the
Indebtedness that is being Refinanced; provided, however, that Permitted
Refinancing Indebtedness shall not include Indebtedness of a Subsidiary that
Refinances Indebtedness of the Borrower.
14
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan that is covered
by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pricing Grid": the table set forth below.
Ratings (in each case,
with an outlook of Applicable Margin for Applicable Margin for
"stable" or better) Commitment Fee Eurodollar Loans ABR Loans
=================================================================================================
> BBB/Baa2 0.250% 0.750% 0.000%
-------------------------------------------------------------------------------------------------
BBB/Baa2 0.250% 1.000% 0.000%
-------------------------------------------------------------------------------------------------
BBB-/Baa3 0.300% 1.250% 0.250%
-------------------------------------------------------------------------------------------------
BB+/Ba1 0.375% 1.500% 0.500%
-------------------------------------------------------------------------------------------------
< BB+/Ba1 0.500% 2.000% 1.000%
-------------------------------------------------------------------------------------------------
The ratings referred to above are the credit ratings assigned to the
Facilities by each of S&P and Moody's, respectively. In the event a "negative"
outlook is assigned to the Facilities by either credit rating agency, the credit
rating of such agency for the purposes of this Pricing Grid shall be deemed to
be the next lower rating level. In the event of split ratings, if the two
ratings are one level apart, the higher rating shall apply, and if the two
ratings are more than one level apart, the level that is one level higher than
the lower of the two ratings shall apply. For the purposes of the Pricing Grid,
changes in the Applicable Margin resulting from changes in the ratings or
outlook of the Facilities shall become effective on the date (the "Adjustment
Date") that is three Business Days after the date on which a new rating or
outlook, as the case may be, is assigned by the applicable rating agency and
shall remain in effect until the next change to be effected pursuant to this
paragraph. Anything in this definition to the contrary notwithstanding,
commencing with the fiscal quarter ending June 30, 2005, if at any time when the
"BB+/Ba1" level of pricing would otherwise be applicable the Consolidated
Leverage Ratio as at the last day of the most recent period of four consecutive
fiscal quarters of the Borrower for which financial statements shall have been
delivered to the Administrative Agent pursuant to Section 6.1 is less than 1.0
to 1.0 and no Default or Event of Default is then in existence, the "BBB-/Baa3"
level of pricing shall instead be applicable.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"Properties": as defined in Section 4.16(a).
"Refinance": in respect of any Indebtedness, to refinance, extend,
renew, refund, repay, prepay, repurchase, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Register": as defined in Section 10.6(c).
"Regulation U": Regulation U of the Board as in effect from time to
time.
15
"Reimbursement Obligation": the obligation of the Borrower to reimburse
the Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of
Credit.
"Related Parties": with respect to any specified Person, such Person's
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person's Affiliates.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg.
Section 4043.
"Required Lenders": at any time, the holders of more than 50% of (a)
until the Closing Date, the Commitments then in effect and (b) thereafter, the
sum of (i) the aggregate unpaid principal amount of the Term Loans then
outstanding and (ii) the Total Revolving Commitments then in effect or, if the
Revolving Commitments have been terminated, the Total Revolving Extensions of
Credit then outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer": the Chief Executive Officer, President, Chief
Financial Officer or Vice President, Business Development of the Borrower, but
in any event, with respect to financial matters, the Chief Financial Officer or
Vice President, Business Development of the Borrower.
"Restricted Payments": as defined in Section 7.6.
"Revolving Commitment": as to any Lender, the obligation of such
Lender, if any, to make Revolving Loans and participate in Letters of Credit in
an aggregate principal and/or face amount not to exceed the amount set forth as
the "Revolving Commitment" of such Lender on the Addendum delivered by such
Lender on the Closing Date or in the Assignment and Assumption pursuant to which
such Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof. The original amount of the Total Revolving
Commitments is $150,000,000.
"Revolving Commitment Period": the period from and including the
Closing Date to the Revolving Termination Date.
"Revolving Extensions of Credit": as to any Revolving Lender at any
time, an amount equal to the sum of (a) the aggregate principal amount of all
Revolving Loans held by such Lender then outstanding and (b) such Lender's
Revolving Percentage of the L/C Obligations then outstanding.
"Revolving Lender": each Lender that has a Revolving Commitment or that
holds Revolving Loans.
"Revolving Loans": as defined in Section 2.4(a).
"Revolving Percentage": as to any Revolving Lender at any time, the
percentage which such Lender's Revolving Commitment then constitutes of the
Total Revolving Commitments or, at any
16
time after the Revolving Commitments shall have expired or terminated, the
percentage which the aggregate principal amount of such Lender's Revolving Loans
then outstanding constitutes of the aggregate principal amount of the Revolving
Loans then outstanding, provided, that, in the event that the Revolving Loans
are paid in full prior to the reduction to zero of the Total Revolving
Extensions of Credit, the Revolving Percentages shall be determined in a manner
designed to ensure that the other outstanding Revolving Extensions of Credit
shall be held by the Revolving Lenders on a comparable basis.
"Revolving Termination Date": January 28, 2010.
"S&P": Standard & Poor's Ratings Group, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, or any successor thereto.
"SEC": the Securities and Exchange Commission, any successor thereto
and any analogous Governmental Authority.
"Senior 2012 Note Indenture": the Indenture, dated as of the date
hereof, entered into by the Borrower and Wachovia Bank, National Association, as
trustee, in connection with the issuance of the Senior 2012 Notes, together with
all instruments and other agreements entered into by the Borrower in connection
therewith.
"Senior 2015 Note Indenture": the Indenture, dated as of the date
hereof, entered into by the Borrower and Wachovia Bank, National Association, as
trustee, in connection with the issuance of the Senior 2015 Notes, together with
all instruments and other agreements entered into by the Borrower in connection
therewith.
"Senior 2012 Notes": the notes of the Borrower due 2012 issued on the
Closing Date pursuant to the Senior 2012 Note Indenture.
"Senior 2015 Notes": the notes of the Borrower due 2015 issued on the
Closing Date pursuant to the Senior 2015 Note Indenture.
"Senior Note Indentures": the collective reference to the Senior 2012
Note Indenture and the Senior 2015 Note Indenture.
"Senior Notes": the collective reference to the Senior 2012 Notes and
the Senior 2015 Notes.
"Single Employer Plan": any Plan that is covered by Title IV of ERISA,
but that is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of any
date of determination, (a) the amount of the "present fair saleable value" of
the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment,
17
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (y) right to an equitable
remedy for breach of performance if such breach gives rise to a right to
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
"Specified Swap Agreement": any Swap Agreement entered into by the
Borrower and any Lender or affiliate thereof in respect of interest rates or
currency exchange rates.
"Stated Maturity": with respect to any Indebtedness, the date specified
in the governing documents thereof as the fixed date on which the final or only,
as the case may be, payment of principal of such Indebtedness is due and
payable, including pursuant to any mandatory redemption provision (but excluding
any provision providing for the repurchase of such Indebtedness at the option of
the holder thereof upon the happening of any contingency beyond the control of
the issuer).
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Swap Agreement": any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; provided that no phantom
stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
the Borrower or any of its Subsidiaries shall be a "Swap Agreement".
"Syndication Agent": as defined in the preamble hereto.
"Term Commitment": as to any Lender, the obligation of such Lender, if
any, to make a Term Loan to the Borrower in a principal amount equal to the
amount set forth as the "Term Commitment" of such Lender on the Addendum
delivered by such Lender on the Closing Date. The original aggregate amount of
the Term Commitments is $300,000,000.
"Term Lender": each Lender that has a Term Commitment or that holds a
Term Loan.
"Term Loan": as defined in Section 2.1.
"Term Percentage": as to any Term Lender at any time, the percentage
which such Lender's Term Commitment then constitutes of the aggregate Term
Commitments (or, at any time after the Closing Date, the percentage which the
aggregate principal amount of such Lender's Term Loans then outstanding
constitutes of the aggregate principal amount of the Term Loans then
outstanding).
"Total Revolving Commitments": at any time, the aggregate amount of the
Revolving Commitments then in effect.
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"Total Revolving Extensions of Credit": at any time, the aggregate
amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time.
"Transferee": any Eligible Assignee or Participant.
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.
"United States": the United States of America.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any certificate
or other document made or delivered pursuant hereto or thereto, (i) accounting
terms relating to any Group Member not defined in Section 1.1 and accounting
terms partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP, (ii) the words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation", (iii) the word "incur" shall be construed to mean incur, create,
issue, assume, become liable in respect of or suffer to exist (and the words
"incurred" and "incurrence" shall have correlative meanings), (iv) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, Capital Stock, securities, revenues, accounts, leasehold
interests and contract rights, and (v) references to agreements or other
Contractual Obligations shall, unless otherwise specified, be deemed to refer to
such agreements or Contractual Obligations as amended, supplemented, restated or
otherwise modified from time to time.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Commitments. Subject to the terms and conditions hereof, each
Term Lender severally agrees to make a term loan (a "Term Loan") to the Borrower
on the Closing Date in an amount equal to the amount of the Term Commitment of
such Lender. The Term Loans may from time to time be Eurodollar Loans or ABR
Loans, as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.9.
2.2 Procedure for Term Loan Borrowing. The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, one Business Day
prior to the anticipated Closing Date) requesting that the Term Lenders make the
Term Loans on the Closing Date. The Term Loans made on the Closing Date shall
initially be ABR Loans and, unless otherwise agreed by the Administrative Agent
in its sole discretion, no Term Loan may be converted into or continued as a
Eurodollar Loan having an Interest Period in excess of one month prior to the
date that is three (3) Business Days after the Closing Date. Upon receipt of
such notice the Administrative Agent shall promptly notify each Term Lender
thereof. Not later than 12:00 Noon, New York City time, on the Closing Date each
Term Lender shall
19
make available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the Term Loan or Term Loans to be made by
such Lender. The Administrative Agent shall credit the account of the Borrower
on the books of such office of the Administrative Agent, or as otherwise
directed by the Borrower, with the aggregate of the amounts made available to
the Administrative Agent by the Term Lenders in immediately available funds.
2.3 Repayment of Term Loans. The Term Loan of each Term Lender shall
mature in 20 consecutive quarterly installments, each of which shall be in an
amount equal to such Lender's Term Percentage multiplied by the amount set forth
below opposite such installment:
Installment Principal Amount
----------- ----------------
March 31, 2005 7,500,000
June 30, 2005 7,500,000
September 30, 2005 7,500,000
December 31, 2005 7,500,000
March 31, 2006 7,500,000
June 30, 2006 7,500,000
September 30, 2006 7,500,000
December 31, 2006 7,500,000
March 31, 2007 15,000,000
June 30, 2007 15,000,000
September 30, 2007 15,000,000
December 31, 2007 15,000,000
March 31, 2008 15,000,000
June 30, 2008 15,000,000
September 30, 2008 15,000,000
December 31, 2008 15,000,000
March 31, 2009 30,000,000
June 30, 2009 30,000,000
September 30, 2009 30,000,000
January 28, 2010 30,000,000
2.4 Revolving Commitments. (a) Subject to the terms and conditions
hereof, each Revolving Lender severally agrees to make revolving credit loans
("Revolving Loans") to the Borrower from time to time during the Revolving
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such Lender's Revolving Percentage of the L/C Obligations
then outstanding, does not exceed the amount of such Lender's Revolving
Commitment. During the Revolving Commitment Period the Borrower may use the
Revolving Commitments by borrowing, prepaying the Revolving Loans in whole or in
part, and reborrowing, all in accordance with the terms and conditions hereof.
The Revolving Loans may from time to time be Eurodollar Loans or ABR Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.5 and 2.9.
(b) The Borrower shall repay all outstanding Revolving Loans on the
Revolving Termination Date.
2.5 Procedure for Revolving Loan Borrowing. The Borrower may borrow
under the Revolving Commitments during the Revolving Commitment Period on any
Business Day, provided that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
(a) prior to 12:00 Noon, New York City time, three Business Days prior to the
20
requested Borrowing Date, in the case of Eurodollar Loans, or (b) prior to 10:00
A.M., New York City time, on the requested Borrowing Date, in the case of ABR
Loans), specifying (i) the amount and Type of Revolving Loans to be borrowed,
(ii) the requested Borrowing Date and (iii) in the case of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Period therefor. Any Revolving Loans made on the Closing Date
shall initially be ABR Loans and, unless otherwise agreed by the Administrative
Agent in its sole discretion, no Revolving Loan may be made as, converted into
or continued as a Eurodollar Loan having an Interest Period in excess of one
month prior to the date that is three (3) Business Days after the Closing Date.
Each borrowing under the Revolving Commitments shall be in an amount equal to
(x) in the case of ABR Loans, $1,000,000 or a whole multiple of $100,000 in
excess thereof (or, if the then aggregate Available Revolving Commitments are
less than $1,000,000, such lesser amount) and (y) in the case of Eurodollar
Loans, $5,000,000 or a whole multiple of $100,000 in excess thereof. Upon
receipt of any such notice from the Borrower, the Administrative Agent shall
promptly notify each Revolving Lender thereof. Each Revolving Lender will make
the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Borrower at the Funding Office prior
to 12:00 Noon, New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the Administrative
Agent crediting the account of the Borrower on the books of such office, or as
otherwise directed by the Borrower, with the aggregate of the amounts made
available to the Administrative Agent by the Revolving Lenders and in like funds
as received by the Administrative Agent.
2.6 Commitment Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee
for the period from and including the date hereof to the last day of the
Revolving Commitment Period, computed at the Commitment Fee Rate on the average
daily amount of the Available Revolving Commitment of such Lender during the
period for which payment is made, payable quarterly in arrears on each Fee
Payment Date, commencing on the first such date to occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent the fees in
the amounts and on the dates as set forth in any fee agreements with the
Administrative Agent and to perform any other obligations contained therein.
2.7 Termination or Reduction of Revolving Commitments. The Borrower
shall have the right, upon not less than three Business Days' notice to the
Administrative Agent, to terminate the Revolving Commitments or, from time to
time, to reduce the amount of the Revolving Commitments; provided that no such
termination or reduction of Revolving Commitments shall be permitted if, after
giving effect thereto and to any prepayments of the Revolving Loans made on the
effective date thereof, the Total Revolving Extensions of Credit would exceed
the Total Revolving Commitments. Any such reduction shall be in an amount equal
to $1,000,000, or a whole multiple thereof, and shall reduce permanently the
Revolving Commitments then in effect.
2.8 Optional Prepayments. The Borrower may at any time and from time to
time prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent no later than 11:00
A.M., New York City time, three Business Days prior thereto, in the case of
Eurodollar Loans, and no later than 11:00 A.M., New York City time, one Business
Day prior thereto, in the case of ABR Loans, which notice shall specify the date
and amount of prepayment and whether the prepayment is of Eurodollar Loans or
ABR Loans or a combination thereof; provided, that if a Eurodollar Loan is
prepaid on any day other than the last day of the Interest Period applicable
thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.17.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each relevant Lender thereof. If any such notice is given, the amount specified
in such notice shall be due and payable on the date
21
specified therein, together with (except in the case of Revolving Loans that are
ABR Loans) accrued interest to such date on the amount prepaid. Partial
prepayments of Term Loans and Revolving Loans shall be in an aggregate principal
amount of $1,000,000 or a whole multiple of $100,000 in excess thereof.
2.9 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent prior irrevocable notice of such election no later than
1:00 P.M., New York City time, on the Business Day preceding the proposed
conversion date, provided that any such conversion of Eurodollar Loans may only
be made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent prior irrevocable notice of such election no later than
1:00 P.M., New York City time, on the third Business Day preceding the proposed
conversion date (which notice shall specify the length of the initial Interest
Period therefor), provided that no ABR Loan under a particular Facility may be
converted into a Eurodollar Loan when any Event of Default has occurred and is
continuing and the Administrative Agent or the Majority Facility Lenders in
respect of such Facility have determined in its or their sole discretion not to
permit such conversions. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration of
the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan under a particular Facility may be continued as such
when any Event of Default has occurred and is continuing and the Administrative
Agent has or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such continuations, and
provided, further, that if the Borrower shall fail to give any required notice
as described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso such Loans shall be automatically converted to
ABR Loans on the last day of such then expiring Interest Period. Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.
2.10 Limitations on Eurodollar Tranches. Notwithstanding anything to
the contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans and all selections of Interest Periods shall be in such amounts
and be made pursuant to such elections so that, (a) after giving effect thereto,
the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of $100,000
in excess thereof and (b) no more than ten Eurodollar Tranches shall be
outstanding at any one time.
2.11 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
ABR plus the Applicable Margin.
(c)(i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum equal to (x) in the case of the Loans, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
Section plus 2% or (y) in the case of Reimbursement Obligations, the rate
applicable to ABR Loans under the Revolving Facility plus 2%, and (ii) if all or
a portion of any interest payable on any Loan or Reimbursement Obligation or
22
any commitment fee or other amount payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum equal to the rate then applicable
to ABR Loans under the relevant Facility plus 2% (or, in the case of any such
other amounts that do not relate to a particular Facility, the rate then
applicable to ABR Loans under the Revolving Facility plus 2%), in each case,
with respect to clauses (i) and (ii) above, from the date of such non-payment
until such amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this Section shall
be payable from time to time on demand.
2.12 Computation of Interest and Fees. (a) Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to ABR Loans the rate of interest
on which is calculated on the basis of the Prime Rate, the interest thereon
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.11(a).
2.13 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Majority Facility Lenders in respect of the relevant Facility that
the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans under the relevant Facility that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be continued as
ABR Loans and (z) any outstanding Eurodollar Loans under the relevant Facility
shall be converted, on the last day of the then-current Interest Period, to ABR
Loans. Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans under the relevant Facility shall be made or continued
as such, nor shall the Borrower have the right to convert Loans under the
relevant Facility to Eurodollar Loans.
23
2.14 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the respective Term Percentages or Revolving
Percentages, as the case may be, of the relevant Lenders.
(b) Each payment (including each prepayment) by the Borrower on account
of principal of and interest on the Term Loans shall be made pro rata according
to the respective outstanding principal amounts of the Term Loans then held by
the Term Lenders. The amount of each principal prepayment of the Term Loans
shall be applied to reduce the then remaining installments of the Term Loans pro
rata based upon the respective then remaining principal amounts thereof. Amounts
prepaid on account of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower on account
of principal of and interest on the Revolving Loans shall be made pro rata
according to the respective outstanding principal amounts of the Revolving Loans
then held by the Revolving Lenders.
(d) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 1:00 P.M., New
York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders or the Issuing Lender, as the case may be, at the Funding
Office, in Dollars and in immediately available funds. The Administrative Agent
shall distribute such payments to the Lenders (or, if applicable, the Issuing
Lender) promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(e) Unless the Administrative Agent shall have been notified in writing
by any Lender prior to a borrowing that such Lender will not make the amount
that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon, at a
rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation, for the period until such Lender makes such
amount immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this paragraph shall be conclusive in the absence of manifest error. If
such Lender's share of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days after such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to ABR Loans under
the relevant Facility, on demand, from the Borrower.
(f) Unless the Administrative Agent shall have been notified in writing
by the Borrower prior to the date of any payment due to be made by the Borrower
hereunder that the Borrower will not make such payment to the Administrative
Agent, the Administrative Agent may assume that the Borrower
24
is making such payment, and the Administrative Agent may, but shall not be
required to, in reliance upon such assumption, make available to the Lenders
their respective pro rata shares of a corresponding amount. If such payment is
not made to the Administrative Agent by the Borrower within three Business Days
after such due date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender
against the Borrower.
2.15 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application
or any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by Section 2.16 and changes in the rate of tax on the
overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender that is not
otherwise included in the determination of the Eurodollar Rate; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes entitled
to claim any additional amounts pursuant to this paragraph, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor (such request to include details reasonably
sufficient to establish the basis for such additional costs), the Borrower shall
pay to such Lender such additional amount or amounts as will compensate such
Lender or such corporation for such reduction.
25
(c) A certificate as to any additional amounts payable pursuant to this
Section 2.15 submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error.
Notwithstanding anything to the contrary in this Section 2.15, the Borrower
shall not be required to compensate a Lender pursuant to this Section for any
amounts incurred more than ninety days prior to the date that such Lender
notifies the Borrower of such Lender's intention to claim compensation therefor;
provided that, if the circumstances giving rise to such claim have a retroactive
effect, then such ninety-day period shall be extended to include the period of
such retroactive effect. The obligations of the Borrower pursuant to this
Section shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
2.16 Taxes. (a) All payments made by the Borrower under this Agreement
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on the Administrative Agent or any Lender as a result of a present or
former connection between the Administrative Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Administrative Agent or such Lender having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document). If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") or Other Taxes are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder, the amounts
so payable to the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Non-Excluded Taxes and Other Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the time
such Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.
(d)(i) Each Lender (or Transferee) that is not a "U.S. Person"
as defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender")
shall deliver to the Borrower and the Administrative Agent (or, in the
case of a Participant, to the Lender from which the related
participation shall have been purchased) two copies of either U.S.
Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of
a Non-U.S. Lender claiming exemption from U.S. federal withholding tax
under Section 871(h) or 881(c) of the Code with respect to payments of
26
"portfolio interest", a statement substantially in the form of Exhibit
E and a Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender
claiming complete exemption from, or a reduced rate of, U.S. federal
withholding tax on all payments by the Borrower under this Agreement
and the other Loan Documents. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this
Agreement (or, in the case of any Participant, on or before the date
such Participant purchases the related participation). In addition,
each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such
Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the
Borrower at any time it determines that it is no longer in a position
to provide any previously delivered certificate to the Borrower (or any
other form of certification adopted by the U.S. taxing authorities for
such purpose). Notwithstanding any other provision of this paragraph, a
Non-U.S. Lender shall not be required to deliver any form pursuant to
this paragraph that such Non-U.S. Lender is not legally able to
deliver.
(ii) Each Non-U.S. Lender, to the extent it does not act or
ceases to act for its own account with respect to any portion of any
sums paid or payable to such Lender under any of the Loan Documents,
shall deliver to the Administrative Agent on the date when such
Non-U.S. Lender ceases to act for its own account with respect to any
portion of any such sums paid or payable, and at such other times as
may be necessary in the determination of the Administrative Agent (in
the reasonable exercise of its discretion), (A) two duly signed
completed copies of the forms or statements required to be provided by
such Lender as set forth above, to establish the portion of any such
sums paid or payable with respect to which such Lender acts for its own
account that is not subject to U.S. withholding tax, and (B) two duly
signed completed copies of IRS Form W-8IMY (or any successor thereto),
together with any information such Lender chooses to transmit with such
form, and any other certificate or statement of exemption required
under the Code, to establish that such Lender is not acting for its own
account with respect to a portion of any such sums payable to such
Lender.
(e) Upon the request of the Administrative Agent, each Lender that is a
"United States person" within the meaning of Section 7701(a)(30) of the Code
shall deliver to the Administrative Agent two duly signed completed copies of
IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.
(f) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.
(g) If the Administrative Agent or any Lender determines, in its sole
discretion, that it has received a refund of any Non-Excluded Taxes or Other
Taxes as to which it has been indemnified by the Borrower or with respect to
which the Borrower has paid additional amounts pursuant to this Section 2.16, it
shall pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section
2.16 with respect to the Non-Excluded Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Administrative Agent
27
or such Lender and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided, that the
Borrower, upon the request of the Administrative Agent or such Lender, agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental Authority.
This paragraph shall not be construed to require the Administrative Agent or any
Lender to make available its tax returns (or any other information relating to
its taxes which it deems confidential) to the Borrower or any other Person.
(h) If any Governmental Authority asserts that the Administrative Agent
did not properly withhold or backup withhold, as the case may be, any tax or
other amount from payments made to or for the account of any Lender, such Lender
shall indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses (including
attorney fees) of the Administrative Agent.
(i) The agreements in this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.17 Indemnity. The Borrower agrees to indemnify each Lender for, and
to hold each Lender harmless from, any loss or expense that such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of or conversion from Eurodollar Loans after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Eurodollar Loans on a day that is not the last day of
an Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest that would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of such Interest Period (or, in the
case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) that would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. A certificate as to any
amounts payable pursuant to this Section submitted to the Borrower by any Lender
shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
2.18 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.15 or 2.16(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall affect
or postpone any of the obligations of the Borrower or the rights of any Lender
pursuant to Section 2.15 or 2.16(a).
2.19 Replacement of Lenders. The Borrower shall be permitted to replace
any Lender that (a) requests reimbursement for amounts owing pursuant to Section
2.15 or 2.16(a) or (b) defaults in its obligation to make Loans hereunder, with
a replacement financial institution; provided that (i) such
28
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) prior to any such replacement, such Lender shall have taken no action
under Section 2.18 so as to eliminate the continued need for payment of amounts
owing pursuant to Section 2.15 or 2.16(a), (iv) the replacement financial
institution shall purchase, at par, all Loans, accrued interest, accrued fees
and other amounts owing to such replaced Lender on or prior to the date of
replacement, (v) the Borrower shall be liable to such replaced Lender under
Section 2.17 if any Eurodollar Loan owing to such replaced Lender shall be
purchased other than on the last day of the Interest Period relating thereto,
(vi) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (vii) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 10.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (viii) until such time as
such replacement shall be consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Section 2.15 or 2.16(a), as the case may
be, and (ix) any such replacement shall not be deemed to be a waiver of any
rights that the Borrower, the Administrative Agent or any other Lender shall
have against the replaced Lender.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Prior to the Closing Date, the Existing Issuing
Lender has issued the Existing Letters of Credit which, from and after the
Closing Date, shall constitute Letters of Credit hereunder. Subject to the terms
and conditions hereof, the Issuing Lender, in reliance on the agreements of the
other Revolving Lenders set forth in Section 3.4(a), agrees to issue letters of
credit (the letters of credit issued on and after the Closing Date pursuant to
this Section 3, together with the Existing Letters of Credit, collectively, the
"Letters of Credit") for the account of the Borrower on any Business Day during
the Revolving Commitment Period in such form as may be approved from time to
time by the Issuing Lender; provided that the Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the
aggregate amount of the Available Revolving Commitments would be less than zero.
Each Letter of Credit shall (i) be denominated in Dollars and (ii) expire no
later than the earlier of (x) the first anniversary of its date of issuance and
(y) the date that is five Business Days prior to the Revolving Termination Date,
provided that any Letter of Credit with a one-year term may provide for the
renewal thereof for additional one-year periods (which shall in no event extend
beyond the date referred to in clause (y) above).
(b) The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit if such issuance would conflict with, or cause the Issuing
Lender or any L/C Participant to exceed any limits imposed by, any applicable
Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower may from
time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower promptly following the issuance thereof. The
Issuing Lender shall promptly furnish to the Administrative Agent, which shall
in
29
turn promptly furnish to the Lenders, notice of the issuance of each Letter of
Credit (including the amount thereof).
3.3 Fees and Other Charges. (a) The Borrower will pay a fee on all
outstanding Letters of Credit at a per annum rate equal to the Applicable Margin
then in effect with respect to Eurodollar Loans under the Revolving Facility,
shared ratably among the Revolving Lenders and payable quarterly in arrears on
each Fee Payment Date after the issuance date. In addition, the Borrower shall
pay to the Issuing Lender for its own account a fronting fee of 0.125% per annum
on the undrawn and unexpired amount of each Letter of Credit, payable quarterly
in arrears on each Fee Payment Date after the issuance date.
(b) In addition to the foregoing fees, the Borrower shall pay or
reimburse the Issuing Lender for such normal and customary costs and expenses as
are incurred or charged by the Issuing Lender in issuing, negotiating, effecting
payment under, amending or otherwise administering any Letter of Credit.
3.4 L/C Participations. (a) The Issuing Lender irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the Issuing Lender, on
the terms and conditions set forth below, for such L/C Participant's own account
and risk an undivided interest equal to such L/C Participant's Revolving
Percentage in the Issuing Lender's obligations and rights under and in respect
of each Letter of Credit and the amount of each draft paid by the Issuing Lender
thereunder. Each L/C Participant agrees with the Issuing Lender that, if a draft
is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Administrative Agent, for the
account of the Issuing Lender, upon demand, at the Funding Office an amount
equal to such L/C Participant's Revolving Percentage of the amount of such
draft, or any part thereof, that is not so reimbursed. Each L/C Participant's
obligation to pay such amount shall be absolute and unconditional and shall not
be affected by any circumstance, including (i) any setoff, counterclaim,
recoupment, defense or other right that such L/C Participant may have against
the Issuing Lender, the Borrower or any other Person for any reason whatsoever,
(ii) the occurrence or continuance of a Default or an Event of Default or the
failure to satisfy any of the other conditions specified in Section 5, (iii) any
adverse change in the condition (financial or otherwise) of the Borrower, (iv)
any breach of this Agreement or any other Loan Document by the Borrower or any
other L/C Participant or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
(b) If any amount required to be paid by any L/C Participant to the
Administrative Agent, for the account of the Issuing Lender, pursuant to Section
3.4(a) in respect of any unreimbursed portion of any payment made by the Issuing
Lender under any Letter of Credit is paid to the Administrative Agent within
three Business Days after the date such payment is due, such L/C Participant
shall pay to the Administrative Agent, for the account of the Issuing Lender, on
demand, an amount equal to the product of (i) such amount, times (ii) the daily
average Federal Funds Effective Rate during the period from and including the
date such payment is required to the date on which such payment is immediately
available to the Issuing Lender, times (iii) a fraction the numerator of which
is the number of days that elapse during such period and the denominator of
which is 360. If any such amount required to be paid by any L/C Participant
pursuant to Section 3.4(a) is not made available to the Administrative Agent,
for the account of the Issuing Lender, by such L/C Participant within three
Business Days after the date such payment is due, such L/C Participant shall pay
to the Administrative Agent, for the account of the Issuing Lender, on demand,
such amount with interest thereon calculated from such due date at the rate per
annum applicable to ABR Loans under the Revolving Facility. A certificate of the
Issuing
30
Lender submitted to any L/C Participant with respect to any amounts owing under
this Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and the Administrative Agent has received from any
L/C Participant such L/C Participant's pro rata share of such payment in
accordance with Section 3.4(a), the Administrative Agent or the Issuing Lender,
as the case may be, receives any payment related to such Letter of Credit
(whether directly from the Borrower or otherwise, including proceeds of
collateral applied thereto by the Administrative Agent or the Issuing Lender, as
the case may be), or any payment of interest on account thereof, the
Administrative Agent or the Issuing Lender, as the case may be, will distribute
to such L/C Participant its pro rata share thereof; provided, however, that in
the event that any such payment received by the Administrative Agent or the
Issuing Lender, as the case may be, shall be required to be returned by the
Administrative Agent or the Issuing Lender, as the case may be, such L/C
Participant shall return to the Administrative Agent or the Issuing Lender, as
the case may be, the portion thereof previously distributed by the
Administrative Agent or the Issuing Lender, as the case may be, to it.
3.5 Reimbursement Obligation of the Borrower. If any draft is paid
under any Letter of Credit, the Borrower shall reimburse the Issuing Lender
(through payment to the Administrative Agent) for the amount of (a) the draft so
paid and (b) any taxes, fees, charges or other costs or expenses incurred by the
Issuing Lender in connection with such payment, not later than 1:00 P.M., New
York City time, on the Business Day immediately following the Business Day that
the Borrower receives notice of such draft. Each such payment shall be made to
the Administrative Agent, for the account of the Issuing Lender, at the Funding
Office in Dollars and in immediately available funds. Interest shall be payable
on any such amounts from the date on which the relevant draft is paid until
payment in full at the rate set forth in (x) until the Business Day next
succeeding the date of the relevant notice, Section 2.11(b) and (y) thereafter,
Section 2.11(c).
3.6 Obligations Absolute. The Borrower's obligations under this Section
3 shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment that the Borrower
may have or have had against the Issuing Lender, any beneficiary of a Letter of
Credit or any other Person. The Borrower also agrees with the Issuing Lender
that the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Lender. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct, shall be binding on the Borrower and shall not result in any
liability of the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower and the Administrative Agent of the date and amount thereof. The
responsibility of the Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including
31
each draft) delivered under such Letter of Credit in connection with such
presentment are substantially in conformity with such Letter of Credit.
3.8 Applications. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Borrower represents and warrants to the Administrative Agent and
each Lender that:
4.1 Financial Condition. (a) The unaudited pro forma consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at September
30, 2004 (including the notes thereto) (the "Pro Forma Balance Sheet"), copies
of which have heretofore been furnished to each Lender, has been prepared giving
effect (as if such events had occurred on such date) to (i) the consummation of
the Acquisition, (ii) the Loans to be made and the Senior Notes to be issued on
the Closing Date and the use of proceeds thereof and (iii) the payment of fees
and expenses in connection with the foregoing. The Pro Forma Balance Sheet has
been prepared based on the best information available to the Borrower as of the
date of delivery thereof, and presents fairly on a pro forma basis the estimated
financial position of Borrower and its consolidated Subsidiaries as at September
30, 2004, assuming that the events specified in the preceding sentence had
actually occurred at such date.
(b) The audited consolidated balance sheets of each of the Borrower and
First Health as at December 31, 2003, and the related consolidated statements of
income and of cash flows for the fiscal years ended on such dates, reported on
by and accompanied by an unqualified report from Ernst & Young LLP, in the case
of the Borrower, and Deloitte & Touche LLP, in the case of First Health, present
fairly the consolidated financial condition of each of the Borrower and First
Health as at such dates, and the consolidated results of their respective
operations and their respective consolidated cash flows for the respective
fiscal years then ended. The unaudited consolidated balance sheets of each of
the Borrower and First Health as at September 30, 2004, and the related
unaudited consolidated statements of income and cash flows for the nine-month
period ended on such date, present fairly the consolidated financial condition
of each of the Borrower and First Health as at such date, and the consolidated
results of their respective operations and their respective consolidated cash
flows for the nine-month period then ended (subject to normal year-end audit
adjustments). All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firm
of accountants and disclosed therein). During the period from December 31, 2003
to and including the date hereof there has been no Disposition by any Group
Member of any material part of its business or property (other than the
Acquisition).
4.2 No Change. Since December 31, 2003, there has been no development
or event that, individually or in the aggregate, has had or could reasonably be
expected to have a Material Adverse Effect.
4.3 Existence; Compliance with Law. Each Group Member (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority, and the legal
right, to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently engaged (including
all governmental licenses, permits and other approvals, including all licenses,
permits and approvals issued by the HMO
32
Regulators and the Insurance Regulators), (c) is duly qualified as a foreign
corporation or other organization and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification and (d) is in compliance with all
Requirements of Law, except to the extent that the failure of any of the
statements set forth in this sentence to be true and correct could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Without limiting the generality of the foregoing, each of the
Borrower and the Material Subsidiaries (a) is in compliance with all terms and
provisions of HIPAA and of the HMO Regulations and Insurance Regulations
pertaining to fiscal soundness, solvency or financial condition and (b) has not
received any assertion in writing by an HMO Regulator or an Insurance Regulator
that such Regulator is taking administrative action against the Borrower or such
Material Subsidiary to (i) revoke or modify any contract of insurance, license,
permit, certification, authorization, accreditation or charter or (ii) enforce
the fiscal soundness, solvency or financial provisions or requirements of the
HMO Regulations or Insurance Regulations against the Borrower or any Material
Subsidiary, except where such failure so to comply or such administrative
action, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
4.4 Power; Authorization; Enforceable Obligations. The Borrower has the
power and authority, and the legal right, to make, deliver and perform the Loan
Documents and to obtain extensions of credit hereunder. The Borrower has taken
all necessary organizational action to authorize the execution, delivery and
performance of the Loan Documents and to authorize the extensions of credit on
the terms and conditions of this Agreement. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the Acquisition and
the extensions of credit hereunder or with the execution, delivery, performance,
validity or enforceability of this Agreement or any of the Loan Documents,
except (a) consents, authorizations, filings and notices described in Schedule
4.4, which consents, authorizations, filings and notices have been obtained or
made and are in full force and effect and (b) consents, authorizations, filings
and notices, the absence of which could not reasonably be expected to have a
Material Adverse Effect. Each Loan Document has been duly executed and delivered
on behalf of the Borrower. This Agreement constitutes, and each other Loan
Document upon execution will constitute, a legal, valid and binding obligation
of the Borrower, enforceable against the Borrower in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors'
rights generally and by general equitable principles (whether enforcement is
sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, including delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of Credit,
the borrowings hereunder and the use of the proceeds thereof will not violate
any Requirement of Law (including any HMO Regulation or Insurance Regulation) or
any material Contractual Obligation of any Group Member and will not result in,
or require, the creation or imposition of any Lien on any of their respective
properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation. No Requirement of Law applicable to or Contractual
Obligation of the Borrower or any of its Subsidiaries, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
4.6 Litigation. No litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending on the date of this
Agreement or, to the knowledge of the Borrower, threatened by or against any
Group Member or against any of their respective properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated
hereby or thereby, or (b) that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
33
4.7 No Default. No Group Member is in default under or with respect to
any of its Contractual Obligations to an extent that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
4.8 Ownership of Property; Liens. Each Group Member has title in fee
simple to, or a valid leasehold interest in, all its real property, and good
title to, or a valid leasehold interest in, all its other property, except where
a failure to do so could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. None of such property is subject to
any Lien except as permitted by Section 7.3.
4.9 Intellectual Property. Each Group Member owns, or is licensed to
use, all Intellectual Property necessary for the conduct of its business as
currently conducted, except where a failure to do so could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. No
material claim has been asserted and is pending by any Person challenging or
questioning the use of any Intellectual Property or the validity or
effectiveness of any Intellectual Property, nor does the Borrower know of any
valid basis for any such claim. The use of Intellectual Property by each Group
Member does not infringe on the rights of any Person in any material respect.
4.10 Taxes. Each Group Member has filed or caused to be filed all
Federal, state and other material tax returns that are required to be filed and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than any the amount or validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of the relevant Group
Member). No tax Lien has been filed, and, to the knowledge of the Borrower, no
claim is being asserted, with respect to any such tax, fee or other charge.
4.11 Federal Regulations. No part of the proceeds of any Loans, and no
other extensions of credit hereunder, will be used (a) for "buying" or
"carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation U as now and from time to time hereafter in effect
(except in a manner that is not in violation of Regulation U) or (b) for any
purpose that violates the provisions of the Regulations of the Board. If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form G-3 or FR Form U-1, as
applicable, referred to in Regulation U.
4.12 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan that
has resulted or could reasonably be expected to result in a material liability
under ERISA, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.
34
4.13 Investment Company Act; Other Regulations. The Borrower is not an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Borrower is not subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
4.14 Subsidiaries. Except as disclosed to the Administrative Agent by
the Borrower in writing from time to time after the Closing Date, Schedule 4.14
sets forth the name and jurisdiction of incorporation of each Subsidiary and, as
to each such Subsidiary, the percentage of each class of Capital Stock owned by
any Group Member and whether such Subsidiary is an HMO Subsidiary or an
Insurance Subsidiary.
4.15 Use of Proceeds. The proceeds of the Term Loans shall be used to
finance a portion of the Acquisition, to refinance the Indebtedness outstanding
pursuant to the Existing First Health Credit Agreement and to pay related fees
and expenses. The proceeds of the Revolving Loans, and the Letters of Credit,
shall be used to finance a portion of the Acquisition and for general corporate
purposes.
4.16 Environmental Matters. Except as, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated by any
Group Member (the "Properties") do not contain, and have not previously
contained, any Materials of Environmental Concern in amounts or concentrations
and under circumstances that constitute or constituted a violation of, or could
give rise to liability under, any Environmental Law;
(b) no Group Member has received or is aware of any notice of
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the business operated by any Group Member
(the "Business"), nor does the Borrower have knowledge or reason to believe that
any such notice will be received or is being threatened;
(c) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a location
that could give rise to liability under, any Environmental Law, nor have any
Materials of Environmental Concern been generated, treated, stored or disposed
of at, on or under any of the Properties in violation of, or in a manner that
could give rise to liability under, any applicable Environmental Law;
(d) no judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which any Group Member is or will be named as a party with
respect to the Properties or the Business, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to the Properties or the Business;
(e) there has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations of any Group Member in connection with the Properties or
otherwise in connection with the Business, in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws;
(f) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under or about
the Properties or violation of any Environmental Law with respect to the
Properties or the Business; and
35
(g) no Group Member has assumed any liability of any other Person under
Environmental Laws.
4.17 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement furnished
by or on behalf of any Group Member to the Administrative Agent or the Lenders,
or any of them, for use in connection with the transactions contemplated by this
Agreement or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished (or, in the case of the
Confidential Information Memorandum, as of the date of this Agreement), any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements contained herein or therein, taken as a whole,
not misleading. The projections and pro forma financial information contained in
the materials referenced above are based upon good faith estimates and
assumptions believed by management of the Borrower to be reasonable at the time
made, it being recognized by the Lenders that such financial information as it
relates to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may differ
from the projected results set forth therein by a material amount.
4.18 Certain Documents. The Borrower has delivered to the
Administrative Agent a complete and correct copy of the Acquisition
Documentation and the Senior Note Indentures, including any amendments,
supplements or modifications with respect to any of the foregoing.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of each
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date, of the following conditions precedent:
(a) Credit Agreement. The Administrative Agent shall have
received this Agreement or, in the case of the Lenders, an Addendum,
executed and delivered by the Administrative Agent, the Borrower and
each Lender a party hereto on the Closing Date.
(b) Acquisition, etc. The following transactions shall have
been consummated, in each case on terms and conditions reasonably
satisfactory to the Lenders:
(i) the Borrower shall have received at least $500,000,000
in gross cash proceeds from the issuance of the Senior Notes;
(ii) the Borrower shall have acquired (the "Acquisition")
all of the outstanding capital stock of First Health through a merger
of First Health with and into Merger Sub in accordance with the terms
of the Acquisition Agreement, and no material provision thereof shall
have been waived, amended, supplemented or otherwise modified without
the consent of the Administrative Agent and the Syndication Agent; and
(iii) The Administrative Agent shall have received
satisfactory evidence that (x) the Existing First Health Credit
Agreement shall have been terminated and all amounts outstanding
thereunder (other than the Existing Letters of Credit, which shall
become Letters of Credit hereunder) shall have been paid in full and
(y) satisfactory arrangements shall have been made for the termination
of all Liens granted in connection therewith.
36
(c) Approvals. All governmental and third party approvals,
including any consent, approval or expiration of waiting period under
any applicable antitrust law or that may be required under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, necessary in
connection with the Acquisition, the continuing operations of the Group
Members and the transactions contemplated hereby shall have been
obtained and be in full force and effect, and all applicable waiting
periods shall have expired without any action being taken or threatened
by any competent authority that would restrain, prevent or otherwise
impose adverse conditions on the Acquisition or the financing
contemplated hereby.
(d) Fees. The Agents and the Lenders shall have received all
fees required to be paid, and all expenses for which invoices have been
presented (including the reasonable fees and expenses of legal
counsel), on or before the Closing Date. All such amounts will be paid
with proceeds of Loans made on the Closing Date and will be reflected
in the funding instructions given by the Borrower to the Administrative
Agent on or before the Closing Date.
(e) Closing Certificate; Certificate of Incorporation. The
Administrative Agent shall have received a certificate of the Borrower,
dated the Closing Date, substantially in the form of Exhibit B, with
appropriate insertions and attachments, including the certificate of
incorporation of the Borrower.
(f) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of Bass, ▇▇▇▇▇ & ▇▇▇▇ PLC,
counsel to the Borrower and its Subsidiaries, substantially in
the form of Exhibit D-1; and
(ii) the legal opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, general
counsel of the Borrower and its Subsidiaries, substantially in
the form of Exhibit D-2.
(g) Ratings. Ratings shall have been received for the
Facilities from each of S&P and ▇▇▇▇▇'▇.
5.2 Conditions to Each Extension of Credit. The agreement of each
Lender (including the Issuing Lender) to make any extension of credit requested
to be made by it on any date (including its initial extension of credit) is
subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Group Member in or pursuant
to the Loan Documents shall be true and correct in all material
respects on and as of such date as if made on and as of such date,
except that representations and warranties made as of a specified date
shall remain true and correct as of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
37
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount is
owing to any Lender or the Administrative Agent hereunder, the Borrower shall
and shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to the Administrative Agent (for
delivery to each Lender, with posting to Intralinks or any such other electronic
document delivery service to constitute adequate delivery):
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope
of the audit, by Ernst & Young LLP or other independent certified
public accountants of nationally recognized standing (it being
understood that the Borrower's obligations under this clause (a) will
be satisfied in respect of any fiscal year by delivery to the
Administrative Agent and each Lender within the time specified above of
the Borrower's annual report for such fiscal year on Form 10-K as filed
with the SEC); and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, the unaudited consolidated balance sheet
of the Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and
of cash flows for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments) (it being understood
that the Borrower's obligations under this clause (b) will be satisfied
in respect of any fiscal quarter by delivery to the Administrative
Agent and each Lender within the time specified above of the Borrower's
quarterly report for such fiscal quarter on Form 10-Q as filed with the
SEC).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied (except as approved by such accountants or officer, as the case may be,
and disclosed in reasonable detail therein) consistently throughout the periods
reflected therein and with prior periods.
6.2 Certificates; Other Information. Furnish to the Administrative
Agent (for delivery to each Lender (or, in the case of clause (f), to the
relevant Lender) with posting to Intralinks or any such other electronic
document delivery service to constitute adequate delivery):
(a) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer
stating that, to the best of each such Responsible Officer's knowledge,
the Borrower during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition contained
in this Agreement and the other Loan Documents to be observed,
performed or satisfied by it, and that such Responsible Officer has
obtained no knowledge of any Default or Event of Default, except as
specified in such certificate and (ii) in the case of quarterly or
annual financial statements, (x) a Compliance Certificate containing
all information and calculations necessary for determining compliance
by each Group Member with the provisions of this Agreement referred to
therein as of the last day of the fiscal
38
quarter or fiscal year of the Borrower, as the case may be, and (y) to
the extent not previously disclosed to the Administrative Agent, a
description of any change in the jurisdiction of organization of the
Borrower since the date of the most recent report delivered pursuant to
this clause (y) (or, in the case of the first such report so delivered,
since the Closing Date);
(b) as soon as available, and in any event no later than 30
days after the end of each fiscal year of the Borrower ending on or
after December 31, 2005, a detailed consolidated budget for the
following fiscal year (including a projected consolidated balance sheet
of the Borrower and its Subsidiaries as of the end of the following
fiscal year, the related consolidated statements of projected cash
flow, projected changes in financial position and projected income and
a description of the underlying assumptions applicable thereto)
(collectively (including the projections included in the Confidential
Information Memorandum), the "Budget"), which Budget shall in each case
be accompanied by a certificate of a Responsible Officer stating that
such Budget is based on reasonable estimates, information and
assumptions and that such Responsible Officer has no reason to believe
that such Budget is incorrect or misleading in any material respect;
(c) to the extent not otherwise provided hereunder, within
five days after the same are sent, copies of all financial statements
and reports that the Borrower or any Subsidiary sends to the holders of
any class of the Borrower's debt securities or public equity
securities, and, within five days after the same are filed, copies of
all financial statements and reports that the Borrower may make to, or
file with, the SEC;
(d) to the extent not otherwise provided hereunder, promptly
after the same become publicly available, copies of all periodic and
other reports, proxy statements and other materials filed by the
Borrower or any of its Subsidiaries with the SEC, or with any HMO
Regulators or Insurance Regulators (other than routine periodic reports
or responses filed with such HMO Regulators and Insurance Regulators)
or distributed by the Borrower to its shareholders generally;
(e) promptly upon any material change or modification to the
investment guidelines of the Borrower, copies of such modified
investment guidelines; and
(f) promptly, such additional financial and other information
as the Administrative Agent or any Lender may from time to time
reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where (a) the amount or validity thereof
is currently being contested in good faith by appropriate proceedings and
reserves in conformity with GAAP with respect thereto have been provided on the
books of the relevant Group Member or (b) the failure to so pay, discharge or
otherwise satisfy such obligations, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
6.4 Maintenance of Existence; Compliance. (a)(i) Preserve, renew and
keep in full force and effect its organizational existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business (including all licenses and
certifications required pursuant to any HMO Regulations or Insurance
Regulations, all certifications and authorizations necessary to ensure that each
of the Borrower's HMO Subsidiaries and Insurance Subsidiaries is eligible for
all reimbursements available under HMO Regulations and Insurance Regulations to
the extent applicable to HMOs and insurance companies of their type and the
products provided by them, and all material licenses, permits, authorization and
qualifications required under HMO Regulations and Insurance Regulations in
connection with the ownership or operation of HMOs and
39
insurance companies), except, in each case, as otherwise permitted by Section
7.4 and except, in the case of clause (ii) above, to the extent that failure to
do so could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; and (b) comply with all applicable Contractual
Obligations and Requirements of Law (including Environmental Laws, HIPAA and all
Medicaid Regulations, HMO Regulations and Insurance Regulations) except to the
extent that failure to comply therewith could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all property useful
and necessary in its business in good working order and condition, ordinary wear
and tear excepted and (b) maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks (but including in any event public liability,
product liability and business interruption) as are usually insured against in
the same general area by companies engaged in the same or a similar business.
6.6 Inspection of Property; Books and Records; Discussions. (a) Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) permit
representatives of any Lender, upon reasonable prior notice, to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records at any reasonable time during normal business hours and as
often as may reasonably be desired and to discuss the business, operations,
properties and financial and other condition of the Group Members with officers
and employees of the Group Members and with their independent certified public
accountants.
6.7 Notices. Promptly give notice to the Administrative Agent (for
delivery to each Lender, with posting to Intralinks or any such other electronic
document delivery service to constitute adequate delivery) of:
(a) the occurrence of any Default or Event of Default;
(b) any litigation, investigation or proceeding that may exist
at any time between any Group Member and any Governmental Authority
that if adversely determined could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting any Group Member
(i) in which the amount involved is $25,000,000 or more and not covered
by insurance, (ii) in which injunctive or similar relief is sought or
(iii) that relates to any Loan Document;
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows thereof: (i) the occurrence of
any Reportable Event with respect to any Plan, a failure to make any
required contribution to a Plan, the creation of any Lien in favor of
the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the
PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan;
(e) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
(including any HMO Regulator or Insurance Regulator) against or
affecting the Borrower or any of its Subsidiaries, or any adverse
change in the status of the matters referred to in Section 4.6, that,
individually or in the aggregate, has had, or could reasonably be
expected to have, a Material Adverse Effect;
40
(f) receipt by the Borrower, any Material HMO Subsidiary or
any Material Insurance Subsidiary of any notice of loss of licensure,
loss of participation under any reimbursement program or loss of
applicable health care license or certificate of authority, or loss of
any permit, authorization, accreditation, or qualification or any
notice relating to the threatened loss of any of the foregoing, from
any Governmental Authority, HMO Regulator or Insurance Regulator that,
individually or in the aggregate, has had, or could reasonably be
expected to have, a Material Adverse Effect;
(g) receipt by the Borrower, any Material HMO Subsidiary or
any Material Insurance Subsidiary of any other deficiency notice,
compliance order or adverse reports issued by any Governmental
Authority, HMO Regulator, Insurance Regulator or private insurance
company pursuant to a provider agreement that, if not promptly complied
with or cured, could reasonably be expected to result in the suspension
or forfeiture of any license, certification or licensure necessary for
such Material HMO Subsidiary or Material Insurance Subsidiary to carry
on its business as then conducted or the termination of any insurance
or reimbursement program available to any Material HMO Subsidiary or
any Material Insurance Subsidiary and that, individually or in the
aggregate, has had, or could reasonably be expected to have, a Material
Adverse Effect;
(h) receipt by the Borrower, any Material HMO Subsidiary or
any Material Insurance Subsidiary of any correspondence from any
Governmental Authority, HMO Regulator or Insurance Regulator that
asserts that the Borrower, any Material HMO Subsidiary or any Material
Insurance Subsidiary is not in substantial compliance with any HMO
Regulation or Insurance Regulation or that threatens the taking of any
action against the Borrower, any Material HMO Subsidiary or any
Material Insurance Subsidiary under any HMO Regulation or any Insurance
Regulation and that, individually or in the aggregate, has had, or
could reasonably be expected to have, a Material Adverse Effect; and
(i) any development or event that, individually or in the
aggregate, has had, or could reasonably be expected to have, a Material
Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the relevant Group Member proposes to take with
respect thereto.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount is
owing to any Lender or the Administrative Agent hereunder, the Borrower shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio
as at the last day of any period of four consecutive fiscal quarters of the
Borrower ending on or after June 30, 2005 to exceed 2.25 to 1.00.
(b) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
of the Borrower ending on or after June 30, 2005 to be less than 1.50 to 1.00.
41
(c) Consolidated Net Worth. Permit Consolidated Net Worth as at the
last day of any fiscal quarter of the Borrower ending on or after June 30, 2005
to be less than the sum of (i) $1,583,200,000 and (ii) 50% of cumulative
Consolidated Net Income for each fiscal quarter of the Borrower (beginning with
the fiscal quarter ending March 31, 2005) for which Consolidated Net Income is
positive.
7.2 Indebtedness. Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Borrower pursuant to any Loan Document
and any Permitted Refinancing Indebtedness incurred in respect thereof;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary;
(c) Guarantee Obligations of the Borrower or any of its
Subsidiaries in respect of obligations of any Subsidiary;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d) and any Permitted Refinancing Indebtedness incurred in
respect thereof;
(e) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(g) in an
aggregate principal amount not to exceed $100,000,000 at any one time
outstanding;
(f) Indebtedness of the Borrower in respect of the Senior
Notes in an aggregate principal amount not to exceed $500,000,000 and
any Permitted Refinancing Indebtedness incurred in respect thereof;
(g) Indebtedness of a Subsidiary of the Borrower outstanding
on the date on which such Subsidiary was acquired by the Borrower
(other than Indebtedness incurred as consideration in, or to provide
all or any portion of the funds or credit support utilized to
consummate, the transaction or series of transactions pursuant to which
such Subsidiary became a Subsidiary of the Borrower or was otherwise
acquired by the Borrower) in an aggregate amount (for all Subsidiaries)
at any one time outstanding not to exceed $100,000,000 and any
Permitted Refinancing Indebtedness incurred in respect thereof; and
(h) additional Indebtedness of the Borrower in an aggregate
principal amount not to exceed $250,000,000 at any one time
outstanding.
7.3 Liens. Create, incur, assume or suffer to exist any Lien upon any
of its property, whether now owned or hereafter acquired, except:
(a) Liens for taxes not yet due or that are being contested in
good faith by appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business that are not overdue for a period of more than 60 days or that
are being contested in good faith by appropriate proceedings;
42
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, reservations, rights-of-way, covenants,
conditions, restrictions and other similar encumbrances incurred in the
ordinary course of business that, in the aggregate, are not substantial
in amount and that do not in any case materially detract from the value
of the property subject thereto or materially interfere with the
ordinary conduct of the business of the Borrower or any of its
Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by Section 7.2(d), provided
that no such Lien is spread to cover any additional property after the
Closing Date and that the amount of Indebtedness secured thereby is not
increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(e) (x) to finance the
acquisition of fixed or capital assets or (y) pursuant to a sale and
leaseback transaction, provided that (i) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or
capital assets or such sale and leaseback transaction, as the case may
be, (ii) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness and (iii) the amount of
Indebtedness secured thereby is not increased;
(h) Liens created in connection with this Agreement to secure
the Obligations;
(i) any interest or title of a lessor under any lease entered
into by the Borrower or any other Subsidiary in the ordinary course of
its business and covering only the assets so leased;
(j) Liens on property of a Person at the time such Person
becomes a Subsidiary of the Borrower and securing Indebtedness of such
Person permitted under Section 7.2(g); provided that any such Lien may
not extend to any other property of the Borrower or any other
Subsidiary of the Borrower that is not a direct Subsidiary of such
Person; provided, further, that any such Lien shall not have been
incurred in anticipation of or in connection with the transaction or
series of transactions pursuant to which such Person became a
Subsidiary of the Borrower;
(k) Liens in respect of any writ of execution, attachment,
garnishment, judgment or judicial award, if (i) the time for appeal or
petition for rehearing has not expired, an appeal or appropriate
proceeding for review is being prosecuted in good faith and a stay of
execution pending such appeal or proceeding for review has been
secured, or (ii) the underlying claim is fully covered by insurance,
the insurer has acknowledged in writing its responsibility to pay such
claim and no action has been taken to enforce such execution,
attachment, garnishment, judgment or award; and
(l) Liens not otherwise permitted by this Section so long as
the aggregate outstanding principal amount of the obligations secured
thereby does not at any one time exceed (as to the Borrower and all
Subsidiaries) $100,000,000.
43
7.4 Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of all or substantially all of its
property or business, except that:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
other Subsidiary;
(b) any Subsidiary of the Borrower may Dispose of any or all
of its assets (i) to the Borrower or any other Subsidiary (upon
voluntary liquidation or otherwise) or (ii) pursuant to a Disposition
permitted by Section 7.5;
(c) any Subsidiary of the Borrower may be merged or
consolidated with or into another Person as the means of accomplishing
a Disposition permitted by Section 7.5; and
(d) any Investment expressly permitted by Section 7.7 may be
structured as a merger, consolidation or amalgamation.
7.5 Disposition of Property. Dispose of any of its property, whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person, except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions of accounts receivable in the ordinary course
of business;
(d) Dispositions of investment securities held for investment
purposes in the ordinary course of business;
(e) Dispositions permitted by clause (i) of Section 7.4(b);
(f) the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or any other Subsidiary; and
(g) the Disposition after the Closing Date of other property
having an aggregate fair market value (after taking into account any
liabilities associated with such property) not to exceed 25% of
Consolidated Total Assets as at March 31, 2005.
7.6 Restricted Payments. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend and
cash paid in lieu of fractional shares in connection therewith) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for the purchase, redemption, defeasance, retirement or other acquisition of,
any Capital Stock of any Group Member, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of any Group Member (collectively,
"Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the
Borrower or any other Subsidiary;
44
(b) the Borrower may make Restricted Payments in an aggregate
amount not to exceed the sum of (i) $100,000,000 and (ii) 50% of the
aggregate amount of Consolidated Net Income accrued during the period
commencing with the fiscal quarter ending March 31, 2005 and ending on
the last day of the most recent fiscal quarter, if any, ending at least
45 days prior to the date of such Restricted Payment (or if the
aggregate amount of Consolidated Net Income for such period shall be a
deficit, minus 100% of such deficit); and
(c) the Borrower may repurchase shares of, or options to
purchase shares of, common stock of the Borrower or any of its
Subsidiaries from current or former officers, directors or employees of
the Borrower or any of its Subsidiaries (or permitted transferees of
such current or former officers, directors or employees), pursuant to
the terms of agreements (including employment agreements) or plans (or
amendments thereto) approved by the Board of Directors of the Borrower
under which such individuals purchase or sell, or are granted the
option to purchase or sell, shares of such common stock, provided,
however, that (i) the aggregate amount of such repurchases pursuant to
this clause (c) shall not exceed $5,000,000 in any calendar year and
(ii) at the time of any such repurchase pursuant to this clause (c), no
Default or Event of Default shall have occurred and be continuing (or
result therefrom).
7.7 Investments. Make any advance, loan, extension of credit (by way of
guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets
constituting a business unit of, or make any other investment in, any Person
(all of the foregoing, "Investments"), except:
(a) Investments (including Investments in Subsidiaries) in
existence on the date hereof;
(b) extensions of trade credit in the ordinary course of
business;
(c) Investments in Cash Equivalents, and Investments in
investment securities having an "investment grade" rating by S&P or
▇▇▇▇▇'▇ (at the time of the making of such Investment) and that comply
with investment guidelines from time to time established by the Board
of Directors of the Borrower;
(d) Guarantee Obligations permitted by Section 7.2;
(e) loans and advances to employees of any Group Member in the
ordinary course of business (including for travel, entertainment and
relocation expenses) in an aggregate amount for all Group Members not
to exceed $1,000,000 at any one time outstanding;
(f) the Acquisition;
(g) Investments in assets useful in the business of the
Borrower and its Subsidiaries made by the Borrower or any of its
Subsidiaries with the proceeds of any Disposition of property permitted
under Section 7.5;
(h) intercompany Investments by any Group Member in the
Borrower or any Person that, prior to such investment, is a Group
Member; and
(i) in addition to Investments otherwise expressly permitted
by this Section, Investments by the Borrower or any of its Subsidiaries
in an aggregate amount (valued at cost) not to exceed $500,000,000
during any fiscal year of the Borrower, provided, that (i) if and so
long as the Consolidated Leverage Ratio as at the last day of the most
recent period of four consecutive fiscal
45
quarters of the Borrower for which financial statements shall have been
delivered to the Administrative Agent pursuant to Section 6.1 is less
than 1.0 to 1.0, the foregoing amount shall be increased to
$750,000,000, (ii) if and so long as the Loans are rated at least BBB-
or better by S&P and Baa3 or better by ▇▇▇▇▇'▇ (in each case with at
least a stable outlook), there shall be no limitation on the amount of
the Investments permitted by this Section 7.7(i) and (iii) in the event
that the Borrower makes Investments in excess of $500,000,000 during
any fiscal year in reliance on clause (i) or (ii) of this proviso (any
such excess Investments, the "Excess Investments") and thereafter no
longer satisfies the conditions in clause (i) or (ii) above, as the
case may be, there shall be no Default or Event of Default arising from
the making of such Excess Investments.
7.8 Transactions with Affiliates. Enter into any transaction, including
any purchase, sale, lease or exchange of property, the rendering of any service
or the payment of any management, advisory or similar fees, with any Affiliate
(other than the Borrower or any Subsidiary) unless such transaction is (a) not
otherwise prohibited by this Agreement and (b) upon fair and reasonable terms no
less favorable to the relevant Group Member than it would obtain in a comparable
arm's length transaction with a Person that is not an Affiliate.
7.9 Changes in Fiscal Periods. Permit the fiscal year of the Borrower
to end on a day other than December 31 or change the Borrower's method of
determining fiscal quarters.
7.10 Negative Pledge Clauses. Enter into or suffer to exist or become
effective any agreement that prohibits or limits the ability of any Group Member
to create, incur, assume or suffer to exist any Lien upon any of its property or
revenues, whether now owned or hereafter acquired, other than (a) this Agreement
and the other Loan Documents, (b) the Senior Notes Indentures and the Indenture,
dated as of February 1, 2002, entered into by the Borrower and First Union
National Bank, as trustee, in connection with the issuance of the Borrower's
8-1/8% Senior Notes due 2012 and (c) any agreements governing any purchase money
Liens or Capital Lease Obligations otherwise permitted hereby (in which case,
any prohibition or limitation shall only be effective against the assets
financed thereby).
7.11 Clauses Restricting Subsidiary Distributions. Enter into or suffer
to exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary of the Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to, or other Investments in, the Borrower or any other Subsidiary of
the Borrower or (c) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents, (ii) any restrictions with respect to a Subsidiary imposed pursuant
to an agreement that has been entered into in connection with the Disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary,
(iii) any restrictions on a Subsidiary imposed by HMO Regulations, Insurance
Regulations or any similar Requirements of Law, or any agreements entered into
pursuant thereto, and (iv) any restrictions applicable to a Person at the time
such Person becomes a Subsidiary of the Borrower, provided that any such
restriction shall not have been created in anticipation of or in connection with
the transaction or series of transactions pursuant to which such Person became a
Subsidiary of the Borrower.
7.12 Lines of Business. Enter into any business, either directly or
through any Subsidiary, except for those businesses in which the Borrower and
its Subsidiaries are engaged on the date of this Agreement (after giving effect
to the Acquisition) or that are reasonably related thereto.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
46
(a) the Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or
under any other Loan Document, within five days after any such interest
or other amount becomes due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by the
Borrower herein or in any other Loan Document or that is contained in
any certificate, document or financial or other statement furnished by
it at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been inaccurate in any material
respect on or as of the date made or deemed made; or
(c) the Borrower shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
6.4(a) or Section 6.7(a) or Section 7 of this Agreement; or
(d) the Borrower shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days after notice to the Borrower from the Administrative
Agent or the Required Lenders; or
(e) any Group Member shall (i) default in making any payment
of any principal of any Indebtedness (including any Guarantee
Obligation, but excluding the Loans) when due; or (ii) default in
making any payment of any interest on any such Indebtedness beyond the
period of grace, if any, provided in the instrument or agreement under
which such Indebtedness was created; or (iii) default in the observance
or performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case
of any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided, that a default, event or condition described in
clause (i), (ii) or (iii) of this paragraph (e) shall not at any time
constitute an Event of Default unless, at such time, one or more
defaults, events or conditions of the type described in clauses (i),
(ii) and (iii) of this paragraph (e) shall have occurred and be
continuing with respect to Indebtedness the outstanding principal
amount of which exceeds in the aggregate $20,000,000; or
(f)(i) any Group Member shall commence any case, proceeding
or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or any Group
Member shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against any Group Member
any case, proceeding or other action of a nature referred to in clause
(i) above that (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed or
undischarged for a period of 60 days; or (iii) there shall be commenced
against any Group Member any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets that results
in the entry of an order for any such relief that shall not
47
have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) any Group Member shall
take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or
(g)(i) any Group Member or any Commonly Controlled Entity
shall engage in any "prohibited transaction" (as defined in Section 406
of ERISA or Section 4975 of the Code) involving any Plan, (ii) any
"accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien
in favor of the PBGC or a Plan shall arise on the assets of any Group
Member or any Commonly Controlled Entity, (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA,
(v) any Group Member or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Required Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; and in each case
in clauses (i) through (vi) above, such event or condition, together
with all other such events or conditions, if any, could, in the sole
judgment of the Required Lenders, reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount
exceeding $20,000,000; or
(h) one or more judgments or decrees shall be entered against
any Group Member involving in the aggregate a liability (not paid or
fully covered by insurance as to which the relevant insurance company
has acknowledged coverage) of $20,000,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof; or
(i)(i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), shall become, or obtain rights (whether
by means or warrants, options or otherwise) to become, the "beneficial
owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange
Act), directly or indirectly, of more than 35% of the outstanding
common stock of the Borrower; or (ii) the board of directors of the
Borrower shall cease to consist of a majority of Continuing Directors;
or
(j) the non-compliance by the Borrower or any of its
Subsidiaries with any terms or provisions of any applicable HMO
Regulation or Insurance Regulation pertaining to the fiscal soundness,
solvency or financial condition of the Borrower or any of its
Subsidiaries and such non-compliance shall not have been cured or
waived within 30 days after the applicable statutory grace period (if
any), if such non-compliance could reasonably be expected to have a
Material Adverse Effect;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents (including all amounts of L/C Obligations, whether or
not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) shall immediately become due and
payable, and (B) if such event is any other Event of Default, either or both of
the following actions may be taken: (i) with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative
48
Agent shall, by notice to the Borrower, declare the Revolving Commitments to be
terminated forthwith, whereupon the Revolving Commitments shall immediately
terminate; and (ii) with the consent of the Required Lenders, the Administrative
Agent may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower, declare the Loans (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents (including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) to be due and payable forthwith, whereupon the
same shall immediately become due and payable. With respect to all Letters of
Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this paragraph, the Borrower shall at
such time deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be applied
by the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other Obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower (or such other Person as may be lawfully entitled thereto).
Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived by the Borrower.
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates and appoints
the Administrative Agent as the agent of such Lender under this Agreement and
the other Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Agents nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Group Member or any
officer thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this
49
Agreement or any other Loan Document or for any failure of the Borrower to
perform its obligations hereunder or thereunder. The Agents shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Group Member.
9.4 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any instrument,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including counsel to the Borrower), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request
of the Required Lenders (or, if so specified by this Agreement, all Lenders),
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Loans.
9.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders); provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereafter
taken, including any review of the affairs of a Group Member or any affiliate of
a Group Member, shall be deemed to constitute any representation or warranty by
any Agent to any Lender. Each Lender represents to the Agents 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
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Group Members and
their affiliates and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Group Members and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative
50
Agent hereunder, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Group Member or any affiliate
of a Group Member that may come into the possession of the Administrative Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
9.7 Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent's gross negligence or
willful misconduct. The agreements in this Section shall survive the payment of
the Loans and all other amounts payable hereunder.
9.8 Agent in Its Individual Capacity. Each Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with any Group Member as though such Agent were not an Agent. With respect to
its Loans made or renewed by it and with respect to any Letter of Credit issued
or participated in by it, each Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Lender and may exercise the
same as though it were not an Agent, and the terms "Lender" and "Lenders" shall
include each Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent may resign
as Administrative Agent upon 10 days' notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 8(a) or Section 8(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.
51
9.10 Documentation Agents and Syndication Agent. Neither the
Documentation Agents nor the Syndication Agent shall have any duties or
responsibilities hereunder in its capacity as such.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and the Borrower may, or, with the written consent of the
Required Lenders, the Administrative Agent and the Borrower may, from time to
time, (a) enter into written amendments, supplements or modifications hereto and
to the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Borrower hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled date of any
principal amortization payment in respect of any Term Loan, reduce the stated
rate of any interest or fee payable hereunder (except in connection with the
waiver of applicability of any post-default increase in interest rates (which
waiver shall be effective with the consent of the Majority Facility Lenders of
each adversely affected Facility) or extend the scheduled date of any payment
thereof, or increase the amount or extend the expiration date of any Lender's
Revolving Commitment, in each case without the written consent of each Lender
directly affected thereby; (ii) eliminate or reduce the voting rights of any
Lender hereunder without the written consent of such Lender; (iii) reduce any
percentage specified in the definition of Required Lenders or consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, in each case without the
written consent of all Lenders; (iv) amend, modify or waive any provision of
Section 2.14 without the written consent of the Majority Facility Lenders in
respect of each Facility adversely affected thereby; (v) reduce the percentage
specified in the definition of Majority Facility Lenders with respect to any
Facility without the written consent of all Lenders under such Facility; (vi)
amend, modify or waive any provision of Section 9 without the written consent of
the Administrative Agent; or (vii) amend, modify or waive any provision of
Section 3 without the written consent of the Issuing Lender. Any such waiver and
any such amendment, supplement or modification shall apply equally to each of
the Lenders and shall be binding upon the Borrower, the Lenders, the
Administrative Agent and all future holders of the Loans. In the case of any
waiver, the Borrower, the Lenders and the Administrative Agent shall be restored
to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
Notwithstanding the foregoing, this Agreement may be amended (or
amended and restated) with the written consent of the Required Lenders, the
Administrative Agent and the Borrower (a) to add one or more additional credit
facilities to this Agreement and to permit the extensions of credit from time to
time outstanding thereunder and the accrued interest and fees in respect thereof
to share ratably in the benefits of this Agreement and the other Loan Documents
with the Term Loans and Revolving Extensions of Credit and the accrued interest
and fees in respect thereof and (b) to include appropriately the Lenders holding
such credit facilities in any determination of the Required Lenders and Majority
Facility Lenders.
In addition, notwithstanding the foregoing, this Agreement may be
amended with the written consent of the Administrative Agent, the Borrower and
the Lenders providing the relevant
52
Replacement Term Loans (as defined below) to permit the refinancing, replacement
or modification of all outstanding Term Loans (the "Refinanced Term Loans") with
a replacement term loan tranche hereunder ("Replacement Term Loans"), provided
that (a) the aggregate principal amount of such Replacement Term Loans shall not
exceed the aggregate principal amount of such Refinanced Term Loans, (b) the
Applicable Margin for such Replacement Term Loans shall not be higher than the
Applicable Margin for such Refinanced Term Loans and (c) the Average Life of
such Replacement Term Loans shall not be shorter than the Average Life of such
Refinanced Term Loans at the time of such refinancing.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
Borrower: Coventry Health Care, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President, Business Development
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Administrative Agent: Canadian Imperial Bank of Commerce
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to Section 2 shall not be effective until received.
Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications (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
pursuant to Section 2 unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in its
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.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
53
10.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all its out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including the reasonable fees and disbursements of counsel to the
Administrative Agent and filing and recording fees and expenses, with statements
with respect to the foregoing to be submitted to the Borrower prior to the
Closing Date (in the case of amounts to be paid on the Closing Date) and from
time to time thereafter on a quarterly basis or such other periodic basis as the
Administrative Agent shall deem appropriate, (b) to pay or reimburse each Lender
and the Administrative Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
fees and disbursements of counsel (including the allocated fees and expenses of
in-house counsel) to each Lender and of counsel to the Administrative Agent, (c)
to pay, indemnify, and hold each Lender and the Administrative Agent harmless
from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, that may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and the Administrative Agent and their respective officers,
directors, employees, affiliates, agents and controlling persons (each, an
"Indemnitee") harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including any
of the foregoing relating to the use of proceeds of the Loans or the violation
of, noncompliance with or liability under any Environmental Law applicable to
the operations of any Group Member or any of the Properties and the reasonable
fees and expenses of legal counsel in connection with claims, actions or
proceedings by any Indemnitee against any Group Member under any Loan Document
or by any Group Member against any Indemnitee (all the foregoing in this clause
(d), collectively, the "Indemnified Liabilities"), provided, that the Borrower
shall have no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnitee. All amounts
due under this Section 10.5 shall be payable not later than 10 days after
written demand therefor. Statements payable by the Borrower pursuant to this
Section 10.5 shall be submitted to Vice President, Business Development
(Telephone No. ▇▇▇-▇▇▇-▇▇▇▇) (Telecopy No. 301-493-0711), at the address of the
Borrower set forth in Section 10.2, or to such other Person or address as may be
hereafter designated by the Borrower in a written notice to the Administrative
Agent. The agreements in this Section 10.5 shall survive repayment of the Loans
and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that the Borrower may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of each Lender and no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of paragraph (b) of this Section, (ii) by way of participation in
54
accordance with the provisions of paragraph (d) of this Section 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
any party hereto shall be null and void). Nothing in this Agreement, expressed
or implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in paragraph (d) of this Section and, to the extent
expressly contemplated hereby, the Related Parties of each of the Administrative
Agent and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans at the time owing to it);
provided that (i) except in the case of an assignment of the entire remaining
amount of the assigning Lender's Commitment and the Loans at the time owing to
it or in the case of an assignment to a Lender or an Affiliate of a Lender or an
Approved Fund 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 Loan 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
$2,500,000 in the case of any assignment, unless each of the Administrative
Agent and, so long as no Event of Default has occurred and is continuing, the
Borrower otherwise consents (each such consent not to be unreasonably withheld
or delayed); (ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement with respect to the Loan or the Commitment assigned; (iii) any
assignment of a Revolving Commitment must be approved by the Administrative
Agent and the Issuing Lender (each such consent not to be unreasonably withheld
or delayed); and (iv) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500, and the Eligible Assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an administrative
questionnaire. Subject to acceptance and recording thereof by the Administrative
Agent pursuant to paragraph (c) of this Section, from and after the effective
date specified in each Assignment and Assumption, the Eligible Assignee
thereunder shall be a party to this Agreement and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 10.5 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.
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices in New York 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 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 the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.
55
(d) Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower's Affiliates
or Subsidiaries) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans 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) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver that requires the consent of each Lender
directly affected thereby pursuant to the proviso to the second sentence of
Section 10.1 and that directly affects such Participant. Subject to paragraph
(e) of this Section, the Borrower agrees that each Participant shall be entitled
to the benefits of Sections 2.15, 2.16 and 2.17 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 10.7(b) as though it were a Lender, provided
such Participant agrees to be subject to Section 10.7(a) as though it were a
Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Sections 2.15 or 2.16 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Non-U.S. Lender if it were
a Lender shall not be entitled to the benefits of Section 2.16 unless the
Borrower is notified of the participation sold to such Participant and such
Participant complies with Sections 2.16(d) and (e) as though it were a Lender.
(f)(i) 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, (ii) any Lender that is a fund, trust or similar entity
may assign or pledge all or any portion of the Loans held by it (and any Notes
evidencing such Loans) to a trustee under any indenture to which such Lender is
a party in support of its obligations to the trustee for the benefit of the
applicable trust beneficiaries, and (iii) any Lender may pledge all or any
portion of the Loans held by it (and any Notes evidencing such Loans) to its
lenders for collateral security purposes; provided in each case that no such
pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.
(g) The Borrower, upon receipt of written notice from the relevant
Lender, agrees to issue appropriate Notes to any Lender requiring Notes to
facilitate transactions of the type described in paragraph (f) above.
(h) Notwithstanding the foregoing, any Conduit Lender may assign any or
all of the Loans it may have funded hereunder to its designating Lender without
the consent of the Borrower or the Administrative Agent and without regard to
the limitations set forth in Section 10.6(b). Each of the Borrower, each Lender
and the Administrative Agent hereby confirms that it will not institute against
a Conduit Lender or join any other Person in instituting against a Conduit
Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any state bankruptcy or similar law, for one year and one day
after the payment in full of the latest maturing commercial paper note issued by
such Conduit Lender; provided, however, that each Lender designating any Conduit
Lender hereby agrees to indemnify, save and hold harmless each other party
hereto for any loss, cost, damage or
56
expense arising out of its inability to institute such a proceeding against such
Conduit Lender during such period of forbearance.
10.7 Adjustments; Set-off. (a) Except to the extent that this Agreement
expressly provides for payments to be allocated to a particular Lender or to the
Lenders under a particular Facility, if any Lender (a "Benefitted Lender")
shall, at any time after the Loans and other amounts payable hereunder shall
immediately become due and payable pursuant to Section 8, receive any payment of
all or part of the Obligations owing to it, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 8(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of the Obligations owing to such other Lender, such
Benefitted Lender shall purchase for cash from the other Lenders a participating
interest in such portion of the Obligations owing to each such other Lender, or
shall provide such other Lenders with the benefits of any such collateral, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, after the occurrence and during the continuance of an Event of Default each
Lender shall have the right, without prior notice to the Borrower, any such
notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise), to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application made
by such Lender, provided that the failure to give such notice shall not affect
the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.
57
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States for
the Southern District of New York, and appellate courts from any
thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in Section 10.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
10.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agent and Lenders, on one
hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
10.14 Confidentiality. Each of the Administrative Agent and each Lender
agrees to keep confidential all non-public information relating to any Group
Member provided to it by or on behalf of any Group Member, the Administrative
Agent or any Lender pursuant to or in connection with this Agreement that is
designated by the provider thereof as confidential; provided that nothing herein
shall prevent the Administrative Agent or any Lender from disclosing any such
information (a) to the
58
Administrative Agent, any other Lender or any affiliate thereof, (b) subject to
an agreement to comply with the provisions of this Section, to any actual or
prospective Transferee or any direct or indirect counterparty to any Swap
Agreement (or any professional advisor to such counterparty), (c) to its
employees, directors, agents, attorneys, accountants and other professional
advisors or those of any of its affiliates, (d) upon the request or demand of
any Governmental Authority, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) that has been publicly disclosed, (h) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued with
respect to such Lender, or (i) in connection with the exercise of any remedy
hereunder or under any other Loan Document.
10.15 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
10.16 Delivery of Addenda. Each initial Lender shall become a party to
this Agreement by delivering to the Administrative Agent an Addendum duly
executed by such Lender.
10.17 USA PATRIOT Act Notice. Each Lender and the Administrative Agent
(for itself and not on behalf of any Lender) hereby notifies the 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 "Patriot Act"), it is required to
obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Lender or the Administrative Agent, as applicable, to
identify the Borrower in accordance with the Act. The Borrower shall, and shall
cause each of its Subsidiaries to, provide, to the extent commercially
reasonable, such information and take such actions as are reasonably requested
by each Lender and the Administrative Agent to maintain compliance with the Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
COVENTRY HEALTH CARE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
CANADIAN IMPERIAL BANK OF COMMERCE, as
Administrative Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
▇▇▇▇▇▇ COMMERCIAL PAPER INC., as
Syndication Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
BANK OF AMERICA, N.A., as Documentation
Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
LASALLE BANK NATIONAL ASSOCIATION, as
Documentation Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Documentation Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: Director
Signature Page to Credit Agreement