EXHIBIT 10.12d
EXECUTION
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF JUNE 8, 2000,
BY AND AMONG
HEALTHPLAN SERVICES CORPORATION,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
HEALTHPLAN SERVICES CORPORATION
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the 8th day
of June, 2000, by and among HEALTHPLAN SERVICES CORPORATION, a Delaware
corporation (the "Borrower"), THE LENDERS LISTED ON THE SIGNATURE PAGES HEREOF
("individually referred to herein as a "Lender" and collectively as "Lenders"),
and FIRST UNION NATIONAL BANK, as Administrative Agent for the Lenders.
R E C I T A L S
WHEREAS, the Borrower, the lenders party thereto and the Administrative
Agent are party to that certain Amended and Restated Credit Agreement dated as
of May 1, 1998 (as amended by the Waiver thereto dated as of May 15, 1998, the
Waiver thereto dated as of June 16, 1998, the First Amendment thereto dated as
of June 23, 1998, the Second Amendment and Waiver thereto dated as of December
15, 1998, the Third Amendment and Waiver thereto dated as of November 15, 1999,
the Nonwaiver and Standstill Agreement thereto dated as of February 11, 2000,
the Waiver and Consent thereto dated as of March 1, 2000, the Extension of
Nonwaiver and Standstill Agreement thereto dated as of March 17, 2000, the
Second Extension of Nonwaiver and Standstill Agreement thereto dated as of April
13, 2000, and as such agreement may have otherwise been amended, restated,
supplemented or otherwise modified from time to time prior to the date hereof,
the "Existing Agreement");
WHEREAS, the Borrower has requested and the Required Lenders have
agreed to amend and restate the Existing Agreement to, among other things,
restructure the credit facilities outstanding thereunder on the terms and
conditions of this Agreement;
WHEREAS, the Borrower and the Subsidiary Guarantors have been and will
continue to be members of the same affiliated group and have conducted and will
continue to conduct their operations for their mutual benefit as one integrated
financial enterprise; each of the Subsidiary Guarantors have benefited and will
continue to benefit from the business operations of the other members of the
affiliated group and all extensions of credit to the Borrower under the Existing
Agreement have inured, and the continuation of those extensions of credit
hereunder will inure, to the benefit of the Subsidiary Guarantors, directly or
indirectly;
WHEREAS, the Subsidiary Guarantors under the Existing Agreement will
continue to guaranty the Obligations of the Borrower hereunder and under the
other Loan Documents;
WHEREAS, obligations under the Existing Agreement were secured by a
First Priority Lien on all of the capital stock of certain Subsidiaries of the
Borrower; and
WHEREAS, the Borrower and the Subsidiary Guarantors desire to secure
all of the Obligations hereunder and under the Loan Documents by granting or
continuing to grant to the Administrative Agent, for the benefit of the Lenders,
a First Priority Lien on substantially all of
their respective assets, including a pledge of all of the capital assets of all
of their respective Subsidiaries.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. The following terms when used in this
Agreement shall have the meanings assigned to them below:
"Account" means, with respect to any Person, all present and future
rights of such Person to payment for goods sold or leased or for services
rendered (except those evidenced by instruments or chattel paper), whether now
existing or hereafter arising and wherever arising, and whether or not they have
been earned by performance.
"Account Debtor" means any Person who is or may be become obligated to
any Credit Party under, with respect to, or on account of, an Account.
"Additional Payments" shall have the meaning assigned thereto in
Section 2.3(a).
"Adjusted Budget" means, as at any date of determination, the Budget
for the then current Fiscal Year, as adjusted for (a) the anticipated results
from permitted future Asset Sales to the extent the Borrower or any of its
Subsidiaries has entered into a definitive purchase and sale agreement with a
prospective purchaser with respect thereto, a copy of which shall have been
delivered to the Administrative Agent and Lenders, (b) actual restructuring
charges taken in connection with permitted Asset Sales consummated on or before
such date of determination, and (c) business closures consummated on or prior to
such date of determination, in each case as calculated in a manner satisfactory
to the Required Lenders. Adjustments to the Budget shall take effect as of the
end of the month in which the permitted Asset Sale is irrevocably consummated
or, in the case of a future Asset Sale under clause (a) above, as of the end of
the month in which a definitive purchase and sale agreement becomes effective,
and, in cases other than Asset Sales, at the end of the month when actually
taken by the Borrower.
"Administrative Agent" means First Union in its capacity as
Administrative Agent hereunder, and any successor thereto appointed pursuant to
Section 12.9.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
13.1.
"Affiliate" means, with respect to a Person, any other Person which
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person. The term "control"
means (a) with respect to an Affiliate of the Borrower or any Subsidiary
thereof, the power to vote ten percent (10%) or more of the securities or other
equity interests of a Person having ordinary voting power, (b) with respect to
an Affiliate of the
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Administrative Agent or any Lender, the power to vote twenty percent (20%) or
more of the securities or other equity interests of a Person having ordinary
voting power, or (c) with respect to any Person, the possession, directly or
indirectly, of any other power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"Aggregate Amounts Due" shall have the meaning assigned thereto in
Section 4.5.
"Agreement" means the Existing Agreement, as amended and restated in
its entirety by this Second Amended and Restated Credit Agreement, as it may be
further amended, restated or otherwise modified.
"Applicable Law" means all applicable provisions of constitutions,
laws, statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of all Governmental Authorities and all
orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in Section
4.1(b).
"Application" means an application, in the form specified by the
Issuing Lender from time to time, requesting the Issuing Lender to issue a
Letter of Credit.
"Arbitration Rules" shall have the meaning assigned thereto in Section
13.7(b).
"Asset Sale" shall have the meaning assigned thereto in Section 10.6.
"Assignment and Acceptance" shall have the meaning assigned thereto in
Section 13.11.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the higher of (a) the Prime Rate or (b)
the Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime Rate
or the Federal Funds Rate.
"Borrower" means HealthPlan Services Corporation, a Delaware
corporation, and its permitted successors and assigns.
"Borrowing Base" means, as of any date of determination, the sum of (a)
ninety percent (90%) (or such lesser percentage as determined from time to time
by the Administrative Agent in its reasonable credit judgment) of the value of
the Credit Parties' Eligible Accounts Receivable, less (b) the sum of (i) a
Reserve for L/C Expenses, and (ii) such other reserves as the Administrative
Agent may from time to time require in the exercise of its reasonable credit
judgment upon not less than one (1) Business Day's prior notice to the Borrower.
"Borrowing Base Certificate" means a certificate substantially in the
form of Exhibit E annexed hereto delivered by the Borrower to the Lenders
pursuant to Section 5.2(g) or Section 7.7.
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"Budget" means (a) the budget for Fiscal Year 2000 of Borrower and its
Subsidiaries dated as of May 25, 2000 and delivered to the Lenders on or before
the Closing Date and (b) each budget delivered to the Administrative Agent and
Lenders pursuant to Section 7.1(d) for the following Fiscal Years during the
term of this agreement, each of which shall be prepared in a manner consistent
with the Fiscal Year 2000 budget described in clause (a) above.
"Business Day" means for all purposes any day other than a Saturday,
Sunday or legal holiday on which banks in Charlotte, North Carolina and New
York, New York, are open for the conduct of their commercial banking business.
"Capital Expenditures" means, for any period, the sum of the aggregate
of all expenditures (whether paid in cash or other consideration or accrued as a
liability and including that portion of any Capital Lease which is capitalized
on the Consolidated balance sheet of the Borrower and its Subsidiaries) by the
Borrower and its Subsidiaries during such period that, in conformity with GAAP,
are included in "additions to property, plant or equipment" or comparable items
reflected in the Consolidated statement of cash flows of the Borrower and its
Subsidiaries.
"Capital Lease" means any lease of any property by the Borrower or any
Subsidiary thereof at any time as lessee that would, in accordance with GAAP, be
required to be classified or accounted for as a capital lease on a Consolidated
balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease of
any Person, the amount of the obligation of such Person thereunder that would,
in accordance with GAAP, appear on a Consolidated balance sheet of such Person
as a liability in respect of such Capital Lease.
"Carrier Contracts" means the collective reference to the
administrative services contracts between the Borrower or any Subsidiary thereof
and the Persons for whom the Borrower or such Subsidiary provides
administrative, marketing or other services with respect to health insurance
plans of such Persons in the ordinary course of the Borrower's or such
Subsidiary's business. Each Carrier Contract which is a Material Contract is
listed on Schedule 1.1(a) hereto.
"Cash" means money, currency or a credit balance in a Deposit Account.
"Cash Management Letters" means the collective reference to the letter
agreements by and between the Borrower and the Administrative Agent, any Lender
or any other depository institution, in form and substance satisfactory to the
Administrative Agent, pursuant to which the Administrative Agent, such Lender or
such depository institution, as the case may be, shall maintain a Deposit
Account, as such Cash Management Letters may be amended, restated or otherwise
modified.
"Cash Management Systems" shall have the meaning assigned thereto in
Section 8.12.
"Change of Control" shall have the meaning assigned thereto in Section
11.1(h).
"Client Disbursement Accounts" means the Deposit Accounts maintained by
the Borrower or HPSI in the name of and for the benefit of clients of the
Borrower and its
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Subsidiaries (other than the Borrower or any Affiliate thereof), provided that
funds on deposit in such Deposit Accounts are funds of such clients and are not
beneficially owned by the Borrower or HPSI.
"Closing Date" means the date of this Agreement or such later Business
Day upon which each condition described in Sections 5.2 and 5.3 shall be
satisfied or waived in all respects in a manner acceptable to the Administrative
Agent.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended, supplemented or otherwise modified.
"Collateral" means the assets, property and interests in property of
the Credit Parties, whether now owned or hereafter acquired, that shall, from
time to time, secure the Obligations in accordance with the Security Documents
and any property or interest provided in addition to or in substitution for any
of the foregoing.
"Collateral Account" has the meaning assigned to that term in the
Security and Pledge Agreement.
"Collection Account" shall mean that certain account of the
Administrative Agent, account number 500000000897 in the name of the
Administrative Agent at the Administrative Agent's Office or such other account
as the Administrative Agent shall specify.
"Commitments" means the Revolving Loan Commitments and L/C Loan
Commitments.
"Commitment Fee" shall have the meaning assigned thereto in Section
4.2.
"Consolidated" means, when used with reference to financial statements
or financial statement items of the Borrower and its Subsidiaries, such
statements or items on a consolidated basis in accordance with applicable
principles of consolidation under GAAP.
"Credit Facilities" means the collective reference to the term
facility, revolving credit facility, and L/C loan and letter of credit facility
established pursuant to Articles II and III hereof.
"Credit Parties" means the collective reference to the Borrower and the
Subsidiary Guarantors.
"Daily Receipts" means all amounts received by the Borrower and its
Subsidiaries, whether in the form of cash, checks, any moneys received or
receivable in respect of charges made by means of credit cards, and other
negotiable instruments.
"Default" means any of the events specified in Section 11.1 which with
the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
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"Disbursement Account" means an account maintained by the Borrower with
the Administrative Agent or any Lender into which the Administrative Agent or
such Lender, as the case may be, deposits proceeds of Revolving Loans made to
Borrower pursuant to Section 2.1(b)(ii) for use by the Borrower solely in
accordance with the provisions of Section 2.6.
"Disputes" shall have the meaning assigned thereto in Section 13.7(b).
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"EBITDA" means, for any period, the sum, without duplication, of the
amounts for such period of (a) Net Income, (b) Interest Expense, (c) provisions
for taxes based on income, (d) total depreciation expense, (e) total
amortization expense, (f) UICI acquisition expenses in an amount not to exceed
$1,300,000, in the aggregate and (g) other nonrecurring non-cash items deducted
in the calculation of Net Income not to exceed $1,000,000 in any Fiscal Quarter
or $3,000,000 in the aggregate prior to the Final Maturity Date less other
non-cash items added in the calculation of Net Income, all of the foregoing as
determined on a consolidated basis for the Borrower and its Subsidiaries in
conformity with GAAP.
"Eligible Accounts Receivable" means the aggregate amount of all
Accounts of the Credit Parties which are includible as an asset on the
Borrower's Consolidated Balance Sheet, in accordance with GAAP and not excluded
below. In determining the amount to be included in the Borrowing Base, the face
amount of such Accounts shall be reduced by the amount of all returns,
discounts, deductions, claims, credits, charges, or other allowances. Unless
otherwise approved in writing by the Administrative Agent, an Account of a
Credit Party shall not be included in Eligible Accounts Receivable if:
(a) it does not arise from the sale of goods or the performance of
services by such Credit Party in the ordinary course of its business;
(b) (i) such Credit Party's right to receive payment is not absolute or
is contingent upon the fulfillment of any condition whatsoever or (ii)
such Credit Party is not able to bring suit or otherwise enforce its
remedies against the Account Debtor through judicial process, or (iii)
the Account represents a progress billing consisting of an invoice for
goods sold or used or services rendered pursuant to a contract under
which the Account Debtor's obligation to pay that invoice is subject to
such Credit Party's completion of further performance under such
contract or is subject to the equitable lien of a surety bond issuer;
or
(c) it is unpaid more than one hundred twenty (120) days after the
earlier of (i) the date of invoice or (ii) the date reported by such
Credit Party as revenue on its books and records unless Borrower has
determined in good faith that there is a reasonable likelihood that
such Account remains collectible; provided that the aggregate face
value of all such Accounts shall not exceed the lesser of (A)
$3,000,000 and (B) fifteen percent (15%) of the value of all Eligible
Accounts Receivable; or
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(d) it is from the same Account Debtor or its Affiliate and fifty
percent (50%) or more of all Accounts from that Account Debtor (and its
Affiliates) are ineligible under clause (c) above; or
(e) the Account Debtor for such Account has asserted a right of setoff
against such Credit Party or has disputed its liability or otherwise
has made any claim with respect to such Account or any other Account
which has not been resolved, in each case to the extent of the amount
owed by such Credit Party to such Account Debtor, the amount of such
actual or asserted right of setoff, or the amount of such dispute or
claim, as the case may be; or
(f) the Account Debtor is (or its assets are) the subject of an
Insolvency Event; or
(g) such Account is not payable in Dollars or the Account Debtor for
such Account is located outside the continental United States; or
(h) the sale to the Account Debtor was made pursuant to any written
agreement providing for repurchase or return; or
(i) the Administrative Agent (i) reasonably determines by its own
credit analysis that collection of such Account is uncertain or that
such Account is unlikely to be paid and (ii) provides not less than
seven (7) days prior notice to the Borrower of the exclusion of such
Account from Eligible Accounts Receivable; or
(j) the Account Debtor is the United States of America or any
department, agency or instrumentality thereof, unless such Credit Party
duly assigns its rights to payment of such Account to the
Administrative Agent pursuant to the Assignment of Claims Act of 1940,
as amended (31 U.S.C.ss.ss.3727 et seq.); or
(k) an invoice, acceptable to the Administrative Agent in form and
substance, with respect to such Account has not been sent to the
applicable Account Debtor; or
(l) such Account does not comply with all Applicable Laws, including
the Federal Consumer Credit Protection Act, the Federal Truth in
Lending Act and Regulation Z of the Board of Governors of the Federal
Reserve System; or
(m) such Account is not subject to a valid and perfected First Priority
Lien in favor of the Administrative Agent or does not otherwise conform
to the representations and warranties contained in the Loan Documents;
or
(n) such Account is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold
to or services rendered and accepted by the applicable Account Debtor;
or
(o) it arises from a sale to any director, officer, other employee or
Affiliate of any Credit Party, or to any entity which has any common
officer or director with any Credit Party; or
(p) such Account is evidenced by a judgment, instrument or chattel
paper; or
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(q) such Account exceeds any credit limit established by the
Administrative Agent, in its reasonable discretion, following prior
notice of such limit by the Administrative Agent to the Borrower
"Eligible Assignee" means, with respect to any assignment of the
rights, interest and obligations of a Lender hereunder, a Person that is at the
time of such assignment (a) a commercial bank organized under the laws of the
United States or any state thereof, having combined capital and surplus in
excess of $500,000,000, (b) a commercial bank organized under the laws of any
other country that is a member of the Organization of Economic Cooperation and
Development, or a political subdivision of any such country, having a combined
capital and surplus in excess of $500,000,000; provided that such bank is acting
through a branch or agency located in the United States, (c) a finance company,
insurance company, mutual fund, investment fund or other financial institution
which in the ordinary course of business extends credit of the type extended
hereunder and that has total assets in excess of $1,000,000,000, (d) already a
Lender hereunder (whether as an original party to this Agreement or as the
assignee of another Lender), (e) the successor (whether by transfer of assets,
merger or otherwise) to all or substantially all of the commercial lending
business of the assigning Lender, or (f) any other Person that has been approved
in writing as an Eligible Assignee by the Administrative Agent.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of any
Credit Party or any ERISA Affiliate or (b) has at any time within the preceding
six years been maintained for the employees of any Credit Party or any current
or former ERISA Affiliate.
"Environmental Laws" means any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of the environment, including, but not limited to, requirements
pertaining to the manufacture, processing, distribution, use, treatment,
storage, disposal, transportation, handling, reporting, licensing, permitting,
investigation or remediation of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, each as amended, supplemented or otherwise
modified.
"ERISA Affiliate" means any Person who together with any Credit Party
is treated as a single employer within the meaning of Section 414(b), (c), (m)
or (o) of the Code or Section 4001(b) or ERISA.
"Event of Default" means any of the events specified in Section 11.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Excess Cash Flow" means, for any period and as determined on a
consolidated basis for the Borrower and its Subsidiaries, an amount (if
positive) equal to (a) the amounts for such period of EBITDA minus (b) the sum,
without duplication, of the amounts for such period of (i) voluntary and
scheduled permanent reductions of Total Debt (excluding repayments of Revolving
Loans except to the extent the Revolving Loan Commitments are permanently
reduced in connection with such repayments), (ii) permitted Capital Expenditures
(net of any
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proceeds of any related financings with respect to such expenditures), (iii)
Interest Expense, (iv) restructuring charges paid in cash, and (v) the provision
for current taxes based on income of the Borrower and its Subsidiaries and
payable in cash with respect to such period.
"Existing Agreement" shall have the meaning assigned thereto in the
Recitals hereto.
"Existing Letters of Credit" means the letters of credit issued
pursuant to Section 3.1 of the Existing Agreement and listed on Schedule 1.1(c)
annexed hereto which will, as of the Closing Date, be deemed outstanding as
Letters of Credit issued pursuant to Section 3.1 of this Agreement.
"Existing Loans" means the Loans under and as defined in the Existing
Agreement.
"FDIC" means the Federal Deposit Insurance Corporation, or any
successor thereto.
"Federal Funds Rate" means the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15(519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then "Federal Funds Rate" shall mean a daily rate
which is determined, in the opinion of the Administrative Agent, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. (Charlotte time). Rates for weekends or holidays shall be
the same as the rate for the most immediate proceeding Business Day.
"Final Maturity Date" means August 31, 2001.
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Security Document, that (a) such Lien
has priority over any other Lien on such Collateral (other than Liens permitted
pursuant to Section 10.3) and (b) such Lien is the only Lien (other than Liens
permitted pursuant to Section 10.3) to which such Collateral is subject.
"First Union" means First Union National Bank, a national banking
association, and its successors.
"Fiscal Quarter" means any fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of the Borrower and its
Subsidiaries ending on December 31.
"Fixed Charge Coverage Ratio" means as of any date of determination and
as determined on a consolidated basis in accordance with GAAP, the ratio of, for
the four Fiscal Quarter period ending on or immediately prior to such date, (a)
the sum (without duplication) of the amounts for such period of (x) EBITDA less
(y) the sum (without duplication) of (i) Capital Expenditures, plus (ii) taxes
paid in cash, to (b) the sum (without duplication) for the succeeding four (4)
Fiscal Quarters of (i) Interest Expense plus (ii) any scheduled principal
payments due in respect of any Total Debt (excluding the Additional Payments and
principal payments due hereunder on the Final Maturity Date) plus (iii) the
aggregate amount of all rents paid or payable under all Capital Leases to which
the Borrower or any of its Subsidiaries is a party.
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"GAAP" means generally accepted accounting principles, as recognized by
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained on a consistent
basis for the Borrower and its Subsidiaries throughout the period indicated and
consistent with the prior financial practice of the Borrower and its
Subsidiaries.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or other
political subdivision thereof, and any government or any Person exercising
executive, legislative, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guaranty Obligation" means, with respect to the Borrower and its
Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Indebtedness, lease, dividend or other obligation of any other
Person (determined as if the definition of Indebtedness referred to such Person)
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of any such Person (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation (whether arising by virtue of partnership arrangements, by
agreement to keep well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement condition or otherwise) or (b)
entered into for the purpose of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
provided, that the term Guaranty Obligation shall not include endorsements for
collection or deposit in the ordinary course of business.
"Xxxxxxxxxx" means Xxxxxxxxxx Southwest, Inc., a Missouri corporation.
"Hazardous Materials" means any substances or materials (a) which are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Applicable Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Applicable Law, (d) the discharge or emission or release which requires a
permit or license under any Applicable Law or other Governmental Approval, (e)
which are deemed to constitute a nuisance, or trespass or pose a health or
safety hazard to person or neighboring properties, (f) which are materials
consisting of underground or aboveground storage tanks, whether empty, filled or
partially filled with any substance, or (g) which contain, without limitation,
asbestos, polychlorinated biphenyls, urea formaldehyde foam insulation,
petroleum hydrocarbons, petroleum derived substances or waste, crude oil,
nuclear fuel, natural gas or synthetic gas.
"Hedging Agreement" means any agreement with respect to an interest
rate swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate
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risk exposure executed in connection with hedging the interest rate exposure of
the Borrower, and any confirming letter executed pursuant to such hedging
agreement, all as amended, restated or otherwise modified.
"HPSI" means HealthPlan Services, Inc., a Florida corporation, and its
successors and assigns.
"Inactive Subsidiary" means the Subsidiaries of Borrower listed in
Schedule 1.1(d) attached hereto.
"Indebtedness" means, as applied to any Person: (a) all liabilities,
obligations and indebtedness (including subordinated indebtedness) of such
Person for borrowed money, whether now or hereafter owing or arising and whether
primary, secondary, direct, contingent, fixed or otherwise and whether matured
or unmatured, (b) all notes payable and drafts accepted representing extensions
of credit, whether or not representing an obligation for borrowed money and all
obligations evidenced by bonds, debentures, notes or other similar instruments;
(c) all obligations, contingent or otherwise, of such Person relative to the
face amount of all letters of credit, whether or not drawn, including without
limitation any reimbursement obligation, and banker's acceptances issued for the
account of such Person thereof; (d) all Capital Lease Obligations of such
Person; (e) all obligations to pay the deferred purchase price of property or
services (including, without limitation, all unpaid liabilities under earn-out
agreements to the extent such liabilities are required to be recorded under
GAAP); (f) all indebtedness secured by any Lien on any property or asset owned
or held by that Person regardless of whether the indebtedness secured thereby
shall have been assumed by that Person or is nonrecourse to the credit of that
Person; (g) all obligations under any Hedging Agreement and (h) all Guaranty
Obligations.
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the business of the Borrower and its Subsidiaries as currently
conducted that are material to the condition (financial or otherwise), business
or operations of the Borrower and its Subsidiaries, taken as a whole.
"Insolvency Event" means, with respect to any Person, the occurrence of
any of the events described in Section 11.1(i) or 11.1(j); provided that, solely
for the purposes of this definition, any references to the Borrower or any of
its Subsidiaries in Section 11.1(i) or 11.1(j) shall be deemed to be a reference
to such Person.
"Interest Expense" means, for any period, total interest expense
(including that portion attributable to Capital Leases in accordance with GAAP
and capitalized interest) of the Borrower and its Subsidiaries on a consolidated
basis 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 Hedge Agreements, but excluding, however, any amounts referred to in
Section 4.2 payable to the Administrative Agent and Lenders on or before the
Closing Date.
"IP Collateral" means, collectively, the Intellectual Property that
constitutes Collateral under the Security Agreement.
11
"Issuing Lender" means First Union, in its capacity as issuer of any
Letter of Credit, or any successor thereto.
"L/C Loan Commitment" means the commitment of a Lender to make L/C
Loans to Borrower pursuant to Section 2.1(c), and "L/C Loan Commitments" means
such commitments of all Lenders in the aggregate.
"L/C Loan Exposure" means, with respect to any Lender as of any date of
determination (i) prior to the termination of the L/C Loan Commitments, that
Lender's L/C Loan Commitment and (ii) after the termination of the L/C Loan
Commitments, the sum of (a) the aggregate outstanding principal amount of the
L/C Loans of that Lender plus (b) in the event that Lender is an Issuing Lender,
the aggregate L/C Obligations in respect of all Letters of Credit issued by that
Lender (in each case net of any participations purchased by other Lenders in
such Letters of Credit or in any unreimbursed drawings thereunder) plus (c) the
aggregate amount of all participations purchased by that Lender in any
outstanding Letters of Credit or any unreimbursed drawings under any Letters of
Credit.
"L/C Loans" means the Loans made by Lenders to Borrower pursuant to
Section 2.1(c).
"L/C Notes" means (a) the promissory notes of the Borrower issued
pursuant to Section 2.4(b) on the Closing Date and (b) any promissory notes
issued by the Borrower pursuant to the last sentence of Section 13.11(e) in
connection with assignments of the L/C Loan Commitments and L/C Loans of any
Lenders, in each case substantially in the form of Exhibit C annexed hereto, as
they may be amended, supplemented or otherwise modified from time to time.
"L/C Obligations" means at any time, an amount equal to the sum of (a)
the aggregate undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to Section 3.5.
"L/C Participants" means the collective reference to all the Lenders
having an L/C Loan Commitment.
"Lender" means each Person executing this Agreement as a Lender set
forth on the signature pages hereto and each Person that hereafter becomes a
party to this Agreement as a Lender pursuant to Section 13.11.
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Pro Rata Share of the Loans.
"Letters of Credit" shall have the meaning assigned thereto in Section
3.1.
"Leverage Ratio" means as of the last day of any Fiscal Quarter of the
Borrower as calculated for the four (4) Fiscal Quarter period then ended, the
ratio of (a) Total Debt to (b) EBITDA.
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"Lien" means any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.
"Loans" means one or more of the Term Loans, the Revolving Loans or the
L/C Loans or any combination thereof.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Letters of Credit, the Applications (and any other reimbursement agreements or
other documents executed by the Borrower in favor of the Issuing Lender relating
to the Letters of Credit), the Security Documents, and each other document,
instrument and agreement executed and delivered by any Credit Party in
connection with this Agreement, or otherwise referred to herein or contemplated
hereby, all as may be amended, restated or otherwise modified.
"Maintenance Capital Expenditures" means Capital Expenditures made or
incurred by the Borrower and its Subsidiaries other than Special Projects
Capital Expenditures.
"Maintenance Carry Over Amount" shall have the meaning assigned thereto
in Section 9.4.
"Material Adverse Effect" means a material adverse effect upon (a) the
business, condition (financial or otherwise), operations, performance,
prospects, Collateral or other properties of the Borrower or any of it
Subsidiaries or (b) the ability of any Credit Party to perform its obligations
under any Loan Document.
"Material Contract" means (a) any Carrier Contract or any other
contract or agreement, written or oral, of any Credit Party which in any such
case generates an amount equal to or greater than fifteen percent (15%) of the
revenue of the Borrower (determined on a consolidated basis) as of the end of
the Fiscal Quarter ending on or immediately prior to any date of determination
and (b) any contract or agreement not referred to above the cancellation or
non-renewal of which could reasonably be expected to have a Material Adverse
Effect.
"Maximum Rate" shall have the meaning assigned thereto in Section
4.1(e).
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which any Credit Party or any ERISA Affiliate is making,
or is accruing an obligation to make, contributions within the preceding six (6)
years.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale, cash
payments (including any cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide direct costs
incurred in connection with such Asset Sale, including (a) income taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset
Sale, (b) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on any indebtedness (other than the Loans) that is secured by
a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale and (c) the reasonable
13
fees of attorneys, brokers, accountants and other professionals paid by the
Borrower in connection therewith.
"Net Income" means, for any period, the net income (or loss) of the
Borrower and its Subsidiaries on a consolidated basis for such period taken as a
single accounting period determined in conformity with GAAP; provided that there
shall be excluded (a) the income (or loss) of any Person (other than a
Wholly-Owned Subsidiary of the Borrower) in which any other Person (other than
the Borrower or any of its Wholly-Owned Subsidiaries) has a joint interest, or
the income (or loss) of any Person accounted for by the equity method, except in
each case (i) to the extent of the amount of dividends or other distributions
actually paid in Cash to the Borrower or any of its Wholly-Owned Subsidiaries by
such Person during such period or (ii) to the extent consented to by the
Administrative Agent, (b) the income (or loss) 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 or that Person's
assets are acquired by the Borrower or any of its Subsidiaries, (c) the income
of any Subsidiary of the Borrower to the extent that the declaration or payment
of dividends or similar distributions by that Subsidiary of that income is not
at the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (d) any after-tax gains or losses attributable to
Asset Sales or returned surplus assets of any Pension Plan, and (e) (to the
extent not included in clauses (a) through (d) above) any net extraordinary
gains or net non-cash extraordinary losses.
"Net Insurance/Condemnation Proceeds" means any Cash payments or
proceeds received by the Borrower or any of its Subsidiaries (a) under any
business interruption or casualty insurance policy in respect of a covered loss
thereunder or (b) as a result of the taking of any assets of the Borrower or any
of its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by the Borrower or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
the Borrower or such Subsidiary in respect thereof.
"Net Reversion Amount" shall have the meaning assigned thereto in
Section 2.3 (b)(iii)(D).
"Net Securities Proceeds" means the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses) from the issuance of
Securities of the Borrower.
"Notes" means one or more of the Term Notes, Revolving Notes or L/C
Notes or any combination thereof.
"Notice of Account Designation" shall have the meaning assigned thereto
in Section 2.2(b).
"Notice of Borrowing" shall have the meaning assigned thereto in
Section 2.2(a).
"Notice of Prepayment" shall have the meaning assigned thereto in
Section 2.3(b)(i).
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"Obligations" means, in each case, whether now in existence or
hereafter arising: (a) the principal of and interest on (including interest
accruing after the filing of any bankruptcy or similar petition) the Loans, (b)
the L/C Obligations, and (c) all other fees and commissions (including
attorney's fees), charges, indebtedness, loans, liabilities, financial
accommodations, obligations, covenants and duties owing by the Borrower to the
Lenders or the Administrative Agent, of every kind, nature and description,
direct or indirect, absolute or contingent, due or to become due, contractual or
tortious, liquidated or unliquidated, and whether or not evidenced by any note,
and whether or not for the payment of money, in each case under or in respect of
this Agreement, any Note, any Letter of Credit or any of the other Loan
Documents.
"Officer's Certificate" means, as applied to any Person that is a
corporation, partnership, trust or limited liability company, a certificate
executed on behalf of such Person by one or more Officers of such Person or one
or more Officers of a general partner or a managing member if such general
partner or managing member is a corporation, partnership, trust or limited
liability company.
"Officer's Compliance Certificate" shall have the meaning assigned
thereto in Section 7.2.
"Other Taxes" shall have the meaning assigned thereto in Section
4.9(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for employees of the Credit
Parties or any ERISA Affiliates or (b) has at any time within the preceding six
years been maintained for the employees of the Credit Parties or any of their
current or former ERISA Affiliates.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
"Pledged Collateral" means, collectively, the "Pledged Collateral" as
defined in the Security and Pledge Agreement.
"Pricing Certificate" means an Officer's Certificate of the Borrower
certifying the Leverage Ratio as of the last day of any Fiscal Quarter and
setting forth the calculation of such Leverage Ratio in reasonable detail, which
Officer's Certificate may be delivered to the Administrative Agent at any time
on or after the date of delivery by the Borrower of the Officer's Compliance
Certificate with respect to the period ending on the last day of such Fiscal
Quarter pursuant to Section 7.2.
"Prime Rate" means, at any time, the rate of interest per annum
publicly announced from time to time by First Union as its prime rate. Each
change in the Prime Rate shall be effective as of the opening of business on the
day such change in the Prime Rate occurs. The parties hereto acknowledge that
the rate announced publicly by First Union as its Prime Rate is an index or
15
base rate and shall not necessarily be its lowest or best rate charged to its
customers or other banks.
"Pro Rata Share" means with respect to each Lender, the percentage
obtained by dividing (x) the sum of the outstanding principal amount of Term
Loans of that Lender plus the Revolving Loan Exposure of that Lender plus the
L/C Loan Exposure of that Lender by (y) the sum of the outstanding principal
amount of Term Loans of all Lenders plus the aggregate Revolving Loan Exposure
of all the Lenders plus the aggregate L/C Loan Exposure of all the Lenders, in
any such case as the applicable percentage may be adjusted by assignments
permitted pursuant to Section 13.11. The initial Pro Rata Share of each Lender
is set forth opposite the name of that Lender in Schedule 1.1(b) annexed hereto.
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of the Administrative Agent, desirable in order to create or perfect Liens on
any IP Collateral.
"Register" shall have the meaning assigned thereto in Section 2.4(a).
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Required Lenders" means, at any date, the Lenders having or holding at
least 66-2/3% of the sum of the outstanding principal amount of Term Loans of
all the Lenders plus the aggregate Revolving Loan Exposure of all the Lenders
plus the aggregate L/C Loan Exposure of all the Lenders.
"Reserve for L/C Expenses" means, at any date of determination, the
aggregate amount of costs and expense in excess of amounts then available to be
reimbursed to Issuing Lender out of the proceeds of L/C Loans, as estimated by
the Administrative Agent in its reasonable credit judgment, in consultation with
the Issuing Lender.
"Responsible Officer" means any of the following: the chief executive
officer or chief financial officer of the Borrower or any other officer of the
Borrower reasonably acceptable to the Administrative Agent.
"Retail Card" means Retail Card L.L.C., a Delaware limited liability
company.
"Revolving Loan Commitment" means the commitment of a Lender to make
Revolving Loans to the Borrower pursuant to Section 2.1(b), and "Revolving Loan
Commitments" means such commitments of all the Lenders in the aggregate.
"Revolving Loan Exposure" means, with respect to any Lender as of any
date of determination (a) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (b) after the
termination of the Revolving Loan Commitments, the aggregate outstanding
principal amount of the Revolving Loans of that Lender.
"Revolving Loans" means the Loans made by the Lenders to the Borrower
pursuant to Section 2.1(b).
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"Revolving Notes" means (a) the promissory notes of the Borrower issued
pursuant to Section 2.4(b) on the Closing Date and (b) any promissory notes
issued by the Borrower pursuant to the last sentence of Section 13.11(e) in
connection with assignments of the Revolving Loan Commitments and Revolving
Loans of any Lenders, in each case substantially in the form of Exhibit B
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"Security and Pledge Agreement" means the Security and Second Amended
and Restated Pledge Agreement executed by the Borrower and the Subsidiary
Guarantors in favor of the Administrative Agent, for the ratable benefit of
itself and the Lenders, substantially in the form of Exhibit I hereto, as
amended, modified or supplemented from time to time.
"Security Documents" means the collective reference to the Security and
Pledge Agreement, the Subsidiary Guaranty Agreement, the Cash Management Letters
and each other agreement or writing pursuant to which any Credit Party pledges
or grants a security interest in the Collateral securing the Obligations or such
Person guaranties the payment and/or performance of the Obligations.
"Solvent" means, as to any Person on a particular date, that such
Person (a) has capital sufficient to carry on its business and transactions and
all business and transactions in which it is about to engage and is able to pay
its debts as they mature, (b) does not reasonably believe that it will incur
debts or liabilities beyond its ability to pay such debts or liabilities as they
mature and (c) is not insolvent within the meaning of the federal bankruptcy
laws, Title 11, U.S.C. Section 101(32).
"Special Projects Capital Expenditures" means Capital Expenditures made
or incurred by the Borrower and its Subsidiaries in respect of the projects
listed on Schedule 9.5.
"Special Projects Carry Over Amount" shall have the meaning assigned
thereto in Section 9.5.
"Subordinated Indebtedness" means any unsecured Indebtedness of the
Borrower or any of its Subsidiaries which is subordinated in right of payment to
the Obligations.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other entity of which more than fifty percent (50%) of the
outstanding capital stock, partnership interest or other equity interests is at
the time, directly or indirectly, owned by such Person. Unless otherwise
specified, references herein to any Subsidiary shall mean a Subsidiary of the
Borrower.
17
"Subsidiary Guarantors" means each Subsidiary of the Borrower that
executes a counterpart to the Subsidiary Guaranty Agreement on the Closing Date
or from time to time thereafter.
"Subsidiary Guaranty Agreement" means the Second Amended and Restated
Guaranty Agreement executed by each Subsidiary Guarantor in favor of the
Administrative Agent, for the ratable benefit of itself and the Lenders,
substantially in the form of Exhibit J hereto, as amended, modified or
supplemented from time to time.
"Supplemental Collateral Agent" shall have the meaning assigned thereto
in Section 12.1(b).
"Taxes" shall have the meaning assigned thereto in Section 4.9(a).
"Termination Date" means the earliest of the dates referred to in
Section 2.5.
"Term Loans" means Loans made by the Lenders to the Borrower pursuant
to Section 2.1(a).
"Term Notes" means (a) the promissory notes of the Borrower issued
pursuant to Section 2.4(b) on the Closing Date and (b) any promissory notes
issued by the Borrower pursuant to the last sentence of Section 13.11(e) in
connection with assignments of the Term Loans of any Lenders, in each case
substantially in the form of Exhibit A annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
"Total Debt" means, as at any date of determination, the aggregate
stated balance sheet amount of all Indebtedness of the Borrower and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Total Revenues" means, for any period, the aggregate revenues of the
Borrower and its Subsidiaries on a consolidated basis as determined in
accordance with GAAP.
"Uniform Customs" the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500.
"UCC" means the Uniform Commercial Code as in effect in the State of
North Carolina.
"United States" means the United States of America.
"Wholly-Owned Subsidiary" means a Subsidiary all of the shares of the
capital stock or other similar equity interests of which are, directly or
indirectly, owned or controlled by a Credit Party and/or one or more of its
Wholly-Owned Subsidiaries.
SECTION 1.2 General. Unless otherwise specified, a reference in this
Agreement to a particular section, subsection, Schedule or Exhibit is a
reference to that section, subsection, Schedule or Exhibit of this Agreement.
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and plural, and pronouns stated in
the masculine, feminine or neuter gender shall include the masculine, the
feminine and
18
the neuter. Any reference herein to "Charlotte time" shall refer to the
applicable time of day in Charlotte, North Carolina.
SECTION 1.3 Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. 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. The
use in any of the Loan Documents of the word "include" or "including", when
following any general statement, term or matter, shall not be construed to limit
such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
nonlimiting language (such as "without limitation" or "but not limited to" or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter.
ARTICLE II
AMOUNT AND TERMS OF COMMITMENTS AND LOANS
-----------------------------------------
SECTION 2.1 Commitments; Loans. Subject to the terms and conditions of
this Agreement, and in reliance upon the representations and warranties of the
Borrower herein set forth, each Lender severally agrees to make or maintain, as
the case may be, the Loans described in this Section 2.1.
(a) Term Loans. The Existing Loans were made pursuant to the Existing
Agreement, in each case for the purposes described in Section 2.6 As of the date
of this Agreement, there are outstanding $95,000,000.00 in principal amount of
Existing Loans, $73,774,671.71 of which shall be deemed to be outstanding Term
Loans as of the Closing Date and $21,225,328.29 of which shall be deemed to be
outstanding Revolving Loans as of the Closing Date. Each Lender severally agrees
to maintain and continue as Term Loans hereunder its Pro Rata Share of the
principal amount of $73,774,671.71 of the Existing Loans outstanding on the
Closing Date as equals such Lender's Pro Rata Share of the Term Loans. The
amount of each Lender's Term Loans is set forth opposite its name on Schedule
1.1(b) annexed hereto and, as of the Closing Date, the aggregate outstanding
principal amount shall be $73,774,671.71. Any Term Loans repaid or prepaid may
not be reborrowed.
(b) Revolving Loans. Each Lender severally agrees, subject to the
limitations set forth below with respect to the maximum amount of Revolving
Loans permitted to be outstanding from time to time, (i) to maintain and
continue as Revolving Loans hereunder its Pro Rata Share of $21,225,328.29 of
the principal amount of Existing Loans which are outstanding under the Existing
Agreement as of the Closing Date and (ii) to lend to the Borrower from time to
time during the period from the Closing Date to but excluding the Commitment
Termination Date an
19
aggregate amount not exceeding its Pro Rata Share of the aggregate Revolving
Loan Commitments to be used for the purposes identified in Section 2.6(b). The
original amount of each Lender's Revolving Loan Commitment is set forth opposite
its name on Schedule 1.1(b) annexed hereto and the aggregate original amount of
the Revolving Loan Commitments is $25,000,000; provided that the amount of the
Revolving Loan Commitments shall be permanently reduced from time to time by the
amount of any reductions thereto made pursuant to Section 2.3(b). Each Lender's
Revolving Loan Commitment shall expire on the Final Maturity Date and all
Revolving Loans and all other amounts owed hereunder with respect to the
Revolving Loans and the Revolving Loan Commitments shall be paid in full no
later than that date. Amounts borrowed under this Section 2.1(b) may be repaid
and reborrowed to but excluding the Commitment Termination Date.
Anything contained in this Agreement to the contrary notwithstanding, the
Revolving Loans and the Revolving Loan Commitments shall be subject to the
limitation that at no time shall the aggregate principal amount of all
outstanding Revolving Loans exceed the lesser of (x) the aggregate Revolving
Loan Commitments and (y) the Borrowing Base, in each case then in effect.
(c) L/C Loans. Subject to the provisions of Sections 2.2(a) and 3.5,
each Lender severally agrees to lend to Borrower from time to time during the
period from the Closing Date to but excluding the Commitment Termination Date an
aggregate amount not exceeding its Pro Rata Share of the aggregate L/C Loan
Commitments to be used for the purposes identified in Section 2.6(c). The
original amount of each Lender's L/C Loan Commitment is set forth opposite its
name on Schedule 1.1(b) annexed hereto and the aggregate original amount of the
L/C Loan Commitments is $16,225,328.29; provided that the amount of the L/C Loan
Commitments shall be automatically and permanently reduced by (i) the amount of
any L/C Loan made pursuant to this Agreement, (ii) the amount of any permanent
reduction in the amount available for drawing under any Letter of Credit (other
than as a result of a draw to the extent reimbursed by the proceeds of an L/C
Loan under clause (i)) and (iii) the stated amount of any Letter of Credit that
is not renewed or extended upon the termination or expiry thereof. Each Lender's
L/C Loan Commitment shall expire on the Final Maturity Date and all L/C Loans
and all other amounts owed hereunder with respect to the L/C Loans and the L/C
Loan Commitments shall be paid in full no later than that date. Amounts borrowed
under this Section 2.1(c) and subsequently repaid or prepaid may not be
reborrowed.
SECTION 2.2 Procedure for Advances of Loans.
(a) Requests for Borrowing. The Borrower shall give the Administrative
Agent irrevocable prior written notice in the form attached hereto as Exhibit D
(a "Notice of Borrowing") not later than 11:00 a.m. (Charlotte time) one (1)
Business Day before each requested borrowing date in the case of Revolving
Loans, specifying (i) the date of funding of such Loan, which shall be a
Business Day and (ii) the amount of such Loan, which shall be in an aggregate
principal amount of $500,000 or any integral multiple of $500,000 in excess
thereof or such smaller amount as represents the total amount then available for
drawing under Section 2.1(b). Notices received after 11:00 a.m. (Charlotte time)
shall be deemed received on the next Business Day. In lieu of delivering a
Notice of Borrowing, the Borrower may give the Administrative Agent telephonic
notice by the required time of any proposed borrowing under this Section 2.2(a);
provided that such notice shall be promptly confirmed in writing by delivery
20
of a Notice of Borrowing to Administrative Agent on or before the applicable
date of funding of a Loan. Neither the Administrative Agent nor any Lender shall
incur any liability to the Borrower in acting upon any telephonic notice
referred to above that the Administrative Agent believes in good faith to have
been given by a duly authorized officer or other person authorized to borrow on
behalf of the Borrower or for otherwise acting in good faith under this Section
2.2(a) or Section 2.4(a) and upon funding of Loans by Lenders pursuant to any
such telephonic notice the Borrower shall have effected Loans hereunder. Subject
to the provisions of Section 3.5, upon receipt by the Administrative Agent from
the Issuing Lender of notice that a drawing has been paid under a Letter of
Credit, the Borrower shall be deemed to have timely given a Notice of Borrowing
hereunder to the Administrative Agent requesting the Lenders to make L/C Loans
on such date in an amount equal to the amount of such drawing and, regardless of
whether or not the conditions precedent specified in Article V have been
satisfied, the Lenders shall make Loans in such amount, the proceeds of which
shall be applied as set forth in Section 2.6(c). For the avoidance of doubt, the
Borrower shall have no independent right to request that the Lenders make L/C
Loans other than as set forth in this Section 2.2(a) and Section 3.5. The
Administrative Agent shall promptly notify the Lenders of each Notice of
Borrowing.
The Borrower shall notify the Administrative Agent prior to the funding
of any Loans in the event that any of the matters to which the Borrower is
required to certify in the applicable Notice of Borrowing is no longer true and
correct as of the applicable borrowing date, and the acceptance by the Borrower
of the proceeds of any Loans shall constitute a re-certification by the
Borrower, as of the applicable borrowing date, as to the matters to which the
Borrower is required to certify in the applicable Notice of Borrowing.
(b) Disbursement of Loans. Not later than 2:00 p.m. (Charlotte time) on
the proposed borrowing date, each Lender will make available to the
Administrative Agent, for the account of the Borrower, at the office of the
Administrative Agent in funds immediately available to the Administrative Agent,
such Lender's Pro Rata Share of the Loans to be made on such borrowing date. The
Borrower hereby irrevocably authorizes the Administrative Agent to disburse the
proceeds of each borrowing requested pursuant to this Section 2.2 in immediately
available funds by crediting or wiring such proceeds (i) in the case of proceeds
of Revolving Loans, to the Deposit Account of the Borrower maintained with the
Administrative Agent or by wire transfer to such Account as may be identified in
the most recent notice substantially in the form of Exhibit K hereto (a "Notice
of Account Designation") delivered by the Borrower to the Administrative Agent
or as may be otherwise agreed upon by the Borrower and the Administrative Agent
from time to time and (ii) in the case of proceeds of L/C Loans, to the account
of the Issuing Lender designated by the Issuing Lender to the Administrative
Agent from time to time. Subject to Section 4.6 hereof, the Administrative Agent
shall not be obligated to disburse the portion of the proceeds of any Loan
requested pursuant to this Section 2.2 to the extent that any Lender has not
made available to the Administrative Agent its Pro Rata Share of such Loan.
SECTION 2.3 Repayments, Prepayments and Reductions in Commitments;
General Provisions Regarding Payments; Application of Proceeds of Collateral and
Payments Under Subsidiary Guaranty.
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(a) Scheduled Payments of Term Loans. (i) The Borrower shall make
principal payments on the Terms Loans in installments on the dates and in the
amounts set forth below:
Date Scheduled Repayment
----------------------------------- -----------------------------
May 31, 2000 $250,000
----------------------------------- -----------------------------
June 30, 2000 $250,000
----------------------------------- -----------------------------
July 31, 2000 $250,000
----------------------------------- -----------------------------
August 31, 2000 $500,000
----------------------------------- -----------------------------
September 30, 2000 $500,000
----------------------------------- -----------------------------
October 31, 2000 $500,000
----------------------------------- -----------------------------
November 30, 2000 $500,000
----------------------------------- -----------------------------
December 31, 2000 $500,000
----------------------------------- -----------------------------
January 31, 2001 $500,000
----------------------------------- -----------------------------
February 28, 2001 $500,000
----------------------------------- -----------------------------
March 31, 2001 $500,000
----------------------------------- -----------------------------
April 30, 2001 $500,000
----------------------------------- -----------------------------
May 31, 2001 $500,000
----------------------------------- -----------------------------
June 30, 2001 $500,000
----------------------------------- -----------------------------
July 31, 2001 $500,000
----------------------------------- -----------------------------
August 31, 2001 $37,024,671.71
----------------------------------- -----------------------------
and (ii) the Borrower shall make two additional principal payments (the
"Additional Payments") each in the amount of $15,000,000 on January 31, 2001 and
July 31, 2001, respectively; provided that the scheduled installments of
principal of the Term Loans set forth in this Section 2.3(a) shall be reduced in
connection with any voluntary or mandatory prepayments of the Term Loans in
accordance with Section 2.3(b)(iv); and provided, further that the Term Loans
and all other amounts owed hereunder with respect to the Term Loans shall be
paid in full no later than the Final Maturity Date, and the final installment
payable by the Borrower in respect of the Term Loans on such date shall be in an
amount, if such amount is different from that specified above, sufficient to
repay all amounts owing by the Borrower under this Agreement with respect to the
Term Loans.
(b) Prepayments and Reductions in Revolving Loan Commitments.
(i) Voluntary Prepayments. The Borrower may at any time and
from time to time prepay or repay any Loans in whole or in part, not later than
11:00 a.m. (Charlotte time) upon at least one (1) Business Day irrevocable
notice, in the form attached hereto as Exhibit F (a "Notice of Prepayment")
specifying the date and amount of repayment. Upon receipt of such notice, the
Administrative Agent shall promptly notify each Lender. If any such notice is
given, the amount specified in such notice shall be due and payable on the date
set forth in such notice. Partial repayments shall be in an aggregate minimum
amount of $250,000 or a whole multiple of $250,000 in excess thereof. Any such
voluntary prepayment shall be applied as specified in Section 2.3(b)(iv).
22
(ii) Voluntary Reductions of Revolving Loan Commitments. The
Borrower may, not later than 11:00 (Charlotte time) upon at least five (5)
Business Days' prior written or telephonic notice confirmed in writing to the
Administrative Agent (which original written or telephonic notice the
Administrative Agent will promptly transmit by facsimile or telephone to each
Lender), at any time and from time to time terminate in whole or permanently
reduce in part, without premium or penalty, the Revolving Loan Commitments in an
amount up to the amount by which the Revolving Loan Commitments exceed the
aggregate principal amount of all outstanding Revolving Loans at the time of
such proposed termination or reduction; provided that any such partial reduction
of the Revolving Loan Commitments shall be in an aggregate minimum amount of
$250,000 or a whole multiple of $250,000 in excess thereof (unless such
reduction would reduce the Revolving Loan Commitments to $0, in which case all
amounts hereunder in respect of the Revolving Loans and Revolving Loan
Commitments shall become immediately due and payable). The Borrower's notice to
the Administrative Agent shall designate the date (which shall be a Business
Day) of such termination or reduction and the amount of any partial reduction,
and such termination or reduction of the Revolving Loan Commitments shall be
effective on the date specified in the Borrower's notice and shall reduce the
Revolving Loan Commitments of each Lender proportionately to its Pro Rata Share.
(iii) Mandatory Prepayments and Mandatory Reductions of
Revolving Loan Commitments. The Loans shall be prepaid and/or the Revolving Loan
Commitments shall be permanently reduced in the amounts and under the
circumstances set forth below, all such prepayments and/or reductions to be
applied as set forth below or as more specifically provided in Section
2.3(b)(iv):
(A) Prepayments and Reductions from Net Asset Sale Proceeds.
No later than the date of receipt by the Borrower or any of its
Subsidiaries of any Net Asset Sale Proceeds in respect of any asset
sale pursuant to Section 10.6(b), the Borrower shall prepay the Loans
and/or the Revolving Loan Commitments shall be permanently reduced in
an aggregate amount equal to seventy-five percent (75%) of such Net
Asset Sale Proceeds.
(B) Prepayments and Reductions from Net Insurance/Condemnation
Proceeds. No later than the first Business Day following the date of
receipt by the Administrative Agent or by the Borrower or any of its
Subsidiaries of any Net Insurance/Condemnation Proceeds that are
required to be applied to prepay the Loans and/or reduce the Revolving
Loan Commitments pursuant to the provisions of Section 8.2(c), the
Borrower shall prepay the Loans and/or except as otherwise expressly
provided in Section 8.2(c) the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount equal to one hundred percent
(100%) of the amount of such Net Insurance/Condemnation Proceeds.
(C) Prepayments and Reductions Due to Issuance of Equity or
Debt Securities. On the date of receipt of the Net Securities Proceeds
from the issuance of any equity or Debt Securities of the Borrower
after the Closing Date, the Borrower shall prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an aggregate
amount equal to seventy-five percent (75%) of such Net Securities
Proceeds.
23
(D) Prepayments from Pension Plan Reversions. No later than
the first Business Day following the date of receipt by the Borrower or
any of its Subsidiaries of any surplus assets of any pension plan of
the Borrower or any of its Subsidiaries, the Borrower shall prepay the
Loans and/or the Revolving Loan Commitments shall be reduced in an
amount (the "Net Reversion Amount") equal to one hundred percent (100%)
of such returned surplus assets, net of transaction costs and expenses
incurred in obtaining such return, including incremental taxes payable
as a result thereof.
(E) Prepayments and Reductions from Excess Cash Flow. In the
event that there shall be Excess Cash Flow for the Fiscal Year ending
December 31, 2000, the Borrower shall, no later than ninety (90) days
after the end of such Fiscal Year prepay the Loans and/or the Revolving
Loan Commitments shall be permanently reduced in an aggregate amount
equal to seventy-five percent (75%) of such Excess Cash Flow.
(F) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations.
Concurrently with any prepayment of the Loans and/or reduction of the
Revolving Loan Commitments pursuant to Sections 2.3(b)(iii)(A)-(E), the
Borrower shall deliver to the Administrative Agent an Officer's
Certificate demonstrating the calculation of the amount of the
applicable Net Asset Sale Proceeds, Net Insurance/Condemnation
Proceeds, Net Securities Proceeds, Net Reversion Amount or the
applicable Excess Cash Flow, as the case may be, that gave rise to such
prepayment and/or reduction. In the event that the Borrower shall
subsequently determine that the actual amount was greater than the
amount set forth in such Officer's Certificate, the Borrower shall
promptly make an additional prepayment of the Loans (and/or, if
applicable, the Revolving Loan Commitments shall be permanently
reduced) in an amount equal to the applicable percentage set forth in
clauses (A) through (E) of this Section 2.3(b)(iii) of the amount of
such excess, and the Borrower shall concurrently therewith deliver to
the Administrative Agent an Officer's Certificate demonstrating the
derivation of the additional amount resulting in such excess.
(G) Prepayments Due to Reductions or Restrictions of Revolving
Loan Commitments or L/C Commitments or Insufficient Borrowing Base. The
Borrower shall from time to time prepay the Revolving Loans to the
extent necessary so that the aggregate principal amount of outstanding
Revolving Loans shall not at any time exceed the lesser of (a)
Revolving Loan Commitments then in effect and (b) the Borrowing Base
then in effect.
(H) Prepayment from the Collection Account. The Borrower
hereby authorizes the Administrative Agent to apply on a daily basis
all available funds on deposit in the Collection Account to the
prepayment of the Revolving Loans then outstanding. For the avoidance
of doubt, prepayments under this clause (H) shall not result in a
permanent reduction of the Revolving Loan Commitment unless and to the
extent constituting prepayments under any other clause of this Section
2.3(b)(iii).
(iv) Application of Prepayments.
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(A) Application of Voluntary Prepayments by Type of Loans and
Order of Maturity. Any voluntary prepayments pursuant to Section
2.3(b)(i) shall be applied as specified by the Borrower in the
applicable Notice of Prepayment; provided that in the event the
Borrower fails to specify the Loans to which any such prepayment shall
be applied, such prepayment shall be applied first to repay outstanding
Revolving Loans to the full extent thereof, second to repay outstanding
L/C Loans to the full extent thereof, and third to repay outstanding
Term Loans to the full extent thereof. Any voluntary prepayments of the
Term Loans pursuant to Section 2.3(b)(i) shall be applied to reduce the
scheduled installments of principal of the Term Loans and set forth in
Sections 2.3(a)(i) in inverse chronological order.
(B) Application of Mandatory Prepayments by Type of Loans.
Unless an Event of Default has occurred and is continuing, any amount
required to be applied as a mandatory prepayment of the Loans and/or a
reduction of the Revolving Loan Commitments pursuant to Sections
2.3(b)(iii)(A)-(E) shall be applied first to prepay the Term Loans to
the full extent thereof, second, to the extent of any remaining portion
of such amount, to prepay the L/C Loans to the full extent thereof,
third, to the extent of any remaining portion thereof, to cash
collateralize the outstanding Letters of Credit, such cash collateral
to be deposited in the Collateral Account and applied pursuant to
Section 3.5 and the terms of the Security and Pledge Agreement, fourth,
to the extent of any remaining portion of such amount, to prepay the
Revolving Loans to the full extent thereof and to permanently reduce
the Revolving Loan Commitments by the amount of such prepayment, and
fifth, to the extent of any remaining portion of such amount, to
further permanently reduce the Revolving Loan Commitments to the full
extent thereof. Any mandatory prepayments of Term Loans pursuant to
Sections 2.3(b)(iii)(A)-(F) shall be applied to reduce the scheduled
installments of principal of the Term Loans as follows: first, to the
extent not previously paid, up to $500,000 pro rata to the scheduled
installments of principal of the Term Loans due May 31, 2000, June 30,
2000, and July 31, 2000, and $1,250,000 pro rata to the scheduled
installments of the Term Loans due August 31, 2000, September 30, 2000,
and October 31, 2000, in each case in forward order of maturity;
second, to the extent not previously prepaid, to the Additional
Payments in forward order of maturity; and third, on a pro rata basis
(in accordance with the respective outstanding principal amounts
thereof) to each remaining scheduled installment of principal of the
Term Loans (other than the final such installment) that is unpaid at
the time of such payment.
(v) All payments in respect of the principal amount of any
loan shall include payment of accrued interest on the principal amount repaid or
prepaid, and all such payments shall be applied to the payment of interest
before application to principal.
SECTION 2.4 Register; Promissory Notes.
(a) Register. The Administrative Agent, acting for these purposes
solely as an agent of the Borrower (it being acknowledged that the
Administrative Agent, in such capacity, and its officers, directors, employees,
agent and affiliates shall be entitled to indemnification from the Borrower
under Section 13.2(b)), shall maintain (and make available for inspection by the
Borrower and Lenders upon reasonable prior notice at reasonable times) for the
recordation of,
25
and shall record, the names and addresses of Lenders and the Term Loan
Commitment, Revolving Loan Commitment, L/C Loan Commitment, Term Loan, Revolving
Loans and L/C Loans of each Lender from time to time (the "Register"). The
Borrower, Administrative Agent and Lenders shall deem and treat the Persons
listed as Lenders in the Register as the holders and owners of the corresponding
Commitments and Loans listed therein for all purposes hereof; all amounts owed
with respect to any Commitment or Loan shall be owed to the Lender listed in the
Register as the owner thereof; and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and binding
on any subsequent holder, assignee or transferee of the corresponding
Commitments or Loans. Each Lender shall record on its internal records the
amount of its Loans and Commitments and each payment in respect hereof, and any
such recordation shall be conclusive and binding on the Borrower, absent
manifest error, subject to the entries in the Register, which shall, absent
manifest error, govern in the event of any inconsistency with any Lender's
records. Failure to make any recordation in the Register or in any Lender's
records, or any error in such recordation, shall not affect any Loans or
Commitments or any Obligations in respect of any Loans.
(b) Promissory Notes. The Borrower shall execute and deliver on the
Closing Date to each of the Lenders (or to the Administrative Agent for the
Lenders) (a) a Term Note substantially in the form of Exhibit A annexed hereto
to evidence each Lender's Term Loan, in the principal amount of that Lender's
Term Loan and with other appropriate insertions, (b) a Revolving Note
substantially in the form of Exhibit B annexed hereto to evidence each Lender's
Revolving Loan, in the principal amount of that Lender's Revolving Loan
Commitment and with other appropriate insertions, and (c) an L/C Note
substantially in the form of Exhibit C annexed hereto to evidence each Lender's
L/C Loans, in the principal amount of that Lender's L/C Loan Commitment and with
other appropriate insertions.
SECTION 2.5 Termination Date. The Credit Facilities shall terminate and
all outstanding Obligations shall be paid in full on the earliest of (a) the
Final Maturity Date and (b) the date of termination by the Administrative Agent
on behalf of the Lenders pursuant to Section 11.2(a).
SECTION 2.6 Use of Proceeds.
(a) Existing Loans. The proceeds of the Existing Loans have been
applied by the Borrower as provided in Section 2.7 of the Existing Agreement.
(b) Revolving Loans. The proceeds of any Revolving Loans made on or
after the Closing Date shall be applied (i) to pay any costs associated with the
Loans and Letters of Credit on the Closing Date and (ii) for working capital and
general corporate requirements of the Borrower and its Subsidiaries, including
the payment of certain fees and expenses incurred in connection with the
transactions contemplated hereby.
(c) L/C Loans. The proceeds of any L/C Loans made on or after the
Closing Date shall be applied as specified in Section 3.5.
26
(d) Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by the Borrower or any of its Subsidiaries in
any manner that might cause the borrowing or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve System or any other regulation of such Board or to violate
the Securities and Exchange Act of 1934, in each case as in effect on the date
or dates of such borrowing and such use of proceeds.
ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.1 L/C Commitment.
(a) Issuance of Letters of Credit. Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Lenders
set forth in Section 3.4(a), agrees to issue standby letters of credit ("Letters
of Credit") for the account of the Borrower on any Business Day from the Closing
Date through but not including the Termination Date 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, the sum of (i) the L/C Obligations plus (ii) the
aggregate principal amount of all outstanding L/C Loans would exceed the L/C
Commitment. Each Letter of Credit shall (A) be issued for the sole purpose of
replacing, extending or renewing an Existing Letter of Credit (or any
replacement, renewal or extension thereof issued hereunder) without increasing
the stated amount of such Existing Letter of Credit, (B) expire on a date no
later than one (1) year from the date of issuance, which date shall be no later
than the Termination Date and (C) be subject to the Uniform Customs and, to the
extent not inconsistent therewith, the laws of the State of North Carolina. The
Issuing Lender shall not at any time be obligated to issue any Letter of Credit
hereunder if such issuance would conflict with, or cause the Issuing Lender or
any L/C Participant to exceed any limits imposed by, any Applicable Law.
References herein to "issue" and derivations thereof with respect to Letters of
Credit shall also include extensions or modifications of any existing Letters of
Credit, unless the context otherwise requires; provided that no such
modification shall increase the stated amount of any such Letter of Credit.
(b) Existing Letters of Credit. As of the Closing Date, all of the
Existing Letters of Credit shall be deemed to be Letters of Credit issued
hereunder and shall be subject to all of the terms and provisions of this
Agreement, including all terms and provisions applicable to Letters of Credit
under this Agreement. Each Lender agrees that its obligations with respect to
Letters of Credit pursuant to Section 3.4 shall include the Existing Letters of
Credit as of the Closing Date. With respect to each Existing Letter of Credit,
for the period commencing on the Closing Date to and including the expiration
date of any such Existing Letter of Credit, Borrower shall pay all fees and
commissions set forth in Section 3.3 at the times and in the manner set forth
therein.
SECTION 3.2 Procedure for Issuance of Letters of Credit.
(a) The Borrower may from time to time request that the Issuing Lender
issue a Letter of Credit by delivering to the Issuing Lender at the
Administrative Agent's Office an Application
27
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 shall 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, subject to Section 3.1 and Article V hereof,
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any Letter of Credit (i) earlier than three
(3) Business Days after its receipt of the Application therefor and all such
other certificates, documents and other papers and information relating thereto
and (ii) until the Borrower has returned the original letter of credit to be
replaced, renewed, or extended thereby to the Issuing Lender or delivered an
indemnification to the Issuing Letter with respect to such original Letter of
Credit in form and substance satisfactory to the Issuing Lender) by issuing the
original of such Letter of Credit to the beneficiary thereof or as otherwise may
be agreed by the Issuing Lender and the Borrower. Issuing Lender shall furnish
to the Borrower a copy of such Letter of Credit and furnish to each Lender a
copy of such Letter of Credit and the amount of each Lender's L/C Participation
therein, all promptly following the issuance of such Letter of Credit.
(b) The Borrower shall notify the Issuing Lender prior to the issuance
of any Letter of Credit in the event that any of the matters to which the
Borrower is required to certify pursuant to Section 5.3 or the applicable
Application is no longer true and correct as of the proposed date of issuance of
such Letter of Credit, and upon the issuance of any Letter of Credit the
Borrower shall be deemed to have re-certified, as of the date of such issuance,
as to the matters to which the Borrower is required to certify pursuant to
Section 5.3 and the applicable Application.
SECTION 3.3 Commissions and Other Charges.
(a) The Borrower shall pay to the Administrative Agent, for the account
of the Issuing Lender and the L/C Participants, a letter of credit commission
with respect to each Letter of Credit in an amount equal to the product of (i)
the face amount of such Letter of Credit times (ii) 2.50% per annum. Such
commission shall be payable quarterly in arrears on the last Business Day of
each calendar quarter and on the Termination Date.
(b) In addition to the foregoing commission, the Borrower shall pay the
Issuing Lender an issuance fee of 0.25% per annum on the face amount of each
Letter of Credit, payable quarterly in arrears on the last Business Day of each
calendar quarter and on the Termination Date.
(c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Lender and the L/C Participants all
commissions received by the Administrative Agent in accordance with their
respective Pro Rata Shares.
SECTION 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 hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own
28
account and risk an undivided interest equal to such L/C Participant's Pro Rata
Share in the Issuing Lender's obligations and rights under each Letter of Credit
issued hereunder and the amount of each draft paid by the Issuing Lender
thereunder. Each L/C Participant unconditionally and irrevocably 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 Issuing Lender
upon demand at the Issuing Lender's address for notices specified herein an
amount equal to such L/C Participant's Pro Rata Share of the amount of such
draft, or any part thereof, which is not so reimbursed.
(b) Upon becoming aware of any amount required to be paid by any L/C
Participant to 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, the Issuing Lender shall notify each L/C Participant of the amount
and due date of such required payment and such L/C Participant shall pay to the
Issuing Lender the amount specified on the applicable due date. If any such
amount is paid to the Issuing Lender after the date such payment is due, such
L/C Participant shall pay to the Issuing Lender on demand, in addition to such
amount, the product of (i) such amount, times (ii) the daily average Federal
Funds Rate as determined by the Administrative Agent during the period from and
including the date such payment is due 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. A certificate of the Issuing Lender with respect to
any amounts owing under this Section shall be conclusive in the absence of
manifest error. With respect to payment to the Issuing Lender of the
unreimbursed amounts described in this Section 3.4(b), if the L/C Participants
receive notice that any such payment is due (A) prior to 1:00 p.m. (Charlotte
time) on any Business Day, such payment shall be due that Business Day, and (B)
after 1:00 p.m. (Charlotte time) on any Business Day, such payment shall be due
on the following Business Day.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its L/C Pro
Rata Share of such payment in accordance with this Section 3.4, the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise), or any payment of interest on account thereof,
the Issuing Lender will distribute to such L/C Participant its Pro Rata Share
thereof; provided, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
SECTION 3.5 Reimbursement Obligation of the Borrower. In the event the
Issuing Lender has determined to honor a drawing under a Letter of Credit, the
Issuing Lender shall immediately notify the Borrower and the Administrative
Agent of the amount of such drawing. The Borrower agrees to reimburse the
Issuing Lender on each date on which the Issuing Lender notifies the Borrower of
the date and amount of a drawing paid under any Letter of Credit for the amount
of (a) such drawing so paid and (b) any taxes, fees, charges or other costs or
expenses incurred by the Issuing Lender in connection with such payment;
provided, however that subject to the following proviso, upon the Administrative
Agent's receipt of notification from the Issuing Lender of the amount of any
drawing paid under any Letter of Credit, the Borrower shall be deemed to have
given a timely Notice of Borrowing hereunder to
29
the Administrative Agent requesting the Lenders to make an L/C Loan on such date
in an amount equal to the amount of such drawing and, regardless of whether or
not the conditions precedent specified in Article V, have been satisfied, the
Lenders shall make L/C Loans in such amount, the proceeds of which shall be
applied to reimburse the Issuing Lender for the amount of the related drawing;
provided further however that, notwithstanding anything in the foregoing to the
contrary, in the event that at the time of any drawing under a Letter of Credit
the amounts then on deposit in the Collateral Account for the cash
collateralization of Letter of Credit pursuant to Section 2.3(b)(iv)(B) are
equal to or greater than one hundred five percent (105%) of the then outstanding
L/C Obligations and so long as no Default or Event of Default has then occurred
or is continuing, the Administrative Agent shall disburse amounts from the
Collateral Account to reimburse the Issuing Lender in the amount of such drawing
(and the LC Loan Commitments shall be automatically and permanently reduced by
such amount) and no Notice of Borrowing shall be deemed to have been given
pursuant to this Section 3.5 in respect of such drawing. Each such payment shall
be made to the Issuing Lender at its address for notices specified herein in
lawful money of the United States and in immediately available funds. Interest
shall be payable on any and all amounts remaining unpaid by the Borrower under
this Article III from the date such amounts become payable (whether at stated
maturity, by acceleration or otherwise) until payment in full at the rate which
would be payable on any outstanding L/C Loans which were then overdue.
SECTION 3.6 Obligations Absolute.
The obligation of the Borrower to reimburse the Issuing Lender for
payments under the Letters of Credit issued by it and to repay any L/C Loans
made by the Lenders pursuant to Section 3.5 and the obligations of the Lenders
under Section 3.4 shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances
including any of the following circumstances:
(a) any lack of validity or enforceability of any Letter of Credit;
(b) the existence of any claim, set-off, defense or other right which
the Borrower or any Lender may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any Persons for whom any such transferee
may be acting), the Issuing Lender or other Lender or any other Person or, in
the case of a Lender, against the Borrower, whether in connection with this
Agreement, the transactions contemplated herein or any unrelated transaction
(including any underlying transaction between the Borrower or one of its
Subsidiaries and the beneficiary for which any Letter of Credit was procured);
(c) any draft or other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(d) payment by the Issuing Lender under any Letter of Credit against
presentation of a draft or other document which does not substantially comply
with the terms of such Letter of Credit;
30
(e) any adverse change in the business, operations, properties, assets,
condition (financial or otherwise) or prospects of the Borrower or any of its
Subsidiaries;
(f) any breach of this Agreement or any other Loan Document by any
party thereto;
(g) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(h) the fact that an Event of Default or a Default shall have occurred
and be continuing;
provided, in each case, that payment by the Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of the Issuing Lender under the circumstances in question (as
determined by a final judgment of a court of competent jurisdiction).
SECTION 3.7 Indemnification; Nature of Issuing Lender's Duties.
(a) Indemnification. In addition to amounts payable as provided in
Sections 4.7 and 4.9, the Borrower hereby agrees to protect, indemnify, pay and
save harmless the Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of outside counsel and allocated costs of
internal counsel) which the Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit by
the Issuing Lender, other than as a result of (A) the gross negligence or
willful misconduct of the Issuing Lender as determined by a final judgment of a
court of competent jurisdiction or (B) subject to the following clause (ii), the
wrongful dishonor by the Issuing Lender of a proper demand for payment made
under any Letter of Credit issued by it or (ii) the failure of the Issuing
Lender to honor a drawing under any such Letter of Credit as a result of any act
or omission, whether rightful or wrongful, of any present or future de jure or
de facto Governmental Authority.
(b) Nature of the Issuing Lender' Duties. As between the Borrower and
the Issuing Lender, the Borrower assumes all risks of the acts and omissions of,
or misuse of the Letters of Credit issued by the Issuing Lender by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, the Issuing Lender shall not be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection with the application for and
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing
31
under such Letter of Credit; or (viii) any consequences arising from causes
beyond the control of the Issuing Lender, including any act or omission by a
Governmental Authority specified in Section 3.7(a), and none of the above shall
affect or impair, or prevent the vesting of, any of the Issuing Lender's rights
or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this Section 3.7(b), any action
taken or omitted by the Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put the Issuing Lender under any
resulting liability to the Borrower.
Notwithstanding anything to the contrary contained in this Section 3.7,
the Borrower shall retain any and all rights it may have against the Issuing
Lender for any liability arising solely out of the gross negligence or willful
misconduct of the Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
SECTION 3.8 Effect of Application. To the extent that any provision of
any Application related to any Letter of Credit is inconsistent with the
provisions of this Article III, the provisions of this Article III shall apply.
ARTICLE IV
GENERAL LOAN PROVISIONS
SECTION 4.1 Interest.(a) Subject to the provisions of Sections 4.1(c)
and 4.1(e), the aggregate principal balance of the Notes or any portion thereof
shall bear interest at the Base Rate plus the Applicable Margin set forth below.
(b) Applicable Margin. The Applicable Margin provided for in Section
4.1(a) with respect to the Loans (the "Applicable Margin") shall be determined
by reference to the Leverage Ratio as of the end of the Fiscal Quarter for which
a Pricing Certificate has been delivered pursuant to Section 7.2:
----------------------------------------------- ----------------------------
Leverage Ratio Applicable Margin
----------------------------------------------- ----------------------------
Less than 1.75 to 1.00 1.50%
----------------------------------------------- ----------------------------
Less than 2.25 to 1.00 but greater than or 2.00%
equal to 1.75 to 1.00
----------------------------------------------- ----------------------------
Less than 2.75 to 1.00 but greater than or 2.50%
equal to 2.25 to 1.00
----------------------------------------------- ----------------------------
Greater than or equal to 2.75 to 1.00 3.0%
----------------------------------------------- ----------------------------
; provided that, until the delivery of the Pricing Certificate for the first
Fiscal Quarter ending after the Closing Date, the Applicable Margin shall be
three percent (3.0%) per annum. Upon delivery of the Pricing Certificate by the
Borrower to the Administrative Agent pursuant to Section 7.2, the Applicable
Margin shall automatically be adjusted in accordance with such Pricing
Certificate, such adjustment to become effective on the next succeeding Business
Day
32
following the receipt by the Administrative Agent of such Pricing Certificate;
provided that, if at any time a Pricing Certificate is not delivered at the time
required pursuant to Section 7.2, from the time such Pricing Certificate was
required to be delivered until delivery of such Pricing Certificate, the
Applicable Margin shall be the maximum percentage amount for the relevant Loan
set forth above.
(c) Default Rate. Subject to Section 11.3, upon the occurrence and
during the continuation of any Event of Default, the outstanding principal
amount of all Loans and, to the extent permitted by applicable law, any interest
payments thereon not paid when due and any fees and other amounts then due and
payable hereunder, shall thereafter bear interest (including post-petition
interest in any proceeding under the Bankruptcy Code or other applicable
bankruptcy laws) payable upon demand at a rate that is two percent (2%) per
annum in excess of the interest rate otherwise payable upon the occurrence of
such Event of Default under this Agreement with respect to the Loans. Payment or
acceptance of the increased rates of interest provided for in this Section
4.1(c) is not a permitted alternative to timely payment and shall not constitute
a waiver of any Event of Default or otherwise prejudice or limit any rights or
remedies of the Administrative Agent or any Lender.
(d) Interest Payments; Interest and Fee Computation. Subject to the
provisions of Section 4.1(c), interest on each Loan shall be payable in arrears
on and to the last Business Day of each calendar month commencing June 30, 2000,
upon any prepayment of that Loan (to the extent accrued on the amount being
prepaid) and at maturity (including Final Maturity). In computing interest on
any Loan, the date of the making of such Loan shall be included, and the date of
payment of such Loan shall be excluded; provided that if a Loan is repaid on the
same day on which it is made, one day's interest shall be paid on that Loan.
(e) Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant to the terms of this Agreement or pursuant to any
of the Notes exceed the highest rate permissible under any Applicable Law which
a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the Lenders
have charged or received interest hereunder in excess of the highest applicable
rate, the rate in effect hereunder shall automatically be reduced to the maximum
rate permitted by Applicable Law and the Lenders shall at the Administrative
Agent's option (i) promptly refund to the Borrower any interest received by the
Lenders in excess of the maximum lawful rate or (ii) shall apply such excess to
the principal balance of the Obligations. It is the intent hereof that the
Borrower not pay or contract to pay, and that neither the Administrative Agent
nor any Lender receive or contract to receive, directly or indirectly in any
manner whatsoever, interest in excess of that which may be paid by the Borrower
under Applicable Law.
SECTION 4.2 Fees.
(a) Commitment Fee. Commencing on the Closing Date, the Borrower shall
pay to the Administrative Agent, for the account of the Lenders, a
non-refundable commitment fee (the "Commitment Fee") at a rate per annum equal
to 0.25% on the average daily unused portion of the Revolving Loan Commitment,
such fees to be calculated on the basis of a 360-day year and the actual number
of days elapsed and to be payable quarterly in arrears on the last Business Day
33
of each Fiscal Quarter during the term of this Agreement commencing June 30,
2000, and on the Termination Date. The Commitment Fee shall be distributed by
the Administrative Agent to the Lenders pro rata in accordance with the Lenders'
respective Pro Rata Shares.
(b) Facility Fee. On the Closing Date, the Borrower shall pay to the
Administrative Agent, for distribution to each Lender in proportion to that
Lender's Pro Rata Share, a facility fee equal to $862,500.
(c) Administrative Agent's and Other Fees. In order to compensate the
Administrative Agent for structuring and syndicating the Loans and for its
obligations as the Administrative Agent hereunder, the Borrower agrees to pay to
the Administrative Agent, for its own account, $100,000 on the Closing Date and
a monthly monitoring fee of $8,000, for its own account, in arrears on the last
Business Day of each calendar month thereafter commencing May 31, 2000.
SECTION 4.3 General Provisions Regarding Payment.
(a) Manner of Payment. Each payment by the Borrower on account of the
principal of or interest on the Loans or of any fee, commission or other amounts
(including the Reimbursement Obligation) payable to the Lenders under this
Agreement or any Note shall be made not later than 1:00 p.m. (Charlotte time) on
the date specified for payment under this Agreement to the Administrative Agent
at the Administrative Agent's Office for the account of the Lenders (other than
as set forth below) in accordance with their respective Pro Rata Shares (except
as specified below), in Dollars, in immediately available funds and shall be
made without any set-off, counterclaim or deduction whatsoever. Any payment
received after such time but before 2:00 p.m. (Charlotte time) on such day shall
be deemed a payment on such date for the purposes of Section 11.1, but for all
other purposes shall be deemed to have been made on the next succeeding Business
Day. Any payment received after 2:00 p.m. (Charlotte time) shall be deemed to
have been made on the next succeeding Business Day for all purposes. Upon
receipt by the Administrative Agent of each such payment, the Administrative
Agent shall distribute to each Lender at its address for notices set forth
herein its Pro Rata Share of such payment (except as specified below) and shall
wire advice of the amount of such credit to each Lender. Each payment to the
Administrative Agent of the Issuing Lender's fees or L/C Participants'
commissions shall be made in like manner, but for the account of the Issuing
Lender or the L/C Participants, as the case may be. Each payment to the
Administrative Agent of the Administrative Agent's fees or expenses shall be
made for the account of the Administrative Agent and any amount payable to any
Lender under Sections 4.8, 4.9 or 13.2 shall be paid to the Administrative Agent
for the account of the applicable Lender. The Borrower hereby authorizes the
Administrative Agent to charge its accounts with the Administrative Agent in
order to cause timely payment to be made to the Administrative Agent of all
principal, interest, fees and expenses due hereunder (subject to sufficient
funds being available in its accounts for that purpose). The Administrative
Agent shall promptly notify the Borrower after making any such charges.
(b) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, such
payment shall be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the payment of interest hereunder
or of the commitment fees hereunder, as the case may be.
34
SECTION 4.4 Application of Proceeds of Collateral and Payments after
Event of Default.
Upon the occurrence and during the continuation of an Event of Default,
(i) all payments received on account of the Obligations, whether from the
Borrower, from any Subsidiary Guarantor or otherwise, shall be applied by the
Administrative Agent against the Obligations and (ii) all proceeds received by
the Administrative Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral under any Security Document
may, in the discretion of the Administrative Agent, be held by the
Administrative Agent as Collateral for, and/or (then or at any time thereafter)
applied in full or in part by the Administrative Agent against, the applicable
Secured Obligations (as defined in such Security Document), in each case in the
following order of priority:
(a) to the payment of all costs and expenses of such sale, collection
or other realization, all other expenses, liabilities and advances made or
incurred by the Administrative Agent in connection therewith, and all amounts
for which the Administrative Agent is entitled to compensation (including the
fees described in Section 4.2), reimbursement and indemnification under any Loan
Document and all advances made by the Administrative Agent thereunder for the
account of the applicable Credit Party, and to the payment of all costs and
expenses paid or incurred by the Administrative Agent in connection with the
Loan Documents, all in accordance with Sections 12.7 and 13.2 and the other
terms of this Agreement and the Loan Documents;
(b) thereafter, to the extent of any excess such proceeds, to the
payment of all other Secured Obligations (as defined in the Security and Pledge
Agreement for the ratable benefit of the holders thereof (subject to the
provisions of Section 2.3(b)(v) hereof); and
(c) thereafter, to the extent of any excess such proceeds, to the
payment to or upon the order of such Credit Party or to whosoever may be
lawfully entitled to receive the same or as a court of competent jurisdiction
may direct.
SECTION 4.5 Adjustments.
The Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) that is greater than the proportion received by any
other Lender in respect of the Aggregate Amounts Due to such other Lender, then
the Lender receiving such proportionately greater payment shall (i) notify the
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase assignments (which it shall be
deemed to have purchased from each seller of an assignment simultaneously upon
the receipt by such seller of its portion of such payment) of the Aggregate
Amounts Due to the other Lenders so that all such recoveries of
35
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of the Borrower
or otherwise, those purchases shall be rescinded and the purchase prices paid
for such assignments shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. The Borrower expressly consents
to the foregoing arrangement and agrees that any purchaser of an assignment so
purchased may exercise any and all rights of a Lender as to such assignment as
fully as if that Lender had complied with the provisions of Section 13.11(b)
with respect to such assignment. In order to further evidence such assignment
(and without prejudice to the effectiveness of the assignment provisions set
forth above), each purchasing Lender and each selling Lender agree to enter into
an Assignment Agreement at the request of a selling Lender or a purchasing
Lender, as the case may be, in form and substance reasonably satisfactory to
each such Lender.
SECTION 4.6 Nature of Obligations of the Lenders Regarding Extensions
of Credit; Assumption by the Administrative Agent. The obligations of the
Lenders under this Agreement to make the Loans and issue or participate in
Letters of Credit are several and are not joint or joint and several. Unless the
Administrative Agent shall have received notice from a Lender prior to a
proposed borrowing date that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of the amount to be borrowed
on such date (which notice shall not release such Lender of its obligations
hereunder), the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the proposed borrowing date in
accordance with Section 2.2 (b) and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If such amount is made available to the Administrative
Agent on a date after such borrowing date, such Lender shall pay to the
Administrative Agent on demand an amount, until paid, equal to the product of
(a) the amount of such Lender's Pro Rata Share of such borrowing, times (b) the
daily average Federal Funds Rate during such period as determined by the
Administrative Agent, times (c) a fraction the numerator of which is the number
of days that elapse from and including such borrowing date to the date on which
such Lender's Pro Rata Share of such borrowing shall have become immediately
available to the Administrative Agent and the denominator of which is 360. A
certificate of the Administrative Agent with respect to any amounts owing under
this Section shall be conclusive, absent manifest error. If such Lender's Pro
Rata Share of such borrowing is not made available to the Administrative Agent
by such Lender within three (3) Business Days of such borrowing date, the
Administrative Agent shall be entitled to recover such amount made available by
the Administrative Agent with interest thereon at the rate per annum applicable
to the Loans hereunder, on demand, from the Borrower. The failure of any Lender
to make its Pro Rata Share of any Loan available shall not relieve it or any
other Lender of its obligation, if any, hereunder to make its Pro Rata Share of
such Loan available on such borrowing date, but no Lender shall be responsible
for the failure of any other Lender to make its Pro Rata Share of such Loan
available on the borrowing date.
SECTION 4.7 Increased Costs. If, after the date hereof, the
introduction of, or any change in, any Applicable Law, or in the interpretation
or administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any of the Lenders (or any of their respective Lending
36
Offices) with any request or directive (whether or not having the force of law)
of such Authority, central bank or comparable agency:
(i) shall subject any of the Lenders (or any of their
respective Lending Offices) to any tax, duty or other charge with respect to any
Note, Letter of Credit or Application or shall change the basis of taxation of
payments to any of the Lenders (or any of their respective Lending Offices) of
the principal of or interest on any Note, Letter of Credit or Application or any
other amounts due under this Agreement in respect thereof (except for changes in
the rate of tax on the overall net income of any of the Lenders or any of their
respective Lending Offices imposed by the jurisdiction in which such Lender is
organized or is or should be qualified to do business or such Lending Office is
located); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System), special deposit, insurance or capital or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any of the Lenders (or any of their respective Lending Offices) or
shall impose on any of the Lenders (or any of their respective Lending Offices)
or the foreign exchange and interbank markets any other condition affecting any
Note;
and the net result of any of the foregoing is to increase the costs to any of
the Lenders agreeing to make, making or of maintaining any Loan or Commitment or
issuing or participating in Letters of Credit or to reduce the yield or amount
of any sum received or receivable by any of the Lenders under this Agreement or
under the Notes or Letters of Credit or Application, then such Lender shall
promptly notify the Administrative Agent, and the Administrative Agent shall
promptly notify the Borrower of such fact and demand compensation therefor and,
within fifteen (15) days after such notice by the Administrative Agent, the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or Lenders for such increased cost or reduction. The
Administrative Agent will promptly notify the Borrower of any event of which it
has knowledge which will entitle such Lender to compensation pursuant to this
Section 4.7; provided, that the Administrative Agent shall incur no liability
whatsoever to the Lenders or the Borrower in the event it fails to do so. A
certificate of such Lender setting forth the basis for determining such amount
or amounts necessary to compensate such Lender shall be forwarded to the
Borrower through the Administrative Agent and shall be conclusively presumed to
be correct save for manifest error.
SECTION 4.8 Capital Requirements. If either (a) the introduction of, or
any change in, or in the interpretation of, any Applicable Law or (b) compliance
with any guideline or request issued after the date hereof from any central bank
or comparable agency or other Governmental Authority (whether or not having the
force of law), has or would have the effect of reducing the rate of return on
the capital of, or has affected or would affect the amount of capital required
to be maintained by, any Lender or any corporation controlling such Lender as a
consequence of, or with reference to the Commitments and other commitments of
this type, below the rate which the Lender or such other corporation could have
achieved but for such introduction, change or compliance, then within five (5)
Business Days after written demand by any such Lender, the Borrower shall pay to
such Lender from time to time as specified by such Lender additional amounts
sufficient to compensate such Lender or other corporation for such reduction. A
certificate as to such amounts submitted to the Borrower and the Administrative
37
Agent by such Lender, shall, in the absence of manifest error, be presumed to be
correct and binding for all purposes.
SECTION 4.9 Taxes.
(a) Payments Free and Clear. Any and all payments by the Borrower
hereunder or under the Notes or the Letters of Credit shall be made free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholding, and all liabilities with respect
thereto excluding, (i) in the case of each Lender and the Administrative Agent,
income and franchise taxes imposed by the jurisdiction under the laws of which
such Lender or the Administrative Agent (as the case may be) is organized or is
or should be qualified to do business or any political subdivision thereof, (ii)
in the case of each Lender, income and franchise taxes imposed by the
jurisdiction of such Lender's Lending Office or any political subdivision
thereof and (iii) in the case of each Lender and the Administrative Agent,
income and franchise taxes imposed by the United States (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note or Letter of Credit to any Lender (including the Issuing Lender) or the
Administrative Agent, (A) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.9) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the amount
such party would have received had no such deductions been made, (B) the
Borrower shall make such deductions, (C) the Borrower shall pay the full amount
deducted to the relevant taxing authority or other authority in accordance with
applicable law, and (D) the Borrower shall deliver to the Administrative Agent
evidence of such payment to the relevant taxing authority or other authority in
the manner provided in Section 4.9(d).
(b) Stamp and Other Taxes. In addition, the Borrower shall pay any
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit, the other Loan Documents, or the perfection of any
rights or security interest in respect thereto (hereinafter referred to as
"Other Taxes").
(c) Indemnity. The Borrower shall indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 4.9) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including,
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be made within thirty (30) days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor.
(d) Evidence of Payment. Within thirty (30) days after the date of any
payment of Taxes or Other Taxes, the Borrower shall furnish to the
Administrative Agent, at its address referred to
38
in Section 13.1, the original or a certified copy of a receipt evidencing
payment thereof or other evidence of payment satisfactory to the Administrative
Agent.
(e) Delivery of Tax Forms. Each Lender that is organized under the laws
of any jurisdiction other than the United States or any state or other political
subdivision thereof (for purposes of this Section 4.9(e), a "Non-US Lender")
shall deliver to Administrative Agent and to the Borrower, on or prior to the
Closing Date (in the case of each Lender listed on the signature pages hereof)
or on or prior to the date of the Assignment Agreement pursuant to which it
becomes a Lender (in the case of each other Lender), and at such other times as
may be necessary in the determination of the Borrower or Administrative Agent
(each in the reasonable exercise of its discretion), two original copies of
Internal Revenue Service Form W-8BEN or W-8ECI (or any successor forms) properly
completed and duly executed by such Lender, together with any other certificate
or statement of exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is not subject to
United States withholding tax with respect to any payments to such Lender of
interest payable under any of the Loan Documents. Each Non-US Lender hereby
agrees, from time to time after the initial delivery by such Lender of such
forms, whenever a lapse in time or change in circumstances renders such forms,
certificates or other evidence so delivered obsolete or inaccurate in any
material respect, that such Lender shall promptly (i) deliver to the
Administrative Agent and to the Borrower two original copies of renewals,
amendments or additional or successor forms, properly completed and duly
executed by such Lender, together with any other certificate or statement of
exemption required in order to confirm or establish that such Lender is not
subject to United States withholding tax with respect to payments to such Lender
under the Loan Documents or (ii) notify the Administrative Agent and the
Borrower of its inability to deliver any such forms, certificates or other
evidence.
ARTICLE V
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 5.1 Closing. The closing shall take place at the offices of the
Administrative Agent, Xxx Xxxxx Xxxxx Xxxxxx, XX-00, 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx at 10:00 a.m. on June 8, 2000, or on such other date
as the parties hereto shall mutually agree.
SECTION 5.2 Conditions to Closing and Initial Extensions of Credit. The
obligation of the Lenders to close this Agreement and to make or maintain the
initial Loans or issue the initial Letters of Credit is subject to the
satisfaction of each of the following conditions:
(a) Executed Loan Documents. The following Loan Documents, in form and
substance reasonably satisfactory to the Administrative Agent and Required
Lenders:
(i) this Agreement;
(ii) the Notes;
(iii) the Security and Pledge Agreement; and
39
(iv) the Subsidiary Guaranty Agreement
shall have been duly authorized, executed and delivered to the Administrative
Agent by the applicable Credit Parties, shall be in full force and effect and no
default shall exist thereunder, and such Credit Parties shall have delivered
original counterparts thereof to the Administrative Agent. Required Lenders
shall have executed and delivered to the Administrative Agent this Agreement or
counterparts hereof.
(b) Security Interests in Personal Property. The Administrative Agent
shall have received evidence satisfactory to it that the Borrower and Subsidiary
Guarantors shall have taken or caused to be taken all such actions, executed and
delivered or caused to be executed and delivered all such agreements, documents
and instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clauses (iii), (iv)
and (v) below) that may be necessary or, in the opinion of the Administrative
Agent, desirable in order to create in favor of the Administrative Agent, for
the benefit of the Lenders, a valid and (upon such filing and recording)
perfected first priority security interest in the entire personal property
Collateral. Such actions shall include the following:
(i) Schedules to Security Documents. Delivery to the
Administrative Agent of accurate and complete schedules to all of the applicable
Security Documents.
(ii) Stock Certificates and Instruments. Delivery to the
Administrative Agent of (A) certificates (which certificates shall be
accompanied by irrevocable undated stock powers, duly endorsed in blank and
otherwise satisfactory in form and substance to the Administrative Agent)
representing all capital stock pledged pursuant to the Security and Pledge
Agreement and (B) all promissory notes or other instruments (duly endorsed,
where appropriate, in a manner satisfactory to the Administrative Agent)
evidencing any Collateral;
(iii) Lien Searches and UCC Termination Statements. Delivery
to the Administrative Agent of (A) the results of a recent search, by a Person
satisfactory to the Administrative Agent, of all effective UCC financing
statements and fixture filings and all judgment and tax lien filings which may
have been made with respect to any personal or mixed property of any Credit
Party, together with copies of all such filings disclosed by such search, and
(B) UCC termination statements duly executed by all applicable Persons for
filing in all applicable jurisdictions as may be necessary to terminate any
effective UCC financing statements or fixture filings disclosed in such search
(other than any such financing statements or fixture filings in respect of Liens
permitted to remain outstanding pursuant to the terms of this Agreement).
(iv) UCC Financing Statements and Fixture Filings. Delivery to
the Administrative Agent of UCC financing statements and, where appropriate,
fixture filings, duly executed by each applicable Credit Party with respect to
all personal and mixed property Collateral of such Credit Party, for filing in
all jurisdictions as may be necessary or, in the opinion of the Administrative
Agent, desirable to perfect the security interests created in such Collateral
pursuant to the Security Documents;
40
(v) PTO Cover Sheets, Etc. Delivery to the Administrative
Agent of all cover sheets or other documents or instruments required to be filed
with the PTO in order to create or perfect Liens in respect of any IP
Collateral;
(c) Insurance. The Administrative Agent shall have received
certificates of insurance naming the Administrative Agent as loss payee and
additional insured and certified copies of insurance policies in the form
required under Section 8.2 and the Security Documents and otherwise in form and
substance reasonably satisfactory to the Administrative Agent.
(d) Corporate and Capital Structure, and Ownership.
(i) Corporate Structure. The corporate organizational
structure of the Borrower and its Subsidiaries shall be satisfactory to the
Administrative Agent and the Lenders in all respects.
(ii) Capital Structure and Ownership. The capital structure
and ownership of the Borrower shall be satisfactory to the Administrative Agent
and the Lenders in all respects.
(e) Necessary Governmental Approvals and Consents; Expiration of
Waiting Periods, Etc. The Credit Parties shall have obtained all Governmental
Approvals and all consents of other Persons, in each case that are necessary or
advisable in connection with the transactions contemplated by the Loan Documents
and the continued operation of the business conducted by the Borrower and its
Subsidiaries in substantially the same manner as conducted prior to the Closing
Date. Each such Governmental Approval or consent shall be in full force and
effect, except in a case where the failure to obtain or maintain a Governmental
Approval or consent, either individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. 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 transactions contemplated by the Loan Documents or the
financing thereof. No action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing shall
be pending, and the time for any applicable Governmental Authority to take
action to set aside its consent on its own motion shall have expired.
(f) Collateral Audit. Upon request of the Administrative Agent, the
Administrative Agent shall have received an audit of all accounts receivable of
the Borrower and its Subsidiaries, in form, scope and substance satisfactory to
the Administrative Agent and the Lenders.
(g) Borrowing Base Certificate. On or before the Closing Date, the
Borrower shall have delivered to the Administrative Agent and the Lenders a
Borrower Base Certificate prepared as of a recent date prior to the Closing
Date.
(h) Refinancing of Loans under Existing Agreement; Fees. On or before
the Closing Date, the Borrower shall have paid to the Administrative Agent, for
distribution (as appropriate) to the Administrative Agent and the Lenders, all
interest, letter of credit fees and fees accrued under the Existing Agreement
(including, without limitation, "breakage fees" under Section 4.9
41
of the Existing Agreement) on or before the Closing Date and the fees payable on
the Closing Date referred to in Section 4.2.
(i) Cash Management Systems. On or before the Closing Date, the
Borrower shall have established the Cash Management Systems.
(j) Closing Certificates and Opinions; etc.
(i) Officer's Certificate of the Borrower. The Administrative
Agent shall have received an Officer's Certificate dated as of the Closing Date,
in form and substance satisfactory to the Administrative Agent, to the effect
that all representations and warranties of the Credit Parties contained in this
Agreement and the other Loan Documents are true, correct and complete in all
material respects; that no Credit Party is in violation of any of the covenants
contained in this Agreement and the other Loan Documents; that, after giving
effect to the transactions contemplated by this Agreement, no Default or Event
of Default has occurred and is continuing; and that the Credit Parties have
satisfied each of the closing conditions to be satisfied thereby which has not
been waived by the Administrative Agent and Required Lenders.
(ii) Certificate of Secretary of each Credit Party. The
Administrative Agent shall have received a certificate of the secretary or
assistant secretary of each Credit Party certifying on behalf of such Credit
Party, as applicable, that attached thereto is (A) a true and complete copy of
the articles of organization or certificate of formation or other equivalent, if
applicable, of such Credit Party and all amendments thereto; certified as of a
recent date by the appropriate Governmental Authority in its jurisdiction of
organization; (B) a true and complete copy of the bylaws or operating agreement
or other equivalent, if applicable, of such Credit Party; (C) a true and
complete copy of resolutions duly adopted by the Board of Directors or managing
member, as the case may be, of such Credit Party, authorizing, in the case of
the Borrower, the borrowings contemplated hereunder and, in the case of each of
the Credit Parties, the execution, delivery and performance of this Agreement
and the other Loan Documents; and as to the incumbency and genuineness of the
signature of each officer of such Credit Party executing Loan Documents to which
such Credit Party is a party; and (D) a true and complete copy of each
certificate required to be delivered pursuant to Section 5.2(j)(iii).
(iii) Certificates of Good Standing. The Administrative Agent
shall have received certificates of good standing from the jurisdiction of
organization of each Credit Party and, to the extent requested by the
Administrative Agent, certificates of authority to do business from each
jurisdiction where any Credit Party is authorized to do business each dated a
recent date prior to the Closing Date and certified by the Secretary of State or
other authorized Governmental Authority.
(iv) Opinions of Counsel. The Administrative Agent shall have
received favorable opinions of Fowler, White, Gillen, Boggs, Xxxxxxxxx and
Banker, P.A., counsel to the Credit Parties, and XxXxxxx Xxxxx Battle & Xxxxxx,
special North Carolina counsel to the Credit Parties, each dated as of the
Closing Date and addressed to the Administrative Agent and the Lenders, in form
and substance satisfactory to the Administrative Agent; which opinions shall
cover, without limitation, perfection of the Administrative Agent's security
interest in the Collateral with customary assumptions and exceptions acceptable
to Administrative Agent.
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(k) Consents; Defaults.
(i) Permits and Licenses. All permits and licenses, including
permits and licenses required under Applicable Laws, necessary to the conduct of
business by the Credit Parties shall have been obtained and remain in full force
and effect.
(ii) No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages in respect of, or which is related to or arises out of this
Agreement or the other Loan Documents or the consummation of the transactions
contemplated hereby or thereby, or which, in the Administrative Agent's
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents.
(iii) No Material Adverse Change. There shall not have
occurred any material change in the Collateral, business, properties, business
prospects, financial condition or results of operations of the Credit Parties,
or in any event, condition or state of facts that could reasonably be expected
to have a Material Adverse Effect.
(iv) No Event of Default. No Default or Event of Default shall
have occurred and be continuing.
(l) Financial Matters.
(i) Financial Statements. The Administrative Agent shall have
received (A) audited Consolidated financial statements of the Borrower and its
Subsidiaries for the Fiscal Year ended December 31, 1999, (B) unaudited
Consolidated financial statements of the Borrower and its Subsidiaries for the
three-month period ended March 31, 2000, (C) the Budget for Fiscal Year 2000 and
such other pro forma and projected statements of the Borrower and its
Subsidiaries as the Administrative Agent and the Lenders may request, all in
form and substance reasonably satisfactory to the Administrative Agent and the
Lenders, and (D) such other financial information as may be reasonably requested
by the Administrative Agent.
(ii) Financial Condition Certificate. The Borrower shall have
delivered to the Administrative Agent a certificate on behalf of itself and the
Credit Parties, in form and substance satisfactory to the Administrative Agent,
and certified as accurate in all material respects by a Responsible Officer,
that (A) payables are current and not past due more than ninety (90) days
(except for those being contested in good faith by HPSI) and each Credit Party
is Solvent, (B) the Borrower's and HPSI's liquidity position as of the date of
such certificate is not materially different from the December 31, 1999
financial statements previously furnished to the Administrative Agent, (C)
attached thereto is a pro forma balance sheet of the Borrower and its
Subsidiaries setting forth on a pro forma basis the financial condition of the
Borrower and its Subsidiaries as of that date, reflecting on a pro forma basis
the effect of the transactions contemplated herein, including all material fees
and expenses in connection therewith, and evidencing compliance by the Borrower
on a pro forma basis with the financial covenants contained in Articles IX and X
hereof, (D) the financial projections previously delivered to the Administrative
Agent represent the good faith opinion of the Borrower and
43
senior management thereof as to the projected results contained therein and (E)
attached thereto is a calculation of the Applicable Margin as of the Closing
Date in accordance with Section 4.1(b).
(iii) Payment at Closing. There shall have been paid by the
Credit Parties to the Administrative Agent and the Lenders the fees set forth or
referenced in Section 4.2 and any other accrued and unpaid fees or commissions
due hereunder (including, without limitation, legal fees and expenses), and to
any other Person such amount as may be due thereto in connection with the
transactions contemplated hereby, including all taxes, fees and other charges in
connection with the execution, delivery, recording, filing and registration of
any of the Loan Documents.
(m) Post-Closing Agreement. The Borrower shall have executed a
post-closing agreement in form and substance satisfactory to the Administrative
Agent, it being understood that the Administrative Agent may, in its sole
discretion, extend the time periods set forth therein for compliance of the
matters listed therein.
(n) Miscellaneous.
(i) Notice of Account Designation. The Administrative Agent
shall have received a Notice of Account Designation specifying the account or
accounts to which the proceeds of any Loans made after the Closing Date are to
be disbursed.
(ii) Proceedings and Documents. All opinions, certificates and
other instruments and all proceedings in connection with the transactions
contemplated by this Agreement shall be satisfactory in form and substance to
the Administrative Agent. The Lenders shall have received copies of all other
instruments and other evidence as the Lender may reasonably request, in form and
substance satisfactory to the Lenders, with respect to the transactions
contemplated by this Agreement and the taking of all actions in connection
therewith.
(iii) Due Diligence and Other Documents. The Credit Parties
shall have delivered to the Administrative Agent such other documents,
certificates and opinions as the Administrative Agent reasonably requests,
certified by a Responsible Officer as a true and correct copy thereof.
SECTION 5.3 Conditions to All Loans and Letters of Credit. The
obligations of the Lenders to make any Loan and of the Issuing Lender to issue
any Letter of Credit is subject to the satisfaction of the following conditions
precedent on the relevant borrowing or issue date, as applicable:
(a) Continuation of Representations and Warranties. The representations
and warranties made by the Credit Parties contained in Article VI and in the
other Loan Documents shall be true and correct on and as of such borrowing or
issuance date with the same effect as if made on and as of such borrowing date
or issuance date, except for any representation and warranty made as of an
earlier date, which representation and warranty shall remain true and correct as
of such earlier date.
44
(b) No Existing Default. No Default or Event of Default shall have
occurred and be continuing hereunder (i) on the borrowing date with respect to
such Loan or after giving effect to the Loans to be made on such date or (ii) or
on the issue date with respect to such Letter of Credit or after giving affect
to such Letters of Credit on such date.
(c) Officer's Compliance Certificate; Additional Documents. The
Administrative Agent shall have received the current Officer's Compliance
Certificate and each additional document, instrument, legal opinion or other
item of information reasonably requested by it.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BORROWER
SECTION 6.1 Representations and Warranties. To induce the
Administrative Agent and the Lenders to enter into this Agreement and to induce
the Lenders to make the Loans or the Issuing Lender or any Lender to issue or
participate in the Letters of Credit, the Borrower hereby represents and
warrants to the Administrative Agent, the Issuing Lender and the Lenders that:
(a) Existence; Power; Qualification. Each Credit Party is a duly
organized, validly existing corporation, partnership or limited liability
company organized under the laws of the state of its organization and is in good
standing or active status, as applicable, under the laws of such state, has the
power and authority to own its properties and to carry on its business as now
being and hereafter proposed to be conducted and is duly qualified (or otherwise
licensed) and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification and authorization except where the failure to so qualify could
reasonably be expected to have a Material Adverse Effect. As of the Closing
Date, the jurisdictions in which the Credit Parties are organized and qualified
to do business, including each state where the Borrower or any Subsidiary
thereof is licensed as a third party administrator of insurance plans or
licensed for utilization review services, are described on Schedule 6.1(a).
(b) Ownership. Each Subsidiary of the Borrower as of the Closing Date
is listed on Schedule 6.1(b). The capitalization of the Borrower and each of its
Subsidiaries as of the Closing Date consists of the number of shares or similar
equity interests, authorized, issued and outstanding, of such classes and
series, with or without par value, described on Schedule 6.1(b). All outstanding
shares or similar equity interests have been duly authorized and validly issued
and are fully paid and nonassessable and none of such shares or similar equity
interests constitutes "margin stock" (as defined in Regulation U of the Board of
Governors of the Federal Reserve System). The shareholders of the Subsidiaries
of the Borrower and the number of shares or similar equity interests owned by
each as of the Closing Date are described on Schedule 6.1(b). As of the Closing
Date, there are no outstanding stock purchase, warrants, subscriptions, options,
securities, instruments or other rights of any type or nature whatsoever, which
are convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock or similar equity interests of any Subsidiary of the
Borrower, except as described on Schedule 6.1(b).
45
(c) Authorization of Agreement, Loan Documents and Borrowings. Each
Credit Party has the right, power and authority and has taken all necessary
action to authorize the execution, delivery and performance of each of the Loan
Documents to which it is a party in accordance with their respective terms. Each
of the Loan Documents has been duly executed and delivered by the duly
authorized officers of the Credit Parties party thereto, and constitutes the
legal, valid and binding obligation of each such Credit Party enforceable in
accordance with its respective terms, except as such enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws, the
enforcement of creditors' rights in general and the availability of equitable
remedies.
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws,
Etc. The execution, delivery and performance by each Credit Party of the Loan
Documents to which each such Person is a party, in accordance with their
respective terms, the borrowings hereunder and the transactions contemplated
hereby do not and will not, by the passage of time, the giving of notice or
otherwise, (i) require any Governmental Approval not previously obtained and
disclosed in writing to the Lenders or violate any Applicable Law relating to
the Credit Parties, (ii) conflict with, result in a breach of or constitute a
default under the articles of incorporation, by-laws or other organizational
documents of any Credit Party or any indenture, agreement or other instrument to
which such Person is a party or by which any of its properties may be bound or
any Governmental Approval relating to such Person, (iii) result in or require
the creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by such Person other than Liens arising under the
Loan Documents, or (iv) require any approval of stockholders or similar equity
holders or any approval or consent of any Person under any indenture, agreement
or other instrument to which such Person is a party or by which any of its
properties may be bound, except for such approvals or consents which will be
obtained on or before the Closing Date and disclosed in writing to the Lenders.
(e) Compliance with Law; Governmental Approvals. The Borrower and each
of its Subsidiaries (i) has all Governmental Approvals required by any
Applicable Law for it to conduct its business (except where the failure to have
any such approval could not reasonably be expected to have a Material Adverse
Effect), each of which is in full force and effect, is final and not subject to
review on appeal and is not the subject of any pending or, to the best of its
knowledge, threatened attack by direct or collateral proceeding, and (ii) is in
compliance with each Governmental Approval applicable to it and in all material
respects with all other Applicable Laws relating to it or any of its respective
properties, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect.
(f) Tax Returns and Payments. The Borrower and its Subsidiaries have
duly filed or caused to be filed all federal, state, local and other tax returns
required by Applicable Law to be filed, and, has paid, except to the extent
permitted by Section 8.4, all federal, state, local and other taxes, assessments
and governmental charges or levies upon it and its property, income, profits and
assets which are due and payable. No Governmental Authority has asserted any
Lien or other claim against the Borrower or any of its Subsidiaries with respect
to unpaid taxes which has not been discharged or resolved. The charges, accruals
and reserves on the books of the Borrower and each of its Subsidiaries in
respect of federal, state, local and other taxes for all fiscal years and
portions thereof since the formation of such Person are in the judgment of each
46
such Person adequate, and the Borrower and each of its Subsidiaries do not
anticipate any additional taxes or assessments for any of such years.
(g) Franchises, Intellectual Property and Computer Equipment.
(i) Except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect, the Borrower and each of its
Subsidiaries owns or possesses rights to use all franchises, licenses,
copyrights, copyright applications, patents, patent rights or licenses, patent
applications, trademarks, trademark rights, trade names, trade name rights,
copyrights and rights with respect to the foregoing which are required to
conduct its business as now and presently planned to be conducted without any
conflict with the rights of others. No event has occurred which permits, or
after notice or lapse of time or both would permit, the revocation or
termination of any such rights, and neither the Borrower nor any of its
Subsidiaries is liable to any Person for infringement under Applicable Law with
respect to any such rights as a result of their business operations.
(ii) Except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect, the Borrower and each of its
Subsidiaries has such title to or the right to use, by license or other
agreement, all computer software programs used thereby as are necessary to
permit the Borrower and each such Subsidiary to conduct their operations as
currently conducted, without any known conflict with the rights of others or any
known use by others which conflicts, in any material respect, with the rights of
the Borrower and each such Subsidiary.
(h) Environmental Matters. The Borrower and each of its Subsidiaries
and their respective properties and operations are not in violation in any
material respect of any applicable Environmental Law; (ii) without limitation of
clause (i) above, the Borrower and each of its Subsidiaries and their properties
and operations are not in violation in any material respect of any Environmental
Law, or subject to any existing, pending or threatened investigation, inquiry or
proceeding by any Governmental Authority or to any remedial obligations under
any Environmental Law; and (iii) all material notices, permits, licenses or
similar authorizations, if any, required to be obtained or filed by the Borrower
and each of its Subsidiaries relating to Hazardous Materials, including, without
limitation, past or present treatment, storage, disposal or release of any
Hazardous Materials or solid waste by the Borrower or any of its Subsidiaries
into the environment, have been obtained or applications for such permits and
licenses have been filed and the Borrower and each of its Subsidiaries are in
full compliance in all material respects with the requirements of such permits,
licenses or authorizations.
(i) ERISA. Except as set forth on Schedule 6.1(i) as of the Closing
Date, the Borrower and each of its Subsidiaries and each ERISA Affiliate are in
compliance in all material respects with applicable provisions of ERISA and the
regulations and published interpretations thereunder with respect to all
Employee Benefit Plans except for any required amendments for which the remedial
amendment period as defined in Section 401(b) of the Code has not yet expired.
Each Employee Benefit Plan that is intended to be qualified under Section 401(a)
of the Code has been determined by the Internal Revenue Service to be so
qualified, and each trust related to such plan has been determined to be exempt
under Section 501(a) of the Code. No
47
material liability has been incurred by any Credit Party or any ERISA Affiliate
which remains unsatisfied with respect to any Employee Benefit Plan or any
Multiemployer Plan.
(j) Margin Stock. Neither the Borrower nor any of its Subsidiaries is
engaged principally or as one of its activities in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" (as each
such term is defined or used in Regulations U of the Board of Governors of the
Federal Reserve System). No part of the proceeds of any of the Loans or Letters
of Credit will be used for purchasing or carrying margin stock or for any
purpose which violates, or which would be inconsistent with, the provisions of
Regulation T, U or X of such Board of Governors. If requested by the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
the Lenders a statement or statements in conformity with the requirements of
said Regulation T, U or X to the foregoing effect.
(k) Government Regulation. No Credit Party is an "investment company"
or a company "controlled" by an "investment company" (as each such term is
defined or used in the Investment Company Act of 1940, as amended) and no Credit
Party is, or after giving effect to the making of any Loan or the issuance of
any Letter of Credit will be, subject to regulation under the Public Utility
Holding Company Act of 1935 or the Interstate Commerce Act, each as amended, or
any other Applicable Law which limits its ability to incur or consummate the
transactions contemplated hereby.
(l) Material Contracts. Schedule 6.1(l) sets forth a complete and
accurate list of all Material Contracts of the Borrower and each of its
Subsidiaries in effect as of the Closing Date and not listed on any other
Schedule hereto; other than as set forth in Schedule 6.1(l), each such Material
Contract is, and after giving effect to the consummation of the transactions
contemplated by the Loan Documents will be, in full force and effect in
accordance with the terms thereof; and there are no material defaults by the
Borrower or any such Subsidiary (other than as may be disclosed on Schedule
6.1(l)) or, to the best of the Borrower's knowledge after due inquiry, by any
other party under any such Material Contract. To the extent requested by the
Administrative Agent, the Borrower and each of its Subsidiaries have delivered
to the Administrative Agent a true and complete copy of each Material Contract
required to be listed on Schedule 6.1(l).
(m) Employee Relations. The Borrower and each of its Subsidiaries has a
stable work force in place and is not, except as set forth on Schedule 6.1(m) as
of the Closing Date, party to any collective bargaining agreement nor has any
labor union been recognized as the representative of its employees. The Borrower
knows of no pending, threatened or contemplated strikes, work stoppage or other
collective labor disputes involving its employees or the employees of any of its
Subsidiaries.
(n) Burdensome Provisions. Neither the Borrower nor any of its
Subsidiaries is a party to any indenture, agreement, lease or other instrument,
or subject to any corporate or partnership restriction, Governmental Approval or
Applicable Law which is so unusual or burdensome as in the foreseeable future
could have a Material Adverse Effect. Neither the Borrower nor any of its
Subsidiaries presently anticipates that future expenditures needed to meet the
provisions of federal or state statutes, orders, rules or regulations of a
Governmental Authority will be so burdensome as to have a Material Adverse
Effect.
48
(o) Financial Statements. The Consolidated balance sheet of the
Borrower and its Subsidiaries as of December 31, 1999 and the related statements
of income and retained earnings and cash flows for the periods then ended,
copies of which have been furnished to the Administrative Agent, when read
together with the other financial information pertaining to the Credit Parties
which has heretofore been furnished in writing to the Administrative Agent,
fairly present the assets, liabilities and financial position (on a consolidated
and where applicable, consolidating basis) of the Credit Parties as at such
dates, and the results of the operations and changes of financial position (on a
consolidated and where applicable, consolidating basis) for the periods then
ended. 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 indicated in the notes thereto. The
Credit Parties have no material Indebtedness, obligation or other unusual
forward or long-term commitment which is required to be reflected and is not
fairly reflected in the foregoing financial statements or in the notes thereto,
and, as of the date of the funding of any Loan subsequent to the Closing Date,
is required to be reflected and is not reflected in the most recent financial
statements delivered to the Lenders pursuant to Section 7.1 or the notes
thereto, all as required by GAAP.
(p) No Material Adverse Change; No Restricted Payment. Since December
31, 1999 and except for Borrower's failure to consummate the recently announced
transaction with UICI and UICI Acquisition Co., there has been no material
adverse change in the properties, businesses, results of operations, or
financial or other condition of the Credit Parties taken as a whole, including,
but not limited to, any material adverse change resulting from any fire,
explosion, accident, drought, storm, hail, earthquake, embargo, act of God, or
of the public enemy or other casualty (whether or not covered by insurance).
Neither the Borrower nor any of its Subsidiaries has directly or indirectly
declared, ordered, paid or made, or set apart any sum or property for, any
payments, dividends or other distributions prohibited by Section 10.7 or agreed
to do so.
(q) Solvency. As of the Closing Date and after giving effect to the
incurrence of any Obligations by any Credit Party, each Credit Party, the
Borrower and each of its Subsidiaries will be Solvent.
(r) Titles to Properties; Real Property.
(i) The Borrower and its Subsidiaries have such title to the
real property owned in fee or leased by them as is appropriate to the conduct of
their respective businesses, and valid and legal title to all of their
respective personal property and assets, including, but not limited to, those
reflected on the Consolidated financial statements of the Borrower and its
Subsidiaries delivered pursuant to Section 6.1(o) or in the most recent
financial statements delivered pursuant to Section 7.1, except those which have
been disposed of subsequent to the date of such financial statements in the
ordinary course of business.
(ii) As of the Closing Date, Schedule 6.1(r) annexed hereto
contains a true, accurate and complete list of (A) all interests owned by the
Borrower or any of its Subsidiaries in any real property and (B) all leases,
subleases or assignments of leases (together with all amendments, modifications,
supplements, renewals or extensions of any thereof) affecting any such interest
of the Borrower or any such Subsidiary, regardless of whether the Borrower or
such Subsidiary is the landlord or tenant (whether directly or as an assignee or
successor in interest)
49
under such lease, sublease or assignment. Except as specified in Schedule 6.1(r)
annexed hereto, each agreement listed in clause (B) of the immediately preceding
sentence is in full force and effect and the Borrower does not have knowledge of
any default that has occurred and is continuing thereunder, and each such
agreement constitutes the legally valid and binding obligation of each of the
Borrower and one or more of its Subsidiaries, as applicable, enforceable against
such Person in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles.
(s) Liens. Except for Liens existing on the Closing Date and described
on Schedule 6.1(s), none of the properties and assets owned by the Borrower or
any of its Subsidiaries is subject to any Lien, except Liens permitted pursuant
to Section 10.3. No financing statement under the Uniform Commercial Code of any
state which names the Borrower or any of its Subsidiaries or any of their
respective trade names or divisions as debtor and which has not been terminated,
has been filed in any state or other jurisdiction and neither the Borrower nor
any of Subsidiaries has signed any such financing statement or any security
agreement authorizing any secured party thereunder to file any such financing
statement, except to perfect those Liens listed on Schedule 6.1(s). No effective
filing covering all or part of the IP Collateral is on file in the PTO.
(t) Indebtedness and Guaranty Obligations. Schedule 6.1(t) is a
complete and correct listing of all Indebtedness and Guaranty Obligations of the
Borrower and its Subsidiaries as of the Closing Date. The Borrower and its
Subsidiaries have performed and are in compliance with all of the terms of such
Indebtedness and Guaranty Obligations and all instruments and agreements
relating thereto, and no default or event of default, or event or condition
which with notice or lapse of time or both would constitute such a default or
event of default on the part of the Credit Parties exists with respect to any
such Indebtedness or Guaranty Obligation. To the extent requested by the
Administrative Agent, the Credit Parties have delivered to the Administrative
Agent a true and complete copy of each instrument and agreement evidencing such
Indebtedness and Guaranty Obligation.
(u) Litigation. Except as set forth on Schedule 6.1(u) as of the
Closing Date, there are no actions, suits or proceedings at law or in equity
pending nor, to the knowledge of the Borrower or any of its Subsidiaries,
threatened against or in any other way relating adversely to or affecting the
Borrower or any of its Subsidiaries or any of their respective properties in any
court or before any arbitrator of any kind or before or by any Governmental
Authority which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect. There are no material outstanding or unpaid judgments
against the Borrower or any of its Subsidiaries.
(v) Absence of Defaults. (i) No event has occurred or is continuing
which constitutes a Default or an Event of Default and (ii) no event has
occurred and is continuing which constitutes, or which with the passage of time
or giving of notice or both would constitute, a default or event of default by
the Borrower or any of its Subsidiaries under any Material Contract (other than
this Agreement) or judgment, decree or order to which the Borrower or any of its
Subsidiaries is a party or by which the Borrower or any of its Subsidiaries or
any of their respective properties may be bound or which would require the
Borrower or any of its Subsidiaries to make any
50
payment thereunder prior to the scheduled maturity date therefor, any of which
events referred to in this clause (ii) could reasonably be expected to have a
Material Adverse Effect.
(w) Creation, Perfection and Priority of Liens. The execution and
delivery of the Security Documents by the Credit Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to Section 5.2(b) and (ii)
the delivery to Administrative Agent of any Pledged Collateral not delivered to
Administrative Agent at the time of execution and delivery of the applicable
Security Document (all of which Pledged Collateral has been so delivered) are
effective to create in favor of the Administrative Agent for the benefit of the
Lenders, as security for the Obligations, a valid and perfected First Priority
Lien on all of the Collateral, and all filings and other actions necessary or
desirable to perfect and maintain the perfection and First Priority status of
such Liens have been duly made or taken and remain in full force and effect,
other than the filing of any UCC financing statements delivered to the
Administrative Agent for filing (but not yet filed) and the periodic filing of
UCC continuation statements in respect of UCC financing statements filed by or
on behalf of the Administrative Agent.
(x) Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any Governmental Authority is
required for either (i) the pledge or grant by any Credit Party of the Liens
purported to be created in favor of the Administrative Agent pursuant to any of
the Security Documents or (ii) the exercise by the Administrative Agent of any
rights or remedies in respect of any Collateral (whether specifically granted or
created pursuant to any of the Security Documents or created or provided for by
applicable law), except for filings or recordings contemplated by Section 5.2
and except as may be required, in connection with the disposition of any Pledged
Collateral, by laws generally affecting the offering and sale of securities.
(y) Margin Regulations. The pledge of the Pledged Collateral pursuant
to the Security Documents does not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
(z) Information Regarding Collateral. All information supplied to the
Administrative Agent by or on behalf of any Credit Party with respect to any of
the Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
(aa) Inactive Subsidiaries. No Inactive Subsidiary conducts any
business, has any assets or revenue or is obligated with respect to any
liabilities.
(bb) Deposit Accounts. Schedule 6.1(bb) is a complete and correct
listing of all Deposit Accounts of the Borrower and its Subsidiaries as of the
Closing Date, including and specifically reflecting as such the Client
Disbursement Account.
(cc) Accuracy and Completeness of Information. All written information,
reports and other papers and data produced by or on behalf of the Credit Parties
and furnished to the Lenders were, at the time the same were so furnished,
complete and correct in all respects to the extent necessary to give the
recipient a true and accurate knowledge of the subject matter. No document
furnished or written statement made to the Administrative Agent or the Lenders
by the
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Credit Parties in connection with the negotiation, preparation or execution of
this Agreement or any of the Loan Documents contains or will contain any untrue
statement of a fact material to the creditworthiness of the Credit Parties or
omits or will omit to state a fact necessary in order to make the statements
contained therein not misleading. The Credit Parties are not aware of any facts
not disclosed in writing to the Administrative Agent which could reasonably be
expected to have a Material Adverse Effect.
SECTION 6.2 Survival of Representations and Warranties, etc. All
representations and warranties set forth in this Article VI and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute representations
and warranties made under this Agreement. All representations and warranties
made under this Agreement shall be made or deemed to be made at and as of the
Closing Date and the date of any borrowing or issuance hereunder, shall survive
the Closing Date and the date of any such borrowing or issuance and shall not be
waived by the execution and delivery of this Agreement or any borrowing or
issuance hereunder.
ARTICLE VII
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been paid and satisfied in full and the
Credit Facility terminated, unless consent has been obtained in the manner set
forth in Section 13.12 hereof, the Borrower will furnish or cause to be
furnished to the Administrative Agent at the Administrative Agent's Office set
forth in Section 13.1 hereof and to the Lenders at their respective addresses as
set forth on Schedule 1.1(b), or such other office as may be designated by the
Administrative Agent and the Lenders from time to time:
SECTION 7.1 Financial Statements and Projections.
(a) Monthly Statements. As soon as practicable and in any event within
twenty (20) days after the end of each calendar month ending after the Closing
Date, (i) unaudited Consolidated balance sheets of the Borrower and its
Subsidiaries as of the close of such month and (ii) unaudited Consolidated
statements of income, retained earnings and cash flows for the month then ended,
including the notes thereto, all in reasonable detail setting forth in
comparative form the corresponding figures for the preceding Fiscal Year and the
corresponding figures for the Adjusted Budget for such month, and prepared by
the Borrower in accordance with GAAP and, if applicable, containing disclosure
of the effect on the financial position or results of operations of any change
in the application of accounting principles and practices during the period, and
certified by the chief financial officer of the Borrower to present fairly in
all material respects the financial condition of the Borrower and its
Subsidiaries as of their respective dates and the results of operations of the
Borrower and its Subsidiaries for the respective periods then ended, subject to
normal year-end adjustments. As soon as available and in any event within twenty
(20) days after the end of each month ending after the Closing Date, a separate
report of rolling 13-week cash flow of the Borrower and its Subsidiaries as of
the last day of such month for the 13-week period ending as of such date in
reasonable detail.
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(b) Quarterly Financial Statements. As soon as practicable and in any
event within forty-five (45) days after the end of each Fiscal Quarter,
unaudited Consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as of the close of such Fiscal Quarter of each Fiscal Year and
unaudited Consolidated and consolidating statements of income, retained earnings
and cash flows for the Fiscal Quarter then ended and that portion of the Fiscal
Year then ended, including the notes thereto, all in reasonable detail setting
forth in comparative form the corresponding figures for the preceding Fiscal
Year and the corresponding figures for the Adjusted Budget for such Fiscal
Quarter, and prepared by the Borrower in accordance with GAAP and, if
applicable, containing disclosure of the effect on the financial position or
results of operations of any change in the application of accounting principles
and practices during the period, and certified by the chief financial officer of
the Borrower to present fairly in all material respects the financial condition
of the Borrower and its Subsidiaries as of their respective dates and the
results of operations of the Borrower and its Subsidiaries for the respective
periods then ended, subject to normal year-end adjustments.
(c) Annual Financial Statements. As soon as practicable and in any
event within ninety (90) days after the end of each Fiscal Year, Consolidated
and consolidating balance sheets of the Borrower and its Subsidiaries as of the
close of such Fiscal Year, together with Consolidated and consolidating
statements of income, retained earnings and cash flows for the Fiscal Year then
ended, including the notes thereto, all in reasonable detail setting forth in
comparative form the corresponding figures for the preceding Fiscal Year and the
corresponding figures for the Adjusted Budget for such Fiscal Year and certified
by the chief financial officer of the Borrower to present fairly in all material
respects the financial condition of the Borrower and its Subsidiaries as of
their respective dates and the results of operations of the Borrower and its
Subsidiaries for the respective periods then ended, and, if applicable,
containing disclosure of the effect on the financial position or results of
operation of any change in the application of accounting principles and
practices during the year, and in the case of all such Consolidated financial
statements, audited by and accompanied by a report thereon by an independent
certified public accounting firm acceptable to the Administrative Agent that is
not qualified with respect to scope limitations imposed by the Borrower or with
respect to accounting principles followed by the Borrower not in accordance with
GAAP.
(d) Annual Budgets and Adjustments. As soon as practicable and in any
event (i) no later than sixty (60) days prior to the end of each Fiscal Year, an
annual budget and projections for the Borrower and its Subsidiaries for the
following Fiscal Year indicating consolidated projected balance sheets, cash
flows, earnings and such other items as the Administrative Agent may reasonably
request, in each case for such Fiscal Year and prepared in a manner consistent
with the Budget for Fiscal Year 2000 described in clause (a) of the definition
thereof and (b) within twenty (20) days after the end of each calendar month, an
Adjusted Budget for the then current Fiscal Year.
(e) Other Financial Information. Such other information regarding the
operations, business affairs and financial condition of the Credit Parties and
any Subsidiary thereof as the Administrative Agent or any Lender may reasonably
request.
SECTION 7.2 Officer's Compliance Certificate; Pricing Certificate. At
each time financial statements are delivered pursuant to Sections 7.1 (a), (b)
or (c) and at such other times
53
as the Administrative Agent shall reasonably request, a certificate of a
Responsible Officer of the Borrower in the form of Exhibit G attached hereto (an
"Officer's Compliance Certificate"); in addition, on or before the forty fifth
(45th) day following the end of each Fiscal Quarter, a Pricing Certificate
demonstrating in reasonable detail the calculation of the Leverage Ratio as of
the end of the Fiscal Quarter period then ended.
SECTION 7.3 Reconciliation Statements. If, as a result of any change in
accounting principles and policies from those used in the preparation of the
audited financial statements referred to in Section 6.1(o), the Consolidated
financial statements of the Borrower and its Subsidiaries delivered pursuant to
Sections 7.1 (a), (b) or (c) will differ in any material respect from the
Consolidated financial statements that would have been delivered pursuant to
such sections had no such change in accounting principles and policies been
made, then (a) together with the first delivery of financial statements pursuant
to Sections 7.1 (a), (b) or (c) following such change, Consolidated financial
statements of the Borrower and its Subsidiaries for (X) the current Fiscal Year
to the effective date of such change and (Y) the two (2) full Fiscal Years
immediately preceding the Fiscal Year in which such change is made, in each case
prepared on a pro forma basis as if such change had been in effect during such
periods, and (b) together with each delivery of financial statements pursuant to
Sections 7.1(a), (b) or (c) following such change, if required by the
Administrative Agent, a written statement of the chief accounting officer or
chief financial officer of the Borrower setting forth the differences (including
any differences that would affect any calculations relating to the financial
covenants set forth in Article IX) which would have resulted if such financial
statements had been prepared without giving effect to such change;
SECTION 7.4 Accountants' Certification. Together with each delivery of
Consolidated financial statements of the Borrower and its Subsidiaries pursuant
to Section 7.1(c) above, a written statement by the independent certified public
accountants giving the report thereon stating that their audit examination has
included a review of the terms of this Agreement and the other Loan Documents as
they relate to accounting matters, and (a) stating whether, in connection with
their audit examination, any condition or event that constitutes an Event of
Default or Default has come to their attention and, if such a condition or event
has come to their attention, specifying the nature and period of existence
thereof; provided that such accountants shall not be liable by reason of any
failure to obtain knowledge of any such Event of Default or Default that would
not be disclosed in the course of their audit examination, or (b) stating that
based on their audit examination nothing has come to their attention that causes
them to believe that the Borrower failed to comply with the terms, covenants,
provisions, or conditions of the Agreement insofar as they relate to accounting
matters;
SECTION 7.5 Accountants' Reports. Promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to the Borrower by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of the Borrower and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management in
connection with their annual audit;
54
SECTION 7.6 Notice of Litigation and Other Matters. Prompt (but in no
event later than five (5) Business Days after any Credit Party obtains knowledge
thereof) telephonic and written notice of:
(a) the commencement of any proceeding or investigation by or before
any Governmental Authority and any action or proceeding in any court or before
any arbitrator against or involving any Credit Party or any of their properties,
assets or businesses that (i) seeks damages in excess of $100,000, (ii) seeks
injunctive relief, (iii) is asserted or instituted against any Employee Benefit
Plan or Multiemployer Plan, its fiduciaries or its assets or against any Credit
Party or ERISA Affiliate in connection with any Employee Benefit Plan or
Multiemployer Plan, or 9iv) alleges the violation of any law regarding, or seeks
remedies in connection with, any obligations, responsibilities or liabilities
under any Environmental Laws;
(b) any labor controversy that has resulted in, or threatens to result
in, a strike or other work action against any Credit Party;
(c) any attachment, judgment, lien, levy or order that may be assessed
against or threatened against any Credit Party which could reasonably be
expected to have a Material Adverse Effect;
(d) (i) any Default or Event of Default or (ii) any event which
constitutes or which with the passage of time or giving of notice or both would
constitute a default or event of default under any other Material Contract to
which any Credit Party is a party or by which any Credit Party or any of such
Credit Party's respective property may be bound;
(e) any violation of ERISA or any liability incurred under any Employee
Benefit Plan or Multiemployer Plan;
(f) any event which makes any of the representations set forth in
Section 6.1 inaccurate in any material respect (provided that all Schedules must
be updated by the Credit Parties only at each Fiscal Quarter end by forwarding
any such updates to the Administrative Agent with the applicable Officer's
Compliance Certificate); and
(g) any proposed amendment, change or modification to, or waiver of any
provision of, or any termination of, any Material Contract.
SECTION 7.7 Borrowing Base Certificates.
(a) Borrowing Base Certificate. As soon as available and in any event
within twenty (20) Business Days after the end of each calendar month ending
after the Closing Date or at such additional times as the Administrative Agent
may reasonably request, a Borrowing Base Certificate dated as of the last
Business Day of such calendar month, together with any additional schedules and
other information that the Administrative Agent may reasonably request (it being
understood that the Borrower, in addition to such monthly Borrowing Base
Certificates, may from time to time deliver to the Administrative Agent and the
Lenders, on any Business Day after the Closing Date, a Borrowing Base
Certificate dated as of such Business Day, together with any additional
schedules and other information that the Administrative Agent may reasonably
request. Promptly following receipt of each such Borrowing Base Certificate, the
55
Administrative Agent shall determine or, as the case may be, redetermine the
Borrowing Base in accordance with the definition thereof, using the information
contained in such Borrowing Base Certificate, and shall notify the Borrower of
the Borrowing Base so determined and so redetermined. Each such Borrowing Base
so determined or redetermined by the Administrative Agent shall remain in effect
until notice of a redetermined Borrowing Base shall have been given by the
Administrative Agent in accordance with the provisions of this Section 7.7.
(b) Accounts; Monthly Aging. With respect to Borrower and its
Subsidiaries, a monthly aging of Accounts outstanding aged from invoice due date
as follows: 1 to 30 days, 31 to 60 days, 61 to 90 days, 91 to 120 days and 121
days or more, accompanied by such supporting detail and documentation as shall
be requested by the Administrative Agent in its reasonable discretion.
SECTION 7.8 SEC Filings and Press Releases. Promptly upon their
becoming available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by the Borrower to its
security holders or by any Subsidiary of the Borrower to its security holders
other than the Borrower or another Subsidiary of the Borrower, (b) all regular
and periodic reports and all registration statements (other than on Form S-8 or
a similar form) and prospectuses, if any, filed by the Borrower or any of its
Subsidiaries with any securities exchange or with the Securities and Exchange
Commission or any governmental or private regulatory authority, and (c) all
press releases and other statements made available generally by the Borrower or
any of its Subsidiaries to the public concerning material developments in the
business of the Borrower or any of its Subsidiaries;
SECTION 7.9 Insurance. As soon as practicable after any material change
in insurance coverage maintained by the Borrower and its Subsidiaries notice
thereof to the Administrative Agent specifying the changes and reasons therefor.
SECTION 7.10 Collateral Audit. Upon request of the Administrative
Agent, the Administrative Agent shall have received an audit of all Accounts of
the Borrower and its Subsidiaries, in form, scope and substance satisfactory to
the Administrative Agent and the Lenders; provided that from and after the
Closing Date, so long as no Default or Event of Default has occurred, the
Borrower shall be required to pay for only one such audit in any twelve month
period.
SECTION 7.11 Other Information. With reasonable promptness, such other
information and data with respect to Borrower or any of its Subsidiaries as from
time to time may be reasonably requested by any Lender.
ARTICLE VIII
AFFIRMATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner
provided for in Section 13.12, the Borrower will, and will cause each of its
Subsidiaries to:
56
SECTION 8.1 Preservation of Existence and Related Matters. Except as
permitted by Section 10.5, preserve and maintain its separate corporate
existence and all material rights, franchises, licenses and privileges necessary
to the conduct of its business; and qualify and remain qualified and authorized
to do business in each jurisdiction in which the failure to so qualify could
reasonably be expected to have a Material Adverse Effect.
SECTION 8.2 Maintenance of Property; Insurance; Application of Net
Insurance/Condemnation Proceeds.
(a) Maintenance of Properties. In addition to the requirements of any
of the Security Documents, protect and preserve all properties useful in and
material to its business, including copyrights, patents, trade names and
trademarks; maintain in good working order and condition, other than ordinary
wear and tear excepted all buildings, equipment and other tangible real and
personal property, and from time to time make or cause to be made all renewals,
replacements and additions to such property reasonably necessary for the conduct
of its business.
(b) Insurance. In addition to the requirements of any of the Security
Documents, maintain insurance with financially sound and reputable insurance
companies against such risks and in such amounts as are customarily maintained
by similar businesses or as may be required by Applicable Law, and on the
Closing Date and from time to time thereafter deliver to the Administrative
Agent upon its request (i) a detailed list of the insurance then in effect,
stating the names of the insurance companies, the amounts and rates of the
insurance, the dates of the expiration thereof and the properties and risks
covered thereby, and (ii) a certified copy of the policies of insurance. Each
such policy of insurance shall (A) name the Administrative Agent for the benefit
of the Lenders as an additional insured thereunder as its interests may appear
and (B) in the case of each business interruption and casualty insurance policy,
contain a loss payable clause or endorsement, satisfactory in form and substance
to the Administrative Agent, that names the Administrative Agent for the benefit
of the Lenders as the loss payee thereunder and provides for at least thirty
(30) days prior written notice to the Administrative Agent of any modification
or cancellation of such policy.
(c) Application of Net Insurance/Condemnation Proceeds.
(i) Business Interruption Insurance. Upon receipt by the
Borrower or any of its Subsidiaries of any business interruption insurance
proceeds constituting Net Insurance/Condemnation Proceeds, (A) so long as no
Event of Default or Default shall have occurred and be continuing, the Borrower
shall apply an amount equal to such Net Insurance/Condemnation Proceeds first,
to prepay the Revolving Loans (without a corresponding reduction in the
Revolving Loan Commitments) to the full extent thereof and second, to deposit
the remaining proceeds in the Collateral Account to be disbursed for working
capital purposes in accordance with the terms of the Security and Pledge
Agreement, and (B) if an Event of Default or Default shall have occurred and be
continuing, the Borrower shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or the Revolving Loan
Commitments shall be reduced) as provided in Section 2.3(b);
(ii) Casualty Insurance/Condemnation Proceeds. Upon receipt by
the Borrower or any of its Subsidiaries of any Net Insurance/Condemnation
Proceeds other than
57
from business interruption insurance, (A) so long as no Event of Default or
Default shall have occurred and be continuing, the Borrower shall apply an
amount equal to such Net Insurance/Condemnation Proceeds first, to prepay the
Revolving Loans (without a corresponding reduction in the Revolving Loan
Commitments) to the full extent thereof and second, to deposit the remaining
proceeds in the Collateral Account to be disbursed by the Administrative Agent
to the Borrower to repair, restore or replace the assets in respect of which
such Net Insurance/Condemnation Proceeds were received or for such other
purposes permitted by the terms of this Agreement and acceptable to the
Administrative Agent, in each case in accordance with the terms of the Security
and Pledge Agreement; provided, however that if at any time the Administrative
Agent reasonably determines that such repair, restoration or replacement cannot
be completed with the Net Insurance/Condemnation Proceeds then held by the
Administrative Agent for such purpose, together with funds otherwise available
to the Borrower for such purpose, or that such repair, restoration or
replacement cannot be completed within one hundred eighty (180) days after the
receipt of such Net Insurance/Condemnation Proceeds, and if any such amounts
remain on deposit in the Collateral Account after such one hundred eighty (180)
day period, then the Administrative Agent shall, and the Borrower hereby
authorizes the Administrative Agent to, apply such Net Insurance/Condemnation
Proceeds to prepay the Loans (and/or the Revolving Loan Commitments shall be
reduced) as provided in Section 2.3(b), and (B) if an Event of Default or
Default shall have occurred and be continuing, the Borrower shall apply an
amount equal to such Net Insurance/Condemnation Proceeds to prepay the Loans
(and/or the Revolving Loan Commitments shall be reduced) as provided in Section
2.3(b).
(iii) Net Insurance/Condemnation Proceeds Received by the
Administrative Agent. Upon receipt by the Administrative Agent of any Net
Insurance/Condemnation Proceeds as loss payee, the Administrative Agent shall,
and the Borrower hereby authorizes the Administrative Agent to, apply such Net
Insurance/Condemnation Proceeds in the manner prescribed in Section 2.3(b),
including to prepay the Loans (and/or the Revolving Loan Commitments shall be
reduced) to the extent provided in such Section.
SECTION 8.3 Accounting Methods and Financial Records. Maintain a system
of accounting, and keep such books, records and accounts (which shall be true
and complete in all material respects) as may be required or as may be necessary
to permit the preparation of financial statements in accordance with GAAP
consistently applied and in compliance with the regulations of any Governmental
Authority having jurisdiction over it or any of its properties.
SECTION 8.4 Payment and Performance of Obligations. Pay and perform (a)
all Obligations, (b) all taxes, assessments and other governmental charges that
may be levied or assessed upon it or its property (other than those being
contested in good faith by appropriate proceedings if adequate reserves are
maintained to the extent required by GAAP) and (c) all other indebtedness,
obligations and liabilities in accordance with customary trade practices the
failure to make payment of which could reasonably be expected to have a Material
Adverse Effect.
SECTION 8.5 Compliance With Laws and Approvals. Observe and remain in
compliance in all material respects with all Applicable Laws and maintain in
full force and effect all Governmental Approvals, in each case applicable or
necessary to the conduct of its business
58
including, without limitation, all Environmental Laws and all Governmental
Approvals required thereunder.
SECTION 8.6 Environmental Management. In addition to and without
limiting the generality of Section 8.5, maintain its business premises (whether
leased or owned in fee) free of any Hazardous Materials the removal of which is
required under Environmental Laws; and adopt and maintain prudent management,
disposal, clean-up and other practices as may be required by Environmental Laws
for all other Hazardous Materials located on its business premises.
SECTION 8.7 Compliance with ERISA. In addition to and without limiting
the generality of Section 8.5, make timely payment of contributions required to
meet the minimum funding standards set forth in ERISA with respect to any
Employee Benefit Plan; not take any action or fail to take action the result of
which could be a material liability to the PBGC or to a Multiemployer Plan; not
participate in any prohibited transaction that could result in any material
civil penalty under ERISA or material tax under the Code; furnish to the
Administrative Agent upon the Administrative Agent's request such information
about any Employee Benefit Plan as may be reasonably requested by the
Administrative Agent; and operate each Employee Benefit Plan in such a manner
that will not incur any material tax liability under Section 4980B of the Code
or any material liability to any qualified beneficiary as defined in Section
4980B of the Code.
SECTION 8.8 Compliance With Agreements. Comply with each term,
condition and provision of all leases, agreements and other instruments entered
into in the conduct of its business including, without limitation, all Material
Contracts, where the failure to so comply could reasonably be expected to have a
Material Adverse Effect.
SECTION 8.9 Conduct of Business. Remain engaged primarily in the
business of third party administration of healthcare, life and disability plans
and the marketing of such plans and any other business reasonably related
thereto, including the medical informatics business and cause the Inactive
Subsidiaries to continue to have no assets, conduct no business and incur no
liabilities.
SECTION 8.10 Visits and Inspections. Permit representatives of the
Administrative Agent and the Lenders, upon reasonable notice to the Borrower,
from time to time during normal business hours, as often as may be reasonably
requested, to visit and inspect its properties; inspect, audit and make extracts
from its books, records and files, including, but not limited to, management
letters prepared by independent accountants; and discuss with its partners,
principal officers, and its independent accountants, its business, assets,
liabilities, financial condition, results of operations and business prospects.
SECTION 8.11 Dividends. To the extent necessary in order that the
Borrower be able to make any payment required hereunder, cause its Subsidiaries
to pay dividends or make other cash distributions to the Borrower.
SECTION 8.12 Deposit Accounts and Cash Management Systems. Establish
and maintain the cash management systems (the "Cash Management Systems")
described below:
59
(a) The Borrower shall not, nor shall it permit any of its Subsidiaries
to, establish or maintain any Deposit Account (other than Client Disbursement
Accounts) with any financial institutions other than the Administrative Agent or
a Lender.
(b) The Borrower shall use and maintain each Deposit Account (other
than any Client Disbursement Account) established with the Administrative Agent
or a Lender, as the case may be, in a manner reasonably satisfactory to the
Administrative Agent, and, no later than thirty (30) days after the Closing Date
(which date may be extended by the Administrative Agent, in its sole
discretion), to the extent required by the Administrative Agent, shall have
entered into Cash Management Letters with the Administrative Agent or a Lender,
as the case may be, in respect of such Deposit Account in form and substance
reasonably satisfactory to the Administrative Agent; provided that the Deposit
Accounts of the Borrower which are not established and maintained with the
Administrative Agent shall only be Disbursement Accounts.
(c) From and after the Closing Date, the Borrower shall deposit, and
cause each of its Subsidiaries to deposit, on each Business Day, all Daily
Receipts into the applicable Deposit Account; provided that the Daily Receipts
representing funds owned beneficially by clients of Borrower and its
Subsidiaries (other than Borrower or any of its Affiliates) shall be deposited
only in Client Disbursement Accounts and shall not be deposited in any other
Deposit Account or commingled with any other Daily Receipts of the Borrower or
any of its Subsidiaries.
(d) From and after the Closing Date, on each Business Day, all
collected funds on deposit in each Deposit Account (other than the Client
Disbursement Accounts) in excess of $4,000,000 in the aggregate shall be
transferred to the Collection Account. All available funds on deposit in the
Collection Account shall be applied on a daily basis by the Administrative Agent
to the prepayment of Revolving Loans then outstanding, in accordance with the
provisions of Section 2.3(b)(iii)(H).
SECTION 8.13 Further Assurances. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as the Administrative
Agent or any Lender may reasonably require to document and consummate the
transactions contemplated hereby and to vest completely in and insure the
Administrative Agent and Lenders their respective rights under this Agreement,
the Notes, the Letters of Credit and the other Loan Documents.
ARTICLE IX
FINANCIAL COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in Section 13.12 hereof, the Borrower will not:
SECTION 9.1 Minimum Total Revenue . Permit Total Revenues as of the
last day of each calendar month for the three month period then ended to be less
than ninety percent (90%) of the Total Revenue set forth in the Adjusted Budget
for such three (3) month period.
SECTION 9.2 Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio as of the last day of (i) the second Fiscal Quarter of Fiscal
Year 2000 of the Borrower for
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the four (4) Fiscal Quarter period then ended to be less than 0.4 to 1.00, (ii)
the third Fiscal Quarter of Fiscal Year 2000 of the Borrower for the four (4)
Fiscal Quarter period thereafter to be less than 1.00 to 1.00, and (iii) any
Fiscal Quarter of the Borrower thereafter for the four (4) Fiscal Quarter
periods then ended to be less than 1.25 to 1.00.
SECTION 9.3 Minimum EBITDA. Permit EBITDA as of the last day of each
calendar month for the three month period then ended to be less than ninety
percent (90%) of the aggregate EBITDA set forth in the Adjusted Budget for such
three (3) month period
SECTION 9.4 Maintenance Capital Expenditures. Make or incur any
Maintenance Capital Expenditures in any Fiscal Quarter commencing with the
second Fiscal Quarter of the Fiscal Year 2000 in an aggregate amount in excess
of $1,500,000; provided that to the extent that Maintenance Capital Expenditures
permitted for any such Fiscal Quarter exceed actual Maintenance Capital
Expenditures for such Fiscal Quarter, the excess shall be permitted to be
carried over to the immediately succeeding Fiscal Quarter (the "Maintenance
Carry Over Amount") in addition to the amount otherwise permitted; provided,
however, that the Maintenance Carry Over Amount may only be carried forward for
two (2) consecutive Fiscal Quarters and not beyond and all amounts used for
Maintenance Capital Expenditures in any Fiscal Quarter shall be deemed to count
first against any Maintenance Carry Over Amount and then against any remaining
amount permitted for any such Fiscal Quarter; provided further, however, that in
no event shall the amount of Maintenance Capital Expenditures for any twelve
(12) month period exceed $3,500,000.
SECTION 9.5 Special Projects Capital Expenditures. Make or incur any
Special Projects Capital Expenditures (a) in any Fiscal Quarter during Fiscal
Year 2000 commencing with the second such Fiscal Quarter in an aggregate amount
in excess of $1,500,000; and (b) in any Fiscal Quarter during Fiscal Year 2001
in an aggregate amount in excess of $500,000; provided that to the extent that
Special Projects Capital Expenditures permitted for any such Fiscal Quarter in
clause (a) or (b) above exceed actual Special Projects Capital Expenditures for
such Fiscal Quarter, the excess shall be permitted to be carried over to the
immediately succeeding Fiscal Quarter (the "Special Projects Carry Over Amount")
in addition to the amount otherwise permitted; provided, however, that the
Special Projects Carry Over Amount may only be carried forward for two (2)
consecutive Fiscal Quarters and not beyond and all amounts used for Special
Projects Capital Expenditures in any Fiscal Quarter shall be deemed to count
first against any Special Projects Carry Over Amount and then against any
remaining amount permitted for any such Fiscal Quarter; provided further,
however, that in no event shall the aggregate amount of Special Projects Capital
Expenditures (i) for the Fiscal Year 2000 exceed $6,000,000 and (ii) for any
twelve (12) month period thereafter exceed $6,000,000.
ARTICLE X
NEGATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in Section 13.12 hereof, the Borrower has not and will not permit any of
its Subsidiaries to:
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SECTION 10.1 Limitations on Indebtedness. Create, incur, assume or
suffer to exist, directly or indirectly, any Indebtedness other than:
(a) the Obligations;
(b) existing Indebtedness described as of the Closing Date on Part B of
Schedule 6.1(t) hereto and not otherwise permitted pursuant to this Section 10.1
or Section 10.2 (but no extensions, increases, renewals, refinancings or
modifications thereof);
(c) Indebtedness under any Hedging Agreement reasonably acceptable to
the Administrative Agent; and
(d) purchase money Indebtedness of the Borrower incurred to finance the
acquisition of any assets that would, in accordance with GAAP be required to be
classified or accounted for as a capital asset on the balance sheet of the
Borrower so long as such acquisition is permitted pursuant to and included in
the calculation of the covenant set forth in Section 9.4.
SECTION 10.2 Limitations on Guaranty Obligations. Other than Guaranty
Obligations created by the Loan Documents, create, incur, assume or suffer to
exist, directly or indirectly, any Guaranty Obligations, except indemnity
obligations under surety or fidelity insurance coverage (i) set forth on Part A
of Schedule 6.1(t) and (ii) incurred in the ordinary course of business;
provided that the aggregate amount of such indemnity obligations pursuant to
clauses (i) and (ii) does not exceed $15,000,000.
SECTION 10.3 Liens and Related Matters.
(a) Prohibition on Liens. Create, incur, assume or permit to exist,
directly or indirectly, any Lien on or with respect to any property or asset of
any kind (including any document or instrument in respect of goods or accounts
receivable) of the Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC or under any similar recording or notice statute, except:
(i) Liens for taxes, assessments and other governmental
charges or levies (excluding any Lien imposed pursuant to any of the provisions
of ERISA or Environmental Laws) not yet due or as to which the period of grace
(not to exceed thirty (30) days), if any, related thereto has not expired or
which are being contested in good faith and by appropriate proceedings if
adequate reserves are maintained to the extent required by GAAP;
(ii) the claims of materialmen, mechanics, carriers,
warehousemen, processors or landlords for labor, materials, supplies or rentals
incurred in the ordinary course of business (i) which are not overdue for a
period of more than thirty (30) days or (ii) which are being contested in good
faith and by appropriate proceedings;
(iii) Liens consisting of deposits or pledges made in the
ordinary course of business in connection with, or to secure payment of,
obligations under workers' compensation,
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unemployment insurance or similar claims or to secure the performance of
tenders, bids, contracts, statutory obligations and other similar obligations;
(iv) Liens constituting encumbrances in the nature of zoning
restrictions, easements, and rights or restrictions of record on the use of real
property, which in the aggregate are not substantial in amount and which do not,
in any case, materially detract from the value of such property or impair the
use thereof in the ordinary conduct of business;
(v) purchase money Liens securing any purchase money
Indebtedness permitted under Section 10.1(d); provided, that the Lien attaches
only to the asset being purchased and does not exceed one hundred percent (100%)
of the purchase price of such asset;
(vi) Liens in favor of the Administrative Agent for the
benefit of itself and the Lenders arising under the Loan Documents;
(vii) Liens not otherwise permitted by this Section 10.3 and
in existence on the Closing Date (i) listed on Schedule 6.1(s) and (ii) which
may be reflected on the Lien search reports to be delivered to the
Administrative Agent and the Lenders after the Closing Date as described on
Schedule 6.1(s) to the extent that such Liens evidence the interests of lessors
under Capital Leases (as long as the corresponding Capital Lease Obligation is
otherwise permitted hereunder) and operating leases, in each case in the
property subject to such lease, and such other Liens as permitted by the
Administrative Agent and Required Lenders; and
(viii) extensions, renewals or replacements of any Lien
referred to in clauses (i) through (vii) above provided that such extension,
renewal or replacement is limited to the property originally encumbered thereby.
(b) No Further Negative Pledges. Enter into any agreement prohibiting
the creation or assumption of any Lien upon any of their respective properties
or assets, whether now owned or hereafter acquired, except with respect to
specific property encumbered to secure payment of particular Indebtedness or to
be sold pursuant to an executed agreement with respect to an Asset Sale.
(c) No Restrictions on Subsidiary Distributions to the Borrower or
Other Subsidiaries. Except as provided herein, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any such Subsidiary to (i) pay dividends or make any
other distributions on any of such Subsidiary's capital stock or other equity
interests owned by the Borrower or any other Subsidiary of the Borrower, (ii)
repay or prepay any Obligation owed by such Subsidiary to the Borrower or any
other Subsidiary of the Borrower, (iii) make loans or advances to the Borrower
or any other Subsidiary of the Borrower or (iv) transfer any of its property or
assets to the Borrower or any other Subsidiary of the Borrower.
SECTION 10.4 Limitations on Loans, Advances, Investments and
Acquisitions. Purchase, own, invest in or otherwise acquire, directly or
indirectly, any capital stock, partnership or joint venture interests or any
other Securities of any other Person (including without limitation the creation
or capitalization of any Subsidiary), evidence of Indebtedness or other
obligation or security, substantially all or a material portion of the assets of
any other
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Person or any other investment or interest whatsoever in any other Person; or
make or permit to exist any loans, advances or extensions of credit to, or any
accounts or notes receivable from, or any investment in cash or by delivery of
property in, any Person; or enter into any commitment or option in respect of
the foregoing, except:
(a) investments in treasury bills, certificates of deposits and bankers
acceptances of banks with capital and surplus in excess of $500,000,000, open
market commercial paper maturing within ninety (90) days and having the highest
or second highest rating of either Xxxxx'x Investors Service, Inc. or Standard &
Poor's Ratings Group, a Division of XxXxxx-Xxxx Corporation, (provided that the
fair market value of any investment in such commercial paper having the second
highest rating of Xxxxx'x Investor Service or third highest rating of Standard &
Poor's Ratings Group, a Division of XxXxxx-Xxxx Corporation shall not exceed ten
percent (10%) of the fair market value of all commercial paper investments
permitted by this paragraph (b)), commercial paper and governmental securities
repurchase obligations issued by banks with capital and surplus in excess of
$500,000,000 and money market mutual funds and accounts containing solely the
investments permitted under this clause (a);
(b) investments in Subsidiary Guarantors and, to the extent existing on
the date hereof, investments in Retail Card and Xxxxxxxxxx and the other loans
advances and investments set forth in Schedule 10.4; provided however that,
neither the Borrower nor any of its Subsidiaries shall at any time be obligated
to any Person with respect to the assets, activities or liabilities of Retail
Card or Xxxxxxxxxx; provided further that Retail Card shall be wound down and
dissolved no later than December 31, 2000; provided however that Borrower and
its Subsidiaries may make and be obligated to make additional investments in
Retail Card in an amount not to exceed $100,000 in the aggregate;
(c) trade accounts created in the ordinary course of business;
(d) deposits for utilities under security deposits, leases and similar
prepaid expenses incurred in the ordinary course of business; and
(e) loans and advances to employees (i) in connection with reasonable
travel and business expenses in the ordinary course of business in an aggregate
amount not in excess of $50,000 outstanding at any time or (ii) as permitted by
Section 10.9.
SECTION 10.5 Limitations on Mergers and Liquidation. Merge, consolidate
or enter into any similar combination with any other Person or liquidate,
wind-up or dissolve itself or suffer any liquidation or dissolution except any
Wholly-Owned Subsidiary of the Borrower may merge into the Borrower or with any
other Wholly-Owned Subsidiary thereof (provided that a Credit Party is the
surviving entity).
SECTION 10.6 Restrictions on Sale of Assets, etc. Sell, lease,
transfer, assign, exchange or otherwise dispose of any of its assets (including,
without limitation, accounts receivable and any transaction the primary purpose
of which is to accomplish the sale-leaseback of any asset) or liquidate,
dissolve or enter into any transaction for the purpose of winding up its
business affairs other than (a) the sale of obsolete assets no longer used in
the business of the Borrower or applicable Subsidiary having a fair market value
not in excess of $250,000 in the
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aggregate and (b) with the prior written consent of Required Lenders, sales of
other assets (each, an "Asset Sale") the proceeds of which Asset Sales shall be
applied as required by Section 2.3(b)(iii)(A) or Section 4.4.
SECTION 10.7 Limitations on Restricted Payments. The Borrower shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly,
declare, order, pay, make or set apart any sum for (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of the Borrower now or hereafter outstanding, except a dividend payable solely
in shares of that class of stock to the holders of that class, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
of the Borrower now or hereafter outstanding, (c) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of stock of the Borrower now or hereafter
outstanding, and (d) any payment or prepayment of principal of, premium, if any,
or interest on, or redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment with respect
to, any Subordinated Indebtedness.
SECTION 10.8 Limitations on Exchange and Issuance of Capital Stock.
Issue, sell or otherwise dispose of any class or series of capital stock or
similar equity interests that, by its terms or by the terms of any security into
which it is convertible or exchangeable, is, or upon the happening of an event
or passage of time would be, (a) convertible or exchangeable into Indebtedness
or (b) required to be redeemed or repurchased, including at the option of the
holder, in whole or in part, or has, or upon the happening of an event or
passage of time would have, a redemption or similar payment due.
SECTION 10.9 Transactions with Affiliates. Directly or indirectly, (a)
make any loan or advance to, or purchase, assume or guarantee any note or other
obligation to or from, any of its officers, partners or other Affiliates, or to
or from any member of the immediate family of any of its officers, partners or
other Affiliates, or subcontract any operations to any of its Affiliates, or (b)
enter into, or be a party to, any transaction with any of its Affiliates, except
with respect to each such clause (a) and (b) pursuant to the reasonable
requirements of its business (it being hereby agreed that loans to executive
officers of the Borrower or its Subsidiaries not to exceed at any one time in an
aggregate outstanding principal amount of $500,000 are pursuant to the
reasonable requirements of the Borrower's business) and upon fair and reasonable
terms that are fully disclosed to the Administrative Agent and are no less
favorable to it than it would obtain in a comparable arm's length transaction
with a Person not its Affiliate.
SECTION 10.10 Certain Accounting Changes. Change its Fiscal Year end,
or make any change in its accounting treatment and reporting practices for the
purposes of compliance with the Loan Documents, subject to the provisions of
Section 13.10.
SECTION 10.11 Restrictive Agreements. Enter into any agreement which
contains any covenants materially more restrictive than the provisions of
Articles VIII, IX and X hereof, or which restricts, limits or otherwise
encumbers its ability to incur Liens on or with respect to any of its assets.
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SECTION 10.12 Material Contracts. Amend, modify, cancel, terminate or
otherwise make any change in any Material Contract in any manner that could
reasonably be expected to have a Material Adverse Effect.
SECTION 10.13 Sales and Lease-Backs. Become or remain liable as lessee
or as a guarantor or other surety with respect to any lease, whether an
operating lease or a Capital Lease, of any property (whether real, personal or
mixed), whether now owned or hereafter acquired, (a) that the Borrower or any of
its Subsidiaries has sold or transferred or is to sell or transfer to any other
Person (other than the Borrower or any of its Subsidiaries) or (b) that the
Borrower or any of its Subsidiaries intends to use for substantially the same
purpose as any other property that has been or is to be sold or transferred by
the Borrower or any of its Subsidiaries to any Person (other than the Borrower
or any of its Subsidiaries) in connection with such lease.
SECTION 10.14 Conduct of Business. From and after the Closing Date, the
Borrower shall not, and shall not permit any of its Subsidiaries to, engage in
any business other than the businesses engaged in by the Borrower and its
Subsidiaries on the Closing Date and similar or related businesses.
Notwithstanding anything in this Agreement to the contrary, Borrower shall not
permit any Inactive Subsidiary to engage in any business, acquire any assets or
become obligated with respect to any liabilities.
SECTION 10.15 Organizational Documents. Amend its (a) articles of
organization or certificate of formation, as applicable, or (b) bylaws or
operating agreement or other equivalent, if applicable, in a manner which could
reasonably be expected to have a material adverse effect on the Administrative
Agent or Lenders or such Credit Party's duty or ability to repay the
Obligations.
ARTICLE XI
DEFAULT AND REMEDIES
SECTION 11.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement
Obligations. The Borrower shall default in any payment of principal of any Loan
or the Note or Reimbursement Obligation when and as due (whether at maturity, by
reason of acceleration, notice of voluntary prepayment, mandatory prepayment or
otherwise).
(b) Other Payment Default. The Borrower shall default in the payment
when and as due (whether at maturity, by reason of notice of voluntary
prepayment, mandatory prepayment, acceleration or otherwise) of interest on any
Loan, Note or Reimbursement Obligation or the payment of any other Obligation
(other than as specifically provided for otherwise in Section 11.1(a)) and such
default shall continue unremedied for five (5) Business Days after the due date
thereof.
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(c) Misrepresentation. Any representation or warranty made or deemed to
be made by any Credit Party under this Agreement, any Loan Document or Security
Document, or any amendment supplement or other modification hereto or thereto,
shall at any time prove to have been incorrect or misleading in any material
respect when made.
(d) Default in Performance of Certain Covenants. Any Credit Party shall
(i) default in the performance or observance of any covenant or agreement
contained in Sections 2.6, 7.1, 7.2, 7.3(d) or Articles IX or X of this
Agreement or (ii) default in any material respect of the performance or
observance of any covenant or agreement contained in Section 9 of the Security
and Pledge Agreement.
(e) Default in Performance of Other Covenants and Conditions. Any
Credit Party shall default in the performance or observance of any term,
covenant, condition or agreement contained in this Agreement (other than as
specifically provided for otherwise in this Section 11.1) or any other Loan
Document and such default shall continue for a period of thirty (30) days after
the earlier of (i) an officer of such Credit Party becoming aware of such
default and (ii) written notice thereof has been given to the Borrower by the
Administrative Agent.
(f) Indebtedness Cross-Default. Any Credit Party shall (i) default in
the payment of any Indebtedness (other than the Notes or any Reimbursement
Obligation) the aggregate outstanding amount of which is in excess of $100,000
beyond the period of grace (not to exceed thirty (30) days), if any, provided in
the instrument or agreement under which such Indebtedness was created; or (ii)
default in the observance or performance of any other agreement or condition
relating to any Indebtedness (other than the Notes or any Reimbursement
Obligation) the aggregate outstanding amount of which is in excess of $100,000
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
holders of such Indebtedness (or a trustee or the Administrative Agent on behalf
of such holder or holders) to cause, with the giving or receiving of notice,
lapse of time, or both, or otherwise, any such Indebtedness to become due prior
to its stated maturity.
(g) Other Cross-Defaults; Cancellation and Termination. The Borrower or
any of its Subsidiaries shall default in the payment when due, or in the
performance or observance, of any obligation or condition of any Material
Contract (other than the Credit Agreement) the breach of which could have a
Material Adverse Effect. Any Carrier Contract or other agreement to which the
Borrower or any Subsidiary thereof is a party or any group of such Carrier
Contracts or agreements which individually or in the aggregate generated an
amount equal to or greater than fifteen percent (15%) of the Total Revenue of
the Borrower and its Subsidiaries (determined on a consolidated basis) for the
Fiscal Quarter ending on or most recently ended prior to any date of
determination shall be canceled or terminated during the term of the Credit
Facility.
(h) Change of Control. (i) the Borrower shall cease to own beneficially
and control one hundred percent (100%) of the economic and voting rights
associated with all of the stock or other equity securities of each of its
Subsidiaries free and clear of any Liens (except as created by the Security and
Pledge Agreement and except pursuant to an Asset Sale permitted under Section
10.6) or (ii) any person or group of persons (within the meaning of Section
13(d) of the Securities Exchange Act of 1934, as amended) shall obtain ownership
or control in one or more
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series of transactions of more than twenty percent (20%) of the voting power of
the Borrower entitled to vote in the election of members of the board of
directors of the Borrower or more than such percentage of the issued and
outstanding common stock of the Borrower.
(i) Voluntary Bankruptcy Proceeding. Any Credit Party shall (i)
commence a voluntary case under the federal bankruptcy laws (as now or hereafter
in effect); (ii) file a petition seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or composition for adjustment of debts; (iii) consent to or fail to contest
in a timely and appropriate manner any petition filed against it in an
involuntary case under such bankruptcy laws or other laws; (iv) apply for or
consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
or liquidator of itself or of a substantial part of its property, domestic or
foreign; (v) admit in writing its inability to pay its debts as they become due;
(vi) make a general assignment for the benefit of creditors; or (vii) take any
corporate or similar action for the purpose of authorizing any of the foregoing.
(j) Involuntary Bankruptcy Proceeding. A case or other proceeding shall
be commenced against any Credit Party in any court of competent jurisdiction
seeking (i) relief under the federal bankruptcy laws (as now or hereafter in
effect) or under any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding up or composition for the adjustment of
debts; or (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for any such Person or for all or any substantial part of their
respective assets, domestic or foreign, and such case or proceeding shall
continue undismissed or unstayed for a period of sixty (60) consecutive calendar
days, or an order granting the relief requested in such case or proceeding
(including, but not limited to, an order for relief under such federal
bankruptcy laws) shall be entered.
(k) Failure of Agreements. Any material provision of this Agreement or
of any other Loan Document shall for any reason cease to be valid and binding on
any Credit Party or shall be declared null and void, or any Credit Party shall
so state in writing, or shall deny in writing that it has any further liability,
including with respect to future advances by the Lenders, under any Loan
Document to which it is a party, or any Security Document shall for any reason
cease to create a valid and perfected First Priority Lien on, or security
interest in, any of the Collateral purported to be covered thereby, in each case
other than in accordance with the express terms hereof or thereof.
(l) Judgment or Attachment. Any final judgments or orders for the
payment of money which exceed $500,000 in an amount individually or in the
aggregate shall be entered against any Credit Party by any court or warrants or
writs of attachment or execution or similar processes shall be issued against
any property of the any Credit Party which exceeds $500,000 in value
individually or in the aggregate and such judgments or order warrants or
processes as applicable, shall continue undischarged or unstayed for a period of
forty-five (45) days.
(m) Loss of License. Any license for third party administration or
utilization review services of the Borrower or any Subsidiary thereof shall be
revoked, canceled or otherwise terminated, which event could reasonably be
expected to have a Material Adverse Effect.
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SECTION 11.2 Remedies. Upon the occurrence of an Event of Default, 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:
(a) Acceleration; Termination of Facilities. Declare the principal of
and interest on the Loans and the Notes and the Reimbursement Obligations at the
time outstanding, and all other amounts owed to the Lenders and to the
Administrative Agent under this Agreement or any of the other Loan Documents
(including, without limitation, all L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) and all other Obligations, to be forthwith due
and payable, whereupon the same shall immediately become due and payable without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in this Agreement or the other Loan Documents to the
contrary notwithstanding, and terminate the Credit Facility and any right of the
Borrower to request borrowings or Letters of Credit thereunder; provided, that
upon the occurrence of an Event of Default specified in Section 11.1(i) or (j),
the Credit Facility shall be automatically terminated and all Obligations shall
automatically become due and payable.
(b) Letters of Credit. 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 the preceding paragraph, require the Borrower at such
time to deposit in the Collateral Account an amount equal to one hundred five
percent (105%) of the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts deposited under this Section 11.2(b) and held in the
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 the other Obligations in each case in accordance
with the Security and Pledge Agreement.
(c) Rights of Collection. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Obligations.
SECTION 11.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Loan Documents or that may now or hereafter exist in law
or in equity or by suit or otherwise. No delay or failure to take action on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between the Borrower, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.
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ARTICLE XII
ADMINISTRATIVE AGENT
SECTION 12.1 Appointment.
(a) Appointment of Administrative Agent. Each of the Lenders hereby
irrevocably designates and appoints First Union as the Administrative Agent of
such Lender under this Agreement and the other Loan Documents and each such
Lender irrevocably authorizes First Union as the Administrative Agent for such
Lender, 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 such other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement or such other Loan Documents, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein and therein, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or the other Loan Documents or
otherwise exist against the Administrative Agent.
(b) Appointment of Supplemental Collateral Agents. It is recognized
that in case of litigation under this Agreement or any of the other Loan
Documents, and in particular in case of the enforcement of any of the Loan
Documents, or in case the Administrative Agent deems that by reason of any
present or future law of any jurisdiction it may not exercise any of the rights,
powers or remedies granted herein or in any of the other Loan Documents or take
any other action which may be desirable or necessary in connection therewith, it
may be necessary that the Administrative Agent appoint an additional individual
or institution as a separate trustee, co-trustee, collateral agent or collateral
co-agent (any such additional individual or institution being referred to herein
individually as a "Supplemental Collateral Agent" and collectively as
"Supplemental Collateral Agents").
In the event that the Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to the
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable by
either the Administrative Agent or such Supplemental Collateral Agent, and (ii)
the provisions of this Section 12 and Section 13.2 that refer to the
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to the Administrative Agent shall be deemed to
be references to Administrative Agent and/or such Supplemental Collateral Agent,
as the context may require.
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Should any instrument in writing from the Borrower or any other Credit
Party be required by any Supplemental Collateral Agent so appointed by the
Administrative Agent for more fully and certainly vesting in and confirming to
him or it such rights, powers, privileges and duties, the Borrower shall, or
shall cause such Credit Party to, execute, acknowledge and deliver any and all
such instruments promptly upon request by the Administrative Agent.
SECTION 12.2 Delegation of Duties. The Administrative Agent may execute
any of its respective 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 the Administrative Agent with reasonable care.
SECTION 12.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates shall be (a) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with this
Agreement or the other Loan Documents (except for actions occasioned solely by
its or such Person's own gross negligence or willful misconduct), or (b)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Credit Party or any officer thereof
contained in this Agreement or the other Loan Documents or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or the
other Loan Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the other Loan Documents or
for any failure of any Credit Party to perform its obligations hereunder or
thereunder. The Administrative Agent 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 to inspect the
properties, books or records of the Credit Parties.
SECTION 12.4 Reliance by the Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, 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, without limitation, 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 such Note shall have been
transferred in accordance with Section 13.11 hereof. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement and the other Loan Documents unless it shall first receive such advice
or concurrence of the Required Lenders (or, when expressly required hereby or by
the relevant other Loan Document, all the Lenders) as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action except for its own gross negligence or
willful misconduct. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
Notes in accordance with a request of the Required Lenders (or, when expressly
required hereby or by the relevant other Loan Document,
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all Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all Lenders and all future holders of the Notes.
SECTION 12.5 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 hereunder unless it 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, it shall promptly 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; 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, except to the extent that other provisions of
this Agreement expressly require that any such action be taken or not be taken
only with the consent and authorization or the request of the Lenders or
Required Lenders, as applicable.
SECTION 12.6 Non-Reliance on the Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its respective officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates has made any representations or
warranties to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of the Credit Parties, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative 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
Credit Parties and made its own decision to make its Loans and issue or
participate in Letters of Credit hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Administrative 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 Credit Parties. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by the Administrative Agent hereunder or by the other Loan
Documents, 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, financial and other condition or creditworthiness of the
Credit Parties which may come into the possession of the Administrative Agent or
any of its respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates.
SECTION 12.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such and (to the extent not reimbursed
by the Borrower or the Subsidiary Guarantors and without limiting the obligation
of the Borrower to do so), ratably according to the respective amounts of their
Pro Rata Shares, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
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disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes or any Reimbursement
Obligation) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of this Agreement or 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 the Administrative 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 resulting solely from the Administrative
Agent's bad faith, gross negligence or willful misconduct. The agreements in
this Section 12.7 shall survive the payment of the Notes, any Reimbursement
Obligation and all other amounts payable hereunder and the termination of this
Agreement.
SECTION 12.8 The Administrative Agent in Its Individual Capacity. The
Administrative Agent and its respective Subsidiaries and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Credit Parties as though the Administrative Agent were not an Administrative
Agent hereunder. With respect to any Loans made or renewed by it and any Note
issued to it and with respect to any Letter of Credit issued by it or
participated in by it, the Administrative 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 Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
SECTION 12.9 Resignation of the Administrative Agent; Successor
Administrative Agent. Subject to the appointment and acceptance of a successor
as provided below, the Administrative Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Administrative
Agent, which successor shall have minimum capital and surplus of at least
$500,000,000. If no successor Administrative Agent shall have been so appointed
by the Required Lenders and shall have accepted such appointment within thirty
(30) days after the Administrative Agent's giving of notice of resignation, then
the Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which successor shall have minimum capital and surplus of
at least $500,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 12.9 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.
SECTION 12.10 Security Documents and Guaranties. Each Lender hereby
further authorizes the Administrative Agent, on behalf of and for the benefit of
Lenders, to enter into each Security Document as secured party and to be the
agent for and representative of Lenders, and each Lender agrees to be bound by
the terms of each Security Document; provided that the Administrative Agent
shall not (a) enter into or consent to any material amendment, modification,
termination or waiver of any provision contained in any Security Document or (b)
release any Collateral (except as otherwise expressly permitted or required
pursuant to the
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terms of this Agreement or the applicable Security Document), in each case
without the prior consent of the Required Lenders (or, if required pursuant to
Section 13.12, all Lenders); provided further, however, that, without further
written consent or authorization from Lenders, the Administrative Agent may
execute any documents or instruments necessary to (i) release any Lien
encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted by this Agreement or to which the Required
Lenders have otherwise consented or (ii) release any Subsidiary Guarantor from
the Subsidiary Guaranty Agreement if all of the capital stock of such Subsidiary
Guarantor is sold to any Person (other than an Affiliate of the Borrower)
pursuant to a sale or other disposition permitted hereunder or to which the
Required Lenders have otherwise consented.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third Business Day following the date sent by
certified mail, return receipt requested; provided that notices to the
Administrative Agent shall not be effective until received. A telephonic notice
to the Administrative Agent as understood by the Administrative Agent will be
deemed to be the controlling and proper notice in the event of a discrepancy
with or failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it at
the following addresses, or any other address as to which all the other parties
are notified in writing.
If to the Borrower: HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, President,
Chief Operating Officer
Telephone No.: 813/000-0000
Telecopy No.: 813/289-0490
With a copy to: Fowler, White, Gillen, Boggs,
Xxxxxxxxx and Banker, P.A.
000 Xxxx Xxxxxxx Xxxx.
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esquire
Telephone No.: 813/000-0000
Telecopy No.: 813/229-9401
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If to First Union as First Union National Bank
Administrative Agent: Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Telephone No.: 704/000-0000
Telecopy No.: 704/383-0288
With a copy to: The address of First Union set forth on
Schedule 1.1(b) hereto; and
O'Melveny & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx Xxxxxx, Esquire
Telephone No.: 212/000-0000
Telecopy No.: 212/326-2061
If to any Lender: To the Address set forth on Schedule 1.1(b)
hereto
(c) Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrower and the Lenders, as the Administrative Agent's Office referred to
herein, to which payments due are to be made and at which Loans will be
disbursed and Letters of Credit issued.
SECTION 13.2 Expenses; Indemnity.
(a) Expenses. The Borrower will (i) promptly pay all out-of-pocket
expenses of the Administrative Agent in connection with: (A) the preparation,
execution and delivery of this Agreement and each other Loan Document, whenever
the same shall be executed and delivered, including without limitation all
out-of-pocket due diligence expenses and reasonable fees and disbursements of
counsel for the Administrative Agent, (B) the preparation, execution and
delivery of any waiver, amendment or consent by the Administrative Agent or the
Lenders relating to this Agreement or any other Loan Document, including without
limitation reasonable fees and disbursements of the financial advisors to and
counsel for the Administrative Agent, (C) all the costs of furnishing all
opinions by counsel for the Borrower (including any opinions requested by the
Administrative Agent or Lenders as to any legal matters arising hereunder) and
of the Borrower's performance of and compliance with all agreements and
conditions on its part to be performed or complied with under this Agreement and
the other Loan Documents including with respect to confirming compliance with
environmental, insurance and solvency requirements; and (D) all the actual costs
and reasonable expenses of creating and perfecting Liens in favor of the
Administrative Agent on behalf of Lenders pursuant to any Security Document,
including filing and recording fees, expenses and taxes, stamp or documentary
taxes, search fees, and reasonable fees, expenses and disbursements of counsel
to the Administrative Agent and of counsel providing any opinions that the
Administrative Agent or Required Lenders may request in respect of the Security
Documents or the Liens created pursuant thereto; and (ii)
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promptly pay all reasonable out-of-pocket expenses of the Administrative Agent
and each Lender actually incurred in connection with the administration and
enforcement of any rights and remedies of the Administrative Agent and the
Lenders under this Agreement, the Notes or any other Loan Document (including in
connection with the sale of, collection from, or other realization upon any of
the Collateral or the enforcement of the Subsidiary Guaranty Agreement) or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings, in each case including consulting with
appraisers, accountants, engineers, attorneys and other Persons concerning the
nature, scope or value of any right or remedy of the Administrative Agent or any
Lender hereunder or under any of the other Loan Document or any factual matters
in connection therewith, which expenses shall include without limitation the
reasonable fees and disbursements of such Persons.
(b) Indemnity. The Borrower agrees to defend, indemnify and hold
harmless the Administrative Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any losses, penalties, fines, liabilities, settlements, damages, costs
and expenses, suffered by any such Person in connection with any claim,
investigation, litigation or other proceeding (whether or not any such Person
shall be designated as a party thereto) and the prosecution and defense thereof,
arising out of or in any way connected with this Agreement, any other Loan
Document or the transactions contemplated hereby or thereby, the Loans or
Letters of Credit or the use of the proceeds thereof, any claim under
Environmental Laws or any Hazardous Materials relating to or arising from,
directly or indirectly, any past or present activity, operation, land ownership,
or practice of the Borrower or any of its Subsidiaries, in each case including
without limitation reasonable attorney's and consultant's fees, except to the
extent that any of the foregoing directly result from the gross negligence or
willful misconduct of the party seeking indemnification therefor. In addition,
the Borrower will pay all out-of-pocket expenses of the Administrative Agent in
connection with prosecuting or defending any claim in any way arising out of,
related to, connected with, or enforcing any provision of, this Agreement or any
of the other Loan Documents, which expenses shall include the fees and
disbursements of counsel and of experts and other consultants retained by the
Administrative Agent and the Lenders.
SECTION 13.3 Stamp and Other Taxes. The Borrower will pay any and all
stamp, registration, recordation and similar taxes, fees or charges and shall
indemnify the Lenders against any and all liabilities with respect to or
resulting from any delay in the payment or omission to pay any such taxes, fees
or charges which may be payable or determined to be payable in connection with
the execution, delivery, performance or enforcement of this Agreement and any of
the other Loan Documents or the perfection of any rights thereunder.
SECTION 13.4 Set-off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon and after the occurrence of any Event of Default and during the continuance
thereof, the Lenders and any assignee or participant of a Lender in accordance
with Section 13.11 are hereby authorized by the Borrower at any time or from
time to time, without prior notice to the Borrower or to any other Person, any
such prior notice being hereby expressly waived, to set off and to appropriate
and to apply any and all deposits (general or special, time or demand,
including, but not limited to, indebtedness evidenced by certificates of
deposit, whether matured or unmatured excluding government
76
securities required by Applicable Law to be held as security for worker's
compensation and similar) and any other indebtedness at any time held or owing
by the Lenders, or any such assignee or participant to or for the credit or the
account of the Borrower against and on account of the Obligations irrespective
of whether or not (a) the Lenders shall have made any demand under this
Agreement or any of the other Loan Documents or (b) the Administrative Agent
shall have declared any or all of the Obligations to be due and payable as
permitted by Section 11.2 and although such Obligations shall be contingent or
unmatured.
SECTION 13.5 Governing Law. THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS, UNLESS OTHERWISE EXPRESSLY SET FORTH THEREIN, SHALL BE GOVERNED
BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES
THEREOF.
SECTION 13.6 Consent to Jurisdiction. THE BORROWER HEREBY IRREVOCABLY CONSENTS
TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN
MECKLENBURG COUNTY, NORTH CAROLINA, IN ANY ACTION, CLAIM OR OTHER PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN
DOCUMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS. THE BORROWER HEREBY IRREVOCABLY CONSENTS TO THE
SERVICE OF A SUMMONS AND COMPLAINT AND OTHER PROCESS IN ANY ACTION, CLAIM OR
PROCEEDING BROUGHT BY THE ADMINISTRATIVE AGENT OR ANY LENDER IN CONNECTION WITH
THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS, ON
BEHALF OF ITSELF OR ITS PROPERTY, IN THE MANNER SPECIFIED IN SECTION 13.1. THE
BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT
MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO
ABOVE IN THIS SECTION 13.6. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF ANY INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT. NOTHING
IN THIS SECTION 13.6 SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY
LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW OR
AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING ANY ACTION
OR PROCEEDING AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY OTHER
JURISDICTIONS.
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SECTION 13.7 Waiver of Jury Trial; Binding Arbitration.
(a) Jury Trial. TO THE EXTENT PERMITTED BY LAW, THE ADMINISTRATIVE
AGENT, EACH LENDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE
OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. The scope of this waiver is intended
to be all-encompassing of any and all Disputes that may be filed in any court
and that relate to the subject matter of this transaction, including contract
claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. In the event of litigation, this Agreement may
be filed as a written consent to a trial by the court.
(b) Binding Arbitration. Upon demand of any party, whether made before
or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to this Agreement, the
Notes or any other Loan Documents ("Disputes"), between or among parties to this
Agreement, the Notes or any other Loan Document shall be resolved by binding
arbitration as provided herein. Institution of a judicial proceeding by a party
does not waive the right of that party to demand arbitration hereunder. Disputes
may include, without limitation, tort claims, counterclaims, claims brought as
class actions, claims arising from Loan Documents executed in the future, or
claims concerning any aspect of the past, present or future relationships
arising out of or connected with the Loan Documents. Arbitration shall be
conducted under and governed by the Commercial Financial Disputes Arbitration
Rules (the "Arbitration Rules") of the American Arbitration Association and
Title 9 of the U.S. Code. All arbitration hearings shall be conducted in
Charlotte, North Carolina. The expedited procedures set forth in Rule 51, et
seq. of the Arbitration Rules shall be applicable to claims of less than
$1,000,000. All applicable statutes of limitation shall apply to any Dispute. A
judgment upon the award may be entered in any court having jurisdiction. The
panel from which all arbitrators are selected shall be comprised of licensed
attorneys. The single arbitrator selected for expedited procedure shall be a
retired judge from the highest court of general jurisdiction, state or federal,
of the state where the hearing will be conducted.
(c) Preservation of Certain Remedies. Notwithstanding the preceding
binding arbitration provisions, the parties hereto and to the other Loan
Documents preserve, without diminution, certain remedies that such Persons may
employ or exercise freely, either alone, in conjunction with or during a
Dispute. Each such Person shall have and hereby reserves the right to proceed in
any court of proper jurisdiction or by self help to exercise or prosecute the
following remedies: (i) all rights to foreclose against any real or personal
property or other security by exercising a power of sale granted in the Loan
Documents or under applicable law or by judicial foreclosure and sale, (ii) all
rights of self help including peaceful occupation of property and collection of
rents, set off, and peaceful possession of property, (iii) obtaining provisional
or ancillary
78
remedies including injunctive relief, sequestration, garnishment, attachment,
appointment of receiver and in filing an involuntary bankruptcy proceeding, and
(iv) when applicable, a judgment by confession of judgment. Preservation of
these remedies does not limit the power of an arbitrator to grant similar
remedies that may be requested by a party in a Dispute.
SECTION 13.8 Marshalling; Reversal of Payments. Neither the
Administrative Agent nor any Lender shall be under any obligation to marshal any
assets in favor of the Borrower or any other party or against or in payment of
any or all of the Obligations. To the extent the Borrower makes a payment or
payments to the Administrative Agent for the ratable benefit of the Lenders or
the Administrative Agent receives any payment or proceeds of the Collateral for
the Borrower's benefit which payments or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds repaid, the Obligations or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if such payment or proceeds had not been received by the Administrative
Agent.
SECTION 13.9 Injunctive Relief; Punitive Damages.
(a) The Borrower recognizes that, in the event the Borrower fails to
perform, observe or discharge any of its respective obligations or liabilities
under this Agreement, any remedy of law may prove to be inadequate relief to the
Lenders. Therefore, the Borrower agrees that the Lenders, at the Lenders'
option, shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
(b) The Administrative Agent, the Lenders and the Borrower (on behalf
of itself and its Subsidiaries) hereby agree that the Borrower shall not have a
remedy of punitive or exemplary damages against any other party to a Loan
Document and the Borrower hereby waives any right or claim to punitive or
exemplary damages that they may now have or may arise in the future in
connection with any Dispute, whether such Dispute is resolved through
arbitration or judicially.
The Borrower shall not have a remedy of punitive or exemplary damages
against any other party in any Dispute and hereby waives any right or claim to
punitive or exemplary damages it has now or which may arise in the future in
connection with any Dispute whether the Dispute is resolved by arbitration or
judicially.
SECTION 13.10 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrower or any Subsidiary thereof to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there is an express written direction by the Administrative Agent to the
contrary agreed to by the Borrower, be performed in accordance with GAAP as in
effect on the Closing Date. In the event that changes in GAAP shall be mandated
by the Financial Accounting Standards Board, or any similar accounting body of
comparable standing, or shall be recommended by the Borrower's certified public
accountants, to the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Borrower
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and the Lenders shall have amended this Agreement to the extent necessary to
reflect any such changes in the financial covenants and other terms and
conditions of this Agreement.
SECTION 13.11 Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent and the Lenders,
all future holders of the Notes, and their respective successors and assigns,
except that the Borrower shall not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Assignment by the Lenders. Each Lender may, with the consent of the
Administrative Agent, which consent shall not be unreasonably withheld, assign
to one or more Eligible Assignees all or a portion of its interests, rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Commitments, Letters of Credit or participations therein, Loans
or other obligations at the time owing to it and the Notes held by it); provided
that:
(i) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Lender's rights and obligations under
this Agreement;
(ii) if less than all of the assigning Lender's Commitments,
Loans, Letters of Credit or participations therein and other Obligations of such
assigning Lender hereunder is to be assigned, the portion so assigned shall not
be less than $5,000,000;
(iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance in the form of Exhibit I attached hereto
(an "Assignment and Acceptance"), together with any Note or Notes subject to
such assignment;
(iv) such assignment shall not, without the consent of the
Borrower, require the Borrower to file a registration statement with the
Securities and Exchange Commission or apply to or qualify the Loans or the Notes
under the blue sky laws of any state; and
(v) the assigning Lender shall pay to the Administrative Agent
an assignment fee of $3,500 upon the execution by such Lender of the Assignment
and Acceptance; provided that no such fee shall be payable upon any assignment
by a Lender to an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance, which effective
date shall be at least five (5) Business Days after the execution thereof, (A)
the assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Lender
hereby and (B) the Lender thereunder shall, to the extent provided in such
assignment, be released from its obligations under this Agreement.
80
(c) Rights and Duties Upon Assignment. By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and record the information contained
therein in the Register.
(e) Issuance of New Notes. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Note or Notes subject to such assignment and the written consent to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is substantially in the form of Exhibit H:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the
Borrower; and
(iv) promptly deliver a copy of such Assignment and Acceptance
to the Borrower.
Within five (5) Business Days after receipt of notice, the Borrower
shall execute and deliver to the Administrative Agent, in exchange for the
surrendered Notes, a new Term Note, Revolving Note, and L/C Note to the order of
such Eligible Assignee in amounts equal to the Term Loans, Revolving Loan
Commitment, and L/C Notes assumed by it pursuant to such Assignment and
Acceptance and a new Term Note, Revolving Note and L/C Note to the order of the
assigning Lender in an amount equal to the Term Loans, Revolving Loan
Commitment, and L/C Notes retained by it hereunder. Such new Notes shall be in
an aggregate principal amount equal to the corresponding aggregate principal
amounts of such surrendered Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
the assigned Notes delivered to the assigning Lender. Each surrendered Note or
Notes shall be canceled and returned to the Borrower.
(f) Participations. Each Lender may sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of the
Commitments, Letters of Credit or participations therein, Loans or other
obligations at the time owing to it and the Notes held by it); provided that:
(i) each such participation shall be in an amount not less
than $3,000,000 unless such participation is to an Affiliate in which case no
minimum amount shall be required;
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Commitments) shall remain unchanged;
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
81
(iv) such Lender shall remain the holder of the Notes held by
it for all purposes of this Agreement;
(v) 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;
(vi) such Lender shall not permit such participant the right
to approve any waivers, amendments or other modifications to this Agreement or
any other Loan Document other than waivers, amendments or modifications which
would reduce the principal of or the interest rate on any Loan or Reimbursement
Obligation, extend the term or increase the amount of the Commitments, reduce
the amount of any fees to which such participant is entitled, extend any
scheduled payment date for principal of any Loan or, except as expressly
contemplated hereby or thereby, release substantially all of the Collateral; and
(vii) any such disposition shall not, without the consent of
the Borrower, require the Borrower to file a registration statement with the
Securities and Exchange Commission to apply to qualify the Loans or the Notes
under the blue sky law of any state.
(g) Disclosure of Information; Confidentiality. The Administrative
Agent and the Lenders shall hold all non-public information with respect to the
Borrower obtained pursuant to the Loan Documents in accordance with their
customary procedures for handling confidential information; provided, that the
Administrative Agent may disclose information relating to this Agreement to Gold
Sheets and other similar bank trade publications, such information to consist of
deal terms and other information customarily found in such publications and
provided further, that the Administrative Agent and the Lenders may disclose any
such information to their counsel and accountants and to the extent they
reasonably believe that such disclosure is required by law or requested by any
regulatory authority. Any Lender may, in connection with any assignment,
proposed assignment, participation or proposed participation pursuant to this
Section 13.11, disclose to the assignee, participant, proposed assignee or
proposed participant, any information relating to the Borrower furnished to such
Lender by or on behalf of the Borrower; provided, that prior to any such
disclosure, each such assignee, proposed assignee, participant or proposed
participant shall agree with the Borrower or such Lender to preserve the
confidentiality of any confidential information relating to the Borrower
received from such Lender.
(h) Certain Pledges or Assignments. Nothing herein shall prohibit any
Lender from pledging or assigning any Note to any Federal Reserve Bank in
accordance with Applicable Law.
SECTION 13.12 Amendments, Waivers and Consents. Except as set forth
below, any term, covenant, agreement or condition of this Agreement or any of
the other Loan Documents (other than any Hedging Agreement, the terms and
conditions of which may be amended, modified and waived by the parties thereto)
may be amended or waived by the Lenders, and any consent given by the Lenders,
if, but only if, such amendment, waiver or consent is in writing signed by the
Required Lenders (or by the Administrative Agent with the consent of the
Required Lenders) and delivered to the Administrative Agent and, in the case of
an amendment, signed by the Borrower; provided, that no amendment, waiver or
consent shall
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(a) increase the amount or extend the time of the obligation of the Lenders to
make Loans or issue or participate in Letters of Credit, (b) extend the
originally scheduled time or times of payment of the principal of any Loan or
Reimbursement Obligation or any fees or the time or times of payment of interest
on any Loan or Reimbursement Obligation, (c) reduce the rate of interest or fees
payable on any Loan or Reimbursement Obligation, (d) reduce the principal amount
of any Loan or Reimbursement Obligation, (e) permit any subordination of the
principal or interest on any Loan or Reimbursement Obligation, (f) release any
material portion of the Collateral or release any Security Document (other than
as specifically permitted or contemplated in this Agreement or the applicable
Security Document) or (g) amend the provisions of this Section 13.12 or the
definition of Required Lenders, without the prior written consent of each
Lender. In addition, no amendment, waiver or consent to the provisions of (a)
Article XII shall be made without the written consent of the Administrative
Agent and (b) Article III without the written consent of the Issuing Lender.
SECTION 13.13 Performance of Duties. The Credit Parties' obligations
under this Agreement and each of the Loan Documents shall be performed by the
Credit Parties at their sole cost and expense.
SECTION 13.14 All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Lenders, the Administrative Agent and
any Persons designated by the Administrative Agent or any Lender pursuant to any
provisions of this Agreement or any of the other Loan Documents shall be deemed
coupled with an interest and shall be irrevocable so long as any of the
Obligations remain unpaid or unsatisfied or the Credit Facility has not been
terminated.
SECTION 13.15 Survival Agreements. Notwithstanding anything in this
Agreement or implied by law to the contrary, (a) the agreements of the Borrower
set forth in Sections 4.7, 4.9, 3.7(a), 13.2, and 13.3, (b) any other
indemnities of the Borrower to which the Administrative Agent and/or Lenders are
entitled under this Agreement and the other Loan Documents, and (c) the
agreements of Lenders set forth in Sections 4.5, 12.3 and 12.7 shall survive the
payment of the Loans, the cancellation or expiration of the Letters of Credit
and the reimbursement of any amounts drawn thereunder, and the termination of
this Agreement.
SECTION 13.16 Construction of Agreement. Each of the parties hereto
acknowledges that it has been represented by counsel in the negotiation and
documentation of the terms of this Agreement, that it has had full and fair
opportunity to review and revise the terms of this Agreement, and that this
Agreement has been drafted jointly by all of the parties hereto. Accordingly,
each of the parties hereto acknowledges and agrees that the terms of this
Agreement shall not be construed against or in favor of another party.
SECTION 13.17 Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.
SECTION 13.18 Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without
83
invalidating the remainder of such provision or the remaining provisions hereof
or thereof or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 13.19 Counterparts; Effectiveness. This Agreement and any
amendments, waivers, consents, or supplements may be executed in any number of
counterparts, and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. It is
the intention of each of the parties hereto that all indebtedness of the
Borrower under the Existing Agreement be continued hereunder, that the Existing
Agreement be amended and restated to reflect such continuation and to preserve
the perfection and priority of all security interests securing such indebtedness
under the Existing Agreement and the other Loan Documents, and that all
indebtedness and obligations of the Borrower and its Subsidiaries hereunder and
thereunder shall be secured by the Security Documents. This Agreement
constitutes an amendment and restatement of the Existing Agreement made under
the terms of Section 9.7 thereof, and is not intended by the parties to
constitute a novation or refinancing of the Notes. Notwithstanding the use of
the terms "Loan" or "Loans" to denote the interest of an individual Lender under
this Agreement, no construction shall be applied so as to defeat such intention
of the parties. Unless and until all the conditions set forth in Section 5.2
have been satisfied or waived by the Administrative Agent or the Lenders, the
Existing Agreement shall remain in full force and effect without giving effect
to the amendments set forth herein, as if this Second Amended and Restated
Credit Agreement shall have never been executed and delivered. Any references in
the Loan Documents to specific section numbers of the Existing Agreement or to
specific Schedules or Exhibits thereof shall be deemed to refer to the
appropriate section numbers of this Agreement (however numbered) corresponding
to the specific numbered sections of the Existing Agreement or to the
appropriate Schedules or Exhibits hereof (however identified) corresponding to
the specific Schedules or Exhibits of the Existing Agreement.
SECTION 13.20 Term of Agreement.
(a) This Agreement shall remain in effect from the Closing Date through
and including the date upon which all Obligations shall have been indefeasibly
and irrevocably paid and satisfied in full. The Administrative Agent is hereby
permitted to release all Liens on the Collateral in favor of the Administrative
Agent, for the ratable benefit of itself and the Lenders, upon repayment of the
outstanding principal of and all accrued interest on the Loans, payment of all
outstanding fees and expenses hereunder and the termination of the Lender's
Commitments. No termination of this Agreement shall affect the rights and
obligations of the parties hereto arising prior to such termination.
(b) The Credit Parties expressly acknowledge and agree that each
covenant contained in Articles VII, VIII, IX and X hereof shall be given
independent effect. Accordingly, no Credit Party shall engage in any transaction
or other act otherwise permitted under any covenant contained in any such
Article if, before or after giving effect thereto, such Credit Party shall or
would be in breach of any other covenant contained in any such Article.
[Signature Pages Follow]
84
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized representatives, all as of the day
and year first written above.
BORROWER:
[CORPORATE SEAL] HEALTHPLAN SERVICES CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------
Title: President, Chief Operating Officer
--------------------------------------
S-1
LENDERS:
FIRST UNION NATIONAL BANK, individually and as
Administrative Agent
By: /s/ Xxxxxxx Xxxx
---------------------------------------------------
Name: Xxxxxxx Xxxx
--------------------------------------------
Title: Authorized Officer
-------------------------------------------
CREDIT LYONNAIS, NEW YORK BRANCH
By: /s/ Xxxx-Xxxxxxx Van Essche
---------------------------------------------------
Name: Xxxx-Xxxxxxx Van Essche
--------------------------------------------
Title: Vice President
-------------------------------------------
SUNTRUST BANK, TAMPA BAY
By: /s/ Xxxxxx X. Xxxxxxxxxxx
---------------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
--------------------------------------------
Title: Director
-------------------------------------------
FLEET NATIONAL BANK
By: /s/ Xxxxxx Xxxxxx
---------------------------------------------------
Name: Xxxxxx Xxxxxx
--------------------------------------------
Title: Sr. Vice President
-------------------------------------------
SOUTHTRUST BANK, NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxx
---------------------------------------------------
Name: Xxxx Xxxxx
--------------------------------------------
Title: Vice President
-------------------------------------------
S-2
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "RABOBANK
NEDERLAND", NEW YORK BRANCH
By: /s/ Xxxxxxx Xxxxx /s/ Xxxxx X. X'Xxxxxx
---------------------------------------------------
Name: Xxxxxxx Xxxxx Xxxxx X. X'Xxxxxx
--------------------------------------------
Title: Vice President Vice President
-------------------------------------------
BANK OF AMERICA, N.A.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------------------
Title: Senior Vice President
-------------------------------------------
AMSOUTH BANK
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------------------
Name: Xxxxxxx X. Xxxx
--------------------------------------------
Title: Vice President
-------------------------------------------
HIBERNIA NATIONAL BANK
By: /s/ Xxxxxxxxxxx Xxxxx
---------------------------------------------------
Name: Xxxxxxxxxxx Xxxxx
--------------------------------------------
Title: Vice President
-------------------------------------------
THE FIFTH THIRD BANK OF COLUMBUS
By: /s/ Xxxx Xxxxxx
---------------------------------------------------
Name: Xxxx Xxxxxx
--------------------------------------------
Title: Vice President
-------------------------------------------
S-3
EXHIBITS
Exhibit A - Form of Term Note
Exhibit B - Form of Amended and Restated Revolving Note
Exhibit C - Form of L/C Note
Exhibit D - Form of Notice of Borrowing
Exhibit E - Form of Borrowing Base Certificate
Exhibit F - Notice of Prepayment
Exhibit G - Form of Officer's Compliance Certificate
Exhibit H - Form of Assignment and Acceptance
Exhibit I - Form of Security and Pledge Agreement
Exhibit J - Form of Subsidiary Guaranty Agreement
Exhibit K - Form of Notice of Account Designation
SCHEDULES
Schedule 1.1(a) - Carrier Contracts
Schedule 1.1(b) - Lenders and Commitments
Schedule 1.1(c) - Existing Letters of Credit
Schedule 1.1(d) - Inactive Subsidiaries
Schedule 6.1(a) - Jurisdictions of Organization and Qualification
Schedule 6.1(b) - Subsidiaries and Capitalization
Schedule 6.1(i) - ERISA Plans
Schedule 6.1(1) - Material Contracts
Schedule 6.1(m) - Labor and Collective Bargaining Agreements
Schedule 6.1(r) - Real Property
Schedule 6.1(s) - Liens
Schedule 6.1(t) - Indebtedness and Guaranty Obligations
Schedule 6.1(u) - Litigation
Schedule 6.1(bb - Deposit Accounts
Schedule 9.5 - Special Projects Capital Expenditures
Schedule 10.4 - Existing Loans, Advances and Investments
[AS REQUIRED BY APPLICABLE LAW, THE COMPANY WILL FURNISH SUPPLEMENTALLY ANY
OMITTED EXHIBIT OR SCHEDULE UPON REQUEST]
EXHIBIT 10.12d
EXECUTION
SECURITY AND
SECOND AMENDED AND RESTATED PLEDGE AGREEMENT
This SECURITY AND SECOND AMENDED AND RESTATED PLEDGE AGREEMENT
(this "Agreement") is dated as of June 8, 2000 and entered into by and among
HEALTHPLAN SERVICES CORPORATION, a Delaware corporation (the "Borrower"), each
of THE UNDERSIGNED SUBSIDIARIES of the Borrower (each of such undersigned
Subsidiaries being a "Subsidiary Grantor" and collectively the "Subsidiary
Grantors") and each ADDITIONAL GRANTOR that may become a party hereto after the
date hereof in accordance with Section 22 hereof (each of the Borrower, each
Subsidiary Grantor, and each Additional Grantor being a "Grantor" and
collectively the "Grantors") and FIRST UNION NATIONAL BANK, as administrative
agent for and representative of (in such capacity herein called "Secured Party")
the financial institutions (the "Lenders") party to the Credit Agreement
referred to below and any Interest Rate Hedgers (as hereinafter defined).
R E C I T A L S
---------------
WHEREAS, pursuant to the Second Amended and Restated Credit
Agreement dated as of June 8, 2000 (said Second Amended and Restated Credit
Agreement as it may hereafter be amended, restated, supplemented or otherwise
modified from time to time, being the "Credit Agreement"; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among the Borrower, the financial institutions listed therein as Lenders,
and First Union, as the Administrative Agent (in such capacity, "Administrative
Agent"), Lenders have made certain commitments, subject to the terms and
conditions set forth in the Credit Agreement, to restructure the credit
facilities outstanding under the Existing Agreement on the terms and conditions
of the Credit Agreement;
WHEREAS, the Borrower may from time to time enter, or may from
time to time have entered, into one or more Hedging Agreements (collectively,
the "Lender Hedging Agreements") with one or more Persons that are Lenders or
Affiliates of the Lenders at the time such Lender Hedging Agreements are entered
into (in such capacity, collectively, "Interest Rate Hedgers") in accordance
with the terms of the Credit Agreement, and it is desired that the obligations
of the Borrower under the Lender Hedging Agreements, including without
limitation the obligation of the Borrower to make payments thereunder in the
event of early termination thereof, together with all obligations of the
Borrower under the Credit Agreement and the other Loan Documents, be secured
hereunder;
WHEREAS, the Borrower and the Administrative Agent are party
to that certain Amended and Restated Pledge Agreement dated as of May 1, 1998
(as amended by the Supplement to Pledge Agreement dated as of May 15, 1998 and
as such agreement may have otherwise been amended, restated, supplemented or
otherwise modified from time to time prior to the date hereof, the "Borrower
Pledge Agreement");
WHEREAS, HealthPlan Services, Inc., a Florida corporation and
a Subsidiary of the Borrower ("HPSI"), and the Administrative Agent are party to
that certain Amended and
1
Restated Pledge Agreement dated as of May 1, 1998 (as amended by the Pledge
Agreement Supplement dated as of June 16, 1998, the Pledge Agreement Supplement
dated as of February 16, 2000, the Pledge Agreement Confirmation and Supplements
dated as of February 16, 2000 and as such agreement may have otherwise been
amended, restated, supplemented or otherwise modified from time to time prior to
the date hereof, the "HPSI Pledge Agreement"; together with the Borrower Pledge
Agreement, the "Existing Pledge Agreements");
WHEREAS, certain of the Subsidiary Grantors are party to that
certain Amended and Restated Subsidiary Guaranty Agreement dated as of May 1,
1998, certain of the Subsidiary Grantors are party to that certain Amended and
Restated Subsidiary Guaranty Agreement dated as of May 15, 1998, certain of the
Subsidiary Grantors are party to that certain Amended and Restated Subsidiary
Guaranty Agreement dated as of June 16, 1998, and certain of the Subsidiary
Grantors are party to those certain Amended and Restated Subsidiary Guaranty
Agreements dated as of February 16, 2000 (as each agreement may have otherwise
been amended, restated, supplemented or otherwise modified from time to time
prior to the date hereof, an "Existing Subsidiary Guaranty Agreement", and
collectively, the "Existing Subsidiary Guaranty Agreements");
WHEREAS, pursuant to the Nonwaiver and Standstill Agreement
dated as of February 11, 2000, as amended by the Extension of Nonwaiver and
Standstill Agreement dated as of March 17, 2000, and the Second Extension of
Nonwaiver and Standstill Agreement dated as of April 13, 2000 (the "Nonwaiver
and Standstill Agreement"), the Lenders party to the Existing Agreement agreed
to, among other things, defer the exercise of remedies under the Existing
Agreement with respect to certain existing defaults and events of defaults
thereunder for a limited period;
WHEREAS, it is a condition precedent to Lenders' willingness
to forego the exercise of remedies under the Existing Agreement in respect of
the existing defaults thereunder identified in the Nonwaiver and Standstill
Agreement and to restructure the credit facilities outstanding under the
Existing Agreement as set forth in the Credit Agreement that (i) the Borrower
and HPSI shall continue the grant of a security interest in the pledged
collateral pledged under the Existing Pledge Agreements and shall have agreed to
amend and restate in their entirety the Existing Pledge Agreements as set forth
herein, (ii) the Grantors listed on the signature pages hereof shall have
granted to the Secured Party a First Priority Lien on substantially all of their
respective personal property, including a pledge of all of the capital stock of
their respective Subsidiaries to the extent not previously pledged, and (iii)
the Grantors listed on the signature pages hereof shall have undertaken the
obligations contemplated by this Agreement; and
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Subsidiary Grantors have executed and delivered that certain
Second Amended and Restated Subsidiary Guaranty Agreement dated the date hereof
(said Second Amended and Restated Subsidiary Guaranty Agreement, as it may
hereafter be amended, restated, supplemented or otherwise modified from time to
time, being the "Subsidiary Guaranty Agreement") in favor of Secured Party for
the benefit of Lenders and any Interest Rate Hedgers, which Subsidiary Guaranty
Agreement amends and restates in their entirety the Existing Subsidiary Guaranty
Agreements and pursuant to which each Subsidiary Grantor has guarantied and
continues to guaranty, as applicable, the prompt payment and performance when
due of all obligations of the Borrower under the Credit Agreement and all
obligations of the
2
Borrower under the Lender Hedging Agreements, including without limitation the
obligation of the Borrower to make payments thereunder in the event of early
termination thereof.
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to agree to maintain and make the Loans and other extensions
of credit under the Credit Agreement and to induce Interest Rate Hedgers to
enter into and maintain the Lender Hedging Agreements, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, each Grantor hereby agrees with Secured Party as follows:
Section 1. Grant of Security.
------------------
Each Grantor hereby assigns to Secured Party, and hereby
grants to Secured Party, a security interest in all of such Grantor's right,
title and interest in and to the following, in each case whether now or
hereafter existing, whether tangible or intangible, or in which such Grantor now
has or hereafter acquires an interest and wherever the same may be located (the
"Collateral"):
(a) all equipment in all of its forms, all parts thereof and
all accessions thereto (any and all such equipment, parts and accessions being
the "Equipment");
(b) all inventory in all of its forms, including but not
limited to (i) all goods held by such Grantor for sale or lease or to be
furnished under contracts of service or so leased or furnished, (ii) all raw
materials, work in process, finished goods, and materials used or consumed in
the manufacture, packing, shipping, advertising, selling, leasing, furnishing or
production of such inventory or otherwise used or consumed in such Grantor's
business, (iii) all goods in which such Grantor has an interest in mass or a
joint or other interest or right of any kind, and (iv) all goods which are
returned to or repossessed by such Grantor and all accessions thereto and
products thereof (collectively the "Inventory") and all negotiable and
non-negotiable documents of title (including without limitation warehouse
receipts, dock receipts and bills of lading) issued by any Person covering any
Inventory (any such negotiable document of title being a "Negotiable Document of
Title");
(c) all accounts, contract rights, chattel paper, documents,
instruments, general intangibles and other rights and obligations of any kind
owned by or owing to such Grantor and all rights in, to and under all security
agreements, leases and other contracts securing or otherwise relating to any
such accounts, contract rights, chattel paper, documents, instruments, general
intangibles or other obligations (any and all such accounts, contract rights,
chattel paper, documents, instruments, general intangibles and other obligations
being the "Accounts", and any and all such security agreements, leases and other
contracts being the "Related Contracts");
(d) all deposit accounts ("Deposit Accounts") including the
restricted deposit account established and maintained by Secured Party pursuant
to Section 12 (the "Collateral Account") and the subaccounts of the Collateral
Account established and maintained by Secured Party pursuant to Section 12
(collectively, the "Subaccounts") together with (i) all amounts on deposit from
time to time in such deposit accounts (solely to the extent of such Grantor's
right, title and interest therein) and (ii) all interest, cash, instruments,
securities and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or
3
all of the foregoing; provided, however that the Collateral shall not include
any Client Disbursement Account or funds on deposit in any Client Disbursement
Accounts;
(e) the "Securities Collateral", which term means:
(i) all shares of stock, partnership interests,
interests in joint ventures, limited liability company interests and
all other equity interests now or hereafter owned by such Grantor in
any Person, including all securities convertible into, and rights,
warrants, options and other rights to purchase or otherwise acquire,
any of the foregoing now or hereafter owned by such Grantor, including
those owned on the date hereof and described on Schedule 1(e)(i), and
the certificates or other instruments representing any of the foregoing
and any interest of such Grantor in the entries on the books of any
securities intermediary pertaining thereto (the "Pledged Shares"), and
all dividends, distributions, returns of capital, cash, warrants,
option, rights, instruments, rights to vote or manage the business of
such Person pursuant to organizational documents governing the rights
and obligations of the stockholders, partners, members or other owners
thereof and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any or all of such Pledged Shares; provided, that if the issuer of any
of such Pledged Shares is a controlled foreign corporation (used
hereinafter as such term is defined in Section 975(a) or a successor
provision of the Internal Revenue Code), the Pledged Shares shall not
include any shares of stock of such issuer in excess of the number of
shares of such issuer possessing up to but not exceeding 65% of the
voting power of all classes of capital stock entitled to vote of such
issuer, and all dividends, cash, warrants, rights, instruments and
other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of
such Pledged Shares;
(ii) all indebtedness from time to time owed to such
Grantor by any obligor that is, or becomes, a direct or indirect
Subsidiary of such Grantor, including the indebtedness described on
Schedule 1(e)(ii) and issued by the obligors named therein, and the
instruments evidencing such indebtedness (the "Pledged Debt"), and all
interest, cash, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Debt; and
(iii) all other investment property as that term is
defined in the Uniform Commercial Code of any relevant jurisdiction
(the "UCC"), of such Grantor;
(f) the "Intellectual Property Collateral", which term means:
(i) all rights, title and interest (including rights
acquired pursuant to a license or otherwise) in and to all trademarks,
service marks, designs, logos, indicia, tradenames, trade dress,
corporate names, company names, business names, fictitious business
names, trade styles and/or other source and/or business identifiers and
applications pertaining thereto, owned by such Grantor, or hereafter
adopted and used, in its business (including, without limitation, the
trademarks specifically identified in Schedule 1(f)(i), as the same may
be amended pursuant hereto from time to time) (collectively, the
"Trademarks"), all registrations that have been or may hereafter be
4
issued or applied for thereon in the United States and any state
thereof and in foreign countries (including, without limitation, the
registrations and applications specifically identified in Schedule
1(f)(i), as the same may be amended pursuant hereto from time to time)
(the "Trademark Registrations"), all common law and other rights in and
to the Trademarks in the United States and any state thereof and in
foreign countries (the "Trademark Rights"), and all goodwill of such
Grantor's business symbolized by the Trademarks and associated
therewith (the "Associated Goodwill"):
(ii) all rights, title and interest (including rights
acquired pursuant to a license or otherwise) in and to all patents and
patent applications and rights and interests in patents and patent
applications under any domestic or foreign law that are presently, or
in the future may be, owned or held by such Grantor and all patents and
patent applications and rights, title and interests in patents and
patent applications under any domestic or foreign law that are
presently, or in the future may be, owned by such Grantor in whole or
in part (including, without limitation, the patents and patent
applications listed in Schedule 1(f)(ii), as the same may be amended
pursuant hereto from time to time), all rights corresponding thereto
(including, without limitation, the right, exercisable only upon the
occurrence and during the continuation of an Event of Default, to xxx
for past, present and future infringements in the name of such Grantor
or in the name of Secured Party or Lenders), and all re-issues,
divisions, continuations, renewals, extensions and
continuations-in-part thereof (all of the foregoing being collectively
referred to as the "Patents"); it being understood that the rights and
interests included in the Intellectual Property Collateral hereby shall
include, without limitation, all rights and interests pursuant to
licensing or other contracts in favor of such Grantor pertaining to
patent applications and patents presently or in the future owned or
used by third parties but, in the case of third parties which are not
Affiliates of such Grantor, only to the extent permitted by such
licensing or other contracts and, if not so permitted, only with the
consent of such third parties; and
(iii) all rights, title and interest (including rights
acquired pursuant to a license or otherwise) under copyright in various
published and unpublished works of authorship including, without
limitation, computer programs, computer data bases, other computer
software, layouts, trade dress, drawings, designs, writings, and
formulas owned by such Grantor (including, without limitation, the
works listed on Schedule 1(f)(iii), as the same may be amended pursuant
hereto from time to time) (collectively, the "Copyrights"), all
copyright registrations issued to such Grantor and applications for
copyright registration that have been or may hereafter be issued or
applied for thereon by such Grantor in the United States and any state
thereof and in foreign countries (including, without limitation, the
registrations listed on Schedule 1(f)(iii), as the same may be amended
pursuant hereto from time to time) (collectively, the "Copyright
Registrations"), all common law and other rights in and to the
Copyrights in the United States and any state thereof and in foreign
countries including all copyright licenses (but with respect to such
copyright licenses, only to the extent permitted by such licensing
arrangements) (the "Copyright Rights"), including, without limitation,
each of the Copyrights, rights, titles and interests in and to the
Copyrights, all derivative works and other works protectable by
copyright, which are presently, or in the future may be, owned, created
(as a work for hire for the benefit of such Grantor), authored (as a
work
5
for hire for the benefit of such Grantor), or acquired by such
Grantor, in whole or in part, and all Copyright Rights with respect
thereto and all Copyright Registrations therefor, heretofore or
hereafter granted or applied for, and all renewals and extensions
thereof, throughout the world, including all proceeds thereof (such as,
by way of example and not by limitation, license royalties and proceeds
of infringement suits), the right to renew and extend such Copyright
Registrations and Copyright Rights and to register works protectable by
copyright and the right to xxx for past, present and future
infringements of the Copyrights and Copyright Rights;
(g) all information used or useful or arising from the
business including all goodwill, trade secrets, trade secret rights, know-how,
customer lists, processes of production, ideas, confidential business
information, techniques, processes, formulas, and all other proprietary
information;
(h) to the extent not included in any other paragraph of this
Section 1, all other general intangibles (including without limitation tax
refunds, rights to payment or performance, choses in action and judgments taken
on any rights or claims included in the Collateral);
(i) all plant fixtures, business fixtures and other fixtures
and storage and office facilities, and all accessions thereto and products
thereof;
(j) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software that at any
time evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon;
(k) all proceeds, products, rents and profits of or from any
and all of the foregoing Collateral and, to the extent not otherwise included,
all payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral. For
purposes of this Agreement, the term "proceeds" includes whatever is receivable
or received when Collateral or proceeds are sold, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event
shall the Collateral include, and no Grantor shall be deemed to have granted a
security interest in (i) any of such Grantor's rights or interests in any
license, contract or agreement to which such Grantor is a party as of the date
hereof or any Carrier Contract to which such Grantor is now or may in the future
be a party, or any of its rights or interests under any such license, contract,
agreement or Carrier Contract to the extent, but only to the extent, that such a
grant would, under the terms of such license, contract, agreement, or Carrier
Contract or otherwise, result in a breach of the terms of, or constitute a
default under any license, contract, agreement or Carrier Contract to which such
Grantor is a party (other than to the extent that any such term would be
rendered ineffective pursuant to Section 9-318(4) of the UCC or any other
applicable law (including the Bankruptcy Code) or principles of equity);
provided, that immediately upon the ineffectiveness, lapse or termination of any
such provision, the Collateral shall include, and such Grantor shall be deemed
to have granted a security interest in, all such rights and interests as if such
provision had never
6
been in effect, or (ii) any real property leasehold, unless a Grantor has
executed a leasehold mortgage or leasehold deed of trust covering such real
property leasehold.
The grant of a security interest pursuant to this Section 1
confirms the grant of a First Priority security interest in the "Collateral" as
defined in and as granted pursuant to the Existing Pledge Agreements by the
Grantors party thereto and continues in all respects the grant of the Existing
Pledge Agreements with respect to such "Collateral" without in any way causing
any interruption in the continuity from such original grant.
Section 2. Security for Obligations.
-------------------------
This Agreement secures, and the Collateral assigned by each
Grantor is collateral security for, the prompt payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including without limitation the payment of
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code), of all Secured Obligations of such
Grantor. "Secured Obligations" means:
(a) with respect to the Borrower, all obligations and
liabilities of every nature of the Borrower now or hereafter existing under or
arising out of or in connection with the Credit Agreement and the other Loan
Documents and any Lender Hedging Agreement;
(b) with respect to each Subsidiary Grantor and Additional
Grantor, all obligations and liabilities of every nature of such Grantors now or
hereafter existing under or arising out of or in connection with the Subsidiary
Guaranty Agreement; and
(c) all payment obligations owing by the Borrower or any
Subsidiary Grantors to any Lender or any of its Affiliates in respect of
overdrafts and related liabilities and arising from treasury, depository and
cash management services or in connection with automated clearing house transfer
of funds;
in each case together with all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to the Borrower or any other
Grantor, would accrue on such obligations, whether or not a claim is allowed
against the Borrower or such Grantor for such interest in the related bankruptcy
proceeding), reimbursement of amounts drawn under Letters of Credit, payments
for early termination of Lender Hedging Agreements, fees, expenses, indemnities
or otherwise, whether voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed with others,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Secured Party or any Lender or
Interest Rate Xxxxxx as a preference, fraudulent transfer or otherwise, and all
obligations of every nature of Grantors now or hereafter existing under this
Agreement.
7
Section 3. Grantors Remain Liable.
-----------------------
Anything contained herein to the contrary notwithstanding, (a)
each Grantor shall remain liable under any contracts and agreements included in
the Collateral, to the extent set forth therein, to perform all of its duties
and obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of its rights hereunder shall
not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) Secured Party shall
not have any obligation or liability under any contracts, licenses, and
agreements included in the Collateral by reason of this Agreement, nor shall
Secured Party be obligated to perform any of the obligations or duties of any
Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
Section 4. Representations and Warranties.
--------------------------------
Each Grantor represents and warrants as follows:
(a) Ownership of Collateral. Except as expressly permitted by
the Credit Agreement and for the security interest created by this Agreement,
such Grantor owns the Collateral owned by such Grantor free and clear of any
Lien. Except as expressly permitted by the Credit Agreement and such as may have
been filed in favor of Secured Party relating to this Agreement, no effective
financing statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any filing or recording office.
(b) Locations of Equipment and Inventory. All of the Equipment
and Inventory is, as of the date hereof, or in the case of each Additional
Grantor, the date of the applicable counterpart entered into pursuant to Section
22 (each, a "Counterpart") located at the places specified in Schedule 4(b).
(c) Office Locations. The chief place of business, the chief
executive office and the office where such Grantor keeps its records regarding
the Accounts and all originals of all chattel paper that evidence Accounts are,
as of the date hereof, and have been for the four (4) month period preceding the
date hereof, or, in the case of an Additional Grantor, the date of the
applicable Counterpart, located at the locations set forth on Schedule 4(c);
(d) Names. No Grantor (or predecessor by merger or otherwise
of such Grantor) has, within the four (4) month period preceding the date
hereof, or, in the case of an Additional Grantor, the date of the applicable
Counterpart, had a different name from the name of such Grantor listed or the
signature pages hereof.
(e) Delivery of Certain Collateral. All certificates of title
or instruments (excluding checks) evidencing, comprising or representing the
Collateral (including, without limitation, the Securities Collateral) have been
delivered to Secured Party duly endorsed or accompanied by duly executed
instruments of transfer or assignment in blank.
(f) Securities Collateral. (i) All of the Pledged Shares
described on Schedule 1(e)(i) have been duly authorized and validly issued and
are fully paid and non-assessable; (ii) all of the Pledged Debt described on
Schedule 1(e)(ii) has been duly authorized, authenticated or
8
issued, and delivered and is the legal, valid and binding obligation of the
issuers thereof and is not in default; (iii) except as set forth on Schedule
1(e)(i), the Pledged Shares constitute all of the issued and outstanding shares
of stock or other equity interests of each issuer thereof (subject to the
proviso to Section 1(e)(i) with respect to shares of a foreign controlled
corporation), and there are no outstanding warrants, options or other rights to
purchase, or other agreements outstanding with respect to, or property that is
now or hereafter convertible into, or that requires the issuance or sale of, any
Pledged Shares; (iv) the Pledged Debt constitutes all of the issued and
outstanding intercompany indebtedness evidenced by a promissory note of the
respective issuers thereof owing to such Grantor; (v) Schedule 1(e)(i) sets
forth all of the Pledged Shares owned by each Grantor on the date hereof; and
(vi) Schedule 1(e)(ii) sets forth all of the Pledged Debt in existence on the
date hereof.
(g) Intellectual Property Collateral.
(i) a true and complete list of all Trademark
Registrations and Trademark applications owned, held (whether pursuant
to a license or otherwise) or used by such Grantor, in whole or in
part, is set forth in Schedule 1(f)(i);
(ii) a true and complete list of all Patents owned, held
(whether pursuant to a license or otherwise) or used by such Grantor,
in whole or in part, is set forth in Schedule 1(f)(ii);
(iii) a true and complete list of all Copyright
Registrations and applications for Copyright Registrations held
(whether pursuant to a license or otherwise) by such Grantor, in whole
or in part, is set forth in Schedule 1(f)(iii);
(iv) except as set forth on Schedule 1(f)(iv), after
reasonable inquiry, such Grantor is not aware of any pending or
threatened claim by any third party that any of the Intellectual
Property Collateral owned, held or used by such Grantor is invalid or
unenforceable; and
(v) no effective security interest or other Lien
covering all or any part of the Intellectual Property Collateral is on
file in the United States Patent and Trademark Office or the United
States Copyright Office.
(h) Perfection. The security interests in the Collateral
granted to Secured Party for the ratable benefit of the Lenders and Interest
Rate Hedgers hereunder constitute valid security interests in the Collateral,
securing the payment of the Secured Obligations. Upon (i) the filing of UCC
financing statements naming each Grantor as "debtor", naming Secured Party as
"secured party" and describing the Collateral in the filing offices with respect
to such Grantor set forth on Schedule 4(i), (ii) in the case of the Securities
Collateral consisting of certificated securities or evidenced by instruments,
delivery of the certificates representing such certificated securities and
delivery of such instruments to Secured Party, in each case duly endorsed or
accompanied by duly executed instruments of assignment or transfer in blank,
(iii) in the case of the Intellectual Property Collateral, in addition to the
filing of such UCC financing statements, the filing of a Grant of Trademark
Security Interest, substantially in the form of Exhibit I, and a Grant of Patent
Security Interest, substantially in the form of Exhibit II, with the United
States Patent and Trademark Office and the filing of a Grant of Copyright
Security
9
Interest, substantially in the form of Exhibit III, with the United
States Copyright Office (each such Grant of Trademark Security Interest, Grant
of Patent Security Interest and Grant of Copyright Security Interest being
referred to herein as a "Grant"), and (iv) in the case of Equipment that is
covered by a certificate of title, the filing with the registrar of motor
vehicles or other appropriate authority in the applicable jurisdiction of an
application requesting the notation of the security interest created hereunder
on such certificate of title, the security interests in the Collateral granted
to Secured Party for the ratable benefit of the Lenders and Interest Rate
Hedgers will constitute perfected security interests therein prior to all other
Liens (except in the case of clauses (i), (iii) and (iv) above for Liens
permitted pursuant to Section 10.3 of the Credit Agreement), and all filings and
other actions necessary or desirable to perfect and protect such security
interest have been duly made or taken.
Section 5. Further Assurances.
-------------------
(a) Generally. Each Grantor agrees that from time to time, at
the expense of Grantors, such Grantor will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that Secured Party may request, in order to perfect
and protect any security interest granted or purported to be granted hereby or
to enable Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, each Grantor will: (i) at the request of Secured Party, xxxx
conspicuously each item of chattel paper included in the Accounts, and, at the
request of Secured Party, each of its books and records pertaining to the
Collateral, with a legend, in form and substance satisfactory to Secured Party,
indicating that such Collateral is subject to the security interest granted
hereby, (ii) at the request of Secured Party, deliver and pledge to Secured
Party hereunder all promissory notes and other instruments (including checks)
and all original counterparts of chattel paper constituting Collateral, duly
endorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance satisfactory to Secured Party, (iii) execute and file
such financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as Secured Party
may request, in order to perfect and preserve the security interests granted or
purported to be granted hereby, (iv) furnish to Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail, (v) promptly after the acquisition
by such Grantor of any item of Equipment with a fair market value in excess of
$25,000 that is covered by a certificate of title under a statute of any
jurisdiction under the law of which indication of a security interest on such
certificate is required as a condition of perfection thereof, execute and file
with the registrar of motor vehicles or other appropriate authority in such
jurisdiction an application or other document requesting the notation or other
indication of the security interest created hereunder on such certificate of
title, (vi) within thirty (30) days after the end of each calendar quarter,
deliver to Secured Party copies of all such applications or other documents
filed during such calendar quarter and copies of all such certificates of title
issued during such calendar quarter indicating the security interest created
hereunder in the items of Equipment covered thereby, (vii) at any reasonable
time, upon request by Secured Party, exhibit the Collateral to and allow
inspection of the Collateral by Secured Party, or persons designated by Secured
Party, (viii) at Secured Party's request, appear in and defend any action or
proceeding that may affect such Grantor's title to or Secured Party's security
interest in all or any part of the Collateral, and (ix) use commercially
10
reasonable efforts to obtain any necessary consents of third parties to the
assignment and perfection of a security interest to Secured Party with respect
to any Collateral. Each Grantor hereby authorizes Secured Party to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of any Grantor. Each
Grantor agrees that a carbon, photographic or other reproduction of this
Agreement or of a financing statement signed by such Grantor shall be sufficient
as a financing statement and may be filed as a financing statement in any and
all jurisdictions.
(b) Securities Collateral. Without limiting the generality of
the foregoing Section 5(a), each Grantor agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged hereunder,
promptly (and in any event within five (5) Business Days) deliver to Secured
Party a Pledge Supplement, duly executed by such Grantor, in substantially the
form of Exhibit IV (a "Pledge Supplement"), in respect of the additional Pledged
Shares or Pledged Debt to be pledged pursuant to this Agreement. Upon each
delivery of a Pledge Supplement to Secured Party, the representations and
warranties contained in clauses (i)-(iv) of Section 4(g) hereof shall be deemed
to have been made by such Grantor as to the Securities Collateral described in
such Pledge Supplement as of the date thereof. Each Grantor hereby authorizes
Secured Party to attach each Pledge Supplement to this Agreement and agrees that
all Pledged Shares or Pledged Debt of such Grantor listed on any Pledge
Supplement shall for all purposes hereunder be considered Collateral of such
Grantor; provided, the failure of any Grantor to execute a Pledge Supplement
with respect to any additional Pledged Shares or Pledged Debt pledged pursuant
to this Agreement shall not impair the security interest of Secured Party
therein or otherwise adversely affect the rights and remedies of Secured Party
hereunder with respect thereto.
(c) Intellectual Property Collateral. Without limiting the
generality of the foregoing Section 5(a), if any Grantor shall hereafter obtain
rights to any new Intellectual Property Collateral or become entitled to the
benefit of (i) any patent application or patent or any reissue, division,
continuation, renewal, extension or continuation-in-part of any Patent or any
improvement of any Patent or (ii) any Copyright Registration, application for
Copyright Registration or renewals or extension of any Copyright, then in any
such case, the provisions of this Agreement shall automatically apply thereto.
Each Grantor shall promptly notify Secured Party in writing of any of the
foregoing rights acquired by such Grantor after the date hereof and of (i) any
Trademark Registrations issued or application for a Trademark Registration or
application for a Patent made, and (ii) any Copyright Registrations issued or
applications for Copyright Registration made, in any such case, after the date
hereof. Promptly after the filing of an application for any (1) Trademark
Registration; (2) Patent; and (3) Copyright Registration, each Grantor shall (x)
to the extent not executed and delivered to Secured Party on the date hereof,
execute and deliver an applicable Grant to Secured Party and record in all
relevant places indicated in Section 4(h) or (y) execute and deliver to Secured
Party and record in all places where a Grant is already recorded an IP
Supplement, substantially in the form of Exhibit VI (an "IP Supplement"), in
each case pursuant to which such Grantor shall grant to Secured Party a security
interest to the extent of its interest in such Intellectual Property Collateral;
provided, if, in the reasonable judgment of such Grantor, after due inquiry,
granting such interest would result in the grant of a Trademark Registration or
Copyright Registration in the name of Secured Party, such Grantor shall give
written notice to Secured Party as soon as reasonably practicable and the filing
shall instead be undertaken as soon as practicable but in no case later than
immediately
11
following the grant of the applicable Trademark Registration or Copyright
Registration, as the case may be. Upon delivery to Secured Party of an IP
Supplement, Schedules 1(f)(i), 1(f)(ii), and 1(f)(iii) hereto and Schedule A to
each Grant, as applicable, shall be deemed modified to include reference to any
right, title or interest in any existing Intellectual Property Collateral or any
Intellectual Property Collateral included on Schedule A to such IP Supplement.
Each Grantor hereby authorizes Secured Party to modify this Agreement without
the signature or consent of any Grantor by attaching Schedules 1(f)(i),
1(f)(ii), and 1(f)(iii), as applicable, that have been modified to include such
Intellectual Property Collateral or to delete any reference to any right, title
or interest in any Intellectual Property Collateral in which any Grantor no
longer has or claims any right, title or interest; provided, the failure of any
Grantor to execute an IP Supplement with respect to any additional Intellectual
Property Collateral pledged pursuant to this Agreement shall not impair the
security interest of Secured Party therein or otherwise adversely affect the
rights and remedies of Secured Party hereunder with respect thereto.
Section 6. Certain Covenants of Grantors.
------------------------------
Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or
in violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;
(b) notify Secured Party of any change in such Grantor's name,
identity or corporate structure within fifteen (15) days of such change;
(c) give Secured Party thirty (30) days' prior written notice
of any change in such Grantor's chief place of business, chief executive office
or residence or the office where such Grantor keeps its records regarding the
Accounts and all originals of all chattel paper that evidence Accounts;
(d) if Secured Party gives value to enable such Grantor to
acquire rights in or the use of any Collateral, use such value for such
purposes; and
(e) except as expressly permitted by the Credit Agreement, pay
promptly when due all property and other taxes, assessments and governmental
charges or levies imposed upon, and all claims (including claims for labor,
services, materials and supplies) against, the Collateral, except to the extent
the validity thereof is being contested in good faith; provided that such
Grantor shall in any event pay such taxes, assessments, charges, levies or
claims not later than five days prior to the date of any proposed sale under any
judgment, writ or warrant of attachment entered or filed against such Grantor or
any of the Collateral as a result of the failure to make such payment.
Section 7. Special Covenants With Respect to Equipment and
-----------------------------------------------
Inventory.
----------
Each Grantor shall:
(a) keep the Equipment and Inventory owned by such Grantor at
the places therefor specified on Schedule 4(b) or, upon thirty (30) days' prior
written notice to Secured
12
Party, at such other places in jurisdictions where all action that may be
necessary or desirable, or that Secured Party may request, in order to perfect
and protect any security interest granted or purported to be granted hereby, or
to enable Secured Party to exercise and enforce its rights and remedies
hereunder, with respect to such Equipment and Inventory shall have been taken;
(b) cause the Equipment owned by such Grantor to be maintained
and preserved in the same condition, repair and working order as when new,
ordinary wear and tear excepted, and in accordance with such Grantor's past
practices, and shall forthwith make or cause to be made all repairs,
replacements and other improvements in connection therewith that are necessary
or desirable to such end. Each Grantor shall promptly furnish to Secured Party a
statement respecting any material loss or damage to any of the Equipment owned
by such Grantor;
(c) keep correct and accurate records of Inventory owned by
such Grantor, itemizing and describing the kind, type and quantity of such
Inventory, such Grantor's cost therefor and (where applicable) the current list
prices for such Inventory;
(d) if any Inventory is in possession or control of any of
such Grantor's agents or processors, if the aggregate book value of all such
Inventory exceeds $50,000, and in any event upon the occurrence of an Event of
Default (as defined in Section 16(a)), instruct such agent or processor to hold
all such Inventory for the account of Secured Party and subject to the
instructions of Secured Party;
(e) promptly upon the issuance and delivery to such Grantor of
any Negotiable Document of Title, deliver such Negotiable Document of Title to
Secured Party; and
(f) each Grantor shall, at its own expense, maintain insurance
with respect to the Equipment and Inventory in accordance with the terms of the
Credit Agreement.
Section 8. Special Covenants with respect to Accounts and
----------------------------------------------
Related Contracts.
------------------
(a) Each Grantor shall keep its chief place of business and
chief executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the locations therefor set forth on Schedule 4(d) or, upon
thirty (30) days' prior written notice to Secured Party, at such other location
in a jurisdiction where all action that may be necessary or desirable, or that
Secured Party may request, in order to perfect and protect any security interest
granted or purported to be granted hereby, or to enable Secured Party to
exercise and enforce its rights and remedies hereunder, with respect to such
Accounts and Related Contracts shall have been taken. Each Grantor will hold and
preserve such records and chattel paper and will permit representatives of
Secured Party at any time during normal business hours to inspect and make
abstracts from such records and chattel paper, and each Grantor agrees to render
to Secured Party, at Grantor's cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto. Promptly upon the
request of Secured Party, each Grantor shall deliver to Secured Party complete
and correct copies of each Related Contract.
13
(b) Each Grantor shall, for not less than three (3) years from
the date on which each Account of such Grantor arose, maintain (i) complete
records of such Account, including records of all payments received, credits
granted and merchandise returned, and (ii) all documentation relating thereto.
(c) Except as otherwise provided in this subsection (c), each
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to such Grantor under the Accounts and Related Contracts. In
connection with such collections, each Grantor may take (and, at Secured Party's
direction, shall take) such action as such Grantor or Secured Party may deem
necessary or advisable to enforce collection of amounts due or to become due
under the Accounts; provided, however, that Secured Party shall have the right
at any time, upon the occurrence and during the continuation of an Event of
Default or a Default and upon written notice to such Grantor of its intention to
do so, to notify the account debtors or obligors under any Accounts of the
assignment of such Accounts to Secured Party and to direct such account debtors
or obligors to make payment of all amounts due or to become due to such Grantor
thereunder directly to Secured Party, to notify each Person maintaining a
lockbox or similar arrangement to which account debtors or obligors under any
Accounts have been directed to make payment to remit all amounts representing
collections on checks and other payment items from time to time sent to or
deposited in such lockbox or other arrangement directly to Secured Party and,
upon such notification and at the expense of Grantors, to enforce collection of
any such Accounts and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as such Grantor might have
done. After receipt by such Grantor of the notice from Secured Party referred to
in the proviso to the preceding sentence, (i) all amounts and proceeds
(including checks and other instruments) received by such Grantor in respect of
the Accounts and the Related Contracts shall be received in trust for the
benefit of Secured Party hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith paid over or delivered to Secured Party in the
same form as so received (with any necessary endorsement) to be held as cash
Collateral and applied as provided by Section 18, and (ii) such Grantor shall
not adjust, settle or compromise the amount or payment of any Account, or
release wholly or partly any account debtor or obligor thereof, or allow any
credit or discount thereon.
Section 9. Special Covenants With Respect to the Securities
------------------------------------------------
Collateral.
-----------
(a) Delivery. Each Grantor agrees that, to the extent not
previously delivered to Secured Party pursuant to the Existing Pledge
Agreements, all certificates or instruments representing or evidencing the
Securities Collateral shall be delivered to and held by or on behalf of Secured
Party pursuant hereto and shall be in suitable form for transfer by delivery or,
as applicable, shall be accompanied by such Grantor's endorsement, where
necessary, or duly executed instruments of transfer or assignment in blank and a
duly executed irrevocable proxy substantially in the form of Exhibit V, all in
form and substance satisfactory to Secured Party. Secured Party shall have the
right at any time to exchange certificates or instruments representing or
evidencing Securities Collateral for certificates or instruments of smaller or
larger denominations.
(b) Covenants. Each Grantor shall (i) not, except as expressly
permitted by the Credit Agreement, permit any issuer of Pledged Shares to merge
or consolidate unless all the outstanding capital stock or other equity
interests of the surviving or resulting Person is, upon
14
such merger or consolidation, pledged hereunder and no cash, securities or other
property is distributed in respect of the outstanding shares of any other
constituent corporation; provided, if the surviving or resulting Person upon any
such merger or consolidation involving an issuer of Pledged Shares which is a
controlled foreign corporation, then such Grantor shall only be required to
pledge outstanding capital stock of such surviving or resulting Person
possessing up to but not exceeding 65% of the voting power of all classes of
capital stock of such issuer entitled to vote; (ii) cause each issuer of Pledged
Shares not to issue any stock, other equity interests or other securities in
addition to or in substitution for the Pledged Shares issued by such issuer,
except to such Grantor; (iii) pledge hereunder, immediately upon its acquisition
(directly or indirectly) thereof, any and all additional shares of stock, other
equity interests or other securities of each issuer of Pledged Shares; (iv)
pledge hereunder, immediately upon its acquisition (directly or indirectly)
thereof, any and all shares of stock or other equity interests of any Person
that, after the date of this Agreement, becomes, as a result of any occurrence,
a direct Subsidiary of such Grantor; provided, notwithstanding anything
contained in this clause (iv) to the contrary, such Grantor shall only be
required to pledge the outstanding capital stock of a controlled foreign
corporation possessing up to but not exceeding 65% of the voting power of all
classes of capital stock of such controlled foreign corporation entitled to
vote; (v) pledge hereunder, immediately upon their issuance, any and all
instruments or other evidences of additional indebtedness from time to time owed
to such Grantor by any obligor on the Pledged Debt; (vi) pledge hereunder,
immediately upon their issuance, any and all instruments or other evidences of
indebtedness from time to time owed to such Grantor by any Person that after the
date of this Agreement becomes, as a result of any occurrence, a direct or
indirect Subsidiary of such Grantor; (vii) promptly notify Secured Party of any
event of which such Grantor becomes aware causing loss or depreciation in the
value of the Securities Collateral; (viii) promptly deliver to Secured Party all
written notices received by it with respect to the Securities Collateral; and
(ix), at the request of Secured Party, promptly execute and deliver to Secured
Party an agreement providing for the control, as that term is defined in the
UCC, by Secured Party of all securities entitlements and securities accounts of
such Grantor. Each Grantor hereby agrees that all Pledged Debt is hereby
subordinated in right of payment to the payment in full of the Obligations and
the amount of any such Pledged Debt shall be automatically and simultaneously
reduced and discharged pro tanto by the amount of any payment by the obligor
thereunder under the Subsidiary Guaranty or any guaranty of the Obligations.
(c) Voting and Distributions; IRREVOCABLE PROXY. So long as no
Event of Default shall have occurred and be continuing, (i) each Grantor shall
be entitled to exercise any and all voting and other consensual rights
pertaining to the Securities Collateral or any part thereof for any purpose not
inconsistent with the terms of this Agreement or the Credit Agreement; provided,
no Grantor shall exercise or refrain from exercising any such right if Secured
Party shall have notified such Grantor that, in Secured Party's judgment, such
action would have a material adverse effect on the value of the Securities
Collateral or any part thereof; and provided further, such Grantor shall give
Secured Party at least five (5) Business Days' prior written notice of the
manner in which it intends to exercise, or the reasons for refraining from
exercising, any such right (it being understood, however, that neither (A) the
voting by such Grantor of any Pledged Shares for or such Grantor's consent to
the election of directors or other members of a governing body of an issuer of
Pledged Shares at a regularly scheduled annual or other meeting of stockholders
or holders of equity interests or with respect to incidental matters at any such
meeting, nor (B) such Grantor's consent to or approval of any action otherwise
15
permitted under this Agreement and the Credit Agreement shall be deemed
inconsistent with the terms of this Agreement or the Credit Agreement within the
meaning of this Section, and no notice of any such voting or consent need be
given to Secured Party); (ii) each Grantor shall be entitled to receive and
retain, and to utilize free and clear of the lien of this Agreement, any and all
dividends, other distributions and interest paid in respect of the Securities
Collateral; provided, any and all (A) dividends, distributions and interest paid
or payable other than in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of, or in exchange for,
any Securities Collateral, (B) dividends and other distributions paid or payable
in cash in respect of any Securities Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus, and (C) cash paid, payable or otherwise
distributed in respect of principal or in redemption of or in exchange for any
Securities Collateral, shall be, and shall forthwith be delivered to Secured
Party to hold as, Securities Collateral and shall, if received by such Grantor,
be received in trust for the benefit of Secured Party, be segregated from the
other property or funds of such Grantor and be forthwith delivered to Secured
Party as Securities Collateral in the same form as so received (with all
necessary endorsements); and (iii) Secured Party shall promptly execute and
deliver (or cause to be executed and delivered) to such Grantor all such
proxies, dividend payment orders and other instruments as such Grantor may from
time to time reasonably request for the purpose of enabling such Grantor to
exercise the voting and other consensual rights which it is entitled to exercise
pursuant to clause (i) above and to receive the dividends, distributions,
principal or interest payments which it is authorized to receive and retain
pursuant to clause (ii) above.
Upon the occurrence and during the continuation of an Event of
Default, (x) upon written notice from Secured Party to any Grantor, all rights
of such Grantor to exercise the voting and other consensual rights which it
would otherwise be entitled to exercise pursuant hereto shall cease, and all
such rights shall thereupon become vested in Secured Party who shall thereupon
have the sole right to exercise such voting and other consensual rights; (y) all
rights of such Grantor to receive the dividends, other distributions and
interest payments which it would otherwise be authorized to receive and retain
pursuant hereto shall cease, and all such rights shall thereupon become vested
in Secured Party who shall thereupon have the sole right to receive and hold as
Securities Collateral such dividends, other distributions and interest payments;
and (z) all dividends, principal, interest payments and other distributions
which are received by such Grantor contrary to the provisions of clause (ii) of
the immediately preceding paragraph or clause (y) above shall be received in
trust for the benefit of Secured Party, shall be segregated from other funds of
such Grantor and shall forthwith be paid over to Secured Party as Securities
Collateral in the same form as so received (with any necessary endorsements).
IRREVOCABLE PROXY
-----------------
In order to permit Secured Party to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant hereto and
to receive all dividends and other distributions which it may be entitled to
receive hereunder, (I) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to Secured Party all such proxies, dividend
payment orders and other instruments as Secured Party may from time to time
reasonably request, and (II) without limiting the effect of clause (I) above or
of any irrevocable proxy delivered pursuant to Section 9(a), each Grantor hereby
grants to Secured Party an
16
IRREVOCABLE PROXY to vote the Pledged Shares and to exercise all other rights,
powers, privileges and remedies to which a holder of the Pledged Shares would be
entitled (including giving or withholding written consents of shareholders or
other holders of equity interests, calling special meetings of shareholders or
other holders of equity interests and voting at such meetings), which proxy
shall be effective, automatically and without the necessity of any action
(including any transfer of any Pledged Shares on the record books of the issuer
thereof) by any other Person (including the issuer of the Pledged Shares or any
officer or agent thereof), upon the occurrence of an Event of Default and which
proxy shall only terminate upon the payment in full of the Secured Obligations.
Section 10. Special Covenants With Respect to the Intellectual
--------------------------------------------------
Property Collateral.
--------------------
(a) Each Grantor shall:
(i) diligently keep reasonable records respecting the
Intellectual Property Collateral and at all times keep at least one
complete set of its records concerning such Collateral at its chief
executive office or principal place of business;
(ii) use best efforts so as not to permit the inclusion
in any contract to which it hereafter becomes a party of any provision
that could or might in any way impair or prevent the creation of a
security interest in, or the assignment of, such Grantor's rights and
interests in any property included within the definitions of any
Intellectual Property Collateral acquired under such contracts;
(iii) take any and all reasonable steps to protect the
secrecy of all trade secrets relating to the products and services sold
or delivered under or in connection with the Intellectual Property
Collateral, including, without limitation, where appropriate entering
into confidentiality agreements with employees and labeling and
restricting access to secret information and documents;
(iv) use proper statutory notice in connection with its
use of any of the Intellectual Property Collateral;
(v) use a commercially appropriate standard of quality
(which may be consistent with such Grantor's past practices) in the
manufacture, sale and delivery of products and services sold or
delivered under or in connection with the Trademarks; and
(vi) furnish to Secured Party from time to time at
Secured Party's reasonable request statements and schedules further
identifying and describing any Intellectual Property Collateral and
such other reports in connection with such Collateral, all in
reasonable detail.
(b) Except as otherwise provided in this Section 10, each
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to such Grantor in respect of the Intellectual Property Collateral or
any portion thereof. In connection with such collections, each Grantor may take
(and, at Secured Party's reasonable direction, shall take) such action as such
Grantor or Secured Party may deem reasonably necessary or advisable to enforce
collection of
17
such amounts; provided, Secured Party shall have the right at any time, upon the
occurrence and during the continuation of an Event of Default and upon written
notice to such Grantor of its intention to do so, to notify the obligors with
respect to any such amounts of the existence of the security interest created
hereby and to direct such obligors to make payment of all such amounts directly
to Secured Party, and, upon such notification and at the expense of such
Grantor, to enforce collection of any such amounts and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. After receipt by any Grantor of the
notice from Secured Party referred to in the proviso to the preceding sentence
and during the continuation of any Event of Default, (i) all amounts and
proceeds (including checks and other instruments) received by each Grantor in
respect of amounts due to such Grantor in respect of the Intellectual Property
Collateral or any portion thereof shall be received in trust for the benefit of
Secured Party hereunder, shall be segregated from other funds of such Grantor
and shall be forthwith paid over or delivered to Secured Party in the same form
as so received (with any necessary endorsement) to be held as cash Collateral
and applied as provided by Section 18, and (ii) such Grantor shall not adjust,
settle or compromise the amount or payment of any such amount or release wholly
or partly any obligor with respect thereto or allow any credit or discount
thereon.
(c) Each Grantor shall have the duty diligently to prosecute,
file and/or make, unless and until such Grantor, in such Grantor's commercially
reasonable judgment, decides otherwise, (i) any application relating to any of
the Intellectual Property Collateral owned, held or used by such Grantor and
identified on Schedules 1(f)(i), 1(f)(ii) or 1(f)(iii), as applicable, that is
pending as of the date of this Agreement, (ii) any Copyright Registration on any
existing or future unregistered but copyrightable works (except for works of
nominal commercial value or with respect to which such Grantor has determined in
the exercise of its commercially reasonable judgment that it shall not seek
registration), (iii) application on any future patentable but unpatented
innovation or invention comprising Intellectual Property Collateral, and (iv)
any Trademark opposition and cancellation proceedings, renew Trademark
Registrations and Copyright Registrations and do any and all acts which are
necessary or desirable to preserve and maintain all rights in all Intellectual
Property Collateral. Any expenses incurred in connection therewith shall be
borne solely by Grantors. Subject to the foregoing, each Grantor shall give
Secured Party prior written notice of any abandonment of any Intellectual
Property Collateral or any pending patent application or any Patent.
(d) Except as provided herein, each Grantor shall have the
right to commence and prosecute in its own name, as real party in interest, for
its own benefit and at its own expense, such suits, proceedings or other actions
for infringement, unfair competition, dilution, misappropriation or other
damage, or reexamination or reissue proceedings as are necessary to protect the
Intellectual Property Collateral. Secured Party shall provide, at such Grantor's
expense, all reasonable and necessary cooperation in connection with any such
suit, proceeding or action including, without limitation, joining as a necessary
party. Each Grantor shall promptly, following its becoming aware thereof, notify
Secured Party of the institution of, or of any adverse determination in, any
proceeding (whether in the United States Patent and Trademark Office, the United
States Copyright Office or any federal, state, local or foreign court) or
regarding such Grantor's ownership, right to use, or interest in any
Intellectual Property Collateral. Each Grantor shall provide to Secured Party
any information with respect thereto requested by Secured Party.
18
(e) In addition to, and not by way of limitation of, the
granting of a security interest in the Collateral pursuant hereto, each Grantor,
effective upon the occurrence and during the continuation of an Event of
Default, hereby assigns, transfers and conveys to Secured Party the nonexclusive
right and license to use all trademarks, tradenames, copyrights, patents or
technical processes (including, without limitation, the Intellectual Property
Collateral) owned or used by such Grantor that relate to the Collateral and any
other collateral granted by such Grantor as security for the Secured
Obligations, together with any goodwill associated therewith, all to the extent
necessary to enable Secured Party to realize on the Collateral in accordance
with this Agreement and to enable any transferee or assignee of the Collateral
to enjoy the benefits of the Collateral. This right shall inure to the benefit
of Secured Party and its successors, assigns and transferees, whether by
voluntary conveyance, operation of law, assignment, transfer, foreclosure, deed
in lieu of foreclosure or otherwise. Such right and license shall be granted
free of charge, without requirement that any monetary payment whatsoever be made
to such Grantor. In addition, each Grantor hereby grants to Secured Party and
its employees, representatives and agents the right to visit such Grantor's and
any of its Affiliate's or subcontractor's plants, facilities and other places of
business that are utilized in connection with the manufacture, production,
inspection, storage or sale of products and services sold or delivered under any
of the Intellectual Property Collateral (or which were so utilized during the
prior six month period), and to inspect the quality control and all other
records relating thereto upon reasonable advance written notice to such Grantor
and at reasonable dates and times and as often as may be reasonably requested.
If and to the extent that any Grantor is permitted to license the Intellectual
Property Collateral, Secured Party shall promptly enter into a non-disturbance
agreement or other similar arrangement, at such Grantor's request and expense,
with such Grantor and any licensee of any Intellectual Property Collateral
permitted hereunder in form and substance reasonably satisfactory to Secured
Party pursuant to which (i) Secured Party shall agree not to disturb or
interfere with such licensee's rights under its license agreement with such
Grantor so long as such licensee is not in default thereunder, and (ii) such
licensee shall acknowledge and agree that the Intellectual Property Collateral
licensed to it is subject to the security interest created in favor of Secured
Party and the other terms of this Agreement.
Section 11. [Reserved].
-----------
Section 12. Collateral Account; Subaccounts.
--------------------------------
(a) Collateral Account. Secured Party is hereby authorized to
establish and maintain at its office at 000 X. Xxxxxxx Xxxxxx XX-0, Xxxxxxxxx,
XX 00000-0000 as a blocked account in the name of the Borrower and under the
sole dominion and control of Secured Party, a restricted deposit account,
account number 003-2000007061655, designated as "HealthPlan Services Collateral
Account." All amounts at any time held in the Collateral Account, including the
Subaccounts, shall be beneficially owned by Grantors but shall be held in the
name of Secured Party hereunder, for the benefit of Lenders, as collateral
security for the Secured Obligations upon the terms and conditions set forth
herein. Grantors shall have no right to withdraw, transfer or, except as
expressly set forth herein, otherwise receive any funds deposited into the
Collateral Account, including the Subaccounts. Anything contained herein to the
contrary notwithstanding, the Collateral Account, including the Subaccounts,
shall be subject to such applicable laws, and such applicable regulations of the
Board of Governors of the Federal Reserve System and of any other appropriate
banking or governmental authority, as may now or
19
hereafter be in effect. All deposits of funds in the Collateral Account,
including the Subaccounts, shall be made by wire transfer (or, if applicable, by
intra-bank transfer from another account of a Grantor) of immediately available
funds, in each case addressed in accordance with instructions of Secured Party.
Each Grantor shall, promptly after initiating a transfer of funds to the
Collateral Account or any Subaccount, give notice to Secured Party by
telefacsimile of the date, amount and method of delivery of such deposit (the
"Notice of Deposit"). Cash held by Secured Party in the Collateral Account,
including the Subaccounts, shall not be invested by Secured Party but instead
shall be maintained as a cash deposit in the Collateral Account or Subaccount,
as applicable, pending application thereof as elsewhere provided in this
Agreement. To the extent permitted under Regulation Q of the Board of Governors
of the Federal Reserve System, any cash held in the Collateral Account,
including the Subaccounts, shall bear interest at the standard rate paid by
Secured Party to its customers for deposits of like amounts and terms. Subject
to Secured Party's rights hereunder, any interest earned on deposits of cash in
the Collateral Account, including the Subaccounts, shall be deposited directly
in, and held in the Collateral Account or the respective Subaccount.
(b) Subaccounts.
-----------
(i) Secured Party is hereby authorized to establish and
maintain a Subaccount of the Collateral Account, account number
003-2000007061668, designated as "Net Insurance/Condemnation Proceeds
Subaccount," for which activity relating to Net Insurance/Condemnation
Proceeds shall be separately recorded, established and maintained
pursuant to this Section 12. In addition to the terms and conditions
set forth above in subsection (a), each Grantor shall include in any
Notice of Deposit to Secured Party relating to Net
Insurance/Condemnation Proceeds a detailed description of the assets in
respect of which such Net Insurance/Condemnation Proceeds being
deposited were received. Each Grantor shall also indicate in the Notice
of Deposit that such funds are to be deposited in the Net
Insurance/Condemnation Proceeds Subaccount. So long as no Default or
Event of Default has occurred and is continuing, all proceeds deposited
into the Net Insurance/Condemnation Proceeds Subaccount shall be
disbursed by Secured Party to the Borrower for sole purpose of
repairing, restoring or replacing the assets in respect of which such
Net Insurance/Condemnation Proceeds are received or for such other
purposes permitted by the terms of the Credit Agreement and acceptable
to Secured Party; provided, however that if at any time the Secured
Party reasonably determines that such repair, restoration or
replacement cannot be completed with the Net Insurance/Condemnation
Proceeds then held by Secured Party for such purpose, together with
funds otherwise available to the Borrower for such purpose, or that
such repair, restoration or replacement cannot be completed within one
hundred eighty (180) days after the receipt of such Net
Insurance/Condemnation Proceeds, and if any such amounts remain on
deposit in the Collateral Account after such one hundred eighty (180)
day period, then such Net Insurance/Condemnation Proceeds shall be
applied by the Secured Party to prepay the Loans (and/or the Revolving
Loan Commitments shall be reduced) as provided in Section 2.3(b) of the
Credit Agreement.
(ii) Secured Party is hereby authorized to establish and
maintain a subaccount of the Collateral Account, account number
003-2000007061671, designated as "L/C Cash Collateral Subaccount," for
which activity relating to all amounts deposited in the
20
Collateral Account for the purpose of cash collateralizing Letters of
Credit shall be separately recorded, established and maintained
pursuant to this Section 12. In addition to the terms and conditions
set forth above in subsection (a), each Grantor shall indicate in any
Notice of Deposit to Secured Party relating to L/C cash collateral that
such funds are to be deposited in the L/C Cash Collateral Subaccount.
Funds deposited in the L/C Cash Collateral Subaccount shall be held as
collateral security for the Secured Obligations; provided, that on any
date the Borrower is required to reimburse the Issuing Lender for a
drawing under a Letter of Credit under Section 3.5 of the Credit
Agreement and so long as no Default or Event of Default has then
occurred and is continuing, the Secured Party shall disburse amounts on
deposit in the L/C Cash Collateral Subaccount to reimburse the Issuing
Lender for the amount of such drawing; so long as, after giving effect
to any such disbursement, the funds then available in the L/C Cash
Collateral Subaccount shall not be less than an amount equal to one
hundred five percent (105%) of the then outstanding L/C Obligations.
Section 13. Secured Party Appointed Attorney-in-Fact.
-----------------------------------------
Each Grantor hereby irrevocably appoints Secured Party as such
Grantor's attorney-in-fact effective upon the occurrence of an Event of Default,
with full authority in the place and stead of such Grantor and in the name of
such Grantor, Secured Party or otherwise, from time to time in Secured Party's
discretion to take any action and to execute any instrument that Secured Party
may deem necessary or advisable to accomplish the purposes of this Agreement,
including without limitation:
(a) to obtain and adjust insurance required to be maintained
by such Grantor or paid to Secured Party pursuant to Section 7;
(b) to ask for, demand, collect, xxx for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses (a) and (b)
above;
(d) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;
(e) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with Accounts and other
documents relating to the Collateral; and
(f) generally to sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral as fully and
completely as though Secured Party were the absolute owner thereof for all
purposes, and to do, at Secured Party's option and Grantors' expense, at any
time or from time to time, all acts and things that Secured Party deems
necessary to protect, preserve or realize upon the Collateral and Secured
Party's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as such Grantor might do.
21
In addition, each Grantor hereby irrevocably appoints Secured
Party as such Grantor's attorney-in-fact, with full authority in the place and
stead of such Grantor and in the name of such Grantor, Secured Party or
otherwise, from time to time in Secured Party's discretion to pay or discharge
taxes or Liens (other than Liens permitted under this Agreement or the Credit
Agreement) levied or placed upon or threatened against the Collateral, the
legality or validity thereof and the amounts necessary to discharge the same to
be determined by Secured Party in its sole discretion, any such payments made by
Secured Party to become obligations of such Grantor to Secured Party, due and
payable immediately without demand.
Section 14. Secured Party May Perform.
--------------------------
If any Grantor fails to perform any agreement contained
herein, Secured Party may itself perform, or cause performance of, such
agreement, and the expenses of Secured Party incurred in connection therewith
shall be payable by Grantors under Section 19(b).
Section 15. Standard of Care.
----------------
The powers conferred on Secured Party hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for monies
actually received by it hereunder, Secured Party shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Secured Party accords its own
property.
Section 16. Remedies.
--------
(a) Generally. If any Event of Default (as defined in the
Credit Agreement) or the occurrence of an Early Termination Date (as defined in
a Master Agreement in the form prepared by the International Swap and
Derivatives Association, Inc. or a similar event under any similar swap
agreement) under any Lender Hedging Agreement (either such occurrence being an
"Event of Default" for purposes of this Agreement) shall have occurred and be
continuing, Secured Party may exercise in respect of the Collateral, in addition
to all other rights and remedies provided for herein or otherwise available to
it, all the rights and remedies of a secured party on default under the UCC
(whether or not the UCC applies to the affected Collateral), and also may (i)
require each Grantor to, and each Grantor hereby agrees that it will at its
expense and upon request of Secured Party forthwith, assemble all or part of the
Collateral as directed by Secured Party and make it available to Secured Party
at a place to be designated by Secured Party that is reasonably convenient to
both parties, (ii) enter onto the property where any Collateral is located and
take possession thereof with or without judicial process, (iii) prior to the
disposition of the Collateral, store, process, repair or recondition the
Collateral or otherwise prepare the Collateral for disposition in any manner to
the extent Secured Party deems appropriate, (iv) take possession of any
Grantor's premises or place custodians in exclusive control thereof, remain on
such premises and use the same and any of such Grantor's equipment for the
purpose of completing any work in process, taking any actions described in the
preceding clause (iii) and collecting any Secured Obligation, (v) without notice
except as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any of
22
Secured Party's offices or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon such other
terms as Secured Party may deem commercially reasonable, (vi) exercise dominion
and control over and refuse to permit further withdrawals from any Deposit
Account maintained with Secured Party or any Lender constituting a part of the
Collateral and (vii) without notice to any Grantor, transfer to or to register
in the name of Secured Party or any of its nominees any or all of the Securities
Collateral. Secured Party or any Lender or Interest Rate Xxxxxx may be the
purchaser of any or all of the Collateral at any such sale and Secured Party, as
agent for and representative of Lenders and Interest Rate Hedgers (but not any
Lender or Interest Rate Xxxxxx in its individual capacity unless Requisite
Obligees (as defined in Section 21(a)) shall otherwise agree in writing), shall
be entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at any such public
sale, to use and apply any of the Secured Obligations as a credit on account of
the purchase price for any Collateral payable by Secured Party at such sale.
Each purchaser at any such sale shall hold the property sold absolutely free
from any claim or right on the part of any Grantor, and each Grantor hereby
waives (to the extent permitted by applicable law) all rights of redemption,
stay and/or appraisal which it now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted. Each Grantor
agrees that, to the extent notice of sale shall be required by law, at least ten
(10) days' notice to such Grantor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute reasonable
notification. Secured Party shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Secured Party may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. Each Grantor hereby waives any
claims against Secured Party arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was less than the
price which might have been obtained at a public sale, even if Secured Party
accepts the first offer received and does not offer such Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all the Secured Obligations, Grantors shall be jointly
and severally liable for the deficiency and the fees of any attorneys employed
by Secured Party to collect such deficiency. Each Grantor further agrees that a
breach of any of the covenants contained in this Section will cause irreparable
injury to Secured Party, that Secured Party has no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant
contained in this Section shall be specifically enforceable against such
Grantor, and each Grantor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no default has occurred giving rise to the Secured Obligations
becoming due and payable prior to their stated maturities.
(b) Securities Collateral.
----------------------
(i) Each Grantor recognizes that, by reason of certain
prohibitions contained in the Securities Act and applicable state
securities laws, Secured Party may be compelled, with respect to any
sale of all or any part of the Securities Collateral conducted without
prior registration or qualification of such Securities Collateral under
the Securities Act and/or such state securities laws, to limit
purchasers to those who will agree, among other things, to acquire the
Securities Collateral for their own account, for investment and not
with a view to the distribution or resale thereof. Each Grantor
23
acknowledges that any such private sales may be at prices and on terms
less favorable than those obtainable through a public sale without such
restrictions (including a public offering made pursuant to a
registration statement under the Securities Act) and, notwithstanding
such circumstances and the registration rights granted to Secured Party
by such Grantor pursuant hereto, each Grantor agrees that any such
private sale shall be deemed to have been made in a commercially
reasonable manner and that Secured Party shall have no obligation to
engage in public sales and no obligation to delay the sale of any
Securities Collateral for the period of time necessary to permit the
issuer thereof to register it for a form of public sale requiring
registration under the Securities Act or under applicable state
securities laws, even if such issuer would, or should, agree to so
register it. If Secured Party determines to exercise its right to sell
any or all of the Securities Collateral, upon written request, each
Grantor shall and shall cause each issuer of any Pledged Shares to be
sold hereunder from time to time to furnish to Secured Party all such
information as Secured Party may request in order to determine the
number of shares and other instruments included in the Securities
Collateral which may be sold by Secured Party in exempt transactions
under the Securities Act and the rules and regulations of the
Securities and Exchange Commission thereunder, as the same are from
time to time in effect.
(ii) If Secured Party shall determine to exercise its
right to sell all or any of the Securities Collateral pursuant to this
Section, each Grantor agrees that, upon request of Secured Party (which
request may be made by Secured Party in its sole discretion), such
Grantor will, at its own expense (A) execute and deliver, and cause
each issuer of the Securities Collateral contemplated to be sold and
the directors and officers thereof to execute and deliver, all such
instruments and documents, and do or cause to be done all such other
acts and things, as may be necessary or, in the opinion of Secured
Party, advisable to register such Securities Collateral under the
provisions of the Securities Act and to cause the registration
statement relating thereto to become effective and to remain effective
for such period as prospectuses are required by law to be furnished,
and to make all amendments and supplements thereto and to the related
prospectus which, in the opinion of Secured Party, are necessary or
advisable, all in conformity with the requirements of the Securities
Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto; (B) use its best efforts to qualify the
Securities Collateral under all applicable state securities or "Blue
Sky" laws and to obtain all necessary governmental approvals for the
sale of the Securities Collateral, as requested by Secured Party; (C)
cause each such issuer to make available to its security holders, as
soon as practicable, an earnings statement which will satisfy the
provisions of Section 11(a) of the Securities Act; (D) do or cause to
be done all such other acts and things as may be necessary to make such
sale of the Securities Collateral or any part thereof valid and binding
and in compliance with applicable law; and (E) bear all costs and
expenses, including reasonable attorneys' fees, of carrying out its
obligations under this Section.
(iii) Without limiting the generality of Section 13.2 of
the Credit Agreement, in the event of any public sale described herein,
each Grantor agrees to indemnify and hold harmless Secured Party, and
each Lender and each Interest Rate Xxxxxx and each of their respective
directors, officers, employees and agents from and
24
against any loss, fee, cost, expense, damage, liability or claim, joint
or several, to which any such Persons may become subject or for which
any of them may be liable, under the Securities Act or otherwise,
insofar as such losses, fees, costs, expenses, damages, liabilities or
claims (or any litigation commenced or threatened in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus,
registration statement, prospectus or other such document published or
filed in connection with such public sale, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
will reimburse Secured Party and such other Persons for any legal or
other expenses reasonably incurred by Secured Party and such other
Persons in connection with any litigation, of any nature whatsoever,
commenced or threatened in respect thereof (including any and all fees,
costs and expenses whatsoever reasonably incurred by Secured Party and
such other Persons and counsel for Secured Party and such other Persons
in investigating, preparing for, defending against or providing
evidence, producing documents or taking any other action in respect of,
any such commenced or threatened litigation or any claims asserted).
This indemnity shall be in addition to any liability which any Grantor
may otherwise have and shall extend upon the same terms and conditions
to each Person, if any, that controls Secured Party or such Persons
within the meaning of the Securities Act.
(c) Collateral Account. If an Event of Default has occurred
and is continuing and, in accordance with Section 11.2(b) of the Credit
Agreement, the Borrower is required to pay to Secured Party an amount (the
"Aggregate Available Amount") equal to one hundred five percent (105%) of the
aggregate then undrawn and unexpired amount of all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to Section 11.2(a) of the Credit Agreement, the Borrower
shall deliver funds in such an amount for deposit in the Collateral Account for
the account of the L/C Cash Collateral Subaccount. If for any reason the
aggregate amount delivered by the Borrower for deposit in the Collateral Account
as aforesaid is less than the Aggregate Available Amount, the aggregate amount
so delivered by the Borrower shall be apportioned among all outstanding Letters
of Credit for purposes of this Section in accordance with the ratio of the
maximum amount available for drawing under each such Letter of Credit (as to
such Letter of Credit, the "Maximum Available Amount") to the Aggregate
Available Amount. Upon any drawing under any outstanding Letter of Credit in
respect of which the Borrower has deposited in the Collateral Account any
amounts described above, Secured Party shall apply such amounts to reimburse the
Issuing Lender for the amount of such drawing. In the event of cancellation or
expiration of any Letter of Credit in respect of which the Borrower has
deposited in the Collateral Account any amounts described above, or in the event
of any reduction in the Maximum Available Amount under such Letter of Credit,
Secured Party shall apply the amount then on deposit in the Collateral Account
in respect of such Letter of Credit (less, in the case of such a reduction, the
Maximum Available Amount under such Letter of Credit immediately after such
reduction) first, to the payment of any amounts payable to Secured Party
pursuant to Section 18 hereof, second, to the extent of any excess, to the cash
collateralization pursuant to the terms of this Agreement of any outstanding
Letters of Credit in respect of which the Borrower has failed to pay all or a
portion of the amounts described above (such cash collateralization to be
apportioned among all such Letters of Credit in the manner described
25
above), third, to the extent of any further excess, to the payment of any other
outstanding Secured Obligations in such order as Secured Party shall elect, and
fourth, to the extent of any further excess, to the payment to whomsoever shall
be lawfully entitled to receive such funds.
Section 17. Additional Remedies for Intellectual Property
---------------------------------------------
Collateral.
----------
(a) Anything contained herein to the contrary notwithstanding,
upon the occurrence and during the continuation of an Event of Default, (i)
Secured Party shall have the right (but not the obligation) to bring suit, in
the name of any Grantor, Secured Party or otherwise, to enforce any Intellectual
Property Collateral, in which event each Grantor shall, at the request of
Secured Party, do any and all lawful acts and execute any and all documents
required by Secured Party in aid of such enforcement and each Grantor shall
promptly, upon demand, reimburse and indemnify Secured Party as provided in
Sections 13.2 of the Credit Agreement and Section 19 hereof, as applicable, in
connection with the exercise of its rights under this Section, and, to the
extent that Secured Party shall elect not to bring suit to enforce any
Intellectual Property Collateral as provided in this Section, each Grantor
agrees to use all reasonable measures, whether by action, suit, proceeding or
otherwise, to prevent the infringement of any of the Intellectual Property
Collateral by others and for that purpose agrees to use its commercially
reasonable judgment in maintaining any action, suit or proceeding against any
Person so infringing reasonably necessary to prevent such infringement; (ii)
upon written demand from Secured Party, each Grantor shall execute and deliver
to Secured Party an assignment or assignments of the Intellectual Property
Collateral and such other documents as are necessary or appropriate to carry out
the intent and purposes of this Agreement; (iii) each Grantor agrees that such
an assignment and/or recording shall be applied to reduce the Secured
Obligations outstanding only to the extent that Secured Party (or any Lender)
receives cash proceeds in respect of the sale of, or other realization upon, the
Intellectual Property Collateral; and (iv) within five (5) Business Days after
written notice from Secured Party, each Grantor shall make available to Secured
Party, to the extent within such Grantor's power and authority, such personnel
in such Grantor's employ on the date of such Event of Default as Secured Party
may reasonably designate, by name, title or job responsibility, to permit such
Grantor to continue, directly or indirectly, to produce, advertise and sell the
products and services sold or delivered by such Grantor under or in connection
with the Trademarks, Trademark Registrations and Trademark Rights, such persons
to be available to perform their prior functions on Secured Party's behalf and
to be compensated by Secured Party at such Grantor's expense on a per diem,
pro-rata basis consistent with the salary and benefit structure applicable to
each as of the date of such Event of Default.
(b) If (i) an Event of Default shall have occurred and, by
reason of cure, waiver, modification, amendment or otherwise, no longer be
continuing, (ii) no other Event of Default shall have occurred and be
continuing, (iii) an assignment to Secured Party of any rights, title and
interests in and to the Intellectual Property Collateral shall have been
previously made, and (iv) the Secured Obligations shall not have become
immediately due and payable, upon the written request of any Grantor, Secured
Party shall promptly execute and deliver to such Grantor such assignments as may
be necessary to reassign to such Grantor any such rights, title and interests as
may have been assigned to Secured Party as aforesaid, subject to any disposition
thereof that may have been made by Secured Party; provided, after giving effect
to such reassignment, Secured Party's security interest granted pursuant hereto,
as well as all other rights
26
and remedies of Secured Party granted hereunder, shall continue to be in full
force and effect; and provided further, the rights, title and interests so
reassigned shall be free and clear of all Liens other than Liens (if any)
encumbering such rights, title and interest at the time of their assignment to
Secured Party and Liens permitted pursuant to Section 10.3 of the Credit
Agreement.
Section 18. Application of Proceeds.
------------------------
Except as expressly provided elsewhere in this Agreement, all
proceeds received by Secured Party in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral shall be applied as
provided in the Credit Agreement.
Section 19. Indemnity and Expenses.
----------------------
(a) Grantors jointly and severally agree to indemnify Secured
Party, each Lender and each Interest Rate Xxxxxx from and against any and all
claims, losses and liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions contemplated hereby
(including without limitation enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from Secured Party's or
such Lender's or Interest Rate Xxxxxx'x xxxxx negligence or willful misconduct
as finally determined by a court of competent jurisdiction.
(b) Grantors jointly and severally agree to pay to Secured
Party upon demand the amount of any and all costs and expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, that
Secured Party may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (iii) the
exercise or enforcement of any of the rights of Secured Party hereunder, or (iv)
the failure by any Grantor to perform or observe any of the provisions hereof.
(c) The obligations of Grantors in this Section 19 shall
survive the termination of this Agreement and the discharge of Grantors' other
obligations under this Agreement, the Lender Hedging Agreements, the Credit
Agreement and the other Loan Documents.
Section 20. Continuing Security Interest; Transfer of Loans;
------------------------------------------------
Termination and Release.
------------------------
(a) This Agreement shall create a continuing security interest
in the Collateral and shall (i) remain in full force and effect until the
payment in full of the Secured Obligations, the cancellation or termination of
the Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (ii) be binding upon Grantors and their respective successors and
assigns, and (iii) inure, together with the rights and remedies of Secured Party
hereunder, to the benefit of Secured Party and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (iii), (A) but
subject to the provisions of Section 13.11(b) of the Credit Agreement, any
Lender may assign or otherwise transfer any Loans held by it to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to Lenders herein or otherwise and (B) any
Interest Rate Xxxxxx may assign or otherwise transfer any Lender Hedging
Agreement to which it is a party to any other
27
Person in accordance with the terms of such Lender Hedging Agreement, and such
other Person shall thereupon become vested with all the benefits in respect
thereof granted to Interest Rate Hedgers herein or otherwise.
(b) Upon the payment in full of all Secured Obligations, the
cancellation or termination of the Commitments and the cancellation or
expiration of all outstanding Letters of Credit, the security interest granted
hereby shall terminate and all rights to the Collateral shall revert to the
applicable Grantors. Upon any such termination Secured Party will, at Grantors'
expense, execute and deliver to Grantors such documents as Grantors shall
reasonably request to evidence such termination. In addition, upon the proposed
sale, transfer or other disposition of any Collateral by a Grantor in accordance
with the Credit Agreement for which such Grantor desires to obtain a security
interest release from Secured Party, such Grantor shall deliver an Officers'
Certificate (x) stating that the Collateral subject to such disposition is being
sold, transferred or otherwise disposed of in compliance with the terms of the
Credit Agreement and (y) specifying the Collateral being sold, transferred or
otherwise disposed of in the proposed transaction. Upon the receipt of such
Officers' Certificate, Secured Party shall, at such Grantor's expense, so long
as Secured Party has no reason to believe that the Officers' Certificate
delivered by such Grantor with respect to such sale is not true and correct,
execute and deliver such releases of its security interest in such Collateral
which is to be so sold, transferred or disposed of, as may be reasonably
requested by such Grantor.
Section 21. Secured Party as Agent.
----------------------
(a) Secured Party has been appointed to act as Secured Party
hereunder by Lenders and, by their acceptance of the benefits hereof, Interest
Rate Hedgers. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
without limitation the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 16 in accordance with the instructions of (i) the Required Lenders or
(ii) after payment in full of all Obligations under the Credit Agreement and the
other Loan Documents, the cancellation or expiration of all Letters of Credit
and the termination of the Commitments, (A) the holders of a majority of the
aggregate notional amount under all Lender Hedging Agreements (including Lender
Hedging Agreements that have been terminated) or (B) if all Lender Hedging
Agreements have been terminated in accordance with their terms, the aggregate
amount then due and payable (exclusive of expenses and similar payments but
including any early termination payments then due) under such Lender Hedging
Agreements (Required Lenders or, if applicable, such holders being referred to
herein as "Requisite Obligees"). In furtherance of the foregoing provisions of
this Section 21(a), each Interest Rate Xxxxxx, by its acceptance of the benefits
hereof, agrees that it shall have no right individually to realize upon any of
the Collateral hereunder, it being understood and agreed by such Interest Rate
Xxxxxx that all rights and remedies hereunder may be exercised solely by Secured
Party for the benefit of Lenders and Interest Rate Hedgers in accordance with
the terms of this Section 21(a).
(b) Secured Party shall at all times be the same Person that
is Administrative Agent under the Credit Agreement. Written notice of
resignation by Administrative Agent pursuant to Section12.9 of the Credit
Agreement shall also constitute notice of resignation as
28
Secured Party under this Agreement; and appointment of a successor
Administrative Agent pursuant to Section 12.9 of the Credit Agreement shall also
constitute appointment of a successor Secured Party under this Agreement. Upon
the acceptance of any appointment as Administrative Agent under Section 12.9 of
the Credit Agreement by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Secured Party under this
Agreement, and the retiring Secured Party under this Agreement shall promptly
(i) transfer to such successor Secured Party all sums, securities and other
items of Collateral held hereunder, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Secured Party under this Agreement, and (ii) execute and
deliver to such successor Secured Party such amendments to financing statements,
and take such other actions, as may be necessary or appropriate in connection
with the assignment to such successor Secured Party of the security interests
created hereunder, whereupon such retiring Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation hereunder as Secured Party, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Secured Party hereunder.
(c) Secured Party shall not be deemed to have any duty
whatsoever with respect to any Interest Rate Xxxxxx until it shall have received
written notice in form and substance satisfactory to Secured Party from a
Grantor or the Interest Rate Xxxxxx as to the existence and terms of the
applicable Lender Hedging Agreement.
Section 22. Additional Grantors.
--------------------
The initial Subsidiary Grantors hereunder shall be such of the
Subsidiaries of the Borrower as are signatories hereto on the date hereof. From
time to time subsequent to the date hereof, additional Subsidiaries of the
Borrower may become parties hereto as additional Grantors (each an "Additional
Grantor"), by executing a Counterpart substantially in the form of Exhibit VII
annexed hereto. Upon delivery of any such Counterpart to Secured Party, notice
of which is hereby waived by Grantors, each such Additional Grantor shall be a
Grantor and shall be as fully a party hereto as if such Additional Grantor were
an original signatory hereto. Each Grantor expressly agrees that its obligations
arising hereunder shall not be affected or diminished by the addition or release
of any other Grantor hereunder, nor by any election of Administrative Agent not
to cause any Subsidiary of the Borrower to become an Additional Grantor
hereunder. This Agreement shall be fully effective as to any Grantor that is or
becomes a party hereto regardless of whether any other Person becomes or fails
to become or ceases to be a Grantor hereunder.
Section 23. Amendments; Etc.
----------------
No amendment, modification, termination or waiver of any
provision of this Agreement, and no consent to any departure by any Grantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Secured Party and, in the case of any such amendment or
modification, by Grantors; provided this Agreement may be modified by the
execution of a Counterpart by an Additional Grantor in accordance with Section
22 and Grantors hereby waive any requirement of notice of or consent to any such
amendment. Any such waiver
29
or consent shall be effective only in the specific instance and for the specific
purpose for which it was given.
Section 24. Notices.
-------
Except as otherwise provided in this Agreement, all notices
and communications hereunder shall be in writing, or by telephone subsequently
confirmed in writing. Any notice shall be effective if delivered by hand
delivery or sent via telecopy, recognized overnight courier service or certified
mail, return receipt requested, and shall be presumed to be received by a party
hereto (a) on the date of delivery if delivered by hand or sent by telecopy, (b)
on the next Business Day if sent by recognized overnight courier service and (c)
on the third Business Day following the date sent by certified mail, return
receipt requested; provided that notices to Secured Party shall not be effective
until received. A telephonic notice to Secured Party as understood by Secured
Party will be deemed to be the controlling and proper notice in the event of a
discrepancy with or failure to receive a confirming written notice. For the
purposes hereof, the address of each party hereto shall be as provided in
Section 13.1 of the Credit Agreement or as set forth under such party's name on
the signature pages hereof or such other address as shall be designated by such
party in a written notice delivered to the other parties hereto.
Section 25. Failure or Indulgence Not Waiver; Remedies
------------------------------------------
Cumulative.
----------
No failure or delay on the part of Secured Party in the
exercise of any power, right or privilege hereunder shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
Section 26. Severability of Provisions.
--------------------------
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
the remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 27. Titles and Captions.
-------------------
Titles and captions of Articles, Sections and subsections in
this Agreement are for convenience only, and neither limit nor amplify the
provisions of this Agreement.
Section 28. Governing Law; Terms; Rules of Construction.
-------------------------------------------
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, UNLESS OTHERWISE
EXPRESSLY SET FORTH THEREIN, SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES THAT THE
30
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NORTH CAROLINA. Unless otherwise defined herein or in the
Credit Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code
in the State of North Carolina are used herein as therein defined. The rules of
construction set forth in Sections 1.3 and 13.16 of the Credit Agreement shall
be applicable to this Agreement mutatis mutandis.
Section 29. Consent to Jurisdiction.
------------------------
EACH GRANTOR HEREBY IRREVOCABLY CONSENTS TO THE PERSONAL
JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN MECKLENBURG COUNTY,
NORTH CAROLINA, IN ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EACH
GRANTOR HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF A SUMMONS AND COMPLAINT
AND OTHER PROCESS IN ANY ACTION, CLAIM OR PROCEEDING BROUGHT BY THE SECURED
PARTY IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS
OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS, ON BEHALF OF ITSELF OR ITS PROPERTY, IN THE MANNER SPECIFIED IN
SECTION 24. EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY
COURT REFERRED TO ABOVE IN THIS SECTION 29. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF ANY
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT. NOTHING IN THIS SECTION 29 SHALL AFFECT THE RIGHT OF SECURED PARTY TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW OR AFFECT
THE RIGHT OF SECURED PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST THE
BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTIONS.
Section 30. Waiver of Jury Trial.
--------------------
(a) TO THE EXTENT PERMITTED BY LAW, THE GRANTORS AND SECURED
PARTY HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH
RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS
AND OBLIGATIONS. The scope of this waiver is intended to be all-encompassing of
any and all Disputes that may be filed in any court and that relate to the
subject matter of this transaction, including contract claims, tort claims,
breach of duty claims and all other common law and
31
statutory claims. Each Grantor and Secured Party acknowledge that this waiver is
a material inducement for Grantors and Secured Party to enter into a business
relationship, that Grantors and Secured Party have already relied on this waiver
in entering into this Agreement, and that each will continue to rely on this
waiver in their related future dealings. Each Grantor and Secured Party further
warrant and represent that it has reviewed this waiver with its legal counsel
and that each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. In the event of litigation, this Agreement may
be filed as a written consent to a trial by the court.
(b) Binding Arbitration. If the provisions of Section 30(a)
are held to be unenforceable by a final non-appealable judgment of a court of
competent jurisdiction, then upon demand of any party, whether made before or
after institution of any judicial proceeding, any dispute, claim or controversy
arising out of, connected with or relating to this Agreement or any other Loan
Documents ("Disputes"), between or among parties to this Agreement or any other
Loan Document shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, claims brought as class actions, claims arising from
Loan Documents executed in the future, or claims concerning any aspect of the
past, present or future relationships arising out of or connected with the Loan
Documents. Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association and Title 9 of the U.S. Code. All arbitration hearings
shall be conducted in Charlotte, North Carolina. The expedited procedures set
forth in Rule 51, et seq. of the Arbitration Rules shall be applicable to claims
of less than $1,000,000. All applicable statutes of limitation shall apply to
any Dispute. A judgment upon the award may be entered in any court having
jurisdiction. The panel from which all arbitrators are selected shall be
comprised of licensed attorneys. The single arbitrator selected for expedited
procedure shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will be
conducted. Notwithstanding the foregoing, this paragraph shall not apply to any
Lender Hedging Agreement.
(c) Preservation of Certain Remedies. Notwithstanding the
preceding binding arbitration provisions, the parties hereto and to the other
Loan Documents preserve, without diminution, certain remedies that such Persons
may employ or exercise freely, either alone, in conjunction with or during a
Dispute. Each such Person shall have and hereby reserves the right to proceed in
any court of proper jurisdiction or by self help to exercise or prosecute the
following remedies: (i) all rights to foreclose against any real or personal
property or other security by exercising a power of sale granted in the Loan
Documents or under applicable law or by judicial foreclosure and sale, (ii) all
rights of self help including peaceful occupation of property and collection of
rents, set off, and peaceful possession of property, (iii) obtaining provisional
or ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and in filing an involuntary bankruptcy
proceeding, and (iv) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an arbitrator to
grant similar remedies that may be requested by a party in a Dispute.
32
Section 31. Counterparts.
------------
This Agreement and any amendments, waivers, consents, or
supplements may be executed in any number of counterparts, and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
Section 32. Financial Condition of the Borrower.
-----------------------------------
Lenders, Interest Rate Hedgers and Secured Party shall have no
obligation to disclose or discuss with any Grantor their assessment, or such
Grantor's assessment, of the financial condition of the Borrower. Each Grantor
has adequate means to obtain information from the Borrower on a continuing basis
concerning the financial condition of the Borrower and its ability to perform
its obligations under the Loan Documents and Lender Hedging Agreements, and such
Grantor assumes the responsibility for being and keeping informed of the
financial condition of the Borrower and of all circumstances bearing upon the
risk of nonpayment of the Secured Obligations. Each Grantor hereby waives and
relinquishes any duty on the part of Secured Party or any Lender or any Interest
Rate Xxxxxx to disclose any matter, fact or thing relating to the business,
operations or condition of the Borrower now known or hereafter known by Secured
Party or any Lender or any Interest Rate Xxxxxx.
[The remainder of this page intentionally left blank]
33
IN WITNESS WHEREOF, Grantors and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
HEALTHPLAN SERVICES CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx
President, Chief Operating Officer
HEALTHPLAN SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx
Treasurer, Secretary
Address: c/o HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
NATIONAL PREFERRED PROVIDER
NETWORK, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx
Treasurer, Secretary
Address: c/o HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
NATIONAL NETWORK SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx
Treasurer, Secretary
Address: c/o HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
S-1
QUALITY MEDICAL ADMINISTRATORS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Treasurer, Secretary
Address: c/o HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
AMERICAN BENEFIT PLAN
ADMINISTRATORS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President, Secretary
Address: c/o HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
CENTRA HEALTHPLAN LLC
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Treasurer, Secretary
Address: c/o HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
EMPLOYEE BENEFIT SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Treasurer, Secretary
Address: c/o HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
S-2
GROUP BENEFIT ADMINISTRATORS
INSURANCE AGENCY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Clerk
Address: c/o HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
HEALTHPLAN SERVICES INSURANCE
AGENCY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Clerk
Address: c/o HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
HEALTHPLAN SERVICES INSURANCE
AGENCY OF ILLINOIS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Treasurer, Secretary
Address: c/o HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
S-3
XXXXXXXXXX MANAGEMENT CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Treasurer, Secretary
Address: c/o HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
PROHEALTH, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Treasurer, Secretary
Address: c/o HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
REH AGENCY OF MISSOURI, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Treasurer, Secretary
Address: c/o HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
SOUTHERN NEVADA ADMINISTRATORS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Treasurer, Secretary
Address: c/o HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
S-4
FIRST UNION NATIONAL BANK,
as Secured Party
By: /s/ Xxxxxxx Xxxx
---------------------------------
Xxxxxxx Xxxx
Director
S-5
EXHIBIT 10.12d
EXECUTION
LIMITED WAIVER AND CONSENT
Dated as of June 29, 2000
HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, President & Chief Operating Officer
Ladies and Gentlemen:
Reference is made to: (i) that certain Second Amended and
Restated Credit Agreement dated as of June 8, 2000 (as heretofore amended,
modified, restated or supplemented from time to time, the "Credit Agreement"),
among HealthPlan Services Corporation, a Delaware corporation (the "Borrower"),
the lenders referred to therein (the "Lenders") and First Union National Bank
("First Union"), as administrative agent (the "Administrative Agent"); and (ii)
that certain Security and Second Amended and Restated Pledge Agreement dated as
of June 8, 2000 (as heretofore amended, modified, restated or supplemented from
time to time, the "Security and Pledge Agreement"), among the Borrower, the
Subsidiary Guarantors party thereto and First Union, as administrative agent for
and representative of (in such capacity, the "Secured Party") the Lenders.
Capitalized terms used herein without definition shall have the meanings set
forth in the Credit Agreement or the Security and Pledge Agreement, as
applicable.
The Borrower has informed the Administrative Agent and Lenders
that HPSI has entered into a letter of intent with Xxxxxxxx-Uniservice, Inc., an
Ohio corporation ("Xxxxxxxx"), pursuant to which HPSI has agreed to sell to
Xxxxxxxx all of the assets of HPSI comprising the unemployment compensation and
worker's compensation businesses of HPSI (the "Subject Assets") pursuant to an
Asset Purchase Agreement (the "Asset Purchase Agreement") to be entered into
between Xxxxxxxx and HPSI. The Borrower has requested that Required Lenders
waive the restrictions contained in Sections 8.2(a) and 10.6 of the Credit
Agreement and to the extent necessary to permit the Xxxxxxxx Asset Sale and
consent to the release of the Liens created by the Security and Pledge Agreement
on the Subject Assets pursuant to the terms thereof.
Subject to the representations and warranties contained
herein, the undersigned Required Lenders hereby agree to waive (i) compliance
with Sections 8.2(a) and 10.6 of the Credit Agreement solely to the extent
necessary to permit HPSI to consummate the Xxxxxxxx Asset Sale pursuant to the
terms of the Asset Purchase Agreement, and (ii) any Default or Event of Default
which may have occurred as a result of Borrower's failure to make the payments
required by Section 2.3(b)(iii)(G) with respect to the Borrowing Base determined
by reference to the Borrowing Base Certificate delivered on June 28, 2000;
provided that (a) concurrently with the consummation of the Xxxxxxxx Asset Sale
Borrower shall apply not less than seventy-five
(75%) of the Net Asset Sale Proceeds received in respect of the Xxxxxxxx Asset
Sale to prepay the Loans and/or reduce the Commitments pursuant to Section
2.3(b)(iii)(A) of the Credit Agreement which prepayment shall, notwithstanding
anything in Section 2.3(b)(iv)(B) of the Credit Agreement to the contrary, be
applied to reduce the Additional Payment due on January 31, 2001, (b) in
connection with any such prepayment, Borrower shall deliver the Officer's
Certificate required pursuant to Section 2.3(b)(iii)(F) of the Credit Agreement
and (c) concurrently with the consummation of the Xxxxxxxx Asset Sale Borrower
makes additional payments of the Revolving Loans (exclusive of the payments
under clause (a) of this proviso or any payment under the next succeeding
paragraph) as may be necessary to comply with the provisions of Section
2.3(b)(iii)(G) of the Credit Agreement.
Subject to the representations and warranties contained
herein, the undersigned Required Lenders hereby agree that, of the aggregate
proceeds received by Borrower or any of its Subsidiaries in connection with the
Xxxxxxxx Asset Sale which are excluded from the calculation of Net Asset Sale
Proceeds pursuant to the definition thereof, Borrower may apply up to $7,000,000
in respect of income taxes reasonably estimated to be actually payable at the
end of Borrower's 2000 Fiscal Year as a result of any gain recognized in
connection with the Xxxxxxxx Asset Sale to prepay Loans pursuant to Section
2.3(b)(i) of the Credit Agreement; provided that Administrative Agent shall be
entitled to establish a Reserve in the amount of such estimated payment;
provided further however, that upon any change in Borrower's reasonable
estimation of such income taxes, such Reserve shall be reduced by the amount of
such reduction and Borrower shall apply not less than seventy-five (75%) of the
amount of such reduction to the prepayment of the Loans and/or reduction of
Commitments pursuant to and in accordance with the provisions of Sections
2.3(b)(iii)(A) and 2.3(b)(iii)(F) of the Credit Agreement.
Required Lenders hereby authorize the Administrative Agent to,
upon receipt of an Officers' Certificate from HPSI by the Administrative Agent
pursuant to Section 20(b) of the Security and Pledge Agreement in respect of the
Subject Assets, at HPSI's sole cost and expense and so long as Secured Party has
no reason to believe that such Officers' Certificate is not true and correct,
execute and deliver such releases of its security interest in and Liens on such
Collateral which constitutes Subject Assets as may be reasonably requested by
HPSI in connection with the Xxxxxxxx Asset Sale, including, without limitation,
any UCC-3 termination statements and other full or partial release instruments,
as applicable.
Notwithstanding anything contained herein to the contrary,
this Limited Waiver and Consent shall cease to be of any force or effect if the
Xxxxxxxx Asset Sale has not been consummated on or before July 15, 2000.
Except as expressly provided in this Limited Waiver and
Consent, the Credit Agreement, Security and Pledge Agreement and each other Loan
Document shall continue to be, and shall remain, in full force and effect. The
waivers set forth above shall be limited precisely as written and relate solely
to noncompliance by Borrower with the provisions of Section 8.2(a) and 10.6 of
the Credit Agreement in manner and to the extent described above and nothing in
this Limited Waiver and Consent shall be deemed or otherwise construed (a) to be
a waiver of, or consent to or a modification or amendment of (i) Section 8.2(a)
or 10.6 of the Credit Agreement in any other instance or (ii) any other term or
condition of the Credit Agreement, the Security and Pledge Agreement or any
other Loan Document; (b) to prejudice any other right or rights
2
that the Administrative Agent or the Lenders, or any of them, may now have or
may have in the future under or in connection with the Credit Agreement,
Security and Pledge Agreement or the other Loan Documents; (c) to be a
commitment or any other undertaking or expression of any willingness to engage
in any further discussion with the Borrower or any other person, firm or
corporation with respect to any waiver, amendment, modification or any other
change to the Credit Agreement, Security and Pledge Agreement or the other Loan
Documents or any rights or remedies arising in favor of the Lenders or the
Administrative Agent, or any of them, under or with respect to any such
documents; or (d) to be a waiver of, or consent to or a modification or
amendment of, any other term or condition of any other agreement by and among
the Borrower, on the one hand, and the Administrative Agent or any other Lender,
on the other hand.
Each Subsidiary Guarantor hereby acknowledges that it has read
this Limited Waiver and Consent and consents to the terms hereof and further
hereby confirms and agrees that, notwithstanding the effectiveness of this
Limited Waiver and Consent, the obligations of such Subsidiary Guarantor under
the Subsidiary Guaranty Agreement shall not be impaired or affected and the
Subsidiary Guaranty Agreement is, and shall continue to be, in full force and
effect and is hereby confirmed and ratified in all respects.
By its execution hereof, the Borrower hereby certifies on
behalf of itself and the other Credit Parties that (i) each of the
representations and warranties set forth in the Credit Agreement, Security and
Pledge Agreement and the other Loan Documents is true and correct as of the date
hereof as if fully set forth herein and that, as of the date hereof, no Default
or Event of Default has occurred and is continuing (ii) no Default or Event of
Default exists under the Credit Agreement or the other Loan Documents after
giving effect to the waiver contemplated in this Limited Waiver and Consent and
(iii) all financial projections concerning Borrower and its Subsidiaries that
have been or are hereafter made available to the Administrative Agent or the
other Lenders by Borrower or any of its representatives in connection with the
transactions contemplated hereby (the "Projections") have been (or will be, in
the case of Projections made available after the date hereof) prepared in good
faith based upon reasonable assumptions.
The Borrower shall pay all reasonable out-of-pocket expenses
of the Administrative Agent in connection with the preparation, execution and
delivery of this Limited Waiver and Consent, including, without limitation, the
reasonable fees and disbursements of counsel for the Administrative Agent.
This Limited Waiver and Consent may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument.
This Limited Wavier and Consent shall become effective as of the date hereof
upon (i) the execution of counterparts hereof by the Borrower and the Required
Lenders and receipt by the Administrative Agent of written or telephonic
notification of such execution and authorization of delivery thereof, (ii)
receipt by Administrative Agent and Lenders of the form of Asset Purchase
Agreement, which form shall in all respects be satisfactory to the
Administrative Agent and Required Lenders (which satisfaction shall be evidence
by such Lenders executing a counterpart hereof) and (iii) receipt by
Administrative Agent of the final form of the Asset Purchase Agreement which
shall be in the form approved by the
3
Administrative Agent and Required Lenders with such changes thereto as may be
acceptable to the Administrative Agent.
THIS LIMITED WAIVER AND CONSENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NORTH CAROLINA,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, the parties hereto have caused this
Limited Waiver and Consent to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written above.
FIRST UNION NATIONAL BANK,
individually and as Administrative Agent
By: /s/ Xxxxxxx Xxxx
---------------------------------
Name: Xxxxxxx Xxxx
Title: Authorized Officer
FIRST UNION NATIONAL BANK,
as Secured Party
By: /s/ Xxxxxxx Xxxx
---------------------------------
Name: Xxxxxxx Xxxx
Title: Authorized Officer
CREDIT LYONNAIS, NEW YORK BRANCH,
as a Lender
By: /s/ Xxxx-Xxxxxxx Van Essche
---------------------------------
Name: Xxxx-Xxxxxxx Van Essche
Title: Vice President
SUNTRUST BANK, TAMPA BAY, as a Lender
By: /s/ Xxxxxx X. Xxxxxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Director
FLEET NATIONAL BANK, as a Lender
By: __________________________________
Name:
Title:
S-1
SOUTHTRUST BANK, NATIONAL
ASSOCIATION, as a Lender
By: /s/ Xxxx Xxxxx
--------------------------------------------
Name: Xxxx Xxxxx
Title: Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEEBANK BA "RABOBANK
NEDERLAND", NEW YORK BRANCH, as a
Lender
By: /s/ Xxxxxx Xxxxxx /s/ Xxxxxxx X. Fablano
--------------------------------------------
Name: Xxxxxx Xxxxxx Xxxxxxx X. Fablano
Title: Executive Director Vice President
BANK OF AMERICA, N.A., as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
AMSOUTH BANK, as a Lender
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
HIBERNIA NATIONAL BANK, as a Lender
By: /s/ Xxxxxxxxxxx Xxxxx
--------------------------------------------
Name: Xxxxxxxxxxx Xxxxx
Title: Vice President
S-2
THE FIFTH THIRD BANK OF COLUMBUS,
as a Lender
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
S-3
ACKNOWLEDGED AND AGREED BY:
BORROWER:
HEALTHPLAN SERVICES CORPORATION,
as Borrower
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name:
Title:
SUBSIDIARY GUARANTORS:
HEALTHPLAN SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name:
Title:
NATIONAL PREFERRED PROVIDER NETWORK, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name:
Title:
NATIONAL NETWORK SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name:
Title:
S-4
QUALITY MEDICAL ADMINISTRATORS,
INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name::
Title:
AMERICAN BENEFIT PLAN
ADMINISTRATORS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name:
Title:
CENTRA HEALTHPLAN LLC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name:
Title:
EMPLOYEE BENEFIT SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name:
Title:
GROUP BENEFIT ADMINISTRATORS
INSURANCE AGENCY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name:
Title:
S-5
HEALTHPLAN SERVICES INSURANCE
AGENCY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
HEALTHPLAN SERVICES INSURANCE
AGENCY OF ILLINOIS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
XXXXXXXXXX MANAGEMENT
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
PROHEALTH, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
REH AGENCY OF MISSOURI, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name:
Title:
S-6
SOUTHERN NEVADA ADMINISTRATORS,
INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name:
Title:
S-7
EXHIBIT 10.12d
EXECUTION
LIMITED WAIVER AND CONSENT
Dated as of September 12, 2000
HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, President & Chief Operating Officer
Ladies and Gentlemen:
Reference is made to: (i) that certain Second Amended and
Restated Credit Agreement dated as of June 8, 2000 (as heretofore amended,
modified, restated or supplemented from time to time, the "Credit Agreement"),
among HealthPlan Services Corporation, a Delaware corporation (the "Borrower"),
the lenders referred to therein (the "Lenders") and First Union National Bank
("First Union"), as administrative agent (the "Administrative Agent"); and (ii)
that certain Security and Second Amended and Restated Pledge Agreement dated as
of June 8, 2000 (as heretofore amended, modified, restated or supplemented from
time to time, the "Security and Pledge Agreement"), among the Borrower, the
Subsidiary Guarantors party thereto and First Union, as administrative agent for
and representative of (in such capacity, the "Secured Party") the Lenders.
Capitalized terms used herein without definition shall have the meanings set
forth in the Credit Agreement or the Security and Pledge Agreement, as
applicable.
The Borrower has informed the Administrative Agent and Lenders
that HPSI and its wholly owned subsidiary ProHealth, Inc., a Delaware
corporation ("ProHealth"), have proposed to enter into an Asset Purchase
Agreement (in form and substance satisfactory to the Administrative Agent, the
"Asset Purchase Agreement") with Xxxxxxxx Unicomp, Inc., an Ohio corporation
("Xxxxxxxx"), pursuant to which ProHealth and HPSI will sell to Xxxxxxxx all of
the assets of ProHealth comprising its managed care organization providing
services under the Ohio Worker's Compensation and Health Partnership Program
under the name Xxxxxxxxxx-ProHealth and Xxxxxxxxxx-ProHealth Comp Care (the "MCO
Assets"). The Borrower has requested that Required Lenders waive the
restrictions contained in Sections 8.2(a) and 10.6 of the Credit Agreement and
to the extent necessary to permit the Xxxxxxxx Asset Sale and consent to the
release of the Liens created by the Security and Pledge Agreement on the MCO
Assets pursuant to the terms thereof.
Subject to the representations and warranties contained
herein, the undersigned Required Lenders hereby agree to waive compliance with
Sections 8.2(a) and 10.6 of the Credit Agreement solely to the extent necessary
to permit ProHealth and HPSI to consummate the Xxxxxxxx Asset Sale pursuant to
the terms of the Asset Purchase Agreement; provided that (i) concurrently with
the consummation of the Xxxxxxxx Asset Sale Borrower shall apply not less
than seventy-five (75%) of the Net Asset Sale Proceeds received in respect of
the Xxxxxxxx Asset Sale to prepay the Loans and/or reduce the Commitments
pursuant to Section 2.3(b)(iii)(A) of the Credit Agreement which prepayment
shall, notwithstanding anything in Section 2.3(b)(iv)(B) of the Credit Agreement
to the contrary, be applied to reduce the Additional Payment due on January 31,
2001 and (ii) in connection with any such prepayment, Borrower shall deliver the
Officer's Certificate required pursuant to Section 2.3(b)(iii)(F) of the Credit
Agreement.
Subject to the representations and warranties contained
herein, the undersigned Required Lenders hereby agree that, of the aggregate
proceeds received by Borrower or any of its Subsidiaries in connection with the
Xxxxxxxx Asset Sale which are excluded from the calculation of Net Asset Sale
Proceeds pursuant to the definition thereof, Borrower may apply up to $1,300,000
in respect of income taxes reasonably estimated to be actually payable at the
end of Borrower's 2000 Fiscal Year as a result of any gain recognized in
connection with the Xxxxxxxx Asset Sale to prepay Loans pursuant to Section
2.3(b)(i) of the Credit Agreement; provided that Administrative Agent shall be
entitled to establish a Reserve in the amount of such estimated payment;
provided further however, that upon any change in Borrower's reasonable
estimation of such income taxes, such Reserve shall be reduced by the amount of
such reduction and Borrower shall apply not less than seventy-five (75%) of the
amount of such reduction to the prepayment of the Loans and/or reduction of
Commitments pursuant to and in accordance with the provisions of Sections
2.3(b)(iii)(A) and 2.3(b)(iii)(F) of the Credit Agreement.
Required Lenders hereby authorize the Administrative Agent to,
upon receipt of an Officers' Certificate from HPSI by the Administrative Agent
pursuant to Section 20(b) of the Security and Pledge Agreement in respect of the
MCO Assets, at HPSI's sole cost and expense and so long as Secured Party has no
reason to believe that such Officers' Certificate is not true and correct,
execute and deliver such releases of its security interest in and Liens on such
Collateral which constitutes MCO Assets as may be reasonably requested by HPSI
in connection with the Xxxxxxxx Asset Sale, including, without limitation, any
UCC-3 termination statements and other full or partial release instruments, as
applicable.
Notwithstanding anything contained herein to the contrary,
this Limited Waiver and Consent shall cease to be of any force or effect if the
Xxxxxxxx Asset Sale has not been consummated on or before September 30, 2000.
Except as expressly provided in this Limited Waiver and
Consent, the Credit Agreement, Security and Pledge Agreement and each other Loan
Document shall continue to be, and shall remain, in full force and effect. The
waivers set forth above shall be limited precisely as written and relate solely
to noncompliance by Borrower with the provisions of Section 8.2(a) and 10.6 of
the Credit Agreement in manner and to the extent described above and nothing in
this Limited Waiver and Consent shall be deemed or otherwise construed (a) to be
a waiver of, or consent to or a modification or amendment of (i) Section 8.2(a)
or 10.6 of the Credit Agreement in any other instance or (ii) any other term or
condition of the Credit Agreement, the Security and Pledge Agreement or any
other Loan Document; (b) to prejudice any other right or rights that the
Administrative Agent or the Lenders, or any of them, may now have or may have in
the future under or in connection with the Credit Agreement, Security and Pledge
Agreement or the other Loan Documents; (c) to be a commitment or any other
undertaking or expression of any willingness to engage in any further discussion
with the Borrower or any other person, firm or
2
corporation with respect to any waiver, amendment, modification or any other
change to the Credit Agreement, Security and Pledge Agreement or the other Loan
Documents or any rights or remedies arising in favor of the Lenders or the
Administrative Agent, or any of them, under or with respect to any such
documents; or (d) to be a waiver of, or consent to or a modification or
amendment of, any other term or condition of any other agreement by and among
the Borrower, on the one hand, and the Administrative Agent or any other Lender,
on the other hand.
Each Subsidiary Guarantor hereby acknowledges that it has read
this Limited Waiver and Consent and consents to the terms hereof and further
hereby confirms and agrees that, notwithstanding the effectiveness of this
Limited Waiver and Consent, the obligations of such Subsidiary Guarantor under
the Subsidiary Guaranty Agreement shall not be impaired or affected and the
Subsidiary Guaranty Agreement is, and shall continue to be, in full force and
effect and is hereby confirmed and ratified in all respects.
By its execution hereof, the Borrower hereby certifies on
behalf of itself and the other Credit Parties that (i) each of the
representations and warranties set forth in the Credit Agreement, Security and
Pledge Agreement and the other Loan Documents is true and correct as of the date
hereof as if fully set forth herein and that, as of the date hereof, no Default
or Event of Default has occurred and is continuing (ii) no Default or Event of
Default exists under the Credit Agreement or the other Loan Documents after
giving effect to the waiver contemplated in this Limited Waiver and Consent and
(iii) all financial projections concerning Borrower and its Subsidiaries that
have been or are hereafter made available to the Administrative Agent or the
other Lenders by Borrower or any of its representatives in connection with the
transactions contemplated hereby (the "Projections") have been (or will be, in
the case of Projections made available after the date hereof) prepared in good
faith based upon reasonable assumptions.
The Borrower shall pay all reasonable out-of-pocket expenses
of the Administrative Agent in connection with the preparation, execution and
delivery of this Limited Waiver and Consent, including, without limitation, the
reasonable fees and disbursements of counsel for the Administrative Agent.
This Limited Waiver and Consent may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument.
This Limited Wavier and Consent shall become effective as of the date hereof
upon (i) the execution of counterparts hereof by the Borrower and the Required
Lenders and receipt by the Administrative Agent of written or telephonic
notification of such execution and authorization of delivery thereof, (ii)
receipt by Administrative Agent and Lenders of the form and substance of Asset
Purchase Agreement, which form and substance shall in all respects be
satisfactory to the Administrative Agent and Required Lenders (which
satisfaction shall be evidenced by such Lenders executing a counterpart hereof)
and (iii) receipt by Administrative Agent of the final form of the Asset
Purchase Agreement which shall be in the form approved by the Administrative
Agent and Required Lenders with such changes thereto as may be acceptable to the
Administrative Agent.
THIS LIMITED WAIVER AND CONSENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND
3
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NORTH CAROLINA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, the parties hereto have caused this
Limited Waiver and Consent to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written above.
FIRST UNION NATIONAL BANK,
individually and as Administrative Agent
By: /s/ Xxxxxxx Xxxx
---------------------------------
Name: Xxxxxxx Xxxx
Title: Authorized Officer
FIRST UNION NATIONAL BANK,
as Secured Party
By: /s/ Xxxxxxx Xxxx
---------------------------------
Name: Xxxxxxx Xxxx
Title: Authorized Officer
CREDIT LYONNAIS, NEW YORK BRANCH,
as a Lender
By: /s/ Xxxx-Xxxxxxx Van Essche
---------------------------------
Name: Xxxx-Xxxxxxx Van Essche
Title: Vice President
SUNTRUST BANK, TAMPA BAY, as a Lender
By: /s/ Xxxxxx X. Xxxxxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Director
FLEET NATIONAL BANK, as a Lender
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
S-1
SOUTHTRUST BANK, NATIONAL
ASSOCIATION, as a Lender
By: /s/ Xxxx Xxxxx
-----------------------------------
Name: Xxxx Xxxxx
Title: Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEEBANK BA "RABOBANK
NEDERLAND", NEW YORK BRANCH, as a
Lender
By:
-----------------------------------
Name:
Title:
BANK OF AMERICA, N.A., as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
AMSOUTH BANK, as a Lender
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
HIBERNIA NATIONAL BANK, as a Lender
By: /s/ Xxxxxxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxxxxxx Xxxxx
Title: Vice President
S-2
FIFTH THIRD BANK, CENTRAL OHIO, as a
Lender
By: __________________________________
Name:
Title:
S-3
ACKNOWLEDGED AND AGREED BY:
BORROWER:
HEALTHPLAN SERVICES CORPORATION,
as Borrower
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Operating
Officer
SUBSIDIARY GUARANTORS:
HEALTHPLAN SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
NATIONAL PREFERRED PROVIDER
NETWORK, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer and Secretary
NATIONAL NETWORK SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer and Secretary
S-4
QUALITY MEDICAL ADMINISTRATORS,
INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer and Secretary
AMERICAN BENEFIT PLAN
ADMINISTRATORS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President and
Secretary
CENTRA HEALTHPLAN LLC
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer and Secretary
EMPLOYEE BENEFIT SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer and Secretary
GROUP BENEFIT ADMINISTRATORS
INSURANCE AGENCY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Clerk
S-5
HEALTHPLAN SERVICES INSURANCE
AGENCY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Clerk
HEALTHPLAN SERVICES INSURANCE
AGENCY OF ILLINOIS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer and Secretary
XXXXXXXXXX MANAGEMENT
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer and Secretary
PROHEALTH, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer and Secretary
REH AGENCY OF MISSOURI, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer and Secretary
S-6
SOUTHERN NEVADA ADMINISTRATORS,
INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer and Secretary
S-7
EXHIBIT 10.12d
EXECUTION
LIMITED WAIVER AND CONSENT
Dated as of September 19, 2000
HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, President & Chief Operating Officer
Ladies and Gentlemen:
Reference is made to: (i) that certain Second Amended and
Restated Credit Agreement dated as of June 8, 2000 among HealthPlan Services
Corporation, a Delaware corporation (the "Borrower"), the lenders referred to
therein (the "Lenders") and First Union National Bank ("First Union"), as
administrative agent (the "Administrative Agent") (as modified by the Limited
Waiver and Consent thereto dated as of June 29, 2000, the Limited Waiver and
Consent thereto dated as of September 12, 2000, and as such agreement may have
otherwise been amended, restated, supplemented or otherwise modified from time
to time prior to the date hereof, the "Credit Agreement"); and (ii) that certain
Security and Second Amended and Restated Pledge Agreement dated as of June 8,
2000 (as heretofore amended, modified, restated or supplemented from time to
time, the "Security and Pledge Agreement"), among the Borrower, the Subsidiary
Guarantors party thereto and First Union, as administrative agent for and
representative of (in such capacity, the "Secured Party") the Lenders.
Capitalized terms used herein without definition shall have the meanings set
forth in the Credit Agreement or the Security and Pledge Agreement, as
applicable.
The Borrower has informed the Administrative Agent and Lenders
that the Borrower, as parent, HPSI and Xxxxxxxxxx Management Corporation, a
Pennsylvania corporation and a wholly owned subsidiary of HPSI ("Xxxxxxxxxx";
and, together with HPSI, "Seller"), have proposed to entered into an Asset
Purchase Agreement (the "Asset Purchase Agreement") with Xxxxxxx Inc., a
Delaware corporation ("Xxxxxxx"), pursuant to which Seller will agree to sell to
Xxxxxxx all of the assets of Seller comprising its "Commercial Large Group
Division" which provides third party self-funded health and welfare plan
administration services and consists primarily of Seller's historical business
units that were, or are currently, referred to as CENTRA HealthPlan LLC,
Xxxxxxxxxx Management Corporation and Xxxxxxxxxx Benefit Services, certain care
management services currently provided by ProHealth, Inc. and certain data
reporting services currently provided by Analytics Information Management (the
"Subject Assets"). The Borrower has requested that Required Lenders waive the
restrictions contained in Sections 8.2(a) and 10.6 of the Credit Agreement and
to the extent necessary to permit the
Xxxxxxx Asset Sale and consent to the release of the Liens created by the
Security and Pledge Agreement on the Subject Assets pursuant to the terms
thereof.
Subject to the representations and warranties contained
herein, the undersigned Required Lenders hereby agree to waive compliance with
Sections 8.2(a) and 10.6 of the Credit Agreement solely to the extent necessary
to permit Seller and the Borrower to consummate the Xxxxxxx Asset Sale pursuant
to the terms of the Asset Purchase Agreement; provided that (a) concurrently
with the consummation of the Xxxxxxx Asset Sale, the Borrower shall apply not
less than seventy-five (75%) of the Net Asset Sale Proceeds received in respect
of the Xxxxxxx Asset Sale to prepay the Loans and/or reduce the Commitments
pursuant to Section 2.3(b)(iii)(A) of the Credit Agreement which prepayment
shall, notwithstanding anything in Section 2.3(b)(iv)(B) of the Credit Agreement
to the contrary, be applied to reduce the scheduled payments of Term Loans as
set forth on Schedule A attached hereto, (b) in connection with any such
prepayment, the Borrower shall deliver the Officer's Certificate required
pursuant to Section 2.3(b)(iii)(F) of the Credit Agreement and (c) concurrently
with the consummation of the Xxxxxxx Asset Sale the Borrower makes additional
payments of the Revolving Loans (exclusive of the payments under clause (a) of
this proviso) as may be necessary to comply with the provisions of Section
2.3(b)(iii)(G) of the Credit Agreement.
Required Lenders hereby authorize the Administrative Agent to,
upon receipt of an Officers' Certificate from Seller by the Administrative Agent
pursuant to Section 20(b) of the Security and Pledge Agreement in respect of the
Subject Assets, at Seller's sole cost and expense and so long as Secured Party
has no reason to believe that such Officers' Certificate is not true and
correct, execute and deliver such releases of its security interest in and Liens
on such Collateral which constitutes Subject Assets as may be reasonably
requested by Seller in connection with the Xxxxxxx Asset Sale, including,
without limitation, any UCC-3 termination statements and other full or partial
release instruments, as applicable.
Notwithstanding anything contained herein to the contrary,
this Limited Waiver and Consent shall cease to be of any force or effect if the
Xxxxxxx Asset Sale has not been consummated on or before October 13, 2000.
Except as expressly provided in this Limited Waiver and
Consent, the Credit Agreement, Security and Pledge Agreement and each other Loan
Document shall continue to be, and shall remain, in full force and effect. The
waivers set forth above shall be limited precisely as written and relate solely
to noncompliance by the Borrower with the provisions of Section 8.2(a) and 10.6
of the Credit Agreement in manner and to the extent described above and nothing
in this Limited Waiver and Consent shall be deemed or otherwise construed: (a)
to be a waiver of, or consent to or a modification or amendment of (i) Section
8.2(a) or 10.6 of the Credit Agreement in any other instance or (ii) any other
term or condition of the Credit Agreement, the Security and Pledge Agreement or
any other Loan Document; (b) to prejudice any other right or rights that the
Administrative Agent or the Lenders, or any of them, may now have or may have in
the future under or in connection with the Credit Agreement, Security and Pledge
Agreement or the other Loan Documents; (c) to be a commitment or any other
undertaking or expression of any willingness to engage in any further discussion
with the Borrower or any other person, firm or corporation with respect to any
waiver, amendment, modification or any other change to the Credit Agreement,
Security and Pledge Agreement or the other Loan Documents or any rights or
2
remedies arising in favor of the Lenders or the Administrative Agent, or any of
them, under or with respect to any such documents; or (d) to be a waiver of, or
consent to or a modification or amendment of, any other term or condition of any
other agreement by and among the Borrower, on the one hand, and the
Administrative Agent or any other Lender, on the other hand.
Each Subsidiary Guarantor hereby acknowledges that it has read
this Limited Waiver and Consent and consents to the terms hereof and further
hereby confirms and agrees that, notwithstanding the effectiveness of this
Limited Waiver and Consent, the obligations of such Subsidiary Guarantor under
the Subsidiary Guaranty Agreement shall not be impaired or affected and the
Subsidiary Guaranty Agreement is, and shall continue to be, in full force and
effect and is hereby confirmed and ratified in all respects.
By its execution hereof, the Borrower hereby certifies on
behalf of itself and the other Credit Parties that (i) each of the
representations and warranties set forth in the Credit Agreement, Security and
Pledge Agreement and the other Loan Documents is true and correct as of the date
hereof as if fully set forth herein and that, as of the date hereof, no Default
or Event of Default has occurred and is continuing (ii) no Default or Event of
Default exists under the Credit Agreement or the other Loan Documents after
giving effect to the waiver contemplated in this Limited Waiver and Consent and
(iii) all financial projections concerning the Borrower and its Subsidiaries
that have been or are hereafter made available to the Administrative Agent or
the other Lenders by the Borrower or any of its representatives in connection
with the transactions contemplated hereby (the "Projections") have been (or will
be, in the case of Projections made available after the date hereof) prepared in
good faith based upon reasonable assumptions.
The Borrower shall pay all reasonable out-of-pocket expenses
of the Administrative Agent in connection with the preparation, execution and
delivery of this Limited Waiver and Consent, including, without limitation, the
reasonable fees and disbursements of counsel for the Administrative Agent.
This Limited Waiver and Consent may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument.
This Limited Waiver and Consent shall become effective as of the date hereof
upon (i) the execution of counterparts hereof by the Borrower and the Required
Lenders and receipt by the Administrative Agent of written or telephonic
notification of such execution and authorization of delivery thereof, (ii)
receipt by Administrative Agent and Lenders of the form and substance of Asset
Purchase Agreement, which form and substance shall in all respects be
satisfactory to the Administrative Agent and Required Lenders (which
satisfaction shall be evidenced by such Lenders executing a counterpart hereof)
and (iii) receipt by the Administrative Agent of the final form of the Asset
Purchase Agreement which shall be in the form approved by the Administrative
Agent and Required Lenders with such changes thereto as may be acceptable to the
Administrative Agent.
THIS LIMITED WAIVER AND CONSENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE
3
INTERNAL LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, the parties hereto have caused this
Limited Waiver and Consent to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written above.
FIRST UNION NATIONAL BANK,
individually and as Administrative Agent
By: /s/ Xxxxxxx Xxxx
----------------------------------
Name: Xxxxxxx Xxxx
Title: Authorized Officer
FIRST UNION NATIONAL BANK,
as Secured Party
By: /s/ Xxxxxxx Xxxx
----------------------------------
Name: Xxxxxxx Xxxx
Title: Authorized Officer
CREDIT LYONNAIS, NEW YORK BRANCH,
as a Lender
By: /s/ Xxxx-Xxxxxxx Van Essche
----------------------------------
Name: Xxxx-Xxxxxxx Van Essche
Title: Vice President
SUNTRUST BANK, as a Lender
By: /s/ Xxxxxx X. Xxxxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Director
FLEET NATIONAL BANK, as a Lender
By: /S/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
S-1
SOUTHTRUST BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
Title: Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEEBANK BA "RABOBANK
NEDERLAND", NEW YORK BRANCH, as a
Lender
By: __________________________________
Name:
Title:
BANK OF AMERICA, N.A., as a Lender
By: __________________________________
Name:
Title:
AMSOUTH BANK, as a Lender
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
HIBERNIA NATIONAL BANK, as a Lender
By: __________________________________
Name:
Title:
S-2
FIFTH THIRD BANK, CENTRAL OHIO, as a
Lender
By: /s/ Xxxxx Xxxxx
----------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
S-3
ACKNOWLEDGED AND AGREED BY:
BORROWER:
HEALTHPLAN SERVICES CORPORATION,
as Borrower
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Operating Officer
SUBSIDIARY GUARANTORS:
HEALTHPLAN SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
NATIONAL PREFERRED PROVIDER
NETWORK, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
NATIONAL NETWORK SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
S-4
QUALITY MEDICAL ADMINISTRATORS,
INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
AMERICAN BENEFIT PLAN
ADMINISTRATORS, INC.
By: Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President and
Secretary
CENTRA HEALTHPLAN LLC
By: Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
EMPLOYEE BENEFIT SERVICES, INC.
By: Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
GROUP BENEFIT ADMINISTRATORS
INSURANCE AGENCY, INC.
By: Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Clerk
S-5
HEALTHPLAN SERVICES INSURANCE
AGENCY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Clerk
HEALTHPLAN SERVICES INSURANCE
AGENCY OF ILLINOIS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
XXXXXXXXXX MANAGEMENT
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
PROHEALTH, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
REH AGENCY OF MISSOURI, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
S-6
SOUTHERN NEVADA ADMINISTRATORS,
INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
S-7
EXHIBIT 10.12d
EXECUTION
LIMITED WAIVER
Dated as of September 19, 2000
HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, President & Chief Operating Officer
Ladies and Gentlemen:
Reference is made to that certain Second Amended and Restated
Credit Agreement dated as of June 8, 2000 among HealthPlan Services Corporation,
a Delaware corporation (the "Borrower"), the lenders referred to therein (the
"Lenders") and First Union National Bank ("First Union"), as administrative
agent (the "Administrative Agent") (as modified by the Limited Waiver and
Consent thereto dated as of June 29, 2000, the Limited Waiver and Consent
thereto dated as of September 12, 2000, and as such agreement may have otherwise
been amended, restated, supplemented or otherwise modified from time to time
prior to the date hereof, the "Credit Agreement"). Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement.
The Borrower has requested that Required Lenders waive any
Default or Event of Default which may have occurred under Section 11.1(b) of the
Credit Agreement as a result of the Borrower's failure to make the payments
required by Section 2.3(b)(iii)(G) of the Credit Agreement with respect to the
Borrowing Base.
Subject to the representations and warranties contained
herein, the undersigned Required Lenders hereby agree to waive any Default or
Event of Default which may have occurred or be continuing under Section 11.1(b)
of the Credit Agreement solely as a result of the Borrower's failure to make a
mandatory prepayment of the Loans in an amount of up to $1,600,000 as required
by Section 2.3(b)(iii)(G) of the Credit Agreement during the period commencing
August 22, 2000 through the earlier of (a) the close of business October 13,
2000 and (b) the date HPSI and Xxxxxxxxxx Management Corporation consummate the
proposed sale of the Commercial Large Group Division; provided that nothing in
this Limited Waiver shall be construed to permit the Borrower at any time to
borrow any amounts under the Credit Agreement in violation of Section
2.3(b)(iii)(G) or any other provisions of the Credit Agreement.
Except as expressly provided in this Limited Waiver, the
Credit Agreement and each other Loan Document shall continue to be, and shall
remain, in full force and effect. The waivers set forth above shall be limited
precisely as written and relate solely to noncompliance by the Borrower with the
provisions of Sections 2.3(b)(iii)(G) and 11.1(b) of the Credit
Agreement in manner and to the extent described above and nothing in this
Limited Waiver shall be deemed or otherwise construed (a) to be a waiver of, or
consent to or a modification or amendment of (i) Sections 2.3(b)(iii)(G) and
11.1(b) of the Credit Agreement in any other instance or (ii) any other term or
condition of the Credit Agreement or any other Loan Document; (b) to prejudice
any other right or rights that the Administrative Agent or the Lenders, or any
of them, may now have or may have in the future under or in connection with the
Credit Agreement or the other Loan Documents; (c) to be a commitment or any
other undertaking or expression of any willingness to engage in any further
discussion with the Borrower or any other person, firm or corporation with
respect to any waiver, amendment, modification or any other change to the Credit
Agreement or the other Loan Documents or any rights or remedies arising in favor
of the Lenders or the Administrative Agent, or any of them, under or with
respect to any such documents; or (d) to be a waiver of, or consent to or a
modification or amendment of, any other term or condition of any other agreement
by and among the Borrower, on the one hand, and the Administrative Agent or any
other Lender, on the other hand.
Each Subsidiary Guarantor hereby acknowledges that it has read
this Limited Waiver and consents to the terms hereof and further hereby confirms
and agrees that, notwithstanding the effectiveness of this Limited Waiver, the
obligations of such Subsidiary Guarantor under the Subsidiary Guaranty Agreement
shall not be impaired or affected and the Subsidiary Guaranty Agreement is, and
shall continue to be, in full force and effect and is hereby confirmed and
ratified in all respects.
By its execution hereof, the Borrower hereby certifies on
behalf of itself and the other Credit Parties that (i) each of the
representations and warranties set forth in the Credit Agreement and the other
Loan Documents is true and correct as of the date hereof as if fully set forth
herein and that, as of the date hereof, no Default or Event of Default has
occurred and is continuing and (ii) no Default or Event of Default exists under
the Credit Agreement or the other Loan Documents after giving effect to the
waiver contemplated in this Limited Waiver.
The Borrower shall pay all reasonable out-of-pocket expenses
of the Administrative Agent in connection with the preparation, execution and
delivery of this Limited Waiver, including, without limitation, the reasonable
fees and disbursements of counsel for the Administrative Agent.
This Limited Waiver may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. This
Limited Waiver shall become effective as of the date hereof upon (i) the
execution of counterparts hereof by the Borrower and the Required Lenders and
receipt by the Administrative Agent of written or telephonic notification of
such execution and authorization of delivery thereof and (ii) receipt by the
Administrative Agent of all fees and expenses of counsel and advisors to the
Administrative Agent invoiced prior to September 1, 2000.
THIS LIMITED WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS
2
OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
3
IN WITNESS WHEREOF, the parties hereto have caused this
Limited Waiver to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
FIRST UNION NATIONAL BANK,
individually and as Administrative Agent
By: /s/ Xxxxxxx Xxxx
--------------------------------------
Name: Xxxxxxx Xxxx
Title: Authorized Officer
FIRST UNION NATIONAL BANK,
as Secured Party
By: /s/ Xxxxxxx Xxxx
--------------------------------------
Name: Xxxxxxx Xxxx
Title: Authorized Officer
CREDIT LYONNAIS, NEW YORK BRANCH,
as a Lender
By: /s/ Xxxx-Xxxxxxx Van Essche
--------------------------------------
Name: Xxxx-Xxxxxxx Van Essche
Title: Vice President
SUNTRUST BANK, as a Lender
By: /s/ Xxxxxx X. Xxxxxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Director
FLEET NATIONAL BANK, as a Lender
By: /s/ Xxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
S-1
SOUTHTRUST BANK, NATIONAL
ASSOCIATION, as a Lender
By: /s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
Title: Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEEBANK BA "RABOBANK
NEDERLAND", NEW YORK BRANCH, as a
Lender
By: __________________________________
Name:
Title:
BANK OF AMERICA, N.A., as a Lender
By: __________________________________
Name:
Title:
AMSOUTH BANK, as a Lender
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
HIBERNIA NATIONAL BANK, as a Lender
By: __________________________________
Name:
Title:
S-2
FIFTH THIRD BANK, CENTRAL OHIO, as a
Lender
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
S-3
ACKNOWLEDGED AND AGREED BY:
BORROWER:
HEALTHPLAN SERVICES CORPORATION,
as Borrower
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Operating Officer
SUBSIDIARY GUARANTORS:
HEALTHPLAN SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
NATIONAL PREFERRED PROVIDER
NETWORK, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
NATIONAL NETWORK SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
S-4
QUALITY MEDICAL ADMINISTRATORS,
INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
AMERICAN BENEFIT PLAN
ADMINISTRATORS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President and Secretary
CENTRA HEALTHPLAN LLC
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
EMPLOYEE BENEFIT SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
GROUP BENEFIT ADMINISTRATORS
INSURANCE AGENCY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Clerk
S-5
HEALTHPLAN SERVICES INSURANCE
AGENCY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Clerk
HEALTHPLAN SERVICES INSURANCE
AGENCY OF ILLINOIS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
XXXXXXXXXX MANAGEMENT
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
PROHEALTH, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
REH AGENCY OF MISSOURI, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
S-6
SOUTHERN NEVADA ADMINISTRATORS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
S-7
EXHIBIT 10.12d
EXECUTION
LIMITED WAIVER AND CONSENT
Dated as of October 19, 2000
HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, President & Chief Operating Officer
Ladies and Gentlemen:
Reference is made to: (i) that certain Second Amended and
Restated Credit Agreement dated as of June 8, 2000 among HealthPlan Services
Corporation, a Delaware corporation (the "Borrower"), the lenders referred to
therein (the "Lenders") and First Union National Bank ("First Union"), as
administrative agent (the "Administrative Agent") (as modified by the Limited
Waiver and Consent thereto dated as of June 29, 2000, the Limited Waiver and
Consent thereto dated as of September 12, 2000, the Limited Waiver thereto dated
as of September 19, 2000, the Limited Waiver and Consent thereto dated as of
September 19, 2000 (the "Fourth Limited Waiver and Consent"), and as such
agreement may have otherwise been amended, restated, supplemented or otherwise
modified from time to time prior to the date hereof, the "Credit Agreement");
and (ii) that certain Security and Second Amended and Restated Pledge Agreement
dated as of June 8, 2000 (as heretofore amended, modified, restated or
supplemented from time to time, the "Security and Pledge Agreement"), among the
Borrower, the Subsidiary Guarantors party thereto and First Union, as
administrative agent for and representative of (in such capacity, the "Secured
Party") the Lenders. Capitalized terms used herein without definition shall have
the meanings set forth in the Credit Agreement or the Security and Pledge
Agreement, as applicable.
The Borrower has informed the Administrative Agent and Lenders
that the Borrower, as parent, HPSI and Xxxxxxxxxx Management Corporation, a
Pennsylvania corporation and a wholly owned subsidiary of HPSI (Xxxxxxxxxx
Management Corporation, together with HPSI, "Seller") have proposed to enter
into an Asset Purchase Agreement (as amended, restated or supplemented from time
to time, the "Asset Purchase Agreement") with Xxxxxxx Inc., a Delaware
corporation ("Xxxxxxx"), pursuant to which Seller will agree to sell to Xxxxxxx
a majority of the assets of Seller comprising its "Commercial Large Group
Division" consisting of Seller's historical business units that were, or are
currently, referred to as CENTRA HealthPlan LLC, Xxxxxxxxxx Benefit Services,
certain care management services currently provided by ProHealth, Inc. and
certain data reporting services currently provided by Analytics Information
Management but expressly excluding Xxxxxxxxxx Management Corporation (the
"Subject Assets"). The Borrower has requested that Required Lenders waive the
restrictions
contained in Sections 8.2(a) and 10.6 of the Credit Agreement and to the extent
necessary to permit the Xxxxxxx Asset Sale and consent to the release of the
Liens created by the Security and Pledge Agreement on the Subject Assets
pursuant to the terms thereof.
Subject to the representations and warranties contained
herein, the undersigned Required Lenders hereby agree to waive compliance with
Sections 8.2(a) and 10.6 of the Credit Agreement solely to the extent necessary
to permit Seller and the Borrower to consummate the Xxxxxxx Asset Sale pursuant
to the terms of the Asset Purchase Agreement; provided that (a) concurrently
with the consummation of the Xxxxxxx Asset Sale, the Borrower shall apply not
less than seventy-five (75%) of the Net Asset Sale Proceeds received in respect
of the Xxxxxxx Asset Sale to prepay the Loans and/or reduce the Commitments
pursuant to Section 2.3(b)(iii)(A) of the Credit Agreement which prepayment
shall, notwithstanding anything in Section 2.3(b)(iv)(B) of the Credit Agreement
to the contrary, be applied to reduce the scheduled payments of Term Loans as
set forth on Schedule A attached hereto, (b) in connection with any such
prepayment, the Borrower shall deliver the Officer's Certificate required
pursuant to Section 2.3(b)(iii)(F) of the Credit Agreement and (c) concurrently
with the consummation of the Xxxxxxx Asset Sale the Borrower makes additional
payments of the Revolving Loans (exclusive of the payments under clause (a) of
this proviso) as may be necessary to comply with the provisions of Section
2.3(b)(iii)(G) of the Credit Agreement.
Required Lenders hereby authorize the Administrative Agent to,
upon receipt of an Officers' Certificate from Seller by the Administrative Agent
pursuant to Section 20(b) of the Security and Pledge Agreement in respect of the
Subject Assets, at Seller's sole cost and expense and so long as Secured Party
has no reason to believe that such Officers' Certificate is not true and
correct, execute and deliver such releases of its security interest in and Liens
on such Collateral which constitutes Subject Assets as may be reasonably
requested by Seller in connection with the Xxxxxxx Asset Sale, including,
without limitation, any UCC-3 termination statements and other full or partial
release instruments, as applicable.
Notwithstanding anything contained herein to the contrary,
this Limited Waiver and Consent shall cease to be of any force or effect if the
Xxxxxxx Asset Sale has not been consummated on or before October 31, 2000.
Except as expressly provided in this Limited Waiver and
Consent, the Credit Agreement, Security and Pledge Agreement and each other Loan
Document shall continue to be, and shall remain, in full force and effect. The
waivers set forth above shall be limited precisely as written and relate solely
to noncompliance by the Borrower with the provisions of Section 8.2(a) and 10.6
of the Credit Agreement in manner and to the extent described above and nothing
in this Limited Waiver and Consent shall be deemed or otherwise construed: (a)
to be a waiver of, or consent to or a modification or amendment of (i) Section
8.2(a) or 10.6 of the Credit Agreement in any other instance or (ii) any other
term or condition of the Credit Agreement, the Security and Pledge Agreement or
any other Loan Document; (b) to prejudice any other right or rights that the
Administrative Agent or the Lenders, or any of them, may now have or may have in
the future under or in connection with the Credit Agreement, Security and Pledge
Agreement or the other Loan Documents; (c) to be a commitment or any other
undertaking or expression of any willingness to engage in any further discussion
with the Borrower or any other person, firm or corporation with respect to any
waiver, amendment, modification or any other change to the
2
Credit Agreement, Security and Pledge Agreement or the other Loan Documents or
any rights or remedies arising in favor of the Lenders or the Administrative
Agent, or any of them, under or with respect to any such documents; or (d) to be
a waiver of, or consent to or a modification or amendment of, any other term or
condition of any other agreement by and among the Borrower, on the one hand, and
the Administrative Agent or any other Lender, on the other hand.
Each Subsidiary Guarantor hereby acknowledges that it has read
this Limited Waiver and Consent and consents to the terms hereof and further
hereby confirms and agrees that, notwithstanding the effectiveness of this
Limited Waiver and Consent, the obligations of such Subsidiary Guarantor under
the Subsidiary Guaranty Agreement shall not be impaired or affected and the
Subsidiary Guaranty Agreement is, and shall continue to be, in full force and
effect and is hereby confirmed and ratified in all respects.
By its execution hereof, the Borrower hereby certifies on
behalf of itself and the other Credit Parties that (i) each of the
representations and warranties set forth in the Credit Agreement, Security and
Pledge Agreement and the other Loan Documents is true and correct as of the date
hereof as if fully set forth herein and that, as of the date hereof, no Default
or Event of Default has occurred and is continuing (ii) no Default or Event of
Default exists under the Credit Agreement or the other Loan Documents after
giving effect to the waiver contemplated in this Limited Waiver and Consent and
(iii) all financial projections concerning the Borrower and its Subsidiaries
that have been or are hereafter made available to the Administrative Agent or
the other Lenders by the Borrower or any of its representatives in connection
with the transactions contemplated hereby (the "Projections") have been (or will
be, in the case of Projections made available after the date hereof) prepared in
good faith based upon reasonable assumptions.
The Borrower shall pay all reasonable out-of-pocket expenses
of the Administrative Agent in connection with the preparation, execution and
delivery of this Limited Waiver and Consent, including, without limitation, the
reasonable fees and disbursements of counsel for the Administrative Agent.
This Limited Waiver and Consent may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument.
This Limited Waiver and Consent shall become effective as of the date hereof
upon (i) the execution of counterparts hereof by the Borrower and the Required
Lenders and receipt by the Administrative Agent of written or telephonic
notification of such execution and authorization of delivery thereof, (ii)
receipt by Administrative Agent and Lenders of the form and substance of Asset
Purchase Agreement, which form and substance shall in all respects be
satisfactory to the Administrative Agent and Required Lenders (which
satisfaction shall be evidenced by such Lenders executing a counterpart hereof)
and (iii) receipt by the Administrative Agent of the final form of the Asset
Purchase Agreement which shall be in the form approved by the Administrative
Agent and Required Lenders with such changes thereto as may be acceptable to the
Administrative Agent. For the avoidance of doubt, this Limited Waiver and
Consent supercedes the Fourth Limited Waiver which ceased to be of any force or
effect on October 13, 2000.
3
THIS LIMITED WAIVER AND CONSENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NORTH CAROLINA,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, the parties hereto have caused this
Limited Waiver and Consent to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written above.
FIRST UNION NATIONAL BANK,
individually and as Administrative Agent
By: /s/ Xxxxxxx Xxxx
----------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK,
as Secured Party
By: /s/ Xxxxxxx Xxxx
----------------------------------
Name:
Title:
CREDIT LYONNAIS, NEW YORK BRANCH,
as a Lender
By: /s/ Xxxx-Xxxxxxx Van Essche
----------------------------------
Name: Xxxx-xxxxxxx Van Essche
Title: Vice President
SUNTRUST BANK, as a Lender
By: /s/ Xxxxxx X. Xxxxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Director
FLEET NATIONAL BANK, as a Lender
By: /s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
S-1
SOUTHTRUST BANK, NATIONAL
ASSOCIATION, as a Lender
By: __________________________________
Name:
Title:
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEEBANK BA "RABOBANK
NEDERLAND", NEW YORK BRANCH, as a
Lender
By: __________________________________
Name:
Title:
BANK OF AMERICA, N.A., as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
AMSOUTH BANK, as a Lender
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
HIBERNIA NATIONAL BANK, as a Lender
By: /s/ Xxxxx Angelery
-----------------------------------
Name:
Title:
S-2
FIFTH THIRD BANK, CENTRAL OHIO, as a
Lender
By: /s/ Xxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
S-3
ACKNOWLEDGED AND AGREED BY:
BORROWER:
HEALTHPLAN SERVICES CORPORATION,
as Borrower
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President & Chief Executive Officer
SUBSIDIARY GUARANTORS:
HEALTHPLAN SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
NATIONAL PREFERRED PROVIDER
NETWORK, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
NATIONAL NETWORK SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
S-4
QUALITY MEDICAL ADMINISTRATORS,
INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
AMERICAN BENEFIT PLAN
ADMINISTRATORS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President & Secretary
CENTRA HEALTHPLAN LLC
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
EMPLOYEE BENEFIT SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
GROUP BENEFIT ADMINISTRATORS
INSURANCE AGENCY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Clerk
S-5
HEALTHPLAN SERVICES INSURANCE
AGENCY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Clerk
HEALTHPLAN SERVICES INSURANCE
AGENCY OF ILLINOIS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
XXXXXXXXXX MANAGEMENT
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
PROHEALTH, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
REH AGENCY OF MISSOURI, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
S-6
SOUTHERN NEVADA ADMINISTRATORS,
INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
S-7
EXHIBIT 10.12d
EXECUTION
LIMITED WAIVER
Dated as of December 8, 2000
HealthPlan Services Corporation
0000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, President & Chief Operating Officer
Ladies and Gentlemen:
Reference is made to that certain Second Amended and Restated
Credit Agreement dated as of June 8, 2000 among HealthPlan Services Corporation,
a Delaware corporation (the "Borrower"), the lenders referred to therein (the
"Lenders") and First Union National Bank ("First Union"), as administrative
agent (the "Administrative Agent") (as modified by the Limited Waiver and
Consent thereto dated as of June 29, 2000, the Limited Waiver and Consent
thereto dated as of September 12, 2000, the Limited Waiver thereto dated as of
September 19, 2000, the Limited Waiver and Consent thereto dated as of September
19, 2000, the Limited Waiver and Consent thereto dated as of October 19, 2000,
and as such agreement may have otherwise been amended, restated, supplemented or
otherwise modified from time to time prior to the date hereof, the "Credit
Agreement"). Capitalized terms used herein without definition shall have the
meanings set forth in the Credit Agreement.
The Borrower has requested that Required Lenders waive any
Default or Event of Default which may have occurred or be continuing under
Section 11.1(b) of the Credit Agreement as a result of the Borrower's failure to
make the payments required by Section 2.3(b)(iii)(G) of the Credit Agreement to
the extent the aggregate principal amount of outstanding Revolving Loans exceeds
the Borrowing Base.
Subject to the representations and warranties contained
herein, the undersigned Required Lenders hereby agree to waive any Default or
Event of Default which may have occurred or be continuing under Section 11.1(b)
of the Credit Agreement solely as a result of the Borrower's failure to make a
mandatory prepayment of the Loans in an amount of up to $1,500,000 as required
by Section 2.3(b)(iii)(G) of the Credit Agreement during the period commencing
November 20, 2000 through the earlier of (i) the close of business March 15,
2001 and (ii) the date the Company consummates the sale of its Xxxx-Xxxxxxx
business; provided that nothing in this Limited Waiver shall be construed to
permit the Borrower at any time to borrow any amounts under the Credit Agreement
in violation of Section 2.3(b)(iii)(G) or any other provisions of the Credit
Agreement.
In order to induce the Required Lenders to enter into this
Limited Waiver, the Borrower agrees as follows: (i) the Borrower shall furnish
or cause to be furnished to the Administrative Agent and Lenders (a) as soon as
practicable but in no event later than five Business Days following the end of
each calendar week commencing with the calendar week ending December 31, 2000, a
written report in the agreed upon format of actual cash flow of the Borrower and
its Subsidiaries for such calendar week compared to the then current Budget or
Adjusted Budget, as applicable and (b) as soon as practicable but in no event
later than the fifteenth (15th) day and the last day of each calendar month
commencing with the January 2001 calendar month a brief written report setting
forth in reasonable detail the status of the proposed sales of the Xxxx-Xxxxxx
business, the Small Group business and the Xxxxxxxxxx Management business and
any proposed refinancing or raising of new capital; and (ii) the Borrower shall
pay to the Administrative Agent for the benefit of Lenders a waiver fee ("Waiver
Fee") in the amount of $211,476.12, which Waiver Fee shall be payable in cash on
the earlier of (x) the Final Maturity Date and (y) the date on which the Loans
have been repaid in full, the Revolving Loan Commitments terminated, all
outstanding Letter of Credit replaced or cash collateralized and all other
Obligations then due and owing paid in full. For the avoidance of doubt, this
Limited Waiver shall be deemed a Loan Document and any failure by the Borrower
to comply with any term, covenant or condition hereof shall constitute an
immediate Event of Default.
Except as expressly provided in this Limited Waiver, the
Credit Agreement and each other Loan Document shall continue to be, and shall
remain, in full force and effect. The waivers set forth above shall be limited
precisely as written and relate solely to noncompliance by the Borrower with the
provisions of Sections 2.3(b)(iii)(G) and 11.1(b) of the Credit Agreement in
manner and to the extent described above and nothing in this Limited Waiver
shall be deemed or otherwise construed: (a) to be a waiver of, or consent to or
a modification or amendment of (i) Sections 2.3(b)(iii)(G) and 11.1(b) of the
Credit Agreement in any other instance or (ii) any other term or condition of
the Credit Agreement or any other Loan Document; (b) to prejudice any other
right or rights that the Administrative Agent or the Lenders, or any of them,
may now have or may have in the future under or in connection with the Credit
Agreement or the other Loan Documents; (c) to be a commitment or any other
undertaking or expression of any willingness to engage in any further discussion
with the Borrower or any other person, firm or corporation with respect to any
waiver, amendment, modification or any other change to the Credit Agreement or
the other Loan Documents or any rights or remedies arising in favor of the
Lenders or the Administrative Agent, or any of them, under or with respect to
any such documents; or (d) to be a waiver of, or consent to or a modification or
amendment of, any other term or condition of any other agreement by and among
the Borrower, on the one hand, and the Administrative Agent or any other Lender,
on the other hand.
Each Subsidiary Guarantor hereby acknowledges that it has read
this Limited Waiver and consents to the terms hereof and further hereby confirms
and agrees that, notwithstanding the effectiveness of this Limited Waiver, the
obligations of such Subsidiary Guarantor under the Subsidiary Guaranty Agreement
shall not be impaired or affected and the Subsidiary Guaranty Agreement is, and
shall continue to be, in full force and effect and is hereby confirmed and
ratified in all respects.
2
By its execution hereof, the Borrower hereby certifies on
behalf of itself and the other Credit Parties that (i) each of the
representations and warranties set forth in the Credit Agreement and the other
Loan Documents is true and correct as of the date hereof as if fully set forth
herein and that, as of the date hereof, no Default or Event of Default has
occurred and is continuing and (ii) no Default or Event of Default exists under
the Credit Agreement or the other Loan Documents after giving effect to the
waiver contemplated in this Limited Waiver.
The Borrower shall pay all reasonable out-of-pocket expenses
of the Administrative Agent in connection with the preparation, execution and
delivery of this Limited Waiver, including, without limitation, the reasonable
fees and disbursements of counsel for the Administrative Agent.
This Limited Waiver may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. This
Limited Waiver shall become effective as of the date hereof upon: (i) the
execution of counterparts hereof by the Borrower and the Required Lenders and
receipt by the Administrative Agent of written or telephonic notification of
such execution and authorization of delivery thereof; and (ii) receipt by the
Administrative Agent of all fees and expenses of counsel and advisors to the
Administrative Agent invoiced on or prior to the date hereof.
THIS LIMITED WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
3
IN WITNESS WHEREOF, the parties hereto have caused this
Limited Waiver to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
FIRST UNION NATIONAL BANK,
individually and as Administrative Agent
By: /s/ Xxxxxxx Xxxx
----------------------------------
Name: Xxxxxxx Xxxx
Title: Authorized Officer
CREDIT LYONNAIS, NEW YORK BRANCH,
as a Lender
By: /s/ Xxxx-Xxxxxxx Van Essche
----------------------------------
Name: Xxxx-Xxxxxxx Van Essche
Title: Vice President
SUNTRUST BANK, as a Lender
By: /s/ Xxxxxx X. Xxxxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Director
FLEET NATIONAL BANK, as a Lender
By: /s/ Xxxx X. Xxxx XX
----------------------------------
Name: Xxxx X. Xxxx XX
Title: Vice President
SOUTHTRUST BANK, NATIONAL
ASSOCIATION, as a Lender
By: /s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
Title: Vice President
S-1
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEEBANK BA "RABOBANK
NEDERLAND", NEW YORK BRANCH, as a
Lender
By: __________________________________
Name:
Title:
BANK OF AMERICA, N.A., as a Lender
By: __________________________________
Name:
Title:
AMSOUTH BANK, as a Lender
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
HIBERNIA NATIONAL BANK, as a Lender
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
FIFTH THIRD BANK, CENTRAL OHIO, as a
Lender
By: /s/ Xxxx Xxxxxx
----------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
S-2
ACKNOWLEDGED AND AGREED BY:
BORROWER:
HEALTHPLAN SERVICES CORPORATION,
as Borrower
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President & Chief Executive Officer
SUBSIDIARY GUARANTORS:
HEALTHPLAN SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
PLANVISTA SOLUTIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
NATIONAL NETWORK SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
S-3
QUALITY MEDICAL ADMINISTRATORS,
INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
AMERICAN BENEFIT PLAN
ADMINISTRATORS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President and
Secretary
CENTRA HEALTHPLAN LLC
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
EMPLOYEE BENEFIT SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
GROUP BENEFIT ADMINISTRATORS
INSURANCE AGENCY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Clerk
S-4
HEALTHPLAN SERVICES INSURANCE
AGENCY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Clerk
HEALTHPLAN SERVICES INSURANCE
AGENCY OF ILLINOIS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
XXXXXXXXXX MANAGEMENT
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
PROHEALTH, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
HPS OF MISSOURI, INC. (f/k/a REH
AGENCY OF MISSOURI, INC.)
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
S-5
SOUTHERN NEVADA ADMINISTRATORS,
INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
S-6
EXHIBIT 10.12d
EXECUTION
HEALTHPLAN SERVICES CORPORATION
FIRST AMENDMENT AND LIMITED WAIVER AND CONSENT
THIS FIRST AMENDMENT AND LIMITED WAIVER AND CONSENT to the Credit
Agreement referred to below (this "Amendment"), is dated as of the 29th day of
March, 2001, by and among HEALTHPLAN SERVICES CORPORATION, a Delaware
corporation (the "Borrower"), THE LENDERS LISTED ON THE SIGNATURE PAGES HEREOF
(the "Lenders"), FIRST UNION NATIONAL BANK ("First Union"), as administrative
agent (the "Administrative Agent"), and, for purposes of Section 5 hereof, the
Credit Parties listed on the signature pages hereof, and is made with reference
to: (i) that certain Second Amended and Restated Credit Agreement dated as of
June 8, 2000 by and among the Borrower, the Lenders and the Administrative Agent
(as modified by the Limited Waiver and Consent thereto dated as of June 29,
2000, the Limited Waiver and Consent thereto dated as of September 12, 2000, the
Limited Waiver thereto dated as of September 19, 2000, the Limited Waiver and
Consent thereto dated as of September 19, 2000, the Limited Waiver and Consent
thereto dated as of October 19, 2000, the Limited Waiver dated as of December 8,
2000 and as such agreement may have otherwise been amended, restated,
supplemented or otherwise modified from time to time prior to the date hereof,
the "Credit Agreement"); and (ii) that certain Security and Second Amended and
Restated Pledge Agreement dated as of June 8, 2000 (as heretofore amended,
modified, restated or supplemented from time to time, the "Security and Pledge
Agreement"), among the Borrower, the Subsidiary Guarantors party thereto and
First Union, as administrative agent for and representative of (in such
capacity, the "Secured Party") the Lenders. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement or
the Security and Pledge Agreement, as applicable.
R E C I T A L S
- - - - - - - -
WHEREAS, the Borrower has informed the Administrative Agent and
Lenders that the Borrower and HPSI have proposed to sell in one or more
transactions the capital stock of XxxxxxXxxx.xxx and HealthAxis, Inc. (the
"Subject Shares") which Subject Shares are evidenced by stock certificate HA3590
representing 1,267,786 shares of common stock of HealthAxis, Inc. and stock
certificate no. P 1153 representing 100,000 shares of common stock of Provident
American Corporation (n/k/a HealthAxis, Inc.) (the "Subject Stock
Certificates");
WHEREAS, pursuant to the Security and Pledge Agreement, HPSI granted
to the Secured Party a security interest in all of its right, title and interest
in and to, among other things, the Subject Shares and Subject Stock Certificates
(collectively, the "HealthAxis Securities Collateral");
WHEREAS, the Borrower has informed the Administrative Agent and
Lenders that (i) for administrative reasons, the Borrower intends to cancel (a)
all of the debt owing by HPSI to the Borrower pursuant to that certain
Promissory Note dated January 20, 2000 made by HPSI in favor of the Borrower in
the aggregate principal amount of $29,736,000 (as amended by the Allonge thereto
dated June 8, 2000, the "HPSI Promissory Note") (the "HPSI Debt
Cancellation") and (b) $12,764,000 of the debt owing by American Benefit Plan
Administrators, Inc. ("ABPA") to HPSI pursuant to that certain Promissory Note
dated January 20, 2000 made by ABPA in favor of HPSI in the aggregate principal
amount of $16,245,000 (as amended by the Allonge thereto dated June 8, 2000, the
"ABPA Promissory Note"), which debt was transferred by HPSI and is currently
owing to the Borrower (the "Partial ABPA Debt Cancellation") and (ii) the
Borrower will treat the HPSI Debt Cancellation and the Partial ABPA Debt
Cancellation as a capital contribution to HPSI equal to the aggregate amount of
such cancelled debt and for which no additional capital stock will be issued to
Borrower by HPSI;
WHEREAS, pursuant to the Security and Pledge Agreement, the Borrower
and HPSI granted to the Secured Party a security interest in all of its right,
title and interest in and to, among other things, the HPSI Promissory Note and
the ABPA Promissory Note, respectively;
WHEREAS, the Borrower has requested that the Administrative Agent and
Required Lenders to (i) waive the restrictions contained in Sections 8.2(a) and
10.6 of the Credit Agreement and, to the extent necessary to permit the sale of
the Subject Shares (the "HealthAxis Asset Sale"), consent to the release of the
Liens created by the Security and Pledge Agreement on the HealthAxis Securities
Collateral pursuant to the terms thereof, (ii) consent to the delivery of the
HPSI Promissory Note and ABPA Promissory Note for the purpose of the HPSI Debt
Cancellation and the Partial ABPA Promissory Note Cancellation and (iii) waive
any Default or Event of Default which may have occurred under Section 11.1(b) of
the Credit Agreement as a result of the Borrower's failure to make the payments
required by Section 2.3(b)(iii)(G) of the Credit Agreement with respect to the
Borrowing Base; and
WHEREAS, the Administrative Agent and Required Lenders have agreed to
make certain amendments and waive certain requirements of the Credit Agreement
and consent to the release of liens created by the Security and Pledge Agreement
on the HealthAxis Securities Collateral and the delivery of the HPSI Promissory
Note and ABPA Promissory Note, but only on the terms and conditions hereinafter
set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereby agree pursuant to Section 13.12 of the Credit Agreement as follows:
SECTION 1.
AMENDMENTS TO THE CREDIT AGREEMENT
On the basis of the representations and warranties contained in this
Amendment, and subject to the terms and the satisfaction of the conditions set
forth in this Amendment, the Administrative Agent and Required Lenders hereby
agree as follows:
A. Amendments to Section 1.1.
-------------------------
(1) Section 1.1 of the Credit Agreement is hereby amended
by deleting the definitions of "Maintenance Capital Expenditures," "Maintenance
Carry Over Amount," "Special Project Capital Expenditures" and "Special Project
Carry Over Amount" appearing therein in their entirety.
2
(2) Section 1.1 of the Credit Agreement is further amended by
inserting the following definitions therein in alphabetical order:
"'Carry Over Amount' shall have the meaning assigned thereto in
-----------------
Section 9.4.
'First Amendment' means that certain First Amendment and Limited
---------------
Waiver and Consent to the Second Amended and Restated Credit Agreement
dated as of March 29, 2001 by and among Borrower, the Lenders and the
Administrative Agent.
'First Amendment Effective Date' means the First Amendment Effective
------------------------------
Date as defined in the First Amendment.
'Investment Banker Report' shall have the meaning assigned thereto in
------------------------
Section 8.13.
'PlanVista' means PlanVista Solutions, Inc., f/k/a National Preferred
---------
Provider Network, Inc., a New York corporation, and its successors and
assigns.
'Xxx Xxxx Letters of Credit' means (a) that certain Letter of Credit
--------------------------
No. SM409466 issued by First Union for the account of Xxxxxx X. Xxxx in the
current outstanding amount of $1,000,000 and (b) that certain Letter of
Credit No. SM409467 issued by First Union for the account of Xxxxxx X. Xxxx
in the current outstanding amount of $1,000,000.
'Small Group Alternate Plan' shall have the meaning assigned thereto
--------------------------
in Section 8.14.
'TPA Business' means the Small Group business, the Xxxx-Xxxxxxx
------------
business and the Xxxxxxxxxx Management business of the Borrower."
B. Amendments to Section 2.
-----------------------
(1) Sections 2.1(b) and (c) of the Credit Agreement are
hereby amended and restated in their entirety as follows:
"(b) Revolving Loans. Notwithstanding anything herein or in the Notes
---------------
or any other Loan Document to the contrary, on the First Amendment
Effective Date the Revolving Loan Commitments shall terminate and from and
after such date any Revolving Loans repaid or prepaid may not be
reborrowed. As of the First Amendment Effective Date, there are outstanding
$14,935,827.41 in principal amount of Revolving Loans all of which shall be
deemed to be outstanding Revolving Loans as of the First Amendment
Effective Date. Each Lender severally agrees to maintain and continue as
Revolving Loans hereunder its Pro Rata Share of $14,935,827.41 of the
principal amount of Revolving Loans which are outstanding under this
Agreement as of the First Amendment Effective Date and equals such Lender's
Pro Rata Share of the Revolving Loans. The amount of each Lender's
Revolving Loans is set forth opposite its name on Schedule 1.1(b) annexed
---------------
hereto and, as of the First Amendment Effective Date, the aggregate
outstanding principal amount shall be $14,935,827.41.
3
(c) L/C Loans. From and after the First Amendment Effective Date,
---------
subject to the provisions of Sections 2.2(a) and 3.5, each Lender severally
agrees to lend to Borrower from time to time during the period from the
First Amendment Effective Date to but excluding the Commitment Termination
Date an aggregate amount not exceeding its Pro Rata Share of the aggregate
L/C Loan Commitments to be used for the purposes identified in Section
2.6(c). The original amount of each Lender's L/C Loan Commitment as of the
First Amendment Effective Date is set forth opposite its name on Schedule
--------
1.1(b) annexed hereto and the aggregate original amount of the L/C Loan
------
Commitments is $13,597,065.01; provided that the amount of the L/C Loan
--------
Commitments shall be automatically and permanently reduced by (i) the
amount of any L/C Loan made pursuant to this Agreement, (ii) the amount of
any permanent reduction in the amount available for drawing under any
Letter of Credit (other than as a result of a draw to the extent reimbursed
by the proceeds of an L/C Loan under clause (i)) and (iii) the stated
amount of any Letter of Credit that is not renewed or extended upon the
termination or expiry thereof. Each Lender's L/C Loan Commitment shall
expire on the Final Maturity Date and all L/C Loans and all other amounts
owed hereunder with respect to the L/C Loans and the L/C Loan Commitments
shall be paid in full no later than that date. Amounts borrowed under this
Section 2.1(c) and subsequently repaid or prepaid may not be reborrowed."
(2) Section 2.3(a) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"(a) Scheduled Payments of Term Loans. From and after the First
--------------------------------
Amendment Effective Date, (i) the Borrower shall make principal payments on
the Terms Loans in installments on the dates and in the amounts set forth
below:
------------------------------------------------------
Date Scheduled Repayment
------------------------------------------------------
March 31, 2001 $ 0
------------------------------------------------------
April 30, 2001 $ 0
------------------------------------------------------
May 31, 2001 $ 750,000
------------------------------------------------------
June 30, 2001 $ 750,000
------------------------------------------------------
July 31, 2001 $ 750,000
------------------------------------------------------
August 31, 2001 $35,774,674.20
------------------------------------------------------
and (ii) the Borrower shall make two additional principal payments (the
'Additional Payments'), (x) one in the amount of $1,500,000 on or before
--------------------
April 15, 2001 and (y) one in the amount of $4,453,013 on August 31, 2001;
provided that the scheduled installments of principal of the Term Loans set
--------
forth in this Section 2.3(a) shall be reduced in connection with any
voluntary or mandatory prepayments of the Term Loans in accordance with
Section 2.3(b)(iv); and provided, further that the Term Loans and all other
-------- -------
amounts owed hereunder with respect to the Term Loans shall be paid in full
no later than the Final Maturity Date, and the final installment payable by
the Borrower in respect of the Term Loans on such date shall be in an
amount, if such amount is different
4
from that specified above, sufficient to repay all amounts owing by the
Borrower under this Agreement with respect to the Term Loans."
(3) Section 2.3(b)(iii)(C) of the Credit Agreement is hereby
amended and restated in its entirety as follows:
"(C) Prepayments and Reductions Due to Issuance of Equity or Debt
------------------------------------------------------------
Securities. On the date of receipt of the Net Securities Proceeds from the
----------
issuance of any equity or Debt Securities of the Borrower after the First
Amendment Effective Date, the Borrower shall prepay the Loans as provided
in Section 2.3(b)(iv)(B)."
(4) Section 2.3(b)(iii) of the Credit Agreement is hereby amended
by inserting a new paragraph (I) at the end thereof as follows:
"(I) Prepayments from Tax Refunds. In the event that there shall be a
----------------------------
tax refund for the Fiscal Year 2000, the Borrower shall, no later than the
date of receipt by the Borrower or its Subsidiaries of any such tax refund
prepay the Loans as provided in Section 2.3(b)(iv)(B).
(5) Section 2.3(b)(iv)(B) of the Credit Agreement is hereby
amended by inserting the following new paragraph at the end thereof as
follows:
"Notwithstanding anything herein to the contrary, from and after the
First Amendment Effective Date, unless an Event of Default has occurred and
is continuing, any amount required to be applied as a mandatory prepayment
of the Loans pursuant to Section 2.3(b)(iii)(C) shall be applied first, to
-----
prepay the Term Loans to the full extent thereof, second, to the extent of
------
any remaining portion of such amount, to prepay the L/C Loans to the full
extent thereof, third, to the extent of any remaining portion of such
-----
amount, to prepay the Revolving Loans to the full extent thereof, and
fourth, to the extent of any remaining portion of such amount, to cash
------
collateralize any outstanding Letters of Credit, such cash collateral to be
deposited in the Collateral Account and applied pursuant to Section 3.5 and
the terms of the Security and Pledge Agreement. Any amount required to be
applied as a mandatory prepayment of the Loans pursuant to Section
2.3(b)(iii)(I) shall be applied first, to cash collateralize the
-----
outstanding Xxx Xxxx Letters of Credit, such cash collateral to be
deposited in the Collateral Account and applied pursuant to Section 3.5 and
the terms of the Security and Pledge Agreement, second, to the extent of
------
any remaining portion of such amount, to prepay the Term Loans to the full
extent thereof, third, to the extent of any remaining portion of such
-----
amount, to prepay the L/C Loans to the full extent thereof, fourth, to the
------
extent of any remaining portion of such amount, to prepay the Revolving
Loans to the full extent thereof by the amount of such prepayment, and
fifth, to the extent of any remaining portion of such amount, to cash
-----
collateralize any outstanding Letters of Credit, such cash collateral to be
deposited in the Collateral Account and applied pursuant to Section 3.5 and
the terms of the Security and Pledge Agreement. Any mandatory prepayments
of Term Loans pursuant to Sections 2.3(b)(iii)(C) or (I) shall be applied
to reduce the scheduled installments of principal of the Term Loans as
follows: first, to the extent not previously prepaid, to the Additional
-----
Payments in forward order of maturity; and second, on a pro
------
5
rata basis (in accordance with the respective outstanding principal amounts
thereof) to each remaining scheduled installment of principal of the Term
Loans (other than the final such installment) that is unpaid at the time of
such payment."
C. Amendments to Section 7.
-----------------------
(1) Section 7.1(c) of the Credit Agreement is hereby amended
and restated in its entirety as follows:
"(c) As soon as practicable and in any event (i) within ninety (90)
days after the end of each Fiscal Year other than Fiscal Year 2000 and (ii)
with respect to Fiscal Year 2000, no later than May 31, 2001, Consolidated
and consolidating balance sheets of the Borrower and its Subsidiaries as of
the close of such Fiscal Year, together with Consolidated and consolidating
statements of income, retained earnings and cash flows for the Fiscal Year
then ended, including the notes thereto, all in reasonable detail setting
forth in comparative form the corresponding figures for the preceding
Fiscal Year and the corresponding figures for the Adjusted Budget for such
Fiscal Year and certified by the chief financial officer of the Borrower to
present fairly in all material respects the financial condition of the
Borrower and its Subsidiaries as of their respective dates and the results
of operations of the Borrower and its Subsidiaries for the respective
periods then ended, and, if applicable, containing disclosure of the effect
on the financial position or results of operation of any change in the
application of accounting principles and practices during the year, and in
the case of all such Consolidated financial statements, audited by and
accompanied by a report thereon by an independent certified public
accounting firm acceptable to the Administrative Agent that is not
qualified with respect to scope limitations imposed by the Borrower or with
respect to accounting principles followed by the Borrower not in accordance
with GAAP."
(2) Section 7.7 of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"SECTION 7.7 Accounts; Monthly Aging. As soon as practicable and in
------------------------
any event within twenty (20) days after the end of each calendar month
ending after the First Amendment Effective Date,
(a) with respect to Borrower and its Subsidiaries, an aging of
Accounts outstanding aged from invoice date as follows: 1 to 30 days, 31 to
60 days, 61 to 90 days, 91 to 120 days and 121 days or more, accompanied by
such supporting detail and documentation as shall be requested by the
Administrative Agent in its reasonable discretion; and
(b) with respect to PlanVista, an aging of Accounts of the top ten
(10) customers of PlanVista, by customer name, aged from invoice date as
follows: 1 to 30 days, 31 to 60 days, 61 to 90 days, 91 to 120 days and 121
days or more, accompanied by such supporting detail and documentation as
shall be requested by the Administrative Agent in its reasonable
discretion."
6
(3) Section 7 of the Credit Agreement is further amended by
renumbering Section 7.11 as new Section 7.13 and inserting new Sections
7.11 and 7.12 immediately preceding such new Section 7.13 as follows:
"SECTION 7.11 PlanVista. As soon as practicable and in any event
---------
within twenty (20) days after the end of each calendar month ending after
the First Amendment Effective Date, a report for such month setting forth
in reasonable detail a summary of all new, amended or modified contracts at
PlanVista. The summary shall include, without limitation, the length of
contract, the nature of the services to be provided, the projected revenues
and the anticipated date at which the first revenues are to be received, in
form acceptable to the Administrative Agent."
SECTION 7.12 Proposed Refinancings, Raising of New Capital.
---------------------------------------------
(a) Weekly Reports. By the close of business on Friday of each
--------------
calendar week ending after the First Amendment Effective Date, a brief
written report for such week setting forth in reasonable detail the status
of any proposed refinancing of the Credit Facilities or issuance of any
equity or debt Securities of the Borrower.
(b) Monthly Investment Banker Report. Promptly upon receipt thereof,
--------------------------------
a copy of the Investment Banker Report."
D. Amendment to Section 8. Section 8 of the Credit Agreement is
----------------------
hereby amended by renumbering Section 8.13 as new Section 8.15 and inserting new
Sections 8.13 and 8.14 immediately preceding such new Section 8.15 as follows:
"SECTION 8.13 Investment Banker. The Borrower shall by have retained
-----------------
as soon as practicable and in any event no later than April 30, 2001, the
services of an investment banker in connection with the proposed issuance
of equity or debt Securities of the Borrower. The Borrower agrees that a
condition of engagement of such investment banker shall be the agreement of
such investment banker (i) to submit to the Borrower as soon as practicable
and in any event within five (5) days after the end of each calendar month
commencing with the calendar month ending April 30, 2001, a written report
setting forth in reasonable detail the status of all efforts to issue new
equity or debt Securities of the Borrower, including, without limitation,
the names of all parties contacted and the terms of any proposals submitted
to the Borrower or such investment banker (the `Investment Banker Report'),
------------------------
(ii) that such report is to be shared with the Administrative Agent and
Lenders and (iii) that the Administrative Agent shall have the right to
require the investment banker to provide verbal reports to the
Administrative Agent and the Borrower from time to time.
SECTION 8.14 Sale of TPA Business, Alternative Plan for Small Group
------------------------------------------------------
Business. In the event the TPA Business has not been sold or otherwise
--------
disposed of on or before May 30, 2001, the Borrower shall prepare and
submit for approval by the Administrative Agent and Lenders on or before
June 6, 2001 a detailed plan for the alternate disposition of the Small
Group business (the "Small Group Alternate Plan"). The Small Group
--------------------------
Alternate Plan shall at a minimum provide detailed cash flows for the
7
transition period and a detailed strategy for the divestment of the Small
Group business which shall commence on or before June 15, 2001."
E. Amendments to Section 9.
-----------------------
(1) Section 9.4 of the Credit Agreement is hereby amended
and restated in its entirety as follows:
"SECTION 9.4 Capital Expenditures. Make or incur any Capital
--------------------
Expenditures in any Fiscal Quarter commencing with the second Fiscal
Quarter of the Fiscal Year 2001 in an aggregate amount in excess of
$200,000; provided that to the extent that Capital Expenditures permitted
--------
for any such Fiscal Quarter exceed actual Capital Expenditures for such
Fiscal Quarter, the excess shall be permitted to be carried over to the
immediately succeeding Fiscal Quarter (the `Carry Over Amount') in addition
-----------------
to the amount otherwise permitted; provided, however, that the Carry Over
-------- -------
Amount may only be carried forward for two (2) consecutive Fiscal Quarters
and not beyond and all amounts used for Capital Expenditures in any Fiscal
Quarter shall be deemed to count first against any Carry Over Amount and
then against any remaining amount permitted for any such Fiscal Quarter;
provided further, however, that in no event shall the amount of Capital
-------- ------- -------
Expenditures for any twelve (12) month period exceed $2,400,000."
(2) Section 9 is further amended by deleting Section 9.5
appearing therein in its entirety.
F. Amendment to Section 11.1. Section 11.1 is hereby amended by
-------------------------
inserting a new paragraph (n) at the end thereof as follows:
"(n) Draws Under Certain Letters of Credit. The issuance of (i) a
-------------------------------------
demand for payment by The New England Life Insurance Co. upon the Borrower
that results in a draw request under that certain Letter of Credit No.
S165884 issued by First Union for the account of The New England Life
Insurance Co. in the current outstanding amount of $6,000,000 (unless such
draw is consistent with the terms of a Small Group Alternate Plan that has
been approved by the Administrative Agent and Lenders), (ii) a demand for
payment by Cal Group Insurance Services under the promissory note dated May
27, 1993 that results in a draw request under that certain Letter of
Credit No. S046823 issued by First Union for the account of Cal Group
Insurance Services in the current outstanding amount of $983,440 or (iii) a
demand for payment under an indemnity bond issued by United Pacific
Insurance Company that results in a draw request under that certain Letter
of Credit No. S046450 issued by First Union for the account of United
Pacific Insurance Company in the current outstanding amount of $4,613,625."
G. Amendment to Schedule 1.1(b) (Lenders and Commitments). Schedule
------------------------------------------------------
1.1(b) of the Credit Agreement is hereby amended and restated in its entirety as
set forth Exhibit A attached hereto.
SECTION 2.
LIMITED WAIVER AND CONSENT TO THE CREDIT AGREEMENT; CONDITIONS
TO AMENDMENT
8
A. HealthAxis Asset Sale. On the basis of the representations and
---------------------
warranties contained in this Amendment, and subject to the terms and conditions
of this Amendment, the Administrative Agent and Required Lenders hereby agree to
waive compliance with Sections 8.2(a) and 10.6 of the Credit Agreement solely to
the extent necessary to permit the Borrower and HPSI to consummate the
HealthAxis Asset Sale pursuant to the instructions of the Administrative Agent;
provided that (a) concurrently with the consummation of any transaction
--------
comprising the Health Axis Asset Sale, the Borrower shall apply one hundred
percent (100%) of the Net Asset Sale Proceeds received in respect of the
HealthAxis Asset Sale to prepay the Loans and/or reduce the Commitments pursuant
to Section 2.3(b)(iii)(A) of the Credit Agreement which prepayment shall,
notwithstanding anything in Section 2.3(b)(iv)(B) of the Credit Agreement to the
contrary, be applied first, to the Additional Payment due April 15, 2001 to the
-----
extent then unpaid and second, to the extent of any remaining portion thereof,
------
to the Term Loans in inverse order of maturity. The Required Lenders hereby
consent to the release of the security interest of the Secured Party in and
Liens on the Collateral which constitutes the HealthAxis Securities Collateral
in connection with the HealthAxis Asset Sale.
B. Delivery of the HPSI Promissory Note and ABPA Promissory Note. On
-------------------------------------------------------------
the basis of the representations and warranties contained in this Amendment, and
subject to the terms and conditions of this Amendment, the Required Lenders
hereby consent to the delivery of the HPSI Promissory Note and the ABPA
Promissory Note by the Secured Party to the Borrower solely for the purpose of
the HPSI Debt Cancellation and Partial ABPA Debt Cancellation; provided, that
--------
(i) the Partial HPSI Debt Cancellation shall not exceed an amount equal to
$12,764,000 and (ii) concurrently with the HPSI Debt Cancellation and Partial
ABPA Debt Cancellation the Borrower shall deliver to the Administrative Agent
(a) a new promissory note made by ABPA in favor of the Borrower (duly endorsed,
where appropriate, in a manner satisfactory to the Administrative Agent)
reflecting the reduced debt under the ABPA Promissory Note and (b) duly executed
originals of an Officer's Certificate dated as of the date of the HPSI Debt
Cancellation and Partial ABPA Debt Cancellation (the "Debt Cancellation Date"),
in form and substance satisfactory to the Administrative Agent, certifying that
the representations and warranties of the Credit Parties contained in Section
6.1(t) are true, correct and complete in all material respects as of the Debt
Cancellation Date and attached thereto is a true, correct and complete copy of
Schedule 6.1(t) to the Credit Agreement as of the Debt Cancellation Date.
C. Compliance with Borrowing Base. On the basis of the
------------------------------
representations and warranties contained in this Amendment, and subject to the
terms and conditions of this Amendment, the Administrative Agent and Required
Lenders hereby agree to waive any Default or Event of Default which may have
occurred or be continuing under Section 11.1(b) of the Credit Agreement as a
result of the Borrower's failure to make a mandatory prepayment as required by
Section 2.3(b)(iii)(G) of the Credit Agreement.
D. Conditions to Amendment. In order to induce the Administrative
-----------------------
Agent and Lenders to enter into this Amendment, the Borrower agrees as follows:
(i) the Borrower shall furnish or cause to be furnished to the Administrative
Agent and Lenders as soon as practicable and in any event within thirty (30)
days of the First Amendment Effective Date an Adjusted Budget that takes into
account, among other things, the sale or liquidation of the TPA Business; and
(ii) the Borrower shall pay to the Administrative Agent for the ratable benefit
of Lenders an
9
amendment fee ("Amendment Fee") equal to $150,000 which Amendment Fee shall be
payable in cash on the earlier of (a) payment and satisfaction in full of all
the Obligations and termination of the Credit Agreement, (b) acceleration of the
Obligations, (c) June 30, 2001 and (d) issuance of equity or debt Securities of
the Borrower.
SECTION 3.
LIMITATION OF WAIVER
Except as expressly provided in this Amendment, the Credit Agreement,
the Security and Pledge Agreement and each other Loan Document shall continue to
be, and shall remain, in full force and effect. Without limiting the generality
of the provisions of Section 13.12 of the Credit Agreement, the waivers set
forth above shall be limited precisely as written and relate solely to
noncompliance by the Borrower with the provisions of Sections 2.3(b)(iii)(G),
8.2(a), 10.6 and 11.1(b) of the Credit Agreement in manner and to the extent
described above and nothing in this Limited Waiver and Consent shall be deemed
or otherwise construed to:
(a) constitute a waiver of, or consent to or a modification or
amendment of (i) Sections 2.3(b)(iii)(G), 8.2(a), 10.6 or 11.1(b) of the Credit
Agreement in any other instance or (ii) any other term or condition of the
Credit Agreement, the Security and Pledge Agreement or any other Loan Document;
(b) prejudice any other right or rights that the Administrative Agent
or the Lenders, or any of them, may now have or may have in the future under or
in connection with the Credit Agreement, Security and Pledge Agreement or the
other Loan Documents;
(c) constitute a commitment or any other undertaking or expression of
any willingness to engage in any further discussion with the Borrower or any
other person, firm or corporation with respect to any waiver, amendment,
modification or any other change to the Credit Agreement, the Security and
Pledge Agreement or the other Loan Documents or any rights or remedies arising
in favor of the Lenders or the Administrative Agent, or any of them, under or
with respect to any such documents; or
(d) constitute a waiver of, or consent to or a modification or
amendment of, any other term or condition of any other agreement by and among
the Borrower, on the one hand, and the Administrative Agent or any other Lender,
on the other hand.
SECTION 4.
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and Lenders to enter into
this Amendment, Borrower hereby represents and warrants to the Administrative
Agent and Lenders that:
A. Authorization; Binding Obligations. Each Credit Party has all
----------------------------------
requisite corporate power and authority to enter into this Amendment. The
execution, delivery and performance of this Amendment have been duly authorized
by all necessary corporate action by each Credit Party. This Amendment has been
duly executed and delivered by each Credit Party
10
and is the legal, valid and binding obligation of each Credit Party, enforceable
against each Credit Party in accordance with its terms, except to the extent
that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law). As of the First Amendment
Effective Date (as hereinafter defined), the Credit Agreement, as amended by
this Amendment, will constitute the legal, valid and binding obligation of each
Credit Party, enforceable against each Credit Party in accordance with its
terms, except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).
B. Incorporation of Representations. Each representation and
--------------------------------
warranty of each Credit Party contained in each of the Loan Documents is true,
correct and complete in all material respects on and as of the First Amendment
Effective Date to the same extent as though made on and as of the First
Amendment Effective Date, except to the extent such representations and
warranties relate to an earlier date, in which case they were true, correct and
complete in all material respects as of such earlier date.
C. Absence of Defaults. No event has occurred and is continuing or
-------------------
would result from the execution, delivery or performance of this Amendment that
constitutes or would constitute a Default or Event of Default after giving
effect to this Amendment.
D. Financial Projections. All financial projections concerning the
---------------------
Borrower and its Subsidiaries that have been or are hereafter made available to
the Administrative Agent or the other Lenders by the Borrower or any of its
representatives in connection with the transactions contemplated hereby (the
"Projections") have been (or will be, in the case of Projections made available
after the date hereof) prepared in good faith based upon reasonable assumptions.
E. Performance. The Borrower has performed in all material respects
-----------
all agreements to be performed on its part on or before the date hereof as set
forth in the Credit Agreement.
SECTION 5.
ACKNOWLEDGEMENT AND CONSENT BY CREDIT PARTIES
The Borrower and each other Credit Party executing a counterpart
hereto agree to and acknowledge the terms and provisions of this Amendment and
confirm that each Loan Document to which such Credit Party is a party shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or affected by the
execution of this Amendment, except as specifically provided herein. The
Borrower and each other Credit Party executing a counterpart hereof represent
and warrant that all representations and warranties contained in each Loan
Document to which such Credit Party is a party are true, correct and complete in
all material respects as of the date hereof to the same extent as though made on
each such date and that the Borrower and each such Credit Party has performed in
all material respects all agreements to be performed on its part on or before
the date hereof as set forth in the Loan Documents.
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SECTION 6.
CONDITIONS TO EFFECTIVENESS
This Amendment shall become effective as of the date hereof (the
"First Amendment Effective Date") only upon receipt of the following by the
Administrative Agent:
(a) counterparts hereof duly executed by each Credit Party and the
Required Lenders and written or telephonic notification of such execution and
authorization of delivery thereof;
(b) a certificate on behalf of PlanVista, in form and substance
satisfactory to the Administrative Agent, and certified as accurate in all
material respects by a Responsible Officer, that attached thereto is: (i) an
updated pro forma balance sheet of PlanVista setting forth on a pro forma basis
--- ----- --- -----
the financial condition of PlanVista as of the date the TPA Business is
divested; (ii) updated statements of profits and losses and income of PlanVista,
all in reasonable detail and (iii) a report of rolling 12-month cash flows of
PlanVista on a monthly and a weekly basis for the Fiscal Year 2000, including,
without limitation, tail costs from divestiture of the TPA Business, all in
reasonable detail;
(c) an agreement from XXXXX, in form and substance satisfactory to the
Administrative Agent, supporting the pending sale of the TPA Business; and
(d) such other documents as the Administrative Agent may reasonably
request.
SECTION 7.
MISCELLANEOUS
A. Effect of Amendment. Except as specifically provided herein, this
-------------------
Amendment does not in any way waive, amend, modify, affect or impair the terms
and conditions of the Credit Agreement or the other Loan Documents, and all
terms and conditions of the Credit Agreement and the other Loan Documents are
hereby ratified and confirmed and shall remain in full force and effect unless
otherwise specifically amended, waived, modified or changed pursuant to the
terms and conditions of this Amendment.
On and after the First Amendment Effective Date, each reference in the
Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words
of like import referring to the Credit Agreement, and each reference in the
other Loan Documents to the "Credit Agreement", "thereunder", "thereof", or
words of like import referring to the Credit Agreement shall mean and be a
reference to the Credit Agreement as modified by this Amendment.
B. Fees and Expenses. The Borrower acknowledges that all costs, fees
-----------------
and expenses as described in Section 13.2 of the Credit Agreement incurred by
the Administrative Agent in connection with the preparation, execution and
delivery of this Amendment and the documents and transactions contemplated
hereby, including, without limitation, the reasonable fees and disbursements of
counsel for the Administrative Agent, shall be for the account of the Borrower.
[XXXXX] = Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect to
the omitted portions.
12
C. Headings. Section and subsection headings in this Amendment are
--------
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. Applicable Law. THIS LIMITED WAIVER AND CONSENT AND THE RIGHTS
--------------
AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NORTH CAROLINA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. Counterparts. This Amendment may be executed in any number of
------------
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
13
EXHIBIT 10.12d
IN WITNESS WHEREOF, the parties hereto have caused this Limited Waiver
and Consent to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
FIRST UNION NATIONAL BANK,
individually and as Administrative Agent
By: /s/ Xxxxxxx Xxxx
---------------------------------------
Name: Xxxxxxx Xxxx
Title: Authorized Officer
CREDIT LYONNAIS, NEW YORK BRANCH,
as a Lender
By: /s/ Xxxx Xxxxxxx Xxx Xxxxxx
---------------------------------------
Name: Xxxx Xxxxxxx Xxx Xxxxxx
Title: Vice President
SUNTRUST BANK, as a Lender
By: /s/ Xxxxxx X. Xxxxxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Director
FLEET NATIONAL BANK, as a Lender
By: /s/ Xxxx X. Xxxx, II
---------------------------------------
Name: Xxxx X. Lucy, II
Title: Vice President
SOUTHTRUST BANK, as a Lender
By: /s/ B.E. Xxxxxxx
---------------------------------------
Name: B.E. Xxxxxxx
Title: Group Vice President
S-1
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEEBANK BA "RABOBANK
NEDERLAND", NEW YORK BRANCH, as a
Lender
By: /s/ Xxxxx X. Xxxxxxxxxx /s/ Xxxx XxXxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxxxx Xxxx XxXxxxx
Title: Managing Director Vice President
Chief Risk Officer
BANK OF AMERICA, N.A., as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
AMSOUTH BANK, as a Lender
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice president
HIBERNIA NATIONAL BANK, as a Lender
By: /s/ Xxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
FIFTH THIRD BANK, CENTRAL OHIO, as a
Lender
By: /s/ Xxxx Xxxxxx
---------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
S-2
BORROWER:
HEALTHPLAN SERVICES CORPORATION,
as Borrower
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President & Chief Executive Officer
OTHER CREDIT PARTIES:
HEALTHPLAN SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
PLANVISTA SOLUTIONS, INC. (f/k/a
NATIONAL PREFERRED PROVIDER
NETWORK, INC.)
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
NATIONAL NETWORK SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
S-3
QUALITY MEDICAL ADMINISTRATORS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
AMERICAN BENEFIT PLAN ADMINISTRATORS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President &
Secretary
HPS OF DELAWARE LLC (f/k/a CENTRA
HEALTHPLAN LLC)
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
HPS OF LOUISIANA, INC. (f/k/a EMPLOYEE
BENEFIT SERVICES, INC.)
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
GROUP BENEFIT ADMINISTRATORS
INSURANCE AGENCY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Clerk
S-4
HEALTHPLAN SERVICES INSURANCE
AGENCY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Clerk
HEALTHPLAN SERVICES INSURANCE
AGENCY OF ILLINOIS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
XXXXXXXXXX MANAGEMENT CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
PROHEALTH, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
HPS OF MISSOURI, INC. (f/k/a REH
AGENCY OF MISSOURI, INC.)
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Secretary and Treasurer
S-5
SOUTHERN NEVADA ADMINISTRATORS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
EXHIBIT A Schedule 1.1(b): Lenders and Commitments
[AS REQUIRED BY APPLICABLE LAW, THE COMPANY WILL FURNISH SUPPLEMENTALLY ANY
OMITTED EXHIBIT OR SCHEDULE UPON REQUEST]
S-6
