SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-1
AMENDMENT NO. 4
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
and
SCHEDULE 13D
AMENDMENT NO. 4
EMPHESYS Financial Group, Inc.
(Name of Subject Company)
HEW, Inc.
a wholly owned subsidiary of
HUMANA INC.
(Bidders)
COMMON STOCK, $.01 PAR VALUE
(Title of Class of Securities)
29158K104
(CUSIP No. of Class of Securities)
Arthur P. Hipwell, Esq.
Senior Vice President & General Counsel
Humana Inc.
500 West Main Street
Louisville, Kentucky 40202
(502) 580-1000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on behalf of the Bidders)
Copies to:
Jeffrey Bagner, Esq.
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004-1980
(212) 859-8000
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section
18 of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however,
see the Notes).
<PAGE>
CUSIP NO. 29158K104 Page 2 of 3 Pages
This Amendment No. 4 amends and supplements the Tender
Offer Statement on Schedule 14D-1 and on Schedule 13D filed on
August 16, 1995, as amended on August 24, 1995, August 30,
1995 and September 15, 1995 (the "14D-1"), relating to a
tender offer by HEW, Inc., a Delaware corporation (the
"Offeror") and a wholly owned subsidiary of Humana Inc., a
Delaware corporation (the "Parent"), to purchase all
outstanding shares of common stock, par value $0.01 per share
(the "Shares"), of EMPHESYS Financial Group, Inc. (the
"Company") at a purchase price of $37.50 per Share, net to the
seller, in cash, without interest, upon the terms and
conditions set forth in the Offer to Purchase, dated August
16, 1995, and in the related Letter of Transmittal.
Item 4 Source and Amount of Funds or Other
Consideration.
(a) and (b): The information set forth in the second,
third and fourth paragraphs of Section 10 ("Source and Amount
of Funds") of the Offer to Purchase are amended and restated
as follows:
Under a renegotiated Amended and Restated Credit
Agreement, dated as of September 26, 1995 (the
"Credit Agreement"), by and among the Parent, the
several banks and other financial institutions
from time to time parties thereto (the
"Lenders"), and Chemical Bank, as agent and as
CAF Loan Agent (the "Agent"), the Parent may,
from time to time, borrow up to $600 million for
general corporate purposes. As of September 27,
1995, no borrowings are outstanding under the
Credit Agreement.
Pursuant to the Credit Agreement, the Parent may
request the Lenders to make "Alternate Base Rate
Loans," "Eurodollar Loans" or a combination
thereof, as determined by the Parent. Alternate
Base Rate Loans made pursuant to the Credit
Agreement bear interest on any date at a rate per
annum equal to the greatest of (i) Chemical
Bank's prime rate as publicly announced, (ii) the
Base CP Rate (as defined in the Credit Agreement)
in effect on such day plus 1%, and (iii) the
Federal Funds Effective Rate in effect on such
day plus 0.5000%. Eurodollar Loans made pursuant
to the Credit Agreement bear interest at a per
annum rate determined as an average of the rate
for dollar deposits offered in the interbank
eurodollar market two days prior to the interest
period for the Eurodollar Loan, plus an
additional margin ranging from 0.1600% to
0.4000%. In addition to the Alternate Base Rate
Loans and the Eurodollar Loans, the Credit
Agreement provides that the Parent may request
the Lender to make "CAF Loans," which are
uncommitted advances at competitive rates made on
an auction basis. The Credit Agreement provides
for the payment by the Parent to the Agent, for
the account of each Lender, of a facility fee in
respect of the average daily amount of the
commitment (regardless of utilization) of such
Lender during the preceding fiscal quarter, to be
computed at a rate ranging from 0.0900% to
0.2250%, depending upon the ratio of the Parent's
consolidated total debt to the sum of the
Parent's consolidated total debt and consolidated
net worth (as those terms are defined in the
Credit Agreement). The Credit Agreement contains
customary conditions to borrowing,
representations and warranties, covenants and
events of default. Amounts under the Credit
Agreement may generally be borrowed, repaid and
reborrowed from time to time. All borrowings
under the Credit Agreement mature on September
25, 2000. The Lenders include Chemical Bank;
Bank of America National Trust & Savings
Association; The Chase Manhattan Bank, N.A.; The
First National Bank of Chicago; National City
Bank, Kentucky; NationsBank of Georgia, N.A.; PNC
Bank, Kentucky, Inc.; The Sakura Bank, Limited;
Wachovia Bank of Georgia, N.A.; Credit Lyonnais,
Cayman Islands Branch; Deutsche Bank AG, New York
and/or Cayman Islands Branch; First Interstate
Bank of California; The Sanwa Bank, Limited,
Atlanta Agency; The Sumitomo Bank, Ltd., New York
Branch; ABN Amro, N.V.; The Bank of Nova Scotia;
Citibank, N.A.; The Mitsubishi Bank, Limited;
Bank of Louisville & Trust Company; and The
Boatmen's National Bank of St. Louis.
The foregoing description of the Credit Agreement
is qualified in its entirety by reference to the
text of the Credit Agreement filed as an exhibit
to the Amendment No. 4 to the Tender Offer
Statement on Schedule 14D-1 of the Offeror and
the Parent filed with the Securities and Exchange
Commission in connection with the Offer and is
incorporated herein by reference.
Item 10 Additional Information.
The press release attached hereto as Exhibit (a)(14) is
incorporated by reference.
Item 11 Material To Be Filed as Exhibits.
Exhibit (a)(14) - Press Release issued by the Parent on
September 28, 1995.
Exhibit (b)(2) - Amended and Restated Credit Agreement
dated as of September 26, 1995, among Chemical Bank as Agent,
the Banks party thereto and the Parent.
<PAGE>
CUSIP NO. 29158K104 Page 3 of 3 Pages
SIGNATURE
After due inquiry and to the best of its knowledge and
belief, each of the undersigned certifies that the information
set forth in this statement is true, complete and correct.
HUMANA INC.
BY: /S/ ARTHUR P. HIPWELL
ARTHUR P. HIPWELL
SENIOR VICE PRESIDENT
AND GENERAL COUNSEL
HEW, INC.
BY: /S/ JAMES E. MURRAY
JAMES E. MURRAY
VICE PRESIDENT AND
CONTROLLER
September 28, 1995
EXHIBIT (a)(14)
Humana News Release
For Further Information:
Laurie G. Scarborough
Investor Relations
502/580-1037
September 28, 1995
HUMANA SIGNS $600 MILLION CREDIT AGREEMENT
LOUISVILLE, KY. --- Humana Inc. (NYSE: HUM) announced today that
the company renegotiated its revolving credit agreement increasing the
committed amount from $350 million to $600 million. The 20 bank
syndication effort lead by Chemical Securities Inc. allowed Humana to obtain
lower financing costs and extend the maturity of the agreement.
The company will use up to $300 million of this credit to fund a portion
of its previously-announced acquisition of EMPHESYS Financial Group, Inc.
(NYSE: EFG). The remaining amount of the unused credit agreement will be
available for general corporate purposes, including future acquisitions.
The company recently received credit ratings of A- and A3 from
Standard & Poor's and Moody's Investor Service, respectively, both of which
were reaffirmed following Humana's announcement of the EMPHESYS
acquisition. The company believes that these ratings contributed to the
favorable terms received on the renegotiated credit agreement.
Headquartered in Louisville, Kentucky, Humana provides managed
health care services to 2.4 million members through the operation of health
maintenance organizations and preferred provider organizations located in 14
states and the District of Columbia.
AMENDED AND RESTATED CREDIT AGREEMENT
among
HUMANA INC.,
THE SEVERAL BANKS AND OTHER FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTIES HERETO
AND
CHEMICAL BANK,
AS AGENT AND AS CAF LOAN AGENT
DATED AS OF SEPTEMBER 26, 1995
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . 17
SECTION 2. AMOUNT AND TERMS OF LOANS. . . . . . . . . . . . . . . 18
2.1 Revolving Credit Loans and Revolving Credit
Notes . . . . . . . . . . . . . . . . . . . . . . 18
2.2 CAF Loans and CAF Loan Notes. . . . . . . . . . . 19
2.3 Fees. . . . . . . . . . . . . . . . . . . . . . . 24
2.4 Termination, Reduction or Extension of
Commitments . . . . . . . . . . . . . . . . . . . 24
2.5 Optional Prepayments. . . . . . . . . . . . . . . 26
2.6 Conversion Options; Minimum Amount of
Loans . . . . . . . . . . . . . . . . . . . . . . 27
2.7 Interest Rate and Payment Dates for Revolving
Credit Loans. . . . . . . . . . . . . . . . . . . 28
2.8 Computation of Interest and Fees. . . . . . . . . 28
2.9 Inability to Determine Interest Rate. . . . . . . 29
2.10 Pro Rata Borrowings and Payments. . . . . . . . . 30
2.11 Illegality. . . . . . . . . . . . . . . . . . . . 32
2.12 Requirements of Law . . . . . . . . . . . . . . . 32
2.13 Capital Adequacy. . . . . . . . . . . . . . . . . 33
2.14 Taxes . . . . . . . . . . . . . . . . . . . . . . 34
2.15 Indemnity . . . . . . . . . . . . . . . . . . . . 35
2.16 Application of Proceeds of Loans. . . . . . . . . 35
2.17 Notice of Certain Circumstances; Assignment
of Commitments Under Certain
Circumstances . . . . . . . . . . . . . . . . . . 36
2.18 Regulation U . . . . . . . . . . . . . . . . . . 37
SECTION 3. LETTERS OF CREDIT. . . . . . . . . . . . . . . . . . . 38
3.1 L/C Sublimit. . . . . . . . . . . . . . . . . . . 38
3.2 Procedure for Issuance of Letters of Credit . . . 39
3.3 Fees, Commissions and Other Charges . . . . . . . 39
3.4 L/C Participation . . . . . . . . . . . . . . . . 40
3.5 Reimbursement Obligation of the Borrower. . . . . 41
3.6 Obligations Absolute. . . . . . . . . . . . . . . 41
3.7 Letter of Credit Payments . . . . . . . . . . . . 41
3.8 Application . . . . . . . . . . . . . . . . . . . 42
SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . 42
4.1 Corporate Existence; Compliance with Law. . . . . 42
4.2 No Legal Obstacle to Agreement;
Enforceability. . . . . . . . . . . . . . . . . . 42
4.3 Litigation. . . . . . . . . . . . . . . . . . . . 43
4.4 Disclosure. . . . . . . . . . . . . . . . . . . . 43
4.5 Defaults. . . . . . . . . . . . . . . . . . . . . 44
4.6 Financial Condition . . . . . . . . . . . . . . . 44
4.7 Changes in Condition. . . . . . . . . . . . . . . 44
4.8 Assets. . . . . . . . . . . . . . . . . . . . . . 44
4.9 Tax Returns . . . . . . . . . . . . . . . . . . . 45
4.10 Contracts, etc. . . . . . . . . . . . . . . . . . 45
4.11 Subsidiaries. . . . . . . . . . . . . . . . . . . 45
4.12 Burdensome Obligations. . . . . . . . . . . . . . 45
4.13 Pension Plans . . . . . . . . . . . . . . . . . . 46
4.14 Environmental and Public and Employee Health
and Safety Matters. . . . . . . . . . . . . . . . 46
4.15 Federal Regulations . . . . . . . . . . . . . . . 46
4.16 Investment Company Act; Other Regulations . . . . 47
4.17 Solvency. . . . . . . . . . . . . . . . . . . . . 47
4.19 Business Activity . . . . . . . . . . . . . . . . 47
4.20 Purpose of Loans. . . . . . . . . . . . . . . . . 47
SECTION 5. CONDITIONS . . . . . . . . . . . . . . . . . . . . . . 47
5.1 Conditions to the Closing Date. . . . . . . . . . 47
5.2 Conditions to Each Loan . . . . . . . . . . . . . 49
SECTION 6. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . 50
6.1 Taxes, Indebtedness, etc. . . . . . . . . . . . . 50
6.2 Maintenance of Properties; Maintenance of
Existence . . . . . . . . . . . . . . . . . . . . 51
6.3 Insurance . . . . . . . . . . . . . . . . . . . . 51
6.4 Financial Statements. . . . . . . . . . . . . . . 51
6.5 Certificates; Other Information . . . . . . . . . 53
6.6 Compliance with ERISA . . . . . . . . . . . . . . 54
6.7 Compliance with Laws. . . . . . . . . . . . . . . 54
6.8 Inspection of Property; Books and Records;
Discussions . . . . . . . . . . . . . . . . . . . 54
6.9 Notices . . . . . . . . . . . . . . . . . . . . . 55
6.10 Maintenance of Accreditation, Etc. . . . . . . . 56
6.11 Further Assurances. . . . . . . . . . . . . . . . 56
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . 56
7.1 Financial Condition Covenants . . . . . . . . . . 56
7.2 Limitation on Subsidiary Indebtedness . . . . . . 57
7.3 Limitation on Liens . . . . . . . . . . . . . . . 57
7.4 Limitations on Fundamental Changes. . . . . . . . 58
7.5 Limitation on Sale of Assets. . . . . . . . . . . 59
7.6 Limitation on Distributions . . . . . . . . . . . 60
7.7 Transactions with Affiliates. . . . . . . . . . . 60
7.8 Sale and Leaseback. . . . . . . . . . . . . . . . 60
7.9 Limitation on Negative Pledge Clauses . . . . . . 60
SECTION 8. DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . 61
8.1 Events of Default . . . . . . . . . . . . . . . . 61
8.2 Annulment of Defaults . . . . . . . . . . . . . . 64
8.3 Waivers . . . . . . . . . . . . . . . . . . . . . 65
8.4 Course of Dealing . . . . . . . . . . . . . . . . 65
SECTION 9. THE AGENT. . . . . . . . . . . . . . . . . . . . . . . 65
9.1 Appointment . . . . . . . . . . . . . . . . . . . 65
9.2 Delegation of Duties. . . . . . . . . . . . . . . 65
9.3 Exculpatory Provisions. . . . . . . . . . . . . . 66
9.4 Reliance by Agent . . . . . . . . . . . . . . . . 66
9.5 Notice of Default . . . . . . . . . . . . . . . . 67
9.6 Non-Reliance on Agent and Other Banks . . . . . . 67
9.7 Indemnification . . . . . . . . . . . . . . . . . 67
9.8 Agent and CAF Loan Agent in Its Individual
Capacity. . . . . . . . . . . . . . . . . . . . . 68
9.9 Successor Agent . . . . . . . . . . . . . . . . . 68
SECTION 10. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . 69
10.1 Amendments and Waivers. . . . . . . . . . . . . . 69
10.2 Notices . . . . . . . . . . . . . . . . . . . . . 69
10.3 No Waiver; Cumulative Remedies. . . . . . . . . . 70
10.4 Survival of Representations and Warranties. . . . 70
10.5 Payment of Expenses and Taxes; Indemnity. . . . . 70
10.6 Successors and Assigns; Participations;
Purchasing Banks. . . . . . . . . . . . . . . . . 71
10.7 Adjustments; Set-off. . . . . . . . . . . . . . . 75
10.8 Counterparts. . . . . . . . . . . . . . . . . . . 76
10.9 GOVERNING LAW . . . . . . . . . . . . . . . . . . 76
10.10 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . 76
10.11 Submission To Jurisdiction; Waivers . . . . . . . 76
10.12 Confidentiality of Information. . . . . . . . . . 76
SCHEDULES
SCHEDULE I Commitment Amounts and Percentages; Lending
Offices; Addresses for Notice
SCHEDULE II Applicable Margins
SCHEDULE III Indebtedness
SCHEDULE IV Subsidiaries of the Company
SCHEDULE V Liens
EXHIBITS
EXHIBIT A Form of Revolving Credit Note
EXHIBIT B Form of Grid CAF Loan Note
EXHIBIT C Form of Individual CAF Loan Note
EXHIBIT D Form of CAF Loan Request
EXHIBIT E Form of CAF Loan Offer
EXHIBIT F Form of CAF Loan Confirmation Agreement
EXHIBIT G Form of Commitment Transfer Supplement
EXHIBIT H Form of Closing Certificate
AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of September 26, 1995, among HUMANA INC., a Delaware
corporation (the "Company"), the several banks and other financial
institutions from time to time parties to this Agreement (the "Banks")
and CHEMICAL BANK, a New York banking corporation, as agent for
the Banks hereunder (in such capacity, the "Agent") and as CAF Loan
agent (in such capacity, the "CAF Loan Agent").
WHEREAS, the Company, certain of the Banks (the
"Original Banks") and the Agent are parties to the Credit Agreement
and Amendment dated as of October 27, 1994, as amended and as
in effect immediately prior to the effectiveness of this Agreement (the
"Original Credit Agreement");
WHEREAS, the Credit Agreement, dated as of January
12, 1994, among the parties named therein, was adopted and
incorporated by reference into the Original Credit Agreement;
WHEREAS, the parties to the Original Credit Agreement
wish to amend and restate the Original Credit Agreement pursuant to
this Agreement in order, inter alia, to increase the aggregate
Commitments to $600,000,000, to extend the Termination Date and
to amend certain covenants; and
WHEREAS, the parties hereto have elected to amend
and restate the Original Credit Agreement pursuant to this Agreement
rather than amend the Original Credit Agreement or enter into a new
credit agreement for their convenience and intend that all
indebtedness and obligations created under the Original Credit
Agreement and the other Loan Documents be continued hereunder
and thereunder and remain in full force and effect and not be
discharged, paid, satisfied or cancelled;
NOW, THEREFORE, the parties hereto hereby agree that
on the Closing Date the Original Credit Agreement shall be amended
and restated in its entirety as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the
following terms have the following meanings:
"Acquisition": the acquisition by the Company of
EMPHESYS by means of a tender offer for the capital stock of
EMPHESYS followed by a merger between EMPHESYS and a
Subsidiary of the Company.
"Additional Bank": as defined in subsection 2.4(d).
"Admitted Asset": with respect to any HMO Subsidiary
or Insurance Subsidiary, any asset of such HMO subsidiary or
Insurance Subsidiary which qualifies as an "admitted asset" (or
any like item) under the applicable Insurance Regulations and
HMO Regulations.
"Affiliate": (a) any director or officer of any corporation
or partner or joint venturer or Person holding a similar position
in another Person or members of their families, whether or not
living under the same roof, or any Person owning beneficially
more than 5% of the outstanding common stock or other
evidences of beneficial interest of the Person in question, (b)
any Person of which any one or more of the Persons described
in clause (a) above is an officer, director or beneficial owner of
more than 5% of the shares or other beneficial interest and (c)
any Person controlled by, controlling or under common control
with the Person in question.
"Aggregate Outstanding Extensions of Credit": as to
any Bank at any time, an amount equal to the sum of (a) the
aggregate principal amount of all Loans made by such Bank
then outstanding and (b) such Bank's Commitment Percentage
of the L/C Obligations then outstanding.
"Agreement" : this Amended and Restated Credit
Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.
"Alternate Base Rate": for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal
to the greatest of (a) the Prime Rate in effect on such day, (b)
the Base CD Rate in effect on such day plus 1% and (c) the
Federal Funds Effective Rate in effect on such day plus 1/2 of
1%. For purposes hereof: "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by
the Agent as its prime rate in effect at its principal office in
New York City (each change in the Prime Rate to be effective
on the date such change is publicly announced); "Base CD
Rate" shall mean the sum of (a) the product of (i) the Three-
Month Secondary CD Rate and (ii) a fraction, the numerator of
which is one and the denominator of which is one minus the
C/D Reserve Percentage and (b) the C/D Assessment Rate;
"Three-Month Secondary CD Rate" shall mean, for any day,
the secondary market rate for three-month certificates of
deposit reported as being in effect on such day (or, if such day
shall not be a Business Day, the next preceding Business Day)
by the Board of Governors of the Federal Reserve System (the
"Board") through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or
such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of
deposit of major money center banks in New York City
received at approximately 10:00 A.M., New York City time, on
such day (or, if such day shall not be a Business Day, on the
next preceding Business Day) by the Agent from three New
York City negotiable certificate of deposit dealers of
recognized standing selected by it; "C/D Reserve Percentage"
shall mean, for any day, that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the
Board (or any successor), for determining the maximum
reserve requirement for a member bank of the Federal Reserve
System in New York City with deposits exceeding one billion
Dollars in respect of new non-personal three-month certificates
of deposit in the secondary market in Dollars in New York City
and in an amount of $100,000 or more; "C/D Assessment
Rate" shall mean, for any day, the net annual assessment rate
(rounded upward to the nearest 1/100th of 1%) determined by
Chemical Bank to be payable on such day to the Federal
Deposit Insurance Corporation or any successor ("FDIC") for
FDIC's insuring time deposits made in Dollars at offices of
Chemical Bank in the United States; and "Federal Funds
Effective Rate" shall mean, for any day, the weighted average
of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal
funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate
is not so published for any day which is a Business Day, the
average of the quotations for the day of such transactions
received by the Agent from three federal funds brokers of
recognized standing selected by it. Any change in the
Alternate Base Rate due to a change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective on the effective day of such
change in the Prime Rate, the Three-Month Secondary CD Rate
or the Federal Funds Effective Rate, respectively.
"Alternate Base Rate Loans": Revolving Credit Loans
hereunder at such time as they are made and/or being
maintained at a rate of interest based upon the Alternate Base
Rate.
"Applicable LIBOR Auction Advance Rate": in respect
of any CAF Loan requested pursuant to a LIBOR Auction
Advance Request, the London interbank offered rate for
deposits in Dollars for the period commencing on the date of
such CAF Loan and ending on the maturity date thereof which
appears on Telerate Page 3750 as of 11:00 A.M., London
time, two Working Days prior to the beginning of such period.
"Applicable Margin": for each Type of Revolving Credit
Loan, for any fiscal quarter, the applicable rate per annum set
forth in Schedule 2 hereto opposite the Consolidated
Capitalization Ratio then in effect. Such Applicable Margin
shall be in effect for the period beginning the first Business
Day following the date to which the Consolidated
Capitalization Ratio Certificate is applicable.
"Application": any application, in such form as the
Issuing Bank may specify from time to time, requesting the
Issuing Bank to open a Letter of Credit.
"Available Commitments": at a particular time, an
amount equal to the difference between (a) the amount of the
Commitments at such time and (b) the Aggregate Outstanding
Extensions of Credit at such time.
"Average Quarterly Commitment": as defined in
subsection 2.3(a) hereto.
"Bank Obligations": as defined in subsection 8.1.
"Banks": the several banks and other financial
institutions (which may include certain Original Banks) from
time to time parties to this Agreement.
"Benefitted Bank": as defined in subsection 10.7.
"Borrowing Date": any Business Day specified in a
notice pursuant to subsection 2.1(c) or 2.2(b) as a date on
which the Company requests the Banks to make Revolving
Credit Loans or CAF Loans, as the case may be, hereunder.
"Business Day": a day other than a Saturday, Sunday
or other day on which commercial banks in New York City are
authorized or required by law to close.
"CAF Loan": each CAF Loan made pursuant to
subsection 2.2; the aggregate amount advanced by a CAF
Loan Bank pursuant to subsection 2.2 on each CAF Loan Date
shall constitute one or more CAF Loans, as specified by such
CAF Loan Bank pursuant to subsection 2.2(b)(vi).
"CAF Loan Assignee": as defined in subsection
10.6(c).
"CAF Loan Assignment": any assignment by a CAF
Loan Bank to a CAF Loan Assignee of a CAF Loan and related
Individual CAF Loan Note; any such CAF Loan Assignment to
be registered in the Register must set forth, in respect of the
CAF Loan Assignee thereunder, the full name of such CAF
Loan Assignee, its address for notices, its lending office
address (in each case with telephone and facsimile
transmission numbers) and payment instructions for all
payments to such CAF Loan Assignee, and must contain an
agreement by such CAF Loan Assignee to comply with the
provisions of subsection 10.6(c) and subsection 10.6(h) to the
same extent as any Bank.
"CAF Loan Banks": Banks from time to time
designated as CAF Loan Banks by the Company by written
notice to the CAF Loan Agent (which notice the CAF Loan
Agent shall transmit to each such CAF Loan Bank).
"CAF Loan Confirmation": each confirmation by the
Company of its acceptance of one or more CAF Loan Offers,
which CAF Loan Confirmation shall be substantially in the form
of Exhibit F and shall be delivered to the CAF Loan Agent in
writing or by facsimile transmission.
"CAF Loan Date": each date on which a CAF Loan is
made pursuant to subsection 2.2.
"CAF Loan Note": a Grid CAF Loan Note or an
Individual CAF Loan Note.
"CAF Loan Offer": each offer by a CAF Loan Bank to
make one or more CAF Loans pursuant to a CAF Loan
Request, which CAF Loan Offer shall contain the information
specified in Exhibit E and shall be delivered to the CAF Loan
Agent by telephone, immediately confirmed by facsimile
transmission.
"CAF Loan Request": each request by the Company
for CAF Loan Banks to submit bids to make CAF Loans, which
shall contain the information in respect of such requested CAF
Loans specified in Exhibit D and shall be delivered to the CAF
Loan Agent in writing or by facsimile transmission, or by
telephone, immediately confirmed by facsimile transmission.
"Capital Stock": any and all shares, interests,
participations or other equivalents (however designated) of
capital stock of a corporation, any and all equivalent
ownership interests in a Person (other than a corporation) and
any and all warrants or options to purchase any of the
foregoing.
"Change in Control": of any corporation, (a) any
Person or "group" (as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended), other than the
Company, that shall acquire more than 50% of the Voting
Stock of such corporation or (b) any Person or group (as
defined in preceding clause (a)), other than the Company, that
shall acquire more than 20% of the Voting Stock of such
corporation and, at any time following an acquisition described
in this clause (b), the Continuing Directors shall not constitute
a majority of the board of directors of such corporation.
"Chemical Bank": Chemical Bank, a New York banking
corporation.
"Closing Date": the date on which all of the conditions
precedent for the Closing Date set forth in Section 5 shall have
been fulfilled.
"Code": the Internal Revenue Code of 1986, as
amended from time to time.
"Commitment": as to any Bank, its obligation to make
Revolving Credit Loans to the Company pursuant to subsection
2.1(a) and/or issue or participate in Letters of Credit issued on
behalf of the Company in an aggregate principal amount and/or
face amount not to exceed at any one time outstanding the
amount set forth opposite such Bank's name in Schedule I, as
such amount may be reduced or increased from time to time
as provided herein.
"Commitment Percentage": as to any Bank, the
percentage of the aggregate Commitments constituted by
such Bank's Commitment.
"Commitment Period": the period from and including
the Closing Date to but not including the Termination Date or
such earlier date on which the Commitments shall terminate as
provided herein.
"Commitment Transfer Supplement": a Commitment
Transfer Supplement, substantially in the form of Exhibit G.
"Commonly Controlled Entity": an entity, whether or
not incorporated, which is under common control with the
Company within the meaning of Section 4001 of ERISA or is
part of a group which includes the Company and which is
treated as a single employer under Section 414 of the Code.
"Consolidated Assets": the consolidated assets of the
Company and its Subsidiaries, determined in accordance with
GAAP.
"Consolidated Capitalization Ratio": as at the end of
any fiscal quarter, the ratio of (i) Consolidated Total Debt to (ii)
the sum of (A) Consolidated Total Debt and (B) Consolidated
Net Worth, in each case at such date.
"Consolidated Capitalization Ratio Certificate": as
defined in subsection 6.4(b) hereto.
"Consolidated Earnings Before Interest and Taxes": for
any period for which the amount thereof is to be determined,
Consolidated Net Income for such period plus all amounts
deducted in computing such Consolidated Net Income in
respect of Consolidated Interest Expense and income taxes, all
determined in accordance with GAAP.
"Consolidated Interest Expense": for any period for
which the amount thereof is to be determined, all amounts
deducted in computing Consolidated Net Income for such
period in respect of interest expense on Indebtedness
determined in accordance with GAAP.
"Consolidated Net Income": for any period, the
consolidated net income, if any, after taxes, of the Company
and its Subsidiaries for such period determined in accordance
with GAAP.
"Consolidated Net Tangible Assets": at any date, the
total amount of assets (less applicable reserves and other
properly deductible items) after deducting therefrom (i) all
current liabilities as disclosed on the consolidated balance
sheet of the Company (excluding any thereof which are by
their terms extendable or renewable at the option of the
obligor thereon to a time more than 12 months after the time
as of which the amount thereof is being computed and
excluding any deferred income taxes that are included in
current liabilities), and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense
and other like intangible assets, all as set forth on the most
recent consolidated balance sheet of the Company and
computed in accordance with GAAP.
"Consolidated Net Worth": Consolidated Assets of the
Company and its Subsidiaries less the following:
(a) the amount, if any, at which any treasury
stock appears on the assets side of the balance sheet;
(b) an amount equal to all amounts which
appear or should appear as a credit on the balance
sheet of the Company in respect of any class or series
of preferred stock of the Company; and
(c) all liabilities which in accordance with GAAP
should be reflected as liabilities on such consolidated
balance sheet, but in any event including all
Indebtedness.
"Consolidated Total Debt": the aggregate of all
Indebtedness (including the current portion thereof) of the
Company and its Subsidiaries on a consolidated basis.
"Continuing Bank": as defined in subsection 2.4(c).
"Continuing Director": any member of the Board of
Directors of the Company who is a member of such Board on
the date of this Agreement, and any Person who is a member
of such Board and whose nomination as a director was
approved by a majority of the Continuing Directors then on
such Board.
"Contractual Obligation": as to any Person, any
provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is
a party or by which it or any of its property is bound.
"Control Group Person": any Person which is a
member of the controlled group or is under common control
with the Company within the meaning of Section 414(b) or
414(c) of the Code or Section 4001(b)(1) of ERISA.
"Default": any of the events specified in subsection
8.1, whether or not any requirement for the giving of notice,
the lapse of time, or both, or any other condition, has been
satisfied.
"Distribution": (a) the declaration or payment of any
dividend on or in respect of any shares of any class of Capital
Stock of the Company other than dividends payable solely in
shares of common stock of the Company; (b) the purchase,
redemption or other acquisition of any shares of any class of
Capital Stock of the Company directly or indirectly through a
Subsidiary or otherwise; and (c) any other distribution on or in
respect of any shares of any class of Capital Stock of the
Company.
"Dollars" and "$": dollars in lawful currency of the
United States of America.
"Domestic Lending Office": initially, the office of each
Bank designated as such in Schedule I; thereafter, such other
office of such Bank, if any, located within the United States
which shall be making or maintaining Alternate Base Rate
Loans.
"Effective Date": as defined in subsection 2.4(b).
"EMPHESYS": EMPHESYS Financial Group, Inc., a
Delaware corporation.
"ERISA": the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as
applied to a Eurodollar Loan, the aggregate (without
duplication) of the rates (expressed as a decimal fraction) of
reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board of Governors of
the Federal Reserve System or other Governmental Authority
having jurisdiction with respect thereto), dealing with reserve
requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of such
Board) maintained by a member bank of such System.
"Eurodollar Lending Office": initially, the office of each
Bank designated as such in Schedule I; thereafter, such other
office of such Bank, if any, which shall be making or
maintaining Eurodollar Loans.
"Eurodollar Loans": Revolving Credit Loans hereunder
at such time as they are made and/or are being maintained at a
rate of interest based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during
each Interest Period pertaining to a Eurodollar Loan, the rate
per annum equal to the average (rounded upwards to the
nearest whole multiple of one sixteenth of one percent) of the
respective rates notified to the Agent by the Reference Banks
as the rate at which each of their Eurodollar Lending Offices is
offered Dollar deposits two Working Days prior to the
beginning of such Interest Period in the interbank eurodollar
market where the eurodollar and foreign currency and
exchange operations of such Eurodollar Lending Office are
then being conducted at or about 10:00 A.M., New York City
time, for delivery on the first day of such Interest Period for
the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Loan of such
Reference Bank to be outstanding during such Interest Period.
"Eurodollar Tranche": the collective reference to
Eurodollar Loans having the same Interest Period (whether or
not originally made on the same day).
"Event of Default": any of the events specified in
subsection 8.1, provided that any requirement for the giving of
notice, the lapse of time, or both, or any other condition,
event or act has been satisfied.
"Financing Lease": any lease of property, real or
personal, if the then present value of the minimum rental
commitment thereunder should, in accordance with GAAP, be
capitalized on a balance sheet of the lessee.
"Fixed Rate Auction Advance Request": any CAF Loan
Request requesting the CAF Loan Banks to offer to make CAF
Loans at a fixed rate (as opposed to a rate composed of the
Applicable LIBOR Auction Advance Rate plus or minus a
margin).
"GAAP": (a) with respect to determining compliance
by the Company with the provisions of subsections 7.1, 7.2
and 7.5, generally accepted accounting principles in the United
States of America consistent with those utilized in preparing
the audited financial statements referred to in subsection 4.6
and (b) with respect to the financial statements referred to in
subsection 4.6 or the furnishing of financial statements
pursuant to subsection 6.4 and otherwise, generally accepted
accounting principles in the United States of America from
time to time in effect.
"Governmental Authority": any nation or government,
any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Grid CAF Loan Note": as defined in subsection 2.2(f).
"Guarantee Obligation": any arrangement whereby
credit is extended to one party on the basis of any promise of
another, whether that promise is expressed in terms of an
obligation to pay the Indebtedness of another, or to purchase
an obligation owed by that other, to purchase assets or to
provide funds in the form of lease or other types of payments
under circumstances that would enable that other to discharge
one or more of its obligations, whether or not such
arrangement is listed in the balance sheet of the obligor or
referred to in a footnote thereto, but shall not include
endorsements of items for collection in the ordinary course of
business.
"Headquarters": the principal executive offices of the
Company located at 500 West Main Street, Louisville,
Kentucky 40202.
"HMO": a health maintenance organization doing
business as such (or required to qualify or to be licensed as
such) under HMO Regulations.
"HMO Regulation": all laws, regulations, directives and
administrative orders applicable under federal or state law to
health maintenance organizations and any regulations, orders
and directives promulgated or issued pursuant thereto.
"HMO Regulator": any Person charged with the
administration, oversight or enforcement of an HMO
Regulation.
"HMO Subsidiary": any Subsidiary of the Company
that is now or hereafter an HMO.
"Indebtedness": of a Person, at a particular date, the
sum (without duplication) at such date of (a) all indebtedness
of such Person for borrowed money or for the deferred
purchase price of property or services or which is evidenced
by a note, bond, debenture or similar instrument, (b) all
obligations of such Person under Financing Leases, (c) all
obligations of such Person in respect of letters of credit,
acceptances, or similar obligations issued or created for the
account of such Person in excess of $1,000,000, (d) all
liabilities secured by any Lien on any property owned by the
Company or any Subsidiary even though such Person has not
assumed or otherwise become liable for the payment thereof
and (e) all Guarantee Obligations relating to any of the
foregoing in excess of $1,000,000.
"Individual CAF Loan Note": as defined in subsection
2.2(g).
"Insolvency" or "Insolvent": at any particular time, a
Multiemployer Plan which is insolvent within the meaning of
Section 4245 of ERISA.
"Insurance Regulation": any law, regulation, rule,
directive or order applicable to an insurance company.
"Insurance Regulator": any Person charged with the
administration, oversight or enforcement of any Insurance
Regulation.
"Insurance Subsidiary": any Subsidiary of the Company
that is now or hereafter doing business (or required to qualify
or to be licensed) under Insurance Regulations.
"Interest Payment Date": (a) as to any Alternate Base
Rate Loan, the last day of each March, June, September and
December, commencing on the first of such days to occur
after Alternate Base Rate Loans are made or Eurodollar Loans
are converted to Alternate Base Rate Loans, (b) as to any
Eurodollar Loan in respect of which the Company has selected
an Interest Period of one, two or three months, the last day of
such Interest Period, (c) as to any CAF Loan in respect of
which the Company has selected an Interest Period not
exceeding 90 days or three months, as the case may be, the
last day of such Interest Period and (d) as to any Eurodollar
Loan in respect of which the Company has selected a longer
Interest Period than the periods described in clause (b) and as
to any CAF Loan in respect of which the Company has
selected a longer Interest Period than the periods described in
clause (c), the last day of each March, June, September and
December falling within such Interest Period and the last day
of such Interest Period.
"Interest Period": (a) with respect to any Eurodollar
Loans:
(i) initially, the period commencing on the
borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loans and ending one, two,
three or six months thereafter (or, with the consent of
all the Banks, nine or twelve months thereafter), as
selected by the Company in its notice of borrowing as
provided in subsection 2.1(c) or its notice of conversion
as provided in subsection 2.6(a), as the case may be;
and
(ii) thereafter, each period commencing on
the last day of the next preceding Interest Period
applicable to such Eurodollar Loans and ending one,
two, three or six months thereafter (or, with the
consent of all the Banks, nine or twelve months
thereafter), as selected by the Company by irrevocable
notice to the Agent not less than three Business Days
prior to the last day of the then current Interest Period
with respect to such Eurodollar Loans;
provided that, all of the foregoing provisions relating to
Interest Periods are subject to the following:
(1) if any Interest Period pertaining to a
Eurodollar Loan would otherwise end on a day which is
not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless
the result of such extension would be to carry such
Interest Period into another calendar month in which
event such Interest Period shall end on the immediately
preceding Business Day;
(2) if the Company shall fail to give notice as
provided above, the Company shall be deemed to have
selected an Alternate Base Rate Loan to replace the
affected Eurodollar Loan;
(3) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day
of a calendar month;
(4) any interest period pertaining to a Eurodollar
Loan that would otherwise end after the Termination
Date shall end on the Termination Date; and
(5) the Company shall select Interest Periods so
as not to require a payment or prepayment of any
Eurodollar Loan during an Interest Period for such Loan;
and
(b) with respect to any CAF Loans, the period
commencing on the Borrowing Date therefor and ending on the
maturity date for such CAF Loans as set forth in subsection
2.2(b)(i).
"Issuing Bank": Chemical Bank, in its capacity as
issuer of any Letter of Credit.
"L/C Fee Payment Date": the last day of each March,
June, September and December.
"L/C Obligations": at any time, an amount equal to the
sum of (a) the aggregate then undrawn and unexpired amount
of the then outstanding Letters of Credit and (b) the aggregate
amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to subsection 3.5.
"L/C Participants": the collective reference to all the
Banks other than the Issuing Bank.
"L/C Sublimit": $200,000,000.
"Letters of Credit": as defined in subsection 3.1(a).
"Leverage Ratio": at the last day of any full fiscal
quarter of the Company, the ratio of (a) all Indebtedness of the
Company and its Subsidiaries outstanding on such date to (b)
Consolidated Net Income for the period of four fiscal quarters
of the Company ended on such day plus, to the extent
deducted from earnings in determining such Consolidated Net
Income, Consolidated Interest Expense, income taxes,
depreciation and amortization.
"LIBOR Auction Advance Request": any CAF Loan
Request requesting the CAF Loan Banks to offer to make CAF
Loans at an interest rate equal to the Applicable LIBOR Auction
Advance Rate plus or minus a margin.
"Lien": any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory
or other), or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially
the same economic effect as any of the foregoing).
"Loan": any loan made by any Bank pursuant to this
Agreement.
"Loan Documents": this Agreement, the Notes and the
Applications.
"Majority Banks": (a) during the Commitment Period,
Banks whose Commitment Percentages aggregate at least
51% and (b) after the Commitments have expired or been
terminated, Banks whose outstanding Loans represent in the
aggregate 51% of all outstanding Loans.
"Margin Stock": as defined in Regulation U.
"Margin Stock Collateral": all Margin Stock (other than
Portfolio Margin Stock) of the Company and its Subsidiaries by
which the Loans are deemed "indirectly secured" within the
meaning of Regulation U.
"Material Adverse Effect": any material adverse effect
on (a) the business, assets, operations or condition (financial
or otherwise) of the Company and its Subsidiaries taken as a
whole, (b) the ability of the Company to perform its obligations
under this Agreement and the Notes or (c) the rights and
remedies of the Banks with respect to the Company and its
Subsidiaries under any of the Loan Documents.
"Multiemployer Plan": a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Original Banks": as defined in the recitals hereto.
"Original Credit Agreement": as defined in the recitals
hereto.
"Other Collateral": all assets of the Company and its
Subsidiaries (other than Margin Stock) by which the Loans are
deemed "indirectly secured" within the meaning of Regulation
U.
"Note": any Revolving Credit Note or CAF Loan Note.
"Participants": as defined in subsection 10.6(b).
"Payment Sharing Notice": a written notice from the
Company, or any Bank, informing the Agent that an Event of
Default has occurred and is continuing and directing the Agent
to allocate payments thereafter received from the Company in
accordance with subsection 2.10(c).
"PBGC": the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"Person": an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other
entity of whatever nature.
"Plan": at a particular time, any employee benefit plan
which is covered by ERISA and in respect of which the
Company or a Control Group Person is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA
be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Portfolio Margin Stock": Margin Stock held by
Insurance Subsidiaries or HMO Subsidiaries as portfolio
investments.
"Purchasing Banks": as defined in subsection 10.6(d).
"Reference Banks": Chemical Bank, Bank of America
National Trust & Savings Assciation and Citibank, N.A.
"Register": as defined in subsection 10.6(e).
"Regulation U": Regulation U of the Board of
Governors of the Federal Reserve System.
"Regulation X": Regulation X of the Board of
Governors of the Federal Reserve System.
"Reimbursement Obligation": the obligation of the
Company to reimburse the Issuing Bank pursuant to
subsection 3.5(a) for amounts drawn under Letters of Credit.
"Reorganization": with respect to any Multiemployer
Plan, the condition that such plan is in reorganization within
the meaning of such term as used in Section 4241 of ERISA.
"Reportable Event": any of the events set forth in
Section 4043(b) of ERISA, other than those events as to
which the thirty day notice period is waived under subsections
.13,.14,.16,.18,.19 or .20 of PBGC Reg. Sec. 2615.
"Requested Termination Date": as defined in
subsection 2.4(b).
"Required Banks": (a) during the Commitment Period,
Banks whose Commitment Percentages aggregate at least 66-
2/3% and (b) after the Commitments have expired or been
terminated, Banks whose outstanding Loans represent in the
aggregate at least 66-2/3% of all outstanding Loans.
"Requirement of Law": as to any Person, the
Certificate of Incorporation and By-Laws or other
organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is
subject.
"Responsible Officer": the chief executive officer, the
president, any executive or senior vice president or vice
president of the Company, the chief financial officer, treasurer
or controller of the Company.
"Revolving Credit Loans": as defined in subsection
2.1(a).
"Revolving Credit Notes": as defined in subsection
2.1(b).
"Significant Subsidiary": means, at any particular time,
any Subsidiary of the Company having total assets of
$25,000,000 or more at that time.
"Single Employer Plan": any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Solvent": with respect to any Person (or group of
Persons) on a particular date, that on such date (i) the fair
value of the property of such Person (or group of Persons) is
greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person (or group of
Persons), (ii) the present fair salable value of the assets of
such Person (or group of Persons) is not less than the amount
that will be required to pay the probable liability of such
Person (or group of Persons) on its debts as they become
absolute and matured, (iii) such Person (or group of Persons) is
able to pay its debts and other liabilities, contingent obligations
and other commitments as they mature in the normal course
of business, (iv) such Person (or group of Persons) does not
intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's (or group of Person's) ability to
pay as such debts and liabilities mature, (v) such Person (or
group of Persons) is not engaged in a business or a
transaction, and is not about to engage in a business or a
transaction, for which such Person's (or group of Person's)
property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the
industry in which such Person (or group of Persons) is engaged
and (vi) such Person (or group of Persons) is solvent under all
applicable HMO Regulations and Insurance Regulations. In
computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount
which, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be
expected to become an actual or matured liability.
"Standby Letter of Credit": as defined in subsection
3.1(a).
"Subsidiary": as to any Person, a corporation of which
shares of stock having ordinary voting power (other than stock
having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or
other managers of such corporation are at the time owned, or
the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such
Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Company.
"Taxes": as defined in subsection 2.14.
"Termination Date": the date one day before the fifth
anniversary of the Closing Date (or, if such date is not a
Business Day, the next succeeding Business Day), or such
other Business Day to which the Termination Date may be
changed pursuant to subsection 2.4.
"Terminating Bank": as defined in subsection 2.4(c).
"Transfer Effective Date": as defined in each
Commitment Transfer Supplement.
"Transferee": as defined in subsection 10.6(g).
"Type": as to any Revolving Credit Loan, its nature as
an Alternate Base Rate Loan or Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice
for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, as the same may
be amended from time to time.
"Voting Stock": of any corporation, shares of capital
stock or other securities of such corporation entitled to vote
generally in the election of directors of such corporation.
"Waterside Building": the real property located at 101
East Main Street, Louisville, Kentucky 40202, including the
building housing insurance claim processing operations of the
Company.
"Working Day": any Business Day on which dealings in
foreign currencies and exchange between banks may be
carried on in London, England.
1.2 Other Definitional Provisions. (a) Unless
otherwise specified therein, all terms defined in this Agreement shall
have the defined meanings when used in the Notes or any certificate
or other document made or delivered pursuant hereto.
(b) As used herein and in the other Loan Documents,
and any certificate or other document made or delivered pursuant
hereto or thereto, accounting terms relating to the Company and its
Subsidiaries not defined in subsection 1.1 and accounting terms
partly defined in subsection 1.1, to the extent not defined, shall have
the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references
are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF LOANS
2.1 Revolving Credit Loans and Revolving Credit
Notes. (a) Subject to the terms and conditions hereof, each Bank
severally agrees to make loans ("Revolving Credit Loans") to the
Company from time to time during the Commitment Period in an
aggregate principal amount at any one time outstanding which, when
added to such Bank's Commitment Percentage of the then
outstanding L/C Obligations, does not exceed the Commitment of
such Bank, provided that the Aggregate Outstanding Extensions of
Credit of all Banks shall not at any time exceed the aggregate amount
of the Commitments. During the Commitment Period the Company
may use the Commitments by borrowing, prepaying the Revolving
Credit Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof. The Revolving Credit Loans
may be (i) Eurodollar Loans, (ii) Alternate Base Rate Loans or (iii) a
combination thereof, as determined by the Company and notified to
the Agent in accordance with subsection 2.1(c). Eurodollar Loans
shall be made and maintained by each Bank at its Eurodollar Lending
Office, and Alternate Base Rate Loans shall be made and maintained
by each Bank at its Domestic Lending Office.
(b) The Revolving Credit Loans made by each Bank
shall be evidenced by a promissory note of the Company,
substantially in the form of Exhibit A with appropriate insertions as to
payee, date and principal amount (a "Revolving Credit Note"), payable
to the order of such Bank and evidencing the obligation of the
Company to pay a principal amount equal to the amount of the initial
Commitment of such Bank or, if a lesser amount, the aggregate
unpaid principal amount of all Revolving Credit Loans made by such
Bank. Each Bank is hereby authorized to record the date, Type and
amount of each Revolving Credit Loan made or converted by such
Bank, and the date and amount of each payment or prepayment of
principal thereof, and, in the case of Eurodollar Loans, the Interest
Period with respect thereto, on the schedule annexed to and
constituting a part of its Revolving Credit Note, and any such
recordation shall constitute prima facie evidence of the accuracy of
the information so recorded; provided, however, that the failure to
make any such recordation shall not affect the obligations of the
Company hereunder or under any Revolving Credit Note. Each
Revolving Credit Note shall (x) be dated the Closing Date, (y) be
stated to mature on the Termination Date, and (z) bear interest on the
unpaid principal amount thereof from time to time outstanding at the
applicable interest rate per annum determined as provided in
subsection 2.7.
(c) The Company may borrow under the Commitments
during the Commitment Period on any Working Day if the borrowing
is of Eurodollar Loans or on any Business Day if the borrowing is of
Alternate Base Rate Loans; provided that the Company shall give the
Agent irrevocable notice (which notice must be received by the Agent
(i) prior to 11:30 A.M., New York City time three Working Days prior
to the requested Borrowing Date, in the case of Eurodollar Loans, and
(ii) prior to 10:00 A.M., New York City time, on the requested
Borrowing Date, in the case of Alternate Base Rate Loans), specifying
(A) the amount to be borrowed, (B) the requested Borrowing Date,
(C) whether the borrowing is to be of Eurodollar Loans, Alternate
Base Rate Loans, or a combination thereof, and (D) if the borrowing is
to be entirely or partly of Eurodollar Loans, the length of the Interest
Period therefor. Each borrowing pursuant to the Commitments shall
be in an aggregate principal amount equal to the lesser of (i)
$10,000,000 or a whole multiple of $1,000,000 in excess thereof
and (ii) the then Available Commitments. Upon receipt of such notice
from the Company, the Agent shall promptly notify each Bank
thereof. Each Bank will make the amount of its pro rata share of
each borrowing available to the Agent for the account of the
Company at the office of the Agent set forth in subsection 10.2 prior
to 12:00 P.M., New York City time, on the Borrowing Date requested
by the Company in funds immediately available to the Agent. The
proceeds of all such Revolving Credit Loans will then be made
available to the Company by the Agent at such office of the Agent by
crediting the account of the Company on the books of such office
with the aggregate of the amounts made available to the Agent by
the Banks.
2.2 CAF Loans and CAF Loan Notes. (a) The
Company may borrow CAF Loans from time to time on any Business
Day (in the case of CAF Loans made pursuant to a Fixed Rate Auction
Advance Request) or any Working Day (in the case of CAF Loans
made pursuant to a LIBOR Auction Advance Request) during the
period from the Closing Date until the date occurring 14 days prior to
the Termination Date in the manner set forth in this subsection 2.2
and in amounts such that the Aggregate Outstanding Extensions of
Credit of all Banks at any time shall not exceed the aggregate amount
of the Commitments at such time.
(b) (i) The Company shall request CAF Loans by
delivering a CAF Loan Request to the CAF Loan Agent, not later than
12:00 Noon (New York City time) four Working Days prior to the
proposed Borrowing Date (in the case of a LIBOR Auction Advance
Request), and not later than 10:00 A.M. (New York City time) one
Business Day prior to the proposed Borrowing Date (in the case of a
Fixed Rate Auction Advance Request). Each CAF Loan Request may
solicit bids for CAF Loans in an aggregate principal amount of
$10,000,000 or an integral multiple thereof and for not more than
three alternative maturity dates for such CAF Loans. The maturity
date for each CAF Loan (x) if made pursuant to a Fixed Rate Auction
Advance Request, shall be not less than 7 days nor more than 360
days after the Borrowing Date therefor (and in any event not after the
Termination Date) and (y) if made pursuant to a LIBOR Auction
Advance Request, shall be one, two, three, six, nine or twelve
months after the Borrowing Date therefor (and in any event not after
the Termination Date). The CAF Loan Agent shall promptly notify
each CAF Loan Bank by facsimile transmission of the contents of
each CAF Loan Request received by it.
(ii) In the case of a LIBOR Auction Advance
Request, upon receipt of notice from the CAF Loan Agent of the
contents of such CAF Loan Request, any CAF Loan Bank that elects,
in its sole discretion, to do so, shall irrevocably offer to make one or
more CAF Loans at the Applicable LIBOR Auction Advance Rate plus
or minus a margin for each such CAF Loan determined by such CAF
Loan Bank in its sole discretion. Any such irrevocable offer shall be
made by delivering a CAF Loan Offer to the CAF Loan Agent, before
9:30 A.M., New York City time, three Working Days before the
proposed Borrowing Date, setting forth the maximum amount of CAF
Loans for each maturity date, and the aggregate maximum amount
for all maturity dates, which such Bank would be willing to make
(which amounts may, subject to subsection 2.2(a), exceed such CAF
Loan Bank's Commitment) and the margin above the Applicable
LIBOR Auction Advance Rate at which such CAF Loan Bank is willing
to make each such CAF Loan; the CAF Loan Agent shall advise the
Company before 10:00 A.M., New York City time, three Working
Days before the proposed Borrowing Date of the contents of each
such CAF Loan Offer received by it. If the CAF Loan Agent in its
capacity as a CAF Loan Bank shall, in its sole discretion, elect to
make any such offer, it shall advise the Company of the contents of
its CAF Loan Offer before 9:00 A.M., New York City time, three
Working Days before the proposed Borrowing Date.
(iii) In the case of a Fixed Rate Auction Advance
Request, upon receipt of notice from the Agent of the contents of
such CAF Loan Request, any CAF Loan Bank that elects, in its sole
discretion, to do so, shall irrevocably offer to make one or more CAF
Loans at a rate or rates of interest for each such CAF Loan
determined by such CAF Loan Bank in its sole discretion. Any such
irrevocable offer shall be made by delivering a CAF Loan Offer to the
CAF Loan Agent, before 9:30 A.M., New York City time, on the
proposed Borrowing Date, setting forth the maximum amount of CAF
Loans for each maturity date, and the aggregate maximum amount
for all maturity dates, which such CAF Loan Bank would be willing to
make (which amounts may, subject to subsection 2.2(a), exceed such
CAF Loan Bank's Commitment) and the rate or rates of interest at
which such CAF Loan Bank is willing to make each such CAF Loan;
the CAF Loan Agent shall advise the Company before 10:15 A.M.,
New York City time, on the proposed Borrowing Date of the contents
of each such CAF Loan Offer received by it. If the CAF Loan Agent
or any affiliate thereof in its capacity as a CAF Loan Bank shall, in its
sole discretion, elect to make any such offer, it shall advise the
Company of the contents of its CAF Loan Offer before 9:15 A.M.,
New York City time, on the proposed Borrowing Date.
(iv) The Company shall before 11:00 A.M., New
York City time, three Working Days before the proposed Borrowing
Date (in the case of CAF Loans requested by a LIBOR Auction
Advance Request) and before 10:30 A.M., New York City time, on
the proposed Borrowing Date (in the case of CAF Loans requested by
a Fixed Rate Auction Advance Request) either, in its absolute
discretion:
(A) cancel such CAF Loan Request by giving the CAF
Loan Agent telephone notice to that effect, or
(B) accept one or more of the offers made by any CAF
Loan Bank or CAF Loan Banks pursuant to clause (ii) or clause
(iii) above, as the case may be, by giving telephone notice to
the CAF Loan Agent (immediately confirmed by delivery to the
CAF Loan Agent of a CAF Loan Confirmation) of the amount
of CAF Loans for each relevant maturity date to be made by
each CAF Loan Bank (which amount for each such maturity
date shall be equal to or less than the maximum amount for
such maturity date specified in the CAF Loan offer of such
CAF Loan Bank, and for all maturity dates included in such
CAF Loan Offer shall be equal to or less than the aggregate
maximum amount specified in such CAF Loan offer for all such
maturity dates) and reject any remaining offers made by CAF
Loan Banks pursuant to clause (ii) or clause (iii) above, as the
case may be; provided, however, that (x) the Company may
not accept offers for CAF Loans for any maturity date in an
aggregate principal amount in excess of the maximum principal
amount requested in the related CAF Loan Request, (y) if the
Company accepts any of such offers, it must accept offers
strictly based upon pricing for such relevant maturity date and
no other criteria whatsoever and (z) if two or more CAF Loan
Banks submit offers for any maturity date at identical pricing
and the Company accepts any of such offers but does not
wish to borrow the total amount offered by such CAF Loan
Banks with such identical pricing, the Company shall accept
offers from all of such CAF Loan Banks in amounts allocated
among them pro rata according to the amounts offered by
such CAF Loan Banks (or as nearly pro rata as shall be
practicable after giving effect to the requirement that CAF
Loans made by a CAF Loan Bank on a Borrowing Date for each
relevant maturity date shall be in a principal amount of
$5,000,000 or an integral multiple of $1,000,000 in excess
thereof provided that if the number of CAF Loan Banks that
submit offers for any maturity date at identical pricing is such
that, after the Company accepts such offers pro rata in
accordance with the foregoing, the CAF Loans to be made by
such CAF Loan Banks would be less than $5,000,000
principal amount, the number of such CAF Loan Banks shall be
reduced by the CAF Loan Agent by lot until the CAF Loans to
be made by such remaining CAF Loan Banks would be in a
principal amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof).
(v) If the Company notifies the CAF Loan Agent
that a CAF Loan Request is cancelled pursuant to clause (iv)(A)
above, the CAF Loan Agent shall give prompt, but in no event more
than one hour later, telephone notice thereof to the CAF Loan Banks,
and the CAF Loans requested thereby shall not be made.
(vi) If the Company accepts pursuant to clause
(iv)(B) above one or more of the offers made by any CAF Loan Bank
or CAF Loan Banks, the CAF Loan Agent shall promptly, but in no
event more than one hour later, notify each CAF Loan Bank which
has made such an offer of the aggregate amount of such CAF Loans
to be made on such Borrowing Date for each maturity date and of the
acceptance or rejection of any offers to make such CAF Loans made
by such CAF Loan Bank. Each CAF Loan Bank which is to make a
CAF Loan shall, before 12:00 Noon, New York City time, on the
Borrowing Date specified in the CAF Loan Request applicable thereto,
make available to the Agent at its office set forth in subsection 10.2
the amount of CAF Loans to be made by such CAF Loan Bank, in
immediately available funds. The Agent will make such funds
available to the Company as soon as practicable on such date at the
Agent's aforesaid address. As soon as practicable after each
Borrowing Date, the Agent shall notify each Bank of the aggregate
amount of CAF Loans advanced on such Borrowing Date and the
respective maturity dates thereof.
(c) Within the limits and on the conditions set forth in
this subsection 2.2, the Company may from time to time borrow
under this subsection 2.2, repay pursuant to paragraph (d) below, and
reborrow under this subsection 2.2.
(d) The Company shall repay to the Agent for the
account of each CAF Loan Bank which has made a CAF Loan (or the
CAF Loan Assignee in respect thereof, as the case may be) on the
maturity date of each CAF Loan (such maturity date being that
specified by the Company for repayment of such CAF Loan in the
related CAF Loan Request) the then unpaid principal amount of such
CAF Loan. The Company shall not have the right to prepay any
principal amount of any CAF Loan.
(e) The Company shall pay interest on the unpaid
principal amount of each CAF Loan from the Borrowing Date to the
stated maturity date thereof, at the rate of interest determined
pursuant to paragraph (b) above (calculated on the basis of a 360-day
year for actual days elapsed), payable on the Interest Payment Date
for such CAF Loan as provided in the CAF Loan Note evidencing such
CAF Loan. If all or a portion of the principal amount of any CAF Loan
or any interest or other amount payable hereunder in respect thereof
shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall, without
limiting any rights of any Bank under this Agreement, bear interest
from the date on which such payment was due at a rate per annum
which is 2% above the rate which would otherwise be applicable
pursuant to the CAF Loan Note evidencing such CAF Loan until the
scheduled maturity date with respect thereto as set forth in the CAF
Loan Note evidencing such CAF Loan, and for each day thereafter at
a rate per annum which is 2% above the Alternate Base Rate until
paid in full (as well after as before judgment).
(f) The CAF Loans made by each CAF Loan Bank shall
be evidenced initially by a promissory note of the Company,
substantially in the form of Exhibit B with appropriate insertions (a
"Grid CAF Loan Note"), payable to the order of such CAF Loan Bank
and representing the obligation of the Company to pay the unpaid
principal amount of all CAF Loans made by such CAF Loan Bank, with
interest on the unpaid principal amount from time to time outstanding
of each CAF Loan evidenced thereby as prescribed in subsection
2.2(e). Each CAF Loan Bank is hereby authorized to record the date
and amount of each CAF Loan made by such Bank, the maturity date
thereof, the date and amount of each payment of principal thereof
and the interest rate with respect thereto on the schedule annexed to
and constituting part of its Grid CAF Loan Note, and any such
recordation shall constitute prima facie evidence of the accuracy of
the information so recorded; provided, however, that the failure to
make any such recordation shall not affect the obligations of the
Company hereunder or under any Grid CAF Loan Note. Each Grid
CAF Loan Note shall be dated the Closing Date and each CAF Loan
evidenced thereby shall bear interest for the period from and including
the Borrowing Date thereof on the unpaid principal amount thereof
from time to time outstanding at the applicable rate per annum
determined as provided in, and such interest shall be payable as
specified in, subsection 2.2(e).
(g) Amounts advanced by a CAF Loan Bank pursuant
to this subsection 2.2 on a Borrowing Date which have the same
maturity date and interest rate shall be deemed to constitute one CAF
Loan so long as such amounts remain evidenced by the Grid CAF
Loan Note of such CAF Loan Bank; any such CAF Loan Bank that
wishes such amounts to constitute more than one CAF Loan and to
have each such CAF Loan evidenced by a separate promissory note
payable to such CAF Loan Bank, substantially in the form of Exhibit C
with appropriate insertions as to Borrowing Date, principal amount
and interest rate (an "Individual CAF Loan Note"), shall notify the
CAF Loan Agent and the Company by facsimile transmission of the
respective principal amounts of the CAF Loans (which principal
amounts shall not be less than $5,000,000 for any of such CAF
Loans) to be evidenced by each such Individual CAF Loan Note. Not
later than three Business Days after receipt of such notice, the
Company shall deliver to such CAF Loan Bank an Individual CAF Loan
Note payable to the order of such CAF Loan Bank in the principal
amount of each such CAF Loan and otherwise conforming to the
requirements of this Agreement. Upon receipt of such Individual CAF
Loan Note, such CAF Loan Bank shall endorse on the schedule
attached to its Grid CAF Loan Note the transfer of such CAF Loan
from Grid CAF Loan Note to such Individual CAF Loan Note.
2.3 Fees. (a) The Company agrees to pay to the
Agent, for the account of each Bank, on the last day of each fiscal
quarter, a facility fee in respect of the average daily amount of the
Commitment of such Bank during such fiscal quarter (such amount,
the "Average Quarterly Commitment"). Such fee shall be computed
at the rate per annum set forth in the table below opposite the
Consolidated Capitalization Ratio then in effect (as determined in
accordance with the definition of Applicable Margin).
Consolidated Facility Fee
Capitalization Ratio (Rate Per Annum)
less than .30 .0900%
at least .30 but less than .35 .1250%
at least .35 but less than .40 .1500%
at least .40 .2250%
(b) The Company agrees to pay to the Agent the other
fees in the amounts, and on the dates, agreed to by the Company
and the Agent in the fee letter, dated September 5, 1995, between
the Agent and the Company.
2.4 Termination, Reduction or Extension of
Commitments. (a) The Company shall have the right, upon not less
than five Business Days' notice to the Agent, to terminate the
Commitments or, from time to time, to reduce ratably the amount of
the Commitments, provided that no such termination or reduction
shall be permitted if, after giving effect thereto and to any
prepayments of the Loans made on the effective date thereof, the
then outstanding principal amount of the Loans, when added to the
then L/C Obligations, would exceed the amount of the Commitments
then in effect. Any such reduction shall be in an amount of
$10,000,000 or a whole multiple of $1,000,000 in excess thereof,
and shall reduce permanently the amount of the Commitments then in
effect.
(b) The Company may request, in a notice given as
herein provided to the Agent and each of the Banks not less than 90
days and not more than 120 days prior to the second anniversary of
the Closing Date, that the Termination Date be extended, which
notice shall specify that the requested extension is to be effective
(the "Effective Date") on the second anniversary of the Closing Date,
and that the new Termination Date to be in effect following such
extension (the "Requested Termination Date") is to be the seventh
anniversary of the Closing Date. Each Bank shall, not later than 30
days following such notice, notify the Company and the Agent of its
election to extend or not to extend the Termination Date with respect
to its Commitment. The Company may, not later than 15 days
following such notice from the Banks, revoke its request to extend
the Termination Date. If the Required Banks elect to extend the
Termination Date with respect to their Commitments and the
Company has not revoked its request to extend the Termination Date,
then, subject to the provisions of this subsection 2.4, the Termination
Date shall be extended for two years. Notwithstanding any provision
of this Agreement to the contrary, any notice by any Bank of its
willingness to extend the Termination Date with respect to its
Commitment shall be revocable by such Bank in its sole and absolute
discretion at any time prior to the Effective Date. Any Bank which
shall not notify the Company and the Agent of its election to extend
the Termination Date within 30 days following such notice shall be
deemed to have elected not to extend the Termination Date with
respect to its Commitment.
(c) Provided that the Required Banks shall have elected
to extend their Commitments as provided in this subsection 2.4, if
any Bank shall timely notify the Company and the Agent pursuant to
subsection 2.4(b) of its election not to extend its Commitment or its
revocation of any extension, or shall be deemed to have elected not
to extend its Commitments, (any such Bank being called a
"Terminating Bank"), then the remaining Banks (the "Continuing
Banks") or any of them shall have the right (but not the obligation),
upon notice to the Company and the Agent not later than 30
Business Days preceding the Effective Date to increase their
Commitments, by an amount up to, in the aggregate, the
Commitments of any Terminating Banks. If, in the aggregate, any of
the Continuing Banks elect to increase their Commitments by an
amount in excess of the aggregate Commitments of the Terminating
Banks, then the Commitment of each such Bank shall be increased
pro rata on the relative basis of the amount of increase it so elected
such that the aggregate amount of all such increases shall be equal to
the aggregate Commitments of the Terminating Banks. Each increase
in the Commitment of a Continuing Bank shall be evidenced by a
written instrument executed by such Continuing Bank, the Company
and the Agent, and shall take effect on the Effective Date.
Notwithstanding any provision of this Agreement to the contrary, any
notice by any Continuing Bank of its willingness to increase its
Commitment as provided in this subsection 2.4(c) shall be revocable
by such Bank in its sole and absolute discretion at any time prior to
the Effective Date.
(d) In the event the aggregate Commitments of any
Terminating Banks shall exceed the aggregate amount by which the
Continuing Banks have agreed to increase their Commitments
pursuant to subsection 2.4(c), the Company may, with the approval
of the Agent, designate one or more other banking institutions willing
to extend Commitments until the Requested Termination Date in an
aggregate amount not greater than such excess. Any such banking
institution (an "Additional Bank") shall, on the Effective Date, execute
and deliver to the Company and the Agent a Commitment Transfer
Supplement, satisfactory to the Company and the Agent, setting
forth the amount of such Additional Bank's Commitment and
containing its agreement to become, and to perform all the
obligations of, a Bank hereunder, and the Commitment of such
Additional Bank shall become effective on the Effective Date.
Notwithstanding any provision of this Agreement to the contrary, any
notice by any Additional Bank of its willingness to become a Bank
hereunder shall be revocable by such Additional Bank in its sole and
absolute discretion at any time prior to the Effective Date.
(e) The Company shall deliver to each Continuing Bank
and each Additional Bank, on the Effective Date, in exchange for the
Notes held by such Bank, new Notes, maturing on the Requested
Termination Date, in the principal amount of such Bank's
Commitment after giving effect to the adjustments made pursuant to
this subsection 2.4.
(f) If the Required Banks shall have elected to extend
their Commitments as provided in this subsection 2.4 and the
Company has not revoked its request to extend the Termination Date
as provided in this subsection 2.4, then (i) the Commitments of the
Continuing Banks and any Additional Banks shall continue until the
Requested Termination Date specified in the notice from the
Company, and as to such Banks the term "Termination Date", as
used herein shall mean such Requested Termination Date; (ii) the
Commitments of any Terminating Bank shall continue until the
Effective Date, and shall then terminate (as to any Terminating Bank,
the term "Termination Date", as used herein, shall mean the Effective
Date) upon the payment in full of the outstanding principal amount,
together with accrued interest to such date and any other amounts
owed by the Company to such Terminating Bank pursuant to any
Loan Document of the Loans of such Terminating Bank; and (iii) from
and after the Effective Date, the term "Banks" shall be deemed to
include the Additional Banks and (except with respect to subsections
2.15 and 10.5 to the extent the rights under such subsections arise
after the Termination Date in respect of Terminating Banks) to
exclude the Terminating Banks.
2.5 Optional Prepayments. The Company may at any
time and from time to time, prepay the Revolving Credit Loans, in
whole or in part, without premium or penalty (subject to the
provisions of subsection 2.15), upon at least three Business Days'
irrevocable notice to the Agent, specifying the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans or
Alternate Base Rate Loans or a combination thereof, and if of a
combination thereof, the amount of prepayment allocable to each.
Upon receipt of such notice the Agent shall promptly notify each
Bank thereof. If such notice is given, the payment amount specified
in such notice shall be due and payable on the date specified therein,
together with accrued interest to such date on the amount prepaid.
Partial prepayments shall be in an aggregate principal amount of
$5,000,000, or a whole multiple thereof, and may only be made if,
after giving effect thereto, subsection 2.6(c) shall not have been
contravened.
2.6 Conversion Options; Minimum Amount of Loans.
(a) The Company may elect from time to time to
convert Eurodollar Loans to Alternate Base Rate Loans by giving the
Agent at least two Business Days' prior irrevocable notice of such
election (given before 10:00 A.M., New York City time, on the date
on which such notice is required), provided that any such conversion
of Eurodollar Loans shall, subject to the fourth following sentence,
only be made on the last day of an Interest Period with respect
thereto. The Company may elect from time to time to convert
Alternate Base Rate Loans to Eurodollar Loans by giving the Agent at
least three Business Days' prior irrevocable notice of such election
(given before 11:30 A.M., New York City time, on the date on which
such notice is required). Upon receipt of such notice, the Agent shall
promptly notify each Bank thereof. Promptly following the date on
which such conversion is being made each Bank shall take such
action as is necessary to transfer its portion of such Revolving Credit
Loans to its Domestic Lending Office or its Eurodollar Lending Office,
as the case may be. All or any part of outstanding Eurodollar Loans
and Alternate Base Rate Loans may be converted as provided herein,
provided that, unless the Majority Banks otherwise agree, (i) no
Revolving Credit Loan may be converted into a Eurodollar Loan when
any Event of Default has occurred and is continuing, (ii) partial
conversions shall be in an aggregate principal amount of $5,000,000
or a whole multiple thereof, and (iii) any such conversion may only be
made if, after giving effect thereto, subsection 2.6(c) shall not have
been contravened.
(b) Any Eurodollar Loans may be continued as such
upon the expiration of an Interest Period with respect thereto by
compliance by the Company with the notice provisions contained in
subsection 2.6(a); provided that, unless the Majority Banks otherwise
agree, no Eurodollar Loan may be continued as such when any Event
of Default has occurred and is continuing, but shall be automatically
converted to an Alternate Base Rate Loan on the last day of the then
current Interest Period with respect thereto. The Agent shall notify
the Banks promptly that such automatic conversion contemplated by
this subsection 2.6(b) will occur.
(c) All borrowings, conversions, payments,
prepayments and selection of Interest Periods hereunder shall be in
such amounts and be made pursuant to such elections so that, after
giving effect thereto, the aggregate principal amount of the Loans
comprising any Eurodollar Tranche shall not be less than
$10,000,000. At no time shall there be more than 6 Eurodollar
Tranches.
2.7 Interest Rate and Payment Dates for Revolving
Credit Loans.
(a) The Eurodollar Loans comprising each Eurodollar
Tranche shall bear interest for each day during each Interest Period
with respect thereto on the unpaid principal amount thereof at a rate
per annum equal to the Eurodollar Rate plus the Applicable Margin.
(b) Alternate Base Rate Loans shall bear interest for
each day from and including the date thereof on the unpaid principal
amount thereof at a rate per annum equal to the Alternate Base Rate
plus the Applicable Margin.
(c) If all or a portion of the (i) principal amount of any
Loans, (ii) any interest payable thereon or (iii) any fee or other amount
payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall
bear interest at a rate per annum which is 2% above the Alternate
Base Rate, and any overdue interest or other amount payable
hereunder shall bear interest at a rate per annum which is 2% above
the Alternate Base Rate, in each case from the date of such non-
payment until paid in full (after as well as before judgment). If all or a
portion of the principal amount of any Loans shall not be paid when
due (whether at stated maturity, by acceleration or otherwise), each
Eurodollar Loan shall, unless the Majority Banks otherwise agree, be
converted to an Alternate Base Rate Loan at the end of the last
Interest Period with respect thereto.
(d) Interest shall be payable in arrears on each Interest
Payment Date.
2.8 Computation of Interest and Fees.
(a) Interest in respect of Alternate Base Rate Loans
shall be calculated on the basis of a (i) 365-day (or 366-day, as the
case may be) year for the actual days elapsed when such Alternate
Base Rate Loans are based on the Prime Rate, and (ii) a 360-day year
for the actual days elapsed when based on the Base CD Rate or the
Federal Funds Effective Rate. Interest in respect of Eurodollar Loans
shall be calculated on the basis of a 360-day year for the actual days
elapsed. The Agent shall as soon as practicable notify the Company
and the Banks of each determination of a Eurodollar Rate. Any
change in the interest rate on a Revolving Credit Loan resulting from a
change in the Alternate Base Rate or the Applicable Margin or the
Eurocurrency Reserve Requirements shall become effective as of the
opening of business on the day on which such change in the
Alternate Base Rate is announced, such Applicable Margin changes as
provided herein or such change in or the Eurocurrency Reserve
Requirements shall become effective, as the case may be. The Agent
shall as soon as practicable notify the Company and the Banks of the
effective date and the amount of each such change.
(b) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and
binding on the Company and the Banks in the absence of manifest
error. The Agent shall, at the request of the Company, deliver to the
Company a statement showing the quotations used by the Agent in
determining any interest rate pursuant to subsection 2.7(a) or (c).
(c) If any Reference Bank's Commitment shall
terminate (otherwise than on termination of all the Commitments), or
its Revolving Credit Loans shall be assigned for any reason
whatsoever, such Reference Bank shall thereupon cease to be a
Reference Bank, and if, as a result of the foregoing, there shall only
be one Reference Bank remaining, then the Agent (after consultation
with the Company and the Banks) shall, by notice to the Company
and the Banks, designate another Bank as a Reference Bank so that
there shall at all times be at least two Reference Banks.
(d) Each Reference Bank shall use its best efforts to
furnish quotations of rates to the Agent as contemplated hereby. If
any of the Reference Banks shall be unable or otherwise fails to
supply such rates to the Agent upon its request, the rate of interest
shall be determined on the basis of the quotations of the remaining
Reference Banks or Reference Bank.
(e) Facility fees shall be computed on the basis of a
365-day year for the actual days elapsed.
2.9 Inability to Determine Interest Rate. In the event
that:
(i) the Agent shall have determined (which
determination shall be conclusive and binding upon the
Company) that, by reason of circumstances affecting the
interbank eurodollar market generally, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for any
requested Interest Period;
(ii) only one of the Reference Banks is able to obtain
bids for its Dollar deposits for such Interest Period in the
manner contemplated by the term "Eurodollar Rate"; or
(iii) the Agent shall have received notice prior to the
first day of such Interest Period from Banks constituting the
Majority Banks that the interest rate determined pursuant to
subsection 2.7(a) for such Interest Period does not accurately
reflect the cost to such Banks (as conclusively certified by
such Banks) of making or maintaining their affected Loans
during such Interest Period;
with respect to (A) proposed Revolving Credit Loans that the
Company has requested be made as Eurodollar Loans, (B) Eurodollar
Loans that will result from the requested conversion of Alternate Base
Rate Loans into Eurodollar Loans or (C) the continuation of Eurodollar
Loans beyond the expiration of the then current Interest Period with
respect thereto, the Agent shall forthwith give facsimile or telephonic
notice of such determination to the Company and the Banks at least
one day prior to, as the case may be, the requested Borrowing Date
for such Eurodollar Loans, the conversion date of such Loans or the
last day of such Interest Period. If such notice is given (x) any
requested Eurodollar Loans shall be made as Alternate Base Rate
Loans, (y) any Alternate Base Rate Loans that were to have been
converted to Eurodollar Loans shall be continued as Alternate Base
Rate Loans and (z) any outstanding Eurodollar Loans shall be
converted, on the last day of the then current Interest Period with
respect thereto, to Alternate Base Rate Loans. Until such notice has
been withdrawn by the Agent, no further Eurodollar Loans shall be
made, nor shall the Company have the right to convert Alternate Base
Rate Loans to Eurodollar Loans. The Agent shall withdraw such
notice upon its determination that the event or events which gave
rise to such notice no longer exist.
2.10 Pro Rata Borrowings and Payments.
(a) Each borrowing by the Company of Revolving
Credit Loans shall be made ratably from the Banks in accordance with
their Commitment Percentages.
(b) Whenever any payment received by the Agent
under this Agreement or any Note is insufficient to pay in full all
amounts then due and payable to the Agent and the Banks under this
Agreement and the Notes, and the Agent has not received a Payment
Sharing Notice (or if the Agent has received a Payment Sharing
Notice but the Event of Default specified in such Payment Sharing
Notice has been cured or waived), such payment shall be distributed
and applied by the Agent and the Banks in the following order: first,
to the payment of fees and expenses due and payable to the Agent
under and in connection with this Agreement; second, to the payment
of all expenses due and payable under subsection 10.5(a), ratably
among the Banks in accordance with the aggregate amount of such
payments owed to each such Bank; third, to the payment of fees due
and payable under subsection 2.3, ratably among the Banks in
accordance with their Commitment Percentages; fourth, to the
payment of interest then due and payable under the Notes, ratably
among the Banks in accordance with the aggregate amount of
interest owed to each such Bank; and fifth, to the payment of the
principal amount of the Notes which is then due and payable, ratably
among the Banks in accordance with the aggregate principal amount
owed to each such Bank.
(c) After the Agent has received a Payment Sharing
Notice which remains in effect, all payments received by the Agent
under this Agreement or any Note shall be distributed and applied by
the Agent and the Banks in the following order: first, to the payment
of all amounts described in clauses first through third of the foregoing
paragraph (b), in the order set forth therein; and second, to the
payment of the interest accrued on and the principal amount of all of
the Notes, regardless of whether any such amount is then due and
payable, ratably among the Banks in accordance with the aggregate
accrued interest plus the aggregate principal amount owed to such
Bank.
(d) All payments (including prepayments) to be made
by the Company on account of principal, interest and fees shall be
made without set-off or counterclaim and shall be made to the Agent,
for the account of the Banks, at the Agent's office set forth in
subsection 10.2, in lawful money of the United States of America
and in immediately available funds. The Agent shall distribute such
payments to the Banks promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the CAF
Loans made pursuant to a LIBOR Auction Advance Request) becomes
due and payable on a day other than a Business Day, such payment
shall be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension. If any payment on a
CAF Loan made pursuant to a LIBOR Auction Advance Request
becomes due and payable on a day other than a Working Day, the
maturity thereof shall be extended to the next succeeding Working
Day unless the result of such extension would be to extend such
payment into another calendar month in which event such payment
shall be made on the immediately preceding Working Day.
(e) Unless the Agent shall have been notified in writing
by any Bank prior to a Borrowing Date that such Bank will not make
the amount which would constitute its Commitment Percentage of
the borrowing of Revolving Credit Loans on such date available to the
Agent, the Agent may assume that such Bank has made such amount
available to the Agent on such Borrowing Date, and the Agent may,
in reliance upon such assumption, make available to the Company a
corresponding amount. If such amount is made available to the
Agent on a date after such Borrowing Date, such Bank shall pay to
the Agent on demand an amount equal to the product of (i) the daily
average Federal Funds Effective Rate during such period as quoted by
the Agent, times (ii) the amount of such Bank's Commitment
Percentage of such borrowing, times (iii) 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 Bank's Commitment
Percentage of such borrowing shall have become immediately
available to the Agent and the denominator of which is 360. A
certificate of the Agent submitted to any Bank with respect to any
amounts owing under this subsection 2.10(e) shall be conclusive,
absent manifest error. If such Bank's Commitment Percentage of
such borrowing is not in fact made available to the Agent by such
Bank within three Business Days of such Borrowing Date, the Agent
shall be entitled to recover such amount with interest thereon at the
rate per annum applicable to Alternate Base Rate Loans hereunder, on
demand, from the Company.
2.11 Illegality. Notwithstanding any other provisions
herein, if after the date hereof the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof
shall make it unlawful for any Bank to make or maintain Eurodollar
Loans as contemplated by this Agreement, (a) the Bank shall, within
30 Working Days after it becomes aware of such fact, notify the
Company, through the Agent, of such fact, (b) the commitment of
such Bank hereunder to make Eurodollar Loans or convert Alternate
Base Rate Loans to Eurodollar Loans shall forthwith be cancelled and
(c) such Bank's Revolving Credit Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to Alternate Base Rate
Loans on the respective last days of the then current Interest Periods
for such Revolving Credit Loans or within such earlier period as
required by law. Each Bank shall take such action as may be
reasonably available to it without legal or financial disadvantage
(including changing its Eurodollar Lending Office) to prevent the
adoption of or any change in any such Requirement of Law from
becoming applicable to it.
2.12 Requirements of Law.
(a) If after the date hereof the adoption of or any
change in any Requirement of Law or in the interpretation or
application thereof or compliance by any Bank with any request or
directive (whether or not having the force of law) after the date
hereof from any central bank or other Governmental Authority:
(i) shall subject any Bank to any tax of any kind
whatsoever with respect to this Agreement, any Revolving
Credit Note, any Letter of Credit, any Application or any
Eurodollar Loans made by it, or change the basis of taxation of
payments to such Bank of principal, facility fee, interest or any
other amount payable hereunder in respect of Revolving Credit
Loans (except for changes in the rate of tax on the overall net
income of such Bank);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, or deposits or other
liabilities in or for the account of, advances or loans by, or
other credit extended by, or any other acquisition of funds by,
any office of such Bank which are not otherwise included in
the determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such
Bank, by any amount which such Bank deems to be material, of
making, renewing or maintaining advances or extensions of credit
(including, without limitation, issuing or participating in Letters of
Credit) or to reduce any amount receivable hereunder, in each case, in
respect thereof, then, in any such case, the Company shall promptly
pay such Bank, upon its demand, any additional amounts necessary
to compensate such Bank for such additional cost or reduced amount
receivable. If a Bank becomes entitled to claim any additional
amounts pursuant to this subsection 2.12(a), it shall, within 30
Business Days after it becomes aware of such fact, notify the
Company, through the Agent, of the event by reason of which it has
become so entitled. A certificate as to any additional amounts
payable pursuant to the foregoing sentence submitted by such Bank,
through the Agent, to the Company shall be conclusive in the
absence of manifest error. Each Bank shall take such action as may
be reasonably available to it without legal or financial disadvantage
(including changing its Eurodollar Lending Office) to prevent any such
Requirement of Law or change from becoming applicable to it. This
covenant shall survive the termination of this Agreement and
payment of the outstanding Revolving Credit Notes and all other
amounts payable hereunder.
(b) In the event that after the date hereof a Bank is
required to maintain reserves of the type contemplated by the
definition of "Eurocurrency Reserve Requirements", such Bank may
require the Company to pay, promptly after receiving notice of the
amount due, additional interest on the related Eurodollar Loan of such
Bank at a rate per annum determined by such Bank up to but not
exceeding the excess of (i) (A) the applicable Eurodollar Rate divided
by (B) one minus the Eurocurrency Reserve Requirements over (ii) the
applicable Eurodollar Rate. Any Bank wishing to require payment of
any such additional interest on account of any of its Eurodollar Loans
shall notify the Company no more than 30 Working Days after each
date on which interest is payable on such Eurodollar Loan of the
amount then due it under this subsection 2.12(b), in which case such
additional interest on such Eurodollar Loan shall be payable to such
Bank at the place indicated in such notice. Each such notification
shall be accompanied by such information as the Company may
reasonably request.
2.13 Capital Adequacy. If any Bank shall have
determined that after the date hereof the adoption of or any change
in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Bank or
any corporation controlling such Bank with any request or directive
after the date hereof regarding capital adequacy (whether or not
having the force of law) from any central bank or Governmental
Authority, does or shall have the effect of reducing the rate of return
on such Bank's or such corporation's capital as a consequence of its
obligations hereunder or under any Letter of Credit to a level below
that which such Bank or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration such
Bank's or such corporation's policies with respect to capital
adequacy) by an amount which is reasonably deemed by such Bank
to be material, then from time to time, promptly after submission by
such Bank, through the Agent, to the Company of a written request
therefor (such request shall include details reasonably sufficient to
establish the basis for such additional amounts payable and shall be
submitted to the Company within 30 Working Days after it becomes
aware of such fact), the Company shall promptly pay to such Bank
such additional amount or amounts as will compensate such Bank for
such reduction. The agreements in this subsection 2.13 shall survive
the termination of this Agreement and payment of the Loans and the
Notes and all other amounts payable hereunder.
2.14 Taxes.
(a) All payments made by the Company under this
Agreement shall be made free and clear of, and without reduction or
withholding for or on account of, any present or future income, stamp
or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority excluding, in the case of the
Agent and each Bank, net income and franchise taxes imposed on the
Agent or such Bank by the jurisdiction under the laws of which the
Agent or such Bank is organized or any political subdivision or taxing
authority thereof or therein, or by any jurisdiction in which such
Bank's Domestic Lending Office or Eurodollar Lending Office, as the
case may be, is located or any political subdivision or taxing authority
thereof or therein (all such non-excluded taxes, levies, imposts,
deductions, charges or withholdings being hereinafter called "Taxes").
If any Taxes are required to be withheld from any amounts payable to
the Agent or any Bank hereunder or under the Notes, the amounts so
payable to the Agent or such Bank shall be increased to the extent
necessary to yield to the Agent or such Bank (after payment of all
Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement and the Notes.
Whenever any Taxes are payable by the Company, as promptly as
possible thereafter, the Company shall send to the Agent for its own
account or for the account of such Bank, as the case may be, a
certified copy of an original official receipt received by the Company
showing payment thereof. If the Company fails to pay any Taxes
when due to the appropriate taxing authority or fails to remit to the
Agent the required receipts or other required documentary evidence,
the Company shall indemnify the Agent and the Banks for any
incremental taxes, interest or penalties that may become payable by
the Agent or any Bank as a result of any such failure.
(b) Each Bank that is not incorporated under the laws
of the United States of America or a state thereof agrees that it will
deliver to the Company and the Agent (i) two duly completed copies
of United States Internal Revenue Service Form 1001 or 4224 or
successor applicable form, as the case may be, certifying in each
case that such Bank is entitled to receive payments under this
Agreement and the Notes payable to it, without deduction or
withholding of any United States federal income taxes, and (ii) an
Internal Revenue Service Form W-8 or W-9 or successor applicable
form, as the case may be, to establish an exemption from United
States backup withholding tax. Each Bank which delivers to the
Company and the Agent a Form 1001 or 4224 and Form W-8 or W-9
pursuant to the next preceding sentence further undertakes to deliver
to the Company and the Agent two further copies of the said letter
and Form 1001 or 4224 and Form W-8 or W-9, or successor
applicable forms, or other manner of certification, as the case may
be, on or before the date that any such letter or form expires or
becomes obsolete or after the occurrence of any event requiring a
change in the most recent letter and form previously delivered by it to
the Company, and such extensions or renewals thereof as may
reasonably be requested by the Company, certifying in the case of a
Form 1001 or 4224 that such Bank is entitled to receive payments
under this Agreement without deduction or withholding of any United
States federal income taxes, unless in any such cases an event
(including without limitation any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or
which would prevent such Bank from duly completing and delivering
any such letter or form with respect to it and such Bank advises the
Company that it is not capable of receiving payments without any
deduction or withholding of United Sates federal income tax, and in
the case of a Form W-8 or W-9, establishing an exemption from
United States backup withholding tax.
(c) The agreements in subsection 2.14 shall survive
the termination of this Agreement and the payment of the Notes and
all other amounts payable hereunder.
2.15 Indemnity. The Company agrees to indemnify
each Bank and to hold each Bank harmless from any loss or expense
(other than any loss of anticipated margin or profit) which such Bank
may sustain or incur as a consequence of (a) default by the Company
in payment when due of the principal amount of or interest on any
Eurodollar Loans of such Bank, (b) default by the Company in making
a borrowing or conversion after the Company has given a notice of
borrowing in accordance with subsection 2.1(c) or a notice of
continuation or conversion pursuant to subsection 2.6, (c) default by
the Company in making any prepayment after the Company has given
a notice in accordance with subsection 2.5 or (d) the making of a
prepayment of a Eurodollar Loan on a day which is not the last day of
an Interest Period with respect thereto, including, without limitation,
in each case, any such loss or expense arising from the
reemployment of funds obtained by it to maintain its Eurodollar Loans
hereunder or from fees payable to terminate the deposits from which
such funds were obtained. Any Bank claiming any amount under this
subsection 2.15 shall provide calculations, in reasonable detail, of the
amount of its loss or expense. This covenant shall survive
termination of this Agreement and payment of the outstanding Notes
and all other amounts payable hereunder.
2.16 Application of Proceeds of Loans. Subject to the
provisions of the following sentence, the Company may use the
proceeds of the Loans to finance, in part, the Acquisition and for any
other lawful general corporate purpose, provided that the Company
shall not use the proceeds of the Loans to finance any acquisition of
capital stock of any Person (other than Portfolio Margin Stock) that
has not been approved by the Board of Directors or other governing
body of such Person. The Company will not, directly or indirectly,
apply any part of the proceeds of any such Loan for the purpose of
"purchasing" or "carrying" any Margin Stock within the respective
meanings of each of the quoted terms under Regulation U, or to
refund any indebtedness incurred for such purpose, provided that the
Company may use the proceeds of Loans for such purposes, if (i)
such usage does not violate Regulation U as now and from time to
time hereafter in effect and (ii) the Board of Directors of the issuer of
the Margin Stock being purchased has expressly approved such
transaction and expressly recommended such transaction to its
shareholders.
2.17 Notice of Certain Circumstances; Assignment of
Commitments Under Certain Circumstances.
(a) Any Bank claiming any additional amounts payable
pursuant to subsections 2.12, 2.13 or 2.14 or exercising its rights
under subsection 2.11, shall, in accordance with the respective
provisions thereof, provide notice to the Company and the Agent.
Such notice to the Company and the Agent shall include details
reasonably sufficient to establish the basis for such additional
amounts payable or the rights to be exercised by the Bank.
(b) Any Bank claiming any additional amounts payable
pursuant to subsections 2.12, 2.13 or 2.14 or exercising its rights
under subsection 2.11, shall use reasonable efforts (consistent with
legal and regulatory restrictions) to file any certificate or document
requested by the Company or to change the jurisdiction of its
applicable lending office if the making of such filing or change would
avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue or avoid the circumstances
giving rise to such exercise and would not, in the reasonable
determination of such Bank, be otherwise disadvantageous to such
Bank.
(c) In the event that the Company shall be required to
make any additional payments to any Bank pursuant to subsections
2.12, 2.13 or 2.14 or any Bank shall exercise its rights under
subsection 2.11, the Company shall have the right at its own
expense, upon notice to such Bank and the Agent, to require such
Bank to transfer and to assign without recourse (in accordance with
and subject to the terms of subsection 10.6) all its interest, rights
and obligations under this Agreement to another financial institution
(including any Bank) acceptable to the Agent (which approval shall
not be unreasonably withheld) which shall assume such obligations;
provided that (i) no such assignment shall conflict with any
Requirement of Law and (ii) such assuming financial institution shall
pay to such Bank in immediately available funds on the date of such
assignment the outstanding principal amount of such Bank's Notes
together with accrued interest thereon and all other amounts accrued
for its account or owed to it hereunder, including, but not limited to
additional amounts payable under subsections 2.3, 2.11, 2.12, 2.13,
2.14 and 2.15.
2.18 Regulation U.
(a) If at any time the Company shall use the proceeds
of any Loans for the purpose of "purchasing" or "carrying" any
Margin Stock within the respective meanings of each of the quoted
terms under Regulation U, or to refund any indebtedness incurred for
such purpose, the Company shall give notice thereof to the Agent
and the Banks, and thereafter the Loans made by each Bank shall at
all times be treated for purposes of Regulation U, as two separate
extensions of credit (the "A Credit" and the "B Credit" of such Bank
and, collectively, the "A Credits" and the "B Credits"), as follows:
(i) the aggregate amount of the A Credit of such
Bank shall be an amount equal to such Bank's pro rata share
(based on the amount of its Commitment Percentage) of the
maximum loan value (as determined in accordance with
Regulation U), of all Margin Stock Collateral; and
(ii) the aggregate amount of the B Credit of such Bank
shall be an amount equal to such Bank's pro rata share (based
on the amount of its Commitment Percentage) of all Loans
outstanding hereunder minus such Bank's A Credit.
In the event that any Margin Stock Collateral is acquired or sold, the
amount of the A Credit of such Bank shall be adjusted (if necessary),
to the extent necessary by prepayment, to an amount equal to such
Bank's pro rata share (based on the amount of its Commitment
Percentage) of the maximum loan value (determined in accordance
with Regulation U) as of the date of such acquisition or sale) of the
Margin Stock Collateral immediately after giving effect to such
acquisition or sale. Nothing contained in this subsection 2.18 shall be
deemed to permit any sale of Margin Stock Collateral in violation of
any other provisions of this Agreement.
(b) Each Bank will maintain its records to identify the A
Credit of such Bank and the B Credit of such Bank, and, solely for the
purposes of complying with Regulation U, the A and B Credits shall
be treated as separate extensions of credit. Each Bank hereby
represents and warrants that the loan value of the Other Collateral is
sufficient for such Bank to lend its pro rata share of the B Credit.
(c) The benefits of the indirect security in Margin Stock
Collateral created by any provisions of this Agreement, shall be
allocated first to the benefit and security of the payment of the
principal of and interest on the A Credits of the Banks and of all other
amounts payable by the Company under this Agreement in
connection with the A Credits (collectively, the "A Credit Amounts")
and second, only after the payment in full of the A Credit Amounts,
to the benefit and security of the payment of the principal of and
interest on the B Credits of the Banks and of all other amounts
payable by the Company under this Agreement in connection with the
B Credits (collectively, the "B Credit Amounts"). The benefits of the
indirect security in Other Collateral created by any provisions of this
Agreement, shall be allocated first to the benefit and security of the
payment of the B Credit Amounts and second, only after the payment
in full of the B Credit Amounts, to the benefit and security of the
payment of the A Credit Amounts.
(d) The Company shall furnish to each Bank at the time
of each acquisition and sale of Margin Stock Collateral such
information and documents as the Agent or such Bank may require to
determine the A and B Credits, and at any time and from time to
time, such other information and documents as the Agent or such
Bank may reasonably require to determine compliance with Regulation
U or Regulation G, as applicable.
(e) Each Bank shall be responsible for its own
compliance with and administration of the provisions of this
subsection 2.18 and Regulation U, and the Agent shall have no
responsibility for any determinations or allocations made or to be
made by any Bank as required by such provisions.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Sublimit.
(a) Subject to the terms and conditions hereof, the
Issuing Bank, in reliance on the agreements of the other Banks set
forth in subsection 3.4(a), agrees to issue letters of credit ("Letters of
Credit") for the account of the Company on any Business Day during
the Commitment Period in such form as may be approved from time
to time by the Issuing Bank; provided that the Issuing Bank shall have
no obligation to issue any Letter of Credit if, after giving effect to
such issuance, (i) the L/C Obligations would exceed the L/C Sublimit
or (ii) the Available Commitment would be less than zero. Each Letter
of Credit shall (i) be denominated in Dollars, (ii) be a standby letter of
credit issued to support obligations of the Company or its
Subsidiaries, contingent or otherwise (a "Standby Letter of Credit")
and (iii) expire no later than the Termination Date.
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of
the State of New York.
(c) The Issuing Bank shall not at any time be obligated
to issue any Letter of Credit hereunder if such issuance would conflict
with, or cause the Issuing Bank or any L/C Participant to exceed any
limits imposed by, any applicable Requirement of Law.
(d) No Letter of Credit shall have an expiry date more
than 365 days after its date of issuance.
3.2 Procedure for Issuance of Letters of Credit. The
Company may from time to time request that the Issuing Bank issue
a Letter of Credit by delivering to the Issuing Bank at its address for
notices specified herein an Application therefor, completed to the
satisfaction of the Issuing Bank, and such other certificates,
documents and other papers and information as the Issuing Bank may
request. Upon receipt of any Application, the Issuing Bank will
process such Application and the certificates, documents and other
papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue
the Letter of Credit requested thereby (but in no event shall the
Issuing Bank be required to issue any Letter of Credit earlier than
three Business Days after its receipt of the Application therefor and
all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed by
the Issuing Bank and the Company. The Issuing Bank shall furnish a
copy of such Letter of Credit to the Company promptly following the
issuance thereof.
3.3 Fees, Commissions and Other Charges.
(a) The Company shall pay to the Agent, for the
account of the Issuing Bank and the L/C Participants, a letter of credit
commission with respect to each Letter of Credit, computed at the
rate per annum set forth in the table below opposite the Consolidated
Capitalization Ratio then in effect (as determined in accordance with
the definition of Applicable Margin), of which .125% per annum shall
be payable to the Issuing Bank and the balance shall be payable to
the L/C Participants to be shared ratably among them in accordance
with their respective Commitment Percentages. Such fee shall be
payable on each L/C Fee Payment Date and shall be nonrefundable.
Consolidated L/C Commission
Capitalization Ratio (Rate per Annum)
less than .30 .2850%
at least .30 but less than .35 .3500%
at least .35 but less than .40 .4250%
at least .40 .5250%
(b) In addition to the foregoing fees, the Company
shall pay or reimburse the Issuing Bank for such normal and
customary costs and expenses as are incurred or charged by the
Issuing Bank in issuing, effecting payment under, amending or
otherwise administering any Letter of Credit.
(c) The Agent shall, promptly following its receipt
thereof, distribute to the Issuing Bank and the L/C Participants all fees
received by the Agent for their respective accounts pursuant to this
subsection.
3.4 L/C Participation.
(a) The Issuing Bank irrevocably agrees to grant and
hereby grants to each L/C Participant, and, to induce the Issuing Bank
to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases
from the Issuing Bank, on the terms and conditions hereinafter stated,
for such L/C Participant's own account and risk an undivided interest
equal to such L/C Participant's Commitment Percentage in the Issuing
Bank's obligations and rights under each Letter of Credit issued
hereunder and the amount of each draft paid by the Issuing Bank
thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Bank that, if a draft is paid under any Letter
of Credit for which the Issuing Bank is not reimbursed in full by the
Company in accordance with the terms of this Agreement, such L/C
Participant shall pay to the Issuing Bank upon demand at the Issuing
Bank's address for notices specified herein an amount equal to such
L/C Participant's Commitment Percentage of the amount of such
draft, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C
Participant to the Issuing Bank pursuant to subsection 3.4(a) in
respect of any unreimbursed portion of any payment made by the
Issuing Bank under any Letter of Credit is paid to the Issuing Bank
within three Business Days after the date such payment is due, such
L/C Participant shall pay to the Issuing Bank on demand an amount
equal to the product of (i) such amount, times (ii) the daily average
Federal funds rate, as quoted by the Issuing Bank, during the period
from and including the date such payment is required to the date on
which such payment is immediately available to the Issuing Bank,
times (iii) a fraction the numerator of which is the number of days
that elapse during such period and the denominator of which is 360.
If any such amount required to be paid by any L/C Participant
pursuant to subsection 3.4(a) is not in fact made available to the
Issuing Bank by such L/C Participant within three Business Days after
the date such payment is due, the Issuing Bank shall be entitled to
recover from such L/C Participant, on demand, such amount with
interest thereon calculated from such due date at the rate per annum
applicable to Revolving Credit Loans that are Alternate Base Rate
Loans hereunder. A certificate of the Issuing Bank submitted to any
L/C Participant with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Bank has
made payment under any Letter of Credit and has received from any
L/C Participant its pro rata share of such payment in accordance with
subsection 3.4(a), the Issuing Bank receives any payment related to
such Letter of Credit (whether directly from the Company or
otherwise, including proceeds of collateral, if any, applied thereto by
the Issuing Bank), or any payment of interest on account thereof, the
Issuing Bank will distribute to such L/C Participant its pro rata share
thereof; provided, however, that in the event that any such payment
received by the Issuing Bank shall be required to be returned by the
Issuing Bank, such L/C Participant shall return to the Issuing Bank the
portion thereof previously distributed by the Issuing Bank to it.
3.5 Reimbursement Obligation of the Borrower. The
Company agrees to reimburse the Issuing Bank on each date on
which the Issuing Bank notifies the Company of the date and amount
of a draft presented under any Letter of Credit and paid by the Issuing
Bank for the amount of (a) such draft so paid and (b) any taxes, fees,
charges or other costs or expenses incurred by the Issuing Bank in
connection with such payment. Each such payment shall be made to
the Issuing Bank at its address for notices specified herein in lawful
money of the United States of America and in immediately available
funds. Interest shall be payable on any and all amounts remaining
unpaid by the Company under this subsection from the date such
amounts become payable (whether at stated maturity, by acceleration
or otherwise) until payment in full at a rate per annum equal to the
Alternate Base Rate plus 2%.
3.6 Obligations Absolute. The Company's
obligations under this Section 3 shall be absolute and unconditional
under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment which the Company may have or
have had against the Issuing Bank or any beneficiary of a Letter of
Credit. The Company also agrees with the Issuing Bank that the
Issuing Bank shall not be responsible for, and the Company's
Reimbursement Obligations under subsection 3.5 shall not be affected
by, among other things, the validity or genuineness of documents or
of any endorsements thereon, even though such documents shall in
fact prove to be invalid, fraudulent or forged, or any dispute between
or among the Company and any beneficiary of any Letter of Credit or
any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Company against any beneficiary of
such Letter of Credit or any such transferee. The Issuing Bank shall
not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors
or omissions caused by the Issuing Bank's gross negligence or willful
misconduct. The Company agrees that any action taken or omitted
by the Issuing Bank under or in connection with any Letter of Credit
or the related drafts or documents, if done in the absence of gross
negligence of willful misconduct and in accordance with the
standards of care specified in the Uniform Commercial Code of the
State of New York, shall be binding on the Company and shall not
result in any liability of the Issuing Bank to the Company.
3.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Bank
shall promptly notify the Company of the date and amount thereof.
The responsibility of the Issuing Bank to the Company in connection
with any draft presented for payment under any Letter of Credit shall,
in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents
(including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter
of Credit.
3.8 Application. To the extent that any provision of
any Application related to any Letter of Credit is inconsistent with the
provisions of this Section 3, the provisions of this Section 3 shall
apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants that:
4.1 Corporate Existence; Compliance with Law. Each
of the Company and its Subsidiaries (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the corporate power and authority, and the legal
right, to make, deliver and perform the Loan Documents to which it is
a party, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its
business requires such qualification and (d) is in compliance with all
Requirements of Law, including, without limitation, HMO Regulations
and Insurance Regulations, except to the extent that the failure to be
so qualified or to comply therewith could not have a Material Adverse
Effect.
4.2 No Legal Obstacle to Agreement; Enforceability.
Neither the execution and delivery of any Loan Document, nor the
making by the Company of any borrowings hereunder, nor the
consummation of any transaction herein or therein referred to or
contemplated hereby or thereby nor the fulfillment of the terms
hereof or thereof or of any agreement or instrument referred to in this
Agreement, has constituted or resulted in or will constitute or result
in a breach of any Requirement of Law, including without limitation,
HMO Regulations and Insurance Regulations, or any Contractual
Obligation of the Company or any of its Subsidiaries, or result in the
creation under any agreement or instrument of any security interest,
lien, charge or encumbrance upon any of the assets of the Company
or any of its Subsidiaries. No approval, authorization or other action
by any Governmental Authority, including, without limitation, HMO
Regulators and Insurance Regulators, or any other Person is required
to be obtained by the Company or any of its Subsidiaries in
connection with the execution, delivery and performance of this
Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby, or the making of any borrowing by
the Company hereunder. This Agreement has been, and each other
Loan Document will be, duly executed and delivered on behalf of the
Company. This Agreement constitutes, and each other Loan
Document when executed and delivered will constitute, a legal, valid
and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.3 Litigation. Except as disclosed in the Company's
Annual Report on Form 10-K for its fiscal year ended December 31,
1994 and the Company's Quarterly Reports on Form 10-Q for its
fiscal quarters ended March 31, 1995 and June 30, 1995 filed with
the Securities and Exchange Commission and previously distributed to
the Banks, there is no litigation, at law or in equity, or any proceeding
before any federal, state, provincial or municipal board or other
governmental or administrative agency, including without limitation,
HMO Regulators and Insurance Regulators, pending or to the
knowledge of the Company threatened which, after giving effect to
any applicable insurance, may involve any material risk of a Material
Adverse Effect or which seeks to enjoin the consummation of any of
the transactions contemplated by this Agreement or any other Loan
Document, and no judgment, decree, or order of any federal, state,
provincial or municipal court, board or other governmental or
administrative agency, including without limitation, HMO Regulators
and Insurance Regulators, has been issued against the Company or
any Subsidiary which has, or may involve, a material risk of a Material
Adverse Effect. The Company does not believe that the final
resolution of the matters disclosed in its Annual Report on Form 10-K
for its fiscal year ended December 31, 1994 and the Company's
Quarterly Reports on Form 10-Q for its fiscal quarters ended March
31, 1995 and June 30, 1995 filed with the Securities and Exchange
Commission and previously distributed to the Banks, will have a
Material Adverse Effect.
4.4 Disclosure. Neither this Agreement nor any
agreement, document, certificate or statement furnished to the Banks
by the Company in connection herewith (including, without limitation,
the information relating to the Company and its Subsidiaries included
in the Confidential Information Memorandum dated September 1995
delivered in connection with the syndication of the credit facilities
hereunder) contains any untrue statement of material fact or, taken
as a whole together with all other information furnished to the Banks
by the Company, omits to state a material fact necessary in order to
make the statements contained herein or therein not misleading. All
pro forma financial statements made available to the Banks have been
prepared in good faith based upon reasonable assumptions. There is
no fact known to the Company which materially adversely affects or
in the future may (so far as the Company can now foresee) materially
adversely affect the business, operations, affairs or condition of the
Company and its Subsidiaries on a consolidated basis, except to the
extent that they may be affected by future general economic
conditions.
4.5 Defaults. Neither the Company nor any of its
Subsidiaries is in default under or with respect to any Requirement of
Law or Contractual Obligation in any respect which has had, or may
have, a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
4.6 Financial Condition. The Company has furnished
to the Agent and each Bank copies of the following:
(a) The Annual Report of the Company on Form 10-K
for the fiscal year ended December 31, 1994; and
(b) the Quarterly Reports of the Company on
Form 10-Q for each of the fiscal quarters ended March 31,
1995 and June 30, 1995.
The financial statements included therein, including the related
schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as
disclosed therein). As of the date of such financial statements,
neither the Company nor any of its Subsidiaries had any known
contingent liabilities of any significant amount which in accordance
with GAAP are required to be referred to in said financial statements
or in the notes thereto which could reasonably be expected to have a
Material Adverse Effect. During the period from December 31, 1994
to and including the date hereof, there has been no sale, transfer or
other disposition by the Company or any of its consolidated
Subsidiaries of any asset reflected on the balance sheet referred to
above that would have been a material part of its business or
property and no purchase or other acquisition of any business or
property (including any capital stock of any other Person) material in
relation to the consolidated financial condition of the Company and its
consolidated Subsidiaries at December 31, 1994 other than
transactions relating to the Acquisition.
4.7 Changes in Condition. Since December 31, 1994,
there has been no development or event nor any prospective
development or event, which has had, or may have, a Material
Adverse Effect.
4.8 Assets. The Company and each Subsidiary have
good and marketable title to all material assets carried on their books
and reflected in the financial statements referred to in subsection 4.6
or furnished pursuant to subsection 6.4, except for assets held on
Financing Leases or purchased subject to security devices providing
for retention of title in the vendor, and except for assets disposed of
as permitted by this Agreement.
4.9 Tax Returns. The Company and each of its
Subsidiaries have filed all tax returns which are required to be filed
and have paid, or made adequate provision for the payment of, all
taxes which have or may become due pursuant to said returns or to
assessments received. All federal tax returns of the Company and its
Subsidiaries through their fiscal years ended in 1991 have been
audited by the Internal Revenue Service or are not subject to such
audit by virtue of the expiration of the applicable period of limitations,
and the results of such audits are fully reflected in the balance sheets
referred to in subsection 4.6. The Company knows of no material
additional assessments since said date for which adequate reserves
appearing in the said balance sheet have not been established.
4.10 Contracts, etc. Attached hereto as Schedule III is
a statement of outstanding Indebtedness of the Company and its
Subsidiaries for borrowed money in excess of $1,000,000 as of the
date set forth therein, and a complete and correct list of all
agreements, contracts, indentures, instruments, documents and
amendments thereto to which the Company or any Subsidiary is a
party or by which it is bound pursuant to which any such
Indebtedness of the Company and its Subsidiaries is outstanding on
the date hereof. Said Schedule III also includes a complete and
correct list of all such Indebtedness of the Company and its
Subsidiaries outstanding on the date indicated in respect of Guarantee
Obligations in excess of $1,000,000 and letters of credit in excess of
$1,000,000, and there have been no increases in such Indebtedness
since said date other than as permitted by this Agreement.
4.11 Subsidiaries. As of the date hereof, the
Company has only the Subsidiaries set forth in Schedule IV, all of the
outstanding capital stock of each of which is duly authorized, validly
issued, fully paid and nonassessable and owned as set forth in said
Schedule IV. Schedule IV indicates all Subsidiaries of the Company
which are not Wholly-Owned Subsidiaries and the percentage
ownership of the Company and its Subsidiaries in each such
Subsidiary. The capital stock and securities owned by the Company
and its Subsidiaries in each of the Company's Subsidiaries are owned
free and clear of any mortgage, pledge, lien, encumbrance, charge or
restriction on the transfer thereof other than restrictions on transfer
imposed by applicable securities laws and restrictions, liens and
encumbrances outstanding on the date hereof and listed in said
Schedule IV.
4.12 Burdensome Obligations. Neither the Company
nor any Subsidiary is a party to or bound by any agreement, deed,
lease or other instrument, or subject to any charter, by-law or other
corporate restriction which, in the reasonable opinion of the
management thereof, is so unusual or burdensome as to in the
foreseeable future have a Material Adverse Effect. The Company
does not presently anticipate that future expenditures of the
Company and its Subsidiaries needed to meet the provisions of any
federal or state statutes, orders, rules or regulations will be so
burdensome as to have a Material Adverse Effect.
4.13 Pension Plans. Each Plan maintained by the
Company, any Subsidiary or any Control Group Person or to which
any of them makes or will make contributions is in material
compliance with the applicable provisions of ERISA and the Code.
Neither the Company nor any Subsidiary nor any Control Group
Person maintains, contributes to or participates in any Plan that is a
"defined benefit plan" as defined in ERISA. Neither the Company,
any Subsidiary, nor any Control Group Person has since August 31,
1987 maintained, contributed to or participated in any Multiemployer
Plan, with respect to which a complete withdrawal would result in
any withdrawal liability. The Company and its Subsidiaries have met
all of the funding standards applicable to all Plans that are not
Multiemployer Plans, and there exists no event or condition which
would permit the institution of proceedings to terminate any Plan that
is not a Multiemployer Plan. The current value of the benefits
guaranteed under Title IV of ERISA of each Plan that is not a
Multiemployer Plan does not exceed the current value of such Plan's
assets allocable to such benefits.
4.14 Environmental and Public and Employee Health
and Safety Matters. The Company and each Subsidiary has complied
with all applicable Federal, state, and other laws, rules and
regulations relating to environmental pollution or to environmental
regulation or control or to public or employee health or safety, except
to the extent that the failure to so comply would not be reasonably
likely to result in a Material Adverse Effect. The Company's and the
Subsidiaries' facilities do not contain, and have not previously
contained, any hazardous wastes, hazardous substances, hazardous
materials, toxic substances or toxic pollutants regulated under the
Resource Conservation and Recovery Act, the Comprehensive
Environmental Response Compensation and Liability Act, the
Hazardous Materials Transportation Act, the Toxic Substance Control
Act, the Clean Air Act, the Clean Water Act or any other applicable
law relating to environmental pollution or public or employee health
and safety, in violation of any such law, or any rules or regulations
promulgated pursuant thereto, except for violations that would not be
reasonably likely to result in a Material Adverse Effect. The Company
is aware of no events, conditions or circumstances involving
environmental pollution or contamination or public or employee health
or safety, in each case applicable to it or its Subsidiaries, that would
be reasonably likely to result in a Material Adverse Effect.
4.15 Federal Regulations. No part of the proceeds of
any Loans will be used in any transaction or for any purpose which
violates the provisions of Regulation U as now and from time to time
hereafter in effect. If requested by any Bank or the Agent, the
Company will furnish to the Agent and each Bank a statement to the
foregoing effect in conformity with the requirements of Form FR U-1
referred to in said Regulation U.
4.16 Investment Company Act; Other Regulations.
The Company is not an "investment company", or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended. The Company is not
subject to regulation under any Federal or State statute or regulation
which limits its ability to incur Indebtedness.
4.17 Solvency. Each of the Company, and the
Company and its Subsidiaries taken as a whole, is Solvent.
4.18 Casualties. Neither the businesses nor the
properties of the Company or any of its Subsidiaries are affected by
any fire, explosion, accident, strike, lockout or other material labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of
the public enemy or other casualty (whether or not covered by
insurance) that could reasonably be expected to have a Material
Adverse Effect.
4.19 Business Activity. Neither the Company nor any
of its Subsidiaries is engaged in any line of business that is not
related to the healthcare industry other than the sale of life insurance
in connection with the sale of medical insurance or other healthcare
services or any business or activity which is immaterial to the
Company and its Subsidiaries on a consolidated basis.
4.20 Purpose of Loans. The proceeds of the Loans
shall be used to finance, in part, the Acquisition and for any other
lawful general corporate purpose, provided that the Company shall
not use the proceeds of the Loans to finance any acquisition of
capital stock of any Person (other than Portfolio Margin Stock) that
has not been approved by the Board of Directors or other governing
body of such Person, provided, further, that no part of the proceeds
of any Loans will be used in any transaction or for any purpose which
violates the provisions of Regulation U as now and from time to time
hereafter in effect.
SECTION 5. CONDITIONS
5.1 Conditions to the Closing Date. The obligations of
each Bank to make the Loans contemplated by subsections 2.1 and
2.2 and of the Issuing Bank to issue Letters of Credit contemplated
by subsection 3.1 shall be subject to the compliance by the Company
with its agreements herein contained and to the satisfaction of the
following conditions on or before the Closing Date:
(a) Loan Documents. The Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer
of the Company, with a counterpart for each Bank and (ii) for the
account of each Bank, a Revolving Credit Note and a Grid CAF Loan
Note conforming to the requirements hereof and executed by a duly
authorized officer of the Company.
(b) Legal Opinions. On the Closing Date and on any
Borrowing Date as the Agent shall request, each Bank shall have
received from any general, associate, or assistant general counsel to
the Company, such opinions as the Agent shall have reasonably
requested with respect to the transactions contemplated by this
Agreement.
(c) Closing Certificate. The Agent shall have received,
with a counterpart for each Bank, a Closing Certificate, substantially
in the form of Exhibit H and dated the Closing Date, executed by a
Responsible Officer of the Company.
(d) Legality, etc. The consummation of the
transactions contemplated hereby shall not contravene, violate or
conflict with, nor involve the Agent, the Issuing Bank or any Bank in
any violation of, any Requirement of Law including, without
limitation, HMO Regulations and Insurance Regulations, and all
necessary consents, approvals and authorizations of any
Governmental Authority or any Person to or of such consummation
shall have been obtained and shall be in full force and effect.
(e) Fees. The Agent shall have received the fees to be
received on the Closing Date referred to in subsection 2.3.
(f) Corporate Proceedings. The Agent shall have
received, with a counterpart for each Bank, a copy of the resolutions,
in form and substance satisfactory to the Agent, of the Board of
Directors of the Company authorizing (i) the execution, delivery and
performance of this Agreement, the Notes and the other Loan
Documents, and (ii) the borrowings contemplated hereunder, certified
by the Secretary or an Assistant Secretary of the Company as of the
Closing Date, which certificate shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded and
shall be in form and substance reasonably satisfactory to the Agent.
(g) Corporate Documents. The Agent shall have
received, with a counterpart for each Bank, true and complete copies
of the certificate of incorporation and by-laws of the Company,
certified as of the Closing Date as complete and correct copies
thereof by the Secretary or an Assistant Secretary of the Company.
(h) No Material Litigation. Except as previously
disclosed to the Agent and the Banks pursuant to subsection 4.3, no
litigation, inquiry, investigation, injunction or restraining order
(including any proposed statute, rule or regulation) shall be pending,
entered or threatened which, in the reasonable judgment of the
Majority Banks, could reasonably be expected to have a Material
Adverse Effect.
(i) Incumbency Certificate. The Agent shall have
received, with a counterpart for each Bank, a certificate of the
Secretary or an Assistant Secretary of the Company, dated the
Closing Date, as to the incumbency and signature of the officers of
the Company executing each Loan Document and any certificate or
other document to be delivered by it pursuant hereto and thereto,
together with evidence of the incumbency of such Secretary or
Assistant Secretary.
(j) Good Standing Certificates. The Agent shall have
received, with a copy for each Bank, copies of certificates dated as of
a recent date from the Secretary of State or other appropriate
authority of such jurisdiction, evidencing the good standing of the
Company in its jurisdiction of incorporation and in Kentucky.
(k) No Change. There shall not have occurred any
change, or development of event involving a prospective change, and
a Bank shall not have become aware of any previously undisclosed
information, which in either case in the reasonable judgment of the
Majority Banks could reasonably be expected to have a Material
Adverse Effect.
(l) Repayment of Outstanding Loans. On the Closing
Date, all Loans outstanding under the Original Credit Agreement, if
any, shall be repaid contemporaneously with the making of Loans
hereunder.
5.2 Conditions to Each Loan. The agreement of each
Bank to make any extension of credit requested to be made by it on
any date is subject to the satisfaction of the following conditions
precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Company and its
Subsidiaries in or pursuant to the Loan Documents shall be true and
correct in all material respects on and as of such date as if made on
and as of such date.
(b) No Default. No Default or Event of Default shall
have occurred and be continuing on such date or after giving effect to
the Loans requested to be made on such date.
(c) Additional Matters. All corporate and other
proceedings, and all documents, instruments and other legal matters
in connection with the transactions contemplated by this Agreement
and the other Loan Documents shall be satisfactory in form and
substance to the Agent, and the Agent shall have received such other
documents, instruments, legal opinions or other items of information
reasonably requested by it, including, without limitation, copies of
any debt instruments, security agreements or other material contracts
to which the Company may be a party in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it
shall reasonably request.
(d) Form FR U-1. In the case of any Loan the proceeds
of which will be used, in whole or in part, to purchase or carry Margin
Stock, the Company shall have executed and delivered to the Agent
and each Bank a statement on Form FR U-1 referred to in Regulation
U, showing compliance with Regulation U after giving effect to such
Loan.
(e) Legal Opinion. In the case of any Loan the
proceeds of which will be used, in whole or in part, to purchase or
carry Margin Stock, the Agent shall have received, with a copy for
each Bank, a written legal opinion of Fried, Frank, Harris, Shriver &
Jacobson, counsel to the Company, to the effect that such Loan and
the Company's use of the proceeds thereof does not violate
Regulation U or Regulation X.
Each borrowing and each request for issuance of a Letter of Credit by
the Company hereunder shall constitute a representation and
warranty by the Company as of the date of such extension of credit
that the conditions contained in this subsection 5.2 have been
satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Company hereby agrees that, from and after the
Closing Date and so long as the Commitments remain in effect, any
Note or Letter of Credit remains outstanding and unpaid or any other
amount is owing to any Bank or the Agent hereunder, the Company
shall and (except in the case of delivery of financial information,
reports and notices) shall cause each of its Subsidiaries to:
6.1 Taxes, Indebtedness, etc. Duly pay, discharge or
otherwise satisfy, or cause to be paid, discharged or otherwise
satisfied, before the same shall become in arrears, all taxes,
assessments, levies and other governmental charges imposed upon
such corporation and its properties, sales and activities, or any part
thereof, or upon the income or profits therefrom; provided, however,
that any such tax, assessment, charge or levy need not be paid if the
validity or amount thereof shall currently be contested in good faith
by appropriate proceedings and if the Company or the Subsidiary in
question shall have set aside on its books appropriate reserves in
conformity with GAAP with respect thereto. Each of the Company
and its Subsidiaries will promptly pay when due, or in conformance
with customary trade terms, all other Indebtedness, liabilities and
other obligations of whatever nature incident to its operations;
provided, however, that any such Indebtedness, liability or obligation
need not be paid if the validity or amount thereof shall currently be
contested in good faith and if the Company or the Subsidiary in
question shall have set aside on its books appropriate reserves in
conformity with GAAP with respect thereto.
6.2 Maintenance of Properties; Maintenance of
Existence. Keep its material properties in good repair, working order
and condition and will from time to time make all necessary and
proper repairs, renewals, replacements, additions and improvements
thereto and will comply at all times with the provisions of all material
leases and other material agreements to which it is a party so as to
prevent any loss or forfeiture thereof or thereunder unless compliance
therewith is being contested in good faith by appropriate proceedings
and if the Company or the Subsidiary in question shall have set aside
on its books appropriate reserves in conformity with GAAP with
respect thereto; and in the case of the Company or any Subsidiary of
the Company while such Person remains a Subsidiary, will do all
things necessary to preserve, renew and keep in full force and effect
and in good standing its corporate existence and all rights, privileges
and franchises necessary or desirable to continue such businesses.
6.3 Insurance. Maintain or cause to be maintained,
with financially sound and reputable insurers including any Subsidiary
which is engaged in the business of providing insurance protection,
insurance (including, without limitation, public liability insurance,
business interruption insurance, reinsurance for medical claims and
professional liability insurance against claims for malpractice) with
respect to its material properties and business and the properties and
business of its Subsidiaries in at least such amounts and against at
least such risks as are customarily carried under similar circumstances
by other corporations engaged in the same or a similar business; and
furnish to each Bank, upon written request, full information as to the
insurance carried. Such insurance may be subject to co-insurance,
deductibility or similar clauses which, in effect, result in self-insurance
of certain losses, and the Company may self-insure against such loss
or damage, provided that adequate insurance reserves are maintained
in connection with such self-insurance.
6.4 Financial Statements. The Company will and will
cause each of its Subsidiaries to maintain a standard modern system
of accounting in which full, true and correct entries will be made of
all dealings or transactions in relation to its business and affairs in
accordance with GAAP consistently applied, and will furnish the
following to each Bank (in duplicate if so requested):
(a) Annual Statements. As soon as available, and in
any event within 120 days after the end of each fiscal year, the
consolidated balance sheet as at the end of each fiscal year and
consolidated statements of profit and loss and of retained earnings
for such fiscal year of the Company and its Subsidiaries, together
with comparative consolidated figures for the next preceding fiscal
year, accompanied by reports or certificates of Coopers & Lybrand,
or, if they cease to be the auditors of the Company, of other
independent public accountants of national standing and reputation,
to the effect that such balance sheet and statements were prepared
in accordance with GAAP consistently applied and fairly present the
financial position of the Company and its Subsidiaries as at the end of
such fiscal year and the results of their operations and changes in
financial position for the year then ended and the statement of such
accountants and of the treasurer of the Company that such said
accountants and treasurer have caused the provisions of this
Agreement to be reviewed and that nothing has come to their
attention to lead them to believe that any Default exists hereunder or,
if such is not the case, specifying such Default or possible Default
and the nature thereof. In addition, such financial statements shall be
accompanied by a certificate of the treasurer of the Company
containing computations showing compliance with subsections 7.1,
7.2, 7.3 and 7.5.
(b) Quarterly Statements. As soon as available, and in
any event within 60 days after the close of each of the first three
fiscal quarters of the Company and its Subsidiaries in each year,
consolidated balance sheets as at the end of such fiscal quarter and
consolidated profit and loss and retained earnings statements for the
portion of the fiscal year then ended, of the Company and its
Subsidiaries, together with computations showing compliance with
subsections 7.1, 7.2, 7.3 and 7.5, accompanied by a certificate of
the treasurer of the Company that such statements and computations
have been properly prepared in accordance with GAAP, consistently
applied, and fairly present the financial position of the Company and
its Subsidiaries as at the end of such fiscal quarter and the results of
their operations and changes in financial position for such quarter and
for the portion of the fiscal year then ended, subject to normal audit
and year-end adjustments, and to the further effect that he has
caused the provisions of this Agreement and all other agreements to
which the Company or any of its Subsidiaries is a party and which
relate to Indebtedness to be reviewed, and has no knowledge that
any Default has occurred under this Agreement or under any such
other agreement, or, if said treasurer has such knowledge, specifying
such Default and the nature thereof. At such time that annual
statements or quarterly statements, as the case may be, are
furnished to each Bank pursuant to subsections 6.4(a) and 6.4(b),
respectively, herein, the treasurer of the Company shall deliver to the
Agent and the CAF Loan Agent a certificate showing the
Consolidated Capitalization Ratio (the "Consolidated Capitalization
Ratio Certificate") as of the last day of such fiscal quarter.
(c) ERISA Reports. The Company will furnish the
Agent with copies of any request for waiver of the funding standards
or extension of the amortization periods required by Sections 303 and
304 of ERISA or Section 412 of the Code promptly after any such
request is submitted by the Company to the Department of Labor or
the Internal Revenue Service, as the case may be. Promptly after a
Reportable Event occurs, or the Company or any of its Subsidiaries
receives notice that the PBGC or any Control Group Person has
instituted or intends to institute proceedings to terminate any pension
or other Plan, or prior to the Plan administrator's terminating such
Plan pursuant to Section 4041 of ERISA, the Company will notify the
Agent and will furnish to the Agent a copy of any notice of such
Reportable Event which is required to be filed with the PBGC, or any
notice delivered by the PBGC evidencing its institution of such
proceedings or its intent to institute such proceedings, or any notice
to the PBGC that a Plan is to be terminated, as the case may be. The
Company will promptly notify each Bank upon learning of the
occurrence of any of the following events with respect to any Plan
which is a Multiemployer Plan: a partial or complete withdrawal from
any Plan which may result in the incurrence by the Company or any
of is Subsidiaries of withdrawal liability in excess of $1,000,000
under Subtitle E of Title IV of ERISA, or of the termination, insolvency
or reorganization status of any Plan under such Subtitle E which may
result in liability to the Company or any of its Subsidiaries in excess
of $1,000,000. In the event of such a withdrawal, upon the request
of the Agent or any Bank, the Company will promptly provide
information with respect to the scope and extent of such liability, to
the best of the Company's knowledge.
6.5 Certificates; Other Information. Furnish to each
Bank:
(a) within five Business Days after the same are sent,
copies of all financial statements and reports which the Company
sends to its stockholders, and within five Business Days after the
same are filed, copies of all financial statements and reports which
the Company may make to, or file with, the Securities and Exchange
Commission;
(b) not later than thirty days prior to the end of each
fiscal year of the Company, the Company shall deliver to the Agent
and the Banks a schedule of the Company's insurance coverage and
such supplemental schedules with respect thereto as the Agent and
the Banks may from time to time reasonably request; and
(c) promptly, such additional financial and other
information as any Bank may from time to time reasonably request.
6.6 Compliance with ERISA. Each of the Company
and its Subsidiaries will meet, and will cause all Control Group
Persons to meet, all minimum funding requirements applicable to any
Plan imposed by ERISA or the Code (without giving effect to any
waivers of such requirements or extensions of the related
amortization periods which may be granted), and will at all times
comply, and will cause all Control Group Persons to comply, in all
material respects with the provisions of ERISA and the Code which
are applicable to the Plans. At no time shall the aggregate actual and
contingent liabilities of the Company under Sections 4062, 4063,
4064 and other provisions of ERISA (calculated as if the 30% of
collective net worth amount referred to in Section 4062(b)(1)(A)(i)(II)
of ERISA exceeded the actual total amount of unfunded guaranteed
benefits referred to in Section 4062(B)(1)(A)(i)(I) of ERISA) with
respect to all Plans (and all other pension plans to which the
Company, any Subsidiary, or any Control Group Person made
contributions prior to such time) exceed $5,000,000. Neither the
Company nor its Subsidiaries will permit any event or condition to
exist which could permit any Plan which is not a Multiemployer Plan
to be terminated under circumstances which would cause the lien
provided for in Section 4068 of ERISA to attach to the assets of the
Company or any of its Subsidiaries.
6.7 Compliance with Laws. Comply with all
Contractual Obligations and Requirements of Law (including, without
limitation, the HMO Regulations, Insurance Regulations, Regulation X
and laws relating to the protection of the environment), except where
compliance therewith shall be contested in good faith by appropriate
proceedings, the Company or the Subsidiary in question shall have
set aside on its books appropriate reserves in conformity with GAAP
with respect thereto, and the failure to comply therewith could not, in
the aggregate, have a Material Adverse Effect.
6.8 Inspection of Property; Books and Records;
Discussions. Keep proper books of records and account in which full,
true and correct entries in conformity with GAAP, all Requirements of
Law, including but not limited to, HMO Regulations and Insurance
Regulations, and the terms hereof shall be made of all dealings and
transactions in relation to its business and activities; and permit
representatives of any Bank to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at
any reasonable time and as often as may reasonably be desired and
to discuss the business, operations, properties and financial and other
condition of the Company and its Subsidiaries with officers and
employees of the Company and its Subsidiaries and with its
independent certified public accountants.
6.9 Notices. Promptly give notice to the Agent and
each Bank of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Company or any of its Subsidiaries or
(ii) litigation, investigation or proceeding which may exist at any time
between the Company or any of its Subsidiaries and any
Governmental Authority (including, without limitation, HMO
Regulators and Insurance Regulators), which in either case, if not
cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Company
or any of its Subsidiaries in which the amount involved is $5,000,000
or more and not covered by insurance or in which material injunctive
or similar relief is sought;
(d) a material development or material change in any
ongoing litigation or proceeding affecting the Company or any of its
Subsidiaries in which the amount involved is $5,000,000 or more and
not covered by insurance or in which material injunctive or similar
relief is sought;
(e) the following events, as soon as possible and in any
event within 30 days after the Company knows or has reason to
know thereof: (i) the occurrence or expected occurrence of any
Reportable Event with respect to any Plan, or any withdrawal from,
or the termination, Reorganization or Insolvency of any Multiemployer
Plan or (ii) the institution of proceedings or the taking of any other
action by the PBGC or the Company or any Commonly Controlled
Entity or any Multiemployer Plan with respect to the withdrawal from,
or the terminating, Reorganization or Insolvency of, any Plan;
(f) a development or event which could have a Material
Adverse Effect;
(g) the material non-compliance or potential material
non-compliance with any Contractual Obligation or Requirement of
Law, including, without limitation, HMO Regulations and Insurance
Regulations, that is not currently being contested in good faith by
appropriate proceedings;
(h) the revocation of any material license, permit,
authorization, certificate, qualification or accreditation of the
Company or any Subsidiary by any Governmental Authority,
including, without limitation, the HMO Regulators and Insurance
Regulators; and
(i) any significant change in or material additional
restriction placed on the ability of a Significant Subsidiary to continue
business as usual, including, without limitation, its ability to pay
dividends to the Company, by any Governmental Authority, including,
without limitation, the HMO Regulators and Insurance Regulators.
Each notice pursuant to this subsection shall be accompanied by a
statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the Company
proposes to take with respect thereto.
6.10 Maintenance of Accreditation, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
all licenses, permits, authorizations, certifications and qualifications
(including, without limitation, those qualifications with respect to
solvency and capitalization) required under the HMO Regulations or
the Insurance Regulations in connection with the ownership or
operation of HMO's or insurance companies except were the failure
to do so would not result in a Material Adverse Effect.
6.11 Further Assurances. Execute any and all further
documents, and take all further action which the Majority Banks or
the Agent may reasonably request in order to effectuate the
transactions contemplated by the Loan Documents.
SECTION 7. NEGATIVE COVENANTS
The Company hereby agrees that, from and after the
Closing Date and so long as the Commitments remain in effect, any
Note or Letter of Credit remains outstanding and unpaid or any other
amount is owing to any Bank or the Agent hereunder, the Company
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
7.1 Financial Condition Covenants.
(a) Maintenance of Net Worth. Permit Consolidated
Net Worth at any time to be less than 80% of its Consolidated Net
Worth of the Company and its consolidated subsidiaries as at
September 30, 1994 plus 50% of the Company's Consolidated Net
Income determined on an after-extraordinary items basis for each full
fiscal quarter after September 30, 1994 (without any deduction for
any such fiscal quarter in which Consolidated Net Income is a
negative number).
(b) Fixed Charge Coverage. Permit, on the last day of
any fiscal quarter of the Company, the ratio of (i) Consolidated
Earnings before Interest and Taxes for the four consecutive fiscal
quarters of the Company ending on such date to (ii) Consolidated
Interest Expense during such period, to be less than 3.0 to 1.0.
(c) Maximum Leverage Ratio. Permit the Leverage
Ratio on the last day of any full fiscal quarter of the Company to be
more than 3.0 to 1.0.
7.2 Limitation on Subsidiary Indebtedness. The
Company shall not permit any of the Subsidiaries of the Company to
create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Subsidiary to the Company or
any other Subsidiary;
(b) Indebtedness of a corporation which becomes a
Subsidiary after the date hereof, provided that (i) such indebtedness
existed at the time such corporation became a Subsidiary and was
not created in anticipation thereof and (ii) immediately before and
after giving effect to the acquisition of such corporation by the
Company no Default or Event of Default shall have occurred and be
continuing; and
(c) additional Indebtedness of Subsidiaries of the
Company not exceeding $75,000,000 in aggregate principal amount
at any one time outstanding.
7.3 Limitation on Liens. Create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, except for:
(a) Liens, if any, securing the obligations of the
Company under this Agreement and the Notes;
(b) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, provided that
adequate reserves with respect thereto are maintained on the books
of the Company or its Subsidiaries, as the case may be, in conformity
with GAAP;
(c) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business which are not overdue for a period of more than
60 days or which are being contested in good faith by appropriate
proceedings;
(d) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(e) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(f) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount and which do
not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the Company or such Subsidiary;
(g) Liens in existence on the Closing Date listed on
Schedule V, securing Indebtedness in existence on the Closing Date,
provided that no such Lien is spread to cover any additional property
after the Closing Date and that the amount of Indebtedness secured
thereby is not increased;
(h) Liens securing Indebtedness of the Company and
its Subsidiaries not prohibited hereunder incurred to finance the
acquisition of fixed or capital assets, provided that (i) such Liens shall
be created substantially simultaneously with the acquisition of such
fixed or capital assets, (ii) such Liens do not at any time encumber
any property other than the property financed by such Indebtedness
and (iii) the principal amount of Indebtedness secured by any such
Lien shall at no time exceed 80% of the original purchase price of
such property;
(i) Liens on the property or assets of a corporation
which becomes a Subsidiary after the date hereof securing
Indebtedness permitted by subsection 7.2(b), provided that (i) such
Liens existed at the time such corporation became a Subsidiary and
were not created in anticipation thereof, (ii) any such Lien is not
spread to cover any property or assets of such corporation after the
time such corporation becomes a Subsidiary and (iii) the amount of
Indebtedness secured thereby is not increased;
(j) Liens on the Headquarters and the Waterside
Building; and
(k) Liens not otherwise permitted under this
subsection 7.3 securing obligations in an aggregate amount not
exceeding at any time 10% of Consolidated Net Tangible Assets as at
the end of the immediately preceding fiscal quarter of the Company.
7.4 Limitations on Fundamental Changes. Enter into
any merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or make any
material change in its method of conducting business, or purchase or
otherwise acquire all or substantially all of the Capital Stock, or the
property, business or assets, of any other Person (other than any
Subsidiary) or any business division thereof except:
(a) any Subsidiary of the Company may be merged or
consolidated with or into the Company (provided that the Company
shall be the continuing or surviving corporation) and any Subsidiary of
the Company (except a Subsidiary the Indebtedness with respect to
which is referred to in subsection 7.2(b)) may be merged or
consolidated with or into any one or more wholly owned Subsidiaries
of the Company (provided that the wholly owned Subsidiary or
Subsidiaries shall be the continuing or surviving corporation);
(b) the Company may merge into another corporation
owned by the Company for the purpose of causing the Company to
be incorporated in a different jurisdiction;
(c) the Company or a wholly owned Subsidiary of the
Company may merge with another corporation, provided that (i) the
Company or such wholly owned Subsidiary (subject to clause (ii)), as
the case may be, shall be the continuing or surviving corporation of
such merger, (ii) in the case of a wholly owned Subsidiary of the
Company which is merged into another corporation which is the
continuing or surviving corporation of such merger, the Company
shall cause such continuing or surviving corporation to be a wholly
owned Subsidiary of the Company and (iii) immediately before and
after giving effect to such merger no Default or Event of Default shall
have occurred and be continuing; and
(d) the Acquisition shall be permitted.
7.5 Limitation on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business
or assets (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, except:
(a) obsolete or worn out property disposed of in the
ordinary course of business;
(b) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection
with the compromise or collection thereof;
(c) the sale or other disposition of the Headquarters;
and
(d) the sale or other disposition of securities held for
investment purposes in the ordinary course of business;
(e) any wholly owned Subsidiary may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to the Company or any other
wholly owned Subsidiary of the Company (except to a Subsidiary
referred to in subsection 7.2(b)); and
(f) the sale or other disposition of any other property,
provided that the aggregate book value of all assets so sold or
disposed of in any fiscal year of the Company shall not exceed in the
aggregate 12% of the Consolidated Assets of the Company and its
Subsidiaries as at the end of the immediately preceding fiscal year of
the Company.
7.6 Limitation on Distributions. The Company shall not
make any Distribution except that, so long as no Event of Default
exists or would exist after giving effect thereto, the Company may
make a Distribution.
7.7 Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any
Affiliate (other than the Company and its Subsidiaries) unless such
transaction is otherwise permitted under this Agreement, is in the
ordinary course of the Company's or such Subsidiary's business and
is upon fair and reasonable terms no less favorable to the Company or
such Subsidiary, as the case may be, than it would obtain in an arm's
length transaction.
7.8 Sale and Leaseback. Enter into any arrangement
with any Person providing for the leasing by the Company or any
Subsidiary of real or personal property which has been or is to be sold
or transferred by the Company or such Subsidiary to such Person or
to any other Person to whom funds have been or are to be advanced
by such Person on the security of such property or rental obligations
of the Company or such Subsidiary, unless such arrangement is upon
fair and reasonable terms no less favorable to the Company or such
Subsidiary than would be obtained in a comparable arm's length
transaction between an informed and willing seller or lessor under no
compulsion to sell or lease and an informed and willing buyer or
lessee under no compulsion to buy or lease.
7.9 Limitation on Negative Pledge Clauses. Enter into
any agreement, other than any industrial revenue bonds, purchase
money mortgages or Financing Leases permitted by this Agreement
(in which cases, any prohibition or limitation may only be with
respect to the real or personal property which is the subject thereof
and other property reasonably related thereto), with any Person other
than the Banks pursuant hereto which prohibits or limits the ability of
the Company or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired.
SECTION 8. DEFAULTS
8.1 Events of Default. Upon the occurrence of any of
the following events:
(a) any default shall be made by the Company in any
payment in respect of: (i) interest on any of the Notes, any
Reimbursement Obligation or any facility fee payable hereunder as the
same shall become due and such default shall continue for a period of
five days; or (ii) any Reimbursement Obligation or principal of the
Indebtedness evidenced by the Notes as the same shall become due,
whether at maturity, by prepayment, by acceleration or otherwise; or
(b) any default shall be made by either the Company or
any Subsidiary of the Company in the performance or observance of
any of the provisions of subsections 7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.8
and 7.9; or
(c) any default shall be made in the due performance or
observance of any other covenant, agreement or provision to be
performed or observed by the Company under this Agreement, and
such default shall not be rectified or cured to the satisfaction of the
Majority Banks within a period expiring 30 days after written notice
thereof by the Agent to the Company; or
(d) any representation or warranty made or deemed
made by the Company herein or in any other Loan Document or
which is contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this
Agreement shall have been untrue in any material respect on or as of
the date made and the facts or circumstances to which such
representation or warranty relates shall not have been subsequently
corrected to make such representation or warranty no longer
incorrect; or
(e) any default shall be made in the payment of any
item of Indebtedness of the Company or any Subsidiary or under the
terms of any agreement relating to such Indebtedness and such
default shall continue without having been duly cured, waived or
consented to, beyond the period of grace, if any, therein specified;
provided, however, that such default shall not constitute an Event of
Default unless (i) the outstanding principal amount of such item of
Indebtedness exceeds $5,000,000, or (ii) the aggregate outstanding
principal amount of such item of Indebtedness and all other items of
Indebtedness of the Company and its Subsidiaries as to which such
defaults exist and have continued without being duly cured, waived
or consented to beyond the respective periods of grace, if any,
therein specified exceeds $15,000,000, or (iii) such default shall have
continued without being rectified or cured to the satisfaction of the
Majority Banks for a period of 30 days after written notice thereof by
the Agent to the Company; or
(f) either the Company or any Subsidiary shall be
involved in financial difficulties as evidenced:
(i) by its commencement of a voluntary case
under Title 11 of the United States Code as from time
to time in effect, or by its authorizing, by appropriate
proceedings of its board of directors or other governing
body, the commencement of such a voluntary case;
(ii) by the filing against it of a petition
commencing an involuntary case under said Title 11
which shall not have been dismissed within 60 days
after the date on which said petition is filed or by its
filing an answer or other pleading within said 60-day
period admitting or failing to deny the material
allegations of such a petition or seeking, consenting or
acquiescing in the relief therein provided;
(iii) by the entry of an order for relief in any
involuntary case commenced under said Title 11;
(iv) by its seeking relief as a debtor under any
applicable law, other than said Title 11, of any
jurisdiction relating to the liquidation or reorganization
of debtors or to the modification or alteration of the
rights of creditors, or by its consenting to or
acquiescing in such relief;
(v) by the entry of an order by a court of
competent jurisdiction (i) finding it to be bankrupt or
insolvent, (ii) ordering or approving its liquidation,
reorganization or any modification or alteration of the
rights of its creditors, or (iii) assuming custody of, or
appointing a receiver or other custodian for, all or a
substantial part of its property; or
(vi) by its making an assignment for the
benefit of, or entering into a composition with, its
creditors, or appointing or consenting to the
appointment of a receiver or other custodian for all or a
substantial part of its property; or
(g) a Change in Control of the Company shall occur;
(h) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan, (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Majority Banks, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of
ERISA, (v) the Company or any Commonly Controlled Entity shall, or
in the reasonable opinion of the Majority Banks is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist, with respect to a Plan; and in each case
in clauses (i) through (vi) above, such event or condition, together
with all other such events or conditions, if any, could subject the
Company or any of its Subsidiaries to any tax, penalty or other
liabilities which in the aggregate could have a Material Adverse
Effect; or
(i) one or more judgments or decrees shall be entered
against the Company or any of its Subsidiaries and such judgments or
decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within 45 days from the entry thereof that (i) involves
in the aggregate a liability (not paid or fully covered by insurance) of
$15,000,000 or more, or (ii) could reasonably be expected to have a
Material Adverse Effect; or
(j) (i) any material non-compliance by the Company or
any Significant Subsidiary with any term or provision of the HMO
Regulations or Insurance Regulations pertaining to fiscal soundness,
solvency or financial condition; or (ii) the assertion in writing by an
HMO Regulator or Insurance Regulator that it is taking administrative
action against the Company or any Significant Subsidiary to revoke or
modify any contract of insurance, license, permit, certification,
authorization, accreditation or charter or to enforce the fiscal
soundness, solvency or financial provisions or requirements of the
HMO Regulations or Insurance Regulations against any of such
entities and the Company or such Significant Subsidiary shall have
been unable to cause such HMO Regulator or Insurance Regulator to
withdraw such written notice within five Business Days following
receipt of such written notice by the Company or such Significant
Subsidiary, in each of clauses (i) and (ii), to the extent such event will
or is reasonably expected to have a Material Adverse Effect; or
(k) on or after the Closing Date, (i) for any reason any
Loan Document ceases to be or is not in full force and effect or (ii)
the Company shall assert that any Loan Document has ceased to be
or is not in full force and effect;
then, and in any such event, (A) if such event is an Event of Default
specified in paragraph (f) above with respect to the Company,
automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the Notes (including,
without limitation, all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit have presented
the documents required thereunder) shall immediately become due
and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the
consent of the Majority Banks, the Agent may, or upon the request of
the Majority Banks, the Agent shall, by notice to the Company
declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) with the consent
of the Majority Banks, the Agent may, or upon the request of the
Majority Banks, the Agent shall, by notice of default to the Company,
declare the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement and the Notes (including,
without limitation, all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) (the "Bank
Obligations") to be due and payable forthwith, whereupon the same
shall immediately become due and payable.
With respect to all Letters of Credit as to which
presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, the Company shall
at such time deposit in a cash collateral account opened by the Agent
an amount equal to the aggregate then undrawn and unexpired
amount of such Letters of Credit. Amounts held in such cash
collateral account shall be applied by the Agent to the payment of
drafts drawn under such Letters of Credit, and the unused portion
thereof after all such Letters of Credit shall have expired or been fully
drawn upon, if any, shall be applied to repay other obligations of the
Company hereunder and under the Notes. After all such Letters of
Credit shall have expired or been fully drawn upon, all Reimbursement
Obligations shall have been satisfied and all other obligations of the
Company hereunder and under the Notes shall have been paid in full,
the balance, if any, in such cash collateral account shall be returned
to the Company.
Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
8.2 Annulment of Defaults. An Event of Default shall
not be deemed to be in existence for any purpose of this Agreement
if the Agent, with the consent of or at the direction of the Majority
Banks, subject to subsection 10.1, shall have waived such event in
writing or stated in writing that the same has been cured to its
reasonable satisfaction, but no such waiver shall extend to or affect
any subsequent Event of Default or impair any rights of the Agent or
the Banks upon the occurrence thereof.
8.3 Waivers. The Company hereby waives to the
extent permitted by applicable law (a) all presentments, demands for
performance, notices of nonperformance (except to the extent
required by the provisions hereof), protests, notices of protest and
notices of dishonor in connection with any Reimbursement Obligation
or any of the Indebtedness evidenced by the Notes, (b) any
requirement of diligence or promptness on the part of any Bank in the
enforcement of its rights under the provisions of this Agreement, any
Letter of Credit or any Note, and (c) any and all notices of every kind
and description which may be required to be given by any statute or
rule of law.
8.4 Course of Dealing. No course of dealing between
the Company and any Bank shall operate as a waiver of any of the
Banks' rights under this Agreement or any Note. No delay or
omission on the part of any Bank in exercising any right under this
Agreement or any Note or with respect to any of the Bank
Obligations shall operate as a waiver of such right or any other right
hereunder. A waiver on any one occasion shall not be construed as a
bar to or waiver of any right or remedy on any future occasion. No
waiver or consent shall be binding upon any Bank unless it is in
writing and signed by the Agent or such of the Banks as may be
required by the provisions of this Agreement. The making of a Loan
or issuance of a Letter of Credit hereunder during the existence of a
Default shall not constitute a waiver thereof.
SECTION 9. THE AGENT
9.1 Appointment. Each Bank hereby irrevocably
designates and appoints Chemical Bank as the Agent and CAF Loan
Agent of such Bank under this Agreement, and each such Bank
irrevocably authorizes Chemical Bank, as the Agent and CAF Loan
Agent for such Bank, to take such action on its behalf under the
provisions of this Agreement and to exercise such powers and
perform such duties as are expressly delegated to the Agent or CAF
Loan Agent, as the case may be, by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this
Agreement, neither the Agent nor the CAF Loan Agent shall have any
duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against the Agent or the CAF
Loan Agent.
9.2 Delegation of Duties. The Agent or the CAF Loan
Agent may execute any of its duties under this Agreement by or
through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. Neither the
Agent nor the CAF Loan Agent shall be responsible for the negligence
or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions. Neither the Agent nor the
CAF Loan Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact 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 (except for its or such Person's own
gross negligence or willful misconduct), or (b) responsible in any
manner to any of the Banks for any recitals, statements,
representations or warranties made by the Company or any officer
thereof contained in this Agreement or in any certificate, report,
statement or other document referred to or provided for in, or
received by the Agent or the CAF Loan Agent under or in connection
with, this Agreement or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the
Notes or for any failure of the Company to perform its obligations
hereunder. Neither the Agent nor the CAF Loan Agent shall be under
any obligation to any Bank 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 Company.
9.4 Reliance by Agent. The Agent and the CAF Loan
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 Company), independent accountants and other experts selected
by the Agent or the CAF Loan Agent. The Agent may deem and treat
the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall
have been filed with the Agent. The Agent and the CAF Loan Agent
shall be fully justified in failing or refusing to take any action under
this Agreement unless it shall first receive such advice or concurrence
of the Majority Banks as it deems appropriate or it shall first be
indemnified to its satisfaction by the Banks against any and all liability
and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent and the CAF Loan
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 Majority Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the
Banks and all future holders of the Notes.
9.5 Notice of Default. The Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Agent has received notice from
a Bank or the Company 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 Agent receives such a notice, the
Agent shall promptly give notice thereof to the Banks. The Agent
shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Majority Banks;
provided that, unless and until the Agent shall have received such
directions, the 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 Banks.
9.6 Non-Reliance on Agent and Other Banks. Each
Bank expressly acknowledges that neither the Agent nor the CAF
Loan Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by the Agent or the CAF Loan Agent
hereinafter taken, including any review of the affairs of the Company,
shall be deemed to constitute any representation or warranty by the
Agent to any Bank. Each Bank represents to the Agent and the CAF
Loan Agent that it has, independently and without reliance upon the
Agent or the CAF Loan Agent or any other Bank, 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
Company and made its own decision to make its Loans hereunder and
enter into this Agreement. Each Bank also represents that it will,
independently and without reliance upon the Agent or the CAF Loan
Agent or any other Bank, 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 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
Company. Except for notices, reports and other documents expressly
required to be furnished to the Banks by the Agent or the CAF Loan
Agent hereunder, neither the Agent nor the CAF Loan Agent shall
have any duty or responsibility to provide any Bank with any credit or
other information concerning the business, operations, property,
financial and other condition or creditworthiness of the Company
which may come into the possession of the Agent or the CAF Loan
Agent or any of its officers, directors, employees, agents, attorneys-
in-fact or Affiliates.
9.7 Indemnification. The Banks agree to indemnify the
Agent and the CAF Loan Agent in its capacity as such (to the extent
not reimbursed by the Company and without limiting the obligation of
the Company to do so), ratably according to the respective amounts
of their then existing Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever
which may at any time (including without limitation at any time
following the payment of the Notes) be imposed on, incurred by or
asserted against the Agent or the CAF Loan Agent in any way
relating to or arising out of this Agreement, or any documents
contemplated by or referred to herein or the transactions
contemplated hereby or any action taken or omitted by the Agent or
the CAF Loan Agent under or in connection with any of the
foregoing; provided that no Bank 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 Agent's or the CAF Loan Agent's gross negligence or
willful misconduct. The agreements in this subsection shall survive
the payment of the Notes and all other amounts payable hereunder.
9.8 Agent and CAF Loan Agent in Its Individual
Capacity. The Agent and the CAF Loan Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind
of business with the Company as though the Agent or the CAF Loan
Agent were not the Agent or the CAF Loan Agent hereunder. With
respect to its Loans made or renewed by it and any Note issued to it
and with respect to any Letter of Credit issued or participated in by it,
the Agent and the CAF Loan Agent shall have the same rights and
powers under this Agreement as any Bank and may exercise the
same as though it were not the Agent, and the terms "Bank" and
"Banks" shall include the Agent or the CAF Loan Agent in its
individual capacity.
9.9 Successor Agent and CAF Loan Agent. The Agent
or the CAF Loan Agent may resign as Agent or CAF Loan Agent, as
the case may be, upon 10 days' notice to the Banks. If the Agent or
the CAF Loan Agent shall resign as Agent or CAF Loan Agent, as the
case may be, under this Agreement, then the Majority Banks shall
appoint from among the Banks a successor agent for the Banks which
successor agent shall be approved by the Company, whereupon such
successor agent shall succeed to the rights, powers and duties of the
Agent or CAF Loan Agent, as the case may be, and the term "Agent"
or "CAF Loan Agent", as the case may be, shall mean such successor
agent effective upon its appointment, and the former Agent's or CAF
Loan Agent's rights, powers and duties as Agent or CAF Loan Agent
shall be terminated, without any other or further act or deed on the
part of such former Agent or CAF Loan Agent or any of the parties to
this Agreement or any holders of the Notes. After any retiring
Agent's or CAF Loan Agent's resignation hereunder as Agent or CAF
Loan Agent, the provisions of this subsection 9.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it
was Agent or CAF Loan Agent under this Agreement.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this
Agreement, any Note, nor any terms hereof or thereof may be
amended, supplemented or modified except in accordance with the
provisions of this subsection. With the written consent of the
Majority Banks, the Agent and the Company may, from time to time,
enter into written amendments, supplements or modifications hereto
for the purpose of adding any provisions to this Agreement or the
Notes or changing in any manner the rights of the Banks or of the
Company hereunder or thereunder or waiving, on such terms and
conditions as the Agent may specify in such instrument, any of the
requirements of this Agreement or the Notes or any Default or Event
of Default and its consequences; provided, however, that no such
waiver and no such amendment, supplement or modification shall (a)
extend the maturity (whether as stated, by acceleration or otherwise)
of any Note (subject to the extension provisions of subsection 2.4
hereof), or reduce the rate or extend the time of payment of interest
thereon, or reduce any fee payable to the Banks hereunder, or reduce
the principal amount thereof, or change the amount of any Bank's
Commitment or amend, modify or waive any provision of this
subsection 10.1 or reduce the percentage specified in the definition
of Required Banks or Majority Banks, or consent to the assignment or
transfer by the Company of any of its rights and obligations under
this Agreement, in each case without the written consent of all the
Banks, or (b) amend, modify or waive any provision of Section 9
without the written consent of the then Agent. Any such waiver and
any such amendment, supplement or modification shall apply equally
to each of the Banks and shall be binding upon the Company, the
Banks, the Agent and all future holders of the Notes. In the case of
any waiver, the Company, the Banks and the Agent shall be restored
to their former position and rights hereunder and under the
outstanding Notes, and any Default or Event of Default waived shall
be deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
10.2 Notices. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in writing
(including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when
delivered by hand, or three Business Days after being deposited in
the mail, postage prepaid, or one Business Day after being deposited
with an overnight courier service, or, in the case of telecopy notice,
when sent, confirmation of receipt received, addressed as follows in
the case of the Company, the Agent, and the CAF Loan Agent and as
set forth in Schedule I in the case of the other parties hereto, or to
such other address as may be hereafter notified by the respective
parties hereto and any future holders of the Notes:
The Company: Humana Inc.
The Humana Building
500 West Main Street
Louisville, Kentucky 40202
Attention: James W. Doucette,
Vice President,
Investments and
Treasurer
Telecopy: (502) 580-4089
The Agent and
CAF Loan Agent: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: Carol Burt,
Managing Director
Telecopy: (212) 270-3279
with a copy to: Chemical Bank Agency Services
Corporation
140 East 45th Street
New York, New York 10017
Attention: Janet Belden,
Vice President
Telecopy: (212) 622-0854
provided that any notice, request or demand to or upon the Agent or
the Banks pursuant to Section 2 shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Agent or any
Bank, any right, remedy, power or privilege hereunder, shall operate
as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement
and the Notes.
10.5 Payment of Expenses and Taxes; Indemnity.
(a) The Company agrees (i) to pay or reimburse the Agent for all its
reasonable out-of-pocket costs and expenses incurred in connection
with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the
Notes and any other documents prepared in connection herewith, and
the consummation of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Agent, (ii) to pay or reimburse each
Bank and the Agent for all their reasonable costs and expenses
incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Notes and any such other
documents, including, without limitation, reasonable fees and
disbursements of counsel to the Agent and to the several Banks, and
(iii) to pay, indemnify, and hold each Bank and the Agent harmless
from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise
and other taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or
consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent
under or in respect of, this Agreement, the Notes and any such other
documents.
(b) The Company will indemnify each of the Agent and
the Banks and the directors, officers and employees thereof and each
Person, if any, who controls each one of the Agent and the Banks
(any of the foregoing, an "Indemnified Person") and hold each
Indemnified Person harmless from and against any and all claims,
damages, liabilities and expenses (including without limitation all fees
and disbursements of counsel with whom an Indemnified Person may
consult in connection therewith and all expenses of litigation or
preparation therefor) which an Indemnified Person may incur or which
may be asserted against it in connection with any litigation or
investigation involving this Agreement, the use of any proceeds of
any Loans under this Agreement by the Company or any Subsidiary,
any officer, director or employee thereof, other than litigation
commenced by the Company against any of the Agent or the Banks
which (i) seeks enforcement of any of the Company's right hereunder
and (ii) is determined adversely to any of the Agent or the Banks.
(c) The agreements in this subsection 10.5 shall
survive repayment of the Notes and all other amounts payable
hereunder.
10.6 Successors and Assigns; Participations;
Purchasing Banks. (a) This Agreement shall be binding upon and
inure to the benefit of the Company, the Banks, the Agent, all future
holders of the Notes and their respective successors and assigns,
except that the Company may not assign or transfer any of its rights
or obligations under this Agreement without the prior written consent
of each Bank.
(b) Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable law,
at any time sell to one or more banks or other entities ("Participants")
participating interests in any Loans owing to such Bank, any Notes
held by such Bank, any Commitments of such Bank or any other
interests of such Bank hereunder and under the other Loan
Documents. In the event of any such sale by a Bank of a
participating interest to a Participant, such Bank's obligations under
this Agreement to the other parties under this Agreement shall remain
unchanged, such Bank shall remain solely responsible for the
performance thereof, such Bank shall remain the holder of any such
Notes for all purposes under this Agreement, and the Company and
the Agent shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this
Agreement and under the other Loan Documents. The Company
agrees that if amounts outstanding under this Agreement and the
Notes are due or unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of offset in respect
of its participating interest in amounts owing under this Agreement
and any Notes to the same extent as if the amount of its participating
interest were owing directly to it as a Bank under this Agreement or
any Notes, provided that such right of offset shall be subject to the
obligation of such Participant to share with the Banks, and the Banks
agree to share with such Participant, as provided in subsection 10.7.
The Company also agrees that each Participant shall be entitled to the
benefits of subsections 2.12, 2.13 and 2.15 with respect to its
participation in the Commitments and the Eurodollar Loans
outstanding from time to time; provided that no Participant shall be
entitled to receive any greater amount pursuant to such subsections
than the transferor Bank would have been entitled to receive in
respect of the amount of the participation transferred by such
transferor Bank to such Participant had no such transfer occurred.
No Participant shall be entitled to consent to any amendment,
supplement, modification or waiver of or to this Agreement or any
Note, unless the same is subject to clause (a) of the proviso to
subsection 10.1.
(c) Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable law,
at any time assign to one or more banks or other entities ("CAF Loan
Assignees") any CAF Loan owing to such Bank and any Individual
CAF Loan Note held by such Bank evidencing such CAF Loan,
pursuant to a CAF Loan Assignment executed by the assignor Bank
and the CAF Loan Assignee. Upon such execution, from and after
the date of such CAF Loan Assignment, the CAF Loan Assignee shall,
to the extent of the assignment provided for in such CAF Loan
Assignment, be deemed to have the same rights and benefits of
payment and enforcement with respect to such CAF Loan and
Individual CAF Loan Note and the same rights of offset pursuant to
subsection 8.1 and under applicable law and obligation to share
pursuant to subsection 10.7 as it would have had if it were a Bank
hereunder; provided that unless such CAF Loan Assignment shall
otherwise specify and a copy of such CAF Loan Assignment shall
have been delivered to the Agent for its acceptance and recording in
the Register in accordance with subsection 10.6(f), the assignor
thereunder shall act as collection agent for the CAF Loan Assignee
thereunder, and the Agent shall pay all amounts received from the
Company which are allocable to the assigned CAF Loan or Individual
CAF Loan Note directly to such assignor without any further liability
to such CAF Loan Assignee. A CAF Loan Assignee under a CAF Loan
Assignment shall not, by virtue of such CAF Loan Assignment,
become a party to this Agreement or have any rights to consent to or
refrain from consenting to any amendment, waiver or other
modification of any provision of this Agreement or any related
document; provided that if a copy of such CAF Loan Assignment shall
have been delivered to the Agent for its acceptance and recording in
the Register in accordance with subsection 10.6(f), neither the
principal amount of, the interest rate on, nor the maturity date of any
CAF Loan or Individual CAF Loan Note assigned to the CAF Loan
Assignee thereunder will be modified without the written consent of
such CAF Loan Assignee. If a CAF Loan Assignee has caused a CAF
Loan Assignment to be recorded in the Register in accordance with
subsection 10.6(f), such CAF Loan Assignee may thereafter, in the
ordinary course of its business and in accordance with applicable law,
assign such Individual CAF Loan Note to any Bank, to any affiliate or
subsidiary of such CAF Loan Assignee or to any other financial
institution that has total assets in excess of $1,000,000,000 and
that in the ordinary course of its business extends credit of the type
evidenced by such Individual CAF Loan Note, and the foregoing
provisions of this subsection 10.6(c) shall apply, mutatis mutandis, to
any such assignment by a CAF Loan Assignee. Except in accordance
with the preceding sentence, CAF Loans and Individual CAF Loan
Notes may not be further assigned by a CAF Loan Assignee, subject
to any legal or regulatory requirement that the CAF Loan Assignee's
assets must remain under its control.
(d) Any Bank may, in the ordinary course of its
commercial banking business and in accordance with applicable law,
at any time sell to any Bank or any affiliate thereof, and, with the
consent of the Company and the Agent (which in each case shall not
be unreasonably withheld) to one or more additional banks or financial
institutions ("Purchasing Banks") all or any part of its rights and
obligations under this Agreement and the Notes pursuant to a
Commitment Transfer Supplement, executed by such Purchasing
Bank, such transferor Bank and the Agent (and, in the case of a
Purchasing Bank that is not then a Bank or an affiliate thereof, by the
Company); provided, however, that (i) the Commitments purchased
by such Purchasing Bank that is not then a Bank shall be equal to or
greater than $10,000,000 and (ii) the transferor Bank which has
transferred less than all of its Loans and Commitments to any such
Purchasing Bank shall retain a minimum Commitment, after giving
effect to such sale, equal to or greater than $10,000,000. Upon (i)
such execution of such Commitment Transfer Supplement, (ii)
delivery of an executed copy thereof to the Company and (iii)
payment by such Purchasing Bank, such Purchasing Bank shall for all
purposes be a Bank party to this Agreement and shall have all the
rights and obligations of a Bank under this Agreement, to the same
extent as if it were an original party hereto with the Commitment
Percentage of the Commitments set forth in such Commitment
Transfer Supplement. Such Commitment Transfer Supplement shall
be deemed to amend this Agreement to the extent, and only to the
extent, necessary to reflect the addition of such Purchasing Bank and
the resulting adjustment of Commitment Percentages arising from the
purchase by such Purchasing Bank of all or a portion of the rights and
obligations of such transferor Bank under this Agreement and the
Notes. Upon the consummation of any transfer to a Purchasing
Bank, pursuant to this subsection 10.6(d), the transferor Bank, the
Agent and the Company shall make appropriate arrangements so that,
if required, replacement Notes are issued to such transferor Bank and
new Notes or, as appropriate, replacement Notes, are issued to such
Purchasing Bank, in each case in principal amounts reflecting their
Commitment Percentages or, as appropriate, their outstanding Loans
as adjusted pursuant to such Commitment Transfer Supplement.
(e) The Agent shall maintain at its address referred to
in subsection 10.2 a copy of each CAF Loan Assignment and each
Commitment Transfer Supplement delivered to it and a register (the
"Register") for the recordation of (i) the names and addresses of the
Banks and the Commitment of, and principal amount of the Loans
owing to, each Bank from time to time, and (ii) with respect to each
CAF Loan Assignment delivered to the Agent, the name and address
of the CAF Loan Assignee and the principal amount of each CAF Loan
owing to such CAF Loan Assignee. The entries in the Register shall
be conclusive, in the absence of manifest error, and the Company,
the Agent and the Banks may treat each Person whose name is
recorded in the Register as the owner of the Loan recorded therein for
all purposes of this Agreement. The Register shall be available for
inspection by the Company or any Bank or CAF Loan Assignee at any
reasonable time and from time to time upon reasonable prior notice.
(f) Upon its receipt of a CAF Loan Assignment
executed by an assignor Bank and a CAF Loan Assignee, together
with payment to the Agent of a registration and processing fee of
$1,000, the Agent shall promptly accept such CAF Loan Assignment,
record the information contained therein in the Register and give
notice of such acceptance and recordation to the assignor Bank, the
CAF Loan Assignee and the Company. Upon its receipt of a
Commitment Transfer Supplement executed by a transferor Bank and
a Purchasing Bank (and, in the case of a Purchasing Bank that is not
then a Bank or an affiliate thereof, by the Company and the Agent)
together with payment to the Agent of a registration and processing
fee of $2,500, the Agent shall (i) promptly accept such Commitment
Transfer Supplement (ii) on the Transfer Effective Date determined
pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the
Banks and the Company.
(g) The Company authorizes each Bank to disclose to
any Participant, CAF Loan Assignee or Purchasing Bank (each, a
"Transferee") and any prospective Transferee any and all financial
information in such Bank's possession concerning the Company
which has been delivered to such Bank by the Company pursuant to
this Agreement or which has been delivered to such Bank by the
Company in connection with such Bank's credit evaluation of the
Company prior to entering into this Agreement.
(h) If, pursuant to this subsection 10.6, any interest in
this Agreement or any Note is transferred to any Transferee which is
organized under the laws of any jurisdiction other than the United
States or any State thereof, the transferor Bank shall cause such
Transferee, concurrently with the effectiveness of such transfer, (i) to
represent to the transferor Bank (for the benefit of the transferor
Bank, the Agent and the Company) that under applicable law and
treaties no taxes will be required to be withheld by the Agent, the
Company or the transferor Bank with respect to any payments to be
made to such Transferee in respect of the Loans, (ii) to furnish to the
transferor Bank (and, in the case of any Purchasing Bank and any
CAF Loan Assignee registered in the Register, the Agent and the
Company) either U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service Form 1001 (wherein such Transferee claims
entitlement to complete exemption from U.S. federal withholding tax
on all interest payments hereunder) and (iii) to agree (for the benefit
of the transferor Bank, the Agent and the Company) to provide the
transferor Bank (and, in the case of any Purchasing Bank and any
CAF Loan Assignee registered in the Register, the Agent and the
Company) a new Form 4224 or Form 1001 upon the obsolescence of
any previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and
amendments duly executed and completed by such Transferee, and
to comply from time to time with all applicable U.S. laws and
regulations with regard to such withholding tax exemption.
(i) Nothing herein shall prohibit any Bank or any
Affiliate thereof from pledging or assigning any Note to any Federal
Reserve Bank in accordance with applicable law.
10.7 Adjustments; Set-off. If any Bank (a "Benefitted
Bank") shall at any time receive any payment of all or part of its
Loans or the Reimbursement Obligations owing to it, or interest
thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by offset, pursuant to events or
proceedings of the nature referred to in subsection 8.1(f), or
otherwise) in a greater proportion than any such payment to and
collateral received by any other Bank, if any, in respect of such other
Bank's Loans or the Reimbursement Obligations owing to it, or
interest thereon, such Benefitted Bank shall purchase for cash from
the other Banks such portion of each such other Bank's Loans or the
Reimbursement Obligations owing to it, or shall provide such other
Banks with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such Benefitted Bank to share
the excess payment or benefits of such collateral or proceeds ratably
with each of the Banks; provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from such
Benefitted Bank, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but
without interest. The Company agrees that each Bank so purchasing
a portion of another Bank's Loan may exercise all rights of a payment
(including, without limitation, rights of offset) with respect to such
portion as fully as if such Bank were the direct holder of such portion.
10.8 Counterparts. This Agreement may be executed
by one or more of the parties to this Agreement on any number of
separate counterparts and all of said counterparts taken together shall
be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be lodged with
the Company and the Agent.
10.9 GOVERNING LAW. THIS AGREEMENT AND THE
NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.
10.10 WAIVERS OF JURY TRIAL. THE COMPANY,
THE AGENT, THE CAF LOAN AGENT AND THE BANKS EACH
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
10.11 Submission To Jurisdiction; Waivers. The
Company hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement, or for recognition and
enforcement of any judgement in respect thereof, to the non-
exclusive general jurisdiction of the Courts of the State of New York,
the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof; and
(b) consents that any such action or proceeding may
be brought in such courts, and waives any objection that it may now
or hereafter have to the venue of any such action or proceeding in
any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same.
10.12 Confidentiality of Information. Each Bank
acknowledges that some of the information furnished to such Bank
pursuant to this Agreement may be received by such Bank prior to
the time such information shall have been made public, and each
Bank agrees that it will keep all information so furnished confidential
and shall make no use of such information until it shall have become
public, except (a) in connection with matters involving operations
under or enforcement of this Agreement or the Notes, (b) in
accordance with each Bank's obligations under law or pursuant to
subpoenas or other process to make information available to
governmental agencies and examiners or to others, (c) to each Bank's
corporate Affiliates and Transferees and prospective Transferees so
long as such Persons agree to be bound by this subsection 10.12 and
(d) with the prior consent of the Company.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above written.
HUMANA INC.
By:/s/ James W. Doucette
Name:James W. Doucette
Title:Vice President - Investments & Treasurer
CHEMICAL BANK, as Agent, as CAF
Loan Agent and as a Bank
By:/s/ Peter C. Eckstein
Name: Peter C. Eckstein
Title:Vice President
BANK OF AMERICA NATIONAL TRUST & SAVINGS
ASSOCIATION
By:/s/_____________________________________
Name:_____________________________
Title: ______________________________
THE CHASE MANHATTAN BANK, N.A.
By:/s/_____________________________________
Name:_____________________________
Title: ______________________________
THE FIRST NATIONAL BANK OF CHICAGO
By:/s/_____________________________________
Name:_____________________________
Title:_______________________________
NATIONAL CITY BANK, KENTUCKY
By:/s/_____________________________________
Name:_____________________________
Title:_______________________________
NATIONSBANK OF GEORGIA, N.A.
By:/s/_____________________________________
Name:_____________________________
Title:_______________________________
PNC BANK, KENTUCKY, INC.
By:/s/_____________________________________
Name:_____________________________
Title:_______________________________
THE SAKURA BANK, LIMITED
By:/s/_____________________________________
Name:_____________________________
Title:_______________________________
WACHOVIA BANK OF GEORGIA, N.A.
By:/s/_____________________________________
Name:_____________________________
Title:_______________________________
CREDIT LYONNAIS, Cayman Islands Branch
By:/s/_____________________________________
Name:_____________________________
Title:_______________________________
DEUTSCHE BANK AG, New York Branch and/or Cayman Islands
Branch
By:/s/_____________________________________
Name:_____________________________
Title:_______________________________
FIRST INTERSTATE BANK OF CALIFORNIA
By:/s/_____________________________________
Name:_____________________________
Title:_______________________________
THE SANWA BANK, LIMITED, ATLANTA AGENCY
By:/s/_____________________________________
Name:_____________________________
Title:_______________________________
THE SUMITOMO BANK, LTD., NEW YORK BRANCH
By:/s/_____________________________________
Name:_____________________________
Title:_______________________________
ABN AMRO, N.V.
By:/s/_____________________________________
Name:______________________________
Title:_______________________________
THE BANK OF NOVA SCOTIA
By:/s/_____________________________________
Name:______________________________
Title:________________________________
CITIBANK, N.A.
By:/s/_____________________________________
Name:______________________________
Title:________________________________
THE MITSUBISHI BANK, LIMITED
By:/s/_____________________________________
Name:______________________________
Title:________________________________
BANK OF LOUISVILLE & TRUST COMPANY
By:/s/_____________________________________
Name:______________________________
Title:________________________________
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS
By:/s/_____________________________________
Name:______________________________
Title:________________________________
SCHEDULE 1
Commitment Amounts and Percentages;
Lending Offices; Address for Notices
A. Commitment Amounts and Percentages
Name of Bank Commitment Commitment
Amount Percentage
Chemical Bank $ 45,000,000 7.500%
Bank of America National Trust & Savings
Association $ 35,000,000 5.833%
The Chase Manhattan Bank, N.A. $ 35,000,000 5.833%
The First National Bank of Chicago $ 35,000,000 5.833%
National City Bank, Kentucky $ 35,000,000 5.833%
NationsBank of Georgia, N.A. $ 35,000,000 5.833%
PNC Bank, Kentucky, Inc. $ 35,000,000 5.833%
The Sakura Bank, Limited $ 35,000,000 5.833%
Wachovia Bank of Georgia, N.A. $ 35,000,000 5.833%
Credit Lyonnais, Cayman Islands Branch $ 30,000,000 5.000%
Deutsche Bank AG, New York and/or
Cayman Islands Branch $ 30,000,000 5.000%
First Interstate Bank of California $ 30,000,000 5.000%
The Sanwa Bank, Limited, Atlanta Agency $ 30,000,000 5.000%
The Sumitomo Bank, Ltd., New York Branch $ 30,000,000 5.000%
ABN Amro, N.V. $ 25,000,000 4.167%
The Bank of Nova Scotia $ 25,000,000 4.167%
Citibank, N.A. $ 25,000,000 4.167%
The Mitsubishi Bank, Limited $ 25,000,000 4.167%
Bank of Louisville & Trust Company $ 15,000,000 2.500%
The Boatmen's National Bank of St. Louis $ 10,000,000 1.667%
TOTAL $600,000,000 100.00%
Applicable Margins
REVOLVING CREDIT LOANS
Consolidated Capitalization Alternate Base
Ratio Rate Loans Eurodollar Loans
less than .30 .000% .1600%
at least .30 but
less than .35 .000% .2250%
at least .35 but
less than .40 .000% .3000%
at least .40 .000% .4000%
