SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: September 8, 1997
(Date of Earliest Event Reported)
HUMANA INC.
(Exact name of Registrant as specified in its Charter)
Delaware 1-5975 61-0647538
(State of (Commission (I.R.S. Employer
Incorporation) File Number) Tax Identification No.)
500 West Main Street
Louisville, KY 40202
(Address of principal executive offices)
(502) 580-1000
(Registrant's telephone number, including area code)
Item 2. Acquisition or Disposition of Assets
On September 8, 1997, (the "Effective Time") HUMNOV, Inc., a wholly
owned subsidiary of Humana Inc., a Delaware corporation (the "Company"),
merged with and into Physician Corporation of America, a Delaware corporation
("PCA"). Pursuant to the Agreement and Plan of Merger dated as of June 2,
1997 among Humana Inc., PCA and HUMNOV, Inc. (the "Merger Agreement") each
share of PCA's outstanding Common Stock was converted into the right to
receive $7.00 cash, without interest.
The aggregate purchase price of approximately $409 million, which
includes the purchase of PCA's outstanding Common Stock for approximately
$272 million, the assumption of approximately $122 million of debt and
acquisition costs of approximately $15 million was funded by the Company
through proceeds from the Company's commercial paper program.
For information regarding terms of the merger, reference is made to the
Proxy Statement filed by PCA with the Securities and Exchange Commission on
August 8, 1997, and Humana Inc.'s Current Report on Form 8-K dated June 17,
1997.
Item 5. Other Events
As of August 13, 1997, the Company entered into a $1.5 billion revolving
credit facility (the "Credit Facility") with Chase Manhattan Bank which acts
as sole administrative agent. The Credit Facility contains customary
conditions to borrowing, representations and warranties, covenants and events
of default. Amounts under the Credit Facility will generally be able to be
borrowed, repaid and reborrowed from time to time. The Credit Facility
replaced an existing $600 million credit facility that the Company had with
a syndicate of lenders. The Credit Facility is attached hereto as
Exhibit 10.
As of September 11, 1997, the Company's Board of Directors authorized
an increase in the maximum borrowing limit under the Company's commercial
paper program from $600 million to $1.5 billion. Borrowings under the
commercial paper program are backed by the Credit Facility. The Commercial
Paper Private Placement Memoranda with Chase Securities Inc. and Merrill
Lynch Money Markets Inc. are attached hereto as Exhibits 4a and 4b,
respectively.
Item 7. Financial Statements and Exhibits.
The unaudited pro forma condensed consolidated balance sheet of the
Company and PCA (collectively the "Combined Entities") as of June 30, 1997,
is presented assuming the Merger had occurred on June 30, 1997. The
unaudited pro forma condensed consolidated statements of operations of the
Combined Entities for the six months ended June 30,1997, and for the year
ended December 31, 1996, present the results of operations of the Combined
Entities assuming the merger and related transactions had occurred on January
1, 1996. All material adjustments required to reflect the merger and related
transactions are set forth in the "Pro Forma Adjustments" column. The pro
forma adjustments are based on preliminary assumptions of the allocation of
the purchase price and are subject to substantial revision once appraisals,
evaluations and other studies of the fair value of PCA's assets and
liabilities are completed. Actual purchase accounting adjustments may
differ from the pro forma adjustments presented herein.
The unaudited pro forma condensed consolidated financial statements
should be read in conjunction with the historical consolidated financial
statements of the Company and PCA. The pro forma data is for informational
purposes only and may not necessarily reflect future results of operations
and financial position or what the results of operations or financial
position would have been had the Company and PCA merged at January 1, 1996
or June 30,1997, respectively.
FINANCIAL STATEMENTS
(1) Unaudited Pro Forma Condensed Consolidated Balance Sheet at
June 30, 1997
(2) Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the six months ended June 30, 1997
(3) Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the year ended December 31, 1996
(4) PCA's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, is incorporated by reference herein.
(5) PCA's Quarterly Report on Form 10-Q for the quarter ended June
30, 1997, is incorporated by reference herein.
EXHIBITS
4a. The $1.5 Billion Commercial Paper Private Placement Memorandum
between the Company and Chase Securities Inc.
4b. The $1.5 Billion Commercial Paper Private Placement Memorandum
between the Company and Merrill Lynch Money Markets Inc.
10. The $1.5 Billion Credit Facility between the Company and Chase
Manhattan Bank (agent and CAF loan agent)
<TABLE>
Humana Inc.
Pro forma Condensed Consolidated Balance Sheet
June 30, 1997
(Unaudited)
(Dollars in millions except per share amounts)
<S> <C> <C> <C> <C>
Historical
Physician Humana
Corporation Pro forma Pro forma
Humana of America Adjustments Combined
ASSETS
Current assets:
Cash and cash equivalents $ 55 $ 88 $ 143
Marketable securities 1,261 138 1,399
Premiums receivable, net 256 66 322
Reinsurance recoverable 109 109
Deferred income taxes 83 18 101
Other 125 25 150
Total current assets 1,780 444 2,224
Long-term marketable securities 157 222 $151 (a) 530
Property and equipment, net 375 50 (5) (b) 420
Reinsurance recoverable 218 218
Identifiable intangible assets 81 25 (c) 106
Cost in excess of net assets
acquired 502 118 359 (d) 979
Deferred income taxes 17 4 (e) 21
Other 46 78 124
Total assets $2,958 $1,130 $ 534 $4,622
LIABILITIES and COMMON
STOCKHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Medical and Workers'
Compensation claims
payable $ 997 $ 341 $1,338
Accounts payable and
accrued expenses 370 84 $ 55 (f) 509
Current portion of long-term
debt 122 (122)(g)
Income taxes payable 66 4 70
Total current liabilities 1,433 551 (67) 1,917
Debt 3 9 545 (h) 557
Other 138 626 764
Total liabilities 1,574 1,186 478 3,238
Contingencies
Common stockholders' equity:
Common stock, $.16 2/3
par; authorized
300,000,000 shares;
issued and outstanding
163,428,687 shares -
June 30, 1997
and 162,681,123 shares -
December 31, 1996 27 1 (1)(i) 27
Other 1,357 (57) 57 (i) 1,357
Total common stockholders'
equity 1,384 (56) 56 1,384
Total liabilities and common
stockholders' equity $2,958 $1,130 $534 $4,622
See notes to pro forma condensed consolidated financial statements.
Pro forma Condensed Consolidated Statement of Operations
For the six months ended June 30, 1997
(Unaudited)
(Dollars in millions except per share results)
<S> <C> <C> <C> <C>
Historical
Physician Humana
Corporation Pro forma Pro forma
Humana of America Adjustments Combined
Revenues:
Premiums $3,608 $ 723 $4,331
Interest 53 17 70
Other income 7 3 10
Total revenues 3,668 743 4,411
Operating expenses:
Medical costs 2,971 588 3,559
Selling, general and
administrative 519 124 643
Depreciation and amortization 49 9 $ 4 (j) 62
Total operating expenses 3,539 721 4 4,264
Income from operations 129 22 (4) 147
Interest expense 4 9 14 (k) 27
Income before income taxes 125 13 (18) 120
Income tax provision (benefit) 44 2 (5) (l) 41
Net income (loss) $ 81 $ 11 ($13) $ 79
Earnings (loss) per common
share $0.49 $ 0.48
Shares used in earnings
per common share
computation (000) 162,980 162,980
</TABLE>
See notes to pro forma condensed consolidated financial statements.
Humana Inc.
Notes To Pro forma Condensed Consolidated Financial Statements
As of and for the six months ended June 30, 1997
(Unaudited)
Note 1: Pro forma Adjustments - Condensed Consolidated Balance Sheet
as of June 30, 1997
(a) To record a payment (ultimate purchase of investments)
representing the funding of the statutory deficit
of PCA Property & Casualty Insurance Company, a wholly
owned subsidiary of PCA, ("P&C") as of June 30, 1997.
(b) To adjust property and equipment to estimated fair market value.
(c) To record the estimated purchase price in excess of net tangible
and identifiable intangible assets acquired:
Purchase price $272
Estimated acquisition liabilities (see F/N f) 55
Stockholders' deficit and common stock cancellation 56
Property and equipment adjustment to fair market value 5
Deferred taxes (4)
Identifiable intangible assets (25)
$359
(d) To record identifiable intangible assets.
(e) To record deferred taxes related to purchase accounting
adjustments.
(f) To record estimated liabilities associated with the acquisition
transaction including severance, stock option payouts, lease
obligations and professional fees.
(g) To record the refinancing of debt and capital lease obligations
of PCA.
(h) To record the incremental debt incurred to finance the
acquisition including the purchase of PCA's outstanding
shares ($272 million), to fund the statutory deficit of
P & C ($151 million), and the refinancing of the debt and
capital lease obligations of PCA ($122 million).
(i) To eliminate the acquired deficit of PCA as of June 30, 1997.
Note 2: Pro forma Adjustments - Condensed Consolidated Statement of
Operations for the six months ended June 30, 1997
(j) To record amortization related to the excess of purchase
price over net tangible assets acquired. The excess of
purchase price over net tangible assets acquired will be
amortized over 40 years.
(k) To record estimated interest expense related to the incremental
debt incurred to finance the acquisition and fund the statutory
deficit of P & C. The debt has an assumed annualized interest
rate of 6.5%.
(l) Estimated pro forma income taxes were recorded at an assumed
combined federal and state income tax rate of 35.0 percent.
Humana Inc.
Pro forma Condensed Consolidated Statement of Operations
For the year ended December 31, 1996
(Unaudited)
(Dollars in millions except per share results)
<TABLE>
<S> <C> <C> <C> <C>
Historical
Physician Humana
Corporation Pro forma Pro forma
Humana of America Adjustments Combined
Revenues:
Premiums $6,677 $1,415 $8,092
Interest 101 26 127
Other income 10 23 33
Total revenues 6,788 1,464 8,252
Operating expenses:
Medical costs 5,625 1,131 6,756
Selling, general and
administrative 940 390 1,330
Depreciation and
amortization 98 22 $ 9 (m) 129
Asset write-downs and
other special charges 96 39 135
Loss on assumption of
Workers' Compensation
related liabilities 181 181
Total operating expenses 6,759 1,763 9 8,531
Income (loss) from operations 29 (299) (9) (279)
Interest expense 11 14 27 (n) 52
Income (loss) before income
taxes 18 (313) (36) (331)
Income tax provision (benefit) 6 (35) (9)(o) (38)
Net income (loss) $ 12 ($ 278) ($ 27) ($ 293)
Earnings (loss) per common
share $0.07 ($1.80)
Shares used in earnings
per common share
computation (000) 162,532 162,532
See notes to pro forma condensed consolidated financial statements.
</TABLE>
Humana Inc.
Notes To Pro forma Condensed Consolidated Statement of Operations
For the year ended December 31, 1996
(Unaudited)
Note 3: Pro forma Adjustments - Condensed Consolidated
Statement of Income for the year ended December 31, 1996
(m) To record amortization related to the excess of purchase price
over net tangible assets acquired. The excess of purchase price
over net tangible assets acquired will be amortized over 40
years.
(n) To record estimated interest expense related to the incremental
debt incurred to finance the acquisition and fund the statutory
deficit of P & C. The debt has an assumed annualized interest
rate of 6.5%.
(o) Estimated pro forma income taxes were recorded at an assumed
combined federal and state income tax rate of 35.0 percent.
Note 4: Condensed Consolidated Statement of Income for the year ended
December 31, 1996
Operations for 1996 include nonrecurring items as follows:
(i) Net income for Humana includes special charges of $215 million
pretax related to the restructuring of the Washington, D.C.,
health plan, provision for expected future losses on insurance
contracts, closing 13 service areas, discontinuing unprofitable
products in three markets, a litigation settlement, and planned
workforce reductions.
(ii) Net loss for PCA includes nonrecurring items of $232 million
pretax related to loss on assumption of net Workers'
Compensation related liabilities, loss on long lived assets,
and gain on sales of subsidiaries.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf
by the undersigned hereunto duly authorized.
HUMANA INC.
_________________________________
By: Arthur P. Hipwell
Senior Vice President
and General Counsel
Dated: September 23, 1997
<PAGE>
Exhibit Index
FINANCIAL STATEMENTS
(1) Unaudited Pro Forma Condensed Consolidated Balance Sheet at
June 30, 1997
(2) Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the six months ended June 30, 1997
(3) Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the year ended December 31, 1996
(4) PCA's Annual Report on Form 10-K for the fiscal year ended December
31, 1996, is incorporated by reference herein.
(5) PCA's Quarterly Report on Form 10-Q for the quarter ended June 30,
1997, is incorporated by reference herein.
EXHIBITS
4a. The $1.5 Billion Commercial Paper Private Placement Memorandum
between the Company and Chase Securities Inc.
4b. The $1.5 Billion Commercial Paper Private Placement Memorandum
between the Company and Merrill Lynch Money Markets Inc.
10. The $1.5 Billion Credit Facility between the Company and Chase
Manhattan Bank (agent and CAF loan agent)
September 1997
$1,500,000,000
Private Placement of Commercial Paper Notes
THE COMMERCIAL PAPER NOTES ("NOTE") HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND INITIAL SALE OF THE NOTES
MAY BE MADE ONLY TO INSTITUTIONAL INVESTORS APPROVED AS "ACCREDITED
INVESTORS" (AS DEFINED IN RULE 501 (a) UNDER THE ACT) BY CHEMICAL SECURITIES
INC. ("CSI") OR ANOTHER AUTHORIZED PLACEMENT AGENT, AN ("AUTHORIZED
PLACEMENT AGENT"). SUBSEQUENT SALES OF THE NOTES MAY BE MADE ONLY TO
INSTITUTIONAL INVESTORS APPROVED AS ACCREDITED INVESTORS BY AN AUTHORIZED
PLACEMENT AGENT OR TO "QUALIFIED INSTITUTIONAL BUYERS" (AS DEFINED IN RULE
144A UNDER THE ACT). BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER REPRESENTS
(1) THAT THE NOTE IS BEING ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR
FOR SALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF: (2) THAT IT IS AN
ACCREDITED INVESTOR OR, IN THE CASE OF RESALES PURSUANT TO RULE 144A, THAT
IT IS A QUALIFIED INSTITUTIONAL BUYER; (3) THAT IT UNDERSTANDS THAT THE NOTE
MAY BE SOLD TO IT PURSUANT TO RULE 144A; (4) THAT IT AGREES THAT ANY RESALE
OF THE NOTE WILL BE MADE ONLY IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE ACT AND ONLY (A) TO AN AUTHORIZED PLACEMENT AGENT, (B) THROUGH
AN AUTHORIZED PLACEMENT AGENT TO AN APPROVED INSTITUTIONAL ACCREDITED
INVESTOR OR A QUALIFIED INSTITUTIONAL BUYER OR (C) DIRECTLY TO A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MADE PURSUANT TO RULE 144A; AND
(5) AS TO THE OTHER MATTER SET FORTH UNDER THE SECTION "PRIVATE PLACEMENT"
CONTAINED HEREIN.
CREDIT RATINGS
Commercial Paper
Standard & Poor's Ratings Service A-2
Moody's Investors Service P-2
TERMS OF COMMERCIAL PAPER NOTES
Issuer: Humana Inc. (the "Company").
Incorporation: Delaware
Program Size: Authorized to a maximum outstanding
of $1,500,000,000.
Securities: Unsecured commercial paper notes (the "Notes"),
ranking pari passu with Humana Inc.'s other
unsubordinated and unsecured indebtedness.
Exemption: The Notes are exempt from registration under
the Securities Act of 1933 pursuant to Section
4(2), as amended, and cannot be resold unless
registered or pursuant to an exemption from
registration.
Offering Price: Par less a discount representing an interest
factor or, if interest bearing, at par.
Denominations: Minimum of $250,000.
Maturities: Up to 270 days from date of issue.
Redemption: The Notes will not be redeemed prior to
maturity or be subject to voluntary prepayment.
Form: Each Note will be evidenced by (i) a note
certificate issued in bearer form or (ii) one
of two master notes (interest bearing or
discount) registered in the name of the nominee
of the Depository Trust Company ("DTC"). Each
master note (the "Book-Entry Notes") will be
deposited with the Issuing and Paying Agent as
subcustodian for DTC or its successor. The
Company has been advised that DTC will record,
by appropriate entries on its book-entry
registration and transfer system, the
respective amounts payable in respect of Book-
Entry Notes. Payments by DTC participants to
purchasers for whom a DTC participant is acting
as agent in respect of Book-Entry Notes will be
governed by the standing instructions and
customary practices under which securities are
held at DTC through DTC participants.
Settlement: Unless otherwise agreed to, same day basis, in
immediately available funds.
Issuing & Paying Agent: The Chase Manhattan Bank
55 Water St. - 2nd Floor, Room 234
New York, NY 10041
USE OF PROCEEDS
Proceeds from the sale of the commercial paper notes will be used to meet
working capital requirements and for general corporate purposes, including
the funding of acquisitions and share repurchases.
BANK FACILITIES
Humana Inc. maintains unsecured bank borrowing facilities sufficient to
support the commercial paper outstanding.
PRIVATE PLACEMENT
The Commercial Paper Notes (the "Notes") have not been registered under the
Securities Act of 1933, as amended (the "Act") in reliance upon the exemption
from registration provided by Section 4(2) thereof, which exempts transactions
by an issuer not involving any public offering. The Notes are being offered
initially only to accredited investors in minimum denominations of $250,000.
In the case of a non-bank purchaser acting as a fiduciary for one or more
third parties, each third party must be an accredited investor and must
purchase at least $250,000 in Notes. Each purchaser of a Note from or
through an Authorized Placement Agent will be deemed to have represented and
agreed as follows: (1) the purchaser understands that the Notes are being
issued only in transactions not involving any public offering within the
meaning of the Act; (2) the purchaser is a sophisticated institutional
investor who (A) is an "Accredited Investor" (as that term is defined in
Rule 501(a) of Regulation D under the Act) (or is a fiduciary or agent (other
than a U.S. bank or savings and loan association) which is purchasing the
Notes for the account of an institutional Accredited Investor), (B) has
knowledge and experience (or is a fiduciary or agent with sole investment
discretion having such knowledge and experience) in financial and business
matters and it (or such fiduciary or agent) is capable of evaluating the
merits and risks of investing in the Notes, (C) has had access to such
information as the purchaser deems necessary in order to make an informed
investment decision, and (D) in the case of a resale of Notes pursuant to
Rule 144A under the Act, is a "Qualified Institutional Buyer" as defined in
Rule 144A or is a Qualified Institutional Buyer purchasing the Notes on
behalf of one or more other Qualified Institutional Buyers; (3) such Note
is being purchased for the purchaser's own account (or for the account of one
or more institutional Accredited Investors (or, in the case of a resale
pursuant to Rule 144A under the Act, one or more other Qualified Institutional
Buyers) for which it is acting as duly authorized fiduciary or agent) for
investment and not with a view to, or for sale in connection with, any
distribution thereof; (4) if in the future the purchaser (or any such
investor or any other fiduciary or agent representing such investor) decides
to sell such Note prior to maturity, it will be sold only in a transaction
exempt from registration under the Act, and only (A) to an Authorized
Placement Agent, (B) through an Authorized Placement Agent to an institutional
investor approved by an Authorized Placement Agent as an Accredited Investor
or a Qualified Institutional Buyer or (C) directly to a Qualified
Institutional Buyer in a transaction made pursuant to Rule 144A; (5) the
purchaser understands that, although an Authorized Placement Agent may
repurchase Notes, the Authorized Placement Agents are not obligated to do so,
and accordingly the purchaser (or any such other investor) should be prepared
to hold such Note until maturity; (6) the purchaser has had the opportunity
to ask questions of, and receive answers from, the Company; (7) the purchaser
acknowledges that the Authorized Placement Agents have not verified any of the
information contained or incorporated by reference in this Memorandum and make
no representation of any kind as to the accuracy or completeness of such
information; (8) the purchaser acknowledges that Notes sold to the purchaser
by an Authorized Placement Agent may be sold to the purchaser pursuant to
Rule 144A under the Act; and (9) the purchaser understands that each Note
will bear a legend substantially as set forth in capital letters on the cover
page.
HUMANA INC.
Since 1983, the Company has offered managed health care products which
integrate medical management with the delivery of health care services through
a network of providers who share financial risk or who have incentives to
deliver cost-effective medical services. These products are marketed
primarily through health maintenance organizations ("HMOs") and preferred
provider organizations ("PPOs") that require or encourage the use of
contracting providers. HMOs and PPOs control health care costs by various
means, including pre-admission approval for hospital inpatient services and
pre-authorization of outpatient surgical procedures. The company also offers
various specialty and administrative service products including dental, group
life, workers' compensation, and pharmacy benefit management services.
AVAILABLE INFORMATION
Humana Inc. is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and, in accordance therewith, files reports
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information may be inspected without
charge at the public reference facilities maintained by the Commission at 450
Fifth Street, NW, Washington, D.C. 20549, and at the Regional Offices of the
Commission. Copies thereof may be obtained from the Commission upon payment
of the prescribed fees. If available, such reports and other information may
also be accessed electronically through the Commission's electronic data
gathering, analysis and retrieval system ("EDGAR"). Humana Inc. will provide
without charge to each purchaser of the Notes, upon oral or written request,
a copy of any and all documents filed with the Commission and any and all
publicly available financial information. Requests should be directed to:
Humana Inc., 500 West Main Street, Louisville, Kentucky 40202, (502) 580-1000.
CSI AFFILIATES
Chase Manhattan Bank and other lending affiliates of CSI participate on a
regular basis in various general financing and banking transactions and
services for the Company. Proceeds from the sales of the Notes may be used
to repay indebtedness of the Company to The Chase Manhattan Bank or other
lending affiliates of CSI.
ADDITIONAL INFORMATION
If you require additional information or have any questions, please contact:
Ronald D. Flynn
Money Market Origination
Chase Securities Inc.
270 Park Avenue, 7th Floor
New York, NY 10017
Phone: (212) 834-3435
Fax: (212) 834-6560
The information contained herein has been obtained from sources which CSI
believes to be reliable; however, CSI makes no representation as to either
the completeness or accuracy of this information.
CSI, a wholly-owned subsidiary of The Chase Manhattan Corporation, is a
separate entity from The Chase Manhattan Bank and other lending affiliates.
Unless expressly disclosed otherwise to you, securities sold, offered or
recommended by CSI are not deposits, are not insured by the Federal Deposit
Insurance Corporation, are not guaranteed by an affiliated bank or other
lending affiliate, and are not otherwise an obligation or responsibility of
any affiliated bank or other lending affiliate.
Offering Memorandum Approval:
The information in the sections "CSI Affiliates" and "Additional Information"
is particular to Chase Securities Inc. All other information contained in
this memorandum has been provided by and agreed upon by the Company.
Approved:
By: James W. Doucette
Title: Vice President and Treasurer
Date: September 11, 1997
We hereby approve the form of the attached Private Placement Memorandum
for use in connection with the offering of notes.
Humana Inc.
/s/ James W. Doucette
James W. Doucette September 11, 1997
Vice President and Treasurer
September 1997
$1,500,000,000
Private Placement of Commercial Paper Notes
THE COMMERCIAL PAPER NOTES ("NOTE") HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND INITIAL SALE OF THE NOTES
MAY BE MADE ONLY TO INSTITUTIONAL INVESTORS APPROVED AS "ACCREDITED
INVESTORS" (AS DEFINED IN RULE 501 (a) UNDER THE ACT) BY MERRILL LYNCH MONEY
MARKETS INC. ("MERRILL LYNCH") OR ANOTHER AUTHORIZED PLACEMENT AGENT, AN
("AUTHORIZED PLACEMENT AGENT"). SUBSEQUENT SALES OF THE NOTES MAY BE MADE
ONLY TO INSTITUTIONAL INVESTORS APPROVED AS ACCREDITED INVESTORS BY AN
AUTHORIZED PLACEMENT AGENT OR TO "QUALIFIED INSTITUTIONAL BUYERS" (AS DEFINED
IN RULE 144A UNDER THE ACT). BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER
REPRESENTS (1) THAT THE NOTE IS BEING ACQUIRED FOR INVESTMENT AND NOT WITH
A VIEW TO, OR FOR SALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF: (2) THAT
IT IS AN ACCREDITED INVESTOR OR, IN THE CASE OF RESALES PURSUANT TO RULE 144A,
THAT IT IS A QUALIFIED INSTITUTIONAL BUYER; (3) THAT IT UNDERSTANDS THAT THE
NOTE MAY BE SOLD TO IT PURSUANT TO RULE 144A; (4) THAT IT AGREES THAT ANY
RESALE OF THE NOTE WILL BE MADE ONLY IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE ACT AND ONLY (A) TO AN AUTHORIZED PLACEMENT AGENT, (B) THROUGH
AN AUTHORIZED PLACEMENT AGENT TO AN APPROVED INSTITUTIONAL ACCREDITED
INVESTOR OR A QUALIFIED INSTITUTIONAL BUYER OR (C) DIRECTLY TO A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MADE PURSUANT TO RULE 144A; AND
(5) AS TO THE OTHER MATTER SET FORTH UNDER THE SECTION "PRIVATE PLACEMENT"
CONTAINED HEREIN.
PLACEMENT AGENT:
Merrill Lynch Money Markets Inc.
The date of this Private Placement Memorandum is September 22, 1997.
CREDIT RATINGS (1)
Commercial Paper
Standard & Poor's Ratings Service A-2
Moody's Investors Service P-2
TERMS OF COMMERCIAL PAPER NOTES
Issuer: Humana Inc. (the "Company"). Since 1983, the
Company has offered managed health care products
which integrate management with the delivery of
health care services through a network of providers
who share financial risk or who have incentives to
deliver cost-effective medical services.
Incorporation: Delaware
Program Size: Authorized to a maximum outstanding of
$1,500,000,000.
Securities: Unsecured commercial paper notes (the "Notes"),
ranking pari passu with Humana Inc.'s other
unsubordinated and unsecured indebtedness.
Exemption: The Notes are exempt from registration under the
Securities Act of 1933 pursuant to Section 4(2), as
amended, and cannot be resold unless registered
pursuant to an exemption from registration.
Offering Price: Par less a discount representing an interest factor
or, if interest bearing, at par.
Denominations: Minimum of $250,000.
Maturities: Up to 270 days from date of issue.
Redemption: The Notes will not be redeemed prior to maturity or
be subject to voluntary prepayment.
Form: Each Note will be evidenced by (i) a note
certificate issued in bearer form or (ii) one of
two master notes (interest bearing or discount)
registered in the name of the nominee of the
Depository Trust Company ("DTC"). Each master note
(the "Book-Entry Notes") will be deposited with the
Issuing and Paying Agent as subcustodian for DTC or
its successor. DTC will record, by appropriate
entries on its book-entry registration and transfer
system, the respective amounts payable in respect
of Book-Entry Notes. Payments by DTC participants
to purchasers for whom a DTC participant is acting
as agent in respect of Book-Entry Notes will be
governed by the standing instructions and customary
practices under which securities are held at DTC
through DTC participants.
Settlement: Unless otherwise agreed to, same day basis, in
immediately available funds.
(1) Such ratings are only accurate as of the date hereof, as they have been
obtained with the understanding that Standard & Poor's Ratings Service and
Moody's Investors Service would continue to monitor the credit of the Company
and make future adjustments to such ratings to the extent warranted. The
ratings may be changed, superseded or withdrawn, and therefore, a prospective
purchaser should check the current ratings before purchasing the Notes.
Issuing & Paying Agent: Chase Manhattan Bank
c/o Morgan Guaranty Trust Company
15 Broad Street
18th Floor, CP Window
New York, NY 10023
USE OF PROCEEDS
Proceeds from the sale of the commercial paper notes will be used to meet
working capital requirements and for general corporate purposes, including
the funding of acquisitions and share repurchases.
BANK FACILITIES
Humana Inc. maintains unsecured bank borrowing facilities sufficient to
support the commercial paper outstanding.
PRIVATE PLACEMENT
The Commercial Paper Notes (the "Notes") have not been registered under the
Securities Act of 1933, as amended (the "Act") in reliance upon the exemption
from registration provided by Section 4(2) thereof, which exempts transactions
by an issuer not involving any public offering. The Notes are being offered
initially only to accredited investors in minimum denominations of $250,000.
In the case of a non-bank purchaser acting as a fiduciary for one or more
third parties, each third party must be an accredited investor and must
purchase at least $250,000 in Notes. Each purchaser of a Note from or
through an Authorized Placement Agent will be deemed to have represented and
agreed as follows: (1) the purchaser understands that the Notes are being
issued only in transactions not involving any public offering within the
meaning of the Act; (2) the purchaser is a sophisticated institutional
investor who (A) is an "Accredited Investor" (as that term is defined in Rule
501(a) of Regulation D under the Act) (or is a fiduciary or agent (other than
a U.S. bank or savings and loan association) which is purchasing the Notes
for the account of an institutional Accredited Investor), (B) has knowledge
and experience (or is a fiduciary or agent with sole investment discretion
having such knowledge and experience) in financial and business matters and
it (or such fiduciary or agent) is capable of evaluating the merits and risks
of investing in the Notes, (C) has had access to such information as the
purchaser deems necessary in order to make an informed investment decision,
and (D) in the case of a resale of Notes pursuant to Rule 144A under the Act,
is a "Qualified Institutional Buyer" as defined in Rule 144A or is a
Qualified Institutional Buyer purchasing the Notes on behalf of one or more
other Qualified Institutional Buyers; (3) such Note is being purchased for
the purchaser's own account (or for the account of one or more institutional
Accredited Investors (or, in the case of a resale pursuant to Rule 144A under
the Act, one or more other Qualified Institutional Buyers) for which it is
acting as duly authorized fiduciary or agent) for investment and not with a
view to, or for sale in connection with, any distribution thereof; (4) if in
the future the purchaser (or any such investor or any other fiduciary or
agent representing such investor) decides to sell such Note prior to maturity,
it will be sold only in a transaction exempt from registration under the Act,
and only (A) to an Authorized Placement Agent, (B) through an Authorized
Placement Agent to an institutional investor approved by an Authorized
Placement Agent as an Accredited Investor or a Qualified Institutional
Buyer or (C) directly to a Qualified Institutional Buyer in a transaction
made pursuant to Rule 144A; (5) the purchaser understands that, although an
Authorized Placement Agent may repurchase Notes, the Authorized Placement
Agents are not obligated to do so, and accordingly the purchaser (or any
such other investor) should be prepared to hold such Note until maturity;
(6) the purchaser has had the opportunity to ask questions of, and receive
answers from, the Company; (7) the purchaser acknowledges that the Authorized
Placement Agents have not verified any of the information contained or
incorporated by reference in this Memorandum and make no representation of
any kind as to the accuracy or completeness of such information; (8) the
purchaser acknowledges that Notes sold to the purchaser by an Authorized
Placement Agent may be sold to the purchaser pursuant to Rule 144A under the
Act; and (9) the purchaser understands that each Note will bear a legend
substantially as set forth in capital letters on the cover page.
AVAILABLE INFORMATION
Humana Inc. has made financial and other information readily available on
Disclosure Inc. and Moody's/Docutronics Information Service, Inc. The
Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and, in accordance therewith, files
reports and other information with the Securities and Exchange Commission
(the "Commission"). Such reports and other information may be inspected
without charge at the public reference facilities maintained by the
Commission at 450 Fifth Street, NW, Washington, D.C. 20549, and at the
Regional Offices of the Commission. Copies thereof may be obtained from the
Commission upon payment of the prescribed fees. If available, such reports
and other information may also be accessed electronically through the
Commission's electronic data gathering, analysis and retrieval system
("EDGAR") via electronic means, including the Commission's web site on the
Internet (http://www.sec.gov). Humana will provide without charge to each
purchaser of the Notes, upon oral or written request, a copy of any and all
documents filed with the Commission and any and all publicly available
financial information. Requests should be directed to: Humana Inc.,
500 West Main Street, Louisville, Kentucky 40202, (502) 580-1000. If you
have any questions or require any additional information please contact:
Merrill Lynch Money Markets Inc., Marketing Department - 11th Floor, World
Financial Center, North Tower, 250 Vesey Street, New York, N.Y. 10281-1311,
(212) 449-0296.
EXHIBIT 10
EXECUTION COPY
CREDIT AGREEMENT
among
HUMANA INC.,
THE SEVERAL BANKS AND OTHER FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTIES HERETO,
BANK OF AMERICA NT&SA, AS DOCUMENTATION AGENT
AND
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT AND AS CAF LOAN AGENT
DATED AS OF AUGUST 13, 1997
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . 16
SECTION 2. AMOUNT AND TERMS OF LOANS. . . . . . . . . . . . . 17
2.1 Revolving Credit Loans. . . . . . . . . . . . . . . . 17
2.2 CAF Loans . . . . . . . . . . . . . . . . . . . . . . 18
2.3 Repayment of Loans; Evidence of Debt. . . . . . . . . 20
2.4 Fees. . . . . . . . . . . . . . . . . . . . . . . . . 21
2.5 Termination, Reduction or Extension of Commitments. . 22
2.6 Optional Prepayments. . . . . . . . . . . . . . . . . 24
2.7 Conversion Options; Minimum Amount of Loans . . . . . 24
2.8 Interest Rate and Payment Dates for Loans . . . . . . 25
2.9 Computation of Interest and Fees. . . . . . . . . . . 25
2.10 Inability to Determine Interest Rate . . . . . . . . 26
2.11 Pro Rata Borrowings and Payments . . . . . . . . . . 27
2.12 Illegality . . . . . . . . . . . . . . . . . . . . . 28
2.13 Requirements of Law. . . . . . . . . . . . . . . . . 28
2.14 Capital Adequacy . . . . . . . . . . . . . . . . . . 29
2.15 Taxes. . . . . . . . . . . . . . . . . . . . . . . . 30
2.16 Indemnity. . . . . . . . . . . . . . . . . . . . . . 31
2.17 Application of Proceeds of Loans . . . . . . . . . . 31
2.18 Notice of Certain Circumstances; Assignment of
Commitments Under Certain Circumstances .. . . . . . 31
2.19 Regulation U . . . . . . . . . . . . . . . . . . . . 32
SECTION 3. LETTERS OF CREDIT. . . . . . . . . . . . . . . . . 33
3.1 L/C Sublimit. . . . . . . . . . . . . . . . . . . . . 33
3.2 Procedure for Issuance of Letters of Credit . . . . . 34
3.3 Fees, Commissions and Other Charges . . . . . . . . . 34
3.4 L/C Participation . . . . . . . . . . . . . . . . . . 35
3.5 Reimbursement Obligation of the Borrower. . . . . . . 36
3.6 Obligations Absolute. . . . . . . . . . . . . . . . . 36
3.7 Letter of Credit Payments . . . . . . . . . . . . . . 36
3.8 Application . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 37
4.1 Corporate Existence; Compliance with Law. . . . . . . 37
4.2 No Legal Obstacle to Agreement; Enforceability. . . . 37
4.3 Litigation. . . . . . . . . . . . . . . . . . . . . . 37
4.4 Disclosure. . . . . . . . . . . . . . . . . . . . . . 38
4.5 Defaults. . . . . . . . . . . . . . . . . . . . . . . 38
4.6 Financial Condition . . . . . . . . . . . . . . . . . 38
4.7 Changes in Condition. . . . . . . . . . . . . . . . . 39
4.8 Assets. . . . . . . . . . . . . . . . . . . . . . . . 39
4.9 Tax Returns . . . . . . . . . . . . . . . . . . . . . 39
4.10 Contracts, etc. . . . . . . . . . . . . . . . . . . 39
4.11 Subsidiaries . . . . . . . . . . . . . . . . . . . . 39
4.12 Burdensome Obligations . . . . . . . . . . . . . . . 40
4.13 Pension Plans. . . . . . . . . . . . . . . . . . . . 40
4.14 Environmental and Public and Employee Health and
Safety Matters . . . . . . . . . . . . . . . . . . 40
4.15 Federal Regulations. . . . . . . . . . . . . . . . . 40
4.16 Investment Company Act; Other Regulations. . . . . . 41
4.17 Solvency . . . . . . . . . . . . . . . . . . . . . . 41
4.18 Casualties . . . . . . . . . . . . . . . . . . . . . 41
4.19 Business Activity. . . . . . . . . . . . . . . . . . 41
4.20 Purpose of Loans . . . . . . . . . . . . . . . . . . 41
SECTION 5. CONDITIONS . . . . . . . . . . . . . . . . . . . . 41
5.1 Conditions to the Closing Date. . . . . . . . . . . . 41
5.2 Conditions to Each Loan . . . . . . . . . . . . . . . 43
SECTION 6. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . 44
6.1 Taxes, Indebtedness, etc. . . . . . . . . . . . . . . 44
6.2 Maintenance of Properties; Maintenance of Existence . 44
6.3 Insurance . . . . . . . . . . . . . . . . . . . . . . 45
6.4 Financial Statements. . . . . . . . . . . . . . . . . 45
6.5 Certificates; Other Information . . . . . . . . . . . 47
6.6 Compliance with ERISA . . . . . . . . . . . . . . . . 47
6.7 Compliance with Laws. . . . . . . . . . . . . . . . . 47
6.8 Inspection of Property;Books and Records; Discussions 48
6.9 Notices . . . . . . . . . . . . . . . . . . . . . . . 48
6.10 Maintenance of Accreditation, Etc. . . . . . . . . . 49
6.11 Further Assurances . . . . . . . . . . . . . . . . . 49
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . 49
7.1 Financial Condition Covenants . . . . . . . . . . . . 49
7.2 Limitation on Subsidiary Indebtedness . . . . . . . . 50
7.3 Limitation on Liens . . . . . . . . . . . . . . . . . 50
7.4 Limitations on Fundamental Changes. . . . . . . . . . 51
7.5 Limitation on Sale of Assets. . . . . . . . . . . . . 52
7.6 Limitation on Distributions . . . . . . . . . . . . . 52
7.7 Transactions with Affiliates. . . . . . . . . . . . . 52
7.8 Sale and Leaseback. . . . . . . . . . . . . . . . . . 53
SECTION 8. DEFAULTS . . . . . . . . . . . . . . . . . . . . . 53
8.1 Events of Default . . . . . . . . . . . . . . . . . . 53
8.2 Annulment of Defaults . . . . . . . . . . . . . . . . 56
8.3 Waivers . . . . . . . . . . . . . . . . . . . . . . . 56
8.4 Course of Dealing . . . . . . . . . . . . . . . . . . 56
SECTION 9. THE AGENT. . . . . . . . . . . . . . . . . . . . . 57
9.1 Appointment . . . . . . . . . . . . . . . . . . . . . 57
9.2 Delegation of Duties. . . . . . . . . . . . . . . . . 57
9.3 Exculpatory Provisions. . . . . . . . . . . . . . . . 57
9.4 Reliance by Agent . . . . . . . . . . . . . . . . . . 57
9.5 Notice of Default . . . . . . . . . . . . . . . . . . 58
9.6 Non-Reliance on Agent and Other Banks . . . . . . . . 58
9.7 Indemnification . . . . . . . . . . . . . . . . . . . 58
9.8 Agent and CAF Loan Agent in Its Individual Capacity . 59
9.9 Successor Agent . . . . . . . . . . . . . . . . . . . 59
9.10 Documentation Agent. . . . . . . . . . . . . . . . . 59
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . 59
10.1 Amendments and Waivers . . . . . . . . . . . . . . . 59
10.2 Notices. . . . . . . . . . . . . . . . . . . . . . . 60
10.3 No Waiver; Cumulative Remedies . . . . . . . . . . . 61
10.4 Survival of Representations and Warranties . . . . . 61
10.5 Payment of Expenses and Taxes; Indemnity . . . . . . 61
10.6 Successors and Assigns; Participations;
Purchasing Banks . . . . . . . . . . . . . . . . . 62
10.7 Adjustments; Set-off . . . . . . . . . . . . . . . . 65
10.8 Counterparts . . . . . . . . . . . . . . . . . . . . 65
10.9 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . 66
10.10 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . 66
10.11 Submission To Jurisdiction; Waivers . . . . . . . . 66
10.12 Confidentiality of Information. . . . . . . . . . . 66
10.13 Existing Credit Agreement . . . . . . . . . . . . . 66
<PAGE>
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
SCHEDULE VI Certain Acquisitions and Dispositions
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
EXHIBIT I-1 Form of Company Counsel Opinion
EXHIBIT I-2 Form of Opinion of Fried, Frank, Harris, Shriver & Jacobson
CREDIT AGREEMENT, dated as of August 13,
1997, 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"),
BANK OF AMERICA NT&SA, a national banking association,
as documentation agent (in such capacity, the
"Documentation Agent") and THE CHASE MANHATTAN
BANK, a New York banking corporation, as administrative
agent for the Banks hereunder (in such capacity, the "Agent")
and as CAF Loan agent (in such capacity, the "CAF Loan
Agent").
W I T N E S S E T H:
WHEREAS, the Company, certain of the
Banks and the Agent are parties to the Amended and
Restated Credit Agreement dated as of September 26, 1995,
(the "Existing Credit Agreement");
WHEREAS, the Company has requested the
Banks to provide a $1,500,000,000 credit facility which will
be used to refinance the Existing Credit Agreement and for
general corporate purposes; and
WHEREAS, the Banks are willing to provide
such credit facility upon and subject to the terms and
conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto hereby
agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this
Agreement, the following terms have the following meanings:
"Additional Bank": as defined in subsection
2.5(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": as to any Person, any other
Person (other than a Subsidiary) which, directly or
indirectly, is in control of, is controlled by, or is under
common control with, such Person. For purposes of
this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or
more of the securities having ordinary voting power
for the election of directors of such Person or (b)
direct or cause the direction of the management and
policies of such Person, whether by contract or
otherwise.
"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 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 The Chase Manhattan
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 The Chase Manhattan 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; provided
that for the purposes of calculating the Applicable
Margin, the Consolidated Capitalization Ratio during
the six month period following the Closing Date shall
be deemed to be the greater of (i) the actual
Consolidated Capitalization Ratio and (ii) .35.
"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 2.4(a) hereto.
"Bank Obligations": as defined in subsection
8.1.
"Banks": the several banks and other
financial institutions 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(b) 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.
"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.
"Commercial Letter of Credit": as defined in
subsection 3.1(a).
"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 EBIT": 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; provided, that for purposes
of calculating Consolidated EBIT for any period of
four full fiscal quarters, (i) the Consolidated EBIT
attributable to any Person or business unit acquired
by the Company or its Subsidiaries during such period
(such Consolidated EBIT to be calculated in the same
manner as Consolidated EBIT for the Company and its
Subsidiaries is calculated, mutatis mutandis, provided
that amounts arising prior to the time such acquired
Person or business unit was acquired attributable to
(a) any discontinued operations or products of the
acquired Person or business unit or (b) operations or
products of the acquired Person or business unit
which the Company expects to discontinue as
disclosed in the Company's reports filed with the
Securities and Exchange Commission within three
months after the date of acquisition of such Person
or business unit shall be excluded in such calculation)
shall be included on a pro forma basis for such period
of four full fiscal quarters (assuming the
consummation of each such acquisition and the
incurrence, assumption or repayment of any
Indebtedness in connection therewith occurred on the
first day of such period of four full fiscal quarters)
and provided further that charges of Physician
Corporation of America relating to workers'
compensation arising during the third and fourth
fiscal quarters of 1996, not to exceed
$275,900,000, shall be excluded for purposes of
calculating the Consolidated EBIT of Physician
Corporation of America and (ii) the Consolidated EBIT
of any Person or business unit disposed of by the
Company or its Subsidiaries during such period (such
Consolidated EBIT to be calculated in the same
manner as Consolidated EBIT for the Company and its
Subsidiaries is calculated, mutatis mutandis) shall be
deducted on a pro forma basis for such period of four
full fiscal quarters (assuming the consummation of
each such disposition and the repayment of any
Indebtedness in connection therewith occurred on the
first day of such period of four full fiscal quarters).
"Consolidated EBITDA": for any fiscal period
for which the amount thereof is to be determined,
Consolidated EBIT for such fiscal period plus, to the
extent deducted from Consolidated Net Income for
such fiscal period, depreciation and amortization for
such fiscal period.
"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; provided, that for purposes
of calculating Consolidated Interest Expense for any
period of four full fiscal quarters, (i) the Consolidated
Interest Expense of any Person or business unit
acquired by the Company or its Subsidiaries during
such period (such Consolidated Interest Expense to
be calculated in the same manner as Consolidated
Interest Expense for the Company and its Subsidiaries
is calculated, mutatis mutandis, provided that
amounts arising prior to the time such acquired
Person or business unit was acquired attributable to
(a) any discontinued operations or products of the
acquired Person or business unit or (b) operations or
products of the acquired Person or business unit
which the Company expects to discontinue as
disclosed in the Company's reports filed with the
Securities and Exchange Commission within three
months after the date of acquisition of such Person
or business unit shall be excluded in such calculation)
shall be included on a pro forma basis for such period
of four full fiscal quarters (assuming the
consummation of each such acquisition and the
incurrence, assumption or repayment of any
Indebtedness in connection therewith occurred on the
first day of such period of four full fiscal quarters)
and (ii) the Consolidated Interest Expense of any
Person or business unit disposed of by the Company
or its Subsidiaries during such period (such
Consolidated Interest Expense to be calculated in the
same manner as Consolidated Interest Expense for
the Company and its Subsidiaries is calculated,
mutatis mutandis) shall be deducted on a pro forma
basis for such period of four full fiscal quarters
(assuming the consummation of each such
disposition and the repayment of any Indebtedness in
connection therewith occurred on the first day of
such period of four full fiscal quarters).
"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; provided, that,
for all purposes other than subsection 7.1(a),
Consolidated Net Income shall not be reduced or
increased by the amount of any non-cash
extraordinary charges or credits that would otherwise
be deducted from or added to revenue in determining
such Consolidated Net Income.
"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": at any date, the
stockholders' equity of the Company and its
Subsidiaries at such date, determined in accordance
with GAAP.
"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
2.5(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
2.5(b).
"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 2.3(e).
"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,
(e) all Guarantee Obligations relating to any of the
foregoing in excess of $1,000,000, and (f) for
purposes of subsection 8.1(e) only, all obligations of
such Person in respect of Interest Rate Protection
Agreements.
"Individual CAF Loan Note": as defined in
subsection 2.3(e).
"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(b) or its notice of
conversion as provided in subsection 2.7(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).
"Interest Rate Protection Agreement": any
interest rate protection agreement, interest rate
futures contract, interest rate option, interest rate
cap or other interest rate hedge arrangement to or
under which the Borrower or any of its Subsidiaries is
a party or a beneficiary on the date hereof or
becomes a party or a beneficiary after the date
hereof.
"Issuing Bank": The Chase Manhattan 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": $300,000,000.
"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 EBITDA
for the period of four fiscal quarters of the Company
ended on such day.
"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.
"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.
"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 2.11(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": The Chase Manhattan
Bank, Citibank, N.A. and Bank of America National
Trust and Savings Association.
"Register": as defined in subsection 10.6(e).
"Regulation G": Regulation G of the Board of
Governors of the Federal Reserve System.
"Regulation T": Regulation T of the Board of
Governors of the Federal Reserve System.
"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 .22, .23, .25, .27 or .28 of
PBGC Reg. Sec. 4043.
"Requested Termination Date": as defined in
subsection 2.5(b).
"Required 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 and L/C Obligations
represent in the aggregate at least 51% of all
outstanding Loans and L/C Obligations.
"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 2.3(e).
"Riverview Square": the office building of
the Company located at 201 West Main Street,
Louisville, Kentucky 40202.
"Significant Subsidiary": means, at any
particular time, any Subsidiary of the Company that
(a) accounted for at least 5% of
consolidated revenues of the Company and its
Subsidiaries or 5% of consolidated earnings of the
Company and its Subsidiaries before interest and
taxes, in each case ending on the last day of the last
fiscal quarter immediately preceding the date as of
which any such determination is made; or
(b) has assets which represent at least 5%
of the consolidated assets of the Company and its
Subsidiaries as of the last day of the last fiscal
quarter immediately preceding the date of which any
such determination is made;
all of which, with respect to clauses (a) or (b), shall
be as reflected on the financial statements of the
Company for the period, or as of the date, in
question.
"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.
"Super-Majority Banks": as defined in
subsection 2.5(b).
"Taxes": as defined in subsection 2.15.
"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 2.5.
"Terminating Bank": as defined in subsection
2.5(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.
"Waterside Garage": the parking garage of
the Company located at 201 North Brook Street,
Louisville, Kentucky 40202.
"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. (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(b). 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 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. (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 of $1,000,000 in excess
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
11:00 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
subsection 2.3, and reborrow under this subsection 2.2.
2.3 Repayment of Loans; Evidence of Debt.
(a) The Company hereby unconditionally promises to pay to
the Agent for the account of each Bank (i) the then unpaid
principal amount of each Revolving Credit Loan of such Bank
on the Termination Date (or such earlier date on which the
Loans become due and payable pursuant to Section 8), and
(ii) the principal amount of each CAF Loan made by such
Bank on the maturity date therefor as set forth in the CAF
Loan Request for such CAF Loan (or on such earlier date on
which the Loans become due and payable pursuant to
Section 8). The Company hereby further agrees to pay
interest on the unpaid principal amount of the Loans from
time to time outstanding from the date hereof until payment
in full thereof at the rates per annum, and on the dates, set
forth in subsection 2.8.
(b) Each Bank shall maintain in accordance
with its usual practice an account or accounts evidencing
indebtedness of the Company to such Bank resulting from
each Loan of such Bank from time to time, including the
amounts of principal and interest payable and paid to such
Bank from time to time under this Agreement.
(c) The Agent shall maintain the Register
pursuant to subsection 10.6(e), and a subaccount therein for
each Bank, in which shall be recorded (i) (A) the amount of
each Revolving Credit Loan made hereunder, the Type thereof
and each Interest Period applicable thereto and (B) the
amount of each CAF Loan made by such Bank, the maturity
date therefor as set forth in the CAF Loan Request for such
CAF Loan, the interest rate applicable thereto and each
Interest Payment Date applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due
and payable from the Company to each Bank hereunder and
(iii) both the amount of any sum received by the Agent
hereunder from the Company and each Bank's share thereof.
(d) The entries made in the Register and the
accounts of each Bank maintained pursuant to subsection
2.3(b) shall, to the extent permitted by applicable law, be
prima facie evidence of the existence and amounts of the
obligations of the Company therein recorded; provided,
however, that the failure of any Bank or the Agent to
maintain the Register or any such account, or any error
therein, shall not in any manner affect the obligation of the
Company to repay (with applicable interest) the Loans made
to such Company by such Bank in accordance with the terms
of this Agreement.
(e) The Company agrees that, upon the
request to the Agent by any Bank, the Company will execute
and deliver to such Bank (i) a promissory note of the
Company evidencing the Revolving Credit Loans of such
Bank, substantially in the form of Exhibit A with appropriate
insertions as to payee, date and principal amount (a
"Revolving Credit Note"), (ii) a promissory note of the
Company evidencing the initial CAF Loan or Loans of such
Bank, substantially in the form of Exhibit B with appropriate
insertions (a "Grid CAF Loan Note"), and/or (iii) a promissory
note of the Company evidencing amounts advanced by such
Bank pursuant to subsection 2.2 which have the same
maturity date and interest rate as amounts advanced by such
Bank evidenced by a Grid CAF Loan Note and which such
Bank wishes to constitute more than one CAF Loan (which
principal amounts shall not be less than $5,000,000 for any
such CAF Loans), substantially in the form of Exhibit C with
appropriate insertions (an "Individual CAF Loan Note"). Upon
a Bank's receipt of an Individual CAF Loan Note evidencing a
CAF Loan, such Bank shall endorse on the schedule attached
to its Grid CAF Loan Note the transfer of such CAF Loan from
such Grid CAF Loan Note to such Individual CAF Loan Note.
2.4 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);
provided that for the purposes of calculating facility fees, the
Consolidated Capitalization Ratio during the six month period
following the Closing Date shall be deemed to be the greater
of (i) the actual Consolidated Capitalization Ratio and (ii) .35.
Consolidated Facility Fee
Capitalization Ratio (Rate Per Annum)
less than .20 .0650%
at least .20 but less than .30 .0700%
at least .30 but less than .35 .0900%
at least .35 but less than .40 .1000%
at least .40 .1500%
(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 June 4,
1997, between the Agent and the Company.
2.5 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 written
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 Banks whose Commitment Percentages aggregate
66-2/3% (the "Super-Majority 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 2.5, 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 Super-Majority Banks
shall have elected to extend their Commitments as provided
in this subsection 2.5, if any Bank shall timely notify the
Company and the Agent pursuant to subsection 2.5(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 2.5(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 2.5(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
2.5.
(f) If the Super-Majority Banks shall have
elected to extend their Commitments as provided in this
subsection 2.5 and the Company has not revoked its request
to extend the Termination Date as provided in this subsection
2.5, 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 2.16 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.
2.6 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 2.16), 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 2.7(c) shall not have been contravened.
2.7 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 Working
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 Required 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 2.7(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 2.7(a); provided that,
unless the Required 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 2.7(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.
2.8 Interest Rate and Payment Dates for
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) CAF Loans shall bear interest from the
Borrowing Date to the maturity date therefor as set forth in
the CAF Loan Request for such CAF Loan on the unpaid
principal amount thereof at the rate of interest determined
pursuant to subsection 2.2(b).
(d) 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 Required Banks otherwise agree, be converted to an
Alternate Base Rate Loan at the end of the last Interest Period
with respect thereto.
(e) Interest shall be payable in arrears on
each Interest Payment Date.
2.9 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 and CAF 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 2.8(a) or (d).
(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.
2.10 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 Required Banks that the
interest rate determined pursuant to subsection
2.8(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.
2.11 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 2.4, 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 2.11(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.
2.12 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.
2.13 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 2.13(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 2.13(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.
2.14 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 2.14 shall
survive the termination of this Agreement and payment of the
Loans and the Notes and all other amounts payable
hereunder.
2.15 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 2.15 shall
survive the termination of this Agreement and the payment of
the Notes and all other amounts payable hereunder.
2.16 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(b) or
a notice of continuation or conversion pursuant to subsection
2.7, (c) default by the Company in making any prepayment
after the Company has given a notice in accordance with
subsection 2.6 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 2.16 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.
2.17 Application of Proceeds of Loans.
Subject to the provisions of the following sentence, the
Company may use the proceeds of the Loans for any lawful
general corporate purpose, including acquisitions. 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 such usage does not violate Regulation U as now and from
time to time hereafter in effect.
2.18 Notice of Certain Circumstances;
Assignment of Commitments Under Certain Circumstances.
(a) Any Bank claiming any additional amounts payable
pursuant to subsections 2.13, 2.14 or 2.15 or exercising its
rights under subsection 2.12, 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 2.13, 2.14 or 2.15
or exercising its rights under subsection 2.12, 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 2.13, 2.14 or 2.15 or any Bank shall
exercise its rights under subsection 2.12, 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 2.4, 2.12, 2.13, 2.14, 2.15 and 2.16.
2.19 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
2.19 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 2.19 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 either (A) a standby
letter of credit issued to support obligations of the Company
or its Subsidiaries, contingent or otherwise (a "Standby Letter
of Credit") or (B) a commercial letter of credit issued in
respect of the purchase of goods or services by the Borrower
or its Subsidiaries in the ordinary course of business (a
"Commercial 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 Standby Letter of Credit shall have an
expiry date more than 365 days after its date of issuance,
provided that any such Standby Letter of Credit may provide
that it is automatically renewed on each anniversary of
issuance thereof for additional one-year periods unless the
beneficiary is otherwise notified by the issuer of such
Standby Letter of Credit.
(e) No Commercial Letter of Credit shall
have an expiry date more than 180 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 .100% 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; provided that
for the purposes of calculating letter of credit commissions,
the Consolidated Capitalization Ratio during the six month
period following the Closing Date shall be deemed to be the
greater of (i) the actual Consolidated Capitalization Ratio and
(ii) .35. 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 .20 .2200%
at least .20 but less than .30 .2300%
at least .30 but less than .35 .2600%
at least .35 but less than .40 .3000%
at least .40 .4000%
(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 in all material respects, including, without
limitation, HMO Regulations and Insurance Regulations,
except to the extent that the failure to be so qualified or to
comply therewith would 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, 1996 and the Company's Quarterly
Report on Form 10-Q for its fiscal quarter ended March 31,
1997 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, 1996 and
the Company's Quarterly Report on Form 10-Q for its fiscal
quarter ended March 31, 1997 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 July 1997
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,
1996; and
(b) the Quarterly
Report of the Company on
Form 10-Q for the fiscal quarter
ended March 31, 1997.
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, 1996 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, 1996 other than as disclosed in Schedule VI.
4.7 Changes in Condition. Since
December 31, 1996, 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 1993 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 $2,000,000 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 $2,000,000 and letters of credit in
excess of $2,000,000, 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 Regulations G,
T, U or X 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 or Form FR G-3 referred to in said Regulations
G and 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, sale
of long term care insurance, 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 repay any amounts outstanding
under the Existing Credit Agreement and to finance any
other lawful general corporate purpose, including
acquisitions, provided 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 G or 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. The Agent shall have
received, with a copy for each Bank, opinions
rendered by (i) the general counsel of the Company,
substantially in the form of Exhibit I-1, and (ii)
Fried, Frank, Harris, Shriver & Jacobson, counsel to
the Company, substantially in the form of Exhibit
I-2.
(c) Closing Certificate. The Agent shall
have received, with a copy 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 2.4(b).
(f) Corporate Proceedings. The Agent shall
have received, with a copy 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 copy 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 Required Banks,
could reasonably be expected to have a Material
Adverse Effect.
(i) Incumbency Certificate. The Agent
shall have received, with a copy 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 Required Banks could
reasonably be expected to have a Material Adverse
Effect.
(l) Repayment of Outstanding Loans. On
the Closing Date, all Loans and other amounts
outstanding under the Existing Credit Agreement, if
any, shall be repaid contemporaneously with the
making of Loans hereunder and all commitments to
extend credit thereunder shall be terminated.
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) Regulations. In the case of any
Loan the proceeds of which will be used, in whole
or in part, to finance an acquisition, such
acquisition shall be in full compliance with all
applicable requirements of law, including, without
limitation, Regulations G, T, U and X of the Board
of Governors of the Federal Reserve System.
(e) Governmental, Third Party
Approvals. In the case of any Loan the proceeds of
which will be used, in whole or in part, to finance
an acquisition, all necessary governmental and
regulatory approvals, and all third party approvals
the failure to obtain which would result in the
acceleration of indebtedness unless such
indebtedness is paid when due, in connection with
such acquisition or in connection with this
Agreement shall have been obtained and remain in
effect, and all applicable waiting periods with
respect to antitrust matters shall have expired
without any action being taken by any competent
authority which restrains such acquisition.
(f) No Restraints. In the case of any
Loan the proceeds of which will be used, in whole
or in part, to finance an acquisition, there shall
exist no judgment, order, injunction or other
restraint which would prevent the consummation of
such acquisition.
(g) Form FR U-1; Form FR G-3. 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 or, if applicable,
Form FR G-3 referred to in Regulation G, showing
compliance with Regulation U or Regulation G, as
the case may be, after giving effect to such Loan.
(h) 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, or such
other counsel reasonably acceptable to the Banks,
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;
(c) within five Business Days after the
consummation of a transaction described in
subsection 7.4(c) or (d) or subsection 7.5(f) which,
in each case, involves a Significant Subsidiary or
assets which, if they constituted a separate
Subsidiary, would constitute a Significant
Subsidiary, a certificate of the treasurer or chief
financial officer of the Company demonstrating pro
forma compliance with the financial covenants in
this Agreement after giving effect to such
transaction; and
(d) 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
Required 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
75% of its Consolidated Net Worth of the Company
and its consolidated subsidiaries as at March 31,
1997 plus 50% of Consolidated Net Income for
each full fiscal quarter after March 31, 1997
(without any deduction for any such fiscal quarter
in which such Consolidated Net Income is a
negative number).
(b) Fixed Charge Coverage. Permit the
ratio of (i) Consolidated EBIT for any period of four
consecutive fiscal quarters of the Company 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 3.25 to
1.0, in the case of any such period ending on or
prior to March 31, 1998 and 3.0 to 1.0, in the case
of any such period ending thereafter.
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; or
(c) additional Indebtedness of Subsidiaries
of the Company not exceeding $125,000,000 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, 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 other property
or assets after the time such corporation becomes
a Subsidiary and (iii) the amount of Indebtedness
secured thereby, if any, is not increased;
(j) Liens on the Headquarters, Riverview
Square, the Waterside Garage and the Waterside
Building; or
(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 may be merged or consolidated with or
into any one or more wholly owned Subsidiaries of
the Company (provided that the surviving
corporation shall be a wholly owned Subsidiary);
(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; or
(d) the Company and its Subsidiaries may
purchase or otherwise acquire all or substantially all
of the Capital Stock, or the property, business or
assets, of any other Person, or any business
division thereof, so long as no Default or Event of
Default shall have occurred and be continuing.
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, Riverview Square, the Waterside
Garage and the Waterside Building;
(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)); or
(f) the sale or other disposition of any
other property so long as no Default or Event of
Default shall have occurred and be continuing;
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 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.
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 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
$10,000,000, 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
$25,000,000, or (iii) such default shall have
continued without being rectified or cured 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 Required 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 Required
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
$25,000,000 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
Required Banks, the Agent may, or upon the request of the
Required 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 Required Banks, the Agent
may, or upon the request of the Required 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 Required 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 The Chase Manhattan
Bank as the Agent and CAF Loan Agent of such Bank under
this Agreement, and each such Bank irrevocably authorizes
The Chase Manhattan 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 Required 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 Required
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 Required 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 Required 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.
9.10 Documentation Agent. The
Documentation Agent shall not have any rights, duties or
responsibilities hereunder in its capacity as such. The
Documentation Agent may resign as Documentation Agent
at any time upon notice to the Banks.
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 Required 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 2.5 hereof), or reduce the rate or extend the
time of payment of interest thereon, or reduce or extend
the payment of any fee payable to the Banks hereunder, or
reduce the principal amount thereof, or change the amount
of any Bank's Commitment, in each case without the
consent of each Bank directly affected thereby, or (b)
amend, modify or waive any provision of this subsection
10.1 or reduce the percentage specified in the definition of
Required 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 (c) 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 and
Treasurer
Telecopy: (502) 580-4089
The Agent and
CAF Loan Agent: The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: Dawn Lee Lum
Telecopy: (212) 270-3279
with a copy to: Chase Agent Bank Services
One Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Attention: Janet Belden
Telecopy: (212) 552-5658
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
(including, without limitation, the allocated cost of in-house
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 (including without limitation,
the allocated cost of in-house 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,
excluding litigation commenced by the Company against
any of the Agent or the Banks which (i) seeks enforcement
of any of the Company's rights hereunder and (ii) is
determined adversely to any of the Agent or the Banks (all
such non-excluded claims, damages, liabilities and
expenses, "Indemnified Liabilities"), provided that the
Company shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities to
the extent such Indemnified Liabilities resulted from the
gross negligence or willful misconduct of such Indemnified
Person.
(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
2.13, 2.14 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 then
due and 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 written consent of the
Company.
10.13 Existing Credit Agreement. Each Bank
which is a Bank party to the Existing Credit Agreement and
the Company acknowledge that the commitments under
the Existing Credit Agreement will terminate on the Closing
Date, and each such Bank hereby waives any requirement
of the Existing Credit Agreement that the Company give
any notice of such termination.
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 & Treasurer
THE CHASE MANHATTAN BANK,
as Agent, as CAF Loan Agent and as a Bank
By: /s/ Dawn Lee Lum
Name: Dawn Lee Lum
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION,
as Documentation Agent and as a Bank
By: /s/ Edward S. Han
Name: Edward S. Han
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ William E. Zarrett
Name: William E. Zarrett
Title: Senior Relationship Manager
WACHOVIA BANK, N.A.
By: /s/ John Tibe
Name: John Tibe
Title: Assistant Vice President
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By: /s/ Robert Bottamedi
Name: Robert Bottamedi
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD.,
CHICAGO BRANCH
By: /s/ Tokutaro Sekine
Name: Tokutaro Sekine
Title: General Manager
CITIBANK, N.A.
By: /s/ Margaret Au Brown
Name: Margaret Aubrown
Title: Managing Director
PNC BANK, KENTUCKY, INC.
By:/s/ Paula K. Fryland
Name: Paula K. Fryland
Title: Vice President
WELLS FARGO BANK, N.A.
By: /s/ Ken Taylor
Name: Ken Taylor
Title: Assistant Vice President
By:
Name:
Title:
NATIONAL CITY BANK OF KENTUCKY
By: /s/ Deroy Scott
Name: Deroy Scott
Title: Vice President
BANQUE PARIBAS
By:/s/ Russell A. Pomerantz
Name: Russell A. Pomerantz
Title: Vice President
By: David I. Canavan
Name: David I. Canavan
Title Group Vice President
FIRSTAR BANK MILWAUKEE, N.A.
By: /s/ Sandra J. Hartay
Name: Sandra J. Hartay
Title: Vice President
BANCA MONTE DEI PASCHI DI SIENA, SPA
By: /s/ G. Natalicchi
Name: G. Natalicchi
Title: S.V.P. & General Manager
By: Brian R. Landy
Name: Brian R. Landy
Title: Vice President
BANCA NAZIONALE DEL LAVORO S.P.A.
By: /s/ Giuliano Violetta
Name: Giuliano Violetta
Title: First Vice President
By: Roberto Mancone
Name: Roberto Mancone
Title: Assistant Vice President
BANK ONE,KENTUCKY, NA
By: /s/ Todd D. Munson
Name: Todd D. Munson
Title: Senior Vice President
THE BANK OF NEW YORK
By: /s/ Edward J. Dougherty III
Name: Edward J. Dougherty III
Title: Vice President/U.S. Commercial Banking
BARNETT BANK, N.A.
By: /s/ Melinda J. Lemen
Name: Melinda J. Lemen
Title: Vice President
CORESTATES BANK, N.A.
By: /s/ Elizabeth D. Morris
Name: Elizabeth D. Morris
Title: Vice President
FIFTH THIRD BANK OF KENTUCKY
By: /s/ Robert M. Eversole
Name: Robert M. Eversole
Title: Senior Vice President of Commercial Banking
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Thomas M. Harkless
Name: Thomas M. Harkless
Title: Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ Tom Purcell
Name: Tom Purcell
Title: Vice President
THE NORTHERN TRUST COMPANY
By: /s/ John J. Conway
Name: John J. Conway
Title: Vice President
THE SUMITOMO BANK, LIMITED
By: /s/ Suresh S. Tata
Name: Suresh S. Tata
Title: Senior Vice President
SUNTRUST BANK, NASHVILLE, N.A.
By: /s/ Karen Cole Ahern
Name: Karen Cole Ahern
Title: G. Vice President
ASAHI BANK, LIMITED, CHICAGO BRANCH
By: /s/ Nobuo Suzuki
Name: Nobuo Suzuki
Title: General Manager
THE SANWA BANK, LIMITED
By: /s/ Andrew N. Hammond
Name: Andrew N. Hammond
Title: Vice President-Senior Manager Credit
BANK OF LOUISVILLE AND TRUST COMPANY
By: /s/ Gail W. Pohn
Name: Gail W. Pohn
Title: Executive Vice President
FIRST AMERICAN NATIONAL BANK
By: /s/ Kent D. Wood
Name: Kent D. Wood
Title: Assistant Vice President
STAR BANK,N.A.
By:/s/ John R. Bernloehr
Name: John R. Bernloehr
Title: Vice President
SCHEDULE I
Commitment Amounts and Percentages;
Lending Offices; Address for Notices
A. Commitment Amounts and Percentages
Name of Bank
Commitment Amount
Commitment Percentage
THE CHASE MANHATTAN BANK
$368,000,000
24.53%
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION
$150,000,000
10.00%
THE BANK OF NOVA SCOTIA
$100,000,000
6.67%
WACHOVIA BANK, N.A.
$100,000,000
6.67%
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
$100,000,000
6.67%
THE BANK OF TOKYO-MITSUBISHI, LTD.,
CHICAGO BRANCH
$50,000,000
3.33%
CITIBANK, N.A.
$50,000,000
3.33%
PNC BANK, KENTUCKY, INC.
$50,000,000
3.33%
WELLS FARGO BANK, N.A.
$50,000,000
3.33%
NATIONAL CITY BANK OF KENTUCKY
$35,000,000
2.33%
BANQUE PARIBAS
$30,000,000
2.00%
FIRSTAR BANK MILWAUKEE, N.A.
$30,000,000
2.00%
BANCA MONTE DEI PASCHI DI SIENA, SPA
$25,000,000
1.67%
BANCA NAZIONALE DEL LAVORO S.P.A.
$25,000,000
1.67%
BANK ONE, KENTUCKY, NA
$25,000,000
1.67%
THE BANK OF NEW YORK
$25,000,000
1.67%
BARNETT BANK, N.A.
$25,000,000
1.67%
CORESTATES BANK, N.A.
$25,000,000
1.67%
FIFTH THIRD BANK OF KENTUCKY
$25,000,000
1.67%
THE FIRST NATIONAL BANK OF CHICAGO
$25,000,000
1.67%
KEYBANK NATIONAL ASSOCIATION
$25,000,000
1.67%
THE NORTHERN TRUST COMPANY
$25,000,000
1.67%
THE SUMITOMO BANK, LIMITED
$25,000,000
1.67%
SUNTRUST BANK, NASHVILLE, N.A.
$25,000,000
1.67%
ASAHI BANK, LIMITED, CHICAGO BRANCH
$20,000,000
1.33%
THE SANWA BANK, LIMITED
$20,000,000
1.33%
BANK OF LOUISVILLE AND TRUST COMPANY
$17,000,000
1.11%
FIRST AMERICAN NATIONAL BANK
$15,000,000
1.00%
STAR BANK, N.A.
$15,000,000
1.00%
TOTAL
$1,500,000,000
100.00%
B. LENDING OFFICES; ADDRESSES FOR NOTICES
THE CHASE MANHATTAN BANK
Domestic Lending Office The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Eurodollar Lending Office The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Address for Notices The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Attention: Dawn Lee Lum
Telecopy: (212) 270-3279
BANK OF AMERICA NATIONAL TRUST
& SAVINGS ASSOCIATION
Domestic Lending Office Bank of America National Trust
& Savings Association
1850 Gateway Blvd.
Concord, CA 94520
Eurodollar Lending Office Bank of America National Trust
& Savings Association
Account Administration #5693
1850 Gateway Blvd.
Concord, CA 94520
Address for Notices Bank of America National Trust
& Savings Association
1850 Gateway Blvd.
Concord, CA 94520
Attention: Kelsey Robinson
Telecopy: (415) 675-7531
THE BANK OF NOVA SCOTIA
Domestic Lending Office The Bank of Nova Scotia
600 Peachtree Street, N.E.
Suite 2700
Atlanta, GA 30308
Eurodollar Lending Office The Bank of Nova Scotia
600 Peachtree Street, N.E.
Suite 2700
Atlanta, GA 30308
Address for Notices The Bank of Nova Scotia
600 Peachtree Street, N.E.
Suite 2700
Atlanta, GA 30308
Attention: Dorothy Legista
Telecopy: (404) 888-8998
WACHOVIA BANK, N.A.
Domestic Lending Office Wachovia Bank, N.A.
191 Peachtree Street N.E.
Atlanta, GA 30303
Eurodollar Lending Office Wachovia Bank, N.A.
191 Peachtree Street N.E.
Atlanta, GA 30303
Address for Notices Wachovia Bank, N.A.
191 Peachtree Street N.E.
29th Floor
Atlanta, GA 30303
Attention: John Tibe
Telecopy: (404) 332-5016
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
Domestic Lending Office Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260-0060
Eurodollar Lending Office Morgan Guaranty Trust Company of New York
Nassau Bahamas Office
c/o J.P. Morgan Services Inc.
Euro-Loan Servicing Unit
500 Stanton Christiana Road
Newark, DE 19713
Address for Notices Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260-0060
Attention: Robert Bottamedi
Telecopy: (212) 648-5018
THE BANK OF TOKYO-MITSUBISHI, LTD., CHICAGO BRANCH
Domestic Lending Office The Bank of Tokyo-Mitsubishi, Ltd.,
Chicago Branch
227 W. Monroe St. Suite 2300
Chicago, IL 60606
Eurodollar Lending Office The Bank of Tokyo-Mitsubishi, Ltd.,
Chicago Branch
227 W. Monroe St. Suite 2300
Chicago, IL 60606
Address for Notices The Bank of Tokyo-Mitsubishi, Ltd.,
Chicago Branch
227 W. Monroe St. Suite 2300
Chicago, IL 60606
Attention: Christopher D. Jones
Telecopy: (312) 696-4535
CITIBANK, N.A.
Domestic Lending Office Citibank, N.A.
399 Park Avenue
New York, NY 10043
Eurodollar Lending Office Citibank, N.A.
399 Park Avenue
New York, NY 10043
Address for Notices Citibank, N.A.
399 Park Avenue
New York, NY 10043
Attention: Margaret Brown
Telecopy: (212) 793-3053
PNC BANK, KENTUCKY, INC.
Domestic Lending Office PNC Bank, Kentucky, Inc.
500 West Jefferson
Louisville, KY 40202
Eurodollar Lending Office PNC Bank, Kentucky, Inc.
500 West Jefferson
Louisville, KY 40202
Address for Notices PNC Bank, Kentucky, Inc.
500 West Jefferson
Louisville, KY 40202
Attention: Paula K. Fryland
Telecopy: (502) 581-2302
WELLS FARGO BANK, N.A.
Domestic Lending Office Wells Fargo Bank, N.A.
707 Wilshire Blvd., 16th Floor
MAC 2818-165
Los Angeles, CA 90017
Eurodollar Lending Office Wells Fargo Bank, N.A.
707 Wilshire Blvd., 16th Floor
MAC 2818-165
Los Angeles, CA 90017
Address for Notices Wells Fargo Bank, N.A.
707 Wilshire Blvd., 16th Floor
MAC 2818-165
Los Angeles, CA 90017
Attention: Frieda Youlios
Telecopy: (213) 740-1581
and
Wells Fargo Bank, N.A.
1445 Ross Avenue - 3rd Floor
MAC 5303-032
Dallas, TX 75202-2711
Attention: Ken Taylor
Telecopy: (214) 740-1581
NATIONAL CITY BANK OF KENTUCKY
Domestic Lending Office National City Bank of Kentucky
101 South Fifth Street, 8th Floor
Louisville, KY 40202
Eurodollar Lending Office National City Bank of Kentucky
101 South Fifth Street, 8th Floor
Louisville, KY 40202
Address for Notices National City Bank of Kentucky
101 South Fifth Street, 8th Floor
Louisville, KY 40202
Attention: Deroy Scott
Telecopy: (502) 581-4424
BANQUE PARIBAS
Domestic Lending Office Banque Paribas
227 West Monroe
Suite 3300
Chicago, IL 60606
Eurodollar Lending Office Banque Paribas
227 West Monroe
Suite 3300
Chicago, IL 60606
Address for Notices Banque Paribas
227 West Monroe
Suite 3300
Chicago, IL 60606
Attention: Credit Administration
Telecopy: (312) 853-6020
FIRSTAR BANK MILWAUKEE, N.A.
Domestic Lending Office Firstar Bank Milwaukee, N.A.
U.S. Banking Division
777 East Wisconsin Avenue
Milwaukee, WI 53202
Eurodollar Lending Office Firstar Bank Milwaukee, N.A.
U.S. Banking Division
777 East Wisconsin Avenue
Milwaukee, WI 53202
Address for Notices Firstar Bank Milwaukee, N.A.
U.S. Banking Division
777 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Sandra J. Hartay
Telecopy: (414) 765-5367
BANCA MONTE DEI PASCHI DI SIENA, SPA
Domestic Lending Office Banca Monte Dei Paschi di Siena, SpA
245 Park Avenue, 26th Floor
New York, NY 10167
Eurodollar Lending Office Banca Monte Dei Paschi di Siena, SpA
245 Park Avenue, 26th Floor
New York, NY 10167
Address for Notices Banca Monte Dei Paschi di Siena, SpA
245 Park Avenue, 26th Floor
New York, NY 10167
Attention: Robert Woods
Telecopy: (212) 557-8039
BANCA NAZIONALE DEL LAVORO S.P.A.
Domestic Lending Office Banca Nazionale Del Lavoro S.p.A.
25 West 51st Street
New York, NY 10019
Eurodollar Lending Office Banca Nazionale Del Lavoro S.p.A.
25 West 51st Street
New York, NY 10019
Address for Notices Banca Nazionale Del Lavoro S.p.A.
25 West 51st Street
New York, NY 10019
Attention: Roberto Mancone
Telecopy: (212) 765-2978
BANK ONE, KENTUCKY, NA
Domestic Lending Office Bank One, Kentucky, NA
Corporate Banking
416 West Jefferson Street
Louisville, KY 40202
Eurodollar Lending Office Bank One, Kentucky, NA
Grand Cayman Island Branch
416 West Jefferson Street
Louisville, KY 40202
Address for Notices Bank One, Kentucky, NA
416 West Jefferson Street
KY1-2216
Louisville, KY 40202
Attention: Todd D. Munson
Telecopy: (502) 566-8339
THE BANK OF NEW YORK
Domestic Lending Office The Bank of New York
One Wall Street, 22nd Floor
New York, NY 10286
Eurodollar Lending Office The Bank of New York
One Wall Street, 22nd Floor
New York, NY 10286
Address for Notices The Bank of New York
One Wall Street, 22nd Floor
New York, NY 10286
Attention: Susan Barratta/Janeth Lopez
Telecopy: (212) 635-6397
BARNETT BANK, N.A.
Domestic Lending Office Barnett Bank, N.A.
50 North Laura Street
17th Floor/MC#099-000-1768
Jacksonville, FL 32202
Eurodollar Lending Office Barnett Bank, N.A.
50 North Laura Street
17th Floor/MC#099-000-1768
Jacksonville, FL 32202
Address for Notices Barnett Bank, N.A.
50 North Laura Street
17th Floor/MC#099-000-1768
Jacksonville, FL 32202
Attention: E. Bradley Jones
Telecopy: (904) 791-7063
CORESTATES BANK, N.A.
Domestic Lending Office Corestates Bank, N.A.
1339 Chestnut Street
FC 1-8-3-22
Philadelphia, PA 19101
Eurodollar Lending Office Corestates Bank, N.A.
1339 Chestnut Street
FC 1-8-3-22
Philadelphia, PA 19101
Address for Notices Corestates Bank, N.A.
1339 Chestnut Street
FC 1-8-3-22
Philadelphia, PA 19101
Attention: Elizabeth D. Morris
Telecopy: (215) 973-2738
FIFTH THIRD BANK OF KENTUCKY
Domestic Lending Office Fifth Third Bank of Kentucky
401 South Fourth Avenue
Louisville, KY 40202
Eurodollar Lending Office Fifth Third Bank of Kentucky
401 South Fourth Avenue
Louisville, KY 40202
Address for Notices Fifth Third Bank of Kentucky
401 South Fourth Avenue
Louisville, KY 40202
Attention: Judy Semaria
Telecopy: (502) 562-5540
THE FIRST NATIONAL BANK OF CHICAGO
Domestic Lending Office The First National Bank of Chicago
1 First National Plaza
Suite 0091
Chicago, IL 60670-0091
Eurodollar Lending Office The First National Bank of Chicago
1 First National Plaza
Suite 0091
Chicago, IL 60670-0091
Address for Notices The First National Bank of Chicago
1 First National Plaza
Chicago, IL 60670-0091
Attention: Public Banking Department
Telecopy: (312) 732-2016
KEYBANK NATIONAL ASSOCIATION
Domestic Lending Office Key Bank National Association
127 Public Square
Cleveland, OH 44114-1306
Eurodollar Lending Office Key Bank National Association
127 Public Square
Cleveland, OH 44114-1306
Address for Notices Key Bank National Association
127 Public Square
Mailcode: OH-01-27-0606
Cleveland, OH 44114-1306
Attention: Kathy Koenig
Telecopy: (216) 689-4981
THE NORTHERN TRUST COMPANY
Domestic Lending Office The Northern Trust Company
50 South LaSalle Street
Chicago, IL 60675
Eurodollar Lending Office The Northern Trust Company
50 South LaSalle Street
Chicago, IL 60675
Address for Notices The Northern Trust Company
50 South LaSalle Street
Chicago, IL 60675
Attention: Nicole Kidder
Telecopy: (312) 444-5055
THE SUMITOMO BANK, LIMITED
Domestic Lending Office The Sumitomo Bank, Limited
277 Park Avenue
New York, NY 10172
Eurodollar Lending Office The Sumitomo Bank, Limited
277 Park Avenue
New York, NY 10172
Address for Notices The Sumitomo Bank, Limited
277 Park Avenue
New York, NY 10172
Attention: Rob Bocchicchio
Telecopy: (212) 224-5197
SUNTRUST BANK, NASHVILLE, N.A.
Domestic Lending Office Suntrust Bank, Nashville, N.A.
2nd Floor, Main Office
201 4th Avenue North
Nashville, TN 37219
Eurodollar Lending Office Suntrust Bank, Nashville, N.A.
2nd Floor, Main Office
201 4th Avenue North
Nashville, TN 37219
Address for Notices Suntrust Bank, Nashville, N.A.
2nd Floor, Main Office
201 4th Avenue North
Nashville, TN 37219
Attention: Karen Cole Ahern
Telecopy: (615) 748-5161
ASAHI BANK, LIMITED, CHICAGO BRANCH
Domestic Lending Office Asahi Bank, Limited, Chicago Branch
190 South LaSalle Street
Suite 2350
Chicago, IL 60603
Eurodollar Lending Office Asahi Bank, Limited, Chicago Branch
190 South LaSalle Street
Suite 2350
Chicago, IL 60603
Address for Notices Asahi Bank, Limited, Chicago Branch
190 South LaSalle Street
Suite 2350
Chicago, IL 60603
Attention: Bridget Barnes
Telecopy: (312) 606-1010
THE SANWA BANK, LIMITED
Domestic Lending Office The Sanwa Bank, Limited
4950 Georgia-Pacific Center
133 Peachtree Street, N.E.
Suite 4950
Atlanta, GA 30303
Eurodollar Lending Office The Sanwa Bank, Limited
4950 Georgia-Pacific Center
133 Peachtree Street, N.E.
Suite 4950
Atlanta, GA 30303
Address for Notices The Sanwa Bank, Limited
4950 Georgia-Pacific Center
133 Peachtree Street, N.E.
Suite 4950
Atlanta, GA 30303
Attention: Raymond F. Hamilton
Telecopy: (404) 589-1629
BANK OF LOUISVILLE AND TRUST COMPANY
Domestic Lending Office Bank of Louisville and Trust Company
500 West Broadway
Louisville, KY 40202
Eurodollar Lending Office Bank of Louisville and Trust Company
500 West Broadway
Louisville, KY 40202
Address for Notices Bank of Louisville and Trust Company
500 West Broadway
Louisville, KY 40202
Attention: Roy L. Johnson, Jr.
Telecopy: (502) 562-5464
FIRST AMERICAN NATIONAL BANK
Domestic Lending Office First American National Bank
First American Center
Nashville, TN 37237-0203
Eurodollar Lending Office First American National Bank
First American Center
Nashville, TN 37237-0203
Address for Notices First American National Bank
Commercial Loan Ops/Floor B-2
First American Center
Nashville, TN 37237-0203
Attention: Frenisa Joy
Telecopy: (615) 736-6747
STAR BANK, N.A.
Domestic Lending Office Star Bank, N.A.
425 Walnut Street
Mail Location 8160
Cincinnati, OH 45201-1038
Eurodollar Lending Office Star Bank, N.A.
425 Walnut Street
Mail Location 8160
Cincinnati, OH 45201-1038
Address for Notices Star Bank, N.A.
425 Walnut Street
Mail Location 8160
Cincinnati, OH 45201-1038
Attention: John R. Bernloehr
Telecopy: (513) 632-2068
SCHEDULE II
Applicable Margins
REVOLVING CREDIT LOANS
Consolidated Capitalization
Ratio
Alternate Base
Rate Loans
Eurodollar Loans
less than .20
.000%
.1200%
at least .20 but less than .30
.000%
.1300%
at least .30 but less than .35
.000%
.1600%
at least .35 but less than .40
.000%
.2000%
at least .40
.000%
.3000%
