EX-10.130 3 exh10-130.txt CREDIT AGREEMENT EXHIBIT 10.130 CREDIT AGREEMENT among FIRST HEALTH GROUP CORP. as Borrower, AND CERTAIN SUBSIDIARIES OF THE BORROWER as Guarantors, AND THE LENDERS IDENTIFIED HEREIN, AND BANK OF AMERICA, N.A., as Administrative Agent BANK ONE, NA SUNTRUST BANK LASALLE BANK NATIONAL ASSOCIATION, and BNP PARIBAS, as Co-Syndication Agents DATED AS OF APRIL 23, 2002 BANC OF AMERICA SECURITIES LLC, as Sole Book Manager and Co-Joint Lead Arranger BANC ONE CAPITAL MARKETS, INC., as Co-Joint Lead Arranger TABLE OF CONTENTS SECTION 1 DEFINITIONS AND ACCOUNTING TERMS.....................1 1.1 Definitions...........................................1 1.2 Computation of Time Periods and Other Definitional Provisions..........................................16 1.3 Accounting Terms/Calculation of Financial Covenants..16 1.4 Time.................................................17 SECTION 2 CREDIT FACILITIES...................................17 2.1 Revolving Loans......................................17 2.2 Letter of Credit Subfacility.........................19 2.3 Swing Line Loans Subfacility.........................23 2.4 Continuations and Conversions........................24 2.5 Minimum Amounts......................................25 SECTION 3 GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT...........................................25 3.1 Interest.............................................25 3.2 Place and Manner of Payments.........................25 3.3 Prepayments..........................................26 3.4 Fees.................................................26 3.5 Payment in Full at Maturity..........................27 3.6 Computations of Interest and Fees....................27 3.7 Pro Rata Treatment...................................28 3.8 Sharing of Payments..................................28 3.9 Capital Adequacy.....................................29 3.10 Inability To Determine Interest Rate.................29 3.11 Illegality...........................................29 3.12 Requirements of Law..................................30 3.13 Taxes................................................30 3.14 Compensation.........................................31 3.15 Determination and Survival of Provisions.............32 SECTION 4 GUARANTY............................................32 4.1 Guaranty of Payment..................................32 4.2 Obligations Unconditional............................32 4.3 Modifications........................................33 4.4 Waiver of Rights.....................................33 4.5 Reinstatement........................................33 4.6 Remedies.............................................34 4.7 Limitation of Guaranty...............................34 4.8 Rights of Contribution...............................34 SECTION 5 CONDITIONS PRECEDENT................................34 5.1 Closing Conditions...................................34 5.2 Conditions to All Extensions of Credit...............36 SECTION 6 REPRESENTATIONS AND WARRANTIES......................37 6.1 Organization and Good Standing.......................37 6.2 Due Authorization....................................37 6.3 Enforceable Obligations..............................37 6.4 No Conflicts.........................................37 6.5 Consents.............................................37 6.6 Financial Condition..................................38 6.7 No Material Change...................................38 6.8 Disclosure...........................................38 6.9 No Default...........................................38 6.10 Litigation...........................................38 6.11 Taxes................................................38 6.12 Compliance with Law..................................39 6.13 Licensing and Accreditation..........................39 6.14 Title to Properties..................................39 6.15 Insurance............................................39 6.16 Use of Proceeds......................................39 6.17 Government Regulation................................40 6.18 No Burdensome Restrictions...........................40 6.19 ERISA................................................40 6.20 Environmental Matters................................41 6.21 Intellectual Property................................42 6.22 Subsidiaries.........................................42 6.23 Solvency.............................................42 6.24 Indebtedness.........................................42 SECTION 7 AFFIRMATIVE COVENANTS...............................43 7.1 Information Covenants................................43 7.2 Financial Covenants..................................45 7.3 Preservation of Existence and Franchises.............46 7.4 Books and Records....................................46 7.5 Compliance with Law..................................46 7.6 Payment of Taxes and Other Claims....................46 7.7 Insurance............................................46 7.8 Maintenance of Property..............................46 7.9 Use of Proceeds......................................47 7.10 Audits/Inspections...................................47 7.11 Additional Guarantors................................47 7.12 PPO Business.........................................47 7.13 Claims Administration Business.......................47 SECTION 8 NEGATIVE COVENANTS..................................47 8.1 Indebtedness.........................................47 8.2 Liens................................................48 8.3 Nature of Business...................................48 8.4 Consolidation and Merger.............................48 8.5 Sale or Lease of Assets..............................49 8.6 Investments..........................................49 8.7 Transactions with Affiliates.........................49 8.8 Fiscal Year; Accounting; Organizational Documents....49 8.9 No Limitations.......................................49 8.10 No Other Negative Pledges............................50 8.11 Restricted Payments..................................50 SECTION 9 EVENTS OF DEFAULT...................................50 9.1 Events of Default....................................50 9.2 Acceleration; Remedies...............................52 9.3 Allocation of Payments After Acceleration............53 SECTION 10 AGENCY PROVISIONS..................................54 10.1 Appointment..........................................54 10.2 Delegation of Duties.................................54 10.3 Exculpatory Provisions...............................54 10.4 Reliance on Communications...........................55 10.5 Notice of Default....................................55 10.6 Non-Reliance on Administrative Agent and Other Lenders..............................................56 10.7 Indemnification......................................56 10.8 Administrative Agent in Its Individual Capacity......56 10.9 Successor Agent......................................57 10.10 Other Agents; Lead Managers.........................57 SECTION 11 MISCELLANEOUS......................................57 11.1 Notices..............................................57 11.2 Right of Set-Off; Automatic Debits...................57 11.3 Benefit of Agreement.................................58 11.4 No Waiver; Remedies Cumulative.......................61 11.5 Payment of Expenses; Indemnification.................61 11.6 Amendments, Waivers and Consents.....................61 11.7 Counterparts/Telecopy................................62 11.8 Headings.............................................62 11.9 Survival of Indemnification and Representations and Warranties...........................................62 11.10 Governing Law; Venue; Jurisdiction..................62 11.11 Waiver of Jury Trial; Waiver of Consequential Damages.............................................63 11.12 Severability........................................63 11.13 Further Assurances..................................63 11.14 Confidentiality.....................................63 11.15 Entirety............................................63 11.16 Binding Effect; Continuing Agreement................64 SCHEDULES --------- Schedule 1.1(a) Commitment Percentages/Lending Offices Schedule 2.2(c) Existing Letters of Credit Schedule 6.22 Subsidiaries Schedule 6.24 Indebtedness Schedule 8.2 Liens Schedule 8.6 Investments Schedule 11.1 Notices EXHIBITS -------- Exhibit 2.1(b) Form of Notice of Borrowing Exhibit 2.1(e) Form of New Commitment Agreement Exhibit 2.1(f) Form of Revolving Note Exhibit 2.3(b) Form of Swing Line Loan Request Exhibit 2.3(d) Form of Swing Line Note Exhibit 2.4 Form of Notice of Continuation/Conversion Exhibit 7.1(c) Form of Officer's Certificate Exhibit 7.12 Form of Joinder Agreement Exhibit 11.3(b) Form of Assignment and Assumption CREDIT AGREEMENT THIS CREDIT AGREEMENT (this "Credit Agreement"), is entered into as of April 23, 2002 among FIRST HEALTH GROUP CORP., a Delaware corporation (the "Borrower"), the Guarantors (as defined herein), the Lenders (as defined herein), and BANK OF AMERICA, N.A., as Administrative Agent for the Lenders and as Issuing Lender. RECITALS WHEREAS, the Borrower has requested the Lenders to provide a senior credit facility to the Borrower in an aggregate principal amount of up to $400,000,000; and WHEREAS, the Lenders party hereto have agreed to make the requested senior credit facility available to the Borrower on the terms and conditions hereinafter set forth. NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: SECTION 1 DEFINITIONS AND ACCOUNTING TERMS -------------------------------- 1.1 Definitions. As used herein, the following terms shall have the meanings herein specified unless the context otherwise requires. Defined terms herein shall include in the singular number the plural and in the plural the singular: "Acquisition" means the acquisition by any Person of (a) all or substantially all of the Capital Stock of another Person, (b) all or substantially all of the assets of another Person or (c) all or substantially all of a line of business of another Person, in each case whether or not involving a merger or consolidation with such other Person. "Additional Commitment" means, with respect to any Lender which executes a New Commitment Agreement in accordance with Section 2.1(e), the commitment of such Lender in an aggregate principal amount up to the amount specified in such New Commitment Agreement to (i) make Revolving Loans in accordance with the provisions of Section 2.1, (ii) purchase participation interests in Letters of Credit in accordance with the provisions of Section 2.2 and (iii) purchase participation interests in the Swing Line Loans in accordance with the provisions of Section 2.3. "Adjusted Eurodollar Rate" means the Eurodollar Rate plus the Applicable Percentage. "Administrative Agent" means Bank of America, N.A. (or any successor thereto) or any successor administrative agent appointed pursuant to Section 10.9. "Administrative Questionnaire" means an Administrative Questionnaire in a form supplied by the Administrative Agent. "Affiliate" means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls (including but not limited to all directors and officers of such Person) or is Controlled by or is under direct or indirect common Control with the Person specified. "Control" means the possession, directly or indirectly, of the power (a) to vote 5% or more of the securities having ordinary voting power for the election of directors of a Person or (b) to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. "Controlled" has the meaning correlative thereto. "Agency Services Address" means Bank of America, N.A., NC1-001-15- 04, 101 North Tryon Street, Charlotte, North Carolina 28255, Attn: Agency Services, or such other address as may be identified by written notice from the Administrative Agent to the Borrower. "Agent-Related Person" means the Administrative Agent (including any successor administrative agent), together with its Affiliates (including, in the case of Bank of America in its capacity as the Administrative Agent, BAS), and their respective officers, directors, employees, agents, counsel and attorneys-in-fact. "Applicable Percentage" means the appropriate applicable percentages corresponding to the Debt Rating of the Borrower in effect from time to time as described below: ================================================================================ Pricing Debt Rating Applicable Applicable Applicable All-in Level Percentage Percentage Percentage Drawn for for Letter for Eurodollar of Credit Facility Loans Fees Fee -------------------------------------------------------------------------------- I >= BBB+ from S&P/ .60% .60% .15% .75% >= Baa1 from Moody's -------------------------------------------------------------------------------- II >=BBB but < BBB+ from S&P/ .70% .70% .175% .875% >=Baa2 but =BBB- but =Baa3 but =BB+ but < BBB- from S&P/ 1.075% 1.075% .350% 1.425% >=Ba1 but Each of the parties hereto has caused a counterpart of this Credit Agreement to be duly executed and delivered as of the date first above written. BORROWER: -------- FIRST HEALTH GROUP CORP., a Delaware corporation By: Name: Joseph E. Whitters Title: Chief Financial Officer GUARANTOR: --------- CCN MANAGED CARE, INC., a Delaware corporation By: Name: Joseph E. Whitters Title: Treasurer and Chief Financial Officer ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A., -------------------- in its capacity as Administrative Agent By: ________________________________ Name: ________________________________ Title: ________________________________ LENDERS: ------- BANK OF AMERICA, N.A. By: ________________________________ Name: ________________________________ Title: ________________________________ BANK ONE, NA By: ________________________________ Name: ________________________________ Title: ________________________________ SUNTRUST BANK By: ________________________________ Name: ________________________________ Title: ________________________________ LASALLE BANK NATIONAL ASSOCIATION By: ________________________________ Name: ________________________________ Title: ________________________________ BNP PARIBAS By: ________________________________ Name: ________________________________ Title: ________________________________ By: ________________________________ Name: ________________________________ Title: ________________________________ NATIONAL CITY BANK OF MICHIGAN/ILLINOIS By: ________________________________ Name: ________________________________ Title: ________________________________ THE BANK OF NEW YORK By: ________________________________ Name: ________________________________ Title: ________________________________ BANK HAPOALIM By: ________________________________ Name: ________________________________ Title: ________________________________ By: ________________________________ Name: ________________________________ Title: ________________________________ UNION BANK OF CALIFORNIA, N.A. By: ________________________________ Name: ________________________________ Title: ________________________________ U.S. BANK, NATIONAL ASSOCIATION By: ________________________________ Name: ________________________________ Title: ________________________________ MIZUHO CORPORATE BANK, LTD. By: ________________________________ Name: ________________________________ Title: ________________________________ CITICORP USA, INC. By: ________________________________ Name: ________________________________ Title: ________________________________ THE NORTHERN TRUST COMPANY By: ________________________________ Name: ________________________________ Title: ________________________________ SOCIETE GENERALE By: ________________________________ Name: ________________________________ Title: ________________________________ ***************************************************************************** CREDIT AGREEMENT SCHEDULES & EXHIBITS ***************************************************************************** Schedule 1.1(a) SCHEDULE 1.1(a) LENDERS AND REVOLVING LOAN COMMITMENT PERCENTGATES -------------------------------------------------- Principal Revolving Loan Amount of Commitment Revolving Loan Percentage Committed Lender Amount -------------------------------------------------------------------------- Bank of America, N.A. 11.666666668% $46,666,666.67 Bank of America Corporate Center 100 N. Tryon Street, 17th Floor Attn: Joseph L. Corah Tel: 704.386.5976 Fax: 704.388.6002 -------------------------------------------------------------------------- BNP Paribas 10.000000000% $40,000,000.00 787 7th Avenue New York, NY 10019 Attn: Brock Harris Tel: 212.841.2069 Fax: 212.841.2292 -------------------------------------------------------------------------- National City Bank of 5.000000000% $20,000,000.00 Michigan/Illinois 2021 Spring Road, Suite 600 Oak Brook, IL 60523 Attn: Joel R. Warland, Vice President Tel: 630.954.3122 Fax: 630.954.3736 -------------------------------------------------------------------------- The Bank of New York 6.250000000% $25,000,000.00 One Wall Street New York, NY 10286 Attn: Patrick Vatel Tel: 212.635.7882 Fax: 212.635.1481 -------------------------------------------------------------------------- Bank Hapoalim 2.500000000% $10,000,000.00 225 N. Michigan Avenue Suite 900 Chicago, IL 60601 Attn: Michael J. Byrne Tel: 312.228.64 Fax: 312.228.6490 -------------------------------------------------------------------------- Union Bank of California, N.A. 3.750000000% $15,000,000.00 445 South Figueroa Street, 18th Floor Los Angeles, CA 90071 Attn: Scott Jessup Tel: 213.236.4023 Fax: 213.236.7814 -------------------------------------------------------------------------- U.S. Bank, N.A. 5.000000000% $20,000,000.00 777 E. Wisconsin Avenue MK-FC-GLCB Milwaukee, WI 53202 Attn: Matthew J. Schulz Tel: 414.765.5724 Fax: 414.765.4632 -------------------------------------------------------------------------- Mizuho Corporate Bank, Ltd. 6.250000000% $25,000,000.00 227 West Monroe Street Suite 2600 Chicago, IL 60606 Attn: Thomas Danielson Tel: 312.855.8479 Fax: 312.855.8200 -------------------------------------------------------------------------- CitiCorp USA, Inc. 6.250000000% $25,000,000.00 390 Greenwich Street 19th Floor New York, NY 10013 Attn: Allen Fisher Tel: 212.723.6708 Fax: 212.723.8544 -------------------------------------------------------------------------- Bank One, NA 11.666666668% $46,666,666.67 Mail Code: IL1-0544 1 Bank One Plaza Chicago, IL 60670 Attn: Jeanne Perkins Tel: 312.732.4606 Fax: 312.732.2016 -------------------------------------------------------------------------- SunTrust Bank 11.666666668% $46,666,666.66 201 4th Avenue North 3rd Floor Nashville, TN 37219 Attn: Bill Priester Tel: 615.748.5969 Fax: 615.748.5269 -------------------------------------------------------------------------- LaSalle Bank National Association 10.000000000% $40,000,000.00 135 South La Salle Street Suite 1126 Chicago, IL 60603 Attn: Betty Latson Tel: 312.904.2738 Fax: 312.904.6546 -------------------------------------------------------------------------- The Northern Trust Company 6.250000000% $25,000,000.00 50 South LaSalle Street Chicago, IL 60675 Attn: Ron Mallicoat Tel: 312.444.3428 Fx: 312.444.7997 -------------------------------------------------------------------------- Societe Generale 3.750000000% $15,000,000.00 1221 Avenue of the Americas New York, New York 10020 Attn: Richard Bernal Tel: 212.278.6292 Fx: 212.278.7862 -------------------------------------------------------------------------- -------------------------------------------------------------------------- TOTAL 100.00% $400,000,000.00 -------------------------------------------------------------------------- ***************************************************************************** Schedule 2.2(c) Letters of Credit Outstanding as of 3/31/02 Date Face Expiry Issuer LC # Issued Beneficiary Amount Date ------------ ---------- ------- ------------------ --------- ------- LaSalle Bank 9200101807 9/25/97 New York State 5,000,000 6/30/02 Elderly Pharmaceutical Insurance Coverage Program LaSalle Bank S520046 11/8/99 Banks Richmond L.P. 2,500,000 7/1/02 LaSalle Bank S537062 1/31/02 Lumbermans Mutual 224,000 Automatically Casualty Company renews annually until 3/1/07 unless notice is given ***************************************************************************** Schedule 6.24 Indebtedness as of 12/31/01 Letters of Credit 500,000 1. Lender: Bank One LC#: 00321256 Date Issued: 8/10/99 Beneficiary: College Road Associates Expiry Date: 8/10/04 2. Lender: LaSalle Bank 94,203 LC#: S533348 Date Issued: 7/31/01 Beneficiary: One Cabot Road Hudson, LLC Expiry Date: Automatically renews until 2/28/02 unless notice is given ***************************************************************************** Schedule 8.2 Liens as of 12/31/01 (in 000's) State of California income taxes 1992 1,207 Note: 1) California tax amount above is in dispute; First Health is currently contesting the audit decision. ***************************************************************************** Schedule 8.6 Investments as of 12/31/01 (in 000's) Marketable Securities: U.S. Government securities 20,130 State and municipal securities 6,437 Foreign government securities 438 Corporate securities 30,134 Mortgage and asset-backed securities 3,974 Equity securities 7,034 ------ Total Marketable Securities 68,147 ------ Other Investments: Triton Container Investments L.L.C 47,054 Delphi Ventures V, L.P. 6,000 FFT Partners I, L.P. 2,151 ------ Total Other Investments 55,205 ------ Total Investments 123,352 ======= ***************************************************************************** Schedule 11.1 SCHEDULE 11.1 NOTICES Borrower or Guarantors: ----------------------- First Health Group Corp. 3200 Highland Avenue Downers Grove, Illinois 60515 Attn: Joseph E. Whitters, CFO Telephone: (630) 241-7510 Facsimile: (630) 719-0093 Administrative Agent: -------------------- Bank of America, N.A., as Administrative Agent 101 North Tryon Street NC1-001-15-04 Charlotte, North Carolina 28255 Attn: Wade Duncan Telephone: (704) 388-2374 Facsimile: (704) 409-0619 with a copy to: Bank of America, N.A. Bank of America Corporate Center 100 N. Tryon Street, 17th Floor Attn: Joseph L. Corah Telephone: (704) 386.5976 Facsimile: (704) 388.6002 Lenders: ------- As provided on Schedule 1.1(a) ***************************************************************************** Exhibit 2.1(b) NOTICE OF BORROWING TO: BANK OF AMERICA, N.A., as Administrative Agent 101 North Tryon Street NC1-001-15-04 Charlotte, North Carolina 28255 RE: Credit Agreement dated as of April 23, 2002 among First Health Group Corp. (the "Borrower"), certain Subsidiaries of the Borrower as Guarantors, the Lenders identified therein and Bank of America, N.A., as Administrative Agent (as the same may be amended, modified, extended or restated from time to time, the "Credit Agreement") DATE: April 23, 2002 ____________________________________________________________________________ 1. This Notice of Borrowing is made pursuant to the terms of the Credit Agreement. All capitalized terms used herein unless otherwise defined shall have the meanings set forth in the Credit Agreement. 2. Please be advised that the Borrower is requesting a Revolving Loan in the amount of $133,000,000 to be funded on April 23, 2002 at the interest rate option set forth in paragraph 3 below. 3. The interest rate option applicable to the requested Revolving Loan shall be equal to: a. ____X____ the Base Rate b. ________ the Adjusted Eurodollar Rate for an Interest Period of: ________ one month ________ two months ________ three months ________ six months 4. Immediately after giving effect to the making of the requested Revolving Loan and the application of the proceeds thereof, (i) the sum of the principal amount of Revolving Loans outstanding plus LOC Obligations outstanding plus Swing Line Loans outstanding will be $140,724,000, which is less than or equal to the Revolving Committed Amount; (ii) the sum of outstanding LOC obligations shall not exceed the LOC Committed Amounts and (iii) the sum of outstanding Swing Line Loans shall not exceed the Swing Line Committed Amount. 5. On and as of the date of the funding of the requested Revolving Loan, the representations and warranties made by the Credit Parties in any Credit Document are true and correct in all material respects except to the extent they expressly and exclusively relate to an earlier date. 6. No Default or Event of Default exists or is continuing or will be caused by giving effect to this Notice of Borrowing. FIRST HEALTH GROUP CORP., a Delaware corporation By: /s/ Joseph E. Whitters Name: Joseph E. Whitters Title: Chief Financial Officer ***************************************************************************** Exhibit 7.1(c) OFFICER'S CERTIFICATE --------------------- TO: BANK OF AMERICA, N.A., as Administrative Agent 101 North Tryon Street NC1-001-15-04 Charlotte, North Carolina 28255 RE: Credit Agreement dated as of April 23, 2002 among First Health Group Corp. (the "Borrower"), the Guarantors (as defined therein), the Lenders (as defined therein) and Bank of America, N.A., as Administrative Agent and Issuing Lender (as the same may be amended, modified, extended or restated from time to time, the "Credit Agreement"; all capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement) DATE : April 23, 2002 ---------------------------------------------------------------------------- Pursuant to the terms of Section 5.1(h) of the Credit Agreement, I, Joseph E. Whitters, Chief Financial Officer of the Borrower hereby certify, on behalf of the Borrower and not in my individual capacity, that, as of the date hereof: a. The Credit Parties and each of their Subsidiaries are in material compliance with all existing financial obligations in all material respects. b. No action, suit, investigation or proceeding is pending or, to the knowledge of any Credit Party, threatened in any court or before any arbitrator or Governmental Authority that purports to affect the Credit Parties, any of their Subsidiaries or any transaction contemplated by the Credit Documents, if such action, suit, investigation or proceeding could reasonably be expected to have a Material Adverse Effect. c. The financial statements and information delivered to the Administrative Agent on or before the Closing Date were prepared in good faith and in accordance with GAAP. d. Immediately after giving effect to the Credit Agreement, the other Credit Documents and all the transactions contemplated therein to occur on the date hereof, (i) the Borrower is Solvent and the Borrower and its Subsidiaries taken as a whole are Solvent, (ii) no Default or Event of Default exists, (iii) all representations and warranties contained in the Credit Agreement and in the other Credit Documents are true and correct in all material respects and (iv) the Credit Parties are in compliance with each of the financial covenants set forth in Section 7.2 of the Credit Agreement. e. The amount of EBITDA for such fiscal period attributable to, without duplication, (A) Persons that are not Credit Parties and (B) minority interests is $6,979,000. FIRST HEALTH GROUP CORP., a Delaware corporation By: /s/ Joseph E. Whitters Name: Joseph E. Whitters Title: Chief Financial Officer