Exhibit 4.2.1
FIRST AMENDMENT TO AMENDED AND
RESTATED FINANCING AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND
RESTATED FINANCING AND SECURITY AGREEMENT (this “
Agreement ”) made as of this 9
th day of October, 2009, by and between CATALYST
HEALTH SOLUTIONS, INC., a corporation organized under the laws of
the State of Delaware (formerly known as Healthextras, Inc.) (the
“ Borrower ”) and WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association, its successors and
assigns (the “ Lender ”).
RECITALS
A. The Lender has provided the
Borrower with (i) a revolving credit facility in the maximum
principal amount of Fifty Million Dollars ($50,000,000) as
evidenced by that certain Sixth Amended and Restated Revolving
Credit Promissory Note from the Borrower in favor of the Lender
dated September 15, 2006 and (ii) as part of that
revolving credit facility, a standby letter of credit facility in
the maximum principal amount of Twenty Million Dollars
($20,000,000), each of which are governed by that certain Amended
and Restated Financing and Security Agreement by and between the
Borrower and the Lender dated September 15, 2006 (as amended,
modified, restated, substituted, extended and renewed at any time
and from time to time, the “ Financing Agreement
”). All defined terms used in this Agreement and not defined
herein shall have the meaning given to such terms in the Financing
Agreement.
B. The Borrower has requested that
the Lender (i) increase the maximum principal amount of the
revolving credit facility to One Hundred Million Dollars
($100,000,000), (ii) extend the Revolving Credit Expiration
Date, and (iii) make certain other revisions to the Financing
Agreement as more fully set forth herein, and the Lender has agreed
on the condition, among others, that this Agreement be executed and
delivered by the Borrower to the Lender.
NOW, THEREFORE, in consideration of
the premises, the mutual agreements herein contained, and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Borrower and the Lender hereby
agree as follows:
1. Recitals . The parties
hereto acknowledge and agree that the above Recitals are true and
correct in all respect and that the same are incorporated herein
and made a part hereof by reference.
2. Amendments to Financing
Agreement . The Financing Agreement is hereby amended as
follows:
(a) Section 1.1 (Certain
Defined Terms) .
(i) The following term and its
definition are hereby added to Section 1.1 of the Financing
Agreement in alphabetical order:
“Inactive Subsidiary”
means U.S. Scripts, Inc., a corporation formed under the laws of
the State of Delaware, HealthExtras Benefits Administrator, Inc., a
corporation formed under the laws of the State of Delaware, APS
Benefits Corporation, a corporation formed under the laws of the
State of Delaware, Catalyst Rx, Inc., a corporation formed under
the laws of the State of Delaware, and Catalyst Rx Holdings
Corporation, a corporation formed under the laws of the State of
Delaware, as the case may be and each of their respective
successors and assigns, and “Inactive Subsidiaries”
means each Inactive Subsidiary and each of their respective
successors and assigns.
(ii) The following terms and their
respective definitions in Section 1.1 of the Financing
Agreement are hereby amended and restated in their entirety as
follows:
“Applicable Margin”
means the Applicable Margin set forth below; provided, however,
that if the Borrower fails to deliver its quarterly financial
statement on the date specified in Section 6.1.1(c), the
Applicable Margin shall be 2.75% until such time as the quarterly
financial statement is delivered to the Lender:
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Funded Debt to
EBITDA
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Applicable Margin
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< 1.25
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2.00%
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³ 1.25
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2.75%
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The Applicable Margin shall be
determined and reset on each Interest Rate Adjustment Date, based
on the quarterly financial statement delivered to the Lender for
the previous fiscal quarter pursuant to
Section 6.1.1(c).
“Funded Debt” means at
any date, the aggregate of all interest-bearing Indebtedness for
Borrowed Money of the Borrower and its Subsidiaries, whether
secured or unsecured including, without limitation, all
Subordinated Indebtedness.
“Guarantor” means
CATALYST CONSULTANTS, a corporation organized under the laws of the
State of Nevada, CATALYST RX, a corporation organized under the
laws of the State of Nevada, CATALYST RX GOVERNMENT SERVICES, INC.,
a corporation organized under the laws of the State of Nevada,
MANAGED HEALTHCARE SYSTEMS, INC., a corporation organized under the
laws of the State of Florida, CONCEPT PHARMACEUTICALS, LLC, a
limited liability company organized under the laws of the State of
Alabama, HOSPISCRIPT SERVICES, LLC, a limited liability company
organized under the laws of the State of Delaware, SENIORSCRIPT,
LLC, a limited liability company organized under the laws of the
State of Alabama, CATALYST PRX, LLC, a limited liability company
organized under the laws of the State of Nevada, CATALYST PRX
GOVERNMENT SERVICES, LLC, a limited liability company organized
under the laws of the State of Nevada, COALITION FOR ADVANCED
PHARMACY SERVICES, LLC, a limited liability company organized under
the laws of the State of
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Delaware, R/X
X PHARMACY SOLUTIONS, INC., a corporation
organized under the laws of the State of Arizona, CATALYST RX
REBATE MANAGEMENT, INC., a corporation organized under the laws of
the State of Nevada, CATALYST RX IPA, INC., a corporation organized
under the laws of the State of New York, IMMEDIATE PHARMACEUTICAL
SERVICES, INC., a corporation organized under the laws of the State
of Ohio, and TOTAL SCRIPT, L.L.C., a limited liability company
organized under the laws of the State of Nevada, and any future
guarantor of the Obligations, as the case may be and each of their
respective successors and assigns, and “Guarantors”
means each Guarantor and each of their respective successors and
assigns.
“Guaranty” means that
certain Second Amended and Restated Guaranty of Payment for the
benefit of the Lender dated October 9, 2009 to the Lender from
the Guarantors, and any future guarantees executed by any Guarantor
for the benefit of the Lender, each as may from time to time be
amended, restated, supplemented or otherwise modified.
“Revolving Credit Expiration
Date” means October 9, 2012, unless extended by the
Lender in the exercise of its sole and absolute
discretion.
(b) Section 2.1.1 (Revolving
Credit Facility) . Section 2.1.1 of the Financing
Agreement is hereby amended and restated in its entirety as
follows:
2.1.1. Revolving Credit
Facility .
Subject to and upon the provisions
of this Agreement, the Lender establishes a revolving credit
facility in favor of the Borrower. During the Revolving Credit
Commitment Period, the Borrower may request advances under the
Revolving Credit Facility in accordance with the provisions of this
Agreement. The aggregate of all advances under the Revolving Credit
Facility is sometimes referred to in this Agreement as the
“Revolving Loan”. The principal amount of One Hundred
Million Dollars ($100,000,000), as the same may be reduced in
accordance with Section 2.1.5 is the “Revolving Credit
Committed Amount”. Unless sooner paid, the unpaid Revolving
Loan, together with interest accrued and unpaid thereon, and all
other Obligations shall be due and payable in full on the Revolving
Credit Expiration Date.
(c) Section 2.1.7 (Revolving
Credit Unused Line Fee) . Section 2.1.7 of the Financing
Agreement is hereby amended and restated in its entirety as
follows:
2.1.7 Revolving Credit Unused
Line Fee .
The Borrower shall pay to the Lender
a revolving credit facility fee (collectively, the “Revolving
Credit Unused Line Fees” and individually, a “Revolving
Credit Unused Line Fee”) in an amount equal to three hundred
seventy five hundredths
3
percent (0.375%) of the average
daily unused and undisbursed portion of the Revolving Credit
Committed Amount in effect from time to time accruing during each
calendar quarter tested as of the last day of any calendar quarter.
The accrued and unpaid portion of the Revolving Credit Unused Line
Fee shall be paid by the Borrower to the Lender on the first day of
each calendar quarter, commencing on November 1, 2009, and on
the Revolving Credit Termination Date.
(d) Section 2.2.2 (Letter of
Credit Fees) . The first sentence of Section 2.2.2 of the
Financing Agreement is hereby amended and restated in its entirety
as follows:
Prior to or simultaneously with the
opening of each Letter of Credit, the Borrower shall pay to the
Lender, a per annum letter of credit fee (each a “Letter of
Credit Fee” and collectively the “Letter of Credit
Fees”) in an amount equal to the Applicable Margin multiplied
by the face amount of the Letter of Credit.
(e) Section 6.1.3
(Recordkeeping, Rights of Inspection, Field Examination, Etc.)
. Sections 6.1.3(b) and 6.1.3(c) of the Financing Agreement are
hereby amended and restated in their entirety as
follows:
(b) The Borrower shall, and shall
cause each of its Subsidiaries to, permit authorized
representatives of the Lender to visit and inspect the properties
of the Borrower and its Subsidiaries, to review, audit, check and
inspect the Collateral at any time with or without notice, to
review, audit, check and inspect the Borrower’s other books
of record at any time with or without notice and to make abstracts
and photocopies thereof, and to discuss the affairs, finances and
accounts of the Borrower and/or any Subsidiaries, with the
officers, directors, employees and other representatives of the
Borrower and/or any Subsidiaries and their respective accountants,
all at such times during normal business hours and other reasonable
times and as often as the Lender may reasonably request; provided,
however, that prior to the occurrence of a Default or an Event of
Default, (i) the Lender shall give the Borrower reasonable
prior notice of any such audits or inspections and (ii) the
Borrower shall not be obligated to pay for more than one
(1) audit in any calendar year.
(c) The Borrower hereby irrevocably
authorizes and, upon the Lender’s request, shall direct all
accountants and auditors employed by the Borrower and/or any
Subsidiaries at any time prior to the repayment in full of the
Obligations to exhibit and deliver to the Lender copies of any and
all of the financial statements, trial balances, management
letters, or other accounting records of any nature of the Borrower
and/or any Subsidiaries in the accountant’s or
auditor’s possession, and to disclose to the Lender any
information they may have concerning the financial status and
business operations of the Borrower and its Subsidiaries. Further,
the Borrower hereby authorizes all Governmental Authorities to
furnish to the Lender copies of reports or examinations relating to
the Borrower and/or any Subsidiaries, whether made by the Borrower
or otherwise.
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(f) Section 6.1.7 (Line of
Business) . Section 6.1.7 of the Financing Agreement is
hereby amended and restated in its entirety as follows:
6.1.7 Line of Business
.
The Borrower will continue to engage
substantially only in the business of pharmacy benefit management
and other related healthcare fields.
(g) Section 6.1.8
(Insurance) . The last sentence of Section 6.1.8 of the
Financing Agreement is hereby amended and restated in its entirety
as follows:
If the Lender determines that the
Borrower should obtain additional insurance as a result of any
change in (a) any Law, (b) what is customary for
businesses in the same geographic areas by business entities
engaged in the same or similar business, or (c) any policy of
the Lender or other financial institutions, the Borrower will
obtain such additional insurance within thirty (30) days after
notice in writing from the Lender.
(h) Section 6.1.13(a)
(Funded Debt to EBITDA) . Section 6.1.13(a) of the
Financing Agreement is hereby amended and restated in its entirety
as follows:
(a) Funded Debt to EBITDA. The
Borrower shall maintain a ratio of Funded Debt to EBITDA, tested as
of the last day of each of the Borrower’s fiscal quarters for
the four (4) quarter period ending on that date, of not
greater than 2.00 to 1.00.
(i) Section 6.1.18 (Business
Names; Locations ). Section 6.1.18 of the Financing
Agreement is hereby amended and restated in its entirety as
follows:
6.1.18 Business Names;
Locations .
The Borrower will notify and cause
each of its Subsidiaries to notify the Lender not less than thirty
(30) days prior to (a) any change in the name under which
the Borrower or the applicable Subsidiary conducts its business,
(b) any change of the location of the chief executive office
of the Borrower or the applicable Subsidiary, (c) the opening
of any new place of business or the closing of any existing place
of business if such new or closed place of business either has
twenty-five (25) or more employees or the aggregate value of
Collateral, maintained in such place of business exceeds Three
Million Dollars ($3,000,000), and (d) any change in the
location of the places where the Collateral, or any part thereof,
where the change in the aggregate value of Collateral at such
location exceeds Three Million Dollars ($3,000,000) or any change
in the location of the places where the books and records, or any
part thereof, are kept.
(j) Section 6.2.1 (Merger,
Acquisition or Consolidation ). The following sentence is
hereby added after the last sentence of Section 6.2.1 of the
Financing Agreement:
If the outstanding principal balance
of the Revolving Loan is greater than or equal to Seventy-Five
Million Dollars ($75,000,000) at the time of the closing of any
proposed acquisition, merger or consolidation (an
“Acquisition Transaction”), then prior to closing such
Acquisition Transaction, the Borrower shall provide evidence to
Lender that the Borrower’s Funded Debt to
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EBITDA, tested as of the day of the closing of
each such Acquisition Transaction and after giving effect to each
such Acquisition Transaction on a pro-forma basis, will not be
greater than 1.75 to 1.00.
(k) Section 6.2.2
(Subsidiaries ). Section 6.2.2 of the Financing Agreement
is hereby amended and restated in its entirety as
follows:
6.2.2 Subsidiaries
.
The Borrower will not
(a) permit any Subsidiaries to exist other than the
Subsidiaries identified on EXHIBIT D , (b) create or
acquire any additional Subsidiaries, or (c) permit any
Inactive Subsidiary to become active or operational unless such
Inactive Subsidiary first executes and delivers to Lender in form
and substance satisfactory to Lender (i) a Guaranty of Payment
Agreement, (ii) a Security Agreement, (iii) an opinion of
counsel and (iv) such additional documents as Lender may
require to perfect a first priority lien on the assets of such
Inactive Subsidiary described in the Security Agreement.
(l) Section 6.2.5
(Indebtedness ). Section 6.2.5(g) of the Financing
Agreement is hereby amended and restated in its entirety as
follows:
(g) additional Indebtedness incurred
in the ordinary course of business not to exceed Twenty Million
Dollars ($20,000,000) in the aggregate.
(m) Section 6.2.6
(Investments, Loans and Other Transactions).
Section 6.2.6(a) of the Financing Agreement is hereby amended
and restated in its entirety as follows:
(a) any advance to an officer or
employee of the Borrower or any Subsidiary for travel or other
business expenses in the ordinary course of business, provided that
the aggregate amount of all such advances by the Borrower and its
Subsidiaries (taken as a whole) outstanding at any time shall not
exceed Five Hundred Thousand Dollars ($500,000);
(n) Section 6.2.11 (Other
Businesses). Section 6.2.11 of the Financing Agreement is
hereby amended and restated in its entirety as follows:
6.2.11 Other Businesses
.
The Borrower and its Subsidiaries
will not materially alter the kind or type of Borrower’s
business or that of Borrower’s Subsidiaries or Affiliates, if
any, from the kind described in Section 6.1.7.
(o) Section 6.2.15 (Transfer
of Collateral). The first sentence of Section 6.2.15 of
the Financing Agreement is hereby amended and restated in its
entirety as follows:
The Borrower and the Subsidiaries
will not transfer, or permit the transfer, to another location of
any material portion of the Collateral or the books and records
related to any of the Collateral unless at the time of such
transfer, (a) no Default or
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Event of Default has occurred and is
continuing, and (b) with respect to any transfer of Collateral
having an aggregate value exceeding Three Million Dollars
($3,000,000) or the transfer of any books and records, the Lender
has received (i) at least thirty (30) days prior written
notice and (ii) a duly executed landlord waiver for the new
location acceptable to the Lender and its counsel in their sole but
reasonable discretion.
(p) Section 7.1.8
(Judgment). Section 7.1.8 of the Financing Agreement is
hereby amended and restated in its entirety as follows:
7.1.8 Judgment .
Unless adequately insured in the
opinion of the Lender, the entry of a final judgment for the
payment of money involving more than Two Million Dollars
($2,000,000) against the Borrower or any Subsidiary, and the
failure by the Borrower or such Subsidiary to discharge the same,
or cause it to be discharged, within thirty (30) days from the
date of the order, decree or process under which or pursuant to
which such judgment was entered, or to secure a stay of execution
pending appeal of such judgment.
(q) Section 7.1.10 (Default
Under Other Borrowings). Section 7.1.10 of the Financing
Agreement is hereby amended and restated in its entirety as
follows:
7.1.10 Default Under Other
Borrowings .
Default shall be made with respect
to any Indebtedness for Borrowed Money (other than the Loan) in an
amount individually or in the aggregate in excess of Two Million
Dollars ($2,000,000) if the default is a failure to pay at maturity
or if the effect of such default is to accelerate the maturity of
such Indebtedness for Borrowed Money or to permit the holder or
obligee thereof or other party thereto to cause such Indebtedness
for Borrowed Money to become due prior to its stated
maturity.
(r) Section 7.1.11 (Material
Adverse Change). Section 7.1.11 of the Financing Agreement
is hereby amended and restated in its entirety as
follows:
7.1.11 Material Adverse
Change .
The Lender, in its sole but
reasonable discretion, determines in good faith that a Material
Adverse Effect is occurring or has occurred.
(s) Section 8.1
(Notices). Lender’s and Borrower’s addresses set
forth in Section 8.1 of the Financing Agreement are hereby
amended and restated in their entirety as follows:
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Borrower:
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Catalyst Health
Solutions, Inc.
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800 King Farm
Boulevard
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Rockville,
Maryland 20850
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Attention: Hai
Tran, Chief Financial Officer
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Lender:
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Wachovia Bank,
National Association
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1753 Pinnacle
Drive, VA 1993
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McLean,
Virginia 22102
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Attention:
Barbara K. Angel
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(t) Subsidiaries. Exhibit
“D ” to the Financing Agreement is hereby amended
and restated in its entirety with Exhibit “D”
attached hereto.
(u) Compliance Certificate .
Exhibit “E ” to the Financing Agreement is
hereby amended and restated in its entirety with Exhibit
“E ” attached hereto.
3. Restated Guaranty and Restated
Security Agreement . The Guarantors shall execute and deliver
to the Lender (a) a Second Amended and Restated Guaranty of
Payment Agreement in substantially the form of Exhibit B
attached hereto (the “ Restated Guaranty ”)
pursuant to which they shall jointly and severally guaranty the
repayment in full of the Obligations, and (b) a Second Amended
and Restated Security Agreement in substantially the form of
Exhibit B attached hereto (the “ Restated Security
Agreement ”) pursuant to which they shall grant a first
priority s