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FIRST AMENDMENT TO AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT

Security Agreement

FIRST AMENDMENT TO AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT | Document Parties: CATALYST HEALTH SOLUTIONS, INC | Healthextras, Inc | WACHOVIA BANK, NATIONAL ASSOCIATION You are currently viewing:
This Security Agreement involves

CATALYST HEALTH SOLUTIONS, INC | Healthextras, Inc | WACHOVIA BANK, NATIONAL ASSOCIATION

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Title: FIRST AMENDMENT TO AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT
Governing Law: Maryland     Date: 10/13/2009
Industry: Insurance (Accident and Health)     Sector: Financial

FIRST AMENDMENT TO AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT, Parties: catalyst health solutions  inc , healthextras  inc , wachovia bank  national association
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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:

 

Funded Debt to
EBITDA

 

Applicable Margin

< 1.25

 

2.00%

³ 1.25

 

2.75%

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

 

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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:

    

Catalyst Health Solutions, Inc.

    

800 King Farm Boulevard

    

Rockville, Maryland 20850

    

Attention: Hai Tran, Chief Financial Officer

    

Lender:

    

Wachovia Bank, National Association

    

1753 Pinnacle Drive, VA 1993

    

McLean, Virginia 22102

    

Attention: Barbara K. Angel

(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


 
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