Exhibit 4(a)
AMENDMENT NO. 2 entered into as of April 30,
1999 (this "AMENDMENT"), to the Credit Agreement
dated as of February 12, 1998 (as amended,
supplemented or otherwise modified from time to time,
the "CREDIT AGREEMENT"), among Magellan Health
Services, Inc., a Delaware corporation (the "PARENT
BORROWER"); Charter Behavioral Health System of New
Mexico, Inc., a New Mexico corporation; Merit
Behavioral Care Corporation, a Delaware corporation;
each other wholly owned domestic subsidiary of the
Parent Borrower that becomes a "Subsidiary Borrower"
pursuant to Section 2.23 of the Credit Agreement
(each, a "SUBSIDIARY BORROWER" and, collectively, the
"SUBSIDIARY BORROWERS" (such term is used herein as
modified in Article I of the Credit Agreement); the
Parent Borrower and the Subsidiary Borrowers are
collectively referred to herein as the "BORROWERS");
the Lenders (as defined in Article I of the Credit
Agreement); The Chase Manhattan Bank, a New York
banking corporation, as administrative agent (in such
capacity, the "ADMINISTRATIVE AGENT") for the
Lenders, as collateral agent (in such capacity the
"COLLATERAL AGENT") for the Lenders and as an issuing
bank (in such capacity, an "ISSUING BANK"); First
Union National Bank, a national banking corporation,
as syndication agent (in such capacity, the
"SYNDICATION AGENT") for the Lenders and as an
issuing bank (in such capacity, an "ISSUING BANK");
and Credit Lyonnais New York Branch, a licensed
branch of a bank organized and existing under the
laws of the Republic of France, as documentation
agent (in such capacity, the "DOCUMENTATION AGENT")
for the Lenders and as an issuing bank (in such
capacity, an "ISSUING BANK" and, together with The
Chase Manhattan Bank and First Union National Bank,
each in its capacity as an issuing bank, the "ISSUING
BANKS").
A. The Lenders and the Issuing Banks have extended credit to
the Borrowers, and have agreed to extend credit to the Borrowers, in each case
pursuant to the terms and subject to the conditions set forth in the Credit
Agreement.
B. The Parent Borrower has requested that the Required Lenders
amend certain provisions of the Credit Agreement as set forth herein.
C. The Required Lenders are willing so to amend such
provisions of the Credit Agreement pursuant to the terms and subject to the
conditions set forth herein.
D. Capitalized terms used but not defined herein have the
meanings assigned to them in the Credit Agreement.
Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. AMENDMENT TO SECTION 2.13. Section 2.13 of the
Credit Agreement is hereby amended by replacing the figure "100%" in paragraph
(d) thereof with the figure "75%".
SECTION 2. AMENDMENT TO SECTION 2.23. Section 2.23 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
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SECTION 2.23. ADDITIONAL BORROWERS. The parties
hereto agree that any wholly owned Domestic Subsidiary
Guarantor that is not a Borrower as of the Closing Date, or
that ceases to be a Borrower after the Closing Date, may enter
into and become a party to this Agreement by executing a New
Borrower Agreement. Upon execution and delivery after the date
hereof by the Administrative Agent, the Collateral Agent and
such a Domestic Subsidiary Guarantor of a New Borrower
Agreement, such Domestic Subsidiary Guarantor shall become a
Borrower hereunder to the extent provided in the New Borrower
Agreement. The Parent Borrower may terminate any Subsidiary
Borrower's interests, rights and obligations under this
Agreement in respect of (a)(i) all outstanding Term Loans and
(ii) all Revolving Loans made to, or Letters of Credit issued
for the account of, any Borrowers other than such Subsidiary
Borrower or (b) all Term Loans, Revolving Loans and Letters of
Credit, in each case to the extent provided in a Subsidiary
Borrower Termination executed and delivered by the Parent
Borrower to the Administrative Agent with respect to such
Subsidiary Borrower, PROVIDED that (x) no such Subsidiary
Borrower subject to any such termination shall cease to be a
Guarantor for so long as it shall remain a Subsidiary, except
as otherwise provided in the Guarantee Agreement, and (y) in
the case of any such termination pursuant to clause (b) above,
such Subsidiary shall cease to be a Subsidiary Borrower and a
party to this Agreement. Notwithstanding the preceding
sentence, no Subsidiary Borrower Termination pursuant to
clause (b) above will become effective as to any Subsidiary
Borrower at a time when any principal of or interest on any
Revolving Loan to such Subsidiary Borrower, or any letter of
credit issued for the account of such Subsidiary Borrower,
shall be outstanding hereunder. The execution and delivery of
a New Borrower Agreement or a Subsidiary Borrower Termination
shall not require the consent of any other Borrower hereunder.
The rights and obligations of each Borrower hereunder shall
remain in full force and effect notwithstanding the addition
of any new Borrower or termination of any Borrower as a party
to this Agreement.
SECTION 3. AMENDMENTS TO SECTION 5.04. Section 5.04 of the
Credit Agreement is hereby amended by replacing the words "Green Spring, Merit,
Human Affairs International, Incorporated, National Mentor, Inc. and such other
material Subsidiaries" in paragraphs (a) and (b) thereof with the words "the
Behavioral Managed Care, Specialty Managed Care and Human Services business
segments of the Parent Borrower and such other material business segments of the
Parent Borrower".
SECTION 4. AMENDMENT TO SECTION 9.17. Section 9.17 of the
Credit Agreement is hereby amended by deleting the first sentence of paragraph
(a) thereof and substituting the following sentence therefor:
"Each Borrower agrees that it shall, jointly with the other
Borrowers and severally, be liable for (a) all the Obligations
or (b) in the case of any Subsidiary Borrower that is the
subject of a New Borrower Agreement or Subsidiary Borrower
Termination, the Obligations specified in Section 1 of the New
Borrower Agreement or Subsidiary Borrower Termination, as the
case may be, most recently delivered in respect of such
Subsidiary Borrower."
SECTION 5. AMENDMENTS TO FORMS OF NEW BORROWER AGREEMENT AND
SUBSIDIARY BORROWER TERMINATION. The Form of New Borrower Agreement set forth as
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Exhibit C-2 to the Credit Agreement and the Form of Subsidiary Borrower
Termination set forth as Exhibit C-3 to the Credit Agreement are hereby amended
by deleting such Forms in their entirety and substituting therefor the Form of
New Borrower Agreement and Form of Subsidiary Borrower Termination set forth as
Schedule 1 and Schedule 2 hereto, respectively.
SECTION 6. AMENDMENT TO SCHEDULE 1.01(d). Schedule 1.01(d) to
the Credit Agreement is hereby amended by deleting such Schedule in its entirety
and substituting therefor the Schedule 1.01(d) set forth as Schedule 3 hereto.
SECTION 7. REPRESENTATIONS AND WARRANTIES. Each Borrower
represents and warrants to the Administrative Agent and to each of the Lenders
that:
(a) This Amendment has been duly authorized, executed and
delivered by it and constitutes a legal, valid and binding obligation of each
Loan Party party hereto, enforceable against such Loan Party in accordance with
its terms.
(b) After giving effect to this Amendment, the representations
and warranties set forth in Article III of the Credit Agreement are true and
correct in all material respects on and as of the date hereof with the same
effect as if made on and as of the date hereof, except to the extent such
representations and warranties expressly relate to an earlier date.
(c) On the date hereof and immediately after giving effect to
this Amendment, no Event of Default or Default has occurred and is continuing.
SECTION 8. AMENDMENT FEE. In consideration of the agreements
of the Required Lenders contained in this Amendment, the Parent Borrower agrees
to pay to the Administrative Agent, for the account of each Lender that delivers
an executed counterpart of this Amendment prior to 12:00 p.m., New York City
time, on the date first above written, an amendment fee (the "AMENDMENT FEE") in
an amount equal to 0.05% of the sum of such Lender's outstanding Term Loans and
Revolving Credit Commitment as of such date.
SECTION 9. CONDITIONS TO EFFECTIVENESS. This Amendment shall
become effective as of the date first above written (PROVIDED that Sections 2, 4
and 5 hereof shall become effective as of September 30, 1998) when the
Administrative Agent shall have received (a) counterparts of this Amendment
that, when taken together, bear the signatures of the Borrowers and the Required
Lenders and (b) the Amendment Fees.
SECTION 10. CREDIT AGREEMENT. Except as specifically amended
hereby, the Credit Agreement shall continue in full force and effect in
accordance with the provisions thereof as in existence on the date hereof. After
the date hereof, any reference to the Credit Agreement shall mean the Credit
Agreement as amended hereby. This Amendment shall be a Loan Document for all
purposes.
SECTION 11. APPLICABLE LAW. THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
SECTION 12. COUNTERPARTS. This Amendment may be executed in
two or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one agreement. Delivery of an
executed signature page to this Amendment by
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facsimile transmission shall be effective as delivery of a manually signed
counterpart of this Amendment.
SECTION 13. EXPENSES. The Parent Borrower agrees to reimburse
the Administrative Agent for its out-of-pocket expenses in connection with this
Amendment, including the reasonable fees, charges and disbursements of Cravath,
Swaine & Moore, counsel for the Administrative Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their respective authorized officers as of the
day and year first written above.
MAGELLAN HEALTH SERVICES, INC.,
by
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Name:
Title:
CHARTER BEHAVIORAL HEALTH SYSTEM OF
NEW MEXICO, INC.,
by
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Name:
Title:
MERIT BEHAVIORAL CARE CORPORATION,
by
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Name:
Title:
THE CHASE MANHATTAN BANK, individually
and as Administrative Agent, Collateral Agent
and an Issuing Bank,
by
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Name:
Title:
FIRST UNION NATIONAL BANK,
individually and as Syndication Agent and an
Issuing Bank,
by
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Name:
Title:
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CREDIT LYONNAIS NEW YORK BRANCH,
individually and as Documentation Agent and an
Issuing Bank,
by
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Name:
Title:
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To Approve the Amendment:
Name of Institution
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by
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Name:
Title: