AGP » Topics » Restrictions and covenants in our credit agreement could limit our ability to take certain actions causing our operational and financial flexibility to be negatively impacted.

These excerpts taken from the AGP 10-K filed Feb 24, 2009.
Restrictions and covenants in our credit agreement could limit our ability to take certain actions causing our operational and financial flexibility to be negatively impacted.
 
As of December 31, 2008, we had $44.3 million outstanding under the secured term loan portion of our Credit and Guaranty Agreement (the “Credit Agreement”). As of December 31, 2008, we had no outstanding borrowings


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under the senior secured revolving credit facility portion of our Credit Agreement, but have caused to be issued irrevocable letters of credit in the aggregate face amount of $16.5 million.
 
The Credit Agreement includes customary covenants and events of default. If any event of default occurs and is continuing, the Credit Agreement may be terminated and all amounts owing there under may become immediately due and payable. The Credit Agreement also includes the following financial covenants: (i) maximum leverage ratios as of specified periods, (ii) a minimum interest coverage ratio and (iii) a minimum statutory net worth ratio. The Credit Agreement also imposes acquisition limitations that restrict our ability to make certain acquisitions above specified values. As a result of these restrictions and covenants, our financial and operating flexibility may be negatively impacted.
 
Borrowings under the Credit Agreement are secured by substantially all of our assets and the assets of our wholly-owned subsidiary, PHP Holdings, Inc., including the stock of each of our respective wholly-owned managed care subsidiaries, in each case, subject to carve-outs.
 
Events beyond our control, such as prevailing economic conditions and changes in the competitive environment, could impair our operating performance, which could affect our ability to comply with the terms of the Credit Agreement. Breaching any of the covenants or restrictions could result in the unavailability of the Credit Agreement or a default under the Credit Agreement. We can provide no assurance that our assets or cash flows will be sufficient to fully repay outstanding borrowings under the Credit Agreement or that we would be able to restructure such indebtedness on terms favorable to us. If we were unable to repay, refinance or restructure our indebtedness under the Credit Agreement, the lenders could proceed against the collateral expected to secure the indebtedness.
 
Restrictions
and covenants in our credit agreement could limit our ability to
take certain actions causing our operational and financial
flexibility to be negatively impacted.



 



As of December 31, 2008, we had $44.3 million
outstanding under the secured term loan portion of our Credit
and Guaranty Agreement (the “Credit Agreement”). As of
December 31, 2008, we had no outstanding borrowings





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under the senior secured revolving credit facility portion of
our Credit Agreement, but have caused to be issued irrevocable
letters of credit in the aggregate face amount of
$16.5 million.


 



The Credit Agreement includes customary covenants and events of
default. If any event of default occurs and is continuing, the
Credit Agreement may be terminated and all amounts owing there
under may become immediately due and payable. The Credit
Agreement also includes the following financial covenants:
(i) maximum leverage ratios as of specified periods,
(ii) a minimum interest coverage ratio and (iii) a
minimum statutory net worth ratio. The Credit Agreement also
imposes acquisition limitations that restrict our ability to
make certain acquisitions above specified values. As a result of
these restrictions and covenants, our financial and operating
flexibility may be negatively impacted.


 



Borrowings under the Credit Agreement are secured by
substantially all of our assets and the assets of our
wholly-owned subsidiary, PHP Holdings, Inc., including the stock
of each of our respective wholly-owned managed care
subsidiaries, in each case, subject to carve-outs.


 



Events beyond our control, such as prevailing economic
conditions and changes in the competitive environment, could
impair our operating performance, which could affect our ability
to comply with the terms of the Credit Agreement. Breaching any
of the covenants or restrictions could result in the
unavailability of the Credit Agreement or a default under the
Credit Agreement. We can provide no assurance that our assets or
cash flows will be sufficient to fully repay outstanding
borrowings under the Credit Agreement or that we would be able
to restructure such indebtedness on terms favorable to us. If we
were unable to repay, refinance or restructure our indebtedness
under the Credit Agreement, the lenders could proceed against
the collateral expected to secure the indebtedness.


 




EXCERPTS ON THIS PAGE:

10-K (2 sections)
Feb 24, 2009
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